Espial Reports 2013 Second Quarter Results

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 51,652 45,896
equipment

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

ESPIAL GROUP

CONTACT: For inquiries from the financial press or analysts, contact: Carl Smith
Chief Financial Officer
Espial Group Inc.
Email: csmith@espial.com
Phone: +1 613-230-4770 Kirk Edwardson
Director, Marketing
Espial Group Inc.
Email: kedwardson@espial.com
Phone: +1-613-230-4770 x1145


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