Equity Research INITIATING COVERAGE

Equity Research INITIATING COVERAGE Enghouse Systems Ltd. ESL-T, $34.50 March 10, 2014 Rating: BUY Target Price: $42.00 Market Capitalization: $898.9M Risk Profile: MEDIUM TECHNOLOGY SOFTWARE Ralph Garcea, P.Eng, MBA Analyst 647.776.1763 ralphg@globalmci.com Chris Stringer Associate 647.776.1762 chriss@globalmci.com COMPANY PROFILE Enghouse develops enterprise software solutions for a variety of vertical markets. The Company s operational strategy is to grow organically, and expand its product portfolio and geographical footprint through business acquisitions. The Company has two distinct business units: the Interactive Management Group (IMG) and the Asset Management Group (AMG). IMG is a global provider of communications software and services. AMG operates in two divisions: Enghouse Networks and Enghouse Transportation. Enghouse Networks develops network software and visual computing solutions, and Enghouse Transportation develops and integrates software solutions for the transportation industry. Enghouse was founded in 1984, operates in 15 countries, currently has ~940 employees, and is headquartered in Markham, Ontario. Source: BigCharts.com Financial Summary Last Price $34.50 Price Target C$42.00, (+22.8%) Div / Yield $0.38 / 1.1% 52-week Range $19.54 - $36.60 S/O Basic (M) 26.1 S/O FD (M) 26.8 Market Float (%) 69.1 Market Cap ($M) 898.9 Net Debt ($M) (100.1) Enterprise Value ($M) $798.8 Avg. Weekly Vol. (M) 0.1 Fiscal Year End 31-Oct TAKING IT TO THE NEXT LEVEL INVESTMENT THESIS Enghouse Systems ( Enghouse or the Company ) is a software and services company that provides enterprise software solutions for a variety of vertical markets. With a strong enterprise software spending outlook and growth expected in all of the Company s vertical markets over the next half-decade, we believe Enghouse is well positioned to execute on its business strategy (organic growth and acquisitions) and continue generating increasing license and maintenance revenues, thus providing revenue visibility and steadily boosting its dividend over the forthcoming years. FINANCIAL REVIEW Enghouse reported FQ114 revenue of $47.5M, adj. EBITDA of $12.2M, and EPS of $0.23. Enghouse has grown its revenue at 28% CAGR from F2008-F2013 and its recurring revenue at 26% CAGR. We look for low single-digit organic growth going forward, as well as incremental growth and margin improvement via acquisitions. We forecast a F2012-F2018E CAGR of 17.2% for revenue and 20.9% for adj. EBITDA. VALUATION Enghouse currently trades at a C2014E EV/Sales multiple of 3.9x, and EV/EBITDA multiple of 14.6x, versus industry comparables of 4.3x and 13.5x, respectively. UPCOMING CATALYSTS NEAR TERM: Announcement of new acquisitions and growth from all business units. LONG TERM: Acquisitions to drive growth, leading to a diversified geographical footprint, as well as improved margins and dividend increases. We are initiating coverage on Enghouse Systems with a BUY recommendation and a 12-month target price of $42.00/share, implying a 23% upside from the current share price. Given the diversified revenue mix and high recurring maintenance revenues, offset by integration and customer attrition risk, we rate the risk profile as MEDIUM. Forecasts F2012 F2013 F2014E F2015E F2016E Revenue ($M) 136.37 179.89 204.78 233.72 267.04 Adj. EBITDA ($M) 35.15 44.94 55.55 65.42 76.81 EPS (FD) 0.80 0.92 1.09 1.33 1.57 EPS (basic) 0.82 0.94 1.14 1.39 1.65 CFPS 0.90 1.22 2.03 2.44 2.70 P/E 42.9x 37.6x 31.7x 26.0x 22.0x EV/Sales 5.9x 4.4x 3.9x 3.4x 3.0x EV/EBITDA 22.7x 17.8x 14.4x 12.2x 10.4x See back page for analyst certification and disclosures All figures in C$ unless otherwise noted.

TABLE OF CONTENTS INVESTMENT THESIS... 3 COMPANY OVERVIEW... 4 ACQUISITIONS... 4 WORLDWIDE IT SPENDING... 6 VERTICAL SOFTWARE TRENDS & STRATEGIC OVERVIEW... 7 FINANCIAL REVIEW... 10 GEOGRAPHIC ANALYSIS... 18 VALUATION... 19 COMPETITORS... 21 RISKS... 27 APPENDIX A KEY HISTORICAL DEVELOPMENTS... 28 APPENDIX B ACQUISITIONS OVERVIEW... 29 APPENDIX C PRODUCT OVERVIEW/SECTOR DYNAMICS... 31 SECTOR DYNAMICS... 32 APPENDIX D FINANCIALS... 33 APPENDIX E MANAGEMENT AND DIRECTORS... 36 RESEARCH DISCLOSURES... 38 2

INVESTMENT THESIS Enghouse is a software and services company that provides enterprise software solutions for a variety of vertical markets. The Company s operational strategy is to grow organically, and expand its product portfolio and geographical footprint through accretive acquisitions. The Company operates under two distinct business units: 1) Interactive Management Group ( IMG ), which provides communications software and services; and 2) Asset Management Group ( AMG ), which is further divided into two divisions: Enghouse Networks provides network software and visual computing solutions; and Enghouse Transportation provides transportation software solutions. According to Gartner, enterprise software is anticipated to be the fastest growing segment in its IT Spending Outlook, which is expected to grow 5.3% in C2013 and 6.6% compounded through C2017 reaching ~$400B. The enterprise software industry continues to transition towards a software as a service ( SaaS ) model, providing a much lower total-cost-of-ownership ( TCO ), and should aid enterprise software growth in the forthcoming years. The Company operates in markets that are expected to show growth over the next half-decade (see the Industry section on the Company s operating segments). Historically, Enghouse has experienced low single-digit organic growth, with additional growth coming from acquisitions. Enghouse targets software services companies with $5-50M revenue run rates that support its existing business, as well as software solutions that open doors to new channel partnerships and vertical markets. The Company generates positive cash flow and has a significant amount of cash on hand (~$101M as at January 31, 2014), enabling it to be a cash buyer and carry no debt on its books. For F2013, the Company completed five acquisitions for an aggregate cash purchase price of $25.0M, and in FQ114, $2.2M of cash was spent on acquisitions. On March 4, 2014, Enghouse reported FQ114 revenue of $47.5, adj. EBITDA of $12.2M, and EPS of $0.23. Enghouse has grown its recurring revenue stream at 26% CAGR over the last five years providing the Company with a predictable revenue source. Recurring revenue comprised ~53% of total revenue for FQ114. We believe Enghouse is an attractive name to own. The robust industry dynamics should support organic revenue growth, and the fragmented vertical market software (VMS) sector provides ample targets for Enghouse to acquire. The Company s disciplined acquisition strategy and operational excellence should drive increasing ROE and cash flow from operations, which in turn should support an increasing dividend. We are initiating coverage on Enghouse Systems with a BUY recommendation and a 12-month target price of $42.00/share, implying a 23% upside from the current share price. Given the diversified revenue mix and high recurring maintenance revenues, offset by integration and customer attrition risk, we rate the risk profile as MEDIUM. 3

COMPANY OVERVIEW Enghouse is a software and services company that provides enterprise software solutions for a variety of vertical markets (see Appendix C for product descriptions). The Company s operational strategy is to grow organically, and expand its product portfolio and geographical footprint through accretive acquisitions. Enghouse is divided into two distinct business units: IMG and AMG. IMG is a global provider of communications software and services that help improve customer interactions, organization efficiency, and enterprise communication. IMG s solutions include an advanced Contact Center platform (Cloud & Enterprise), interactive voice response ( IVR ), call recording and quality management, and attendant console solutions. Its products are sold through a direct sales force, as well as via distributors and value-added resellers ( VARs ). IMG targets small, medium, and large enterprises in a number of verticals including insurance, technology, health care, hospitality, banking, and telecommunications. AMG s operations are divided into two divisions: Enghouse Networks and Enghouse Transportation. Enghouse Networks develops network software and visual computing solutions for utility companies, communication service providers, and oil and gas companies. Enghouse Networks offers resource management, revenue management, and data services solutions. Enghouse Transportation develops and integrates software solutions for both the public and private transportation sectors, which include some of the largest transit agencies in North America. Enghouse Transportation s product offerings include transit scheduling and dispatching, outbound messaging, fixed route interactive voice response, charter and tour management, and web-based trip planning. Enghouse was founded in 1984 and went public in 1995. Enghouse operates in 15 countries, has 943 employees, and is headquartered in Markham, Ontario. ACQUISITIONS Enghouse s business strategy is to acquire software and services companies with advanced software solutions and an existing customer base in order to expand its product portfolio, and geographical and customer footprint. The Company targets software solutions that support its existing business, as well as software solutions that could open doors to new channel partnerships and vertical markets. In F2013, the Company spent $25.0M of its cash on acquisitions versus $32.5M in F2012. In addition, Enghouse will look to acquire distressed or underfunded companies, and divisional divestitures. Small software companies have notorious problems scaling beyond the $25-50M annual revenue run rate because larger customers do not typically risk working with small, unproven vendors who may lack the resources that a large software investment requires this is a phenomenon that ratchets down the software company s growth rate significantly once a certain modest scale is reached. Enghouse provides going concern support as the corporate parent, thereby solving the growth and cash flow stability problems most small software companies face on their own. 4

