CounterPath Reports Record First Quarter Fiscal 2013 Financial Results

Sep 13, 2012, 08:30 ET from CounterPath Corporation

Quarterly Revenues Grow 59% Year-over-Year

VANCOUVER, Sept. 13, 2012 /PRNewswire/ - CounterPath Corporation ("CounterPath" or the "Company") (NASDAQ: CPAH) (TSX: CCV), an award-winning provider of desktop and mobile VoIP software products and solutions, today announced the financial and operating results for its first quarter ended July 31, 2012 of fiscal 2013.

First Quarter Financial Highlights

  • Record quarterly revenue of $4.4 million, a 59% increase year-over-year.
  • Gross margin of 87% and a non-GAAP gross margin of 88%.
  • Operating income of $32,609 compared to an operating loss of $1.0 million for the first quarter of fiscal 2012.
  • Net income of $0.9 million or $0.02 per share, compared to a net loss of $0.9 million or a loss of $0.03 per share for the first quarter of fiscal 2012.
  • Non-GAAP net income of $0.5 million or $0.01 per share compared to a non-GAAP net loss of $0.5 million or a loss of $0.02 per share for the first quarter of fiscal 2012.
  • Completed private placement on June 19, 2012 for gross proceeds of $3.6 million.
  • Cash of $11.4 million as of July 31, 2012.

"Our first quarter was highlighted by record revenues and solid growth during a traditionally slower quarter," stated Donovan Jones, President and Chief Executive Officer. "Our direct sales to enterprises and telecommunication service providers were strong, contributing to our overall growth. Enterprises are increasingly realizing the security, productivity and cost saving benefits of our enterprise-grade softphone applications, while telecommunication service providers are reducing customer churn to over-the-top alternatives, by deploying our carrier-grade softphone applications," continued Jones.

Recent Business Highlights

  • Launched Bria for Android Tablet Edition, a standards-based softphone that enables enterprises to extend VoIP calling and PBX features to Android tablets, including employee-owned devices.
  • Launched the Client Configuration Server (CCS) enabled Bria softphone on Apple's iTunes enabling IT managers to centrally deploy, configure and upgrade softphone endpoints ultimately reducing support calls to IT managers and speeding up softphone deployments.
  • The Bria iPad Edition mobile softphone application placed third among nearly 250 entries in the CTIA Emerging Technology (E-Tech) Awards for the category Mobile Applications.
  • Began trading on the NASDAQ Capital Market on July 11, 2012 under the symbol "CPAH" and graduated from the TSX Venture Exchange to the Toronto Stock Exchange on August 20, 2012 under the symbol "CCV".

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 July 31, 2012. 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  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 October 13, 2012. To access the rebroadcast, please dial 416-849-0833 or 1-855-859-2056 and enter passcode 25565884, 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.

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 Company's ability to control its operating expenses, which may adversely affect its financial condition, (3) 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, (4) the Company's ability to remain competitive as other better financed parties develop and release competitive products, (5) the impact of intellectual property litigation that could materially and adversely affect our business, (6) the success by the Company of the sales of its current and new products, (7) the impact of technology changes on the Company's products and on our industry, (8) the failure to develop new and innovative products using the Company's technologies, (9) 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 and the Company's interim and annual filings and other disclosure documents filed from time-to-time on SEDAR at

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

The Toronto Stock Exchange has not reviewed nor approved the contents of this press release and does not accept responsibility for the adequacy or accuracy of this press release.


