Espial Reports Fourth Quarter and Fiscal Year Results March 07, 2013Espial Reports Fourth Quarter and Fiscal Year Results
Ottawa, Ontario - March 7, 2013 - Espial Group Inc. ("Espial" or the "Company"), (TSX:ESP), a leader in the delivery of on-demand TV software and services, today announced its fourth quarter and fiscal year financial results for the three and twelve month periods ended December 31, 2012.
Espial Highlights
Acquisition of ANT plc, extending Espials leadership in HTML5 and TV Everywhere.
Signed partnership agreement with WiLAN to assist Espial in licensing certain of Espials patents related to video-over-IP technology.
Secured 2 new service provider wins for Espial MediaBase in Western Europe and Baltics.
In 2012, shipped the Espial TV browser - based on WebKit and HTML5 - across numerous TV brands including Toshiba, Sharp, Hitachi and Hisense.
In 2012, started shipping Espial products with KBRO, Taiwans largest cable operator, and major Japanese operators NTT and KDDI.
The Espial TV Browser won recognition with Broadband Technology Reports 2012 Diamond Technology Reviews and the "Best Internet Smart TV Solution" in Communications Technology magazine.
Expanded Espials HTML5 application ecosystem for Espial TV Browser with major OTT providers such as You Tube, Vimeo and BBC iPlayer.
Financial Summary
For the three-month period ended December 31, 2012, the Company reported revenues of $2.7 million compared to revenues of $4.1 million for the three months ended December 31, 2011. For the year ended December 31, 2012, the Company reported revenues of $13.3 million compared to revenues of $14.7 million for the year ended December 31, 2011. Last quarter, we experienced a slower pace of roll-outs from our existing pay-TV customers, especially in Europe. We believe this is related to the prevailing economic challenges in Europe and may continue for the next two or three quarters.
Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the fourth quarter of fiscal 2012 was a loss of $0.9 million, compared to income of $0.2 million in the fourth quarter of fiscal 2011. For the year ended December 31, 2012, EBITDA was a loss of $0.7 million compared to an EBITDA loss of $0.2 million in 2011. Net loss, which includes non-cash items like depreciation, stock compensation and amortization of intangibles, for the quarter was $1.3 million or $0.09 per share, compared to a net loss of $0.6 million last year, or $0.04 per share. Net loss for fiscal 2012 was $2.7 million compared to a net loss of $2.5 million in 2011.
"There is an increasing urgency from Pay TV operators to invest in next generation IP video services across TVs, tablets and smart phones. In Q4, we saw North American cable operators become more active around planning investments for their transition to IP-based set-top box and multi-screen services. Towards this, we have made progress on our product capabilities, roadmap, worked with Comcast as an RDK licensee and further extended our HTML5 leadership in rich user experiences" said Jaison Dolvane, President and CEO. "Globally, this remains a common theme with many traditional cable, satellite, and terrestrial Pay TV operators, who are poised to invest in IP video delivery and services. On the Smart TV front, we have seen increased activity with consumer electronics manufacturers continuing to adopt HTML5 as their platform for next generation apps, browser and UX development. Today, Smart TVs which are capable of a full web experience are generally only available on the higher end of the TV Market. We expect this will become a core feature of mass volume flat screen TV models over the next 12-18 months. We continue to innovate rapidly in this market together with our Smart TV customers as well as Internet app and video content providers."
Commenting on the acquisition of ANT plc, Dolvane added, "We announced the acquisition of Ant in Q4, which was completed in Q1, 2013. We are excited to have the Ant team be part of Espial, which provides us with further HTML5 and application engineering capabilities, and a number of new Pay TV and Smart TV customers to leverage into increasing our leadership, market share and relevance in the industry."
Q4 Financial Results
Fourth quarter revenues were $2,716,779 compared with revenues of $4,072,848 in the same period a year ago. Fourth quarter software license and royalty revenues were $1,517,179 compared to $2,834,500 in the fourth quarter of fiscal 2011. Professional services for the fourth quarters of 2012 and 2011 were $221,607 and $445,458 respectively. Maintenance and support revenues for the fourth quarter were $977,992 compared to $792,890 last year.
Gross margins for the fourth quarter of fiscal 2012 was 71% compared with 81% in the fourth quarter of fiscal 2011.
Operating expenses in the fourth quarter of fiscal 2012 were $3,211,461 compared to $3,526,058 in the fourth quarter of fiscal 2011.
Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the fourth quarter of fiscal 2012 was a loss of $910,636 compared to income of $197,052 in fiscal 2011.
Net loss, which includes non-cash items like depreciation, goodwill and intangibles, in the fourth quarter was $1,273,082 compared to a loss of $566,689 last year.
Fiscal 2012 Financial Results
Total revenues for the fiscal year ended December 31, 2012 were $13,280,518 compared with revenues of $14,674,826, in the same period a year ago. Software license and royalty revenues for the 2012 fiscal year were $7,536,633 compared to $9,172,316 in fiscal 2011. Professional services for the fiscal years of 2012 and 2011 were $2,201,640 and $2,440,408 respectively. Maintenance and support revenues for the fiscal year ended December 31, 2012 were $3,542,244
