Espial Reports 2014 Second Quarter Results

 OTTAWA, July 22, 2014 /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  and six month periods ended June 30, 2014.  Espial Q2 Highlights            --  Q2 revenue increased 107% to $4.7 million from $2.3 million             last year.         --  Q2 EBITDA income increased to $0.6 million compared to a loss             of $1.5 million last year.         --  For the six months ended June 30, 2014 revenue increased 101%             to $9.7 million, from $4.8 million last year.         --  For the six months ended June 30, 2014, EBITDA income increased             to $1.9 million compared to a loss of $3.9 million last year.         --  Announced a joint RDK solution with Samsung Electronics to             provide a home entertainment HTML5 user experience, combining             Samsung's IP set-top box and home media gateway with the Espial             STB Client.         --  Selected by a global top 5 TV manufacturer to power its next             generation smart TVs.         --  Completed a $10 million equity offering.  "Q2 was another strong quarter for us and we are pleased with our growth. We  believe our progress is a result of our commitment and focus to deliver  world-class products based on open technologies. In Q2, we saw growing  momentum for open platforms like ours - that are based on RDK and HTML5 - that  allow TV service providers to rapidly introduce innovative services and rich  user experiences. We recently announced a partnership with Samsung to provide  a joint RDK and HTML5 solution on Samsung set-top-boxes", said Jaison Dolvane,  CEO, Espial.  "Samsung is a major consumer TV brand and this partnership  reinforces Espial's leadership as RDK continues to gain momentum.  During the  quarter, we also continued to make progress with major operators globally who  are undertaking RDK evaluation projects with us.  On the Smart TV front, we  secured a top five TV manufacturer win and further expanded our footprint in  an existing customer to increase use of Espial software across a broader range  of TV models."  Financial Summary  For the three-month period ended June 30, 2014, the Company reported revenue  of $4.7 million compared with revenue of $2.3 million for the three months  ended June 30, 2013. Earnings before interest, foreign exchange, taxes, stock  compensation, depreciation and amortization (EBITDA) for the second quarter of  fiscal 2014 was income of $0.6 million compared to a loss of  $1.5 million in  the second quarter of fiscal 2013. Net income for the quarter was $0.1 million  or $0.00 per share, compared with a net loss of $2.1 million last year, or  $0.15 per share.  Q2 Financial Results         --  Revenue for the second quarter of fiscal 2014 was $4,712,514             compared with revenue of $2,279,506 in the same period a year             ago. Second quarter software license revenue was $1,109,268             compared with software license revenue of $949,471 in the             second quarter of fiscal 2013. Professional services revenue             for the second quarters of 2014 and 2013 were $2,411,387 and             $254,777 respectively.  Maintenance and support revenue for the             second quarter was $1,191,859 compared with $1,075,258 last             year.         --  North American revenue was $2,371,417 in the second quarter of             fiscal 2014 compared to $812,923 in 2013. Asia revenue was             $1,113,030 in the second quarter of 2014 compared to $463,787             in 2013.  European revenue was $1,228,067 in the second quarter             of 2014 compared to $1,002,796 in 2013         --  Gross margin for the second quarter of fiscal 2014 was 72             percent compared with 78 percent in the second quarter of             fiscal 2013.         --  Operating expenses for the second quarter of fiscal 2014 were             $3,157,315 compared with $3,738,296 in the second quarter of             fiscal 2013.         --  Earnings for the second quarter of fiscal 2014 before interest,             foreign exchange, taxes, stock compensation, depreciation and             amortization (EBITDA) was income of $601,952 compared to a loss             of $1,480,644 in the second quarter of fiscal 2013.         --  Net income in the second quarter was $90,571 compared with a             loss of $2,132,914 last year.  A complete set of financial statements and management's discussion and  analysis for the period ended June 30, 2014 will be available at  http://www.sedar.com.  Conference Call  The Company will be hosting a conference call to discuss the Q2 2014 financial  results on July 22, 2014 at 10:00 a.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 August 23,  2014, at the following numbers and passcode:         --  Toll line: +1 416-764-8677, Passcode:  151923         --  Toll-free line: +1-888-390-0541, Passcode: 151923  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 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 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, ,  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  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 and its Annual Information Form for the fiscal year ended December  31, 2013 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, 2014 June 30, 2013 June 30, 2014 June 30, 2013                        (3 months)    (3 months)    (6 months)    (6 months)                       (unaudited)   (unaudited)   (unaudited)   (unaudited)                                                                                 Net income     (loss) and     Comprehensive     loss                  $90,571  ($2,132,915)    $1,119,146  ($5,405,084)     Add                                                                         Stock     compensation          150,584        37,268       184,345        80,050       Depreciation                                                  100,937       of property       and equipment        46,115        51,652        85,816     Amortization of     intangibles           160,770       393,556       321,539       755,517                           448,040   (1,650,439)     1,710,846   (4,468,580)                                                                     Less (add)                                                                  Net interest     income     (expense)            (10,913)     (133,210)      (94,619)     (267,572)     Foreign     exchange gain     (loss)               (92,321)        22,253        21,460     (201,030)     Income taxes         (50,678)      (58,837)     (123,765)     (102,681)                                                                     Earnings before     interest,     foreign     exchange,     taxes, stock     compensation,     depreciation     and     amortization         $601,952  ($1,480,645)    $1,907,771  ($3,897,297)   Q2 Consolidated  Statements of Income  (Loss)                                Three Months Ended                  Six Months Ended                           June 30,        June 30,         June 30,         June 30,                               2014            2013             2014             2013                        (Unaudited)     (Unaudited)      (Unaudited)      (Unaudited)     Revenue                                                                                Software       $   1,109,268   $     949,471    $   4,536,619    $   2,338,915       Professional       2,411,387         254,777        2,771,781            services                                                               502,596       Support and        1,191,859       1,075,258        2,378,938            maintenance                                                          1,980,053     Total revenue        4,712,514       2,279,506        9,687,338        4,821,564     Cost of revenue      1,310,717         504,330        2,064,848        1,017,647                                                                                          Gross margin         3,401,797       1,775,176        7,622,490        3,803,917     Expenses                                                                               Sales and            924,620         992,918        1,846,921            marketing                                                            2,128,341       General and          637,026         545,775        1,180,964            administrative                                                       1,134,283       Research and       