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CounterPath Reports Second Quarter Fiscal 2012 Financial Results
Wednesday, December 14, 2011

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Vancouver, BC, December 14, 2011--(T-Net)--- CounterPath Corporation (TSX-V: CCV), an award-winning provider of desktop and mobile VoIP software products and solutions, today announced the financial and operating results for the second quarter of fiscal year 2012.


Financial and operating highlights for the second quarter ended October 31, 2011 include:

  • Record revenue of $3.5 million, an increase of 35% compared to revenue of $2.6 million for the second quarter endedOctober 31, 2010.

  • Non-GAAP gross profit increased to 87% of revenue compared to 81% for the same quarter last year.

  • Non-GAAP operating income of $0.1 million compared to a non-GAAP operating loss of $0.7 million for the same quarter last year.

  • Net income of $0.1 million, or $0.00 per share, compared to a net loss of $0.8 million, or ($0.03) per share for the same quarter last year.

  • The entering into of a strategic agreement to provide mobile applications to GENBAND, a global leader of IP infrastructure and service solutions with product deployed in 80 of the world's top 100 telecommunication operators.

  • The addition of SMS, instant messaging and presence capabilities to Bria iPhone Edition, iPad Edition and Android Edition.

  • The introduction of the Client Configuration Server designed to enable enterprises and service providers to efficiently deploy and configure softphones and manage ongoing updates, greatly simplifying endpoint administration.

"We are pleased with our quarterly results showing strong revenue growth and positive income. Our revenues, margins, and income were at record levels resulting from continued expansion of our customer base, sales of our mobile applications and a seasonally strong quarter," stated Donovan Jones, President and Chief Executive Officer. "With Apple's iOS and Google's Android mobile and tablet operating systems representing over 67% of worldwide market share of the smartphone segment (Gartner), CounterPath is well positioned to be a leading provider of consumer to enterprise grade, mobile softphone applications. We intend to continue investing in developing leading solutions to address the market opportunity fueled by global wireline and wireless operators. In addition, our strategy of increasing our indirect sales through channel partners continued to advance during the quarter," continued Jones.


Financial Results


(All amounts in U.S. dollars and in accordance with accounting principles generally accepted in the United States ("GAAP") unless otherwise specified.)


For the quarter ended October 31, 2011, revenue was $3.5 million compared to $2.6 million for the same quarter last year. Software revenue for the quarter ended October 31, 2011 was $2.1 million compared to $1.8 million for the same quarter last year. Service revenue for the quarter ended October 31, 2011 was $1.3 million compared to $0.8 million for same quarter last year.


Operating expenses for the quarter ended October 31, 2011 were $3.7 million compared to $3.7 million for the same quarter last year. Operating expenses for the quarter included a non-cash expense of $0.2 million for amortization of intangible assets and a non-cash stock-based compensation expense of $0.1 million.


Sales and marketing expenses were $0.9 million for the quarter ended October 31, 2011 compared to $0.9 million for same quarter last year. For the quarter ended October 31, 2011, research and development expenses were $1.1 million and general and administrative expenses were $1.0 million, compared to $1.1 million and $1.1 million, respectively, for the same quarter last year.


The net income for the quarter ended October 31, 2011 was $0.1 million, or $0.00 per share, compared to a net loss of $0.8 million, or a loss of $0.03 per share, for the quarter ended October 31, 2010. The net loss included a non-cash gain of $0.3 million for the change of fair value of derivative liability attributable to warrants issued to investors in the June 14, 2011financing.


At October 31, 2011, the Company had $7.2 million in cash, compared to $1.7 million at April 30, 2011. At October 31, 2011, the Company's working capital was $7.1 million, compared to $1.4 million at April 30, 2011.


Subsequent to the end of the quarter, on December 14, 2011, the Company granted 1,000,000 stock options to employees, including a total of 400,000 stock options to two officers pursuant to its stock option plan. Each stock option entitles the holder thereof the right to purchase one share of common stock at a price to be set at the closing price on December 14, 2011.  The options vest in the amount of 12.5% on the date which is six months from the date of grant and then beginning in the seventh month at 1/42 per month for 42 months, after which time the options will be fully vested.


