VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 07/25/13 -- CounterPath Corporation ("CounterPath" or the "Company") (TSX: CCV)(NASDAQ: CPAH), a leading developer of award-winning desktop, tablet and mobile VoIP, video and messaging software products and solutions, today announced the financial and operating results for its fourth quarter and fiscal year ended April 30, 2013.
Fiscal Fourth Quarter Financial and Operating Highlights
-- Quarterly revenue of $4.0 million, compared to revenue of $3.3 million
for the previous quarter and $4.4 million for the fourth quarter of
fiscal year 2012.
-- GAAP gross margin of 86%. Non-GAAP gross margin of 87%.
-- Non-GAAP income from operations of $0.04 million compared to Non-GAAP
income from operations of $0.4 million for the fourth quarter of fiscal
year 2012.
-- Net income of $0.1 million, or $0.00 per share, compared to a net loss
of $1.2 million, or a loss of $0.03 per share, for Q4-2012. The $0.1
million net income includes a non-cash gain of $0.3 million (loss of
$1.4 million - Q4-2102) for the fair value adjustment on derivative
instruments attributable to a change in fair value of certain warrants,
the key determinant of which is proportionate to the change in the
Company's share price.
-- Non-GAAP net income of $0.05 million, or $0.00 per share, compared to
non-GAAP net income of $0.4 million, or $0.01 per share, for the fourth
quarter of fiscal year 2012.
-- Cash of $11.2 million as of April 30, 2013.
Fiscal 2013 Financial and Operating Highlights
-- Record annual revenue of $15.2 million, an 8% increase over last fiscal
year (excluding Europe, sales growth of 24% year-over-year).
-- GAAP gross margin of 85%. Non-GAAP gross margin of 86%.
-- Non-GAAP loss from operations of $0.4 million compared to a non-GAAP
income from operations of $0.1 million last fiscal year.
-- Net income of $0.5 million, or $0.01 per share, compared to a net loss
of $2.1 million, or a loss of $0.05 per share, last fiscal year. The
$0.5 million net income includes a non-cash gain of $1.8 million (loss
of $0.7 million - 2012) for the fair value adjustment on derivative
instruments.
-- Non-GAAP net loss of $0.3 million or a loss of $0.01 per share, compared
to a non-GAAP net income of $0.1 million or $0.00 per share last fiscal
year.
"It was a solid fourth quarter for the company, rounding out a year in which we posted record annual revenues, added Tier One customers, including three leading cable companies and increased our channels to market," stated Donovan Jones, President and Chief Executive Officer. "Our sales growth was particularly strong outside Europe, however, some challenges in Europe affected our combined results for the year. We invested in sales and marketing in 2013 and will continue to strengthen our teams, most notably in Europe, which we expect will contribute to revenue growth this year."
Recent Business Highlights
-- Announced a global distribution agreement with Arrow Electronics, Inc.,
which has over 120,000 original equipment manufacturers, contract
manufacturers and commercial customers across more than 390 locations in
53 countries.
-- Primus Business Services announced the launch of Primus Softphone for
Apple iPhone and Google Android, powered by CounterPath's softphone
technology.
-- Announced that CounterPath has again been named one of the Top 250
Canadian Information and Communication Technologies (ICT) by Branham
Group in the 2013 Edition of the Branham300. CounterPath was also ranked
as one the industry's Top 20 Movers and Shakers based on revenue growth
year-over-year.
-- Announced a Bria softphone license agreement with Jive Communications, a
leading provider of hosted VoIP and unified communications to businesses
and institutions.
Financial Outlook
For fiscal 2014, CounterPath expects an increase in revenue over the prior year, based on rising market demand, new customer wins and follow-on sales from current customers, many of which are at the early stages in their deployment timelines. The Company expects to increase its sales and marketing resources to support sales growth in all of its key markets. Historically, CounterPath has experienced quarter-to-quarter fluctuations in revenue based largely on seasonality and the timing of larger customer deployments. The Company expects similar effects in fiscal 2014, with the first quarter expected to be a slower period.
