OTTAWA,
April 23, 2014 /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,
2014.
Espial Q1 Highlights
- Q1 revenue increased 96% to a record $5.0 million from $2.5
million last year.
- Record EBITDA increased to an income of $1.3 million
- Solid shipments in Q1 of set-top box and devices to our Service
Provider and Smart TV customers globally
- Participated in leading cable industry panels on RDK &
HTML5 at TV Connect in London, UK
and the Lightreading Cable Event in Denver, Colorado
- Secured 2 new wins for Espial multiscreen solutions with
several European service provider customers to introduce TV
everywhere services.
"We had a strong start to fiscal 2014. In
Q1, we saw solid set-top box and Smart TV deployments and new
project wins from both our service provider and consumer electronic
customers." said Jaison Dolvane, CEO, Espial. "Cable
operators are looking to adopt open, cloud based solutions like RDK
and HTML5, so they can achieve rapid service innovation and deliver
rich user experiences. In line with our strategy, we continue
to gain the attention of major cable operators worldwide and made
good progress developing our sales pipeline in Q1. We are very
pleased with our recent quarterly results and believe we remain
well positioned to capitalize on the opportunities ahead."
Financial Summary
For the three-month period ended March 31,
2014, the Company reported revenues of $5.0 million compared with revenues
of $2.5 million for the
three months ended March 31, 2013. Earnings before interest,
foreign exchange, taxes, stock compensation, depreciation and
amortization (EBITDA) for the first quarter of fiscal 2014
was $1.3 million compared with a
loss of $2.4 million in the
first quarter of fiscal 2013. Net income for the quarter
was $1.0 million or
$0.05 per share, compared with a
net loss of $3.3
million last year, or $0.23 per share.
Q1 Financial Results
- First quarter revenues were $4,974,824 compared with revenues of $2,542,059 in the same period a year ago. First
quarter software license and royalty revenues were $3,427,351 compared to $1,389,445 in the first quarter of fiscal
2013. Professional services for the first quarters of 2014 and
2013 were $360,394 and $247,819 respectively. Maintenance and
support revenues for the first quarter were $1,187,079 compared to $904,795 last year.
- North American revenues were $1,859,999 in the first quarter of fiscal 2014
compared to $897,394 in 2013.
Asia revenues were $1,014,449 in the first quarter of 2014 compared
to $897,385 in 2013. European
revenues were $2,100,376 in the first
quarter of 2014 compared to $747,280
in 2013.
- Gross margin for the first quarter of fiscal 2014 was 85%
compared with 80% in the first quarter of fiscal 2013.
- Operating expenses in the first quarter of fiscal 2014 were
$3,149,105 compared to $4,899,419 in the first quarter of fiscal
2013.
- Earnings before interest, foreign exchange, taxes, stock
compensation, depreciation and amortization (EBITDA) for the first
quarter of fiscal 2014 was $1,305,819
compared to a loss of $2,416,649 in
fiscal 2013. Included in last year's loss was a restructuring
charge of $1,049,222 related to the
acquisition of ANT.
- Net income, which includes non-cash items like depreciation,
goodwill and intangibles in the first quarter of fiscal 2014 was
$1,028,574 compared to a loss of
$3,272,165 last year.
Cash and cash equivalents on March 31, 2014 was $7,032,088.
A complete set of financial statements and
management's discussion and analysis for the period ended
March 31, 2014 will be available at
http://www.sedar.com.
