CounterPath reports fiscal 2010 financial results
VANCOUVER, July 27 /PRNewswire-FirstCall/ - 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 financial and operating results for the year ended April 30, 2010.
Financial and operating highlights for the year include:
- Revenues of $8.0 million for fiscal year 2010 compared to $9.8
million for fiscal year 2009.
- Fourth quarter revenues of $2.7 million, up from third quarter
revenues of $1.4 million for fiscal 2010 and up from revenues of $2.2
million for the fourth quarter of fiscal year 2009.
- A considerable reduction in expenses, as operating expenses for
fiscal year 2010 were $13.3 million, down significantly from $26.2
million for fiscal year 2009. Non-GAAP operating expenses were also
lower coming in at $11.5 million for fiscal year 2010 compared to
$18.5 million for fiscal year 2009.
- A net loss for fiscal year 2010 of $5.5 million ($0.18 per share)
compared to a net loss of $15.8 million ($0.57 per share) for fiscal
year 2009.
- The leveraging of our channel partners such as Digium(R), BroadSoft
(R) and Genesys (an Alcatel-Lucent company) to drive company revenues
facilitated by customized versions of our software applications such
as Bria for Asterisk, Bria for BroadWorks and Bria for Genesys.
- Further expansion of our customer base comprising largely telecom
OEMs, service providers and enterprises, with one of the largest OEMs
in the world representing 15% of our total revenues for fiscal year
2010.
- 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.
- The granting of a fundamental patent which extends CounterPath's
portfolio of patents and exclusive licenses covering its fixed-mobile
convergence solutions.
- Subsequent to the year end, the launch of Bria iPhone Edition to
address the growing number of SMEs, large enterprises and governments
that are deploying iPhones, iPod Touches and iPads for mobile
workers, many of whom require full access to their communications
services while away from their desk or office.
"We are starting to see many positive signs that we are emerging from the economic downturn that persisted through most of calendar year 2009 including the increase in orders reflected in our Q4 results," stated Donovan Jones, President and CEO, CounterPath. "Fiscal 2010 was a challenging year for us, but we have come out of it stronger. We made significant reductions in expenses providing a competitive cost profile while continuing to innovate and deliver to the expectations of our customers and partners. As a leading provider of softphones, mobile clients, integrated unified communications (UC) and fixed mobile convergence (FMC) solutions, CounterPath is uniquely positioned for growth and market share expansion as enterprise and service providers rapidly embrace VoIP and new forms of communications," 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 fiscal year ended April 30, 2010, revenue was $8.0 million compared to $9.8 million for fiscal 2009. Software revenue for the fiscal year ended April 30, 2010 was $6.0 million compared to $6.9 million for the previous year. Service revenue for the fiscal year ended April 30, 2010 was $2.0 million compared to $3.0 million for fiscal 2009.
Operating expenses for the fiscal year ended April 30, 2010 were $13.3 million compared to $26.2 million for fiscal 2009. The decrease in operating expenses was primarily due to the restructuring of operations in fiscal 2009 which reduced operating costs in fiscal 2010. Sales and marketing expenses were $3.1 million for the fiscal year ended April 30, 2010 compared to $4.1 million for the previous year. For the fiscal year ended April 30, 2010, research and development expenses were $3.6 million and general and administrative expenses were $3.7 million compared to $7.1 million and $6.5 million, respectively, for the previous year.
Sales and marketing expenses were $3.1 million for the fiscal year ended April 30, 2010 compared to $4.1 million for the previous year. For the fiscal year ended April 30, 2010, research and development expenses were $3.6 million and general and administrative expenses were $3.7 million compared to $7.1 million and $6.5 million, respectively, for the previous year.
Operating expenses for the fiscal year ended April 30, 2010 include a non-cash charge of $0.9 million for amortization of intangible assets acquired from NewHeights Software Corporation, FirstHand Technologies Inc. and BridgePort Networks, Inc., compared to $2.0 million in fiscal 2009. Other non-cash charges included a non-cash $0.9 million stock-based compensation expense for fiscal year ended April 30, 2010 compared to $1.4 million in fiscal 2009.
The net loss for the fiscal year ended April 30, 2010 was $5.5 million, or a loss of $0.18 per share, compared to a net loss of $15.8 million, or a loss of $0.57 per share, for fiscal 2009.
