OTTAWA, Feb. 26, 2014 /CNW/ - February 26, 2014 - Espial® 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, 2013.
Espial Q4 Highlights
- Announced a major Tier 1 North American cable operator win for Espial's RDK and HTML5 user experience (UX) solutions.
- Launched new on demand-services with Telenor owned Canal Digital Kabel, Norway's largest cable operator.
- Announced a reseller deal for the Espial TV Browser with a leading, global Smart TV chipset manufacturer who started shipments with 2 new major Smart TV consumer electronic brands.
- Q4 revenue increased 44% to $3.9 million from $2.7 million last year.
- Q4 EBITDA increased to income of $0.6 million from a loss of $0.9 million last year.
"We had a strong Q4 and a good finish to 2013. In 2013, we continued to invest in innovating around our RDK software and HTML5 user experience solutions" said Jaison Dolvane, CEO, Espial. "We announced a major cable operator win in Q4 2013 and continued to grab the attention of some of the world's largest cable operators with our sales and marketing efforts. Cable operators need open, cloud-based service platforms, using HTML5, to enable rapid service innovation and compete effectively against new, more nimble Internet competitors. As we move into 2014, we do so with a strong product portfolio, continued R&D innovation and a solid sales pipeline."
Fourth Quarter Financial Summary
For the three-month period ended December 31, 2013, the Company reported revenues of $3.9 million compared to revenues of $2.7 million for the three months ended December 31, 2012. Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the fourth quarter of fiscal 2013 was income of $0.6 million, compared to a loss of $0.9 million in the fourth quarter of fiscal 2012. Net income, which includes non-cash items like depreciation, stock compensation and amortization of intangibles, for the quarter was $0.1 million or $0.01 per share, compared to a net loss of $1.3 million last year, or $0.09 per share.
Q4 Financial Results
- Fourth quarter revenues were $3,902,541 compared with revenues of $2,716,779 in the same period a year ago. Fourth quarter software license and royalty revenues were $2,482,863 compared to $1,517,179 in the fourth quarter of fiscal 2012. Professional services for the fourth quarters of 2013 and 2012 were $328,477 and $221,607 respectively. Maintenance and support revenues for the fourth quarter were $1,091,201 compared to $977,992 last year.
- North American revenues were $1,717,493 in the fourth quarter of 2013 compared to $838,661 in 2012. Asia revenues were $892,517 in the fourth quarter of 2013 compared to $563,747 in 2012. European revenues were $1,292,531 in the fourth quarter of 2013 compared to $1,314,391 in 2012
- Gross margin for the fourth quarter of fiscal 2013 was 81% compared with 71% in the fourth quarter of fiscal 2012.
- Operating expenses in the fourth quarter of fiscal 2013 were $2,845,056 compared to $3,211,461 in the fourth quarter of fiscal 2012.
- Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the fourth quarter of fiscal 2013 was income of $576,690 compared to a loss of $910,636 in fiscal 2012.
- Net income, which includes non-cash items like depreciation, goodwill and intangibles, in the fourth quarter was $148,944 compared to a loss of $1,273,082 last year.
Fiscal 2013 Financial Results
- Total revenues for the fiscal year ended December 31, 2013 were $12,549,412 compared with revenues of $13,280,518, in the same period a year ago. Software license and royalty revenues for the 2013 fiscal year were $7,031,332 compared to $7,536,633 in fiscal 2012. Professional services for the fiscal years of 2013 and 2012 were $1,315,749 and $2,201,640 respectively. Maintenance and support revenues for the fiscal year ended December 31, 2013 were $4,202,331 compared to $3,542,244 last year.
- North American revenues were $4,262,957 in the 2013 fiscal year compared to $2,833,563 in 2012. Asia revenues were $4,125,156 in the 2013 fiscal year compared to $2,524,494 in 2012. European revenues were $4,161,299 in the 2013 fiscal year compared to $7,922,460 in 2012.
- Gross margin for the 2013 fiscal year was 82% compared with 78% in fiscal 2012.
- Operating expenses for the 2013 fiscal year were $14,668,472 compared to $12,539,180 in fiscal 2012. Included in the fiscal 2013 year operating expenses is a restructuring charge and integrations costs related to the acquisition of ANT
- Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the fiscal year ended December 31, 2013 was a loss of $2,960,261 compared to a loss of $747,962 in fiscal 2012.
- Net loss in the 2013 fiscal year was $5,529,425 compared to a loss of $2,707,139 in 2012.
Cash, restricted cash and cash equivalents on December 31, 2013, was $7,407,093.
A complete set of financial statements and management's discussion and analysis for the period ended December 31, 2013, will be available at http://www.sedar.com.
Conference Call
The Company will be hosting a conference call to discuss the Q4 and fiscal year 2013 financial results on February 27, 2014 at 10:00 a.m. Eastern Time (ET). The phone number to join the results discussion is:
- Toll free line (Canada/US) - +1 888-390-0605
- Toll line (international/local) - +1 416-764-8609
The playback for the call will be available until 11:59pm EST on March 25, 2014, at the following numbers and passcode:
- Toll line: +1 416-764-8677, Passcode: 657861
- Toll-free line: +1-888-390-0541, Passcode: 657861
About Espial (www.espial.com)
Espial is a leading supplier of digital TV and IPTV software and solutions to cable MSOs and telecommunications operators as well as consumer electronics manufacturers. Espial's middleware, video-on-demand, and browser products power a diverse range of pay-TV and Internet TV business models. Over 35 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. Visit www.espial.com or contact via phone at +1 613 230 4770.