About CounterPath


CounterPath Corporation is an award-winning provider of innovative desktop and mobile VoIP software products and solutions. The Company's product suite includes SIP-based softphones, server applications and Fixed Mobile Convergence (FMC) solutions that enable service providers, enterprises and Original Equipment Manufacturers (OEM) to cost-effectively integrate voice, video, presence and Instant Messaging (IM) applications into their VoIP offerings and extend functionality across both fixed and mobile networks.


CounterPath's customers include some of the world's largest telecommunications service providers and network equipment providers including AT&T, Verizon, BT (British Telecommunications PLC), Mobilkom Austria, Avaya, BroadSoft, Cisco Systems, GENBAND, Metaswitch and Mitel.


For more information please visit www.counterpath.com.


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. 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   Six Months Ended
    October 31,   October 31,  
    2011   2010     2011   2010  
Non-GAAP gross profit:                       
                        
  Revenue $ 3,473,853   $ 2,567,663   $ 6,232,587   $ 4,787,248 
    Less:                       
    Cost of sales   648,201     695,822     1,508,346     1,444,684 
  GAAP gross profit $ 2,825,652   $ 1,871,841   $ 4,724,241   $ 3,342,564 
                        
  Percentage of revenue   81%     73%     76%     70% 
                        
  GAAP gross profit $ 2,825,652   $ 1,871,841   $ 4,724,241   $ 3,342,564 
    Plus:                       
    Stock-based compensation   8,875     3,590     17,919     10,341 
    Amortization of intangible assets   203,294     209,919     484,174     418,392 
  Non-GAAP gross profit $ 3,037,821   $ 2,085,350   $ 5,226,334   $ 3,771,297 
                        
  Percentage of revenue   87%     81%     84%     79% 
    Three Months Ended   Six Months Ended
    October 31,   October 31,  
    2011     2010     2011     2010  
Non-GAAP income (loss) from operations:                       
                        
  GAAP loss from operations $ (229,630)   $ (1,176,637)   $ (1,179,860)   $ (2,630,706)
  Plus:                       
    Stock-based compensation   129,923     281,299     374,184     581,784 
    Amortization of intangible assets   203,294     209,919     484,174     418,392 
  Non-GAAP income (loss) from operations $ 103,587   $ (685,419)   $ (321,502)   $ (1,630,530)


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, such as the following: (1) With Apple's iOS and Google's Android mobile and tablet operating systems representing over 67% of worldwide market share of the smartphone segment, CounterPath is well positioned to be a leading provider of consumer to enterprise grade, mobile softphone applications; and (2) We intend to continue investing in developing leading solutions to address the market opportunity fueled by global wireline and wireless operators.


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) the Company's ability to remain competitive as other better financed parties develop and release competitive products, (2) lack of cash flow which may adversely affect our operations, (3) general economic conditions as they affect CounterPath and its current and prospective customers, including a continued downturn in general economic conditions internationally, (4) the success by the Company of the sales of its current and new products, (5) the impact of technology changes on the Company's products and on our industry, (6) the impact of intellectual property litigation that could materially and adversely affect our business (7) the failure to develop new and innovative products using the Company's technologies, (8) 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, and (9) 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.


