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Espial Reports 2009 First Quarter Results

^{Published on 2009-05-07 13:49:33, Last Modified on 2009-05-07 13:52:35 - Market Wire}
 

 OTTAWA, May 7 /CNW Telbec/ - Espial(R) Group Inc. ("Espial" or the "Company"), (TSX:ESP), a leader in the delivery of TV software, today announced its first quarter financial results for the three month period ended March 31, 2009. HIGHLIGHTS: - First quarter revenue of $3.1 million, an increase of 142% from last year - EBITDA loss of $809 thousand compare to a loss of $2.0 million last year - Demonstrated Espial solutions at CCBN in Beijing, China, IPTV World Forum in London, UK. For the three-month period ended March 31, 2009, the Company reported revenues of $3.1 million compared to revenues of $1.3 million for the three months ended March 31, 2008. Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the first quarter of fiscal 2009 was a loss of $0.8 million compared to a loss of $2.0 million in the first quarter of fiscal 2008. Net loss for the quarter was $1.2 million or $0.08 per share, compared to a net loss of $1.8 million last year, or $0.19 per share. "We are pleased with the start of the new fiscal year", said Jaison Dolvane, President and CEO. "The economic impact of the global slowdown has impacted how people spend their time and income. We believe that consumers will continue to spend their entertainment dollars on their TV and VOD services during these difficult times. While our industry is still in the early stages of growth, and as such in the short-term we may experience significant fluctuations in amount, size and timing of orders, we are very excited by increasing interest for IPTV & VOD by telcos and cable." Q1 Financial Results First quarter revenues were $3,083,121 compared with revenues of $1,274,286 in the same period a year ago. First quarter software license and royalty revenues were $2,079,464 compared to software license and royalty revenues of $519,649 in the first quarter of fiscal 2008. Professional services for the first quarters of 2009 and 2008 were $233,098 and $404,366 respectively. Maintenance and support revenues for the first quarter were $770,559 compared to $350,271 last year. Gross margins for the first quarter of fiscal 2009 were 79% compared with 48% in the first quarter of fiscal 2008. Operating expenses in the first quarter of fiscal 2009 were $3,650,480 compared to $2,707,957 in the first quarter of fiscal 2008. Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the first quarter of fiscal 2009 was a loss of $809,264 compared to a loss of $1,986,742 in fiscal 2008. Net loss in the first quarter was $1,182,302 compared to a loss of $1,802,803 last year. Cash and cash equivalents at March 31, 2009 was $8,360,213. The Company will be hosting a conference call to discuss the fourth quarter financial results on Thursday, May 7th, 2009 at 5:30 PM Eastern Standard Time (EST). The phone number to join the results discussion is: - Toll line - 416-646-3095 - Toll free line - 800-814-4853 The playback for the call will be available until midnight on Sunday, June 7th, 2009, at the following numbers and passcode: - Toll line: 416-640-1917 - passcode: 21305546# - Toll free line: 877-289-8525 - passcode: 21305546# About Espial ([ www.espial.com ]) Espial provides intelligent and open TV software to service providers in the cable, telecommunications and hospitality industries. It's middleware and video-on-demand solutions provide superior service delivery, advanced service innovation tools and the ability to serve a wide range of market segments - including over-the-top, IPTV, hybrid IP, multi-dwelling unit and enterprise. With over 2.5 million licenses of its patented software technology in use, Espial is a leading supplier of TV software. Espial is headquartered in Ottawa, Canada. For more information please visit the Espial website @ [ www.espial.com ]. 