OTTAWA, May 14 /CNW Telbec/ - Espial(R) Group Inc. ("Espial" or the "Company"), (TSX:ESP), a leader in the delivery of TV software, today announced its first quarter financial results for the three month period ended March 31, 2010.
HIGHLIGHTS:
- First quarter revenue of $3.8 million, an increase of 23% from last
year and a record for the Company
- EBITDA income of $0.1 million compare to a loss of $0.8 million last
year
- Introduced Espial TV Browser product to enable Internet video on
Connected TVs and Set-Top Boxes, a market that is expected to grow to
nearly 243 million units annually by 2013
- Announced that Jilin Cable Network, a major Chinese cable operator
providing analog and digital TV services to 3 million subscribers
selected Espial MediaBase Video-on-Demand Platform to power their
Video-On-Demand (VOD), Network Personal Video Recorder (NPVR) and
Timeshift-TV (TSTV) services
For the three-month period ended March 31, 2010, the Company reported revenues of $3.8 million compared to revenues of $3.1 million for the three months ended March 31, 2009. Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the first quarter of fiscal 2010 was $0.1 million compared to a loss of $0.8 million in the first quarter of fiscal 2009. Net loss for the quarter was $0.4 million or $0.03 per share, compared to a net loss of $1.2 million last year, or $0.08 per share.
"We had a good start to the fiscal year," said Jaison Dolvane, President and CEO. "We added new customers and our existing customers continued to deploy our products as they expanded to add additional subscribers and improve take up of Video-On-Demand services. We believe our customers remain in the early stage of growth as many have just recently launched IPTV or hybrid-IP TV solutions that will continue to be rolled out over the next several years. In the first quarter, we also introduced our new Espial TV Browser product to enable consumer-electronics manufacturers and operators to deliver Internet video services like You Tube and premium video services similar to Netflix and Amazon. While we are very pleased to report record revenue and positive EBITDA for the first time, we remain cautious in the near term since the pace of customer deployments may vary significantly from quarter to quarter and as a result our revenue and EBITDA will continue to vary in the near term."
Q1 Financial Results
First quarter revenues were $3,793,983 compared with revenues of $3,083,121 in the same period a year ago. First quarter software license and royalty revenues were $1,888,808 compared to software license and royalty revenues of $2,079,464 in the first quarter of fiscal 2009. Professional services for the first quarters of 2010 and 2009 were $1,152,587 and $233,098 respectively. Maintenance and support revenues for the first quarter were $752,588 compared to $770,559 last year.
Gross margin for the first quarter of fiscal 2010 was 71% compared with 79% in the first quarter of fiscal 2009.
Operating expenses in the first quarter of fiscal 2010 were $2,983,341 compared to $3,650,480 in the first quarter of fiscal 2009.
Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the first quarter of fiscal 2010 was $133,921 compared to a loss of $809,264 in fiscal 2009.
Net loss in the first quarter was $398,191 compared to a loss of $1,182,302 last year.
Cash and cash equivalents at March 31, 2010 was $8,156,978.
