Espial Reports 2015 Third Quarter Results

Espial® Group Inc. ("Espial" or the "Company"), (TSX:ESP), today announced its Third quarter financial results for the three and nine month periods ended September 30, 2015.

 Ottawa, Ontario – October 28, 2015 – Transforming the viewing experience worldwide, Espial® Group Inc. (“Espial” or the “Company”), (TSX:ESP),  today announced its Third quarter financial results for the three and nine month periods ended September 30, 2015.


Espial Q3 Highlights


  • Record quarterly revenue of $8.7 million
  • Adjusted EBITDA income of $2.3 million
  • Tele Columbus selected Espial to provide software and services for their next-generation, IP video services solution
  • Debuted our G4 STB Client solution for IPTV/Telco operators at IBC in Amsterdam
  • Integrated our G4 STB Client with Metrological, a leading provider of cloud-based applications to operators
  • Record attendance at Espial’s 2015 Asia-Pac Seminar in Tokyo, Japan



“We had a very strong quarter with record revenue and EBITDA,” said Jaison Dolvane, CEO, Espial.  “In Q3, we secured a significant software license order for deployment by a North American cable operator, expanded our relationship with Tele Columbus, a major German cable operator customer, and launched our G4 product for Telcos.  We continued to make progress on our pipeline and believe we are well situated for the change occurring in the industry.”


“In Q3, we delivered software licenses for current generation and new 4k set-top boxes to a channel partner for deployment at a North American cable operator. The same operator is currently working on its next generation platform and we have been informed that this operator does not intend to deploy our software as previously contemplated and we are in discussions regarding this.  We continue to work with our channel partner and operator to improve current user experience and deliver 4K Ultra High Definition on its current platform.”



Financial Summary


For the three-month period ended September 30, 2015, the Company is reporting revenue of $8.7 million compared with revenue of $5.1 million for the three months ended September 30, 2014. Adjusted EBITDA income for the third quarter of fiscal 2015 was $2.3 million compared to $0.7 million for the third quarter of fiscal 2014. Net income for the quarter was $2.2 million, compared with net income of $0.2 million last year. Adjusted net income for the third quarter was $2.7 million compared to adjusted net income of $0.7 million last year.



Q3 Financial Results


  • Third quarter revenues were $8,709,354 compared with revenues of $5,057,826 in the same period a year ago. Third quarter software license and royalty revenues were $5,217,518 compared to $1,288,712 in the third quarter of fiscal 2014. Professional services for the third quarters of 2015 and 2014 were $2,146,008 and $2,556,776 respectively.  Maintenance and support revenues for the third quarter were $1,345,828 compared to $1,212,338 last year.


  • North American revenues were $5,696,380 in the third quarter of 2015 compared to $2,141,731 in 2014. Asia revenues were $694,704 in the third quarter of 2015 compared to $659,185 in 2014.  European revenues were $2,318,270 in the third quarter of 2015 compared to $2,256,910 in 2014.


  • Gross margin for the third quarter of fiscal 2015 was 77% compared with 72% in the third quarter of fiscal 2014.


  • Operating expenses in the third quarter of fiscal 2015 were $4,941,261 compared to $3,501,456 in the third quarter of fiscal 2014.


  • Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (adjusted EBITDA income) for the third quarter of fiscal 2015 was $2,333,471 compared to $718,244 in fiscal 2014.


  • Net income, which includes non-cash items like depreciation, amortization of intangibles and stock compensation, in the third quarter was $2,203,314 compared to $213,970 last year.


  • Cash, restricted cash and cash equivalents on September 30, 2015, was $47,516,284


A complete set of financial statements and management’s discussion and analysis for the quarter ended September 30, 2015 will be available at



Conference Call

The Company will be hosting a conference call to discuss the Q3 2015 financial results on October 28, 2015 at 5:00PM 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 November 28, 2015, at the following numbers and passcode:


Toll-free line: +1-855-859-2056 or +1-404-537-3406, Passcode: 61236138
About Espial (

