CounterPath Reports Third Quarter Fiscal 2010 Financial Results
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 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
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Operating expenses (GAAP) $3,151,040 $4,319,295
------------ ------------
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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) 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 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 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
SOURCE CounterPath Corporation
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