VANCOUVER, March 12 /PRNewswire-FirstCall/ -- CounterPath Corporation ("CounterPath" or the "Company") (OTCBB: CPAH; TSX-V: CCV), a leading provider of desktop and mobile VoIP software products and solutions, today announced financial and operating results for the third quarter of fiscal year 2010.
Financial and operating highlights for the third quarter ended January 31, 2010 include:
- Revenue for the third quarter of $1.4 million compared to revenue of $1.9 million for the second quarter of fiscal 2010 and $2.0 million for the third quarter of fiscal 2009. - A considerable reduction in expenses as non-GAAP operating expenses for the third quarter were $2.6 million, down from $3.6 million in non-GAAP operating expenses for the quarter ended January 31, 2009. - A net loss for the third quarter of $1.8 million ($0.06 per share) compared to a net loss of $2.2 million ($0.08 per share) for the quarter ended January 31, 2009. - The launch of Bria for Asterisk, a co-branded, open standards-based softphone that interoperates seamlessly with Asterisk telephony platforms enabling SMBs and enterprises to implement a complete end-to-end VoIP solution that is powerful and easy to install. - The launch of Bria 3.0 multimedia VoIP softphone for both Mac and PC platforms with new features such as high-definition (HD) video, user customization and presence alert, all designed to enhance the overall user experience and the enterprise feature set. - Subsequent to the quarter, the granting of a fundamental patent which extends CounterPath's portfolio of patents and exclusive licenses covering its fixed-mobile convergence solutions.
"While we had a number of orders which were delayed resulting in lower revenues for this quarter, we are seeing increased sales activity," stated Donovan Jones, President and CEO, CounterPath. "There is strong interest in our end-to-end solutions and the market momentum is favorable. Our industry leading, patent protected VoIP, mobile VoIP and fixed mobile convergence applications continue to represent compelling solutions for improving both enterprise and consumer productivity while reducing costs," 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. Consolidated financial results include the financial results of NewHeights Software Corporation from August 2, 2007 and the financial results for FirstHand Technologies Inc. and BridgePort Networks, Inc., from February 1, 2008.)
For the quarter ended January 31, 2010, revenue was $1.4 million compared to $2.0 million for the same quarter last year. Software revenue for the quarter ended January 31, 2010 was $1.0 million compared to $1.3 million for the same quarter last year. Service revenue for the quarter ended January 31, 2010 was $0.3 million compared to $0.7 million for same quarter last year.
Operating expenses for the quarter ended January 31, 2010 were $3.2 million compared to $4.3 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 $0.3 million. The quarter-over-quarter decrease in operating expenses was primarily due to significant employee rationalization completed over the previous quarters.
Sales and marketing expenses were $0.6 million for the quarter ended January 31, 2010 compared to $0.8 million for same quarter last year. For the quarter ended January 31, 2010, research and development expenses were $0.8 million and general and administrative expenses were $0.9 million, compared to $1.1 million and $1.5 million, respectively, for the same quarter last year.
The net loss for the quarter ended January 31, 2010 was $1.8 million, or a loss of $0.06 per share, compared to a net loss of $2.2 million, or a loss of $0.08 per share, for the quarter ended January 31, 2009.
At January 31, 2010, the Company had $2.4 million in cash, compared to $2.9 million at April 30, 2009. At January 31, 2010, the Company's working capital was $1.1 million, compared to $1.6 million at April 30, 2009.
About CounterPath
CounterPath Corporation is a leading 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), Deutsche Telekom, Cisco Systems and Mitel.
Visit http://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 operating expenses which exclude non-cash stock-based compensation, amortization and impairment of intangible asset charges relative to operating expenses and operating losses 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 Three months ended January 31, -------------------------- (Unaudited) 2010 2009 ------------ ------------ Non-GAAP operating expenses $2,593,875 $3,603,292 Add: Stock-based compensation 336,796 257,132 Amortization of intangible assets 220,369 458,871 ------------ ------------ Operating expenses (GAAP) $3,151,040 $4,319,295 ------------ ------------ ------------ ------------ 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) There is strong interest in our end-to-end solutions and the market momentum is favorable.
