CounterPath Reports Fourth Quarter and Fiscal 2012 Financial Results
Company Reports Record Quarterly and Annual Revenues
VANCOUVER, July 19, 2012 /PRNewswire/ – CounterPath Corporation (“CounterPath” or the “Company”) (NASDAQ: CPAH) (TSXV: CCV), an award-winning provider of desktop and mobile VoIP software products and solutions,
today announced the financial and operating results for its fourth
quarter and fiscal year ended April 30, 2012.
Fourth Quarter Financial and Operating Highlights
-- Record quarterly revenue of $4.4 million, a 35% increase
year-over-year and a 25% increase over the last quarter.
-- GAAP gross margin of 85%. Non-GAAP gross margin of 88%.
-- Operating income of $0.1 million compared to an operating loss
of $0.5 million for the fourth quarter of fiscal year 2011.
-- A net loss of $1.2 million or a loss of $0.03 per share,
compared to a net loss of $0.8 million or a loss of $0.02 per
share, for the quarter ended April 30, 2011. The $1.2 million
net loss includes a non-cash $1.4 million charge for fair value
adjustment on derivative instruments attributable to a change
in fair value of certain warrants, the key determinant of which
is proportionate to the increase in the Company's share price.
-- Non-GAAP net income of $0.4 million or $0.01 per share compared
to a non-GAAP net loss of $0.4 million or a loss of $0.01 per
share for the quarter ended April 30, 2011.
-- Cash of $8.2 million as of April 30, 2012.
Fiscal 2012 Financial and Operating Highlights
-- Record annual revenue of $14.1 million, a 28% increase over
last year.
-- GAAP gross margin of 80%. Non-GAAP gross margin of 86%.
-- Non-GAAP operating income of $0.1 million compared to a
non-GAAP operating loss of $2.1 million last year.
-- A net loss of $2.1 million or a loss of $0.05 per share
compared to a net loss of $3.5 million or a loss of $0.11 per
share last year. The $2.1 million net loss includes a non-cash
$0.7 million charge for fair value adjustment on derivative
instruments.
-- Non-GAAP net income of $0.1 million or $0.00 per share,
compared to a non-GAAP net loss of $1.9 million or a net loss
of $0.06 per share last year.
“Another solid quarter boosted by strong mobile application demand
enabled CounterPath to post record quarterly and annual revenues,”
stated Donovan Jones, President and Chief Executive Officer. “During
fiscal 2012, we also controlled costs and improved profitability,
evidenced by our first positive operating income in the fourth quarter
and our first positive non-GAAP net income for the full fiscal year.”
“Over the past year, CounterPath’s desktop and mobile solutions have
been implemented by several major telecom, OEM and enterprise customers
in North America and Europe, while our Bria mobile apps climbed the
rankings of both the Apple iTunes App Store and Android Google Play.
We enter fiscal 2013 with a strong balance sheet and the products and
solutions to address the large and growing softphone market,” continued
Jones.
Recent Business Highlights
-- Received the BCTIA Technology Impact Award for Achievements on
Rogers One Number(TM) contract by offering a web-based VoIP
complement to Rogers' mobile offerings launched in February
2012.
-- Launched cloud-based Client Configuration Server hosted
offering which allows IT managers to deploy, configure and
manage softphone endpoints remotely.
-- Granted U.S. Patent "Method and System for Extending Services
to Cellular Devices", a patent describing how business users
may access enterprise telephony features on their mobile
devices such as 4-digit extension dialing, ad hoc conferencing
and call transfers.
-- Received 2012 Most Innovative VoIP Product Award by the
Internet Telephony Service Providers Association (ITSPA), the
UK's industry body for Internet telephony service providers for
Bria iPad Edition mobile softphone.
-- Subsequent to year end, completed private placement on June 19,
2012 for gross proceeds of $3.6 million.
