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Espial Reports 2012 Second Quarter Results

August 9, 2012

OTTAWA, Aug. 9, 2012 /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, 2012.

Espial Highlights

        --  Q2 2012 revenue of $3.8 million with EBITDA of $0.2 million.
        --  Espial TV Browser selected to power new Sharp® AQUOS® LED TVs
        --  Smart TVs from Hitachi, Toshiba and Sharp - powered by the
            Espial TV Browser - began shipping to retail stores in several
            regions across the world.
        --  Com Hem, the largest cable operator in Scandinavia, launched
            DVR services using hybrid-IP cable STBs powered by the Espial
            Media Service Platform.
        --  Continued to deliver solid expansion revenue from Espial's
            major cable operators in Europe and Asia.
        --  Espial executives presented at important industry events
            including the Smart TV Summit in San Francisco, the Web Video
            Conference in Montreal and the Connected TV Summit in London,
            UK.

For the three-month period ended June 30, 2012, the Company reported
revenues of $3.8 million compared with revenues of $3.8 million for the
three months ended June 30, 2011. Earnings before interest, foreign
exchange, taxes, stock compensation, depreciation and amortization
(EBITDA) for the second quarter of fiscal 2012 was $233,646 compared
with earnings of $29,828 in the second quarter of fiscal 2011. Net loss
for the quarter was $0.3 million or $0.02 per share, compared with a
net loss of $0.5 million last year, or $0.04 per share.

“We demonstrated another positive EBITDA quarter in Q2, 2012″ said
Jaison Dolvane, President and CEO. “This quarter we experienced solid
expansion orders from our existing pay-TV operator customers as they
continue to roll out their next generation of TV services. We also saw
our Smart TV customers, like Sharp, start shipping their 2012 models of
Espial powered Smart TVs.  Our products continue to be of strong
interest to our cable, telecom and consumer electronics customers
looking to roll-out HTML5 user experiences and IP services across
set-top boxes, Smart TVs, mobile phones, tablets, PCs and gaming
consoles.”

Q2 Financial Results

        --  Revenue for the second quarter of fiscal 2012 was $3,842,525
            compared with revenues of $3,821,933 in the same period a year
            ago. Second quarter software license and royalty revenues were
            $2,186,765 compared with software license and royalty revenues
            of $2,160,938 in the second quarter of fiscal 2011.
            Professional services revenue for the second quarters of 2012
            and 2011 were $742,191 and $882,406 respectively.  Maintenance
            and support revenues for the second quarter were $913,569
            compared with $778,589 last year.
        --  Gross margin for the second quarter of fiscal 2012 was 79
            percent compared with 76 percent in the second quarter of
            fiscal 2011.
        --  Operating expenses for the second quarter of fiscal 2012 were
            $3,154,572 compared with $3,326,919 in the second quarter of
            fiscal 2011.
        --  Earnings for the second quarter of fiscal 2012 before interest,
            foreign exchange, taxes, stock compensation, depreciation and
            amortization (EBITDA) was $233,646 compared with earnings of
            $29,828 in the second quarter of fiscal 2011.
        --  Net loss in the second quarter was $296,533 compared with a
            loss of $506,493 last year.
        --  Cash and cash equivalents on June 30, 2012, was $10,210,322.

A complete set of financial statements and management’s discussion and
analysis for the period ended June 30, 2012, will be available at http://www.sedar.com.

Conference Call

The Company will be hosting a conference call to discuss the second
quarter  2012 results on August 9, 2012 at 5:00 p.m. Eastern Standard
Time (EST). The phone number to join the results discussion is:

        --  Toll free line  (Canada/US) -  +1 888-231-8191
        --  Toll line (international/local) - +1 647-427-7450

The playback for the call will be available until 11:59pm EST on
September 7, 2012, at the following numbers and passcode:

        --  Toll line: +1 416-849-0833, Passcode: 16417811
        --  Toll-free line: +1-855-859-2056, Passcode: 16417811

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 10 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 about
anticipated benefits of new customer and partner relationships, future
opportunities for the company and products and any other statements
regarding Espial’s 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 risks and uncertainties, including Espial’s
ability to effectively develop its distribution channels, and generate
increased demand for its products.  Additional risks and uncertainties
affecting Espial can be found in Espial’s Annual Report for the fiscal
year ended December 31, 2011 and in its most recent quarterly report
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.  Espial assumes no obligation to update or revise any
forward looking statements, whether as a result of new information,
future events or otherwise. 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, 2012 June 30, 2011

                                                   (3 months)    (3 months)

                                                  (unaudited)   (unaudited)

    Net loss and Comprehensive loss                $(296,533)    $(506,493)

    Add                                                                    

      Stock compensation                               32,686       110,663

      Depreciation of property and equipment           45,896        50,377

    Amortization of intangibles                       286,785       286,122

                                                       68,834      (59,331)

    Less (add)                                                             

    Net interest income (expense)                   (112,859)     (119,585)

    Foreign exchange gain (loss)                     (51,953)        30,426

    Earnings before interest, foreign exchange,
    taxes, stock
    compensation,  depreciation and
    amortization                                     $233,646       $29,828

 

SOURCE ESPIAL GROUP


Source: PR Newswire