Espial Reports 2009 Fourth Quarter and Fiscal Year Results
OTTAWA, Feb. 25 /CNW Telbec/ - Espial(R) Group Inc. ("Espial" or the "Company"), (TSX:ESP), a leader in the delivery of on-demand TV software and services, today announced its fourth quarter and fiscal year financial results for the three and twelve month periods ended December 31, 2009.
2009 HIGHLIGHTS:
- Annual revenue of $12.2 million, an increase of 21% from last year
and a record for the Company.
- Announced that Chongqing Cable TV Network - a Chinese cable operator
providing analog and digital TV services to 4.2 million subscribers -
selected Espial MediaBase to power their on-demand services including
Video-On-Demand (VOD), Network PVR (Personal Video Recorder) and
Timeshift-TV services.
- Announced Com Hem AB, Sweden's largest cable operator with
1.8 million homes served, launched next generation hybrid IP-Cable
digital TV and VOD services using Espial's IPTV middleware.
- Announced Tele2 in the Netherlands selected Espial's IPTV middleware
for its next generation television platform which provides advanced
services including linear TV, Video-On-Demand, High Definition, PVR
and interactive services.
- Announced Invitel (previously Vivendi Telecom) in Hungary has
launched Video-On Demand, Network PVR and Timeshift-TV services using
Espial's MediaBase VOD Platform.
- Announced reseller agreement with Power & Tel to distribute Espial
MediaBase VOD Platform to telcos in North America.
- Announced 4 new wins with LeRu Telephone, Granby Telephone, Seneca
Telephone and McDonald County Telephone in North America for Espial
MediaBase.
- Announced Sogetel, the largest independent telephone company in
Quebec, Canada is preparing to deliver IP-based television and Video
On-Demand services using Espial IPTV Middleware and Espial MediaBase.
- Announced Buffalo Inc. in Japan selected Espial's set-top box (STB)
middleware for their recently launched hybrid set-top box
providing digital TV (satellite, terrestrial and IP) and on-demand
services.
- Released new versions of our flagship Video-On-Demand and IPTV
middleware products.
For the year ended December 31, 2009, the Company reported revenues of $12.2 million compared to revenues of $10.1 million for the year ended December 31, 2008, a 21% annual growth in revenues. For the three-month period ended December 31, 2009, the Company reported revenues of $3.1 million compared to revenues of $3.3 million for the three months ended December 31, 2008.
Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the fourth quarter of fiscal 2009 was a loss of $0.3 million compared to a loss of $1.2 million in the fourth quarter of fiscal 2008. For the year ended December 31, 2009, EBITDA was a loss of $2.1 million compared to an EBITDA loss of $5.2 million in 2008, a 60% annual improvement in EBITDA. Net loss, which includes non-cash items like depreciation, stock compensation and amortization of intangibles, for the quarter was $0.9 million or $0.06 per share, compared to a net loss of $1.3 million last year, or $0.09 per share. Net loss for fiscal 2009 was $4.2 million compared to a net loss of $5.4 million in 2008.
"We are very pleased with our 2009 results and our market momentum," said Jaison Dolvane, President and CEO. "We demonstrated revenue growth with a significant improvement in our EBITDA during one of the worst economic periods in recent times. Throughout 2009, we announced a series of new customer wins and deployments across various regions - these strategic wins testify to the value and strength of our products. This provides us with excellent global reference accounts for our target markets including cable operators, IPTV operators and consumer electronics manufacturers."
Q4 Financial Results
- Fourth quarter revenues were $3,100,699 compared with revenues of
$3,279,368 in the same period a year ago. Fourth quarter software
license and royalty revenues were $1,496,120 compared to software
license and royalty revenues of $2,377,114 in the fourth quarter of
fiscal 2008. Professional services for the fourth quarters of 2009
and 2008 were $892,638 and $410,943 respectively. Maintenance and
support revenues for the fourth quarter were $711,941 compared to
$491,311 last year.
- Gross margins for the fourth quarter of fiscal 2009 were 70% compared
with 79% in the fourth quarter of fiscal 2008.
- Operating expenses in the fourth quarter of fiscal 2009 were
$2,983,357 compared to $4,160,399 in the fourth quarter of fiscal
2008.
- Earnings before interest, foreign exchange, taxes, stock
compensation, depreciation and amortization (EBITDA) for the fourth
quarter of fiscal 2009 was a loss of $311,946 compared to a loss of
$1,241,077 in fiscal 2008.
- Net loss, which includes non-cash items like depreciation, goodwill
and intangibles, in the fourth quarter was $877,704 compared to a
loss of $1,325,525 last year.
Fiscal 2009 Financial Results
- Total revenues for the fiscal year ended December 31, 2009 were
$12,217,744 compared with revenues of $10,110,605, in the same period
a year ago. Software license and royalty revenues for the 2009 fiscal
year were $7,250,697 compared to software license and royalty
revenues of $5,832,967 in fiscal 2008. Professional services for the
fiscal years of 2009 and 2008 were $1,896,446 and $2,623,004
respectively. Maintenance and support revenues for the fiscal year
ended December 31, 2009 were $3,070,601 compared to $1,654,634 last
year.
- Gross margins for the 2009 fiscal year were 76% compared with 71% in
fiscal 2008.
- Operating expenses for the 2009 fiscal year were $13,080,992 compared
to $13,226,774 in fiscal 2008.