Conference Call
The Company will be hosting a conference call to
discuss the Q1 2014 financial results on April 24, 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 ET on May 23, 2014, at the following numbers and
passcode:
- Toll line: +1 416-764-8677, Passcode: 425739
- Toll-free line: +1-888-390-0541, Passcode: 425739
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 and its Annual
Information Form for the fiscal year ended December 31, 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:
|
March 31,
2014 |
|
March 31,
2013 |
|
(3
months) |
|
(3
months) |
|
(unaudited) |
|
(unaudited) |
|
|
|
|
Net income (loss) and Comprehensive
loss |
$1,028,574 |
|
($3,272,165) |
Add |
|
|
|
|
Stock compensation |
33,761 |
|
42,782 |
|
|
Depreciation of property and
equipment |
39,701 |
|
49,285 |
Amortization of intangibles |
160,770 |
|
361,957 |
|
1,262,806 |
|
(2,818,141) |
Less (add) |
|
|
|
Net interest income (expense) |
(83,707) |
|
(134,362) |
Foreign exchange gain (loss) |
113,781 |
|
(223,283) |
Income taxes |
(73,087) |
|
(43,846) |
Earnings before interest, foreign
exchange, taxes, stock compensation, depreciation and
amortization |
$1,305,819 |
|
($2,416,650) |
Q1 Consolidated Statements of Income
(Loss)
|
Three months Ended |
|
March 31,
2014 |
|
March 31, 2013 |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
Software |
$ |
3,427,351 |
|
$ |
1,389,445 |
|
Professional services |
|
360,394 |
|
|
247,819 |
|
Support and maintenance |
|
1,187,079 |
|
|
904,795 |
Revenue |
|
4,974,824 |
|
|
2,542,059 |
Cost of revenue |
|
754,131 |
|
|
513,317 |
Gross margin |
|
4,220,693 |
|
|
2,028,742 |
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
Sales and marketing |
|
922,301 |
|
|
1,135,423 |
|
General and administrative |
|
543,938 |
|
|
588,508 |
|
Research and development |
|
1,522,097 |
|
|
1,764,309 |
|
Business restructuring
charges |
|
- |
|
|
1,049,222 |
|
Amortization of intangible
assets |
|
160,770 |
|
|
361,961 |
|
|
3,149,106 |
|
|
4,899,423 |
Income (loss) before
other income (expense) |
|
1,071,587 |
|
|
(2,870,681) |
|
Interest income |
|
5,075 |
|
|
7,718 |
|
Foreign exchange gain (loss) |
|
113,781 |
|
|
(223,283) |
|
Interest expense |
|
(88,782) |
|
|
(142,080) |
Income (loss) before
taxes |
|
1,101,661 |
|
|
(3,228,326) |
Income taxes |
|
(73,087) |
|
|
(43,843) |
Net income (loss) and
comprehensive income (loss) |
$ |
1,028,574 |
|
$ |
(3,272,169) |
Consolidated Balance Sheets
|
March 31, 2014 |
|
December 31, 2013 |
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
7,032,088 |
|
$ |
7,407,093 |
|
Accounts receivable |
|
2,472,045 |
|
|
2,057,222 |
|
Investment tax credits
receivable |
|
387,574 |
|
|
312,027 |
|
Prepaid expenses and other
assets |
|
703,542 |
|
|
502,990 |
|
|
10,595,249 |
|
|
10,279,332 |
|
|
|
|
|
|
Equipment |
|
506,762 |
|
|
539,348 |
Intangible assets |
|
1,963,298 |
|
|
2,099,398 |
Goodwill |
|
3,340,808 |
|
|
3,340,808 |
|
$ |
16,406,117 |
|
$ |
16,258,886 |
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
Accounts payable and accrued
liabilities |
$ |
1,767,764 |
|
$ |
1,872,505 |
|
Provisions |
|
292,838 |
|
|
281,813 |
|
Deferred revenue |
|
3,884,442 |
|
|
4,052,700 |
|
Term Debt |
|
1,482,619 |
|
|
2,442,056 |
|
|
7,427,663 |
|
|
8,649,074 |
Provisions |
|
295,553 |
|
|
363,132 |
Total Liabilities |
|
7,723,216 |
|
|
9,012,206 |
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
Share capital |
|
78,283,061 |
|
|
77,781,292 |
|
Warrants |
|
1,308,121 |
|
|
1,436,004 |
|
Share based payments reserve |
|
12,158,841 |
|
|
12,125,080 |
|
Deficit |
|
(83,067,122) |
|
|
(84,095,696) |
|
|
8,682,901 |
|
|
7,246,680 |
|
$ |
16,406,117 |
|
$ |
16,258,886 |
SOURCE ESPIAL GROUP