Espial Reports 2013 First Quarter Results
OTTAWA, May 9, 2013 /CNW/ - Espial® Group Inc. ("Espial" or the "Company"), (TSX: ESP), a leader in the delivery of on-demand TV software and services, today announced its first quarter financial results for the three month period ended March 31, 2013.
- Completed acquisition of ANT, which further advances Espial's market leadership in HTML5 user experience across set-top boxes and multi-screen devices.
- Secured new customers including Cisco, Samsung and Humax through the acquisition of ANT.
- Signed a partnership agreement with WiLAN to pursue licensing of certain Espial's patents related to video-over-IP technology.
- Received grant of patent by the USPTO for fast channel change technology
For the three-month period ended March 31, 2013, the Company reported revenues of $2.5 million compared with revenues of $3.7 million for the three months ended March 31, 2012. Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the first quarter of fiscal 2013 was a loss of $2.5 million compared with an income of $0.1 million in the first quarter of fiscal 2012. Included in the quarter's EBITDA was a restructuring charge of $1.1 million related to the acquisition of ANT. Net loss for the quarter was $3.3 million or $0.23 per share, compared with a net loss of $0.4 million last year, or $0.03 per share.
"We're pleased to close the ANT acquisition and excited to have the team join Espial" said Jaison Dolvane, CEO, Espial. "We are now working to integrate the companies and expect to complete this over the next 2 quarters. The acquisition of ANT provides us with a strong set of customers and increased engineering capability to deliver an advanced HTML5 user experience across set-top boxes and multiscreen devices. In Q1, we also continued our initiatives to increase the depth of our intellectual property and develop licensing programs through our partnership with WiLAN. We believe that as service providers and Smart TV manufacturers migrate to IP video services, Espial's products and intellectual property are well positioned to play a key role in the industry. Our customer pipeline remains strong and the new products we release later this year will differentiate us further."
"As a result of the ANT acquisition closing mid-way through the quarter, our first quarter results did not include $993,000 of revenue that would have been included had the acquisition occurred at the beginning of the quarter. In addition, we recorded a $1.1 million one-time acquisition related restructuring charge" said Carl Smith, Chief Financial Officer. "As we noted in our last two conference calls and press releases, we continue to experience a slower pace of roll-outs from our existing European customers. We believe this is related to the prevailing economic challenges in Europe and may continue for some time. Europe notwithstanding, we are seeing increased activity in North America and Asia as those economies gain strength."
Q1 Financial Results
- First quarter revenues were $2,542,059 compared with revenues of $3,650,536 in the same period a year ago. First quarter software license and royalty revenues were $1,389,445 compared to $1,908,236 in the first quarter of fiscal 2012. Professional services for the first quarters of 2013 and 2012 were $247,819 and $962,025 respectively. Maintenance and support revenues for the first quarter were $904,795 compared to $780,275 last year.
- Gross margin for the first quarter of fiscal 2013 was 78% compared with 77% in the first quarter of fiscal 2012.
- Operating expenses in the first quarter of fiscal 2013 were $4,899,423 compared to $3,045,360 in the first quarter of fiscal 2012.
- Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the first quarter of fiscal 2013 was a loss of $2,460,496 compared to income of $112,758 in fiscal 2012. Included in the loss was a restructuring charge of $1,049,222 related to the acquisition of ANT.
- Net loss, which includes non-cash items like depreciation, goodwill and intangibles in the first quarter was $3,272,169 compared to a loss of $358,603 last year.
Cash and cash equivalents on March 31, 2013 was $4,912,034.
A complete set of financial statements and management's discussion and analysis for the period ended March 31, 2013 will be available at http://www.sedar.com.
The Company will be hosting a conference call to discuss the Q1 2013 financial results on May 10, 2013 at 10:30 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 ET on June 9, 2013, at the following numbers and passcode:
- Toll line: +1 416-764-8677, Passcode: 653198
- Toll-free line: +1-888-390-0541, Passcode: 653198
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 us 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, the anticipated synergies of the ANT Plc acquisition and the integration of ANT into the company's operations, 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 Espial's ability to successful integrate ANT's operations into its existing operations, 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 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:
|March 31, 2013||March 31, 2012|
|(3 months)||(3 months)|
|Net loss and Comprehensive loss||($3,272,169)||($358,603)|
|Depreciation of property and equipment||49,285||43,055|
|Amortization of intangibles||361,961||285,466|
|Net interest income (expense)||(134,362)||(120,345)|
|Foreign exchange gain (loss)||(223,283)||(1,038)|
Earnings before interest, foreign exchange, taxes,
stock compensation, depreciation and amortization
SOURCE ESPIAL GROUP