Espial Reports Fourth Quarter and Fiscal Year Results

OTTAWA, March 7, 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 fourth quarter and fiscal year financial results 
for the three and twelve month periods ended December 31, 2012. 
Espial Highlights 


    --  Acquisition of ANT plc, extending Espial's leadership in HTML5
        and TV Everywhere.
    --  Signed partnership agreement with WiLAN to assist Espial in
        licensing certain of Espial's patents related to video-over-IP
        technology.
    --  Secured 2 new service provider wins for Espial MediaBase in
        Western Europe and Baltics.
    --  In 2012, shipped the Espial TV browser - based on WebKit and
        HTML5 - across numerous TV brands including Toshiba, Sharp,
        Hitachi and Hisense.
    --  In 2012, started shipping Espial products with KBRO, Taiwan's
        largest cable operator, and major Japanese operators NTT and
        KDDI.
    --  The Espial TV Browser won recognition with Broadband Technology
        Report's 2012 Diamond Technology Reviews and the "Best Internet
        Smart TV Solution" in Communications Technology magazine.
    --  Expanded Espial's HTML5 application ecosystem for Espial TV
        Browser with major OTT providers such as You Tube, Vimeo and
        BBC iPlayer.

Financial Summary

For the three-month period ended December 31, 2012, the Company reported 
revenues of $2.7 million compared to revenues of $4.1 million for the three 
months ended December 31, 2011. For the year ended December 31, 2012, the 
Company reported revenues of $13.3 million compared to revenues of $14.7 
million for the year ended December 31, 2011.  Last quarter, we experienced 
a slower pace of roll-outs from our existing pay-TV customers, especially in 
Europe. We believe this is related to the prevailing economic challenges in 
Europe and may continue for the next two or three quarters.

Earnings before interest, foreign exchange, taxes, stock compensation, 
depreciation and amortization (EBITDA) for the fourth quarter of fiscal 2012 
was a loss of $0.9 million, compared to income of $0.2 million in the fourth 
quarter of fiscal 2011. For the year ended December 31, 2012, EBITDA was a 
loss of $0.7 million compared to an EBITDA loss of $0.2 million in 2011. Net 
loss, which includes non-cash items like depreciation, stock compensation and 
amortization of intangibles, for the quarter was $1.3 million or $0.09 per 
share, compared to a net loss of $0.6 million last year, or $0.04 per share. 
Net loss for fiscal 2012 was $2.7 million compared to a net loss of $2.5 
million in 2011.

"There is an increasing urgency from Pay TV operators to invest in next 
generation IP video services across TVs, tablets and smart phones. In Q4, we 
saw North American cable operators become more active around planning 
investments for their transition to IP--based set-top box and multi-screen 
services. Towards this, we have made progress on our product capabilities, 
roadmap, worked with Comcast as an RDK licensee and further extended our HTML5 
leadership in rich user experiences." said Jaison Dolvane, President and 
CEO. "Globally, this remains a common theme with many traditional cable, 
satellite, and terrestrial Pay TV operators, who are poised to invest in IP 
video delivery and services. On the Smart TV front, we have seen increased 
activity with consumer electronics manufacturers continuing to adopt HTML5 as 
their platform for next generation apps, browser and UX development.Today, 
Smart TVs which are capable of a full web experience are generally only 
available on the higher end of the TV Market. We expect this will become a 
core feature of mass volume flat screen TV models over the next 12-18 months. 
We continue to innovate rapidly in this market together with our Smart TV 
customers as well as Internet app and video content providers."

Commenting on the acquisition of ANT plc, Dolvane added, "We announced the 
acquisition of Ant in Q4, which was completed in Q1, 2013. We are excited 
to have the Ant team be part of Espial, which provides us with further HTML5 
and application engineering capabilities, and a number of new Pay TV and Smart 
TV customers to leverage into increasing our leadership, market share and 
relevance in the industry"