Acquisition strategy: Sectors Enghouse s target markets include: 1) Transportation (fleet management and logistics software); 2) Telecom (billing, OSS/BSS, provisioning, fraud, and security software); 3) Customer contact centres (customer interaction and engagement software); 4) Geographic Information Systems ( GIS ) software; and 5) New fragmented sectors. Size Enghouse targets private or public firms with $5-50M revenue run rates and a strong recurring revenue stream. Geographical Markets North American, European, Nordic, and Asia-Pacific countries. Cash Acquirer As at January 31, 2013, Enghouse had ~$101M in cash and short-term investments. The Company s significant cash on hand and positive cash flow generation enables it to be a cash buyer. The Company will look for a cash payback period within five to six years. EXHIBIT 1 RECENT ACQUISITIONS (PRODUCT AND GEOGRAPHIC DIVERSIFICATION) Source: Company presentation 5

WORLDWIDE IT SPENDING OUTLOOK FOR GLOBAL ENTERPRISE SOFTWARE REMAINS POSITIVE Gartner expects worldwide IT spending to increase 2.8% (at constant currency) in C2013 to $3,678B, reaching $4,267B by C2017. Notable is the strength in Enterprise Software, the fastest growing segment in the IT spending outlook, which is expected to grow 5.3% in C2013 and 6.6% compounded through C2017 reaching ~$400B. EXHIBIT 2 GLOBAL IT SPENDING FORECAST Data Center Systems Software Devices IT Services Telecom Services US$B 2000 1800 1600 1400 1200 1000 800 600 400 200 0 2011 2012 2013E 2014E 2015E 2016E 2017E Source: Gartner (September 2013) TRANSITION TO SAAS MODEL SHOULD GROW THE OVERALL SOFTWARE PIE As enterprise software continues to transition from a large, complex, license driven market to a utility service with a much lower TCO, we believe total software spend will continue to grow. A larger overall addressable market will counteract the apparent erosion of pricing power. WESTERN WORLD DOMINATES According to Gartner, the West still dominates enterprise software spending as North America accounted for 46.6% of C2012 enterprise software revenues, with Western Europe at 26.6%. 6

VERTICAL SOFTWARE TRENDS & STRATEGIC OVERVIEW ESL-T VMS vendors have a singular focus on providing solutions for industry specific problems within welldefined niches; some examples include public transit, network management, and call centres. These vertical solutions tend to be far more utilitarian than their horizontal counterparts they solve unique, practical, and often mission critical problems specific to the given industry (for example, paratransit scheduling and dispatching), rather than general problems native to most business functions (for example, business transaction data capture). In C2012, Gartner reported that the VMS industry reached $110B, up 3% from C2011. Even in the horizontal software space, such as that occupied by Enterprise Resource Planning ( ERP ) software companies, Oracle (ORCL-US, Not Rated) and SAP (SAP-US, Not Rated), the vertical-ization trend has made an impact. The horizontal ERP vendors have all tailored vertical-specific versions of their core database products and solutions. The VMS market has been facilitated by recent technological progress, growth in the number of Small and Medium Businesses ( SMBs ), and a trend toward delivering mass customization to the consumer, made possible by the efficient manufacturing of a proliferating number of technological innovations. NASCENT BUSINESS PROCESS AND TECHNOLOGICAL INNOVATIONS HAVE USHERED IN THE VMS MARKET The adoption of the SaaS model has allowed software companies to hurdle several key sales obstacles. First, license driven software deals are often delayed in uncertain economic environments, while SaaS generates less upfront costs and thus, less buyer friction. Moreover, SaaS offers a dramatically lower TCO than the traditional license plus an upfront maintenance/support contract. This has the beneficial consequence of allowing former uneconomical software products to be marketed and delivered cost effectively to previously untapped customers. SaaS has been aided by the advent of utility (or cloud ) computing based on cheap broadband and exponentially larger storage capacity. These factors SaaS, utility computing, decreasing storage/broadband costs have allowed increasingly more focused industry niches to be served by low capital intensity software companies, i.e., the VMS market. Benefits of targeting vertical software markets: Marketing in tightly defined niches allows vendors to capture share more quickly. Sales and marketing can be more finely tailored to the peculiarities of a given vertical. Naturally, tighter niches are smaller markets; there is less room for competition to enter once a first mover establishes a beach head, therefore winner takes all is often the normal sector outcome (as opposed to horizontal software markets that require a far more general marketing approach, leaving marketing space open for several competitors across the spectrum of verticals). SaaS taps new markets. VMS is increasingly being delivered as a service. The low cost, low commitment SaaS model has a greater potential to bring in customers that previously did not consider an industry software solution affordable. VMS business is more cash flow stable. Missed quarterly estimates by the large software/tech incumbents often occur because large or long-term deals were pushed into the next quarter. The recurring revenue streams of VMS companies are more stable. 7

GROWTH EXPECTED IN ALL SEGMENTS CONTACT CENTRE INFRASTRUCTURE According to Gartner, contact centre shipments are expected to grow at 4.8% CAGR from C2010 to C2017E, while end-user spending is expected to grow at 1.2% CAGR over the forecasted period. Key trends currently witnessed in the contact centre infrastructure market include the increasing adoption of social media interaction and mobile application connection with customers; increasing infrastructure consolidation and centralized projects; multimedia routing; deployment of the contact centre as a service model (CCaaS); and cloud-based contact centre infrastructures. Industry Consolidation In today s era, managers are looking for a contact centre infrastructure that hosts a vast array of technologies to support the complex needs of agents and customers. To ensure ease of integration, managers are looking for a sole vendor who can host all their technologies. The trend towards a single source vendor has led to industry consolidation and the formation of strategic partnerships with channel partners and suppliers to expand the vendors product portfolio. Market consolidation has slowed and is reaching maturity in North America, Europe, and Asia- Pacific; however, emerging markets are witnessing rapid growth. In C2012, North America and Europe comprised 60% of agent shipments. From a vendor outlook, Avaya (Private), Cisco (CSCO- US; Not Rated), and Genesys (Private) were the three largest vendors comprising in excess of 60% of global agent shipments; Huawei (Private), NEC Corp. (6701-TYO; Not Rated) and Mitel (MITL-US; Not Rated) held the next three positions at a combined market share of less than 15%. Cloud-based contact centre infrastructure According to DMG Consulting, cloud-based contact centre infrastructure solutions grew ~224% from 268,794 seats in C2008 to 871,717 seats as at June 30, 2012. DMG forecasts that the market will continue to grow at 40% CAGR from C2012-2015E, and estimates that ~18% of all contact centre seats will be in the cloud by C2015E. The cloud-based contact centre infrastructure market has experienced growth through economic booms and downturns. It is also currently experiencing an influx of demand from customers looking to transition towards a lower capex, cloud-based solution. NETWORK INFRASTRUCTURE The communications market is continuously changing and OSS/BSS is critical for communication services providers ( CSPs ) to manage their networks and customers relationships in order to remain competitive. Frost & Sullivan notes that declining ARPU for voice, the growing gap between data and revenue, convergence in networks, increasing demand for connected devices, and intense competition are making OSS/BSS a necessity amongst CSPs. CSPs are looking for alternative revenue streams while maintaining a low-cost ownership, customer-centric business model that provides customers with a distinguished experience and tailored services. According to Transparency s OSS/BSS 2013 market research report, the global OSS/BSS market is expected to grow at a CAGR of 16.2% from C2012-2018E, reaching US$48.54B by C2018E. In C2012, North America was the largest market in the world (US$7.18B), as a result of its early commercialization and deployment of telecom services; however, Asia-Pacific, particularly India and China, will experience the largest growth during the forecasted period due to enhanced service offerings. The two driving forces fuelling growth in the global OSS/BSS market are: 1) increasing adoption of convergent billing systems; and 2) growth in the telecom industry due to an increasing wireless subscriber base and growing demand for connected devices. The OSS/BSS market is highly fragmented and according to Transparency s 8

OSS/BSS 2013 market research report, five companies comprised 40% of the OSS/BSS market share in C2012. GLOBAL TELECOM GIS MARKET According to Research and Markets, the global telecom GIS market will grow at 9.9% CAGR from C2012-2016E. The report notes that the key market drivers are the use of GIS for capacity planning and customizable GIS applications, while the availability of low-cost GIS equipment could hinder market growth. FLEET MANAGEMENT MARKET A study by Markets and Markets revealed that in C2013 the fleet management market was valued at $10.9B and will continue to grow at 22.8% CAGR from C2013-2018E, reaching ~$30.5B by C2018E. The report notes that the Asia-Pacific region will experience the highest growth rate due to an increasing number of vehicles being deployed on the roads; government regulations mandating GPS tracking devices in certain regions will provide fleet management opportunities; and industry consolidation will continue as larger players acquire smaller, adept competitors. With respect to the North American region, Berg Insight noted, as at Q412, 3.3M fleet management systems were deployed in North America in commercial vehicle fleets, with deployments expected to reach 6.8M by C2017E equating to 15.6% CAGR. Again, government regulation will play a key role in market growth, in conjunction with demand for more sophisticated transportation infrastructure due to a booming North American population. Latin America will experience the highest growth rate at 16.3% CAGR and will see deployments rise from 1.6M in Q412 to 3.3M by C2017E. Europe is forecasted to grow at 16.0% CAGR from 3.05M deployments in Q412 to 6.4M by C2017E. 9

