CounterPath Reports First Quarter Fiscal 2010 Financial Results
Company Moving Closer to Profitability
Financial and operating highlights for the first quarter ended
- Revenue for the first quarter of $2.1 million compared to revenue of
$2.2 million for the fourth quarter ended April 30, 2009, and revenue
of $2.6 million for the quarter ended July 31, 2008.
- A net loss for the first quarter of $1.2 million ($0.04 per share)
compared to a net loss of $4.2 million ($0.15 per share) for the
fourth quarter ended April 30, 2009, and a net loss of $5.9 million
($0.23 per share) for quarter ended July 31, 2008.
- Significant reduction in expenses as non-GAAP operating expenses for
the first quarter were $2.5 million, down from $3.3 million in non-
GAAP operating expenses for the fourth quarter ended April 30, 2009
and $7.2 million in non-GAAP operating expenses for the quarter ended
July 31, 2008.
- Significant reduction in losses as non-GAAP operating loss for the
first quarter was $0.4 million, down from the $1.1 million non-GAAP
operating loss for the fourth quarter ended April 30, 2009 and the
$4.6 million non-GAAP operating loss for the quarter ended July 31,
2008.
- The announcement that Genesys, the world's No. 1 contact center
software company, will integrate CounterPath's Software Development
Kit (SDK) into its Agent Desktop product suite to bring improved VoIP
communication technology to call center customers worldwide.
- The initiation of two additional trials with North American service
providers for CounterPath's convergence gateway, and development of a
SIP-based peer to peer communications feature that federates
seamlessly with the SMS network to allow subscribers to leverage
their single telephone for both voice and text communications.
- The launching of a new beta version of X-Lite focused on enriching
the softphone experience for the X-Lite community. With over 340,000
softphone downloads a month, this latest version of the world's
favorite free softphone provides new features, usability
improvements and a more unified approach to communicating with peers
regardless of location.
"This quarter CounterPath delivered improving operating performance in a challenging market environment," stated
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
Operating expenses for the quarter ended
Sales and marketing expenses were
The net loss for the quarter ended
At
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, Mitel and Nortel.
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 and non-GAAP operating losses, 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 ending
----------------------------------------
July 31, April 30, July 31,
(Unaudited) 2009 2009 2008
------------ ------------ ------------
Non-GAAP operating expenses $2,463,585 $3,322,580 $7,242,833
Add:
Stock-based compensation 219,615 366,779 507,988
Amortization of intangible
assets 205,972 496,315 545,473
Impairment of intangible assets - 2,755,333 -
------------ ------------ ------------
Operating expenses (GAAP) $2,889,172 $6,941,007 $8,296,294
------------ ------------ ------------
------------ ------------ ------------
Three months ending
----------------------------------------
July 31, April 30, July 31,
(Unaudited) 2009 2009 2008
------------ ------------ ------------
Non-GAAP operating loss ($413,128) ($1,149,130) ($4,630,073)
Add:
Stock-based compensation 219,615 366,779 507,988
Amortization of intangible
assets 205,972 496,315 545,473
Impairment of intangible assets - 2,755,333 -
------------ ------------ ------------
Operating loss (GAAP) ($838,715) ($4,767,557) ($5,683,534)
------------ ------------ ------------
------------ ------------ ------------
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) Our business strategy is sound and we are beginning to see signs of improvement in the industry and in our orders or that (2) the Company is moving closer profitability.
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)
July 31, April 30,
2009 2009
------------ ------------
Assets (Unaudited)
Current assets:
Cash $ 2,107,364 $ 2,931,932
Accounts receivable (net of allowance
for doubtful accounts of $625,065 and
$755,114, respectively) 2,731,045 2,524,220
Investment tax credits recoverable - 143,334
Other current assets 1,269,802 310,274
------------ ------------
Total current assets 6,108,211 5,909,760
Deposits 99,958 114,267
Equipment 229,554 258,442
Intangible assets (net of accumulated
amortization of $3,581,167 and $3,375,195,
respectively) 2,893,795 2,201,894
Goodwill 8,093,201 7,262,701
Other assets 86,065 92,101
------------ ------------
Total Assets $17,510,784 $15,839,165
------------ ------------
------------ ------------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 3,835,803 $ 3,488,001
Unearned revenue 607,761 708,455
Customer deposits 4,079 9,443
Accrued warranty 123,212 137,378
------------ ------------
Total current liabilities 4,570,855 4,343,277
Deferred lease inducements 17,466 55,016
Unrecognized tax benefit 98,575 98,575
------------ ------------
Total liabilities 4,686,896 4,496,868
Stockholders' equity:
Preferred stock, $0.001 par value
Authorized: 100,000,000
Issued and outstanding: July 31, 2009 - 1;
April 30, 2009 - 1 - -
Common stock, $0.001 par value - Note 5
Authorized: 83,076,900
Issued and outstanding:
July 31, 2009 - 29,409,420
April 30, 2009 - 28,832,050 29,409 28,832
Additional paid-in capital 49,330,897 48,718,443
Accumulated deficit (35,560,531) (34,318,195)
Accumulated other comprehensive loss -
currency translation adjustment (975,887) (3,086,783)
------------ ------------
Total stockholders' equity 12,823,888 11,342,297
------------ ------------
Liabilities and Stockholders' Equity $17,510,784 $15,839,165
------------ ------------
------------ ------------
COUNTERPATH CORPORATION
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(Stated in U.S. Dollars)
(Unaudited)
Three Months Ended July 31,
---------------------------
2009 2008
------------- -------------
Revenue:
Software $ 1,141,343 $ 1,848,305
Service 909,114 764,455
------------- -------------
Total revenue 2,050,457 2,612,760
Operating expenses:
Cost of sales (includes depreciation of
$2,121 and $21,484 and amortization of
intangible assets of $205,972 and $545,473) 642,728 1,377,843
Sales and marketing 759,005 1,481,951
Research and development 820,128 3,017,412
General and administrative 622,399 2,228,127
Restructuring costs 44,912 190,961
------------- -------------
Total operating expenses 2,889,172 8,296,294
------------- -------------
Loss from operations (838,715) (5,683,534)
Interest and other income (expense), net
Interest income 27,758 18,068
Interest expense (1,666) (7,295)
Foreign exchange loss (429,713) (183,041)
------------- -------------
Net loss for the period $(1,242,336) $(5,855,802)
------------- -------------
------------- -------------
Other comprehensive income (loss):
Foreign currency translation adjustments 2,110,896 (20,450)
------------- -------------
Comprehensive income (loss) $ 868,560 $(5,835,352)
------------- -------------
------------- -------------
Loss per share:
Basic and diluted $ (0.04) $ (0.23)
------------- -------------
------------- -------------
Weighted average common shares outstanding: 28,968,332 25,948,247
For further information: David Karp, Chief Financial Officer, CounterPath Corporation, (604) 320-3344 ext 1114, [email protected]
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