- Earnings before interest, foreign exchange, taxes, stock
compensation, dividends on redeemable preferred shares, depreciation
and amortization (EBITDA) for the fiscal year ended December 31, 2009
was a loss of $2,081,092 compared to a loss of $5,203,257 in fiscal
2008.
- Net loss in the 2009 fiscal year was $4,157,319 compared to a loss of
$5,368,853 in 2008.
- Cash and cash equivalents at December 31, 2009 was $8,711,699.
The Company will be hosting a conference call to discuss the fourth
quarter financial results on February 25, 2010 at 5:00 PM Eastern Standard
Time (EST). The phone number to join the results discussion is:
- Toll free line (Canada-U.S.) - 888-231-8191
- Toll line (international/local) - 647-427-7450
The playback for the call will be available until March 25, 2010 at the
following numbers and passcode:
- Toll line: 416-849-0833 - passcode: 58677756
- Toll free line: 1-800-642-1687 - passcode: 58677756
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 Ottawa, Canada with offices around the world in USA, Europe and Asia. For more information please call +1.613.230.4770 or visit www.espial.com.
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 December 31, 2008 and once filed its 2009 report and in its most recent quarterly report filed on SEDAR at www.sedar.com. If any of these risks or uncertainties were to materialize, or if the factors and assumptions underlying the forward-looking information were to prove incorrect, actual results could vary materially from those that are expressed or implied by the forward-looking information contained herein. Espial assumes no obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
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, depreciation and amortization is as follows:
December 31 December 31 December 31 December 31
2009 2008 2009 2008
------------ ------------ ------------ ------------
(3 months) (3 months) (12 months) (12 months)
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net loss and
Comprehensive loss ($877,704) ($1,325,525) ($4,157,319) ($5,368,853)
Add
Stock compensation 141,701 69,300 319,701 114,100
Depreciation of
property and equipment 81,218 81,359 294,937 282,955
Amortization of
intangibles 283,081 172,417 1,132,332 422,186
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(371,704) (1,002,449) (2,410,349) (4,549,612)
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Less (add)
Interest income 11,878 38,379 75,510 373,342
Foreign exchange gain
(loss) (71,636) 200,249 (404,767) 280,303
---------------------------------------------------
Earnings before interest,
foreign exchange, taxes,
stock compensation,
depreciation and
amortization ($311,946) ($1,241,077) ($2,081,092) ($5,203,257)
---------------------------------------------------
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ESPIAL GROUP INC.
Consolidated Balance Sheet
(in Canadian dollars)
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As at As at
December 31, December 31,
2009 2008
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CURRENT ASSETS
Cash and cash equivalents $ 8,711,699 $10,476,443
Short-term investments 122,246 122,246
Accounts receivable 1,989,367 2,269,251
Investment tax credits receivable 550,000 363,424
Prepaid expenses and other assets 178,003 209,974
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11,551,315 13,441,338
Property and equipment 767,451 899,734
Intangible assets 4,380,482 4,338,814
Goodwill 3,340,808 4,489,077
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$20,040,056 $23,168,963
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CURRENT LIABILITIES
Operating line $ 500,044 $ -
Accounts payable and accrued liabilities 1,643,717 2,229,241
Deferred revenue 2,064,598 1,270,407
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4,208,359 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 10,568,844 10,249,143
Deficit (69,761,158) (65,603,839)
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15,831,697 19,669,315
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$20,040,056 $23,168,963
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ESPIAL GROUP INC.
Consolidated Statement of Loss and Comprehensive Loss
(in Canadian dollars except share data)
December 31 December 31 December 31 December 31
2009 2008 2009 2008
------------ ------------ ------------ ------------
(3 months) (3 months) (12 months) (12 months)
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue $3,100,699 $3,279,368 $12,217,744 $10,110,605
Cost of revenue 935,288 681,411 2,964,814 2,904,618
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Gross margin 2,165,411 2,597,957 9,252,930 7,205,987
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Expenses
Sales and marketing 1,056,416 1,496,305 4,245,989 5,367,633
General and
administrative 491,684 681,880 2,008,775 2,481,369
Research and
development 929,257 1,659,138 5,079,258 4,558,531
Stock compensation 141,701 69,300 319,701 114,100
Depreciation of
property and
equipment 81,218 81,359 294,937 282,955
Amortization of
intangibles 283,081 172,417 1,132,332 422,186
-------------------------------------------------------------------------
2,983,357 4,160,399 13,080,992 13,226,774
-------------------------------------------------------------------------
Loss before other
income (expense) (817,946) (1,562,442) (3,828,062) (6,020,787)
-------------------------------------------------------------------------
Other income
(expenses)
Interest income 11,878 38,379 75,510 373,342
Foreign exchange
gain (loss) (71,636) 200,249 (404,767) 280,303
Loss on disposal
of property
and equipment - (1,711) - (1,711)
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(59,758) 236,917 (329,257) 651,934
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NET LOSS AND
COMPREHENSIVE LOSS ($877,704) ($1,325,525) ($4,157,319) ($5,368,853)
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Net loss per common
share - basic and
diluted ($0.06) ($0.09) ($0.29) ($0.46)
Weighted average
number of common
shares - basic and
diluted 14,101,829 14,101,829 14,101,829 11,604,583
%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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