Q4 Financial Results
    --  Fourth quarter revenues were $2,716,779 compared with revenues
        of $4,072,848 in the same period a year ago. Fourth quarter
        software license and royalty revenues were $1,517,179 compared
        to $2,834,500 in the fourth quarter of fiscal 2011. 
        Professional services for the fourth quarters of 2012 and 2011
        were $221,607 and $445,458 respectively.  Maintenance and
        support revenues for the fourth quarter were $977,992 compared
        to $792,890 last year.
    --  Gross margins for the fourth quarter of fiscal 2012 was 71%
        compared with 81% in the fourth quarter of fiscal 2011.
    --  Operating expenses in the fourth quarter of fiscal 2012 were
        $3,211,461 compared to $3,526,058 in the fourth quarter of
        fiscal 2011.
    --  Earnings before interest, foreign exchange, taxes, stock
        compensation, depreciation and amortization (EBITDA) for the
        fourth quarter of fiscal 2012 was a loss of $910,636 compared
        to income of $197,052 in fiscal 2011.
    --  Net loss, which includes non-cash items like depreciation,
        goodwill and intangibles, in the fourth quarter was $1,273,082
        compared to a loss of $566,689 last year.

Fiscal 2012 Financial Results
    --  Total revenues for the fiscal year ended December 31, 2012 were
        $13,280,518 compared with revenues of $14,674,826, in the same
        period a year ago. Software license and royalty revenues for
        the 2012 fiscal year were $7,536,633 compared to $9,172,316 in
        fiscal 2011.  Professional services for the fiscal years of
        2012 and 2011 were $2,201,640 and $2,440,408 respectively. 
        Maintenance and support revenues for the fiscal year ended
        December 31, 2012 were $3,542,244 compared to $3,062,102 last
        year.
    --  Gross margins for the 2012 fiscal year was 78% compared with
        78% in fiscal 2011.
    --  Operating expenses for the 2012 fiscal year were $12,539,180
        compared to $13,387,767 in fiscal 2011.
    --  Earnings before interest, foreign exchange, taxes, stock
        compensation, , depreciation and amortization (EBITDA) for the
        fiscal year ended December 31, 2012 was a loss of $747,962
        compared to a loss of $193,123 in fiscal 2011.
    --  Net loss in the 2012 fiscal year was $2,707,139 compared to a
        loss of $2,502,410 in 2011.

Cash, restricted cash and cash equivalents on December 31, 2012, was 
$11,220,195.

A complete set of financial statements and management's discussion and 
analysis for the period ended December 31, 2012, will be available at 
http://www.sedar.com.

Conference Call

The Company will be hosting a conference call to discuss the Q4 and fiscal 
year 2012 financial results on March 7, 2013 at 5:00 p.m. Eastern Standard 
Time (EST). The phone number to join the results discussion is:
    --  Toll free line  (Canada/US) -  +1 888-390-0546
    --  Toll line (international/local) - +1 416-764-8688

The playback for the call will be available until 11:59pm EDT on April 4, 
2013, at the following numbers and passcode:
    --  Toll line: +1 416-764-8677, Passcode:  834472
    --  Toll-free line: +1-888-390-0541, Passcode: 834472

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 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 successful 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:
                    December 31, December 31, December 31, December 31,
                            2012         2011         2012         2011
                      (3 months)   (3 months)  (12 months)  (12 months)
                     (unaudited)  (unaudited)  (unaudited)  (unaudited)
                                                                       

Net loss and
Comprehensive loss  ($1,273,082)   ($566,689) ($2,707,139) ($2,502,410)

Add                                                                    

Stock compensation        37,732       76,092      141,488      423,079

Depreciation of
property and
equipment                 60,743       51,530      207,919      198,450

Amortization of
intangibles              288,196      286,174    1,146,573    1,144,698
                       (886,411)    (152,893)  (1,211,159)    (736,183)

Less (add)                                                             

Net interest income
(expense)              (125,068)    (116,639)    (469,481)    (474,866)

Foreign exchange
gain (loss)              149,293    (233,306)        6,284     (68,194)

Earnings before
interest, foreign
exchange, taxes,
stock
compensation, 
depreciation and
amortization          ($910,636)     $197,052   ($747,962)   ($193,123)
    



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

SOURCE: ESPIAL GROUP

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/March2013/07/c3231.html

CO: ESPIAL GROUP
ST: Ontario
NI: SOF INTERNET TVNEWS ERN CONF 

-0- Mar/07/2013 21:45 GMT


 
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