FINANCIAL REVIEW On March 4, 2014, Enghouse reported FQ114 revenue of $47.5M, adj. EBITDA of $12.2M ($0.45/diluted share), and EPS of $0.23. At the end of FQ114, the Company had $100M in cash and short-term investments, with no long-term debt. Enghouse generates revenue from four sources: software licenses, professional services, hardware, and hosted and maintenance services. Software Licenses Software license revenue accounted for 33% of total revenue in FQ114 ($15.8M), up 5% y/y from $15.1M due to incremental contributions from subscription based license sales and acquisitions. An increase in software license revenue will directly impact other segments since software license agreements usually include maintenance and hosted services, professional services, and hardware. Services Services revenue consists of professional services (consulting/training), and hosted and maintenance services (recurring revenue stream). Professional service revenue accounted for 11% of total revenue in FQ114 ($5.1M), down 7% y/y from $5.5M. Hosted and maintenance revenue accounted for 53% of total revenue in FQ114 ($25.0M), up 22% y/y from $20.6M. Services revenue was up y/y due to higher software license revenue and incremental revenue contributions from acquisitions. Hardware Hardware revenue accounted for 3% of total revenue in FQ114 ($5.1M), up 89% y/y from $0.8M, due to additional hardware sales from Locus. EXHIBIT 3 TOTAL REVENUE VS. ADJ. EBITDA MARGIN Total Revenue Adj. EBITDA Margin 400,000 35% Revenue ($000s) 350,000 300,000 250,000 200,000 150,000 100,000 50,000 30% 25% 20% 15% 10% 5% Adj. EBITDA Margin (%) 0 0% F2008 F2009 F2010 F2011 F2012 F2013 F2014E F2015E F2016E F2017E F2018E Source: Company report, GMCI 10

EXHIBIT 4 REVENUE BY SEGMENT Software Licenses Professional Services Hardware Hosted & Maintenance Services Adj. EBITDA Margin 50,000 40,000 30,000 20,000 10,000 0 40% 35% 30% 25% 20% 15% 10% 5% 0% FQ111 FQ211 FQ311 FQ411 FQ112 FQ212 FQ312 FQ412 Revenue ($000s) FQ113 FQ213 Adj. EBITDA Margin (%) FQ313 FQ413 FQ114 Source: Company report, GMCI Interactive Management Group IMG comprised 80% ($37.8M) of total revenue for FQ114, up 3% y/y from $36.7.0M. Again, revenue was up due to incremental revenue contributions from acquisitions and licenses sold on a subscription basis. Asset Management Group AMG comprised 20% ($9.7M) of total revenue for FQ114, up 85% y/y from $5.3M. AMG revenue was up due to incremental revenue contributions from Locus operations. EXHIBIT 5 REVENUE SPLIT BY BUSINESS UNIT Interactive Management Group Asset Management Group Revenue Mix (%) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 11% 12% 10% 10% 10% 12% 13% 15% 13% 19% 22% 22% 20% 89% 88% 90% 90% 90% 88% 87% 85% 87% 81% 78% 78% 80% FQ111 FQ211 FQ311 FQ411 FQ112 FQ212 FQ312 FQ412 FQ113 FQ213 FQ313 FQ413 FQ114 Source: Company report, GMCI 11

The Company s recurring revenue stream (hosted and maintenance) increased 22% y/y. We forecast F2012-F2018E recurring revenue CAGR at 17.5%, reinforced by our revenue mix assumption, which we estimate hosted and maintenance contributions of 51-54% going forward. These high levels of recurring revenue make Enghouse s IMG and AMG attractive takeout candidates for any larger enterprise software company competing in its vertical markets. EXHIBIT 6 RECURRING REVENUE STREAM CONTINUES TO GROW Hosted & Maintenance Services RR/TR 30,000 25,000 20,000 15,000 10,000 5,000 60% 50% 40% 30% 20% 10% 0 0% FQ111 FQ211 FQ311 FQ411 FQ112 FQ212 FQ312 Recurring Revenue ($000s) FQ412 FQ113 FQ213 FQ313 FQ413 FQ114 Source: Company report, GMCI Enghouse s gross margin for FQ114 was 71%, which is consistent with its historic low 70s range. The Company s FQ114 adj. EBITDA was $12.2M (26% margin) versus $9.6M (23% margin) in FQ113. Historically, adj. EBITDA margins have remained stable in the mid 20s; however, we look for continued margin improvement, as typically Enghouse s acquired companies increase its sales and margins. Direct costs comprised 29% ($13.9M) of total revenue for FQ114 versus 28% y/y; squeezed margins were due to lower margins on incremental hardware and hosted services revenue. We have modelled direct costs in the high 20s range consistent with historical margins. Cash opex as a percentage of revenue improved y/y comprising 45% ($21.4M) of total revenue versus 49% ($20.7M) in FQ113. 12

EXHIBIT 7 EXPENSES AND MARGINS Cash OPEX OPEX Gross Margin Adj. EBITDA Margin 25,000 80% Expenses ($000s) 20,000 15,000 10,000 5,000 70% 60% 50% 40% 30% 20% 10% 0 0% FQ111 FQ211 FQ311 FQ411 FQ112 FQ212 FQ312 FQ412 FQ113 FQ213 FQ313 FQ413 FQ114 Source: Company report, GMCI EXHIBIT 8 DIRECT COSTS AND GROSS MARGINS Software Licenses Services Hardware Gross Margin 16,000 80% Direct Costs ($000s) 14,000 12,000 10,000 8,000 6,000 4,000 2,000 75% 70% 65% 60% 55% Gross Margin (%) 0 50% FQ111 FQ211 FQ311 FQ411 FQ112 FQ212 FQ312 FQ412 FQ113 FQ213 FQ313 FQ413 FQ114 Source: Company report, GMCI 13

As at January 31, 2014, the Company had ~$101M in cash and short-term investments, with zero debt. In FQ114, the Company spent $2.2M on acquisitions and $2.1M on cash dividends. Cash flow from operations ( CFOPs ) was $9.9M for FQ114 versus $6.1M y/y; higher net income and an increase in deferred revenue for the period was the primary causes for the increased CFOPs. The Company s ability to maintain positive CFOPs and remain debt free has enabled it to finance acquisitions solely with cash. We believe the Company s positive cash flow generation, accompanied with its significant cash on hand, will allow Enghouse to continue executing on its acquisition strategy going forward. EXHIBIT 9 POSITIVE CASH FLOW GENERATION CF per Share FCF per Share 0.80 0.60 0.40 0.20 0.00 (0.20) (0.40) (0.60) (0.80) FQ111 FQ211 FQ311 FQ411 FQ112 FQ212 FQ312 FQ412 FQ113 FQ213 FQ313 FQ413 FQ114 Source: Company report, GMCI EXHIBIT 10 FREE CASH FLOW; CASH PAID OUT FOR DIVIDENDS AND ACQUISITIONS Cash paid out for dividends Cash paid out for acquisitions FCF 120,000 100,000 80,000 60,000 40,000 20,000 0 F2008 F2009 F2010 F2011 F2012 F2013 Cash ($000s) F2014E F2015E F2016E F2017E F2018E Source: Company report, GMCI 14

On March 4, 2014, Enghouse increased its quarterly dividend by 25% from $0.08/share to $0.10/share (1.1% yield) the dividend will be paid to shareholders on May 30, 2014. We have modelled 16-20%% cash flow dividend payout going forward, consistent with management expectations and reinforced by a healthy ROE (13-17% over trailing 10 quarters). We look for ROE to trend towards the high teens over our forecasted period, thus providing investors with an increasing dividend yield along the way and the Company with sufficient equity surplus to invest in future growth prospects. As illustrated in Exhibit 11, Enghouse has historically hovered around the 10% sustainable growth rate. We believe the Company can sustain growth in the short term without increasing its financial leverage; however, we look for Enghouse to utilize leverage or equity in the future to surpass the 10% growth ceiling. EXHIBIT 11 SUSTAINABLE GROWTH FOR THE FORESEEABLE FUTURE Sustainable Growth Rate Retention Rate 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% FQ111 FQ211 FQ311 FQ411 FQ112 FQ212 FQ312 FQ412 FQ113 FQ213 FQ313 FQ413 FQ114 Source: Company reports, GMCI 15

EXHIBIT 12 QUARTERLY DIVIDEND PAYOUT ROE Payout Ratio Dividend/CFO 120% 100% 80% 60% 40% 20% 0% FQ111 FQ211 FQ311 FQ411 FQ112 FQ212 FQ312 FQ412 FQ113 FQ213 FQ313 FQ413 FQ114 Source: Company reports, GMCI The Company ended the quarter with $51.2M in deferred revenue versus $42.9M y/y. We note, deferred revenue tends to dip in the fourth quarter, and then trend higher in the first quarter as the Company s customers renew their contracts at the start of the calendar year. EXHIBIT 13 DEFERRED REVENUE INCREASING Deferred Revenue % of Revenue Deferred Revenue ($000's) 60,000 50,000 40,000 30,000 20,000 10,000 140% 120% 100% 80% 60% 40% 20% 0 0% FQ111 FQ211 FQ311 FQ411 FQ112 FQ212 FQ312 FQ412 FQ113 FQ213 FQ313 FQ413 FQ114 Source: Company reports, GMCI 16

