Espial Reports 2014 First Quarter Results
April 23, 2014 --
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."
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.
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)|
|Net income (loss) and Comprehensive loss||$1,028,574||($3,272,165)|
|Depreciation of property and equipment||39,701||49,285|
|Amortization of intangibles||160,770||361,957|
|Net interest income (expense)||(83,707)||(134,362)|
|Foreign exchange gain (loss)||113,781||(223,283)|
|Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization||$1,305,819||($2,416,650)|
Q1 Consolidated Statements of Income (Loss)
|Three months Ended|
|March 31, 2014||March 31, 2013|
|Support and maintenance||1,187,079||904,795|
|Cost of revenue||754,131||513,317|
|Sales and marketing||922,301||1,135,423|
|General and administrative||543,938||588,508|
|Research and development||1,522,097||1,764,309|
|Business restructuring charges||-||1,049,222|
|Amortization of intangible assets||160,770||361,961|
|Income (loss) before other income (expense)||1,071,587||(2,870,681)|
|Foreign exchange gain (loss)||113,781||(223,283)|
|Income (loss) before taxes||1,101,661||(3,228,326)|
|Net income (loss) and comprehensive income (loss)||$||1,028,574||$||(3,272,169)|
Consolidated Balance Sheets
|March 31, 2014||December 31, 2013|
|Cash and cash equivalents||$||7,032,088||$||7,407,093|
|Investment tax credits receivable||387,574||312,027|
|Prepaid expenses and other assets||703,542||502,990|
|Accounts payable and accrued liabilities||$||1,767,764||$||1,872,505|
|Share based payments reserve||12,158,841||12,125,080|
SOURCE ESPIAL GROUP
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