Espial Reports 2016 First Quarter Results


Ottawa, Ontario – May 4, 2016 – 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, 2016.


Espial Q1 Highlights

  • First quarter revenue of $5.3 million and adjusted EBITDA loss of $1.2 million.
  • North American cable operator customer began rolling out their 4K Ultra High Definition set-top boxes together with market leading content offerings for 4K sports and entertainment.
  • Tele Columbus, a leading German cable operator, announced very positive consumer ratings and termed the field trial of their new Advanced TV video service as an “unqualified success”.
  • Our second European cable operator customer concluded advanced field trials and are now in a training phase to prepare their call center, retail and field tech staff for a commercial launch.
  • Strengthened our integration and solution delivery capabilities, growing our Espial EliteTM Professional Services Team


“In Q1, we made major strides toward commercial deployment of our operator customers through real-world trials with their next generation video services,” said Jaison Dolvane, CEO, Espial. “Our priorities are focused on these operators to ensure they roll out successfully.  We have a good pipeline of new prospects, and these deployment milestones provide a solid foundation to build additional customer wins.  In addition, we continue to invest in our solution delivery capabilities and R&D to innovate on user experience and cloud software solutions that enable our customers to achieve competitive advantage.”


Financial Summary

For the three-month period ended March 31, 2016, the Company is reporting revenue of $5.3 million compared with revenue of $5.4 million for the three months ended March 31, 2015. Adjusted EBITDA loss for the first quarter of fiscal 2016 was $1.2 million compared to income of $0.8 million for the first quarter of fiscal 2015. Cash on March 31, 2016, was $48.5 million.

Q1 Financial Results

  • First quarter revenues were $5,323,982 compared with revenues of $5,415,877 in the same period a year ago. First quarter software license and royalty revenues were $2,440,739 compared to $2,413,027 in the first quarter of fiscal 2015. Professional services for the first quarters of 2016 and 2015 were $1,672,025 and $1,872,706 respectively.  Maintenance and support revenues for the first quarter were $1,211,218 compared to $1,130,144 last year.
  • European revenues were $3,407,180 in the first quarter of 2016 compared to $2,913,080 in 2015. Asia revenues were $1,113,020 in the first quarter of 2016 compared to $1,161,278 in 2015. North American revenues were $803,782 in the first quarter of 2016 compared to $1,341,519 in 2015.
  • Gross margin for the first quarter of fiscal 2016 was 64% compared with 78% in the first quarter of fiscal 2015.
  • Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (adjusted EBITDA) for the first quarter of fiscal 2016 was a loss of $1,166,501compared to income of $785,998 in fiscal 2015.
  • Net loss, which includes non-cash items like depreciation, goodwill and intangibles, in the first quarter was $1,967,532 compared to net income of $359,225 last year.

Cash and cash equivalents on March 31, 2016, was $48,514,160

A complete set of financial statements and management’s discussion and analysis for the quarter ended March 31, 2016 will be available at


Conference Call

The Company will be hosting a conference call to discuss the Q1 2016 financial results on May 4, 2016 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 June 4, 2016, at the following numbers and passcode:

  • Toll-free line: +1-855-859-2056 or +1-404-537-3406, Passcode: 1775691.


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 (including our ability to successfully execute on market opportunities and secure new customer wins) 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 grow its integration and support capabilities, execute on market opportunities, 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, 2014 and 2015 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 March 31, 2016Three months endedMarch 31, 2015
Net (loss) income$   (1,967,532)$  359,225
 Stock based compensation389,456320,863
Amortization of intangibles174,683161,219
Adjusted net (loss)  income(1,403,393)841,307
Net interest income(86,732)(36,390)
Foreign exchange loss / gain223,550(103,756)
Income tax31,62336,793
Adjusted EBITDA$    (1,166,501)  $  785,998
Adjusted Basic net income per share$(0.03)$0.03
Adjusted diluted net income per share$(0.03)$0.03


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 Loss

Comprehensive Income and Loss

(In Canadian dollars, except share amounts)


                 Three Months Ended
   March 31, 2016March 31, 2015
  Software  $    2,440,739         $    2,413,027
  Professional services 1,672,0251,872,706
  Support and maintenance 1,211,2181,130,144
Revenue 5,323,9825,415,877
Cost of revenue 1,928,9831,169,387
Gross margin 3,394,9994,246,490
  Sales and marketing 1,264,4431,146,086
  General and administrative 864,748790,041
  Research and development 2,890,2161,893,272
  Amortization of intangible assets 174,683161,219
(Loss) income  before other (expense)  income (1,799,091)255,872
  Interest income 86,73236,390
  Foreign exchange (loss) gain (223,550)103,756
(Loss) income  before taxes (1,935,909)396,018
Income taxes (31,623)(36,793)
Net and comprehensive (loss) income$   (1,967,532) $   359,225
(Loss) income  per common share – basic $           (0.05)$           0.01
(Loss) income per common share – diluted $           (0.05)          $            0.01


Consolidated Balance Sheets

March 31, 2016 December 31, 2015
Cash and cash equivalents$ 48,514,160 $  49,947,096
Accounts receivable6,925,9358,397,948
Investment tax credits receivable487,593413,920
Prepaid expenses and other assets663,965734,906
Intangible assets1,609,0561,658,610
$ 62,925,065$  65,847,628
Accounts payable and accrued liabilities$  2,707,060 $   3,165,144
Deferred revenue2,794,8053,690,638
Total Liabilities 5,501,8656,855,782
Share capital126,600,874126,583,844
Share based payments reserve14,441,66214,059,806
$ 62,925,065 $  65,847,628


Statements of Cash Flows

Three Months Ended
March 31, 2016 March 31, 2015
Net (loss) income$ (1,967,532)$ 359,225
Items not affecting cash 
Depreciation of property and equipment68,45148,043
Amortization of intangible assets174,683161,219
Share-based compensation expense389,456320,863
Changes in non-cash operating working capital items115,364(1,505,861)
Purchase of equipment(97,659)(34,409)
Purchase of intangibles(125,129)
Proceeds from options exercised9,430270,554
Proceeds from warrants exercised72,000
Cash and cash equivalents outflow(1,432,936)(381,576)
Cash and cash equivalents, beginning of period49,947,09618,111,324
Cash and cash equivalents, end of period$ 48,514,160 $ 17,729,748
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