EXHIBIT 14 DSO AND DPO TREND UPWARD DSO DPO 350 300 250 200 150 100 50 0 FQ111 FQ211 FQ311 FQ411 FQ112 FQ212 FQ312 FQ412 FQ113 FQ213 FQ313 FQ413 FQ114 Source: Company reports, GMCI 17

GEOGRAPHIC ANALYSIS Enghouse generates its revenues from five geographical markets: US, UK, Europe, Canada, and Asia- Pacific. For F2013, the revenue split was as follows: US (38%), UK (23%), Europe (26%), Canada (5%), and Asia-Pacific (8%) versus 46%, 26%, 15%, 6%, and 7%, respectively, for F2012. We witnessed a more balanced geographical revenue mix in F2013, primarily due to the Company s acquisitions of Vision, Albatross, and Locus, which significantly expanded its presence in the Scandinavian and Norwegian markets. We look for Enghouse to continue pursuing strategic acquisitions outside of North America in order to reduce its dependency in this region. EXHIBIT 15 GEOGRAPHIC REVENUE MIX F2013 Geographical Revenue Split F2012 Geographical Revenue Split 26% 5% 8% 38% US U.K Europe Canada 15% 6% 7% 46% 23% Asia-Pacific 26% Source: Company reports, GMCI 18

VALUATION We value Enghouse at $42.00/share using a DCF model in which we forecast a F2012-2018E CAGR of 17.2% for revenue and 20.9% for EBITDA. We use a discount rate of 10% and a terminal EV/EBITDA multiple of 11.0x. EXHIBIT 16 DISCOUNTED CASH FLOW Enghouse Systems Ltd. CAGR Discounted Cash Flow Analysis F2012 F2013 F2014E F2015E F2016E F2017E F2018E 12-18E Revenue ($000's) 136,368 179,886 204,782 233,720 267,042 306,287 352,978 17.2% Revenue Growth 11.3% 31.9% 13.8% 14.1% 14.3% 14.7% 15.2% Adj. EBITDA ($000's) 35,148 44,939 55,546 65,425 76,808 90,781 109,997 20.9% Adj. EBITDA Growth 9.1% 27.9% 23.6% 17.8% 17.4% 18.2% 21.2% Adj. EBITDA Margin 25.8% 25.0% 27.1% 28.0% 28.8% 29.6% 31.2% Depreciation and Amortization 12,360 17,311 18,291 19,992 23,132 22,256 23,212 EBIT ($000's) 22,244 25,137 37,142 45,433 53,676 68,525 86,785 NOPAT ($000's) 20,093 22,628 29,764 36,347 42,941 54,820 69,428 Plus Amortization ($000's) 12,360 17,311 18,291 19,992 23,132 22,256 23,212 Less Capital Expenditures ($000's) (34,748) (26,429) (22,342) (33,478) (38,516) (44,317) (46,264) Capital Intensity 25.5% 14.7% 10.9% 14.3% 14.4% 14.5% 13.1% Net Working Capital Changes ($000's) (8,245) (7,545) 5,601 8,710 5,843 3,440 11,907 EPS (Continuing) 0.80 0.92 1.09 1.33 1.57 2.00 2.54 Unlevered Free Cash Flow ($000's) (10,540) 5,965 31,315 31,571 33,400 36,200 58,283 PV of Unlevered FCFs ($000's) (11,804) 6,073 28,985 26,566 25,544 25,168 36,837 Valuation Assumption Discount Rate 10.0% Temrinal Multiple 11.00x Valuation Analysis Current 1-Yr Target 2 Yr-Target Total PV of FCF's 135,854 107,473 81,163 Terminal Value 1,209,966 1,209,966 1,209,966 PV of Terminal Value 841,229 925,351 1,018,152 Nebt (debt) cash position 100,081 117,763 144,623 Total Value 1,077,163 1,150,588 1,243,938 DCF Value/Share 39.34 42.02 45.43 FD Shares O/S 27,380 27,380 27,380 Source: Company report, GMCI estimates EXHIBIT 17 DCF SENSITIVITY ANALYSIS Terminal EV/EBITDA Multiplier 42.02 7.00x 8.00x 9.00x 10.00x 11.00x 12.00x 13.00x 6% 32.65 36.06 39.47 42.88 46.29 49.70 53.11 8% 31.14 34.37 37.61 40.84 44.08 47.31 50.55 Discount Rate 10% 29.73 32.81 35.88 38.95 42.02 45.10 48.17 12% 28.43 31.35 34.27 37.19 40.11 43.03 45.95 14% 27.21 29.99 32.77 35.55 38.33 41.11 43.88 16% 26.08 28.73 31.37 34.02 36.66 39.31 41.96 Source: Company report, GMCI estimates 19

EXHIBIT 18 GLOBAL SOFTWARE VENDORS Local Price Div. Mkt. Cap. Revenue (USD) P/E EV/Sales EV/EBITDA GLOBAL SOFTWARE Ticker 7-Mar Target Yield (US$M) C13E C14E C13E C14E C13E C14E C13E C14E Enghouse Systems Ltd ESL-T 34.50 42.00 1.2% 821 174 190 39.0 30.6 4.2 3.9 16.8 14.6 Constellation Software Inc CSU-T 265.48 280.00 1.7% 5,131 1,211 1,661 24.8 20.4 4.3 3.2 21.5 15.9 Opentext Corp OTC-T 55.76 62.50 1.4% 6,176 1,482 1,771 17.1 14.9 4.2 3.5 13.5 11.2 Microsoft Corp MSFT-US 37.90 38.60 2.9% 314,570 81,624 87,226 13.9 13.5 3.1 2.9 8.0 7.8 Oracle Corp ORCL-US 38.83 39.26 1.2% 174,634 38,060 39,562 13.8 12.6 4.2 4.1 8.4 8.0 Sap Ag SAP-XE 56.37 64.21 1.5% 95,843 23,287 24,534 16.8 16.3 4.2 4.0 11.0 11.3 Vmware Inc VMW-N 101.51 105.85-43,729 5,207 6,031 30.1 28.7 7.4 6.4 19.1 17.1 Adobe Systems Inc ADBE-US 68.52 65.05-34,223 4,048 4,145 51.5 57.3 8.0 7.9 26.4 28.9 Salesforce.com Inc CRM-N 60.74 70.09-37,057 3,986 5,183 NMF NMF 9.6 7.3 NMF NMF Symantec Corp SYMC-US 20.59 25.14 2.8% 14,239 6,742 6,696 11.3 11.1 1.8 1.9 5.8 5.8 Dassault Systemes Sa DSY-FR 84.10 92.50 1.0% 14,681 2,764 3,091 24.2 24.2 4.6 4.1 11.6 11.9 Ca Inc CA-US 32.93 31.85 3.0% 14,745 4,572 4,535 11.2 12.1 3.0 3.0 7.6 7.6 Citrix Systems Inc CTXS-US 60.99 64.58-11,207 2,918 3,188 20.2 20.8 3.6 3.3 10.8 11.1 Red Hat Inc RHT-US 60.52 62.29-11,471 1,499 1,720 42.6 37.8 7.0 6.1 24.0 20.8 Autodesk Inc ADSK-US 53.61 58.71-12,094 2,277 2,351 31.5 45.3 4.7 4.6 19.0 23.7 Netsuite Inc N-N 109.43 118.87-8,267 415 540 NMF NMF NMF NMF NMF NMF Ansys Inc ANSS-US 83.30 85.25-7,709 866 950 25.5 24.9 8.0 7.3 15.7 14.3 Verisign Inc VRSN-US 55.88 57.83-7,469 965 1,017 24.0 21.1 NMF NMF NMF NMF The Sage Group Plc SGE-LN 419.40 370.53 2.6% 7,695 2,233 2,298 19.4 17.7 3.7 3.6 12.6 12.1 Concur Technologies Inc CNQR-US 115.51 116.93-6,541 578 731 NMF NMF 11.0 8.7 NMF NMF Informatica Corp INFA-US 40.09 46.82-4,378 948 1,060 27.8 24.7 3.9 3.5 14.9 12.8 Tibco Software Inc TIBX-US 22.34 26.05-3,615 1,073 1,161 21.5 19.0 3.2 2.9 12.9 10.7 Qlik Technologies Inc QLIK-US 30.00 32.40-2,674 470 550 NMF NMF 5.2 4.4 NMF NMF Software Ag SOW-XE 28.69 30.10 1.6% 3,452 1,340 1,357 13.9 13.3 2.7 2.7 10.1 9.5 Compuware Corp CPWR-US 10.69 12.50 4.6% 2,332 925 802 25.4 24.6 2.4 2.8 11.1 12.2 Manhattan Associates Inc MANH-US 39.21 38.00-2,997 415 452 42.6 38.4 6.9 6.3 25.0 22.4 Progress Software Corp PRGS-US 22.51 25.33-1,161 339 333 18.9 16.1 2.7 2.8 8.4 7.9 Pegasystems Inc PEGA-US 40.09 50.33 0.3% 1,529 511 579 26.7 25.6 2.6 2.3 13.2 12.0 Microstrategy Inc MSTR-US 131.36 127.67-1,484 576 619 55.9 51.2 2.0 1.8 24.7 16.1 Source: Thomson One except for ESL-T, CSU-T, and OTC-T estimates EXHIBIT 19 CANADIAN TECH DIVIDEND PORTFOLIO Mean excl. ESL-T 25.4x 24.7x 4.8x 4.3x 14.6x 13.5x Mean 26.0x 24.9x 4.8x 4.3x 14.7x 13.6x Median 24.2x 21.1x 4.2x 3.6x 13.1x 12.0x CANADIAN TECH DIVIDEND Local Price Div. Mkt. Cap. Revenue (USD) P/E EV/Sales EV/EBITDA Ticker 7-Mar Target Yield (US$M) C13E C14E C13E C14E C13E C14E C13E C14E Enghouse Systems Ltd ESL-T 34.50 42.00 1.1% 821 174 190 39.0 30.6 4.2 3.9 16.8 14.6 Com Dev International Ltd CDV-T 3.90 5.00 0.8% 272 204 204 48.7 43.3 0.2 0.2 0.9 0.9 Opentext Corp OTC-T 55.76 62.50 1.4% 6,176 1,482 1,771 17.1 14.9 4.2 3.5 13.5 11.2 Constellation Software Inc CSU-T 265.48 280.00 1.7% 5,131 1,211 1,661 24.8 20.4 4.3 3.2 21.5 15.9 Macdonald Dettwiler And Associates Ltd MDA-T 84.32 96.00 1.6% 2,773 1,712 1,836 15.9 14.3 1.9 1.8 11.3 9.9 Wilan Inc WIN-T 3.38 7.00 4.7% 370 88 92 20.6 8.0 3.3 3.2 16.0 6.7 Evertz Technologies Ltd ET-T 17.76 18.14 3.8% 1,203 301 200 19.7 19.1 3.3 2.5 11.6 10.8 Computer Modelling Group Ltd CMG-T 29.94 7.00 2.4% 1,128 68 76 42.8 37.8 15.7 14.1 29.1 25.5 Mediagrif Interactive Technologies Inc MDF-T 19.20 21.54 2.1% 277 60 65 22.4 20.1 5.2 4.8 13.3 11.7 Absolute Software Corp ABT-T 7.22 8.27 3.1% 285 85 93 NMF 55.1 2.7 2.5 19.2 16.1 Calian Technologies Ltd CTY-T 19.35 22.50 5.7% 130 223 211 11.4 11.2 0.5 0.6 6.6 7.2 C-com Satellite Systems Inc CMI-V 1.81 N/A 9.2% 58 16 20 22.6 20.1 2.0 1.6 11.1 8.9 Mean 3.1% Mean 25.9x 24.6x 4.0x 3.5x 14.2x 11.6x Median 2.2% Median 22.4x 20.1x 3.3x 2.8x 13.4x 11.0x Source: Thomson One except for ESL-T, CDV-T, MDA-T, WIN-T, CSU-T, and OTC-T estimates 20

