Press Release

May 07, 2009

Ottawa, Ontario - May 7, 2009 - Espial Group Inc. ("Espial" or the "Company"), (TSX:ESP), a leader in the delivery of TV software, today announced its first quarter financial results for the three month period ended March 31, 2009.

HIGHLIGHTS:

• First quarter revenue of $3.1 million, an increase of 142% from last year
• EBITDA loss of $809 thousand compare to a loss of $2.0 million last year
• Demonstrated Espial solutions at CCBN in Beijing, China, IPTV World Forum in London, UK.

For the three-month period ended March 31, 2009, the Company reported revenues of $3.1 million compared to revenues of $1.3 million for the three months ended March 31, 2008. Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the first quarter of fiscal 2009 was a loss of $0.8 million compared to a loss of $2.0 million in the first quarter of fiscal 2008. Net loss for the quarter was $1.2 million or $0.08 per share, compared to a net loss of $1.8 million last year, or $0.19 per share.

"We are pleased with the start of the new fiscal year", said Jaison Dolvane, President and CEO. "The economic impact of the global slowdown has impacted how people spend their time and income. We believe that consumers will continue to spend their entertainment dollars on their TV and VOD services during these difficult times. While our industry is still in the early stages of growth, and as such in the short-term we may experience significant fluctuations in amount, size and timing of orders, we are very excited by increasing interest for IPTV & VOD by telcos and cable."


 
Q1 Financial Results

First quarter revenues were $3,083,121 compared with revenues of $1,274,286 in the same period a year ago. First quarter software license and royalty revenues were $2,079,464 compared to software license and royalty revenues of $519,649 in the first quarter of fiscal 2008. Professional services for the first quarters of 2009 and 2008 were $233,098 and $404,366 respectively. Maintenance and support revenues for the first quarter were $770,559 compared to $350,271 last year.

Gross margins for the first quarter of fiscal 2009 were 79% compared with 48% in the first quarter of fiscal 2008.

Operating expenses in the first quarter of fiscal 2009 were $3,650,480 compared to $2,707,957 in the first quarter of fiscal 2008.

Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the first quarter of fiscal 2009 was a loss of $809,264compared to a loss of $1,986,742 in fiscal 2008.

Net loss in the first quarter was $1,182,302 compared to a loss of $1,802,803 last year.


Cash and cash equivalents at March 31, 2009 was $8,360,213.
 
The Company will be hosting a conference call to discuss the fourth quarter financial results on Thursday, May 7th, 2009 at 5:30 PM Eastern Standard Time (EST). The phone number to join the results discussion is:

• Toll line - 416-646-3095
• Toll free line - 800-814-4853

The playback for the call will be available until midnight on Sunday, June 7th, 2009, at the following numbers and passcode:

• Toll line: 416-640-1917 - passcode: 21305546#
• Toll free line: 877-289-8525 - passcode: 21305546#

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