COUNTERPATH, CORP. 
By VANCOUVER, Dec. 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 fiscal 2013 second quarter ended October 31, 2012.
Second Quarter Financial Highlights
-- Quarterly revenue of $3.6 million, a 3% increase
year-over-year. Revenue for the six months ending October 31,
2012 of $8.0 million, a 28% increase year-over-year
-- Gross margin of 82% in Q2 2013 versus 81% in Q2 2012 and a
non-GAAP gross margin of 83%.
-- Non-GAAP loss from operations of $0.3 million compared to
non-GAAP income from operations of $0.1 million for the second
quarter of fiscal 2012.
-- Net loss of $0.3 million (or loss of $0.01 per share), compared
to a net income of $0.1 million (or $0.00 per share) for the
second quarter of fiscal 2012.
-- Non-GAAP net loss of $0.3 million (or loss of $0.01 per share),
compared to a non-GAAP net income of $0.2 million (or $0.00 per
share) for the second quarter of fiscal 2012. For the six
months ended October 31, 2012, non-GAAP net income was $0.2
million (or $0.00 per share).
-- Cash of $11.7 million as of October 31, 2012.
"While year-to-date sales growth was solid based on an exceptionally strong first quarter, growth in the second quarter was affected by some delays in sales from our channel partners as we transition a greater share of our contract business from direct sales to the channel, as well as the continued economic challenges in Europe," stated Donovan Jones, President and Chief Executive Officer. "The opportunity continues to grow for our offerings with carriers looking to offer voice and video on multiple end user devices, leveraging data and WiFi networks and enterprises looking to create cost savings and increased productivity extending communications services to mobile devices. Overall, with a strong sales pipeline, channel partners coming on-line and favorable long-term market trends, our outlook for continued growth remains very positive." continued Jones.
Recent Operational Highlights
-- Announced an agreement to provide the Bria mobile and tablet
softphone applications to Altibox, a leading Norwegian
triple-play service provider, enabling their customers to make
mobile calls using their home phone number regardless of their
location.
-- Announced an agreement with Nippon Telegraph and Telephone
Software Corporation that will enable Japanese enterprises to
extend unified communications and fixed-mobile convergence
services to their customers' mobile workers, telecommuters and
business travelers.
-- Rogers Communications, Canada's largest provider of wireless
voice and data communications services and one of Canada's
leading providers of cable television, high-speed Internet and
telephony services launched the iOS and Android tablet
applications late in the second fiscal quarter for Rogers One
NumberTM service based on CounterPath's technology.
-- Released new features for the Client Configuration Server, a
carrier-grade solution enabling enterprises to remotely manage
all of their Bria desktop, mobile and tablet softphones and
address and the challenges inherit in the "bring your own
device" (BYOD) to work trend.
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 October 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.cnw.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 December 20, 2012. To access the rebroadcast, please dial 416-849-0833 or 1-855-859-2056 and enter passcode 75231593, 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, such as the following: overall, with a strong sales pipeline, channel partners coming on-line and favorable long-term market trends, our outlook for continued growth remains very positive.
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 variability in our sales from reporting period to reporting period due to extended sales cycles as a result of selling our products through channel partners or the length of time of deployment of our products by our customers (3) the Company's ability to control its operating expenses, which may adversely affect its financial condition, (4) 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, (5) the Company's ability to remain competitive as other better financed parties develop and release competitive products, (6) the impact of intellectual property litigation that could materially and adversely affect our business, (7) the success by the Company of the sales of its current and new products, (8) the impact of technology changes on the Company's products and on our industry, (9) the failure to develop new and innovative products using the Company's technologies, (10) 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.