1,434,899       1,806,048        2,956,995            development                                                          3,570,356       Business                   -               -                -            restructuring       charges                                                              1,049,222       Amortization         160,770         393,556          321,539            of intangible       assets                                                                 755,517                          3,157,315       3,738,297        6,306,419        8,637,719     Income (loss)          244,482                                           before other     income (expense)                   (1,963,121)        1,316,071      (4,833,802)       Interest               6,469           2,749           11,544            income                                                                  10,467       Foreign             (92,321)          22,253           21,458            exchange       (loss) gain                                                          (201,030)       Interest            (17,381)       (135,959)        (106,163)            expense                                                              (278,038)                                                                                          Income (loss)          141,249                                           before taxes                       (2,074,078)        1,242,910      (5,302,403)                                                                                          Income tax            (50,678)                                           expense                               (58,837)        (123,765)        (102,681)     Net income       $      90,571   $                $                $     (loss) and     comprehensive     income (loss)                      (2,132,915)        1,119,145      (5,405,084)                                                                                          Income (loss)    $        0.00   $                $                $     per common share     - basic                                 (0.15)             0.06           (0.38)                                                                                          Weighted average    20,629,280                                           number of common     shares     outstanding -     basic                               14,106,829       20,218,270       14,106,829                                                                                          Income (loss)    $        0.00   $                $                $     per common share     - diluted                               (0.15)             0.05           (0.38)                                                                                          Weighted average    23,960,897                                           number of common     shares     outstanding -     diluted                             14,106,829       23,018,360       14,106,829     Consolidated Balance Sheets                                           June 30, 2014   December 31, 2013                                                                                                                                                             CURRENT ASSETS                                                                Cash and cash equivalents         $    14,427,985   $       7,407,093       Accounts receivable                     3,970,236           2,057,222       Investment tax credits receivable         462,460             312,027       Prepaid expenses and other assets         758,234             502,990                                              19,618,915          10,279,332                                                                                   Equipment                                 517,262             539,348       Intangible assets                       1,802,528           2,099,398       Goodwill                                3,340,808           3,340,808                                         $    25,279,513   $      16,258,886                                                                                 CURRENT LIABILITIES                                                           Accounts payable and accrued                        $       liabilities                       $     2,539,355           1,872,505       Provisions                                290,153             281,813       Deferred revenue                        4,024,649           4,052,700       Term Debt                                       -           2,442,056                                               6,854,157           8,649,074     Provisions                                  220,304             363,132     Total Liabilities                         7,074,461           9,012,206                                                                                 SHAREHOLDERS' EQUITY                                                          Share capital                          87,298,111          77,781,292       Warrants                                1,574,067           1,436,004       Share based payments reserve           12,309,425          12,125,080       Deficit                              (82,976,551)        (84,095,696)                                              18,205,052           7,246,680                                         $    25,279,513   $      16,258,886     Statements of Cash Flows                                                        Six Months Ended                                            June 30, 2014      June 30, 2013                                              (unaudited)        (unaudited)     CASH PROVIDED BY (USED IN) OPERATING                                          Net income (loss)                    $   1,119,145    $   (5,405,084)       Items not affecting cash                                                      Depreciation of property and              85,816            100,938         equipment                                                  Amortization of intangible assets        321,539            755,517         Share-based compensation expense         184,345             80,051         Interest accretion on term debt           57,945             81,139         Provisions                             (134,488)            454,316                                                1,634,302        (3,933,123)                                                                         Changes in non-cash operating        (1,679,892)            580,828         working capital items                                                                              (45,590)        (3,352,295)       INVESTING                                                                     Purchase of property and equipment      (63,730)           (21,501)         Purchase of intangible software         (24,669)            (5,255)         Purchase of business                           -        (2,120,412)         Redemption of short- term                      -          8,054,551         investments                                                                                        (88,399)          5,907,383       FINANCING                                                                     Operating line draw (repayment)                -        (2,008,384)         Repayment of term debt               (2,500,000)                  -         Options exercised                          2,960                  -         Warrants exercised                       474,582                  -         Proceeds from equity financing        10,000,080                  -         Costs of share issuance                (822,741)                  -                                                7,154,881        (2,008,384)       Net cash and cash equivalents inflow     7,020,892            546,704       Cash and cash equivalents, beginning                        3,055,644       of period                                7,407,093            Cash and cash equivalents, end of    $                      3,602,348       period                                  14,427,985    $    SOURCE  Espial Group  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  To view this news release in HTML formatting, please use the following URL:  http://www.newswire.ca/en/releases/archive/July2014/22/c8329.html  CO: Espial Group ST: Ontario NI: SOF INTERNET TVNEWS ERN CONF ECO  
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