-- Subsequent to year end, began trading on The NASDAQ Stock
Market LLC on July 11, 2012 under the symbol CPAH.
Subsequent to the year end, on July 19, 2012, the Company granted
$215,000 of deferred share units (“DSUs”) to six non-employee directors
and $175,000 of DSUs to two officers and one employee pursuant to its
deferred share plan (“DSUP”). The number of DSUs issued is based on the
dollar amount granted divided by the closing market share price today.
Each DSU provides the holder thereof the right to exchange the DSU,
once vested, into one share of common stock of the Company under the
terms and conditions of the DSUP. The DSUs granted to the six
non-employee directors in lieu of cash retainers for directorship, vest
immediately and the DSUs granted to the two officers and one employee
vest as to one-third of the DSUs on the first, second and third
anniversary of the date of the grant.
Conference Call Information
CounterPath will host an investor conference call and live webcast today
at 11:00 a.m. ET to discuss its financial results for the fourth
quarter and fiscal year ended April 30, 2012. To access the conference
call by telephone, dial 647-427-7450 or 1-888-231-8191. Please connect
approximately 15 minutes prior to the beginning of the call to ensure
participation. A question and answer session for analysts and
institutional investors will follow management’s presentation.
A live audio webcast of the conference call will be available at www.newswire.ca. Please connect at least 15 minutes prior to the conference call to
ensure adequate time for any software download that may be required to
join the webcast. The webcast will be archived for 30 days.
A rebroadcast will be available to listeners until 12 a.m. ET on
Thursday, July 26, 2012. To access the rebroadcast, please dial
416-849-0833 or 1-855-859-2056 and enter passcode 96815733, followed by
the number sign.
Forward-Looking Statements
This news release contains “forward-looking statements”. Statements in
this news release, which are not purely historical, are forward-looking
statements and include any statements regarding beliefs, plans,
expectations or intentions regarding the future.
It is important to note that actual outcomes and the Company’s actual
results could differ materially from those in such forward-looking
statements. Actual results could differ from those projected in any
forward-looking statements due to numerous factors. Such factors
include, among others: (1) general economic conditions as they affect
CounterPath and its current and prospective customers, including a
continued downturn in general economic conditions internationally, (2)
the Company’s ability to remain competitive as other better financed
parties develop and release competitive products, the Company’s ability
to control its operating expenses, which may adversely affect its
financial condition, (3) a decline in our stock price or insufficient
investor interest in the Company’s securities which may impact on the
Company’s ability to raise additional financing as required, (4) the
impact of intellectual property litigation that could materially and
adversely affect our business, (5) the success by the Company of the
sales of its current and new products, (6) the impact of technology
changes on the Company’s products and on our industry, (7) the failure
to develop new and innovative products using the Company’s
technologies, (8) the potential dilution to shareholders or overhang on
our share price of our outstanding stock options and warrants. Readers
should also refer to the risk disclosures outlined in the Company’s
quarterly reports on Form 10-Q or Form 10-Q/A, or in the annual reports
on Form 10-K or Form 10-K/A, and the Company’s other disclosure
documents filed from time-to-time with the Securities and Exchange
Commission at www.sec.gov and the Company’s interim and annual filings and other disclosure
documents filed from time-to-time on SEDAR at www.sedar.com.
About CounterPath
CounterPath’s SIP-based VoIP softphones are changing the face of
telecommunications. An industry and user favorite, Bria softphones for
desktop and mobile devices, together with the company’s server
applications and Fixed Mobile Convergence (FMC) solutions, enable
service providers, OEMs and enterprises large and small around the
globe to offer a seamless and unified communications experience across
both fixed and mobile networks. Standards-based, cost-effective and
reliable, CounterPath’s award-winning solutions power the voice and
video calling, messaging, and presence offerings of customers such as
Alcatel-Lucent, AT&T, Verizon, BT, Mobilkom Austria, Rogers, Avaya,
BroadSoft, Cisco Systems, GENBAND, Metaswitch Networks, Mitel and NEC.
