Espial Reports 2010 Fourth Quarter and Fiscal Year Results

OTTAWA, Feb. 24 /CNW/ - Espial(R) Group Inc. ("Espial" or the "Company"), (TSX:ESP), a leader in the delivery of on-demand TV software and services, today announced its fourth quarter and fiscal year financial results for the three and twelve month periods ended December 31, 2010.

2010 HIGHLIGHTS:

    <<
    -  Achieved record annual revenue of $13.3 million and 44% improvement in
       EBITDA over 2009.
    -  Improved balance sheet by securing a $3.5 million long-term debt
       offering.
    -  Secured major customers like Jilin Cable in China, while existing
       customers like Optimius, Tele2, Com Hem, SFR demonstrated very strong
       expansion in their subscriber growth.
    -  Introduce support to enable over the top Internet video to multiple
       screens including mobile phones, iPads and PCs across Espial products.
    -  Introduced Espial TV Browser product to enable Internet video on
       Connected TV devices, expanding our entry into the Connected TV market
       expected to be 243 million units shipping annually by 2013.
    -  Secured new design wins for our Espial Browser v6 product with
       Consumer Electronic manufacturers. Announced a partnership with Sigma
       Designs to pre-integrate Espial Webkit Browser with Flash and HTML5
       video and the availability of Espial WebKit Browser on the Intel 4100
       and 4200 reference chipsets.
    -  Expanded presence, through a partnership with Conax, the global
       content security specialist, to deliver Hybrid-IP TV solutions and
       middleware for cable, satellite, terrestrial and telecom operators
       using the Espial TV Services Platform.
    >>

For the year ended December 31, 2010, the Company reported revenues of $13.3 million compared to revenues of $12.2 million for the year ended December 31, 2009, a 9% annual growth in revenues. For the three-month period ended December 31, 2010, the Company reported revenues of $3.5 million compared to revenues of $3.1 million for the three months ended December 31, 2009.

Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the fourth quarter of fiscal 2010 was a loss of $0.8 million compared to a loss of $0.3 million in the fourth quarter of fiscal 2009. For the year ended December 31, 2010, EBITDA was a loss of $1.2 million compared to an EBITDA loss of $2.1 million in 2009, a 44% annual improvement in EBITDA. Net loss, which includes non-cash items like depreciation, stock compensation and amortization of intangibles, for the quarter was $1.4 million or $0.10 per share, compared to a net loss of $0.9 million last year, or $0.06 per share. Net loss for fiscal 2010 was $3.2 million compared to a net loss of $4.2 million in 2009.

"We are very pleased with our 2010 achievements and financial results", said Jaison Dolvane, President and CEO. "We believe 2010 was a pivotal year for our industry. The success of OTT service providers like Netflix demonstrates the value of on-demand & interactive TV. Such services, along with increased competition in TV service providers, is increasing pressure on incumbent Pay TV operators, telcos, cable & satellite operators to deliver next generation on-demand video services across multiple screens and networks. This increased activity with service providers, coupled with a strong desire for Consumer Electronic manufacturers to offer Internet video and web capabilities on their devices is increasing demand for our products and broadening our customer base".

Q4 Financial Results

    <<
    -  Fourth quarter revenues were $3,459,511 compared with revenues of
       $3,100,699 in the same period a year ago. Fourth quarter software
       license and royalty revenues were $2,608,846 compared to software
       license and royalty revenues of $1,496,120 in the fourth quarter of
       fiscal 2009. Professional services for the fourth quarters of 2010 and
       2009 were $57,867 and $892,638 respectively. Maintenance and support
       revenues for the fourth quarter were $792,798 compared to $711,941
       last year.
    -  Gross margins for the fourth quarter of fiscal 2010 were 66% compared
       with 70% in the fourth quarter of fiscal 2009.
    -  Operating expenses in the fourth quarter of fiscal 2010 were
       $3,557,733 compared to $2,983,357 in the fourth quarter of fiscal
       2009.
    -  Earnings before interest, foreign exchange, taxes, stock compensation,
       depreciation and amortization (EBITDA) for the fourth quarter of
       fiscal 2010 was a loss of $796,463 compared to a loss of $311,946 in
       fiscal 2009.
    -  Net loss, which includes non-cash items like depreciation, goodwill
       and intangibles, in the fourth quarter was $1,362,527 compared to a
       loss of $877,704 last year.
    >>

