Espial Reports First Quarter 2017 Results

OTTAWA, Ontario--()--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, 2017.


  • First quarter revenue of $8.7 million, an increase of 63% over the same period in 2016.
  • First quarter adjusted EBITDA loss was $1.0 million.
  • Tele Columbus, a major German cable operator with 3.7 million homes launched their “advanceTV” 4K service, powered by Espial’s cloud platform and device solutions.
  • Extended our market leadership in RDK solutions, with new deployments, technology contributions, and innovations in process, product and organization, that will deliver lower risk and fast time to market for new set-top box services.
  • Presented at the 2017 RDK Americas Summit in Denver, together with Tele Columbus showcasing their service to operators from Europe, Asia, North America & South America.
  • Introduced new Espial Elevate features available to over 40 operators, including OTT Apps, advanced User Experience, wireless TV and IPTV capabilities on our shared cloud service.
  • Launched five IPTV lab trials on Espial Elevate cloud service with operators in North America.

“We’re off to a good start in 2017,” said Jaison Dolvane, CEO Espial. “In Q1, our customers deploying Espial solutions, including NOS, Tele Columbus and several operators on the Espial Elevate shared cloud service, drove an increase in revenues of 63% over last year. Our Agile and DevOps software engineering processes have increased our velocity in delivering new features and updates to enhance subscriber experience and help our customers expand their footprint. We’re continuing to invest in our cloud and device products aimed at accelerating adoption of Espial solutions. In Q1, we progressed our sales pipeline further and believe we are well positioned to become a partner to major service providers for their next generation Pay TV platforms.”

Board Change

“Tawfiq Arafat has resigned from the Board and will not be standing for re-election at our upcoming Annual and Special Shareholder meeting to be held on June 13th” added Mr. Dolvane. “I wish to sincerely thank Tawfiq for the six years of guidance, insight and counsel he provided to Espial while on our Board.” The Board is in the process of reviewing candidates, to nominate for election at our upcoming shareholder meeting, who will compliment and strengthen the Espial board. Information concerning our Board nominees will be set forth in the Management Information Circular that will be delivered to shareholders and filed on SEDAR in advance of the meeting.

Financial Summary

For the three-month period ended March 31, 2017, revenue was $8.7 million compared with revenue of $5.3 million for the three months ended March 31, 2016. Adjusted EBITDA loss for the first quarter of fiscal 2017 was $1.0 million compared to adjusted EBITDA loss of $1.2 million for the first quarter of fiscal 2016. Net loss for the quarter was $1.8 million, compared with a net loss of $2.0 million for the first quarter of fiscal 2016.

Q1 Financial Results

  • First quarter revenues were $8,664,010 compared with revenues of $5,323,982 in the same period a year ago. First quarter software license and royalty revenues were $5,025,351 compared to $2,440,739 in the first quarter of fiscal 2016. Professional services for the first quarters of 2017 and 2016 were $1,585,934 and $1,672,025 respectively. Maintenance and support revenues for the first quarter were $2,052,725 compared to $1,211,218 last year.
  • North American revenues were $5,088,367 in the first quarter of 2017 compared to $803,782 in 2016. Asia revenues were $520,672 in the first quarter of 2017 compared to $1,113,020 in 2016. European revenues were $3,054,971 in the first quarter of 2017 compared to $3,407,180 in 2016.
  • Gross margin for the first quarter of fiscal 2017 was 74% compared with 64% in the first quarter of fiscal 2016.
  • Operating expenses in the first quarter of fiscal 2017 were $8,130,367 compared to $5,194,090 in the first quarter of fiscal 2016.
  • Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (adjusted EBITDA) for the first quarter of fiscal 2017 was a loss of $987,182 compared to loss of $1,166,501 in fiscal 2016.
  • Net loss, which includes non-cash items like depreciation, amortization of intangibles and stock compensation, in the first quarter was $1,799,947 compared to a loss of $1,967,532 last year.

Cash and cash equivalents on March 31, 2017, was $41,707,814.

