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CounterPath Reports Third Quarter Fiscal 2018 Financial Results
Wednesday, March 28, 2018Company Profile | Follow Company
Company Records 21% Year-Over-Year Revenue Growth
Vancouver, BC, March 28, 2018--(T-Net)--CounterPath Corporation (NASDAQ: CPAH) (TSX: PATH), a global provider of award-winning over-the-top (OTT) Unified Communications solutions for enterprises and carriers, announced the financial and operating results for the third quarter ended January 31, 2018 of fiscal year 2018.
Third Quarter Financial Highlights
Management Commentary
"CounterPath grew its subscription, support and maintenance revenue to a record level in the third quarter and I am pleased with the increased customer activity," said Donovan Jones, President and Chief Executive Officer. "We entered into an agreement with an existing customer worth approximately $2 million over three years, while an international, tier-one service provider for which we completed customization services last quarter, placed their first softphone license order.
Our team has also been working towards the recent launch of CounterPath Stretto Collaboration, our new hosted team collaboration service. Stretto Collaboration extends the CounterPath Bria softphone experience by allowing customers to add HD video, voice, messaging, presence, screen sharing and now collaboration to their existing UC deployment without requiring any changes to their current communications environment. CounterPath also strengthened its partnership with Oracle Communications by developing a joint UC cloud solution.
The CounterPath and Oracle solution seamlessly interoperates between communications systems, devices and legacy infrastructure to enhance enterprise communication capabilities and fills a key gap in the UC user experience by providing businesses and service providers with an "Always Connected" state regardless of location, device or network. CounterPath and Oracle are showcasing the joint solution in the Oracle booth this week at Enterprise Connect, targeting mid to large enterprise." continued Jones.
Recent Business Highlights
Financial Overview
(All amounts are in U.S. dollars and in accordance with accounting principles generally accepted in the United States ("GAAP") unless otherwise specified - unaudited.)
Revenue was $3.1 million for the quarter ended January 31, 2018 compared to $2.6 million for the same quarter last fiscal year. Software revenue was $1.8 million compared to $1.3 million for the same quarter last fiscal year. Subscription, support and maintenance revenue was $1.1 million compared to $1.0 million for the same quarter last fiscal year. Professional services and other revenue was $0.2 million compared to $0.2 million for the same quarter last fiscal year.
Operating expenses for the quarter ended January 31, 2018 were $3.5 million compared to $3.1 million for the same quarter last fiscal year. Operating expenses for the quarter ended January 31, 2018 included a non-cash stock-based compensation expense of $0.1 million (2017 - $0.2 million). Sales and marketing expenses were $1.0 million for the quarter ended January 31, 2018 compared to $0.8 million for the same quarter last fiscal year. For the quarter ended January 31, 2018, research and development expenses were $1.4 million and general and administrative expenses were $0.8 million compared to $1.2 million and $0.7 million, respectively, for same quarter last fiscal year.
Foreign exchange loss for the quarter ended January 31, 2018 was $0.3 million compared to foreign exchange loss of $0.2 million for the same quarter last fiscal year. The foreign exchange gain (loss) represents the gain (loss) on account of translation of the intercompany accounts of CounterPath's subsidiary which are maintained in Canadian dollars and transactional gains and losses resulting from transactions denominated in currencies other than U.S. dollars.
The net loss for the quarter ended January 31, 2018 was $0.8 million, or $0.14 per share, compared to a net loss of $0.7 million, or $0.14 per share, for the same quarter last fiscal year. As of January 31, 2018, the Company had $3.0 million in cash, compared to $2.1 million at April 30, 2017.
About CounterPath
CounterPath Unified Communications solutions are changing the face of telecommunications. An industry and user favorite, Bria softphones for desktop, tablet and mobile devices, together with Stretto Platform™ server solutions, enable operators, OEMs and enterprises large and small around the globe to offer a seamless and unified over-the-top (OTT) communications experience across both fixed and mobile networks. The Bria and Stretto combination enables an improved user experience as an overlay to the most popular UC and IMS telephony and applications servers on the market today. 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 AT&T, Avaya, BroadSoft, BT, Cisco Systems, Metaswitch Networks, Mitel, NEC, Network Norway, Nokia, Ribbon Communications, Rogers and Verizon. Visit CounterPath www.counterpath.com.