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 fourth quarter and fiscal year ended April 30, 2013. 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 taped rebroadcast will be available to listeners until 12 a.m. ET on August 1, 2013. To access the rebroadcast, please dial 416-849-0833 or 1-855-859-2056 and enter passcode 17363616, 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, outlook, expectations or intentions regarding the future such as the following: (1) CounterPath expects an increase in revenue over the prior year, based on rising market demand, new customer wins and follow on sales from current customers, many of which are at the early stages in their deployment timelines; and (2) the Company expects to increase its sales and marketing resources to support sales growth in all its key markets.
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 CounterPath's sales from reporting period to reporting period due to extended sales cycles as a result of selling CounterPath's products through channel partners or the length of time of deployment of CounterPath's products by our customers (3) the Company's ability to manage 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 competitors 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.
(TABLES TO FOLLOW)
COUNTERPATH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)
April 30, April 30,
2013 2012
------------ ------------
Assets
Current assets:
Cash $ 11,229,595 $ 8,154,139
Accounts receivable (net of
allowance for doubtful accounts of
$456,051 (2012 - $334,294)) 4,640,620 4,014,472
Prepaid expenses and deposits 139,591 170,556
------------ ------------
Total current assets 16,009,806 12,339,167
Deposits 125,160 62,521
Equipment 167,986 101,024
Intangible assets (net of accumulated
amortization of $5,929,285 (2012 -
$5,890,282)) - 38,853
Derivative instruments 9,830 -
Goodwill 8,660,930 8,957,977
Other assets 82,165 44,402
------------ ------------
Total Assets $ 25,055,877 $ 21,543,944
------------ ------------
------------ ------------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued
liabilities $ 2,363,311 $ 2,416,489
Derivative instruments 93,057 2,026,944
Unearned revenue 1,442,511 1,308,174
Customer deposits 9,553 13,872
Accrued warranty 91,151 84,948
------------ ------------
Total current liabilities 3,999,583 5,850,427
Convertible debentures - -
Deferred lease inducements 30,110 56,082
Unrecognized tax benefit 98,575 98,575
------------ ------------
Total liabilities 4,128,268 6,005,084
------------ ------------
Stockholders' equity:
Preferred stock, $0.001 par value
Authorized: 100,000,000
Issued and outstanding: April 30,
2013 - 1; April 30, 2012 - 1 - -
Common stock, $0.001 par value
Authorized: 83,076,900
Issued:
April 30, 2013 - 41,958,350; April
30, 2012 - 39,960,479 41,959 39,961
Treasury stock (79) -
Additional paid-in capital 66,191,140 61,025,529
Accumulated deficit (44,974,491) (45,446,771)
Accumulated other comprehensive
income (loss) - currency
translation adjustment (330,920) (79,859)
------------ ------------
Total stockholders' equity 20,927,609 15,538,860
------------ ------------
Liabilities and Stockholders' Equity $ 25,055,877 $ 21,543,944
------------ ------------
------------ ------------
COUNTERPATH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in U.S. Dollars)
(Unaudited)
Three Months Ended Year Ended
April 30, April 30,
---------------------- ----------------------
2013 2012 2013 2012
---------- ---------- ---------- ----------
Revenue:
Software $ 2,707,194 $ 2,926,074 $ 9,164,107 $ 8,494,852
Service 1,316,086 1,438,964 6,075,816 5,588,644
---------- ---------- ---------- ----------
Total revenue 4,023,280 4,365,038 15,239,923 14,083,496
---------- ---------- ---------- ----------
Operating expenses:
Cost of sales (includes
