Espial Reports 2015 First Quarter Results

Ottawa, Ontario – May 7, 2015 - Transforming the viewing experience worldwide, Espial® Group Inc. ("Espial" or the "Company"), (TSX:ESP),  today announced its first quarter financial results for the three month period ended March 31, 2015

 Espial Reports 2015 First Quarter Results

Ottawa, Ontario – May 7, 2015 – Transforming the viewing experience worldwide, Espial® Group Inc. (“Espial” or the “Company”), (TSX:ESP),  today announced its first quarter financial results for the three month period ended March 31, 2015

Espial Q1 Highlights


  • Record quarterly revenue of $5.4 million.
  • Adjusted EBITDA income of $0.8 million.
  • In January, announced a major European cable operator chose Espial’s G4 Client software and integration services to deliver their next-gen RDK based 4K DVB set-top box platform and user experience.
  • In March, announced a second major European cable operator selected Espial’s end-to-end RDK solution, including Espial’s G4 Client software for DVB/IP set-top boxes, user experience, and Espial’s back-office service management platform.
  • Jeff Huppertz joined Espial’s management team as VP Marketing and Business Development
  • In April, Mike Hayashi, former Time Warner Cable Executive Vice President, joined Espial’s board of directors.
  • On May 6, 2015 closed a $35 million bought deal financing.



“Espial had a strong start to 2015, signing two major European cable operator contracts to provide our flagship G4 Client software and integration services,” said Jaison Dolvane, CEO, Espial. “We are seeing growing interest in RDK from the worldwide operator community and continue to strengthen our pipeline.   I’m also excited to have Jeff Huppertz join our management team and Mike Hayashi join the Espial Board of Directors.  These are great additions to our team and I look forward to working together to execute on the opportunity ahead of us”



Financial Summary


For the three-month period ended March 31, 2015, the Company is reporting revenue of $5.4 million compared with revenue of $5.0 million for the three months ended March 31, 2014. Adjusted EBITDA income for the first quarter of fiscal 2015 was $0.8 million compared to $1.3 million for the first quarter of fiscal 2014. Net income for the quarter was $0.4 million, compared with net income of $1.0 million last year. Adjusted net income for the first quarter was $0.8 million compared to adjusted net income of $1.2 million last year.



Q1 Financial Results


  • First quarter revenues were $5,415,877 compared with revenues of $4,974,824 in the same period a year ago. First quarter software license and royalty revenues were $2,413,027 compared to $3,427,351 in the first quarter of fiscal 2014. Professional services for the first quarters of 2015 and 2014 were $1,872,706 and $360,394 respectively.  Maintenance and support revenues for the first quarter were $1,130,144 compared to $1,187,079 last year.


  • North American revenues were $1,341,519 in the first quarter of 2015 compared to $1,859,999 in 2014. Asia revenues were $1,161,278 in the first quarter of 2015 compared to $1,014,449 in 2014.  European revenues were $2,913,080 in the first quarter of 2015 compared to $2,100,376 in 2014.


  • Gross margin for the first quarter of fiscal 2015 was 78% compared with 85% in the first quarter of fiscal 2014.


  • Operating expenses in the first quarter of fiscal 2015 were $3,990,618 compared to $3,149,106 in the first quarter of fiscal 2014.



  • Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (adjusted EBITDA) for the first quarter of fiscal 2015 was income of $785,998 compared to income of $1,305,819 in fiscal 2014.


  • Net income, which includes non-cash items like depreciation, goodwill and intangibles, in the first quarter was $359,225 compared to net income of $1,028,574 last year.



Cash, restricted cash and cash equivalents on March 31, 2015, was $17,729,748


A complete set of financial statements and management’s discussion and analysis for the quarter ended March 31, 2015 will be available at



Conference Call

The Company will be hosting a conference call to discuss the Q1 2015 financial results on May 8,  2015 at 10:00AM EDT and the phone number to join the results discussion is:


  • Toll Free line (Canada/US)             877-201-0168
  • Toll line (International/Local)             647-788-4901


The playback for the call will be available two hours after the call’s completion and will be available until 11:59pm ET on June 9, 2015, at the following numbers and passcode:


  • Toll-free line: +1-855-859-2056 or +1-404-537-3406, Passcode: 41436385.


About Espial (

With Espial, video service providers create responsive and engaging subscriber viewing experiences incorporating intuitive content discovery and instinctive navigation. Service providers achieve ‘Web-speed’ innovation with Espial’s flexible, open software leveraging RDK and HTML5 technologies. This provides competitive advantage through an immersive and personalized user experience, seamlessly blending advanced TV services with OTT content. With customers spanning six continents, Espial is headquartered in Ottawa, Canada, has R&D centers in Silicon Valley and the UK, and sales/support offices in the U.S., Europe and Asia. For more information, visit


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 years ended December 31, 2013 and 2014 filed on SEDAR at 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

We use adjusted net income (loss) and adjusted diluted earnings (loss) per share, which remove the impact of our amortization of intangible assets and stock based compensation expense, to measure our performance as these measures align our results and improve comparability against our peers. We use adjusted EBITDA to provide investors with a supplemental measure of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our capital expenditure and working capital requirements.