COMPETITORS Interactive Management Group Enghouse s IMG division operates in an extremely competitive market characterized by low barriers to entry, high threats from substitute products, and consists of larger firms with greater access to capital resources who can fund inorganic growth and adapt to technological change much more efficiently. IMG s competition arises from various vendor groups including computer telephony platform developers, computer telephony application software developers, telecommunication equipment vendors, and network based enterprise voice portal suppliers. IMG faces stiff direct and indirect competition from its channel partners, VARs, and consulting integration firms. Key success factors for the IMG division include continuous innovation, and research and development initiatives; the ability to leverage relationships with channel partners, distributors, and system integrators; competitive pricing and high quality product offerings; and the ability to retain strong brand recognition amongst its peers. Enghouse delivers leading customer interaction solutions, in the cloud, hosted or on-premise to address specific market requirements. EXHIBIT 20 IMG PORTFOLIO Source: Company reports Functionality 21

Avaya is a global provider of unified communications, contact centre solutions, networking, and video products and services. Avaya s customers include large organizations, government agencies, and small businesses. A majority of Avaya s revenue is generated indirectly via distributors, resellers, system integrators, and telecom service providers. According to Gartner s magic quadrant for contact centre infrastructure, Avaya comprised the largest market share for contact centre routing and agent shipments; its C2012 market share was greater than 35% for both categories. Mitel Networks is a global provider of business communications and collaboration systems for the small and medium enterprise ( SME ) market. Currently, Mitel operates in 90+ countries, has a network of 1,600+ VARs and partners, and 100,000+ global customers. On November 11, 2013, Mitel acquired Aastra Technologies for a total consideration of ~$392M (the deal closed in Q114). The combined companies will generate US$1.1B+ in revenue, have a global customer base of 60M+ end users, and possess the largest market share in Western Europe for SMB/Enterprise communications. Mitel reported F2013 revenue of US$576.9M, EBITDA of US$79.7M, and EPS of US$0.18. Aastra Technologies is a global provider of unified communications, IP telephony, and multimedia contact centre solutions for SMBs and mid-size and large enterprises. Aastra s core product is Solidus ecare a multichannel contact centre platform that is installed on a global basis and marketed via its channel partner network. Aastra targets the health care, tourism, hospitality, real estate, and transportation industries. Aastra reported F2012 revenue of US$606.6M, EBITDA of US$38.17M, and EPS of US$2.60. Interactive Intelligence Group (ININ-US; Not Rated) provides unified business communications solutions for call centres, enterprise IP telephony, and business process automation. Interactive Intelligence s Customer Interaction Center is an all-in-one bundled suite contact centre solution, which is directed at mid-size and large contact centres. Interactive Intelligence targets the financial services, telecom, insurance, and accounts receivables management verticals. Interactive Intelligence reported F2013 revenue of US$318.2M, EBITDA of US$28.1M, and EPS of US$0.45. Genesys develops and provides computer telephony integration software, including contact centre solutions, unified communications, enterprise back-office services, and customer service and workforce optimization. Genesys core solution is its customer interaction management product, which offers a highly scalable, customizable contact centre infrastructure. On February 1, 2012, Alcatel-Lucent divested the Genesys business to Permira Funds for US$1.5B. Aspect Software (Private) provides contact centre, workforce optimization, and back office optimization solutions for mid-size to large organizations. Aspect has served 2,000+ clients in over 70 countries. Aspect targets the banking, health care, retail, telecom, and travel sectors. Cisco Systems manufactures and provides IP-based networking equipment to the communications and IT markets. Cisco s contact centre product offerings support all contact centre sizes. Cisco reported F2013 revenue of US$48.6B, EBITDA of US$13.6B, and EPS of US$1.86. 22

EXHIBIT 21 CONTACT CENTRE INFRASTRUCTURE MAGIC QUADRANT Source: Gartner, June 2013 Asset Management Group Enghouse s AMG segment faces stiff competition from larger, bettercapitalized firms in both its networks and transportation divisions. In the networks division, competition arises from service infrastructure providers whose products allow CSPs to offer a number of solutions, such as NetCracker Technology (6701-TYO; Not Rated), Oracle (ORCL-US; Not Rated), and Amdocs (DOX-US; Not Rated); network infrastructure providers such as Alcatel-Lucent (ALU-US; Not Rated), Ericsson (ERIC-US; Not Rated), and Nokia Solutions and Networks ((NSN) (NOK-US; Not Rated)); and Software suppliers and integrators that provide consulting services such as Accenture (ACN-US; Not Rated), IBM (IBM-US; Not Rated), and CGI (GIB A-T: $51.00; Strong Buy). The OSS/BSS market is highly fragmented and according to Transparency s OSS/BSS 2013 market research report, five companies comprised 40% of the OSS/BSS market share in C2012. Competitors for Enghouse s transportation software solutions include Giro (Private), RouteMatch (Private), Descartes Systems Group (DSGX-US, Strong Buy, TP US$17.00), and Trapeze Group, a subsidiary of Constellation Software s (CSU-T, Strong Buy, TP $280.00) Volaris Group, as well as a variety of smaller firms in the public and private transportation software sectors. For Enghouse to remain competitive in both the networks and transportation markets, it must continue to invest in its R&D initiatives, adapt rapidly to technological change, and thoroughly understand its clients needs. Redknee Solutions (RKN-T; Not Rated) is a global provider of OSS/BSS communication software products, solutions, and services. It provides converged billing, charging, customer service, and payment solutions for voice and data services. More than 200 operators license Redknee s software solutions, across 90 countries, and deliver in excess of 22B network transactions/month. In C2012, Redknee acquired Nokia Solutions and Networks BSS, which significantly enhanced its customer network to over 2B global subscribers. Redknee reported F2013 revenue of $144.2M, EBITDA of $5.3M, and EPS of $0.00. 23

