corporate overview - enghouse systems...software licenses 45,108 45,691-1% 30,198 hosted and...
TRANSCRIPT
Corporate Overview June, 2013
2
Snapshot
Publicly listed (TSX:ESL), global software and services
company focused on specific market segments
Business Segments
– Interactive Group
• Customer interaction software solutions
– Asset Management Group
• Transportation Division - Public transit and transportation software
• Networks Division - Software and services for telecom providers
Dual-growth strategy based on organic expansion and accretive
acquisitions
Financial Snapshot 1st Half FY 13 1st Half FY 12
– Revenue $86.5m $62.0m
– Adjusted EBITDA $0.77/sh $0.60/sh
– Dividend $0.13/sh $0.10/sh
3
Build a larger, more diverse enterprise software and services
company through:
– Growing our existing live and self-service solutions business
• Interactive Management Group
– Growing our existing network solutions and transportation management
software businesses
• Asset Management Group
– Consistently generating income and positive cash flow
– Completing selective acquisitions within existing markets and entering new
growth software markets
Strategy
4
Interactive Portfolio
CIM Enterprise
cloud or on-premise
Sin
gle
-site
Multi-site
Scale
Informal Formal Formality
Leading solutions to maximize the value of customer
interaction, spanning unified communications, contact center
and self-service
CCU Service Provider hosted, multi-tenant
Zeacom SME
on-premise
Operator
Console on-premise
5
Transportation Portfolio
TRANSIT OPERATIONS Fixed Route & Para-transit scheduling · Dispatch · Workflow / Driver
Management
Fixed Route & Para-transit IVR · Web Based Trip Planning
COMMUNICATIONS
Coach and Tour Operations Management
PRIVATE TRANSPORTATION
Software solutions for transportation and fleet management
Emergency Control Center & Dispatch (Police, Fire, Ambulance) · Non
Emergency Patient Transport
PUBLIC SAFETY
FLEET & TRANSPORTATION MANAGEMENT Logistics Management · Order Tracking · Telematics · Container and Vehicle
Tracking and Monitoring
6
Networks Portfolio
Network Planning · Engineering · Inventory · Business Intelligence
GIS & NETWORK ANALYTICS
INTELLIGENT NETWORK PLATFORM
Least Cost Routing · Toll Free · Wholesale · Value Added Services
Infrastructure Management · Site Build-out · Workflow · Property Rentals
NETWORK ROLLOUT
Billing · Order Management · Workflow · Provisioning
SERVICE DELIVERY CLOUD
NUMBER PORTABILITY
Global NP Data · Routing · Applications
Technology solutions to optimize performance for next
generation network operators
7
ANNUAL RESULTS
8
FY 12 Highlights
FY 2012 FY 2011
Revenue - a year over year increase of 11% $136.4m $122.6m
Revenue by Segment
Interactive Management Group $119.1m $109.7m
Asset Management Group $17.3m $12.9m
License revenue - large 3rd party license sale in FY11 $45.1m $45.7m
Recurring revenue - a year over year increase of 22% $71.6m $58.5m
R & D expense as a % of revenue 15.9% 13.0%
Adjusted EBITDA¹ per diluted share - an increase of 7% $1.35 $1.26
Note¹ : Adjusted EBITDA: net income before depreciation, amortization of acquired software and customer relationships, finance
income/expenses, other income, the provision for income tax and special charges for acquisition restructuring and transaction costs.
9
FY 12 Highlights
FY 2012 FY 2011
Adjusted EBITDA¹ - an increase of 9% over FY 11 $35.1m $32.2m
Cumulative annual dividend - per common share, based
on date of record, an increase of 28% over FY 11 $0.23 $0.18
Cash spent on annual dividend $5.9m $4.5m
Cash spent on acquisitions (net of cash acquired) $32.5m $16.8m
Cash balance - beginning of period $99.6m $78.2m
Cash balance - end of period $83.7m $99.6m
Acquisitions
CustomCall Data Systems, Inc. March 1st
Zeacom Group Limited June 1st
Note¹ : Adjusted EBITDA: net income before depreciation, amortization of acquired software and customer relationships, finance
income/expenses, other income, the provision for income tax and special charges for acquisition restructuring and transaction costs.
