COUNTERPATH, CORP. 
By Quarterly Revenues Grow 59% Year-over-Year
VANCOUVER, Sept. 13, 2012 /PRNewswire/ - CounterPath Corporation ("CounterPath" or the "Company") (NASDAQ: CPAH) (TSX: CCV), an award-winning provider of desktop and mobile VoIP software products and solutions, today announced the financial and operating results for its first quarter ended July 31, 2012 of fiscal 2013.
First Quarter Financial Highlights
-- Record quarterly revenue of $4.4 million, a 59% increase
year-over-year.
-- Gross margin of 87% and a non-GAAP gross margin of 88%.
-- Operating income of $32,609 compared to an operating loss of
$1.0 million for the first quarter of fiscal 2012.
-- Net income of $0.9 million or $0.02 per share, compared to a
net loss of $0.9 million or a loss of $0.03 per share for the
first quarter of fiscal 2012.
-- Non-GAAP net income of $0.5 million or $0.01 per share compared
to a non-GAAP net loss of $0.5 million or a loss of $0.02 per
share for the first quarter of fiscal 2012.
-- Completed private placement on June 19, 2012 for gross proceeds
of $3.6 million.
-- Cash of $11.4 million as of July 31, 2012.
"Our first quarter was highlighted by record revenues and solid growth during a traditionally slower quarter," stated Donovan Jones, President and Chief Executive Officer. "Our direct sales to enterprises and telecommunication service providers were strong, contributing to our overall growth. Enterprises are increasingly realizing the security, productivity and cost saving benefits of our enterprise-grade softphone applications, while telecommunication service providers are reducing customer churn to over-the-top alternatives, by deploying our carrier-grade softphone applications," continued Jones.
Recent Business Highlights
-- Launched Bria for Android Tablet Edition, a standards-based
softphone that enables enterprises to extend VoIP calling and
PBX features to Android tablets, including employee-owned
devices.
-- Launched the Client Configuration Server (CCS) enabled Bria
softphone on Apple's iTunes enabling IT managers to centrally
deploy, configure and upgrade softphone endpoints ultimately
reducing support calls to IT managers and speeding up softphone
deployments.
-- The Bria iPad Edition mobile softphone application placed third
among nearly 250 entries in the CTIA Emerging Technology
(E-Tech) Awards for the category Mobile Applications.
-- Began trading on the NASDAQ Capital Market on July 11, 2012
under the symbol "CPAH" and graduated from the TSX Venture
Exchange to the Toronto Stock Exchange on August 20, 2012 under
the symbol "CCV".
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 quarter ended July 31, 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 12:00 a.m. ET on October 13, 2012. To access the rebroadcast, please dial 416-849-0833 or 1-855-859-2056 and enter passcode 25565884, 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 control its operating expenses, which may adversely affect its financial condition, (3) a decline in the Company's 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 Company's ability to remain competitive as other better financed parties develop and release competitive products, (5) the impact of intellectual property litigation that could materially and adversely affect our business, (6) the success by the Company of the sales of its current and new products, (7) the impact of technology changes on the Company's products and on our industry, (8) the failure to develop new and innovative products using the Company's technologies, (9) the potential dilution to shareholders or overhang on the Company's share price of its 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.
The Toronto Stock Exchange has not reviewed nor approved the contents of this press release and does not accept responsibility for the adequacy or accuracy of this press release.