For more information please visit www.counterpath.com.
Disclaimer: Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of this
release.
COUNTERPATH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)
April 30, April 30,
2012 2011
Assets
Current assets:
Cash $ 8,154,139 $ 1,707,397
Accounts receivable (net of 4,014,472 3,018,188
allowance for doubtful
accounts of $334,294 (2011 -
$49,883))
Investment tax credits - -
recoverable
Prepaid expenses and 170,556 110,412
deposits
Total current assets 12,339,167 4,835,997
Deposits 62,521 159,433
Equipment 101,024 59,574
Intangible assets (net of 38,853 859,664
accumulated amortization of
$5,890,282 (2011 -
$5,097,578))
Goodwill 8,957,977 9,247,993
Other assets 44,402 48,308
Total Assets $ 21,543,944 $ 15,210,969
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued $ 2,416,489 $ 2,340,897
liabilities
Derivative instruments 2,026,944 -
Unearned revenue 1,308,174 958,626
Customer deposits 13,872 2,018
Accrued warranty 84,948 146,868
Total current liabilities 5,850,427 3,448,409
Convertible debentures - 1,305,002
Deferred lease inducements 56,082 2,474
Unrecognized tax benefit 98,575 98,575
Total liabilities 6,005,084 4,854,460
Stockholders' equity:
Preferred stock, $0.001 par
value
Authorized: 100,000,000
Issued and outstanding: - -
April 30, 2012 - 1; April
30, 2011 - 1
Common stock, $0.001 par value
Authorized: 83,076,900
Issued and outstanding:
April 30, 2012 - 39,960,479; 39,961 33,440
April 30, 2011 - 33,439,906
Additional paid-in capital 61,025,529 53,420,601
Accumulated deficit (45,446,771 ) (43,323,410 )
Accumulated other (79,859 ) 225,878
comprehensive income (loss) -
currency translation
adjustment
Total stockholders' 15,538,860 10,356,509
equity
Liabilities and Stockholders' $ 21,543,944 $ 15,210,969
Equity
COUNTERPATH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(Stated in U.S. Dollars)
(Unaudited)
Three Months Ended Year Ended
April 30, April 30,
2012 2011 2012 2011
Revenue:
Software $ 2,926,074 $ 2,145,653 $ 8,494,852 $ 7,205,947
Service 1,438,964 1,085,295 5,588,644 3,834,351
Total 4,365,038 3,230,948 14,083,496 11,040,298
revenue
Operating
expenses:
Cost of sales
(includes
depreciation
of $25,485
(2011 -
$22,017) and
amortization
of intangible
assets of
$786,712 (2011
- $853,677)) 639,537 695,845 2,818,569 2,864,838
Sales and 1,092,611 888,097 3,869,815 3,495,274
marketing
Research and 1,444,591 1,152,636 4,782,908 4,469,979
development
General and 1,108,282 963,776 4,032,035 3,997,340
administrative
Total 4,285,021 3,700,354 15,503,327 14,827,431
operating
expenses
Income (loss) 80,017 (469,406 ) (1,419,831 ) (3,787,133 )
from operations
Interest and
other income
(expense), net
Interest and 27,108 54,108 171,453 245,401
other income
Interest (348 ) (35,460 ) (172,460 ) (80,365 )
expense
Foreign (1,622 ) (324,057 ) 13,280 (166,949 )
exchange gain
(loss)
Fair value (1,352,035 ) - (715,803 ) -
adjustment on
derivative
instruments
Gain on - - - 246,715
settlement of
debt
Net loss for the $ (1,246,880 ) $ (774,815 ) $ (2,123,361 ) $ (3,542,331 )
year
Other
comprehensive
income (loss):
Foreign 199,745 784,443 (305,737 ) 639,560
currency
translation
adjustments
Comprehensive $ (1,047,135 ) $ 9,628 $ (2,429,098 ) $ (2,902,771 )