Fiscal 2010 Financial Results

    <<
    -  Total revenues for the fiscal year ended December 31, 2010 were
       $13,311,294 compared with revenues of $12,217,744, in the same period
       a year ago. Software license and royalty revenues for the 2010 fiscal
       year were $8,312,594 compared to software license and royalty revenues
       of $7,250,697 in fiscal 2009. Professional services for the fiscal
       years of 2010 and 2009 were $1,821,620 and $ 1,896,446 respectively.
       Maintenance and support revenues for the fiscal year ended
       December 31, 2010 were $3,177,080 compared to $3,070,601 last year.
    -  Gross margins for the 2010 fiscal year were 73% compared with 76% in
       fiscal 2009.
    -  Operating expenses for the 2010 fiscal year were $12,741,313 compared
       to $13,080,992 in fiscal 2009.
    -  Earnings before interest, foreign exchange, taxes, stock compensation,
       dividends on redeemable preferred shares, depreciation and
       amortization (EBITDA) for the fiscal year ended December 31, 2010 was
       a loss of $1,155,306 compared to a loss of $2,081,092 in fiscal 2009.
    -  Net loss in the 2010 fiscal year was $3,222,863 compared to a loss of
       $4,157,319 in 2009.
    -  Cash and cash equivalents at December 31, 2010 was $10,724,599.
    >>

The Company will be hosting a conference call to discuss the fourth quarter financial results on February 24, 2011 at 5:00 PM Eastern Standard Time (EST). The phone number to join the results discussion is:

    <<
    -  Toll Free line (Canada/US)- 888-231-8191
    -  Toll line (International/Local) - 647-427-7450
    >>

The playback for the call will be available until March 24, 2011 at the following numbers and passcode:

    <<
    -  Toll line: 416-849-0833 - passcode:  44457630
    -  Toll free line: 1-800-642-1687- passcode: 44457630
    >>

About Espial (www.espial.com)

Espial provides scalable and open digital TV software to service providers in the cable, telecommunications and hospitality industries. Its middleware, Video-On-Demand and browser solutions provide superior service delivery, advanced service innovation tools and the ability to implement flexible business models. Espial serves a range of market segments including, IPTV, Cable, hybrid IP, over-the-top, multi-dwelling unit and enterprise. With over 7 million subscribers using Espial's patented solutions, Espial is a leading supplier of TV software. Espial is headquartered in Ottawa, Canada with offices around the world in USA, Europe and Asia. For more information please call +1.613.230.4770 or visit 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 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, 2009 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, depreciation and amortization is as follows:

    <<
                          December 31  December 31  December 31  December 31
                              2010         2009         2010         2009
                          ------------------------- -------------------------
                           (3 months)   (3 months)  (12 months)  (12 months)
                          (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)

    Net loss and
     Comprehensive loss   ($1,362,527)   ($877,704) ($3,222,863) ($4,157,319)
    Add
      Stock compensation      125,000      141,701      475,000      319,701
      Depreciation of
       property and
       equipment               62,230       81,218      231,366      294,937
    Amortization of
     intangibles              283,083      283,081    1,132,332    1,132,332
    -------------------------------------------------------------------------
                             (892,214)    (371,704)  (1,384,165)  (2,410,349)
    -------------------------------------------------------------------------
    Less (add)
    Interest income             4,603       11,878       15,333       75,510
    Foreign exchange
     gain (loss)             (100,354)     (71,636)    (244,192)    (404,767)
                          ---------------------------------------------------
    Earnings before
     interest, foreign
     exchange, taxes,
     stock compensation,
     depreciation and
     amortization           ($796,463)   ($311,946) ($1,155,306) ($2,081,092)
                          ---------------------------------------------------
                          ---------------------------------------------------


    ESPIAL GROUP INC.
    Consolidated Balance Sheet
    (in Canadian dollars)
    -------------------------------------------------------------------------
                                                        As at        As at
                                                    December 31, December 31,
                                                        2010         2009
    -------------------------------------------------------------------------
    CURRENT ASSETS
      Cash and cash equivalents                     $10,724,599  $ 8,711,699
      Short-term investments                            110,000      122,246
      Accounts receivable                             3,201,585    1,989,367
      Investment tax credits receivable                 300,000      550,000
      Prepaid expenses and other assets                 261,134      178,003
    -------------------------------------------------------------------------
                                                     14,597,318   11,551,315