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Revenue Distribution
US 46%
UK 26%
EUROPE 15%
CANADA 6%
APAC 7%
REVENUE BY GEOGRAPHY
FY 2012
INTERACTIVE
GROUP
ASSET
MANAGEMENT GROUP
REVENUE BY BUSINESS SEGMENT
FY 2012
17m
119m
License
33%
Recurring
53%
Services
13%
Hardware 1%
REVENUE BREAKDOWN
FY 2012
11
Fiscal Year Results
FY 08 FY 09 FY10 FY11 FY 12
53m
78m
94m
123m
136m
TOTAL REVENUE
FY 08 FY 09 FY10 FY11 FY 12
30m
41m
47m
59m
72m
57% 53% 50% 53%
RECURRING REVENUE
48%
FY 08 FY 09 FY 10 FY 11 FY 12
$0.50
$0.68
$0.85
$1.26
$1.35 ADJUSTED EBITDA
PER SHARE
FY 08 FY 09 FY 10 FY 11 FY 12
$0.10 $0.11
$0.14
$0.18
$0.23
DIVIDEND PER SHARE
(based on date of record)
12
Balance Sheet October 31 October 31
FY 2012 FY 2011
$59,544 $65,624
24,108 33,967
31,368 23,006
3,853 3,479
118,873 126,076
3,365 1,543
42,637 29,709
64,358 44,242
10,477 9,548
$239,710 $211,118
$26,053 $22,686
2,008 3,520
1,676 1,267
1,621 2,442
35,935 28,933
67,293 58,848
13,241 9,525
- 420
1,236 1,404
81,770 70,197
55,751 52,134
2,847 2,970
99,371 84,782
(29) 1,035
157,940 140,921
$239,710 $211,118
Short-term investments
Assets
Current assets:
Cash and cash equivalents
Deferred income taxes
Accounts receivable, net
Prepaid expenses and other assets
Non-current assets:
Property, plant and equipment
Acquired software and customer relationships
Goodwill
Non-current liabilities:
Total assets
Liabilities
Current liabilities:
Trade payables
Income taxes payable
Dividends payable
Accrued provisions
Deferred revenue
Total liabilities and equity
Deferred income tax liabilities
Long-term income taxes payable
Deferred revenue
Total liabilities
Shareholders’ Equity
Share capital
Contributed surplus
Retained earnings
Accumulated other comprehensive (loss) gain
Total equity
13
Income Statement
2012 2011 Chg % 2010
Revenue (GAAP)
Software licenses 45,108 45,691 -1% 30,198
Hosted and maintenance service 71,608 58,526 22% 47,404
Professional services 18,083 15,734 15% 13,900
Hardware 1,569 2,608 -40% 2,706
136,368 122,559 11% 94,208
Direct costs
Software licenses 4,115 5,208 -21% 4,363
Services 31,410 26,635 18% 22,429
Hardware 1,134 1,966 -42% 1,845
36,659 33,809 8% 28,637
Revenue, net of direct costs 99,709 88,750 12% 65,571
Operating expenses
Selling, general and administrative 43,069 40,861 5% 31,446
Research and development 21,492 15,678 37% 12,477
Amortization of property, plant and equipment 1,386 1,102 26% 1,331
Special charges 544 1,775 -69% -
66,491 59,416 12% 45,254
Results from operating activities 33,218 29,334 13% 20,317
Amortization of acquired SW and CR (10,974) (10,291) 7% (8,458)
Finance income 987 692 43% 434
Finance expenses (269) (201) 34% (170)
Other income 145 956 -85% 1,145
Income before income taxes 23,107 20,490 13% 13,268
Provision for recovery of income taxes 2,234 (2,575) -187% 3,030
Net income for the period 20,873 23,065 -10% 10,238
Earnings per share
Basic 0.82$ 0.91$ -10% 0.41$
Diluted 0.80$ 0.90$ -11% 0.40$
For the year ended October 31
14
1ST HALF RESULTS
15
1ST Half FY 13 Highlights
1H FY 13 1H FY 12
Revenue - an increase of approx. 40% over 1H FY 12 $86.5m $62.0m
Revenue by Segment
Interactive Management Group $72.9m $55.2m
Asset Management Group $13.6m $6.8m
License revenue - an increase of 36% over 1H FY 12 $28.7m $21.1m
Recurring revenue - an increase of approx. 38% over
1H FY 12 $44.0m $32.0m
R & D expense as a % revenue 17.9% 16.6%
Adjusted EBITDA¹ per diluted share - an increase of
28% over 1H FY 12 $0.77 $0.60
Note¹ : Adjusted EBITDA: net income before depreciation, amortization of acquired software and customer relationships, finance
income/expenses, other income, the provision for income tax and special charges for acquisition restructuring and transaction costs.
