Espial Reports Fourth Quarter and Full Year 2016 Results
Ottawa, Ontario – February 23, 2017 - Transforming the viewing experience worldwide, Espial® Group Inc. ("Espial" or the "Company"), (TSX:ESP), today announced its fourth quarter and full year financial results for the three and twelve month periods ended December 31, 2016.
Highlights - Fourth quarter revenue of $12.7 million
- Fourth quarter adjusted EBITDA income of $3.2 million
- Increased revenue year-over-year by 15% to a record $28.6 million in 2016
- Adjusted EBITDA loss of $1.9 million in 2016
- Tele Columbus, a major German cable operator, introduced their "advanceTV" service, developed and integrated by Espial. This next generation 4K video service for set-top boxes, tablets, and smartphones was launched in January, 2017 across Germany within Tele Columbus' network of almost 3.7 million homes
- NOS, Portugal's primary cable operator, with approximately 1.6 million subscribers, launched their next-generation Hybrid IP video service, "UMA" in June 2016, developed and integrated by Espial. With high user ratings and reviews, NOS is now continuing to further deploy and scale their "UMA" service.
- Enhanced Espial's market leading position in RDK with our Espial Elite system integration services and commercially proven RDK based Espial G4 Client and User Experience products.
- Acquired Whole Home Solution platform from ARRIS, which included a hosted video platform, 40+ customer relationships and a world class integration, operations and engineering team.
- Introduced Espial Elevate, a new cloud-based, turnkey, video-as-a-service solution that integrates assets acquired from ARRIS with Espial's industry leading IP back office, client and user experience solutions. Announced 3 new Espial Elevate customers which include Easton Utilities, HBC, and Ritter Communications.
- Announced a global marketing and distribution partnership agreement with ARRIS, the world's largest set-top box manufacturer. As part of this agreement, the two companies will jointly deliver end-to-end, IP video solutions to service providers worldwide.
"I am very pleased with our business accomplishments and our latest Q4 and 2016 financial results," said Jaison Dolvane, CEO, Espial. "In 2016, we achieved key customer deployments, cemented our leading position as a RDK solution provider, increased our scale and product portfolio and expanded our distribution channel through a global collaboration agreement with ARRIS. Our customers, NOS and Tele Columbus, introduced their "UMA" and "
advanceTV" next generation Pay TV services to very positive reviews. We are proud of the great subscriber experiences that these service providers have achieved using Espial products and system integration services. In 2016, we also introduced Espial Elevate, a cloud based turn-key video-as-a-service solution that provides service providers with a seamless path to next generation user experiences, IP video services and rapid innovation. Our accomplishments in 2016 are significant for Espial, the industry and for the adoption of RDK. We demonstrated the carrier grade nature of Espial's solutions that provide advanced features, low risk and time to market advantages to leading video service providers."
Financial Summary For the three-month period ended December 31, 2016, revenue was $12.8 million compared with revenue of $5.2 million for the three months ended December 31, 2015. Adjusted EBITDA income for the fourth quarter of fiscal 2016 was $3.2 million compared to adjusted EBITDA loss of $0.6 million for the fourth quarter of fiscal 2015. Net income for the quarter was $2.5 million, compared with a net loss of $1.0 million for the fourth quarter of fiscal 2015.
For the fiscal year ended December 31, 2016, the Company reported revenue of $28.6 million compared with revenue of $24.8 million for the fiscal year ended December 31, 2015. Adjusted EBITDA loss for fiscal 2016 was $1.9 million compared to income of $2.9 million for fiscal 2015. Net loss for the year was $4.9 million, compared to net income of $1.3 million last year.
Q4 Financial Results - Fourth quarter revenues were $12,753,702 compared with revenues of $5,209,206 in the same period a year ago. Fourth quarter software license and royalty revenues were $9,752,798 compared to $2,426,721 in the fourth quarter of fiscal 2015. Professional services for the fourth quarters of 2016 and 2015 were $1,096,363 and $1,576,139 respectively. Maintenance and support revenues for the fourth quarter were $1,904,540 compared to $1,206,346 last year.
- North American revenues were $7,758,240 in the fourth quarter of 2016 compared to $2,457,595 in 2015. Asia revenues were $782,797 in the fourth quarter of 2016 compared to $616,408 in 2015. European revenues were $4,212,664 in the fourth quarter of 2016 compared to $2,135,203 in 2015.
- Gross margin for the fourth quarter of fiscal 2016 was 82% compared with 66% in the fourth quarter of fiscal 2015.
- Operating expenses in the fourth quarter of fiscal 2016 were $7,986,116 compared to $4,639,271 in the fourth quarter of fiscal 2015.
- Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (adjusted EBITDA) for the fourth quarter of fiscal 2016 was income of $3,244,668 compared to loss of $582,572 in fiscal 2015.
- Net income, which includes non-cash items like depreciation, amortization of intangibles and stock compensation, in the fourth quarter was $2,474,708 compared to a loss off $1,012,696 last year.
Fiscal 2016 Financial Results - Total revenues for the fiscal year ended December 31, 2016 were $28,644,570 compared with revenues of $24,834,692, in the same period a year ago. Software license and royalty revenues for the 2016 fiscal year were $18,142,077 compared to $11,767,217 in fiscal 2015. Professional services for the fiscal years of 2016 and 2015 were $4,614,199 and $8,294,954 respectively. Maintenance and support revenues for the fiscal year ended December 31, 2016 were $5,888,294 compared to $4,772,521 last year.
- North American revenues were $11,383,936 in the 2016 fiscal year compared to $11,073,288 in 2015. Asia revenues were $3,330,831 in the 2016 fiscal year compared to $3,000,206 in 2015. European revenues were $13,929,803 in the 2016 fiscal year compared to $10,761,198 in 2015.
- Gross margin for the 2016 fiscal year was 75% compared with 74% in fiscal 2015.
- Operating expenses for the 2016 fiscal year were $26,028,495 compared to $17,873,415 in fiscal 2015.
- Adjusted EBITDA for the fiscal year ended December 31, 2016 was a loss of $1,899,798 compared to income of $2,907,404 in fiscal 2015.
- Net loss in the 2016 fiscal year was $4,874,769 compared to net income of $1,272,008 in 2015.
Cash and cash equivalents on December 31, 2016, was $43,047,878
A complete set of financial statements and management's discussion and analysis for the period ended December 31, 2016 will be available at
https://www.sedar.com.
Conference Call The Company will be hosting a conference call to discuss the Q4 and full year 2016 financial results on February 23, 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 March 24, 2017, at the following numbers and passcode:
Toll-free line: +1-800-585-8367 or +1-416-621-4642, Passcode: 71150010