CounterPath Reports First Quarter Fiscal 2012 Financial Results

VANCOUVER, Sept. 14, 2011 /CNW/ - 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 its first fiscal quarter of 2012. The Company's fiscal year runs May 1 to April 30.

Financial and operating highlights for the first quarter ended July 31, 2011, include:

  • Revenue of $2.8 million, a 24-percent increase year-over-year.

  • A non-GAAP operating loss of $0.4 million compared to a non-GAAP operating loss of $0.9 million for the quarter ended July 31, 2010.

  • A net loss of $0.9 million or a loss of $0.03 per share, compared to a net loss of $1.4 million or a loss of $0.04 per share, for the quarter ended July 31, 2010.

  • The launch of the Client Configuration Server (CCS) designed to enable enterprises and service providers such as telcos, cable providers and ITSPs to deploy, configure and manage their softphone deployments.

  • A newly granted patent, No. 7,958,276, which covers the automatic configuration of peripheral devices such as VoIP softphones, headsets and speakerphones. When combined with the CCS, this feature enables an IT department to simplify implementation and achieve zero-touch deployments.

  • The release of Bria iPad Edition Version 1.0, a standards-based, service agnostic softphone for making and receiving calls over a Wi-Fi or a 3G/4G mobile connection. (Available in the Apple iTunes Store.)

  • The closing of a private placement under which the Company raised $7.1 million including the exercise of warrants for $1.5 million in July and August and the conversion of all of the Company's convertible debt to equity.

"This last quarter was highlighted by continued effort toward customization for a Tier One rollout expected later this year which is anticipated to lead to broader adoption of our applications," stated Donovan Jones, President and CEO of CounterPath. "Our recently completed financing will enable CounterPath to broaden our resources and accelerate the sales and marketing of our applications. We are seeing improved market conditions for our applications, evidenced by growing market shares for Android and iOS smartphones which, according to a report published by Gartner in August 2011, represented 43% and 18%, respectively, of worldwide smartphones shipped in calendar Q2-2011. Our strategy of enabling anytime, anywhere communications is well timed given the current market shift to mobilizing consumer and office workers, and we are well positioned as a leader in providing softphone applications for network equipment providers, enterprises and service providers," continued Jones.

Financial Results for the First Quarter Ended July 31, 2011

(All amounts in U.S. dollars and in accordance with accounting principles generally accepted in the United States ("GAAP") unless otherwise specified.)

Revenue was $2.8 million for the quarter ended July 31, 2011 compared to $2.2 million for the same quarter last year. Software revenue for the quarter ended July 31, 2011 was $1.6 million compared to $1.8 million for the same quarter last year. Service revenue for the quarter ended July 31, 2011 was $1.2 million compared to $0.4 million for same quarter last year.

Operating expenses for the quarter ended July 31, 2011 were $3.7 million compared to $3.7 million for the same quarter last year. Operating expenses for the quarter ended July 31, 2011 included a non-cash expense of $0.3 million for amortization of intangible assets and a non-cash stock-based compensation expense of $0.2 million.

Sales and marketing expenses were $0.8 million for the quarter ended July 31, 2011 compared to $0.9 million for same quarter last year. For the quarter ended July 31, 2011, research and development expenses were $1.0 million and general and administrative expenses were $1.0 million, compared to $1.1 million and $1.0 million, respectively, for the same quarter last year.

Interest and other income (expense) for the three months ended July 31, 2011 included a non-cash expense of $0.2 million for the accretion of debenture discount, related to the conversion of the convertible debentures in the quarter (2010 - $nil), offset by a non-cash gain of $0.1 million for the change in fair value of derivative liability, related to warrants issued under the June 14, 2011 private placement (2010 - $nil). The net loss for the quarter ended July 31, 2011 was $0.9 million, or a loss of $0.03 per share, compared to a net loss of $1.4 million, or a loss of $0.04 per share, for the quarter ended July 31, 2010.