The Company will be hosting a conference call to discuss the first quarter financial results on Monday, May 17th, 2010 at 5:30 PM Eastern Standard Time (EST). The phone number to join the results discussion is:
- Toll Free line (Canada/US) - 888-231-8191
- Local/International - 647-427-7450
The playback for the call will be available until midnight on Thursday, June 17th, 2010, at the following numbers and passcode:
- Toll line: 416-849-0833 - passcode: 75163985
- Toll free line: 1-800-642-1687- passcode: 75163985
About Espial (www.espial.com)
Espial is a leading supplier of high performance and open digital and IP TV software and solutions to service providers in the cable, telecommunications, hospitality and consumer electronics industries. Its middleware, video-on-demand and browser solutions provide superior service delivery, advanced service innovation tools and the flexibility to implement diverse pay-TV business models. Over 7 million licenses of its patented software are in use across the world. Espial is headquartered in Ottawa, Canada and has offices in the United States, 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, 2009 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, dividends on redeemable preferred shares, depreciation and amortization is as follows:
March 31 March 31
2010 2009
----------------------------
(3 months) (3 months)
(Unaudited) (Unaudited)
Net loss and Comprehensive loss ($398,191) ($1,182,302)
Add
Stock compensation 80,000 53,000
Depreciation of property and equipment 53,785 65,060
Amortization of intangibles 283,083 283,441
-------------------------------------------------------------------------
18,677 (780,801)
-------------------------------------------------------------------------
Less (add)
Interest income (expense) (3,976) 32,065
Foreign exchange gain (loss) (111,268) (3,602)
----------------------------
----------------------------
Earnings before interest, foreign exchange,
taxes, stock compensation, depreciation
and amortization $133,921 ($809,264)
----------------------------
----------------------------
ESPIAL GROUP INC.
Consolidated Balance Sheets
(in Canadian dollars)
-------------------------------------------------------------------------
March 31, December 31,
2010 2009
(unaudited) (audited)
-------------------------------------------------------------------------
CURRENT ASSETS
Cash and cash equivalents $ 8,156,978 $ 8,711,699
Short-term investments 122,246 122,246
Accounts receivable 2,819,606 1,989,367
Investment tax credits receivable 375,000 550,000
Prepaid expenses 327,948 178,003
-------------------------------------------------------------------------
$ 11,801,778 $ 11,551,315
Property & equipment $ 724,902 $ 767,451
Intangible assets 4,097,399 4,380,482
Goodwill 3,340,808 3,340,808
-------------------------------------------------------------------------
$ 19,964,887 $ 20,040,056
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CURRENT LIABILITIES
Operating line $ 1,000,489 $ 500,044
Accounts payable and accrued liabilities 1,769,763 1,643,717
Deferred revenue 1,681,129 2,064,598
-------------------------------------------------------------------------
$ 4,451,381 $ 4,208,359
-------------------------------------------------------------------------
COMMITMENTS
SHAREHOLDERS' EQUITY
Share capital $ 74,859,576 $ 74,859,576
Warrants 164,435 164,435
Contributed surplus 10,648,844 10,568,844
Deficit (70,159,349) (69,761,158)
-------------------------------------------------------------------------
$ 15,513,506 $ 15,831,697
-------------------------------------------------------------------------
$ 19,964,887 $ 20,040,056
-------------------------------------------------------------------------
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ESPIAL GROUP INC.
Consolidated Statements of Loss and Comprehensive Loss
(in Canadian dollars except share data)
Three Months Ended
-------------------------------------------------------------------------
March 31, March 31,
2010 2009
(unaudited) (unaudited)
-------------------------------------------------------------------------
Revenue $ 3,793,983 $ 3,083,121
Cost of revenue 1,093,589 643,406
-------------------------------------------------------------------------
Gross margin 2,700,394 2,439,715
-------------------------------------------------------------------------
Expenses
Sales and marketing 1,125,391 1,142,263
General and administrative 504,486 543,736
Research and development 936,596 1,562,980
Stock compensation expense 80,000 53,000
Depreciation of property and equipment 53,785 65,060
Amortization of intangible assets 283,083 283,441
-------------------------------------------------------------------------
2,983,341 3,650,480
-------------------------------------------------------------------------
Loss before other income (expense) (282,947) (1,210,765)
-------------------------------------------------------------------------
Other income (expense)
Interest income (expense) (3,976) 32,065
Foreign exchange gain (loss) (111,268) (3,602)
-------------------------------------------------------------------------
(115,244) 28,463
-------------------------------------------------------------------------
NET LOSS AND COMPREHENSIVE LOSS $ (398,191) $ (1,182,302)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net loss per common share -
basic and diluted $ (0.03) $ (0.08)
Weighted average number of common shares
outstanding - basic and diluted 14,101,829 14,101,829
%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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