A complete set of financial statements and management’s discussion and analysis for the period ended March 31, 2017 will be available at

Conference Call

The Company will be hosting a conference call to discuss the Q1 2017 financial results on May 2, 2017 at 5:00PM EDT and the phone number to join the results discussion is:

  • Toll Free line (Canada/US) 866-521-4909
  • Toll line (International/Local) 647-427-2311

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 2, 2017, at the following numbers and passcode:

Toll-free line: +1-800-585-8367 or +1-416-621-4642, Passcode: 13008297

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, with R&D centers in Seattle, Montreal, Silicon Valley, Cambridge and Lisbon, and with sales offices in North America, 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 or new board nominees, 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, 2016 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) which removes 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) and Adjusted EBITDA are not recognized, defined or standardized measures under IFRS. Our definition of Adjusted net income (loss) and Adjusted EBITDA will likely differ from that used by other companies and therefore comparability may be limited. Adjusted net income (loss) and Adjusted EBITDA 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 to the most comparable IFRS financial measure as follows:

  Three months ended

March 31, 2017

  Three months ended

March 31, 2016

Net loss $




Share-based compensation 432,486 389,456
Amortization of intangibles   182,879   174,683
Adjusted net loss



Add (less)
Depreciation 99,831 68,451
Net interest (income) expense



Other (income) expense 82,996 223,550
Income tax   77,117   31,623
Adjusted EBITDA $




Consolidated Statements of Income and
Comprehensive Income
(In Canadian dollars)

  Three Months Ended
March 31, 2017   March 31, 2016
Software $ 5,025,351 $ 2,440,739
Professional services 1,585,934 1,672,025
Support and maintenance 2,052,725 1,211,218
Total revenue 8,664,010 5,323,982
Cost of revenue 2,236,021 1,928,983
Gross margin 6,427,989 3,394,999
Sales and marketing 1,655,158 1,264,443
General and administrative 1,006,700 864,748
Research and development 5,285,630 2,890,216
Amortization of intangible assets 182,879 174,683
  8,130,367 5,194,090
Loss before other expense (1,702,378) (1,799,091)
Other expense (82,996) (223,550)
Interest income 62,544 86,732
Loss before taxes (1,722,830) (1,935,909)
Income taxes (77,117) (31,623)
Net loss and comprehensive loss $ (1,799,947) $ (1,967,532)

Consolidated Balance Sheets

    March 31, 2017   December 31, 2016  
Cash and cash equivalents $ 41,707,814 $ 43,047,878
Accounts receivable 8,176,253 10,475,563
Investment tax credits receivable 371,740 321,018
Prepaid expenses and other assets   817,532     653,055  
51,073,339 54,497,514
Equipment 1,466,869 1,420,957
Intangible assets 1,635,188 1,818,067
Goodwill   3,632,604     3,632,604  
  $ 57,808,000   $ 61,369,142  
Accounts payable and accrued liabilities $ 3,384,732 $ 4,542,527
Provisions 272,026 334,591
Deferred revenue   1,548,052     2,054,323  
    5,204,810     6,931,441  
Total Liabilities 5,204,810 6,931,441
Share capital 124,900,373 125,362,413
Share based payments reserve 16,029,337 15,601,861
Deficit   (88,326,520 )  



    52,603,190     54,437,701  
  $ 57,808,000   $ 61,369,142  

Statements of Cash Flows

  Three Months Ended
  March 31, 2017   March 31, 2016
Net loss $ (1,799,947) $ (1,967,532)
Items not affecting cash
Depreciation of property and equipment 99,831 68,451
Amortization of intangible assets 182,879 174,683
Share-based compensation expense 432,486 389,456
Provisions   (62,565)   -
(1,147,316) (1,334,942)
Changes in non-cash operating

working capital items

  420,045   115,364
    (727,271)   (1,219,578)
Purchase of equipment (145,743) (97,659)
Purchase of intangibles   -   (125,129)
    (145,743)   (222,788)
Options exercised 6,183 9,430
Share repurchase program   (473,233)   -
    (467,050)   9,430
Net cash and cash equivalents outflow (1,340,064) (1,432,936)
Cash and cash equivalents, beginning of period   43,047,878   49,947,096
Cash and cash equivalents, end of period $ 41,707,814 $ 48,514,160


For inquiries from the financial press or analysts, contact:
Espial Group Inc.
Carl Smith, +1 613-230-4770
Chief Financial Officer
Kirk Edwardson, +1-613-230-4770 x1145
Director, Marketing

Release Summary

Espial Reports First Quarter 2017 Results


For inquiries from the financial press or analysts, contact:
Espial Group Inc.
Carl Smith, +1 613-230-4770
Chief Financial Officer
Kirk Edwardson, +1-613-230-4770 x1145
Director, Marketing