Ericsson is a communication technology company and one of the largest global providers of wireless network equipment. Ericsson has 2.5B+ subscribers and more than 40% of global mobile traffic is directed over Ericsson s networks. Ericsson continues to grow inorganically, having acquired ConceptWave and Telcordia (US$1.15B) in C2012. Ericsson reported C2013 revenue of US$34.9B, EBITDA of US$4.3B, and EPS of US$0.57. Amdocs develops and integrates OSS/BSS solutions for communications, media, and entertainment service providers. Its product offerings include billing services, revenue management, service and resource management, and customer relationship management (CRM) solutions. Amdocs primarily focuses on tier one and tier two telecommunication providers. In C2006, Amdocs acquired Cramer Systems Group for $375M, significantly expanding its customer and geographical network to capitalize on service provider s migration from legacy OSS/BSS systems to next generation systems. Amdocs reported F2013 revenue of US$3.34B, EBITDA of US$0.62B, and EPS of US$2.53. NetCracker Technology, a subsidiary of NEC Corp., is a mid-sized OSS software provider to telecommunications service providers, cable operators, enterprises, government agencies, and the utility/energy markets. Its product offerings include network inventory management, order management, cost management, and customer tracking analysis. In C2012, NetCracker acquired Convergys global information management business for $449M. Alcatel Lucent manufactures mobile phones and telecommunication equipment used by service providers. The company s business can be broken down into three segments: Software, Networks, and Services and Solutions. Alcatel reported C2013 revenue of US$19.2B, EBITDA of US$1.15B, and EPS of US$(0.76). Oracle provides computer hardware products and services, and enterprise software. In C2006, Oracle acquired MetaSolv Software for US$219M, further expanding its communication suite to include provisioning, network inventory, and activation solution. The transaction provided Oracle with a software solution for end-to-end OSS/BSS, and ERP communication processes. Oracle reported F2013 revenue of US$37.18B, EBITDA of US$17.36B, and EPS of US$2.26. Huawei is a global provider of IT and communication solutions. Huawei s OSS solution offerings include telecom network planning and design, IP maintenance, resource management, provisioning and activation, network diagnosis and monitoring, system architecture, and end-to-end professional service. Nokia Solutions and Networks (NSN), a subsidiary of Nokia Corporation, is a global provider of data networking and telecommunications equipment to operators and service providers. NetAct is NSN s integrated OSS and has 800 installations with more than 400 operators worldwide. In C2012, Redknee acquired NSN s BSS business. Nokia Corp. reported C2013 revenue of US$16.8B, EBITDA of US$1.4B, and EPS of (US$0.23). 24

International Business Machine (IBM) is an American information technology company operating in five segments: global technology services, global business services, software, systems and technology, and global financing. Tivoli, Netcool, and Maximo are IBM s OSS solutions, which offer many services including asset management, configuration management, and service management. IBM has made numerous acquisitions in the OSS market and continues to pursue inorganic growth. IBM reported F2013 revenue of US$99.7B, EBITDA of US$23.4B, and EPS of US$14.94. Giro is a global provider of software solutions for the public transit and postal distribution markets. Giro offers three software solutions: 1) Hastus software for transit scheduling and operations; 2) GeoRoute software for routing and scheduling postal distribution; 3) Giro/Access software for paratransit scheduling. Constellation Software acquires, manages, and has built a portfolio of over 125 VMS companies based around the globe. The software designed by Constellation companies provides mission critical solutions for the unique business problems experienced within the ~60 industry verticals these companies serve. Through its wholly owned subsidiary Volaris Group, Constellation Software offers intelligent transportation systems, and asset management and logistics. Constellation reported F2012 revenue of US$891.2M, EBITDA of US$185.9M, and EPS of US$7.42. Descartes Systems Group is a global leader in providing on-demand, SaaS solutions focused on improving the productivity, performance, and security of logistics-intensive businesses. Descartes has 10,000+ customers and 147,000+ connected parties using its modular SaaS solutions to route, schedule, track and measure delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; file customs and security documents for imports and exports; and complete numerous other logistics processes by participating in the world s largest, collaborative multi-modal logistics community. Descartes reported F2013 revenue of US$126.8M, EBITDA of US$34.3M, and EPS of US$0.25. Fleetmatics (FLTX-US; Not Rated) is a global provider of SaaS based fleet management solutions for SMBs. As of September 30, 2013, Fleetmatics tracks 417,000+ active vehicles, growing 37.6% y/y. Fleetmatics reported F2013 revenue of US$177.4M, EBITDA of US$44.8M, and EPS of US$0.82. 25

EXHIBIT 22 OSS MAGIC QUADRANT Source: Gartner 26

RISKS Enghouse s operations are exposed to a variety of business, industry, and economic risks. Acquisition Risk Enghouse pursues an acquisition strategy whereby it faces a variety of acquisition risks including identifying suitable acquisition targets at a fair or discounted valuation, successful integration of the acquired firm, and associated risks from competitors who have greater capital resources to purchase candidates at higher valuation multiples. M&A Deterioration Risk A large proportion of the Company s growth comes from acquisitions. Should conditions in the market for VMS companies deteriorate through increased competition, limited suitable targets, or some other factor, our forward estimates would likely be overstated. Currency Risk Enghouse s functional currency is the Canadian Dollar; therefore, the Company is exposed to translation risk. Enghouse s revenues and expenses are exposed to exchange risk from fluctuations in the US Dollar, Pound Sterling, and the Swedish Kronor. For FQ114, foreign currency translation positively impacted revenue by ~$2.5M and negatively impacted costs by $1.9M. R&D Risk Customers needs are rapidly changing and becoming more demanding; therefore, the Company must continue to evolve with technological change and adapt to new industry standards. Intellectual Property Risk Enghouse may not have the resources to protect its IP from infringement against better-capitalized firms. Enghouse s patents could be incomplete, invalid, disputed or refused. It is possible that the patents applied for will not be granted or will not provide the desired protection, which could result in legal proceedings. Economic & Country Risk Enghouse s operations are impacted by economic conditions in its geographical markets. Economic turmoil in these markets could lead to declining sales. Maintenance Renewals Risk Enghouse recognizes a significant portion of its revenue from maintenance renewals. In FQ114, the Company generated ~53% of its revenue from maintenance and supported services. If the Company s customer attrition rate were to increase, sales would be severely impacted. Customer Risk Enghouse must maintain strong relationships with its channel partners, VARs, OEMs, and consulting integration firms. If the Company were to lose one of its larger partners, revenues and brand recognition could be impacted. 27

APPENDIX A KEY HISTORICAL DEVELOPMENTS $40.00 $35.00 Close Price, Daily 200-Day MA T S R 1.6 1.4 $30.00 Q 1.2 Stock Price ($) $25.00 $20.00 $15.00 $10.00 B C D E F G H I J K L N M P O 1.0 0.8 0.6 0.4 Volume (M Shares) $5.00 0.2 $0.00 May-01 Aug-01 Nov-01 Feb-02 May-02 Aug-02 Nov-02 Feb-03 May-03 Aug-03 Nov-03 Feb-04 May-04 Aug-04 Nov-04 Feb-05 May-05 Aug-05 Nov-05 Feb-06 May-06 Aug-06 Nov-06 Feb-07 May-07 Aug-07 Nov-07 Feb-08 May-08 Aug-08 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 0.0 Point Date Event A June 29, 1995 Enghouse completes IPO B December 17, 2002 Enghouse acquires Stntellect Inc. C December 10, 2003 Enghouse acquires Teloquent Communications Corp. D November 28, 2005 Enghouse acquires Apropos Systems Ltd. for US$2.76/common share E April 2, 2007 Enghouse acquires Ontira F April 1, 2008 Enghouse acquires UK-based Gamma Projects G October 20, 2008 Enghouse completes acquisition of Envox for $14M H April 3, 2009 Enghouse acquires Trio Enterprises AB of Sweden for ~$7M I November 2, 2009 Enghouse completes acquisition of Pulse J April 1, 2010 Enghouse acquires Mettoni Group for $23M K June 2, 2010 Enghouse completes acquisition of Telrex Intellectual Property and Operations L April 1, 2011 Enghouse acquires CosmoCom for $18.6M M March 1, 2012 Enghouse acquires CustomCall Data Systems for ~$7M N March 31, 2012 Enghouse acquires Zeacom Group Ltd. For $31M O November 1, 2012 Enghouse acquires Visionutveckling AB for $10.75M P December 3, 2012 Enghouse acquires Albatross Scandinavia AB for $1.15M Q March 1, 2013 Enghouse acquires Locus Holding AS for ~$12.7M R September 6, 2013 Enghouse acquires Safeharbor Knowledge Solutions S October 7, 2013 Enghouse acquires ANDTEK Gmbh T November 4, 2013 Enghouse acquires Information Access Technology, Inc. Source: Company report, Bloomberg, GMCI 28

APPENDIX B ACQUISITIONS OVERVIEW EXHIBIT 23 ACQUISITIONS Source: Company Website & GMCI RECENT ACQUISITIONS INTERACTIVE MANAGEMENT GROUP: IT Sonix AG On March 4, 2013, Enghouse acquired IT Sonix for 7.0. IT Sonix is a software provider specializing in outbound contact centre solutions, with a main focus on tele-marketing. IT Sonix s applications will be integrated with Enghouses s current product line. The acquisition strengthens the Company s presence in Germany, establishes new presence in Italy, and adds scale to the UK operations. Information Access Technology, Inc. ( IAT ) On November 4, 2013, Enghouse acquired IAT for an undisclosed amount. IAT provides communication technology services for outbound dialling and broadcast messaging, as well as a variety of other hosted services, which are primarily targeted towards small, medium, and large contact centres. Andtek On October 7, 2013, Enghouse acquired Andtek for an undisclosed amount. Andtek is a German company that provides attendant console and contact centre solutions for a variety of small and large organizations. The acquisition strengthened the Company s attendant console and contact centre solutions presence in Germany, as well as expanded its existing channel partnership network. Safeharbor On September 6, 2013, Enghouse acquired Safeharbor for an undisclosed amount. Safeharbor provides a SaaS knowledge base platform, and contact centre services for the technology, retail, financial, airline, communications, and utility industries. The acquisition enhanced the Company s IMG product portfolio and its SMB customer network. 29