Adjusted net income (loss), adjusted diluted earnings (loss) per share and adjusted EBITDA income (loss) are not recognized, defined or standardized measures under IFRS. Our definition of adjusted net income (loss), adjusted EBITDA income (loss) and adjusted diluted earnings (loss) per share will likely differ from that used by other companies and therefore comparability may be limited.  Adjusted net income (loss), adjusted EBITDA income (loss) and adjusted diluted earnings (loss) per share should not be considered a substitute for or in isolation from measures prepared in accordance with IFRS. Investors are encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put undue reliance on non-IFRS measures and view them in conjunction with the most comparable IFRS financial measures. We have reconciled adjusted net income (loss) and adjusted EBITDA income (loss) to the most comparable IFRS financial measure as follows:




Three months endedMarch 31, 2015 Three months endedMarch 31, 2014
Net income $  359,225 $  1,028,574
 Stock based compensation 320,864 33,761
Amortization of intangibles 161,219 160,770
Adjusted net income 841,308 1,223,105
Depreciation 48,043 39,701
Net interest expense (income) (36,390) 83,707
Foreign exchange gain (103,756) (113,781)
Income tax 36,793 73,087
Adjusted EBITDA $  785,998 $1,305,819
Adjusted Basic net income per share $0.03 $0.06
Adjusted diluted net income per share $0.03 $0.06





For inquiries from the financial press or analysts, contact:

Carl Smith
Chief Financial Officer
Espial Group Inc.
Phone: +1 613-230-4770
Kirk Edwardson
Director, Marketing
Espial Group Inc.
Phone: +1-613-230-4770 x1145 



Consolidated Statements of Income and

Comprehensive Income

(In Canadian dollars), except share amounts)


                    Three Months Ended
  March 31, 2015 March 31, 2014
  Software  $         2,413,027  $         3,427,351
  Professional services                1,872,706                360,394
  Support and maintenance                1,130,144                1,187,079
Total Revenue             5,415,877             4,974,824
Cost of revenue                1,169,387                754,131
Gross margin 4,246,490 4,220,693
  Sales and marketing 1,146,086             922,301
  General and administrative                790,041                543,938
  Research and development 1,893,272             1,522,097
  Amortization of Intangible assets                161,219                160,770
            3,990,618             3,149,106
Income from operations               255,872               1,071,587
Other income (expenses)                                      
  Interest income 36,390                    5,075
  Foreign exchange gain                 103,756                 113,781
  Interest expense               –               (88,782)
140,146 30,074
Income before tax 396,018 1,101,661
 Income taxes (36,793) (73,087)
Net income and comprehensive income    $           359,225  $           1,028,574
Basic net income per share $0.01 $0.05
Diluted net income per share $0.01 $0.05




Consolidated Balance Sheets


March 31, 2015  December 31, 2014
  Cash and cash equivalents $  17,729,748 $  18,111,324
  Accounts receivable 4,871,176 3,861,058
  Investment tax credits receivable 387,850 312,329
  Prepaid expenses and other assets 673,463 567,853
23,662,237 22,852,564
Equipment 713,992 727,626
Intangible assets 1,335,575 1,496,794
Goodwill 3,340,808 3,340,808
$  29,052,612 $  28,417,792
  Accounts payable and accrued liabilities $   2,105,118 $   2,521,480
  Provisions 32,518
  Deferred revenue 3,659,417 3,557,667
  Term Debt
5,797,053 6,079,147
Provisions 169,506 275,234
Total Liabilities 5,966,559 6,354,381
  Share capital 91,664,297 91,072,570
  Warrants 898,199 928,063
  Share based payments reserve 13,088,144 12,986,590
Deficit (82,564,587) (82,923,812)
23,086,053 22,063,411
$  29,052,612 $  28,417,792




Statements of Cash Flows


Three months Ended
March 31, 2015  March 31, 2014
    Net income $ 359,225 $ 1,028,574
    Items not affecting cash  
Depreciation of property and equipment 48,043                39,701
      Amortization of intangible assets 161,219 160,770
      Share-based compensation expense 320,863 33,761
      Interest accretion on long-term debt 40,563
    Provisions (73,210) (56,554)
816,140 1,246,815
    Changes in non-cash operatingworking capital items (1,505,861) (963,920)
(689,721) 282,895
    Purchase of equipment (34,409) (7,115)
    Purchase of intangibles (24,670)
(34,409) (31,785)
    Repayment of term debt (1,000,000)
    Proceeds from options exercised 270,554
    Proceeds from warrants exercised 72,000 373,885
342,554 (626,115)
Cash and cash equivalents outflow (381,576) (375,005)
Cash and cash equivalents, beginning of period 18,111,324 7,407,093
Cash and cash equivalents, end of period $ 17,729,748  $  7,032,088
Supplementary information:  
Interest paid $           – $ 48,219
Interest received $ 36,390   $   5,075
Taxes paid $ 36,793 $ 73,087