CounterPath Reports Second Quarter Fiscal 2010 Financial Results
Financial and operating highlights for the second quarter ended
- The closing of a $1.9 million (CDN$2.0 million) private placement
providing additional capital resources to fund operations.
- Revenue for the second quarter of $1.9 million compared to revenue of
$2.1 million for the first quarter ended July 31, 2009.
- A significant reduction in expenses as non-GAAP operating expenses for
the second quarter were $3.3 million, down from $5.9 million in
non-GAAP operating expenses for the quarter ended October 31, 2008.
- A net loss for the second quarter of $1.8 million ($0.06 per share)
compared to a net loss of $3.5 million ($0.12 per share) for the
quarter ended October 31, 2008.
- The launch of Bria for BroadWorks, a feature-rich, open
standards-based softphone that interoperates seamlessly with
BroadSoft's BroadWorks(R) VoIP application platform, and the
demonstration of the softphone with added single number SMS capability
at BroadSoft Connections 2009.
- The addition of a tier one OEM for our Bria softphone which adds to
the growing number of tier one OEM's that license our technology such
as Cisco Systems, Mitel and Nortel.
- Record monthly downloads of the X-Lite softphone, which in recent
months have exceeded 500,000 per month. Additionally, our online store
sales for the quarter increased 33% over the prior quarter.
- Subsequent to the quarter, the beta launches of our new softphone
offerings Bria 3.0 and X-Lite 4.0, both of which will become generally
available in early calendar 2010 for Windows as well as Mac operating
systems.
"While we grew our customer base during the quarter and saw repeat customers, we had lower than normal average order sizes reflecting the slowdown in spending on communications technologies," stated
Financial Results
(All amounts in U.S. dollars and in accordance with accounting principles generally accepted in the
For the quarter ended
Operating expenses for the quarter ended
Sales and marketing expenses were
The net loss for the quarter ended
At
Subsequent to the quarter, on
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
October 31,
---------------------------
(Unaudited) 2009 2008
------------- -------------
Non-GAAP operating expenses $ 3,288,552 $ 5,856,172
Add:
Stock-based compensation 190,787 311,965
Amortization of intangible assets 216,584 510,171
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Operating expenses (GAAP) $ 3,695,923 $ 6,678,308
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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 plan to use funds from our recently closed private placement to add sales and marketing resources to grow our business; (2) we expect to leverage our OEM partnerships as well as build new channels to deploy our solutions; and (3) we expect to see continued growth in online sales of our softphone products as users of our free softphone convert to our feature rich paid for versions.
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)
October 31, April 30,
2009 2009
------------- -------------
Assets (Unaudited)
Current assets:
Cash $ 3,441,969 $ 2,931,932
Accounts receivable (net of allowance for
doubtful accounts of $1,028,269 and
$755,114, respectively) 1,841,100 2,524,220
Investment tax credits recoverable 181,896 143,334
Other current assets 816,684 310,274
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Total current assets 6,281,649 5,909,760
Deposits 101,912 114,267
Equipment 217,072 258,442
Intangible assets 2,790,277 2,201,894
Goodwill 8,197,782 7,262,701
Other assets 75,172 92,101
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Total Assets $ 17,663,864 $ 15,839,165
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 3,459,562 $ 3,488,001
Unearned revenue 513,956 708,455
Customer deposits 4,213 9,443
Accrued warranty 108,786 137,378
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Total current liabilities 4,086,517 4,343,277
Deferred lease inducements 10,147 55,016
Unrecognized tax benefit 98,575 98,575
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Total liabilities 4,195,239 4,496,868
Stockholders' equity:
Preferred stock, $0.001 par value
Authorized: 100,000,000
Issued and outstanding: October 31,
2009 - 1; April 30, 2009 - 1 - -
Common stock, $0.001 par value
Authorized: 83,076,900
Issued and outstanding:
October 31, 2009 - 32,768,629 April 30,
2009 - 28,832,050 32,768 28,832
Additional paid-in capital 51,383,429 48,718,443
Accumulated deficit (37,314,084) (34,318,195)
Accumulated other comprehensive loss -
currency translation adjustment (633,488) (3,086,783)
------------- -------------
Total stockholders' equity 13,468,625 11,342,297
------------- -------------
Liabilities and Stockholders' Equity $ 17,663,864 $ 15,839,165
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COUNTERPATH CORPORATION
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(Stated in U.S. Dollars)
(Unaudited)
Three Months Ended Six Months Ended
October 31, October 31,
--------------------------- ---------------------------
2009 2008 2009 2008
------------- ------------- ------------- -------------
Revenue:
Software $ 1,451,826 $ 2,113,617 $ 2,593,169 $ 3,961,922
Service 448,781 903,213 1,357,895 1,667,668
------------- ------------- ------------- -------------
Total revenue 1,900,607 3,016,830 3,951,064 5,629,590
Operating expenses:
Cost of sales
(includes
depreciation of
$2,925 and
$36,862 and
amortization of
intangible
assets of
$422,556 and
$1,055,644 for
six months ended
October 31, 2009
and 2008
respectively) 727,874 1,086,203 1,370,602 2,464,046
Sales and
marketing 690,551 1,186,713 1,449,556 2,668,664
Research and
development 1,004,594 2,103,685 1,824,722 5,121,097
General and
administrative 1,272,904 1,559,672 1,895,303 3,787,799
Restructuring
costs - 742,035 44,912 932,996
------------- ------------- ------------- -------------
Total operating
expenses 3,695,923 6,678,308 6,585,095 14,974,602
------------- ------------- ------------- -------------
Loss from
operations (1,795,316) (3,661,478) (2,634,031) (9,345,012)
Interest and other
income (expense),
net:
Interest income 33,816 32,198 61,574 50,266
Interest expense (5) (3,140) (1,671) (10,435)
Foreign exchange
gain (loss) 7,952 108,346 (421,761) (74,695)
------------- ------------- ------------- -------------
Net loss for the
period $ (1,753,553) $ (3,524,074) $ (2,995,889) $ (9,379,876)
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Other comprehensive
income (loss):
Foreign currency
translation
adjustments 342,399 (3,052,311) 2,453,295 (3,031,861)
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Comprehensive
loss $ (1,411,154) $ (6,576,385) $ (542,594) $(12,411,737)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net loss per share:
Basic and
diluted $ (0.06) $ (0.12) $ (0.10) $ (0.35)
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Weighted average
common shares
outstanding: 29,526,663 28,682,680 29,247,497 26,441,072
For further information: David Karp, Chief Financial Officer, CounterPath Corporation, (604) 320-3344 ext 1114, [email protected]
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