Visionutveckling AB ( Vision ) On November 1, 2012, Enghouse acquired Vision for total cash consideration of $10.75M. Vision is a Swedish company that provides attendant and contact centre software solutions. As at November 1, 2012, Vision s solutions have been integrated with 1,300+ customers and generated $11.5M in revenue in F2012. The acquisition enhanced Enghouse s cloud and enterprise contact centre product suite, strengthened its Scandinavian customer network, and increased its presence in both the SME and telecom sectors. Zeacom Group Ltd. On June 1, 2012, Enghouse acquired Zeacom Group Ltd. for a net cash purchase price of ~$30.0M. Zeacom provides multi-channel contact centre and business process automation solutions. The acquisition significantly expanded the Company s geographical scope and added Microsoft Lync capability to the Company s contact centre solutions. CosmoCom, Inc. On April 1, 2011, Enghouse acquired CosmoCom for total cash consideration of $18.6M. CosmoCom provides enterprises and service providers with an open, scalable contact centre solution for both on-premise and in the cloud. The acquisition strengthened the Company s presence in the hosted services market, expanded its geographical network, and increased its recurring revenue stream. RECENT ACQUISITIONS ASSET MANAGEMENT GROUP: Locus Holdings AS ( Locus ) On March 1, 2013, Enghouse acquired Locus for a net cash purchase price of ~$12.7M. Locus is a Norwegian supplier of fleet management solutions for the transport and logistics, and public safety markets in the Scandinavian region. The acquisition enhanced the Company s fleet and transport management solutions, and strengthened its presence in the Scandinavian region. Albatross Scandinavia AB ( Albatross ) On December 1, 2012, Enghouse acquired Albatross for total cash consideration of $1.15M. Albatross is a Swedish company that sells a real-time intelligent network platform to telecom operators in nine countries. The acquisition expanded the Company s geographical footprint and enhanced Enghouse s Pulse Intelligent Network platform. CustomCall Data Systems On March 1, 2012, Enghouse acquired CustomCall for a net cash purchase price of ~$7.0M. CustomCall provides billing, provisioning, and workflow solutions to communication service providers. The acquisition increased the Company s hosted services capacity, thus directly growing its recurring revenue stream. 30

APPENDIX C PRODUCT OVERVIEW/SECTOR DYNAMICS Segment Solutions Markets Served ESL-T Enghouse Interactive Enghouse Interactive is a global provider of communications software and services that help improve customer interactions, organization efficiency, and enterprise communication. Carriers, service providers, insurance companies, banks, government, utilities, technology, health care and hospitality companies. Enghouse Networks Enghouse Networks develops network software and visual computing solutions. Utility companies, communication service providers, electric utilities, and oil and gas companies Enghouse Transportation Enghouse Transportation develops and integrates software solutions for the transportation industry (public & private). Public and private transportation sectors Source: Company report & GMCI 31

SECTOR DYNAMICS Interactive Contact Centre s upgrade cycle to IP is less than ~50% complete (Source: Gartner Feb 2011). IP migration, multi-media routing and email driving technology refresh. Mobile computing/workforce driving significant multi-channel requirements. Transportation Networks Trend to in-sourcing contact centres due to increasing costs overseas and political/nationalistic pressures. Traditional PBX market becoming increasingly commoditized. Microsoft s (MSFT-US; Not Rated) entry in the IP PBX could be a disruptive force (Lync Voice Platform). Fragmented and competitive market. New technologies driving growth in systems and tangible cost benefits/savings. Evolving tablet and smart phone technologies replacing traditional Mobile Data Terminals (MDT s). LTE networks to provide interoperability across geographies. Cloud computing gaining momentum and driving replacement of legacy technology systems in a space traditionally slow to adopt. Economic uncertainty and rising fuel costs driving increased ridership in both public and private sectors. International political focus on terrorism and natural disasters driving continued investment in transportation and public safety systems. Top 25 business support system, OSS and service delivery platform vendors generated ~62% of revenue in 2012 open for more consolidation. IT spend forecasted to be ~4.1% in 2013 and ~4.0% in 2014 (Source: Gartner). Highly fragmented and competitive space driven by deregulation, shift to wireless, lower cost VOIP versus wire line subscribers, FTTH. Mobile networks worldwide are expanding LTE coverage. Telcos reluctant to adopt the cloud but adoption rapidly increasing. Big data and analytics technologies being deployed to enable revenue growth and/or cost savings. Source: Company report & GMCI 32

APPENDIX D FINANCIALS EXHIBIT 24 INCOME STATEMENT Income Statement (YE OCT 31) F2012 F2013 F2014E F2015E F2016E F2017E F2018E Revenue: Software Licenses 45,108 58,887 65,283 74,423 84,842 97,568 113,179 Professional Services 18,083 23,931 23,388 26,194 29,599 33,743 39,142 Hardware 1,569 5,306 8,507 9,358 10,293 11,323 12,455 Hosted & Maintenance Services 71,608 91,762 107,605 123,746 142,307 163,654 188,202 Total Revenue 136,368 179,886 204,782 233,720 267,042 306,287 352,978 Direct Costs: Software Licenses 4,115 4,336 5,174 4,674 5,341 6,126 7,060 Services 31,410 43,190 48,994 52,587 59,016 68,608 77,655 Hardware 1,134 3,592 4,951 5,860 6,776 7,537 8,251 Total Direct Costs 36,659 51,118 59,119 63,121 71,133 82,271 92,965 Gross Margin: Software Licenses 40,993 54,551 60,109 69,748 79,501 91,442 106,119 Services 58,281 72,503 81,999 97,353 112,891 128,788 149,689 Hardware 435 1,714 3,556 3,498 3,517 3,786 4,204 Total Gross Margin 99,709 128,768 145,663 170,599 195,908 224,016 260,012 Operating Expenses: Selling, General & Administrative 43,069 53,366 54,658 67,779 77,442 87,292 97,069 Research & Development 21,492 30,463 35,459 37,395 41,659 45,943 52,947 Depreciation of Property & Equipment 1,386 1,743 2,197 2,106 2,288 2,071 2,147 Special Charges 544 2,491 112 - - - - Total Operating Expenses 66,491 88,063 92,426 107,280 121,388 135,306 152,162 Operating Income 33,218 40,705 53,237 63,319 74,520 88,711 107,850 Other Income (Expenses) Amortization of Intangibles (10,974) (15,568) (16,095) (17,886) (20,844) (20,185) (21,065) Net Interest Income 718 328 85 - - - - Other Income 145 1,582 7 - - - - Foreign Exchange Gain - - - - - - - Total Other Income (10,111) (13,658) (16,003) (17,886) (20,844) (20,185) (21,065) EBT 23,107 27,047 37,234 45,433 53,676 68,525 86,785 Income Taxes 2,234 2,700 7,397 9,087 10,735 13,705 17,357 Net Income 20,873 24,347 29,838 36,347 42,941 54,820 69,428 EPS Basic EPS 0.82 0.94 1.14 1.39 1.65 2.10 2.66 Diluted EPS 0.80 0.92 1.09 1.33 1.57 2.00 2.54 Shares Outstanding Basic 25,569 25,915 26,086 26,086 26,086 26,086 26,086 Diluted 25,976 26,526 27,380 27,380 27,380 27,380 27,380 Operating Metrics Gross Profit 99,709 128,768 145,663 170,599 195,908 224,016 260,012 Adj. EBITDA 35,148 44,939 55,546 65,425 76,808 90,781 109,997 EBT 23,107 27,047 37,234 45,433 53,676 68,525 86,785 Net Income 20,873 24,347 29,838 36,347 42,941 54,820 69,428 Source: Company report, GMCI estimates 33

EXHIBIT 25 BALANCE SHEET Balance Sheet (YE OCT 31) F2012 F2013 F2014E F2015E F2016E F2017E F2018E Current Assets Cash 59,544 70,109 95,730 118,225 141,304 166,561 211,666 Short-Term Investments 24,108 20,188 23,084 23,084 23,084 23,084 23,084 Accounts Receivable 31,368 36,444 41,237 40,334 42,238 48,438 49,726 Income Tax receivable - - - - - - - Future Income Taxes - - - - - - - Prepaid Expenses & Other Assets 3,853 5,839 7,297 6,654 7,517 8,685 8,840 Total Current Assets 118,873 132,580 167,348 188,297 214,143 246,768 293,317 Non-Current Assets Property & Equipment 3,365 3,599 4,287 4,657 5,059 5,493 5,050 Acquired Software & Intangibles 42,637 132,358 144,218 157,335 172,317 193,944 217,439 Goodwill 64,358 - - - - - - Future Income Taxes 10,477 9,419 10,939 11,639 12,339 13,039 13,740 Total Assets 239,710 277,956 326,792 361,928 403,858 459,244 529,545 Current Liabilities Accounts Payable & Accured Liabilities 26,053 32,659 36,071 40,079 45,279 52,313 59,164 Income Taxes Payable 2,008 1,555 2,016 2,393 2,815 3,584 4,542 Dividends Payables 1,676 2,083 2,457 2,924 3,202 3,534 4,617 Accrued Provisions 1,621 3,427 3,588 3,121 2,843 2,511 2,376 Deferred Revenue 35,935 39,325 50,890 53,744 56,804 60,166 66,176 Total Current Liabilities 67,293 79,049 95,022 102,260 110,944 122,109 136,876 Non-Current Liabilities Future Income Taxes 13,241 14,482 15,989 16,689 17,389 18,089 17,841 Long-Term Income Taxes Payable - - - - - - - Deferred Revenue 1,236 1,797 2,152 2,455 2,805 3,217 3,707 Total Liabilities 81,770 95,328 113,163 121,405 131,138 143,415 158,423 Shareholders' Equity Share Capital 55,751 58,514 58,994 58,994 58,994 58,994 58,994 Contributed Surplus 2,847 3,175 3,742 5,144 6,746 8,584 10,702 Retained Earnings 99,371 115,800 136,016 161,508 192,103 233,374 286,549 Accumulated Other Comprehensive Loss (29) 5,139 14,877 14,877 14,877 14,877 14,877 Total Shareholders' Equity 157,940 182,628 213,629 240,523 272,720 315,829 371,121 Total Liabilities & Shareholders' Equity 239,710 277,956 326,792 361,928 403,858 459,244 529,545 Source: Company report, GMCI estimates 34

