OTTAWA, Aug. 12 /CNW Telbec/ - Espial(R) Group Inc. ("Espial" or the
"Company"), (TSX:ESP), a leader in the delivery of TV software, today
announced its second quarter financial results for the three-month period
ended June 30, 2008.
Q2 HIGHLIGHTS:
- Announced acquisition of Kasenna, a leading Video on Demand software
company
- Signed a global software and distribution agreement with Motorola
- Announced appointment of cable executive, Michael Lee, from Rogers
Communications to the Espial board of directors
For the three-month period ended June 30, 2008 the Company reported
revenues of $1,827,475 compared to revenues of $2,007,947 for the three months
ended June 30, 2007. For the three-month period, net loss was $1,365,135, or
$0.15 per share, compared to a net loss of $4,758,508 last year, or $1.79 per
share.
"We are pleased with the significant progress we've made and momentum
we've gained in Q2. The acquisition of Kasenna positions us as a leading
supplier of TV software to the telco, cable and hospitality industries. The
signing of the software license and distribution agreement with Motorola
provides a new, tier 1 channel for our products and services" noted
Jaison Dolvane, President and CEO of Espial. "It's also noteworthy that the
addition of Michael Lee, Chief Strategy Officer for Rogers Communications,
bolsters the experience of our board of directors with the insight and
expertise of a seasoned cable executive."
"During the quarter we solidified our position in the industry with the
Kasenna acquisition and significantly broadened our customer base. We also
made strong progress in developing our pipeline directly and via channels.
Through these, we will continue to strengthen the foundation of our business
to leverage future industry growth" added Mr. Dolvane. "Our key objectives for
the remainder of 2008 are to successfully integrate Kasenna operations, deploy
our key customers for the Evo TV Service Platform, improve channel
productivity, and to secure 2 new major customers for our high value products.
Q2 Financial Results
Second quarter revenues were $1,827,475 compared with revenues of
$2,027,947 in the same period a year ago. Second quarter software license and
royalty revenues were $1,243,644 compared to software license and royalty
revenues of $1,424,957 in the second quarter of fiscal 2007. Professional
services for the second quarters of 2008 and 2007 were $240,702 and
$190,199 respectively. Maintenance and support revenues for the second quarter
were $343,129 compared to $412,792 last year.
Gross margins for the second quarter of fiscal 2008 were 71% compared with
72% in the second quarter of fiscal 2007.
Operating expenses in the second quarter of fiscal 2008 were $2,736,182
compared to $5,444,142 in the second quarter of fiscal 2007.
Earnings before interest, foreign exchange, taxes, stock compensation,
depreciation and amortization (EBITDA) for the second quarter of fiscal 2008
was a loss of $1,412,930 compared to a loss of $1,802,831 in fiscal 2007.
Net loss in the second quarter was $1,365,135 compared to a loss of
$4,758,508 last year.
Cash and cash equivalents at June 30, 2008 was $13,821,950.
The Company will be hosting a conference call to discuss the second
quarter financial results on August 12, 2008 at 5:00 PM Eastern Standard Time
(EST). The phone number to join the results discussion is:
- Toll line - 416 644 3422
- Toll free line - 800-814-4860
The playback for the call will be available until Friday, September 12,
2008 at the following numbers and passcode:
- Toll line: 416-640-1917 - passcode: 21280124(number sign).
- Toll free line: 877-289-8525 - passcode: 21280124(number sign).
About Espial (www.espial.com)
Espial provides intelligent and open TV software to service providers in
the cable, telecommunications and hospitality industries. It's middleware and
video-on-demand solutions provide superior service delivery, advanced service
innovation tools and the ability to serve a wide range of market segments -
including over-the-top, IPTV, hybrid IP, multi-dwelling unit and enterprise.
With over 2.5 million licenses of its patented software technology in use,
Espial is a leading supplier of TV software. Espial is headquartered in
Ottawa, Canada. For more information please visit the Espial website @
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, 2007 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.
Non-GAAP Financial Measures
In addition to our GAAP results, Espial discloses a "Earnings before
interest, foreign exchange, taxes, stock compensation, depreciation and
amortization (EBITDA)", which is referred to as a "Non-GAAP Measure". Because
the Non-GAAP Measure is not calculated in accordance with GAAP, it is used by
management as a supplement to, and not an alternative to, or superior to,
financial measures calculated in accordance with GAAP.
ESPIAL GROUP INC.
Consolidated Balance Sheet
(in Canadian dollars)
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June 30, December 31,
2008 2007
(unaudited)
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CURRENT ASSETS
Cash and cash equivalents $ 13,821,950 $ 631,027
Short-term investments 110,000 16,402,949
Accounts receivable 1,853,257 1,950,267
Investment tax credits receivable 300,000 626,815
Prepaid expenses 255,455 243,034
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16,340,662 19,854,092
PROPERTY AND EQUIPMENT 769,011 806,305
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$ 17,109,673 $ 20,660,397
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CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 1,393,388 $ 1,714,774
Deferred revenue 661,304 668,485
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2,054,692 2,383,259
DEFERRED REVENUE - 51,719
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2,054,692 2,434,978
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COMMITMENTS
SHAREHOLDERS' EQUITY
Share capital 68,248,462 68,248,462
Warrants 76,900 76,900
Contributed surplus 10,132,543 10,135,043
Deficit (63,402,924) (60,234,986)
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15,054,981 18,225,419
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$ 17,109,673 $ 20,660,397
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ESPIAL GROUP INC.
Consolidated Statement of Operations and Comprehensive Loss
(in Canadian dollars except share data)
Three Months Ended Six Months Ended
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June 30, June 30, June 30, June 30,
2008 2007 2008 2007
(unaudited) (unaudited) (unaudited) (unaudited)
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Revenue $ 1,827,475 $ 2,027,947 $ 3,101,761 $ 4,207,409
Cost of revenue 522,970 562,678 1,184,031 1,085,876
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Gross margin 1,304,505 1,465,269 1,917,730 3,121,533
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Expenses
Sales and
marketing 1,251,181 1,356,530 2,461,563 2,683,609
General and
administrative 492,688 644,610 969,336 995,383
Research and
development 973,566 1,216,588 1,886,507 2,241,734
Stock compensation
expense (46,500) 4,165,738 (2,500) 4,169,313
Amortization 65,247 75,814 129,236 134,657
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2,736,182 7,459,281 5,444,142 10,224,696
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Loss before other
income (expense) (1,431,677) (5,994,012) (3,526,412) (7,103,163)
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Other income
(expenses)
Dividends on
redeemable
preferred shares - (290,662) - (713,381)
Interest income 98,435 54,927 246,958 75,217
Foreign exchange
gain (loss) (31,893) 1,831,202 111,513 1,574,380
Interest on
loan payable - (359,962) - (500,639)
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66,542 1,235,504 358,471 435,576
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Net loss and
comprehensive
loss $ (1,365,135) $ (4,758,508) $ (3,167,941) $ (6,667,587)
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Net loss per
common share -
basic and
diluted $ (0.15) $ (1.79) $ (0.34) $ (4.31)
Weighted average
number of common
shares - basic
and diluted 9,329,605 2,663,380 9,329,605 1,548,535
%SEDAR: 00025301E
