Record Revenue and Income
VANCOUVER, Dec. 14, 2011 /PRNewswire/ - CounterPath Corporation ("CounterPath" or the "Company") (OTCBB: CPAH) (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 ended October 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, 2011 financing.
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 grossprofit: Revenue $ 3,473,853 $ 2,567,663 $ 6,232,587 $ 4,787,248 Less: Cost of 648,201 695,822 1,508,346 1,444,684 sales GAAP gross $ 2,825,652 $ 1,871,841 $ 4,724,241 $ 3,342,564 profit Percentage of 81% 73% 76% 70% revenue GAAP gross $ 2,825,652 $ 1,871,841 $ 4,724,241 $ 3,342,564 profit Plus: Stock-based 8,875 3,590 17,919 10,341 compensation Amortization 203,294 209,919 484,174 418,392 of intangible assets Non-GAAP gross $ 3,037,821 $ 2,085,350 $ 5,226,334 $ 3,771,297 profit Percentage of 87% 81% 84% 79% revenue
Three Months Ended Six Months Ended October 31, October 31, 2011 2010 2011 2010 Non-GAAPincome (loss) from operations: GAAP loss from $ (229,630) $ (1,176,637) $ (1,179,860) $ (2,630,706) operations Plus: Stock-based 129,923 281,299 374,184 581,784 compensation Amortization 203,294 209,919 484,174 418,392 of intangible assets Non-GAAP $ 103,587 $ (685,419) $ (321,502) $ (1,630,530) income (loss) from operations
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 3,682,969 3,018,188 allowance for doubtful accounts of $169,381 and $49,883, respectively) 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 347,178 859,664 accumulated amortization of $5,384,450 and $5,103,570, respectively) 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 $ 2,028,640 $ 2,340,897 liabilities 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 - 39,869 33,440 39,868,297; April 30, 2011 - 33,439,906 Additional paid-in capital 60,625,733 53,420,601 Accumulated deficit (44,137,079) (43,323,410) Accumulated other comprehensive (188,002) 225,878 income (loss) - currency translation adjustment Total stockholders' equity 16,340,521 10,356,509 Liabilities and Stockholders' $ 20,404,468 $ 15,210,969 Equity
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 3,473,853 2,567,663 6,232,587 4,787,248 revenue Operating expenses: Cost of sales 648,201 695,822 1,508,346 1,444,684 (includes depreciation of $12,363 (2010 - $9,654) and amortization of intangible assets of $484,174 (2010 - $418,392)) Sales and 921,232 900,264 1,743,266 1,765,947 marketing Research and 1,114,017 1,096,115 2,106,528 2,159,762 development General and 1,020,033 1,052,099 2,054,307 2,047,561 administrative Total 3,703,483 3,744,300 7,412,447 7,417,954 operating expenses Loss from (229,630) (1,176,637) (1,179,860) (2,630,706) operations Interest and other income (expense), net: Interest and 49,483 42,709 98,836 94,788 other income Interest (442) (2,532) (171,684) (2,753) expense Change in fair 282,014 - 427,728 - value of derivative liability Gain on - 246,715 - 246,715 settlement of debt Foreign 10,624 43,746 11,311 15,700 exchange gain Net income $ 112,049 $ (845,999) $ (813,669) $ (2,276,256) (loss) for the period Other comprehensive income (loss): Foreign (366,823) 16,429 (413,880) (200,580) currency translation adjustments Comprehensive $ (254,774) $ (829,570) $ (1,227,549) $ (2,476,836) income (loss) Net income (loss) per share: Basic and $ 0.00 $ (0.03) $ (0.02) $ (0.07) diluted Weighted 39,552,114 33,113,474 37,692,012 33,089,839 average common shares outstanding:
SOURCE CounterPath Corporation