depreciation of $67,669
(2012 - $25,485) and
amortization of
intangible assets of
$39,003 (2012 - $786,712) 553,545 639,537 2,276,777 2,818,569
Sales and marketing 1,269,839 1,092,611 4,463,292 3,869,815
Research and development 1,410,401 1,444,591 5,503,928 4,782,908
General and administrative 955,806 1,108,282 4,452,214 4,032,035
---------- ---------- ---------- ----------
Total operating expenses 4,189,591 4,285,021 16,696,211 15,503,327
---------- ---------- ---------- ----------
Income (loss) from
operations (166,311) 80,017 (1,456,288) (1,419,831)
Interest and other income
(expense), net
Interest and other income 6,131 27,108 141,391 171,453
Interest expense (387) (348) (1,135) (172,460)
Foreign exchange gain
(loss) 966 (1,622) 2,539 13,280
Fair value adjustment on
derivative instruments 261,173 (1,352,035) 1,785,773 (715,803)
---------- ---------- ---------- ----------
Net income (loss) for the
period $ 101,572 $(1,246,880)$ 472,280 $(2,123,361)
---------- ---------- ---------- ----------
Net income/ (loss) per
share:
Basic $ 0.00 $ (0.03)$ 0.01 $ (0.05)
Diluted $ 0.00 $ (0.03)$ (0.01)$ (0.05)
Weighted average common
shares outstanding:
Basic 41,933,750 39,932,662 41,519,117 38,792,066
Diluted 44,387,217 39,932,662 41,637,025 38,792,066
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 margin 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 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)
Three Months Ended Twelve Months Ended
April 30, April 30,
------------------------- -------------------------
2013 2012 2013 2012
------------ ------------ ------------ ------------
Non-GAAP gross margin:
Revenue $ 4,023,280 $ 4,365,038 $ 15,239,923 $ 14,083,496
Less:
Cost of sales 553,545 639,537 2,276,777 2,818,569
------------ ------------ ------------ ------------
GAAP gross profit $ 3,469,735 $ 3,725,501 $ 12,963,146 $ 11,264,927
Percentage of revenue
(gross margin) 86% 85% 85% 80%
GAAP gross profit $ 3,469,735 $ 3,725,501 $ 12,963,146 $ 11,264,927
Plus:
Stock-based
compensation 14,360 8,756 33,577 35,510
Amortization of
intangible assets 9,697 102,977 39,003 786,712
------------ ------------ ------------ ------------
Non-GAAP gross profit $ 3,493,792 $ 3,837,234 $ 13,035,726 $ 12,087,149
Percentage of revenue
(Non-GAAP gross
margin) 87% 88% 86% 86%
Three Months Ended Twelve Months Ended
April 30, April 30,
2013 2012 2013 2012
---------- ------------ ----------- -----------
Non-GAAP income (loss)
from operations:
GAAP income (loss)
from operations $ (166,311)$ 80,017 $ (1,456,288)$ (1,419,831)
Plus:
Stock-based
compensation 195,896 205,971 1,008,004 738,803
Amortization of
intangible assets 9,697 102,977 39,003 786,712
----------- ------------- ----------- -----------
Non-GAAP income (loss)
from operations $ 39,282 $ 388,965 $ (409,281)$ 105,684
Three Months Ended Twelve Months Ended
April 30, April 30,
------------------------ ------------------------
2013 2012 2013 2012
----------- ----------- ----------- -----------
Non-GAAP net income
(loss):
GAAP net income (loss)$ 101,572 $ (1,246,880)$ 472,280 $ (2,123,361)
Plus:
Stock-based
compensation 195,896 205,971 1,008,004 738,803
Amortization of
intangible assets 9,697 102,977 39,003 786,712
Fair value adjustment
on derivative
instruments (261,174) 1,352,035 (1,785,774) 715,803
----------- ----------- ----------- -----------
Non-GAAP net income
(loss) $ 45,991 $ 414,103 $ (266,487)$ 117,957
GAAP net income (loss)
per share:
Basic $ 0.00 $ (0.03)$ 0.01 $ (0.05)
Diluted $ 0.00 $ (0.03)$ (0.01)$ (0.05)
Non-GAAP net income
(loss) per
Basic $ 0.00 $ 0.01 $ (0.01)$ 0.00
Diluted $ 0.00 $ 0.01 $ (0.01)$ 0.00
Contacts:
CounterPath
David Karp
Chief Financial Officer
(604) 628-9364
dkarp@counterpath.com
www.counterpath.com
TMX Equicom
Michael Moore
(619) 467-7067
mmoore@tmxequicom.com