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 these terms or other similar expressions concerning matters that are not historical facts. In particular, statements or assumptions about, , economic conditions, benefits of new customer and partner relationships, future opportunities for the company and products and any other statements regarding Espial's objectives (and strategies to achieve such objectives), 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 known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those in the forward-looking statements or could cause our current objectives and strategies to change, including but not limited to changing conditions and other risks associated with the on-demand TV software industry and the market segments in which Espial operates, competition, Espial's ability to effectively develop its distribution channels and generate increased demand for its products, economic conditions, technological change, unanticipated changes in our costs, regulatory changes, litigation, the emergence of new opportunities, many of which are beyond our control and current expectation or knowledge.
Additional risks and uncertainties affecting Espial can be found in Management's Discussion and Analysis of Results of Operations and Financial Condition for the fiscal year ended December 31, 2012 and 2013 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 and our current objectives or strategies may change. Espial assumes no obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
Non-IFRS Financial Measures
Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) is a non-IFRS financial measure that does not have any prescribed meaning by IFRS and is therefore unlikely to be comparable to similar measures presented by other issuers. Management believes that this non-IFRS financial measure, when taken together with the corresponding consolidated IFRS 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:
December 31, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2012 |
||||||
(3 months) | (3 months) | (12 months) | (12 months) | ||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||
Net loss and Comprehensive loss | $ 148,943 | ($1,273,082) | ($ 5,529,421 | ($2,707,139) | |||||
Add | |||||||||
Stock compensation | 36,751 | 37,732 | 143,969 | 141,488 | |||||
Depreciation of property and equipment | 59,569 | 60,743 | 212,158 | 207,919 | |||||
Amortization of intangibles | 161,460 | 288,196 | 1,101,885 | 1,146,573 | |||||
406,723 | (886,411) | (4,071,413) | (1,211,159) | ||||||
Less (add) | |||||||||
Net interest income (expense) | (147,836) | (125,068) | (547,024) | (469,481) | |||||
Foreign exchange gain (loss) | 33,241 | 149,293 | (277,641) | 6,284 | |||||
Income tax | (55,371) | - | (286,483) | - | |||||
Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization | $ 576,689 | ($910,636) | ($ 2,960,261) | ($747,962) |
Q4 Consolidated Statements of Income (Loss)
Three months ended December 31, 2013 |
Three months ended December 31, 2012 |
|||||
(Unaudited) | (Unaudited) | |||||
Revenue | ||||||
Software | $ | 2,482,863 | $ | 1,517,179 | ||
Professional services | 328,477 | 221,607 | ||||
Support and maintenance | 1,091,201 | 977,992 | ||||
Total Revenue | 3,902,541 | 2,716,779 | ||||
Cost of revenue | 738,575 | 802,624 | ||||
Gross margin | 3,163,966 | 1,914,155 | ||||
Expenses | ||||||
Sales and marketing | 710,362 | 978,995 | ||||
General and administrative | 394,635 | 360,878 | ||||
Research and development | 1,578,599 | 1,583,393 | ||||
Business restructuring charges | - | - | ||||
Amortization of Intangible assets | 161,460 | 288,196 | ||||
2,845,056 | 3,211,462 | |||||
Loss before other expense | 318,910 | (1,297,307) | ||||
Interest income | 3,360 | 14,328 | ||||
Foreign exchange gain | 33,241 | 149,293 | ||||
Interest expense | (151,196) | (139,396) | ||||
Income (loss) before tax | 204,315 | (1,273,082) | ||||
Taxes | (55,371) | - | ||||
Net income (loss) | $ | 148,944 | $ | (1,273,082) |
Consolidated Balance Sheets
December 31, 2013 (unaudited) |
December 31, 2012 (unaudited) |
|||||
CURRENT ASSETS | ||||||
Cash and cash equivalents | $ | 7,407,093 | $ | 3,055,644 | ||
Restricted cash | - | 8,164,551 | ||||
Accounts receivable | 2,057,222 | 1,758,089 | ||||
Investment tax credits receivable | 312,027 | 300,000 | ||||
Prepaid expenses and other assets | 502,990 | 212,722 | ||||
10,279,332 | 13,491,006 | |||||
Equipment | 539,348 | 609,088 | ||||
Intangible assets | 2,099,398 | 1,032,409 | ||||
Goodwill | 3,340,808 | 3,340,808 | ||||
$ | 16,258,886 | $ | 18,473,311 | |||
CURRENT LIABILITIES | ||||||
Operating line | $ | - | $ | 3,010,192 | ||
Accounts payable and accrued liabilities | 1,872,505 | 1,869,932 | ||||
Provisions | 281,813 | - | ||||
Deferred revenue | 4,052,700 | 1,327,484 | ||||
Term Debt | 2,442,056 | - | ||||
8,649,074 | 6,207,608 | |||||
Term debt | - | 3,256,604 | ||||
Provisions | 363,132 | - | ||||
Total Liabilities | 9,012,206 | 9,464,212 | ||||
COMMITMENTS | ||||||
SHAREHOLDERS' EQUITY | ||||||
Share capital | 77,781,292 | 74,861,877 | ||||
Warrants | 1,436,004 | 732,382 | ||||
Share based payments reserve | 12,125,080 | 11,981,111 | ||||
Deficit | (84,095,696) | (78,566,271) | ||||
7,246,680 | 9,009,099 | |||||
$ | 16,258,886 | $ | 18,473,311 |
SOURCE: ESPIAL GROUP
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For inquiries from the financial press or analysts, contact:
Carl Smith
Chief Financial Officer
Espial Group Inc.
Email: [email protected]
Phone: +1 613-230-4770
Kirk Edwardson
Director, Marketing
Espial Group Inc.
Email: [email protected]
Phone: +1-613-230-4770 x1145
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