loss
Net loss per
share:
Basic and $ (0.03 ) $ (0.02 ) $ (0.05 ) $ (0.11 )
diluted
Weighted 39,932,662 33,191,749 38,792,066 33,191,749
average common
shares
outstanding:
Non-GAAP Financial Measures
This news release contains “non-GAAP financial measures”. The non-GAAP
financial measures in this news release consist of non-GAAP gross
profit and non-GAAP income (loss) from operations which exclude
non-cash stock-based compensation and amortization of intangible asset
charges relative to gross profit and income (loss) from operations
calculated in accordance with GAAP. The non-GAAP financial measures
also include non-GAAP net income (loss) which excludes non-cash
stock-based compensation, amortization of intangible assets and fair
value adjustment on derivative instruments charges relative to income
(loss) calculated in accordance with GAAP. Non-GAAP financial measures
should not be considered as a substitute for, or superior to, measures
of financial performance prepared in accordance with GAAP. CounterPath
utilizes both GAAP and non-GAAP financial measures to assess what it
believes to be its core operating performance and to evaluate and
manage its internal business and assist in making financial operating
decisions. CounterPath believes that the inclusion of non-GAAP
financial measures, together with GAAP measures, provides investors
with an alternative presentation useful to investors’ understanding of
CounterPath’s core operating results and trends.
Reconciliation to GAAP
(Unaudited)
Three Months Ended Twelve Months Ended
April 30, April 30,
2012 2011 2012 2011
Non-GAAP gross
profit:
Revenue $ 4,365,038 $ $3,230,948 $ 14,083,496 $ 11,040,298
Less:
Cost of 639,537 695,845 2,818,569 2,864,838
sales
GAAP gross $ 3,725,501 $ $2,535,103 $ $11,264,927 $ 8,175,460
profit
Percentage of 85% 78% 80% 74%
revenue (gross
margin)
GAAP gross $ 3,725,501 $ 2,535,103 $ 11,264,927 $ 8,175,460
profit
Plus:
Stock-based 8,756 8,088 35,510 27,399
compensation
Amortization 102,977 220,639 786,712 853,677
of
intangible
assets
Non-GAAP gross $ 3,837,234 $ 2,763,830 $ 12,087,149 $ 9,056,536
profit
Percentage of 88% 86% 86% 82%
revenue
(Non-GAAP gross
margin)
Three Months Ended Twelve Months Ended
April 30, April 30,
2012 2011 2012 2011
Non-GAAP income
(loss) from
operations:
GAAP loss $ 80,017 $ (469,406 ) $ (1,419,831 ) $ (3,787,133 )
from
operations
Plus:
Stock-based 205,971 120,890 738,803 812,485
compensation
Amortization 102,977 220,639 786,712 853,677
of intangible
assets
Non-GAAP $ 388,965 $ (127,877 ) $ 105,684 $ (2,120,971 )
income (loss)
from
operations
Three Months Ended Twelve Months Ended
April 30, April 30,
2012 2011 2012 2011
Non-GAAP net
income (loss):
GAAP net $ (1,246,880 ) $ (774,815 ) $ (2,123,361 ) $ (3,542,331 )
loss
Plus:
Stock-based 205,971 120,890 738,803 812,485
compensation
Amortization 102,977 220,639 786,712 853,677
of
intangible
assets
Fair value 1,352,035 715,803
adjustment
on
derivative
instruments
Non-GAAP net $ 414,103 $ (433,286 ) $ 117,957 $ (1,876,169 )
income
(loss)
GAAP net $ (0.03 ) $ (0.02 ) $ (0.05 ) $ (0.11 )
loss per
share -
basic &
diluted
Non-GAAP net $ 0.01 $ (0.01 ) $ 0.00 $ (0.06 )
loss per
share -
basic &
diluted
SOURCE CounterPath Corporation