At April 30, 2010, the Company had $1.6 million in cash, compared to $2.9 million at April 30, 2009. At April 30, 2010, the Company's working capital was $0.8 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 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
Year ended
April 30,
---------------------------
(Unaudited) 2010 2009
------------- -------------
Non-GAAP operating expenses $ 11,521,926 $ 18,459,530
Add:
Stock-based compensation 883,225 1,443,864
Amortization of intangible assets 868,446 2,010,830
Impairment of intangible assets - 2,755,333
Restructuring costs 44,912 1,565,347
------------- -------------
Operating expenses (GAAP) $ 13,318,509 $ 26,234,904
------------- -------------
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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) We are starting to see many positive signs that we are emerging from the economic downturn that persisted through most of calendar year 2009 including the increase in orders; and (2) CounterPath is uniquely positioned for growth and market share expansion as enterprise and service providers rapidly embrace VoIP and new forms of communications.
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)
April 30, April 30,
2010 2009
------------- -------------
Assets
Current assets:
Cash $ 1,556,813 $ 2,931,932
Accounts receivable (net of
allowance for doubtful accounts
of $1,116,119 (2009 - $755,114)) 2,345,633 2,524,220
Investment tax credits recoverable 129,285 143,334
Prepaid expenses and deposits 221,041 310,274
------------- -------------
Total current assets 4,252,772 5,909,760
Deposits 101,994 114,267
Equipment 111,150 258,442
Intangible assets (net of accumulated
amortization of $4,243,641
(2009 - $3,375,195)) 2,930,616 2,201,894
Goodwill 8,740,025 7,262,701
Other assets 58,817 92,101
------------- -------------
Total Assets $ 16,195,374 $ 15,839,165
------------- -------------
------------- -------------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 2,667,997 $ 3,488,001
Unearned revenue 655,361 708,455
Customer deposits 5,127 9,443
Accrued warranty 120,963 137,378
------------- -------------
Total current liabilities 3,449,448 4,343,277
Deferred lease inducements 4,677 55,016
Unrecognized tax benefit 98,575 98,575
------------- -------------
Total liabilities 3,552,700 4,496,868
------------- -------------
Stockholders' equity:
Preferred stock, $0.001 par value
Authorized: 100,000,000
Issued and outstanding:
April 30, 2010 - 1; April 30, 2009 - 1 - -
Common stock, $0.001 par value
Authorized: 83,076,900
Issued and outstanding:
April 30, 2010 - 33,015,627;
April 30, 2009 - 28,832,050 33,016 28,831
Additional paid-in capital 51,902,471 48,718,444
Accumulated deficit (39,779,781) (34,318,195)
Accumulated other comprehensive
income (loss) - currency
translation adjustment 486,968 (3,086,783)
------------- -------------
Total stockholders' equity 12,642,674 11,342,297
------------- -------------
Liabilities and Stockholders' Equity $ 16,195,374 $ 15,839,165
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COUNTERPATH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(Stated in U.S. Dollars)
Years Ended
April 30,
---------------------------
2010 2009
------------- -------------
Revenue
Software $ 5,974,712 $ 6,868,980
Service 2,042,145 2,964,121
------------- -------------
Total revenue 8,016,857 9,833,101
------------- -------------
Operating expenses:
Cost of sales (includes depreciation
of $6,361 (2009 - $50,743) and
amortization of intangible assets of
$868,446 (2009 - $2,010,830)) 2,933,749 4,183,626
Sales and marketing 3,063,523 4,147,626
Research and development 3,586,425 7,075,640
General and administrative 3,689,900 6,507,332
Impairment of intangible assets - 2,755,333
Restructuring costs 44,912 1,565,347
------------- -------------
Total operating expenses 13,318,509 26,234,904
------------- -------------
Loss from operations (5,301,652) (16,401,803)
Interest and other income (expense), net
Interest income 221,493 107,931
Interest expense (2,599) (11,676)
Foreign exchange gain (loss) (378,828) 466,836
------------- -------------
Net loss for the year (5,461,586) (15,838,712)
Other comprehensive income (loss):
Foreign currency translation adjustments 3,573,751 (3,818,372)
------------- -------------
Comprehensive loss $ (1,887,835) $(19,657,084)
------------- -------------
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Net loss per share:
Basic and diluted $ (0.18) $ (0.57)
Weighted average common shares
outstanding: 31,067,445 27,886,194
SOURCE CounterPath Corporation
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