EXHIBIT 26 CASH FLOW STATEMENT Cash Flow Statement (YE OCT 31) F2012 F2013 F2014E F2015E F2016E F2017E F2018E Operating Activities Net Income 20,873 24,347 29,838 36,347 42,941 54,820 69,428 Depreciation of Property & Equipment 1,386 1,743 2,197 2,106 2,288 2,071 2,147 Amortization of Intangibles 10,974 15,568 16,095 17,886 20,844 20,185 21,065 Stock-Based Compensation 621 1,016 686 1,402 1,602 1,838 2,118 Gain on Sale of Short-term Investments - - - - - - - Gain on Sale of Patents - - - - - - - Income Tax expense (recovery) 2,234 2,700 7,397 9,087 10,735 13,705 17,357 Finance Expenses & Other Income 124 (1,269) 51 - - - - Changes in Non-Cash Working Capital: Accounts Receivable (1,694) 4,040 (630) 903 (1,904) (6,200) (1,288) Prepaid Expenses & Other Assets 1,351 (477) (756) 643 (863) (1,168) (155) Accounts Payable & Accured Liabilities (6,525) (5,961) (1,970) 4,007 5,201 7,034 6,851 Intome Taxes Payable (2,473) (900) (161) - - - - Deferred Revenue 1,272 (4,247) 9,118 3,157 3,410 3,774 6,500 Unrealized Foreign Exchange Gain (176) - - - - - - Income Tax Paid (4,492) (4,203) (6,168) - 8,709-10,313-12,937-16,399 Total Cash Provided by Operating Activities 23,475 32,357 55,696 66,828 73,941 83,122 107,623 Investing Activities Purchase of Property & Equipment (2,295) (1,403) (2,691) (2,476) (2,690) (2,504) (1,704) Finance Income - - - - - - - Business Acquisitions (32,453) (25,026) (19,651) (31,002) (35,826) (41,813) (44,560) Proceeds from Sale of Patents - - - - - - - Proceeds from Sale of Short-Term Investments 8,704 7,948 (1,615) - - - - Total Cash Provided by Investing Activities (26,044) (18,481) (23,957) (33,478) (38,516) (44,317) (46,264) Financing Activities Issuance of Share Capital 2,873 2,075 361 - - - - Dividend Payment (5,875) (7,511) (9,617) (10,855) (12,346) (13,549) (16,254) Repurchase of Common Shares - - - - - - - Total Cash Provided by Financing Activities (3,002) (5,436) (9,256) (10,855) (12,346) (13,549) (16,254) Effect of Foreign Exchange (loss) (509) 2,125 3,138 - - - - Net Increase in Cash (6,080) 10,565 25,621 22,495 23,079 25,257 45,105 Beginning Cash 65,624 59,544 70,109 95,730 118,225 141,304 166,561 Ending Cash 59,544 70,109 95,730 118,225 141,304 166,561 211,666 Source: Company report, GMCI estimates 35

APPENDIX E MANAGEMENT AND DIRECTORS EXHIBIT 27 MANAGEMENT HOLDINGS Management Shares Options Stephen Sadler - CEO 4,567,000 240,000 Craig Wallace - COO 75,000 Doug Bryson - VP, Finance & Admin. 15,000 40,000 Sam Anidjar - VP, Corporate Development Geoff Bartle - VP, Corporate Info. Systems Todd May, VP, General Counsel Source: Sedi, Company report, GMCI estimates Stephen Sadler, Chief Executive Office Stephen Sadler is the former Vice-Chairman and CEO of Geac Computer Corporation. Mr. Sadler took Geac from receivership in 1987 and grew the company by acquisition into a major international software company serving several different markets. He was the Chairman of Helix until December 31, 2012, one of Canada s original technology venture capital firms, as well as a director of several public and private companies, including OpenText Corporation. Mr. Sadler is the largest shareholder of Enghouse. Craig Wallace, Chief Operating Officer Craig Wallace has spent over 25 years in the software industry, successfully managing and growing several companies (privately held and publicly traded) across a number of verticals, customer segments and geographies. Prior to joining Enghouse, he served as President & COO of PCDOCS, CEO of AOL Canada, and more recently as President & COO of Kaboose Inc. Mr. Wallace received a Bachelor of Commerce degree from the University of Toronto and holds CA and CPA accounting designations. Doug Bryson, VP, Finance & Admin. Doug Bryson is a Chartered Accountant and began his career with KPMG. Prior to joining Enghouse, he was Controller for Phonettix Intelcom, a publicly traded software and telecommunications company. Prior to that he was the Manager of Accounting and Taxation for Hitachi Data Systems Inc. in Canada. Sam Anidjar, VP, Corporate Development Sam Anidjar is responsible for the Company s acquisition initiatives and assists with investor relations activities. Prior to joining Enghouse, he held various senior management roles in operations and acquisitions at Geac Computer Corporation, Celestica, SSA Global and CDC Software. Mr. Anidjar holds a Bachelor of Technology in Industrial Engineering from Ryerson University. Geoff Bartle, VP, Corporate Information Systems Geoff Bartle is responsible for the company's global IT infrastructure and information systems. Prior to joining Enghouse, he successfully held senior management technology roles for global software enterprises such as Geac Computer Corporation, SSA Global, Infor Global Solutions Inc. and most recently at TriNet HR Corporation. Mr. Bartle holds a Bachelor of Mathematics from the University of Waterloo. Todd May, VP, General Counsel Todd May is responsible for overseeing all legal matters within Enghouse including compliance, corporate governance, and contracts. In addition, he is actively involved in the Company s mergers and acquisitions activities. Prior to joining Enghouse, Mr. May was a partner 36

practicing in the securities and corporate/commercial areas at Aird & Berlis LLP. He has extensive experience in dealing with Merger and Acquisition transactions with both public and private companies. He has also advised many public high tech companies on corporate governance, disclosure and compliance matters, as well as ongoing corporate/commercial and employment situations. He was awarded his Bachelor of Commerce degree from Carleton University in Ottawa and his LL.B. from Queens University in 1991. EXHIBIT 28 DIRECTOR HOLDINGS Board of Directors Shares Options Stephen Sadler, Chairman & CEO 4,567,000 240,000 Eric Demirian, President & CEO of CCFL Parklea Capital Inc. 8,000 60,000 Reid Drury, Founding Partner at Polar Capital Corp. 79,500 80,000 John Gibson, President & founder of E.E.S Financial 60,000 60,000 Pierre Lassonde, Chairman of Franco-Nevada Corp. 3,270,400 85,000 Paul Stoyan, Managing Partner of Gardiner Roberts LLP. 66,000 40,000 Source: Sedi, Company report, GMCI estimates Stephen Sadler, Chairman of the Board Bio in management section. Eric Demirian, Director Eric Demirian is President and Chief Executive Officer of CCFL Parklea Capital Inc., an investment banking and corporate finance firm focused on providing strategic advice, raising debt and equity capital and executing corporate finance transactions for mid-sized and large private and public companies. Mr. Demirian has been a Director of a number of public, private and not for profit organizations. Reid Drury, Director Mr. Drury is a founding partner of Polar Capital Corporation, a merchant banking firm. He serves as a director of a number of companies. John Gibson, Director John Gibson is the President and founder of E.E.S. Financial Services Ltd., a personal financial planning company. Over the years, he has been active in various services and charitable organizations. He is currently on the Board of Directors for the Children s Aid Foundation and is the Chairman of Individual Giving. Pierre Lassonde, Director Pierre Lassonde is Chairman of Franco-Nevada Corporation. He was President of Newmont Mining Corporation from 2002 to 2006 and from 1982 to 2002 was a co-founder and co-ceo of the original Franco-Nevada. Paul Stoyan, Director Paul Stoyan is managing partner of Gardiner Roberts LLP, a Toronto based law firm founded in the 1920s. He practises business law with a special emphasis on mergers and acquisitions, corporate finance and corporate governance. He has worked extensively with various companies in the technology sector and over the years he has served as a director of several companies. Source: Company Website 37

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