16
1ST Half FY 13 Highlights
1H FY 13 1H FY 12
Adjusted EBITDA¹ - an increase of 29% over 1H FY 12 $20.3m $15.7m
Quarterly dividend (cumulative) - per common share,
based on date of record $0.13 $0.10
Cash spent on dividend $3.4m $2.5m
Cash spent on acquisitions (net of cash acquired) $16.8m $5.8m
Cash balance - beginning of period $83.7m $99.6m
Cash balance - end of period $80.9m $100.4m
Acquisitions
Visionutveckling Nov 1st
Albatross Dec 1st
CustomCall March 1st
Locus March 1st
Note¹ : Adjusted EBITDA: net income before depreciation, amortization of acquired software and customer relationships, finance
income/expenses, other income, the provision for income tax and special charges for acquisition restructuring and transaction costs.
17
Quarterly Results
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY 10 FY 11 FY 12 FY 13
ADJUSTED EBITDA
$ millions
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY 10 FY 11 FY 12 FY 13
RECURRING REVENUE
$ millions
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY 10 FY 11 FY 12 FY 13
REVENUE
$ millions
$0.000
$0.010
$0.020
$0.030
$0.040
$0.050
$0.060
$0.070
$0.080
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY 10 FY 11 FY 12 FY 13
DIVIDEND PER SHARE
(based on date of record)
18
Balance Sheet Q2 FY 13 April 30,
2013 October 31,
2012
Assets Current assets: Cash and cash equivalents $ 60,059 $ 59,544 Short-term investments 20,881 24,108 Accounts receivable, net 34,674 31,368 Income tax receivable 369 - Prepaid expenses and other assets 5,785 3,853
121,768 118,873 Non-current assets: Property, plant and equipment 4,007 3,365 Intangibles 126,488 106,995 Deferred income taxes 9,327 10,477
Total assets $ 261,590 $ 239,710
Liabilities
Current liabilities: Trade payables $ 34,616 $ 26,053 Income taxes payable - 2,008 Dividends payable 2,076 1,676 Accrued provisions 2,531 1,621 Deferred revenue 41,331 35,935
80,554 67,293 Non-current liabilities: Deferred income tax liabilities 14,876 13,241 Deferred revenue 1,350 1,236
Total liabilities 96,780 81,770
Shareholders’ Equity
Share capital 57,615 55,751 Contributed surplus 2,781 2,847 Retained earnings 103,953 99,371 Accumulated other comprehensive gain (loss) 461 (29)
Total shareholders’ equity 164,810 157,940
Total liabilities and shareholders’ equity
$ 261,590
$ 239,710
19
Income Statement 1st Half FY 13
20
Acquisition Strategy
Established track record of value creation through acquisitions
To consistently generate positive operating cash flows to fund
further growth and drive shareholder value
Economic factors favorable for acquisitions especially for
small-cap companies
Target companies in the $5m - $50m revenue range preferably
with strong recurring revenue
Objective is for a cash payback within 5 - 6 years
21
Recent Acquisitions
Q1 FY 2013
CosmoCom
April 1, 2011
Q2 FY 2011
(Interactive)
CustomCall
March 1, 2012
Q2 FY 2012
(Networks)
Zeacom
June 1, 2012
Q3 FY 2012
(Interactive)
Visionutveckling
Nov 1, 2012
Q1 FY 2013
(Interactive)
Albatross
Dec 1, 2012
Q1 FY 2013
(Networks)
Locus
March 1, 2013
Q2 FY 2013
(Transportation)
22
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