ESP Brompton Energy Split Corp

OTTAWA, Oct. 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 third quarter financial results for the three and nine month periods ended September 30, 2014.

Espial Q3 Highlights

• Q3 revenue increased 32% to a record $5.1 million from $3.8 million last year.
• Q3 EBITDA income increased to $0.7 million compared to $0.4 million last year.
• For the nine months ended September 30, 2014 revenue increased 71% to $14.7 million, from $8.6 million last year.
• For the nine months ended September 30, 2014, EBITDA income increased to $2.6 million compared to a loss of $3.5 million last year.
• Sharp Corporation expanded its deal with Espial to include new LED Smart TV models.
• Espial's G4 UX and RDK based STB Client received the Elite Diamond Technology Review ranking by Broadband Technology Report (BTR).
• Showcased DVB demonstrations, based on RDK set-top box, to European cable operators at IBC in Amsterdam.

"We are pleased to report record revenue of $5.1m in Q3, and strong EBITDA performance.   In Q3, we continued to innovate and demonstrate leadership around our RDK and HTML5 products.  We made good progress this quarter, including showcasing European Digital Video Broadcast (DVB) at IBC which expands our ability to target European Pay TV service providers" said Jaison Dolvane, CEO, Espial. "In Q3, we also realized increased revenues from our Tier 1 North American Cable customer and from ongoing proof of concept projects with service providers. We continue to see growing interest from Pay TV service providers in open software solutions, like RDK & HTML5 solutions, for next generation set-top boxes. We believe our focus and investments in these areas will position us to lead the industry."

Financial Summary

For the three-month period ended September 30, 2014, the Company reported revenue of $5.1 million compared with revenue of $3.8 million for the three months ended September 30, 2013. Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the third quarter of fiscal 2014 was $0.7 million compared to $0.4 million in the third quarter of fiscal 2013. Net income for the quarter was $0.2 million or $0.01 per share, compared with a net loss of $0.3 million last year, or $0.02 per share.

Q3 Financial Results

• Revenue for the third quarter of fiscal 2014 was $5,057,826 compared with revenue of $3,825,306 in the same period a year ago. Third quarter software license revenue was $1,288,712 compared with software license revenue of $2,209,553 in the third quarter of fiscal 2013. Professional services revenue for the third quarters of 2014 and 2013 were $2,556,776 and $484,676 respectively.  Maintenance and support revenue for the third quarter was $1,212,338 compared with $1,131,077 last year.
• North American revenue was $2,141,731 in the third quarter of fiscal 2014 compared to $835,138 in 2013. Asia revenue was $659,185in the third quarter of 2014 compared to $1,876,137 in 2013.  European revenue was $2,256,910 in the third quarter of 2014 compared to $1,114,031 in 2013
• Gross margin for the third quarter of fiscal 2014 was 72 percent compared with 86 percent in the third quarter of fiscal 2013.
• Operating expenses for the third quarter of fiscal 2014 were $3,501,456 compared with $3,185,697 in the third quarter of fiscal 2013.
• Earnings for the third quarter of fiscal 2014 before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) was $718,243 compared to $360,343 in the third quarter of fiscal 2013.
• Net income in the third quarter was $213,970 compared with a loss of $273,284 last year.
• Cash and cash equivalents on September 30, 2014, was $15,835,740.

A complete set of financial statements and management's discussion and analysis for the period ended September 30, 2014 will be available at http://www.sedar.com.

Conference Call

The Company will be hosting a conference call to discuss the Q3 2014 financial results on Wednesday, October 22nd at 5:00PM EDT and the phone number to join the results discussion is:

• Toll Free line (Canada/US) 888-390-0546
• Toll line (International/Local Ottawa) 613-627-2402
• Toll line (International/Local Toronto) 416-764-8688

The playback for the call will be available until 11:59pm ET on November 21, 2014, at the following numbers and passcode:

• Toll line: +1 416-764-8677, Passcode: 258268
• Toll-free line: +1-888-390-0541, Passcode: 258268
  

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:  

Q3 Consolidated Statements of Income (Loss)  

Consolidated Balance Sheets

Statements of Cash Flows

SOURCE Espial Group