With Espial, video service providers create responsive and engaging subscriber viewing experiences incorporating powerful content discovery and intuitive 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 Montreal, 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, ongoing or future benefits of existing and new customer and partner relationships, our position or ability to capitalize on the move to more open systems by service providers, existing or 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 continue to supply existing customers and partners with its products and services and avoid being displaced by competitive offerings, 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 ended September 30, 2015 Three months ended September 30, 2014 Nine months ended September 30, 2015 Nine months ended September 30, 2014
(unaudited) (unaudited) (unaudited) (unaudited)
Net income $   2,203,314 $ 213,970 $  2,284,704 $ 1,333,116
 Stock based compensation 305,198 339,793 1,051,478 524,138
Amortization of intangibles 155,069 161,338 484,730 482,877
Adjusted net income 2,663,581 715,101 3,820,912 2,340,131
Depreciation 76,911 52,968 176,324 138,784
Net interest income / expense (95,093) (34,796) (220,068) 59,823
Foreign exchange gain / loss (410,628) (52,252) (516,135) (73,712)
Income tax expense 98,700 37,223 228,942 160,988
Adjusted EBITDA $     2,333,471 $  718,244 $3,489,975 $2,626,014
Adjusted diluted net earnings per share $0.06 $0.03 $0.10 $0.11



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)


Three Months Ended Nine months Ended
September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014
  Software $  5,217,518 $   1,288,712 $  9,340,496 $  5,825,331
  Professional services 2,146,008 2,556,776 6,718,815 5,328,557
  Support and maintenance 1,345,828 1,212,338 3,566,175 3,591,276
Total revenue 8,709,354 5,057,826 19,625,486 14,745,164
Cost of revenue 1,971,800 1,392,225 4,613,899 3,457,073
Gross margin 6,737,554 3,665,601 15,011,587 11,288,091
  Sales and marketing 1,414,264 981,570 3,763,098 2,828,491
  General and administrative 868,960 813,345 2,561,948 1,994,310
  Research and development 2,502,968 1,545,203 6,424,368 4,502,197
  Amortization of intangible assets 155,069 161,338 484,730 482,877
4,941,261 3,501,456 13,234,144 9,807,875
Income before other income (expense) 1,796,293 164,145 1,777,443 1,480,216
  Interest income 95,093 34,796 220,068 46,340
  Foreign exchange gain 410,628 52,252 516,135             73,712
  Interest expense            (106,163)
 Income before taxes 2,302,014 251,193 2,513,646 1,494,105
Income tax expense (98,700) (37,223) (228,942) (160,989)
Net income and comprehensive income $  2,203,314 $     213,970   $       2,284,704 $  1,333,116
Earnings per common share – basic $  0.06 $  0.01 $0.07 $ 0.06
Earnings per common share – diluted $ 0.06 $   0.01 $0.07 $  0.05



Consolidated Balance Sheets

September 30, 2015  December 31, 2014 
  Cash and cash equivalents $ 47,516,284 $  18,111,324
  Accounts receivable 10,028,969 3,861,058
  Investment tax credits receivable 380,975 312,329
  Prepaid expenses and other assets 723,243 567,853
58,649,471 22,852,564
Equipment 973,968 727,626
Intangible assets 1,798,126 1,496,794
Goodwill 3,632,604 3,340,808
$ 65,054,169 $  28,417,792
  Accounts payable and accrued liabilities $  3,314,565 $   2,521,480
  Deferred revenue 2,997,933 3,557,667
6,312,498 6,079,147
Provisions 275,234
Total Liabilities  6,312,498 6,354,381
  Share capital 124,874,352 91,072,570
  Warrants 764,709 928,063
  Share based payments reserve 13,741,718 12,986,590
Deficit (80,639,108) (82,923,812)
58,741,671 22,063,411
$ 65,054,169 $  28,417,792


Statements of Cash Flows


Nine months Ended
September 30, 2015  September 30, 2014 
    Net income $        2,284,704 $  1,333,116
    Items not affecting cash  
Depreciation of property and equipment 176,324 138,784
      Amortization of intangible assets 484,730 482,877
      Share-based compensation expense 1,051,478 524,138
      Interest accretion on long-term debt 57,944
    Provisions (275,234) (261,059)
3,722,002 2,275,800
    Changes in non-cash operatingworking capital items (5,536,973) (2,546,274)
(1,814,971) (270,474)
    Purchase of equipment (357,895) (153,151)
    Purchase of intangibles (42,629) (29,711)
    Purchase of business, net of cash acquired (1,721,623)
(2,122,147) (182,862)
    Repayment of term debt (2,500,000)
    Proceeds from options exercised 374,402 9,963
    Proceeds from warrants exercised 350,988 798,583
    Proceeds from equity financing 35,000,000 11,500,092
    Costs of share issuance (2,383,312) (926,655)
33,342,078 8,881,983
Cash and cash equivalents inflow 29,404,960 8,428,647
Cash and cash equivalents, beginning of period 18,111,324 7,407,093
Cash and cash equivalents, end of period $  47,516,284 $  15,835,740