COUNTERPATH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)
October 31, April 30,
2012 2012
Assets (Unaudited)
Current assets:
Cash $ 11,669,746 $ 8,154,139
Accounts receivable (net of
allowance for doubtful accounts
of $328,188
and $334,294 respectively) 4,733,123 4,014,472
Prepaid expenses and deposits 83,861 170,556
Total current assets 16,486,730 12,339,167
Deposits 126,551 62,521
Equipment 233,282 101,024
Intangible assets (net of 19,425 38,853
accumulated amortization of
$5,909,873 and
$5,890,282, respectively)
Derivative instruments 65,461 -
Goodwill 8,783,088 8,957,977
Other assets 84,819 44,402
Total Assets $ 25,799,356 $ 21,543,944
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued $ 2,318,598 $ 2,416,489
liabilities
Derivative instruments 969,451 2,026,944
Unearned revenue 1,594,643 1,308,174
Customer deposits 13,872 13,872
Accrued warranty 87,555 84,948
Total current liabilities 4,984,119 5,850,427
Deferred lease inducements 45,314 56,082
Unrecognized tax benefit 98,575 98,575
Total liabilities 5,128,008 6,005,084
Stockholders' equity:
Preferred stock, $0.001 par value
Authorized: 100,000,000
Issued and outstanding: October - -
31, 2012 - 1; April 30, 2012 - 1
Common stock, $0.001 par value
Authorized: 83,076,900
Issued and outstanding:
October 31, 2012 - 41,724,874; 41,725 39,961
April 30, 2012 - 39,960,479
Additional paid-in capital 65,742,529 61,025,529
Accumulated deficit (44,904,338) (45,446,771)
Accumulated other comprehensive
income - currency translation
adjustment (208,568) (79,859)
Total stockholders' equity 20,671,348 15,538,860
Liabilities and Stockholders' Equity $ 25,799,356 $ 21,543,944
COUNTERPATH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in U.S. Dollars)
(Unaudited)
Three Months Ended Six Months Ended
October 31, October 31,
2012 2011 2012 2011
Revenue:
Software $ 1,811,815 $ 2,127,860 $ 4,339,871 $ 3,711,911
Service 1,750,972 1,345,993 3,610,684 2,520,676
Total 3,562,787 3,473,853 7,950,555 6,232,587
revenue
Operating
expenses:
Cost of sales
(includes
depreciation
of $22,071
(2011 -
$12,363) and
amortization
of intangible
assets of
$19,591 (2011
- $484,174)) 626,006 648,201 1,185,799 1,508,346
Sales and 1,028,217 921,232 2,083,252 1,743,266
marketing
Research and 1,284,594 1,114,017 2,645,606 2,106,528
development
General and 1,164,092 1,020,033 2,543,411 2,054,307
administrative
Total 4,102,909 3,703,483 8,458,068 7,412,447
operating
expenses
Loss from (540,122) (229,630) (507,513 ) (1,179,860)
operations
Interest and
other income
(expense), net:
Interest and 18,090 49,483 61,943 98,836
other income
Interest (154) (442) (624 ) (171,684)
expense
Fair value 208,036 282,014 993,164 427,728
adjustment on
derivative
instruments
Foreign (10,955) 10,624 (4,537 ) 11,311
exchange gain
(loss)
Net income $ (325,105) $ 112,049 $ 542,433 $ (813,669)
(loss) for the
period
Net income
(loss) per
share:
Basic and $ (0.01) $ 0.00 $ 0.01 $ (0.02)
diluted
Weighted 41,592,776 39,552,114 41,159,949 37,692,012
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 may include non-GAAP gross margin and non-GAAP income (loss) from operations which exclude non-cash stock-based compensation and amortization of intangible asset charges relative to gross margin 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 net 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 Three Months Ended Six Months Ended
margin:
October 31, October 31,
2012 2011 2012 2011
Revenue $ 3,562,787 $ 3,473,853 $ 7,950,555 $ 6,232,587
Less:
Cost of 626,006 648,201 1,185,799 1,508,346
sales
GAAP gross $ 2,936,781 $ 2,825,652 $ 6,764,756 $ 4,724,241
profit
Percentage of 82% 81% 85% 76%
revenue (gross
margin)
GAAP gross $ 2,936,781 $ 2,825,652 $ 6,764,756 $ 4,724,241
profit
Plus:
Stock-based 8,797 8,875 17,636 17,919
compensation
Amortization 9,683 203,294 19,591 484,174
of
intangible
assets
Non-GAAP gross $ 2,955,261 $ 3,037,821 $ 6,801,983 $ 5,226,334
profit
Percentage of 83% 87% 86% 84%
revenue
(non-GAAP
gross margin)
Non-GAAP Three Months Ended Six Months Ended
income
(loss) from
operations:
October 31, October 31,
2012 2011 2012 2011
GAAP Income $ (540,122) $ (229,630) $ (507,513) $ (1,179,860)
(loss) from
operations
Plus:
Stock-based 214,605 129,923 611,375 374,184
compensation
Amortization 9,683 203,294 19,591 484,174
of
intangible
assets
Non-GAAP $ (315,834) $ 103,587 $ 123,453 $ (321,502)
income
(loss) from
operations
Non-GAAP net Three Months Ended Six Months Ended
income
(loss):
October 31, October 31,
2012 2011 2012 2011
GAAP net $ (325,105) $ 112,049 $ 542,433 $ (813,669)
income
(loss)
Plus:
Stock-based 214,605 129,923 611,375 374,184
compensation
Amortization 9,683 203,294 19,591 484,174
of
intangible
assets
Fair value (208,036) (282,014) (993,164) (427,728)
adjustment
on
derivative
instruments
Non-GAAP net $ (308,853) $ 163,252 $ 180,235 $ (383,039)
income
(loss)
GAAP net $ (0.01) $ 0.00 $ 0.01 $ (0.02)
income
(loss) per
share -
basic
& diluted
Non-GAAP net $ (0.01) $ 0.00 $ 0.00 $ (0.01)
Income
(loss) per
share -
basic &
diluted
SOURCE CounterPath Corporation
