VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/14/13 -- CounterPath Corporation (TSX: CCV)(NASDAQ: CPAH) ("CounterPath" or the "Company") (http://www.counterpath.com/), an award-winning (http://www.counterpath.com/awards) provider of desktop and mobile VoIP software products and solutions, today announced the financial and operating results for its fiscal 2013 third quarter ended January 31, 2013.
Third Quarter Financial Highlights
-- Quarterly revenue of $3.3 million, down 6% year-over-year. Revenue year-
to-date of $11.2 million, up 15% year-over-year.
-- GAAP and non-GAAP gross margin of 84%.
-- Net loss of $0.2 million or $0.00 per share, compared to a net loss of
$0.1 million or $0.00 per share for the third quarter of fiscal 2012.
-- Non-GAAP net loss of $0.5 million or $0.01 per share, compared to a non-
GAAP net income of $0.1 million or $0.00 per share for the third quarter
of fiscal 2012.
-- Increase in cash and cash equivalents to $12.8 million as of January 31,
2013, up from $11.7 million as of October 31, 2012.
"The market trends driving demand for our technology continue to signal future growth, and we are seeing this reflected in a healthy pipeline of new opportunities with carrier customers and enterprises," stated Donovan Jones, President and Chief Executive Officer. "Our wins with Altibox, Network Norway and Optima Telekom announced during the quarter are indicative of the demand for innovative solutions that increase offerings and value to customers of service providers and provide IT managers the ability to manage costs and improve efficiencies for a growing mobile workforce. While some sales have taken longer to complete, we are very encouraged by the new business activity and are optimistic this will translate into growth in the coming quarters, including our fourth quarter, which is seasonally a stronger quarter."
Recent Operational Highlights
-- Announced a joint solution with Acme Packet, based on Acme Packet's Net-
Net session border controller and CounterPath's Bria softphone. The
solution is the first to leverage Acme Packet's implementation of an
emerging standard known as Tunneled Service Control Function (TSCF),
which delivers a secure and high quality alternative for real-time,
over-the-top (OTT) communications targeted at service providers looking
to extend service footprint and increase subscriber base.
-- Secured a licensing deal through a channel partner with a North American
cable operator, to launch CounterPath's client and provisioning software
for smartphones and tablets over Wi-Fi to extend the cable operator's
home phone offering.
-- Demonstrated and operated an end-to-end network solution called "Bria
play" at the 2013 Mobile World Congress enabling a community of
journalists, analysts and select carriers, enterprises and OEMs to
experience the high quality audio and video offered by our products,
wrapped in an easy, intuitive on-boarding experience.
-- Announced Bria mobile softphone to be the core technology behind Optima
Telekom's, Croatia's second largest telecommunications provider, new OTT
VoIP service. "Tornado" enables Optima Telekom subscribers to stay
connected with friends, family or colleagues whether they are in Croatia
or abroad as users are able to call any fixed or mobile number device at
a fixed rate thus reducing costly roaming charges and unnecessary
billing surprises.
-- The granting of patent No. US 8,335,187 which outlines the process by
which a Network Convergence Gateway (NCG) detects and monitors a mobile
subscriber's location and automatically routes calls to either a packet-
based (IP) endpoint or the traditional circuit switched entity.
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 January 31, 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 rebroadcast will be available to listeners until 12:00 a.m. ET on March 21, 2013. To access the rebroadcast, please dial 416-849-0833 or 1-855-859-2056 and enter passcode 17534634, 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: while some sales have taken longer to complete, we are very encouraged by the new business activity and are optimistic this will translate into growth in the coming quarters, including our fourth quarter which is seasonally a stronger quarter.