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 failure to develop new and innovative products using the Company's technologies, (2) the Company's ability to remain competitive as other parties develop and release competitive products, (3) the Company's ability to retain the employees necessary to continue research and development of current and new products, (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 the VoIP industry, (6) the compatibility of the Company's products with new computer operating systems, (7) the rate of adoption by service providers and the general public of VoIP as a replacement for regular and cellular phone service, (8) general economic conditions as they affect CounterPath and its current and prospective customers, including a continued downturn in general economic conditions internationally, (9) the ability of the Company to control costs operating, general administrative and other expenses, and (10) insufficient investor interest in the Company's securities which may impact on the Company's ability to raise additional financing as required. Readers should also refer to the risk disclosures outlined in the Company's quarterly reports on Form 10-Q, annual reports on Form 10-K and the Company's other disclosure documents filed from time-to-time with the Securities and Exchange Commission at http://www.sec.gov/ and the Company's interim and annual filings and other disclosure documents filed from time-to-time on SEDAR at http://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) January 31, April 30, 2010 2009 ------------- ------------ (Unaudited) Assets Current assets: Cash $ 2,351,791 $ 2,931,932 Accounts receivable (net of allowance for doubtful accounts of $1,032,784 and $755,114, respectively) 1,546,144 2,524,220 Investment tax credits recoverable 102,817 143,334 Other current assets 854,816 310,274 ------------ ------------ Total current assets 4,855,568 5,909,760 Deposits 101,538 114,267 Equipment 202,638 258,442 Intangible assets (net of accumulated amortization of $4,018,121 and $3,375,195, respectively) 2,587,959 2,201,894 Goodwill 8,214,480 7,262,701 Other assets 67,912 92,101 ------------ ------------ Total Assets $ 16,030,095 $ 15,839,165 ------------ ------------ ------------ ------------ Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 3,191,821 $ 3,488,001 Unearned revenue 486,862 708,455 Customer deposits 4,213 9,443 Accrued warranty 108,786 137,378 ------------ ------------ Total current liabilities 3,791,682 4,343,277 Deferred lease inducements 9,619 55,016 Unrecognized tax benefit 98,575 98,575 ------------ ------------ Total liabilities 3,899,876 4,496,868 ------------ ------------ Stockholders' equity: Preferred stock, $0.001 par value Authorized: 100,000,000 Issued and outstanding: January 31, 2010 - 1; April 30, 2009 - 1 - - Common stock, $0.001 par value Authorized: 83,076,900 Issued and outstanding: January 31, 2010 - 32,949,835 April 30, 2009 - 28,832,050 32,949 28,832 Additional paid-in capital 51,743,434 48,718,443 Accumulated deficit (39,095,668) (34,318,195) Accumulated other comprehensive loss - currency translation adjustment ' (550,496) (3,086,783) ------------ ------------ Total stockholders' equity 12,130,219 11,342,297 ------------ ------------ Liabilities and Stockholders' Equity $ 16,030,095 $ 15,839,165 ------------ ------------ ------------ ------------ COUNTERPATH CORPORATION CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Stated in U.S. Dollars) (Unaudited) Three Months Ended Nine Months Ended January 31, January 31, -------------------------- -------------------------- 2010 2009 2010 2009 ------------ ------------ ------------ ------------ Revenue: Software $ 1,030,004 $ 1,305,303 $ 3,623,173 $ 5,267,225 Service 333,414 724,758 1,691,309 2,392,426 ------------ ------------ ------------ ------------ Total revenue 1,363,418 2,030,061 5,314,482 7,659,651 Operating expenses: Cost of sales (includes depreciation of $4,911 and $48,490 and amortization of intangible assets of $642,925 and $1,514,515 for nine months ended January 31, 2010 and 2009 respectively) 794,364 863,573 2,164,966 3,327,619 Sales and marketing 644,212 762,398 2,093,768 3,431,062 Research and development 797,162 1,142,497 2,621,884 6,263,594 General and administrative 915,302 1,524,559 2,810,605 5,312,358 Restructuring costs - 26,268 44,912 959,264 ------------ ------------ ------------ ------------ Total operating expenses 3,151,040 4,319,295 9,736,135 19,293,897 ------------ ------------ ------------ ------------ Loss from operations (1,787,622) (2,289,234) (4,421,653) (11,634,246) Interest and other income (expense), net: Interest income 53,239 33,627 114,813 83,893 Interest expense (685) (1,278) (2,356) (11,713) Foreign exchange gain (loss) (46,516) 19,360 (468,277) (55,335) ------------ ------------ ------------ ------------ Net loss for the period $ (1,781,584) $ (2,237,525) $ (4,777,473) $(11,617,401) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Other comprehensive income (loss): Foreign currency translation adjustments 82,992 (282,407) 2,536,287 (3,314,268) ------------ ------------ ------------ ------------ Comprehensive loss $ (1,698,592) $ (2,519,932) $ (2,241,186) $(14,931,669) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Net loss per share: Basic and diluted $ (0.06) $ (0.08) $ (0.16) $ (0.42) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Weighted average common shares outstanding: 30,710,069 28,542,855 30,395,799 27,721,110
CounterPath Corporation
CONTACT: David Karp, Chief Financial Officer, CounterPath Corporation,
(604) 320-3344 ext 1114, ir@counterpath.com
