CounterPath Reports Record First Quarter Fiscal 2013 Financial Results

Quarterly Revenues Grow 59% Year-over-Year

VANCOUVER, Sept. 13, 2012 /CNW/ - 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 www.newswire.ca.  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 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.

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 www.counterpath.com.

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.

COUNTERPATH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)

					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

COUNTERPATH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(Stated in U.S. Dollars)
(Unaudited)

										Three Months Ended
										July 31,
										2012			2011
Revenue:
	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
		Less:
		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
		Plus:
		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)
	Plus:
	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)
	Plus:
	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

David Karp
Chief Financial Officer, CounterPath
[email protected]
[phone]

Craig Armitage
Equicom Group
[email protected]
[phone] x278