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, Metaswitch Networks 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 (1) non-GAAP operating loss which excludes stock-based compensation and amortization of intangible asset charges relative to operating 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
 
    Three Months Ended
July 31,
(Unaudited)   2011     2010
Non-GAAP operating loss:          
           
  GAAP Loss from operations $ (950,230)   $ (1,454,069)
  Plus:          
    Stock-based compensation   244,261     300,485
    Amortization of intangible assets   280,880     208,473
  Non-GAAP operating loss $ (425,089)   $ (945,111)

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) This last quarter was highlighted by continued effort towards customization for a Tier One rollout expected later this year which is anticipated to lead to broader adoption of our applications.

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 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 CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)
    July 31,     April 30,
    2011     2011
Assets   (Unaudited)      
  Current assets:          
    Cash $ 7,229,474   $ 1,707,397
    Accounts receivable (net of allowance for doubtful
accounts of $101,293 and $49,883, respectively)
  2,420,610     3,018,188
    Prepaid expenses and deposits   85,223     110,412
      Total current assets   9,735,307     4,835,997
           
  Deposits   159,813     159,433
  Equipment   35,695     59,574
  Intangible assets (net of accumulated amortization of
$5,384,450 and $5,103,570, respectively)
  571,106     859,664
  Goodwill   9,194,383     9,247,993
  Other assets   48,371     48,308
Total Assets $ 19,744,675   $ 15,210,969
           
Liabilities and Stockholders' Equity          
  Current liabilities:          
    Accounts payable and accrued liabilities $ 1,943,410   $ 2,340,897
    Derivative Liability   1,165,427     -
    Unearned revenue   770,374     958,626
    Customer deposits   2,083     2,018
    Accrued warranty   123,901     146,868
      Total current liabilities   4,005,195     3,448,409
           
  Deferred lease inducements   1,847     2,474
  Convertible debentures   -     1,305,002
  Unrecognized tax benefit   98,575     98,575
      Total liabilities   4,105,617     4,854,460
           
  Stockholders' equity:          
  Preferred stock, $0.001 par value          
    Authorized: 100,000,000          
    Issued and outstanding: July 31, 2011 - 1; April 30, 2011 - 1   -     -
  Common stock, $0.001 par value          
    Authorized: 83,076,900          
    Issued and outstanding:          
    July 31, 2011 - 38,794,815;   April 30, 2011 - 33,440,106   38,795     33,440
  Additional paid-in capital   59,670,570     53,420,601
  Accumulated deficit   (44,249,128)     (43,323,410)
  Accumulated other comprehensive income - currency
translation adjustment
  178,821     225,878
      Total stockholders' equity   15,639,058     10,356,509
Liabilities and Stockholders' Equity $ 19,744,675   $ 15,210,969

COUNTERPATH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(Stated in U.S. Dollars)
(Unaudited)
    Three Months Ended
    July 31,
    2011     2010
Revenue:          
  Software $ 1,584,051   $ 1,819,152
  Service   1,174,683     400,433
    Total revenue   2,758,734     2,219,585
Operating expenses:          
  Cost of sales (includes  depreciation of $6,181(2010 - $3,994)
and amortization of intangible assets of $280,880 (2010 - $208,473))
  860,145     748,862
  Sales and marketing   822,034     865,683
  Research and development   992,511     1,063,647
  General and administrative   1,034,274     995,462
    Total operating expenses   3,708,964     3,673,654
Loss from operations   (950,230)     (1,454,069)
Interest and other income (expense), net:          
  Interest and other income   49,353     52,079
  Interest expense   (171,242)     (221)
  Change in fair value of derivative liability   145,714     -
  Foreign exchange loss   687     (28,046)
Net loss for the period $ (925,718)   $ (1,430,257)
           
           
Other comprehensive income (loss):          
  Foreign currency translation adjustments   (47,057)     (217,009)
Comprehensive income (loss) $ (972,775)   $ (1,647,266)
Net loss per share:          
  Basic and diluted $ (0.03)   $ (0.04)
           
  Weighted average common shares outstanding:   35,831,910     33,066,204

 

 

 

SOURCE CounterPath Corporation

For further information:

David Karp
Chief Financial Officer
CounterPath Corporation
+1.604.320.3344 ext 1114
ir@counterpath.com

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CounterPath Corporation

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