Espial Reports 2013 Third Quarter Results

OTTAWA, Oct. 22, 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 third quarter financial results for the three month period ended September 30, 2013.

Q3 Espial Highlights

  • Signed a multi-year, multi-million dollar contract with a Tier 1 North American cable operator to deploy Espial RDK software solutions including the Espial G4 Application Framework and Espial G4 User Experience across multi-platform set-top boxes, TVs, Tablets and Smartphones.
  • A leading Asian chipset vendor selected Espial TV Browser to power millions of Smart TVs.
  • 2 Smart TV manufacturers committed to shipping TVs with Espial browser software starting Q4, 2013.
  • Revenue of $3.8 million, a 68% sequential increase over the previous quarter.
  • EBITDA earnings of $0.2 million compared to a loss of $1.5 million in the previous quarter.

"Overall, we are pleased with our financial results for Q3 and with the momentum we picked up with significant customer wins in the service provider and Smart TV markets.  We signed major contracts with a North American Tier 1 Cable operator, one of the industry's leading Smart TV chipset vendors along with 2 global Smart TV manufacturers who will begin shipping in Q4 2013. These contracts are significant financial and industry wins for us" said Jaison Dolvane, CEO, Espial. "Our leadership in HTML5 user experience and RDK solutions - a new set-top software initiative driven by the cable community - have been key factors in securing these recent wins. Our European customers are also beginning to increase investments in upgrading and extending their TV platforms. Overall, we remain optimistic about our business moving forward and feel that Espial is well positioned to capitalize on Service Provider and Smart TV opportunities to build and deliver their next generation video & TV services."

Financial Summary

For the three-month period ended September 30, 2013, the Company reported revenues of $3.8 million compared with revenues of $3.1 million for the three months ended September 30, 2012. Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the third quarter of fiscal 2013 was earnings of $0.2 million compared with a loss of $0.2 million in the third quarter of fiscal 2012. Net loss for the quarter was $0.3 million or $0.02 per share, compared with a net loss of $0.8 million last year, or $0.06 per share.

Q3 Financial Results

  • Revenue for the third quarter of fiscal 2013 was $3,825,306 compared with revenues of $3,070,677 in the same period a year ago. Third quarter software license and royalty revenues were $2,209,553 compared with software license and royalty revenues of $1,924,453 in the third quarter of fiscal 2012. Professional services revenue for the third quarters of 2013 and 2012 were $484,676 and $275,816 respectively.  Maintenance and support revenues for the third quarter were $1,131,077 compared with $870,408 last year.
  • European revenues were $1,114,031 in the third quarter of 2013 compared to $1,916,897 in 2012. Asia revenues were $1,876,136 in the third quarter of 2013 compared to $354,998 in 2012.  North American revenues were $835,139 in the third quarter of 2013 compared to $798,782 in 2012.
  • Gross margin for the third quarter of fiscal 2013 was 82 percent compared with 83 percent in the third quarter of fiscal 2012.
  • Operating expenses for the third quarter of fiscal 2013 were $3,185,697 compared with $3,127,787 in the third quarter of fiscal 2012.
  • Earnings for the third quarter of fiscal 2013 before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) was $231,914 compared with a loss of $183,730 in the third quarter of fiscal 2012.
  • Net loss in the third quarter was $273,284 compared with a loss of $778,920 last year.

Cash and cash equivalents on September 30, 2013, was $3,003,045.

A complete set of financial statements for the period ended September 30, 2013 will be available at http://www.espial.com.

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, anticipated investments by our European customers in upgrading and extending their TV platforms,  Espial's business moving forward and Espial's ability to capitalize on Service Provider and Smart TV opportunities to build and deliver their next generation video & TV services 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 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:

  September 30, 2013 September 30, 2012
  (3 months) (3 months)
  (unaudited) (unaudited)
     
Net loss and Comprehensive loss $(273,284) $(778,920)
Add    
  Stock compensation 27,167 49,613
  Depreciation of property and equipment 51,652 58,225
Amortization of intangibles 184,912 286,126
  (9,553) (384,956)
Less (add)    
Net interest income (expense) (131,616) (111,208)
Foreign exchange gain (loss) (109,851) (90,018)
Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization $  231,914 $(183,730)

 

SOURCE ESPIAL GROUP



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