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 INTERIM CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)
January 31, April 30,
2013 2012
------------------------
Assets (Unaudited)
Current assets:
Cash and cash equivalents $12,830,189 $ 8,154,139
Accounts receivable (net of allowance for
doubtful accounts of $391,840 and $334,294
respectively) 3,857,824 4,014,472
Prepaid expenses and deposits 130,470 170,556
------------------------
Total current assets 16,818,483 12,339,167
Deposits 127,872 62,521
Equipment 187,976 101,024
Intangible assets (net of accumulated
amortization of $5,919,588 and $5,890,282,
respectively) 9,697 38,853
Derivative instruments 78,435 -
Goodwill 8,769,027 8,957,977
Other assets 81,979 44,402
------------------------
Total Assets $26,073,469 $21,543,944
------------------------
------------------------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 2,272,713 $ 2,416,489
Derivative instruments 387,286 2,026,944
Unearned revenue 2,280,778 1,308,174
Customer deposits 9,553 13,872
Accrued warranty 93,330 84,948
------------------------
Total current liabilities 5,043,660 5,850,427
Deferred lease inducements 45,242 56,082
Unrecognized tax benefit 98,575 98,575
------------------------
Total liabilities 5,187,477 6,005,084
Stockholders' equity:
Preferred stock, $0.001 par value
Authorized: 100,000,000
Issued and outstanding: January 31, 2013 - 1;
April 30, 2012 - 1 - -
Common stock, $0.001 par value
Authorized: 83,076,900
Issued and outstanding:
January 31, 2013 - 41,929,898; April 30, 2012
- 39,960,479 41,930 39,961
Additional paid-in capital 66,120,550 61,025,529
Accumulated deficit (45,076,063) (45,446,771)
Accumulated other comprehensive income -
currency translation adjustment (200,425) (79,859)
------------------------
Total stockholders' equity 20,885,992 15,538,860
------------------------
Liabilities and Stockholders' Equity $26,073,469 $21,543,944
------------------------
------------------------
COUNTERPATH CORPORATION
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in U.S. Dollars)
(Unaudited)
Three Months Ended Nine Months Ended
January 31, January 31,
2013 2012 2013 2012
--------------------------------------------------
Revenue:
Software $ 2,117,042 $ 1,856,867 $ 6,456,913 $ 5,568,778
Service 1,149,046 1,629,004 4,759,730 4,149,680
--------------------------------------------------
Total revenue 3,266,088 3,485,871 11,216,643 9,718,458
--------------------------------------------------
Operating expenses:
Cost of sales
(includes
depreciation of
$22,071 (2012 -
$17,363) and
amortization of
intangible assets of
$29,306 (2012 -
$683,735)) 537,433 670,687 1,723,232 2,179,033
Sales and marketing 1,110,201 1,033,938 3,193,453 2,777,204
Research and
development 1,447,921 1,231,789 4,093,527 3,338,317
General and
administrative 952,997 869,446 3,496,408 2,923,753
--------------------------------------------------
Total operating
expenses 4,048,552 3,805,860 12,506,620 11,218,307
--------------------------------------------------
Loss from operations (782,464) (319,989) (1,289,977) (1,499,849)
Interest and other
income (expense), net:
Interest and other
income 73,317 45,509 135,260 144,345
Interest expense (124) (428) (748) (172,112)
Foreign exchange gain
(loss) 6,110 3,592 1,573 14,903
Fair value adjustment
on derivative
instruments 531,436 208,504 1,524,600 636,232
--------------------------------------------------
Net income (loss) for
the period $ (171,725) $ (62,812) $ 370,708 $ (876,481)
--------------------------------------------------
--------------------------------------------------
Net income (loss) per
share:
Basic and diluted $ 0.00 $ 0.00 $ 0.01 $ (0.02)
Weighted average
common shares
outstanding: 41,836,341 39,876,373 41,385,413 38,420,132
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 margin: Three Months Ended Nine Months Ended
January 31, January 31,
--------------------------------------------------
2013 2012 2013 2012
--------------------------------------------------
Revenue $ 3,266,088 $ 3,485,871 $11,216,643 $ 9,718,458
Less:
Cost of sales 537,433 670,687 1,723,232 2,179,033
--------------------------------------------------
GAAP gross profit $ 2,728,655 $ 2,815,184 $ 9,493,411 $ 7,539,425
Percentage of revenue
(gross margin) 84% 81% 85% 78%
GAAP gross profit $ 2,728,655 $ 2,815,184 $ 9,493,411 $ 7,539,425
Plus:
Stock-based
compensation 8,247 8,835 25,884 26,754
Amortization of
intangible assets 9,715 199,561 29,306 683,735
--------------------------------------------------
Non-GAAP gross profit $ 2,746,617 $ 3,023,580 $ 9,548,601 $ 8,249,914
Percentage of revenue
(non-GAAP gross
margin) 84% 87% 85% 85%
Non-GAAP income (loss)
from operations: Three Months Ended Nine Months Ended
January 31, January 31,
--------------------------------------------------
2013 2012 2013 2012
--------------------------------------------------
GAAP income (loss)
from operations $ (782,464) $ (319,989) $(1,289,977) $(1,499,849)
Plus:
Stock-based
compensation 200,733 158,649 812,108 532,832
Amortization of
intangible assets 9,715 199,561 29,306 683,735
--------------------------------------------------
Non-GAAP income
(loss) from
operations $ (572,016) $ 38,221 $ (448,563) $ (283,282)
Non-GAAP net income
(loss): Three Months Ended Nine Months Ended
January 31, January 31,
--------------------------------------------------
2013 2012 2013 2012
--------------------------------------------------
GAAP net income
(loss) $ (171,725) $ (62,812) $ 370,708 $ (876,481)
Plus:
Stock-based
compensation 200,733 158,649 812,108 532,832
Amortization of
intangible assets 9,715 199,561 29,306 683,735
Fair value adjustment
on derivative
instruments (531,436) (208,504) (1,524,600) (636,232)
--------------------------------------------------
Non-GAAP net income
(loss) $ (492,713) $ 86,894 $ (312,478) $ (296,146)
GAAP net income
(loss) per share -
basic & diluted $ 0.00 $ 0.00 $ 0.01 $ (0.02)
Non-GAAP net income
(loss) per share -
basic & diluted $ (0.01) $ 0.00 $ (0.01) $ (0.01)
Contacts:
CounterPath Corporation
David Karp
Chief Financial Officer
(604) 628-9364
dkarp@counterpath.com
www.counterpath.com
TMX Equicom
Philip Dale
(416) 815-0700 x253
pdale@tmxequicom.com
