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COUNTERPATH, CORP. (CPAH)

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CounterPath, Corp. : CounterPath Reports Record First Quarter Fiscal 2013 Financial Results

09/13/2012 | 08:35am US/Eastern
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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

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