COUNTERPATH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)
July 31, April 30,
2012 2012
Assets (Unaudited)
Current assets:
Cash $ 11,404,439 $ 8,154,139
Accounts receivable
(net of allowance for
doubtful accounts of
$258,974 and
$334,294,
respectively) 5,391,270 4,014,472
Prepaid expenses and 123,262 170,556
deposits
Total current 16,918,971 12,339,167
assets
Deposits 77,741 62,521
Equipment 109,077 101,024
Intangible assets (net
of accumulated
amortization of
$5,900,190
and $5,890,282,
respectively) 29,139 38,853
Derivative instruments 57,700 -
Goodwill 8,754,087 8,957,977
Other assets 53,582 44,402
Total Assets $ 26,000,297 $ 21,543,944
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and $ 2,357,631 $ 2,416,489
accrued liabilities
Derivative 1,244,876 2,026,944
instruments
Unearned revenue 1,679,861 1,308,174
Customer deposits 13,872 13,872
Accrued warranty 94,072 84,948
Total current 5,390,312 5,850,427
liabilities
Deferred lease 54,758 56,082
inducements
Unrecognized tax 98,575 98,575
benefit
Total liabilities 5,543,645 6,005,084
Stockholders' equity:
Preferred stock, $0.001
par value
Authorized:
100,000,000
Issued and - -
outstanding: July 31,
2012 - 1; April 30,
2012 - 1
Common stock, $0.001
par value
Authorized:
83,076,900
Issued and
outstanding:
July 31, 2012 - 41,564 39,961
41,563,353; April
30, 2012 - 39,960,479
Additional paid-in 65,234,746 61,025,529
capital
Accumulated deficit (44,579,233) (45,446,771)
Accumulated other (240,425) (79,859)
comprehensive income -
currency translation
adjustment
Total stockholders' 20,456,652 15,538,860
equity
Liabilities and Stockholders' $ 26,000,297 $ 21,543,944
Equity
COUNTERPATH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(Stated in U.S. Dollars)
(Unaudited)
Three Months Ended
July 31,
2012 2011
Revenue:
Software $ 2,528,056 $ 1,584,051
Service 1,859,712 1,174,683
Total 4,387,768 2,758,734
revenue
Operating expenses:
Cost of sales
(includes
depreciation of
$5,310 (2011 -
$6,181)
and amortization
of intangible
assets of $9,908
(2011 - $280,880)) 559,793 860,145
Sales and marketing 1,055,035 822,034
Research and 1,361,012 992,511
development
General and 1,379,319 1,034,274
administrative
Total 4,355,159 3,708,964
operating
expenses
Income (loss) from 32,609 (950,230)
operations
Interest and other income
(expense), net:
Interest and other 43,853 49,353
income
Interest expense (470) (171,242)
Fair value 785,128 145,714
adjustment on
derivative
instruments
Foreign exchange 6,418 687
gain
Net income (loss) for the $ 867,538 $ (925,718)
period
Other
comprehensive
income (loss):
Foreign currency (160,566) (47,057)
translation
adjustments
Comprehensive income (loss) $ 706,972 $ (972,775)
Net income (loss) per
share:
Basic and diluted $ 0.02 $ (0.03)
Weighted average 40,727,122 35,831,910
common shares
outstanding:
Non-GAAP Financial Measures
This news release contains "non-GAAP financial measures". The non-GAAP financial measures in this news release may include 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 may 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)
Non-GAAP gross profit: Three Months Ended
July 31,
2012 2011
Revenue $ 4,387,768 $ 2,758,734
Less:
Cost of sales 559,793 860,145
GAAP gross profit $ 3,827,975 $ 1,898,589
Percentage of revenue 87% 69%
(gross margin)
GAAP gross profit $ 3,827,975 $ 1,898,589
Plus:
Stock-based 8,839 9,044
compensation
Amortization of 9,908 280,880
intangible assets
Non-GAAP gross profit $ 3,846,722 $ 2,188,513
Percentage of revenue 88% 86%
(non-GAAP gross margin)
Non-GAAP income (loss) from Three Months Ended
operations:
July 31,
2012 2011
GAAP Income (loss) from $ 32,609 $ (950,230)
operations
Plus:
Stock-based compensation 396,770 244,261
Amortization of intangible 9,908 280,880
assets
Non-GAAP income (loss) from $ 439,287 $ (425,089)
operations
Non-GAAP net income (loss): Three Months Ended
July 31,
2012 2011
GAAP net income (loss) $ 867,538 $ (925,718)
Plus:
Stock-based compensation 396,770 244,261
Amortization of intangible assets 9,908 280,880
Fair value adjustment on (785,128) (145,714)
derivative instruments
Non-GAAP net income (loss) $ 489,088 $ (546,291)
GAAP net income (loss) per share $ 0.02 $ (0.03)
- basic & diluted
Non-GAAP net Income (loss) per $ 0.01 $ (0.02)
share - basic & diluted
SOURCE CounterPath Corporation
