Press Release

Espial Group Inc. Reports Third Quarter 2009 Results

OTTAWA, Nov. 5 /CNW Telbec/ - Espial(R) Group Inc. ("Espial" or the "Company"), (TSX:ESP), a leader in the delivery of digital TV software, today announced its third quarter financial results for the three-month period ended September 30, 2009.

Q3 HIGHLIGHTS:

- Announced Com Hem AB, Sweden's largest cable operator with 1.8 million homes served, has launched its next generation digital TV and VOD services - named Com Hem On Demand - using Espial's Evo TV Service Platform.

- Announced Chongqing Cable TV Network, a China based cable provider that provides analog and digital TV services to 4.2 million subscribers, has selected Espial MediaBase to power their on-demand services including video-on-demand, network PVR and timeshift TV services.

- Released Espial MediaBase 9.0 video-on-demand platform with dramatically improved capture and streaming performance, lower power consumption with Solid State Storage and improved back office support for cable operators. 

- Added eight new service provider customers.

For the three-month period ended September 30, 2009 the Company reported revenues of $2.9 million compared to revenues of $3.7 million for the three months ended September 30, 2008. Prior year revenue included $0.7 million of non-recurring professional services. Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the third quarter of fiscal 2009 was a loss of $0.5 million compared to a loss of $0.6 million in fiscal 2008. Net loss for the quarter was $1.0 million or $0.07 per share, compared to a net loss of $0.9 million last year, or $0.06 per share.

"We are pleased with our results for the first nine months this year and have grown our business by 33% over last year," noted Jaison Dolvane, President and CEO of Espial. "In Q3, we announced the successful launch of Com Hem's hybrid IP Cable service, a major cable operator in Europe. This is a premier showcase for the Evo TV Service Platform highlighting it's openness, scalablity and customizability. We also announced that Chongqing Cable TV Network, one of China's largest cable operators, has selected Espial MediaBase to power their on-demand services. Again, this testifies to the scalability, reliability and performance of our VOD system. These are two major milestones for the company that demonstrates the strength of our products and services for major telcos and cable companies globally."

Q3 Financial Results

Third quarter revenues were $2,923,521 compared with revenues of $3,729,476 in the same period a year ago. Third quarter software license and royalty revenues were $1,894,381 compared to software license and royalty revenues of $1,696,277 in the third quarter of fiscal 2008. Professional services for the third quarters of 2009 and 2008 were $282,048 and $1,564,243 respectively. Maintenance and support revenues for the third quarter were $747,093 compared to $468,955 last year.

Gross margins for the third quarter of fiscal 2009 were 79% compared with 72% in the third quarter of fiscal 2008.

Operating expenses in the third quarter of fiscal 2009 were $3,216,395 compared to $3,622,233 in the third quarter of fiscal 2008.

Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the third quarter of fiscal 2009 was a loss of $479,608 compared to a loss of $562,506 in fiscal 2008.

Net loss in the third quarter was $993,442 compared to a loss of $875,391 last year.

Cash and cash equivalents at September 30, 2009 was $ 7,910,447.

The Company will be hosting a conference call to discuss the third quarter financial results on November 5, 2009 at 5:15 PM Eastern Standard Time (EST).

The phone number to join the results discussion is:

- Toll line - 416 644 3431

- Toll free line - 877 974 0450

The playback for the call will be available until Saturday, December 5, 2009 at the following numbers and passcode:

- Toll line: 416-640-1917 - passcode: 4180391 followed by the number sign.

- Toll free line: 877-289-8525 - passcode: 4180391 followed by the number sign.

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 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.