Contacts
David Karp
Chief Financial Officer, CounterPath
dkarp@counterpath.com
(604) 628-9364
CONDENSED CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)
(Unaudited)
January 31, | April 30, | |||||||
2018 | 2017 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 3,048,418 | $ | 2,071,019 | ||||
Accounts receivable (net of allowance for doubtful accounts of $249,995 and $80,232, respectively) | 3,932,957 | 2,133,469 | ||||||
Prepaid expenses and deposits | 236,987 | 170,853 | ||||||
Total current assets | 7,218,362 | 4,375,341 | ||||||
Deposits | 102,417 | 91,400 | ||||||
Equipment | 125,094 | 125,813 | ||||||
Goodwill | 7,144,260 | 6,440,955 | ||||||
Other assets | 210,865 | 199,637 | ||||||
Total Assets | $ | 14,800,998 | $ | 11,233,146 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 2,080,402 | $ | 1,825,528 | ||||
Accrued warranty | 65,330 | 54,365 | ||||||
Customer deposits | 2,794 | 6,211 | ||||||
Unearned revenue | 2,421,672 | 2,134,948 | ||||||
Total current liabilities | 4,570,198 | 4,021,052 | ||||||
Deferred lease inducements | 17,611 | 23,022 | ||||||
Unrecognized tax liability | 9,763 | 9,763 | ||||||
Total liabilities | 4,597,572 | 4,053,837 | ||||||
Stockholders' equity: | ||||||||
Preferred stock, $0.001 par value | ||||||||
Authorized: 100,000,000 | ||||||||
Issued and outstanding: January 31, 2018 - nil; April 30, 2017 - nil | - | - | ||||||
Common stock, $0.001 par value | ||||||||
Authorized: 10,000,000 | ||||||||
Issued and outstanding: | ||||||||
January 31, 2018 - 5,935,206; April 30, 2017 - 5,005,245 | 5,935 | 5,005 | ||||||
Treasury stock | - | (60) | ||||||
Additional paid-in capital | 75,071,382 | 71,680,575 | ||||||
Accumulated deficit | (62,253,057) | (60,481,015) | ||||||
Accumulated other comprehensive loss - currency translation adjustment | (2,620,834) | (4,025,196) | ||||||
Total stockholders' equity | 10,203,426 | 7,179,309 | ||||||
Liabilities and Stockholders' Equity | $ | 14,800,998 | $ | 11,233,146 |
COUNTERPATH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in U.S. Dollars)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
January 31, | January 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenue: | ||||||||||||||||
Software | $ | 1,791,165 | $ | 1,324,203 | $ | 5,306,925 | $ | 4,223,066 | ||||||||
Subscription, support and maintenance | 1,120,690 | 1,031,162 | 3,069,371 | 2,944,349 | ||||||||||||
Professional services and other | 172,048 | 199,994 | 1,230,978 | 1,165,051 | ||||||||||||
Total revenue | 3,083,903 | 2,555,359 | 9,607,274 | 8,332,466 | ||||||||||||
Operating expenses: | ||||||||||||||||
Cost of sales (includes depreciation of $4,753 (2017 - $4,975)) | 362,057 | 360,722 | 1,131,122 | 1,334,385 | ||||||||||||
Sales and marketing | 996,470 | 819,958 | 3,031,981 | 2,770,367 | ||||||||||||
Research and development | 1,361,219 | 1,215,783 | 4,052,129 | 3,524,959 | ||||||||||||
General and administrative | 800,049 | 678,243 | 2,407,234 | 2,531,322 | ||||||||||||
Total operating expenses | 3,519,795 | 3,074,706 | 10,622,466 | 10,161,033 | ||||||||||||
Loss from operations | (435,892) | (519,347) | (1,015,192) | (1,828,567) | ||||||||||||
Interest and other income (expense), net: | ||||||||||||||||
Interest and other income | - | 36 | - | 222 | ||||||||||||
Interest expense | (123) | - | (338) | - | ||||||||||||
Foreign exchange gain/(loss) | (342,328) | (162,829) | (756,512) | 218,274 | ||||||||||||
Net loss for the period | $ | (778,343) | $ | (682,140) | $ | (1,772,042) | $ | (1,610,071) | ||||||||
Net loss per share: | ||||||||||||||||
Basic and diluted | $ | (0.14) | $ | (0.14) | $ | (0.33) | $ | (0.35) | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic and diluted | 5,539,352 | 4,789,675 | 5,354,690 | 4,631,472 |
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 income (loss) from operations which excludes non-cash stock-based compensation relative to 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 and foreign exchange gain (loss) 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 | Nine Months Ended | ||||||||||||||||
January 31, | January 31, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Non-GAAP income (loss) from operations: | |||||||||||||||||
GAAP loss from operations | $ | (435,892) | $ | (519,347) | $ | (1,015,192) | $ | (1,828,567) | |||||||||
Plus: | |||||||||||||||||
Stock-based compensation | 87,924 | 150,325 | 494,883 | 701,515 | |||||||||||||
Non-GAAP loss from operations | $ | (347,968) | $ | (369,022) | $ | (520,309) | $ | (1,127,052) |
Three Months Ended | Nine Months Ended | |||||||||||||||
January 31, | January 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Non-GAAP net income (loss): | ||||||||||||||||
GAAP net loss | $ | (778,343) | $ | (682,140) | $ | (1,772,042) | $ | (1,610,071) | ||||||||
Plus: | ||||||||||||||||
Stock-based compensation | 87,924 | 150,325 | 494,883 | 701,515 | ||||||||||||
Foreign exchange (gain) loss | 342,328 | 162,829 | 756,512 | (218,274) | ||||||||||||
Non-GAAP net loss | $ | (348,091) | $ | (368,986) | $ | (520,647) | $ | (1,126,830) | ||||||||
GAAP net loss per share: | ||||||||||||||||
Basic and diluted | $ | (0.14) | $ | (0.14) | $ | (0.33) | $ | (0.35) | ||||||||
Non-GAAP net loss per share: | ||||||||||||||||
Basic and diluted | $ | (0.06) | $ | (0.08) | $ | (0.10) | $ | (0.24) |
Company Snapshot |
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CounterPath, an Alianza Company
Vancouver, BC (InfoTech)
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