    Property and equipment                              661,678      767,451
    Intangible assets                                 3,248,150    4,380,482
    Goodwill                                          3,340,808    3,340,808
    -------------------------------------------------------------------------
                                                    $21,847,954  $20,040,056
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    CURRENT LIABILITIES
      Operating line                                $ 1,000,219  $   500,044
      Accounts payable and accrued liabilities        2,441,954    1,643,717
      Deferred revenue                                1,821,947    2,064,598
    -------------------------------------------------------------------------
                                                      5,264,120    4,208,359
    Long term debt                                    2,932,053            -
    -------------------------------------------------------------------------
    Total Liabilities                                 8,196,173    4,208,359
    -------------------------------------------------------------------------

    COMMITMENTS
    SHAREHOLDERS' EQUITY
      Share capital                                  74,859,576   74,859,576
      Warrants                                          732,382      164,435
      Contributed surplus                            11,043,844   10,568,844
      Deficit                                       (72,984,021) (69,761,158)
    -------------------------------------------------------------------------
                                                     13,651,781   15,831,697
    -------------------------------------------------------------------------
                                                    $21,847,954  $20,040,056
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    ESPIAL GROUP INC.
    Consolidated Statement of Loss and Comprehensive Loss
    (in Canadian dollars except share data)

                          December 31  December 31  December 31  December 31
                              2010         2009         2010         2009
                          ------------------------- -------------------------
                           (3 months)   (3 months)  (12 months)  (12 months)
                          (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)

    Revenue                $3,459,511   $3,100,699  $13,311,294  $12,217,744

    Cost of revenue         1,168,554      935,288    3,563,985    2,964,814
    -------------------------------------------------------------------------
    Gross margin            2,290,957    2,165,411    9,747,309    9,252,930
    -------------------------------------------------------------------------
    Expenses

      Sales and marketing  1,226,555     1,056,416    4,335,749    4,245,989

      General and
       administrative        548,354       491,684    1,916,744    2,008,775

      Research and
       development         1,312,511       929,257    4,650,122    5,079,258

      Stock compensation     125,000       141,701      475,000      319,701

      Depreciation of
       property and
       equipment              62,230        81,218      231,366      294,937

    Amortization of
     intangibles             283,083       283,081    1,132,332    1,132,332
    -------------------------------------------------------------------------

                           3,557,733     2,983,357   12,741,313   13,080,992
    -------------------------------------------------------------------------
    Loss before other
     income (expense)     (1,266,776)     (817,946)  (2,994,004)  (3,828,062)
    -------------------------------------------------------------------------
    Other income (expenses)

      Interest income          4,603        11,878       15,333       75,510

      Foreign exchange
       gain (loss)          (100,354)      (71,636)    (244,192)    (404,767)
    -------------------------------------------------------------------------

                             (95,751)      (59,758)    (228,859)    (329,257)
    -------------------------------------------------------------------------
    NET LOSS AND
     COMPREHENSIVE LOSS   (1,362,527)    ($877,704)  (3,222,863) ($4,157,319)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net loss per common
     share - basic and
     diluted                  ($0.10)       ($0.06)      ($0.23)      ($0.29)
    Weighted average
     number of common
     shares- basic and
     diluted              14,101,829    14,101,829   14,101,829   14,101,829
    >>

SOURCE ESPIAL GROUP

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

Profil de l'entreprise

ESPIAL GROUP

Renseignements sur cet organisme


FORFAITS PERSONNALISÉS

Jetez un coup d’œil sur nos forfaits personnalisés ou créez le vôtre selon vos besoins de communication particuliers.

Commencez dès aujourd'hui .

ADHÉSION À CNW

Remplissez un formulaire d'adhésion à CNW ou communiquez avec nous au 1-877-269-7890.

RENSEIGNEZ-VOUS SUR LES SERVICES DE CNW

Demandez plus d'informations sur les produits et services de CNW ou communiquez avec nous au 1‑877-269-7890.