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 theses terms or other similar expressions concerning matters that are not historical facts. In particular, statements about the benefits and synergies of the Kasenna acquisition transaction, 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 integrate Kasenna operations and 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, 2008 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-GAAP Financial Measures Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) is a non-GAAP financial measure that does not have any prescribed meaning by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. Management believes that this non-GAAP financial measure, when taken together with the corresponding consolidated GAAP 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 March 31 2009 2008 ----------------------------------- (3 months) (3 months) (Unaudited) (Unaudited) Net loss and Comprehensive loss ($1,182,302) ($1,986,742) Add Stock compensation 53,000 44,000 Depreciation of property and equipment 65,060 63,900 Amortization of intangibles 283,441 - ------------------------------------------------------------------------- (780,801) (1,694,813) ------------------------------------------------------------------------- Less (add) Interest income 32,065 148,523 Foreign exchange gain (loss) (3,602) 143,406 ----------------------------------- Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization ($809,264) ($1,986,742) ----------------------------------- ----------------------------------- ESPIAL GROUP INC. Consolidated Balance Sheet (in Canadian dollars) ------------------------------------------------------------------------- ------------------------------------------------------------------------- March 31, December 31, 2009 2008 (unaudited) (unaudited) ------------------------------------------------------------------------- CURRENT ASSETS Cash and cash equivalents $ 8,360,213 $ 10,476,443 Short-term investments 122,246 122,246 Accounts receivable 3,052,267 2,269,251 Investment tax credits receivable 438,424 363,424 Prepaid expenses 260,256 209,974 ------------------------------------------------------------------------- 12,233,406 13,441,338 Property & equipment 839,921 899,734 Intangible assets 5,229,373 4,338,814 Goodwill 3,340,808 4,489,077 ------------------------------------------------------------------------- $ 21,643,508 $ 23,168,963 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CURRENT LIABILITIES Accounts payable and accrued liabilities $ 1,630,499 $ 2,229,241 Deferred revenue 1,472,996 1,270,407 ------------------------------------------------------------------------- 3,103,495 3,499,648 ------------------------------------------------------------------------- COMMITMENTS SHAREHOLDERS' EQUITY Share capital 74,859,576 74,859,576 Warrants 164,435 164,435 Contributed surplus 10,302,143 10,249,143 Deficit (66,786,141) (65,603,839) ------------------------------------------------------------------------- 18,540,013 19,669,315 ------------------------------------------------------------------------- $ 21,643,508 $ 23,168,963 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ESPIAL GROUP INC. Consolidated Statement of Loss and Comprehensive Loss (in Canadian dollars except share data) Three Months Ended ------------------------------------------------------------------------- ------------------------------------------------------------------------- March 31, March 31, 2009 2008 (unaudited) (unaudited) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Revenue $ 3,083,121 $ 1,274,286 Cost of revenue 643,406 661,061 ------------------------------------------------------------------------- Gross margin 2,439,715 613,225 ------------------------------------------------------------------------- Expenses Sales and marketing 1,142,263 1,210,381 General and administrative 543,736 476,647 Research and development 1,562,980 912,939 Stock compensation expense 53,000 44,000 Depreciation of property and equipment 65,060 63,990 Amortization of intangible assets 283,441 - ------------------------------------------------------------------------- 3,650,480 2,707,957 ------------------------------------------------------------------------- Loss before other income (expense) (1,210,765) (2,094,732) ------------------------------------------------------------------------- Other income (expense) Interest income 32,065 148,523 Foreign exchange gain (loss) (3,602) 143,406 ------------------------------------------------------------------------- 28,463 291,929 ------------------------------------------------------------------------- NET LOSS AND COMPREHENSIVE LOSS $ (1,182,302) $ (1,802,803) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net loss per common share - basic and diluted $ (0.08) $ (0.19) Weighted average number of common shares outstanding - basic and diluted 14,101,829 9,329,605 %SEDAR: 00025301E 

For further information: Inquiries from financial press or analysts: Carl Smith, Chief Financial Officer, Espial Group Inc., (613) 230-4770, [ csmith@espial.com ]; Kirk Edwardson, Director, Marketing, Espial Group Inc., (613) 230-4770 x1145, [ kedwardson@espial.com ]