Espial Reports 2013 Second Quarter Results

OTTAWA, Aug. 1, 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 second quarter financial results for the three month period ended June 30, 2013.

Q2 Espial Highlights

  • Pace - the world's largest set-top box manufacturer - and Espial signed co-selling and marketing agreement to jointly deliver an advanced RDK & HTML5 based set-top box solution integrating Espial's STB client software with Pace set-top boxes.
  • Cisco showcased Espial's multi-screen applications integrated with Cisco RDK-based set-top boxes at the Cable Show in Washington, DC.
  • Completed Espial TV Browser integration with 2 new Smart TV manufacturers that will begin shipments later this year.
  • Espial was recognized for its leadership in HbbTV, and elected as marketing co-chair to the HbbTV, a leading global standards organization.
  • Harvard, a leading UK-based consumer electronics company, started shipping set-top boxes powered by the Espial STB Client under their Goodmans and View21 brands.

"Espial continues to gain recognition in delivering advanced HTML5 user experiences on set-top boxes and Smart TVs. We are building this leadership position with our high performance HTML5 clients and intelligent cloud solutions, new partnerships and customer deployments." said Jaison Dolvane, CEO, Espial. "Globally, the majority of the service providers and Smart TV manufacturers are looking to adopt intelligent cloud and HTML5 technologies as essential components in their next generation TV platforms.  We are well positioned to capitalize on this trend.  In Europe, we continue to experience lower expansion revenues from our current telecom operator customers due to the overall economy; however cable operators in that region are beginning to show positive signs of investing in next generation IP services."

Financial Summary

For the three-month period ended June 30, 2013, the Company reported revenues of $2.3 million compared with revenues of $3.8 million for the three months ended June 30, 2012. Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the second quarter of fiscal 2013 was a loss of $1.5 million compared with earnings of $0.2 million in the second quarter of fiscal 2012. Net loss for the quarter was $2.1 million or $0.15 per share, compared with a net loss of $0.3 million last year, or $0.02 per share.

"Year over year, we experienced a significant decrease in our European revenue" said Carl Smith, Chief Financial Officer.  "Our European revenue for this quarter decreased to $1.0 million from $2.4 million last year due primarily to slower roll-outs from existing customers. Our customers have indicated this is a temporary situation and is a result of constrained capital budgets due to the economy.  Europe notwithstanding, we are seeing increased activity in North America and Asia.  We are also seeing increased royalties from Smart TV shipments and expect this to continue to grow into 2014".

Q2 Financial Results

  • Revenue for the second quarter of fiscal 2013 was $2,279,506 compared with revenues of $3,842,525 in the same period a year ago. Second quarter software license and royalty revenues were $949,471 compared with software license and royalty revenues of $2,186,765 in the second quarter of fiscal 2012. Professional services revenue for the second quarters of 2013 and 2012 were $254,777 and $742,191 respectively.  Maintenance and support revenues for the second quarter were $1,075,258 compared with $913,569 last year.

  • Gross margin for the second quarter of fiscal 2013 was 75 percent compared with 79 percent in the second quarter of fiscal 2012.

  • Operating expenses for the second quarter of fiscal 2013 were $3,738,296 compared with $3,154,572 in the second quarter of fiscal 2012.

  • Earnings for the second quarter of fiscal 2013 before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) was a loss of $1,539,481 compared with earnings of $233,646 in the second quarter of fiscal 2012.

  • Net loss in the second quarter was $2,132,914 compared with a loss of $296,533 last year.

Cash and cash equivalents on June 30, 2013, was $3,602,648.

A complete set of financial statements and management's discussion and analysis for the period ended June 30, 2013 will be available at http://www.sedar.com.

Conference Call

The Company will be hosting a conference call to discuss the Q2 2013 financial results on August 1, 2013 at 5:00 p.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 September 2, 2013, at the following numbers and passcode:

  • Toll line: +1 416-764-8677, Passcode:  275817
  • Toll-free line: +1-888-390-0541, Passcode: 275817

About Espial (www.espial.com)

Espial is a leading supplier of digital TV and IPTV software and solutions to service providers 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 successfully 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:

           June 30, 2013 June 30, 2012
  (3 months) (3 months)
  (unaudited) (unaudited)
     
Net loss and Comprehensive loss $(2,132,914) $(296,533)
Add    
Stock compensation 37,268 32,686
Depreciation of property and equipment 51,652 45,896
Amortization of intangibles 393,556 286,785
  (1,650,438) 68,834
Less (add)    
Net interest income (expense) (133,210) (112,859)
Foreign exchange gain (loss) 22,253 (51,953)
Earnings before interest, foreign exchange, taxes, stock
compensation, depreciation and amortization
$(1,539,481) $233,646

 

 

 

SOURCE ESPIAL GROUP



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