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 INTERIM CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)

    October 31,     April 30,  
    2011     2011  
Assets   (Unaudited)       
  Current assets:           
    Cash $ 7,240,634   $ 1,707,397 
    Accounts receivable (net of allowance for doubtful accounts of $169,381 and $49,883, respectively)   3,682,969     3,018,188 
    Prepaid expenses and deposits   80,420     110,412 
      Total current assets   11,004,023     4,835,997 
            
  Deposits   127,618     159,433 
  Equipment   23,939     59,574 
  Intangible assets (net of accumulated amortization of $5,384,450 and $5,103,570, respectively)   347,178     859,664 
  Goodwill   8,856,910     9,247,993 
  Other assets   44,800     48,308 
Total Assets $ 20,404,468   $ 15,210,969 
            
Liabilities and Stockholders' Equity           
  Current liabilities:           
    Accounts payable and accrued liabilities $ 2,028,640   $ 2,340,897 
    Derivative liability   883,413    
    Unearned revenue   919,570     958,626 
    Customer deposits   2,083     2,018 
    Accrued warranty   110,072     146,868 
      Total current liabilities   3,943,778     3,448,409 
            
  Deferred lease inducements      21,594     2,474 
  Convertible debentures   -     1,305,002 
  Unrecognized tax benefit   98,575     98,575 
      Total liabilities   4,063,947     4,854,460 
            
  Stockholders' equity:           
  Preferred stock, $0.001 par value           
    Authorized: 100,000,000           
    Issued and outstanding: October 31, 2011 - 1; April 30, 2011 - 1   -    
  Common stock, $0.001 par value           
    Authorized: 83,076,900           
    Issued and outstanding:           
    October 31, 2011 - 39,868,297;  April 30, 2011 - 33,439,906   39,869     33,440 
  Additional paid-in capital   60,625,733     53,420,601 
  Accumulated deficit   (44,137,079)     (43,323,410)
  Accumulated other comprehensive income (loss) - currency translation adjustment   (188,002)     225,878 
      Total stockholders' equity   16,340,521     10,356,509 
Liabilities and Stockholders' Equity $ 20,404,468   $ 15,210,969 
            
            
            

COUNTERPATH CORPORATION
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(Stated in U.S. Dollars)
(Unaudited)

    Three Months Ended   Six Months Ended  
    October 31,   October 31,  
    2011   2010     2011   2010  
Revenue:                       
  Software $ 2,127,860   $ 1,751,317   $ 3,711,911   $ 3,570,469
  Service   1,345,993     816,346     2,520,676     1,216,779
    Total revenue   3,473,853     2,567,663     6,232,587     4,787,248
Operating expenses:                       
  Cost of sales (includes depreciation of $12,363 (2010 - $9,654) and amortization of intangible assets of $484,174 (2010 - $418,392))   648,201     695,822     1,508,346     1,444,684
  Sales and marketing   921,232     900,264     1,743,266     1,765,947
  Research and development   1,114,017     1,096,115     2,106,528     2,159,762
  General and administrative   1,020,033     1,052,099     2,054,307     2,047,561
    Total operating expenses   3,703,483     3,744,300     7,412,447     7,417,954
Loss from operations   (229,630)     (1,176,637)     (1,179,860)     (2,630,706)
Interest and other income (expense), net:                       
  Interest and other income   49,483     42,709     98,836     94,788
  Interest expense   (442)     (2,532)     (171,684)     (2,753)
  Change in fair value of derivative liability   282,014     -     427,728    
  Gain on settlement of debt   -     246,715     -     246,715
  Foreign exchange gain   10,624     43,746     11,311     15,700
Net income (loss) for the period $ 112,049   $ (845,999)   $ (813,669)   $ (2,276,256)
                        
                        
Other comprehensive income (loss):                       
  Foreign currency translation adjustments   (366,823)     16,429     (413,880)     (200,580)
Comprehensive income (loss) $ (254,774)   $ (829,570)   $ (1,227,549)   $ (2,476,836)
Net income (loss) per share:                       
  Basic and diluted $ 0.00   $ (0.03)   $ (0.02)   $ (0.07)
                        
  Weighted average common shares outstanding:   39,552,114     33,113,474     37,692,012     33,089,839
                    

 



CounterPath Corporation

Vancouver, BC (InfoTech)
65 Employees In BC (65 Total)
Founded: 2002 | Revenues: $11.00 Million

CounterPath Corporation is a leading provider of innovative desktop and mobile VoIP software products and solutions.

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CounterPath Corporation

Posted: Dec 14, 2011

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