Espial Group Inc. Reports Third Quarter 2009 Results
Q3 HIGHLIGHTS:
- Announced Com Hem AB, Sweden's largest cable operator with 1.8
million homes served, has launched its next generation digital TV and
VOD services - named Com Hem On Demand - using Espial's Evo TV
Service Platform.
- Announced Chongqing Cable TV Network, a China based cable provider
that provides analog and digital TV services to 4.2 million
subscribers, has selected Espial MediaBase to power their on-demand
services including video-on-demand, network PVR and timeshift TV
services.
- Released Espial MediaBase 9.0 video-on-demand platform with
dramatically improved capture and streaming performance, lower power
consumption with Solid State Storage and improved back office support
for cable operators.
- Added eight new service provider customers.
For the three-month period ended
"We are pleased with our results for the first nine months this year and have grown our business by 33% over last year," noted Jaison Dolvane, President and CEO of Espial. "In Q3, we announced the successful launch of Com Hem's hybrid IP Cable service, a major cable operator in
Q3 Financial Results
Third quarter revenues were
Gross margins for the third quarter of fiscal 2009 were 79% compared with 72% in the third quarter of fiscal 2008.
Operating expenses in the third quarter of fiscal 2009 were
Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the third quarter of fiscal 2009 was a loss of
Net loss in the third quarter was
Cash and cash equivalents at
The Company will be hosting a conference call to discuss the third quarter
financial results on November 5, 2009 at 5:15 PM Eastern Standard Time (EST).
The phone number to join the results discussion is:
- Toll line - 416 644 3431
- Toll free line - 877 974 0450
The playback for the call will be available until Saturday, December 5,
2009 at the following numbers and passcode:
- Toll line: 416-640-1917 - passcode: 4180391 followed by the number
sign.
- Toll free line: 877-289-8525 - passcode: 4180391 followed by the
number sign.
About Espial (www.espial.com)
Espial provides scalable and open digital TV software to service providers in the cable, telecommunications and hospitality industries. Its middleware, video-on-demand and browser solutions provide superior service delivery, advanced service innovation tools and the ability to implement flexible business models. Espial serves a range of market segments including, IPTV, Cable, hybrid IP, over-the-top, multi-dwelling unit and enterprise. With over 7 million subscribers using Espial's patented solutions, Espial is a leading supplier of TV software. Espial is headquartered in
Forward Looking Statement
This press release contains information that is forward looking information with respect to Espial within the meaning of Section 138.4(9) of the Ontario Securities Act (forward looking statements) and other applicable securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or the negative of theses terms or other similar expressions concerning matters that are not historical facts. In particular, statements about the benefits and synergies of the Kasenna acquisition transaction, future opportunities for the company and products and any other statements regarding Espial's future expectations, beliefs, goals or prospects are or involve forward-looking information.
Forward-looking information is based on certain factors and assumptions. While the company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward-looking information, by its nature necessarily involves risks and uncertainties, including Espial's ability to effectively integrate Kasenna operations and effectively develop its distribution channels, and generate increased demand for its products. Additional risks and uncertainties affecting Espial can be found in Espial's Annual Report for the fiscal year ended
Non-GAAP Financial Measures
Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) is a non-GAAP financial measure that does not have any prescribed meaning by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. Management believes that this non-GAAP financial measure, when taken together with the corresponding consolidated GAAP measures, increases the transparency of the Company's current results and enables investors to more fully understand trends in its current and future performance. A reconciliation of net loss to earnings before interest, foreign exchange, taxes, stock compensation, dividends on redeemable preferred shares, depreciation and amortization is as follows:
September September
30, 2009 30, 2008
-------------------------
(3 months) (3 months)
(Unaudited) (Unaudited)
Net loss and Comprehensive loss $ (993,442) $ (875,391)
Add
Stock compensation 75,000 47,300
Depreciation of property and equipment 74,274 72,359
Amortization of intangibles 282,365 249,769
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(561,803) (505,963)
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Less (add)
Interest income 13,103 88,003
Foreign exchange gain (loss) (95,298) (31,460)
--------------------------
Earnings before interest, foreign exchange,
taxes, stock compensation, depreciation
and amortization $ (479,608) $ (562,506)
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ESPIAL GROUP INC.
Consolidated Balance Sheet
(in Canadian dollars)
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September 30, December 31,
2009 2008
(unaudited) (unaudited)
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CURRENT ASSETS
Cash and cash equivalents $ 7,910,447 $ 10,476,443
Short-term investments 122,246 122,246
Accounts receivable 3,166,330 2,269,251
Investment tax credits receivable 475,000 363,424
Prepaid expenses 201,056 209,974
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11,875,079 13,441,338
Property & equipment 787,318 899,734
Intangible assets 4,663,565 4,338,814
Goodwill 3,340,808 4,489,077
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$ 20,666,770 $ 23,168,963
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CURRENT LIABILITIES
Operating line $ 800,214 $ -
Accounts payable and accrued liabilities 1,438,454 2,229,241
Deferred revenue 1,860,403 1,270,407
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4,099,071 3,499,648
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COMMITMENTS
SHAREHOLDERS' EQUITY
Share capital 74,859,576 74,859,576
Warrants 164,435 164,435
Contributed surplus 10,427,143 10,249,143
Deficit (68,883,455) (65,603,839)
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16,567,699 19,669,315
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$ 20,666,770 $ 23,168,963
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ESPIAL GROUP INC.
Consolidated Statement of Operations and Comprehensive Loss
(in Canadian dollars except share data)
Three Months Ended Nine Months Ended
September September September September
30, 2009 30, 2008 30, 2009 30, 2008
(unaudited) (unaudited) (unaudited) (unaudited)
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Revenue $ 2,923,521 $ 3,729,476 $ 9,117,045 $ 6,831,237
Cost of revenue 618,372 1,039,177 2,028,714 2,223,208
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Gross margin 2,305,149 2,690,299 7,088,331 4,608,029
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Expenses
Sales and
marketing 1,073,955 1,409,766 3,188,495 3,871,328
General and
administrative 461,387 830,153 1,516,123 1,799,489
Research and
development 1,250,691 1,012,886 4,146,014 2,899,393
Stock compensation
expense 75,000 47,300 178,000 44,800
Depreciation of
property &
equipment 74,177 72,359 213,631 201,595
Amortization of
intangible assets 282,365 249,769 849,249 249,769
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3,217,575 3,622,233 10,091,512 9,066,374
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Loss before other
income (expense) (912,426) (931,934) (3,003,181) (4,458,345)
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Other income
(expenses)
Interest income 12,996 88,003 63,576 334,964
Foreign exchange
gain (loss) (94,012) (31,460) (340,011) 80,052
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(81,016) 56,543 (276,435) 415,016
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Net loss and
comprehensive loss (993,442) (875,391) (3,279,616) (4,043,329)
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Net loss per
common share -
basic and
diluted $ (0.07) $ (0.06) $ (0.23) $ (0.38)
Weighted average
number of common
shares- basic
and diluted 14,101,829 13,583,109 14,101,829 10,757,789
%SEDAR: 00025301E
For further information: Inquiries from financial press or analysts: Carl Smith, Chief Financial Officer, Espial Group Inc., Email: [email protected], Phone: (613) 230-4770; Kirk Edwardson, Director, Marketing, Espial Group Inc., Email: [email protected], Phone: (613) 230-4770 x1145
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