    July 31,     April 30,  
    2012     2012  
Assets   (Unaudited)        
   Current assets:            
       Cash $ 11,404,439   $ 8,154,139  
      Accounts receivable (net of allowance for doubtful accounts of     $258,974 and $334,294, respectively)   5,391,270     4,014,472  
      Prepaid expenses and deposits   123,262     170,556  
            Total current assets   16,918,971     12,339,167  
  Deposits   77,741     62,521  
  Equipment   109,077     101,024  
   Intangible assets (net of accumulated amortization of $5,900,190    and $5,890,282, respectively)   29,139     38,853  
   Derivative instruments   57,700     -  
   Goodwill   8,754,087     8,957,977  
  Other assets   53,582     44,402  
Total Assets $ 26,000,297   $ 21,543,944  
Liabilities and Stockholders' Equity            
   Current liabilities:            
      Accounts payable and accrued liabilities $ 2,357,631   $ 2,416,489  
       Derivative instruments   1,244,876     2,026,944  
      Unearned revenue   1,679,861     1,308,174  
      Customer deposits   13,872     13,872  
      Accrued warranty   94,072     84,948  
            Total current liabilities   5,390,312     5,850,427  
   Deferred lease inducements         54,758     56,082  
   Unrecognized tax benefit   98,575     98,575  
           Total liabilities   5,543,645     6,005,084  
   Stockholders' equity:            
   Preferred stock, $0.001 par value            
      Authorized: 100,000,000            
      Issued and outstanding: July 31, 2012 - 1; April 30, 2012 - 1   -     -  
  Common stock, $0.001 par value            
       Authorized: 83,076,900            
       Issued and outstanding:            
       July 31, 2012 - 41,563,353;   April 30, 2012 - 39,960,479   41,564     39,961  
  Additional paid-in capital   65,234,746     61,025,529  
  Accumulated deficit   (44,579,233)     (45,446,771)  
   Accumulated other comprehensive income - currency translation adjustment   (240,425)     (79,859)  
           Total stockholders' equity   20,456,652     15,538,860  
Liabilities and Stockholders' Equity $ 26,000,297   $ 21,543,944  


                Three Months Ended
                July 31,
                2012     2011  
  Software             $ 2,528,056   $ 1,584,051  
  Service               1,859,712     1,174,683  
            Total revenue               4,387,768     2,758,734  
Operating expenses:                        
  Cost of sales (includes depreciation of $5,310 (2011 - $6,181)  and amortization of intangible  assets of $9,908 (2011 - $280,880))               559,793     860,145  
  Sales and marketing               1,055,035     822,034  
  Research and development               1,361,012     992,511  
  General and administrative               1,379,319     1,034,274  
            Total operating expenses               4,355,159     3,708,964  
Income (loss) from operations               32,609     (950,230)  
Interest and other income (expense), net:                        
  Interest and other income               43,853     49,353  
  Interest expense               (470)     (171,242)  
  Fair value adjustment on derivative instruments               785,128     145,714  
  Foreign exchange gain               6,418     687  
Net income (loss) for the period             $ 867,538   $ (925,718)  
Other comprehensive income (loss):                        
  Foreign currency translation adjustments               (160,566)     (47,057)  
Comprehensive income (loss)             $ 706,972   $ (972,775)  
Net income (loss) per share:                        
  Basic and diluted             $ 0.02   $ (0.03)  
   Weighted average common shares outstanding:               40,727,122     35,831,910  

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 profit 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 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 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 profit:               Three Months Ended
                July 31,
                  2012      2011 
   Revenue             $ 4,387,768   $ 2,758,734
        Cost of sales               559,793     860,145
   GAAP gross profit             $ 3,827,975   $ 1,898,589
   Percentage of revenue (gross margin)               87%     69%
   GAAP gross profit             $ 3,827,975   $ 1,898,589
        Stock-based compensation               8,839     9,044
        Amortization of intangible assets               9,908     280,880
   Non-GAAP gross profit             $ 3,846,722   $ 2,188,513
   Percentage of revenue (non-GAAP gross margin)               88%     86%

Non-GAAP income (loss) from operations:                Three Months Ended
        July 31,  
                2012     2011  
   GAAP Income (loss) from operations             $ 32,609   $ (950,230)
   Stock-based compensation               396,770     244,261
   Amortization of intangible assets               9,908     280,880
   Non-GAAP income (loss) from operations             $ 439,287   $ (425,089)

Non-GAAP net income (loss):     Three Months Ended
      July 31,  
            2012     2011  
   GAAP net income (loss)         $ 867,538   $ (925,718)
    Stock-based compensation           396,770     244,261
   Amortization of intangible assets           9,908     280,880
   Fair value adjustment on derivative instruments           (785,128)     (145,714)
   Non-GAAP net income (loss)         $ 489,088   $ (546,291)
   GAAP net income (loss) per share - basic & diluted         $ 0.02   $ (0.03)
    Non-GAAP net Income (loss) per share - basic & diluted         $ 0.01   $ (0.02)




SOURCE CounterPath Corporation