CounterPath Corporation (“CounterPath” or the “Company”) (OTCBB: CPAH) (TSX-V: CCV), an award-winning provider of desktop and mobile VoIP software products and solutions, today announced the financial and operating results for the second quarter of fiscal year 2012.
Financial and operating highlights for the second quarter ended October 31, 2011 include:
- Record revenue of $3.5 million, an increase of 35% compared to revenue of $2.6 million for the second quarter ended October 31, 2010.
- Non-GAAP gross profit increased to 87% of revenue compared to 81% for the same quarter last year.
- Non-GAAP operating income of $0.1 million compared to a non-GAAP operating loss of $0.7 million for the same quarter last year.
- Net income of $0.1 million, or $0.00 per share, compared to a net loss of $0.8 million, or ($0.03) per share for the same quarter last year.
- The entering into of a strategic agreement to provide mobile applications to GENBAND, a global leader of IP infrastructure and service solutions with product deployed in 80 of the world’s top 100 telecommunication operators.
- The addition of SMS, instant messaging and presence capabilities to Bria iPhone Edition, iPad Edition and Android Edition.
- The introduction of the Client Configuration Server designed to enable enterprises and service providers to efficiently deploy and configure softphones and manage ongoing updates, greatly simplifying endpoint administration.
“We are pleased with our quarterly results showing strong revenue growth and positive income. Our revenues, margins, and income were at record levels resulting from continued expansion of our customer base, sales of our mobile applications and a seasonally strong quarter” stated Donovan Jones, President and Chief Executive Officer. “With Apple’s iOS and Google’s Android mobile and tablet operating systems representing over 67% of worldwide market share of the smartphone segment (Gartner), CounterPath is well positioned to be a leading provider of consumer to enterprise grade, mobile softphone applications. We intend to continue investing in developing leading solutions to address the market opportunity fueled by global wireline and wireless operators. In addition, our strategy of increasing our indirect sales through channel partners continued to advance during the quarter,” continued Jones.
(All amounts in U.S. dollars and in accordance with accounting principles generally accepted in the United States (“GAAP”) unless otherwise specified.)
For the quarter ended October 31, 2011, revenue was $3.5 million compared to $2.6 million for the same quarter last year. Software revenue for the quarter ended October 31, 2011 was $2.1 million compared to $1.8 million for the same quarter last year. Service revenue for the quarter ended October 31, 2011 was $1.3 million compared to $0.8 million for same quarter last year.
Operating expenses for the quarter ended October 31, 2011 were $3.7 million compared to $3.7 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 $0.1 million.
Sales and marketing expenses were $0.9 million for the quarter ended October 31, 2011 compared to $0.9 million for same quarter last year. For the quarter ended October 31, 2011, research and development expenses were $1.1 million and general and administrative expenses were $1.0 million, compared to $1.1 million and $1.1 million, respectively, for the same quarter last year.
The net income for the quarter ended October 31, 2011 was $0.1 million, or $0.00 per share, compared to a net loss of $0.8 million, or a loss of $0.03 per share, for the quarter ended October 31, 2010. The net loss included a non-cash gain of $0.3 million for the change of fair value of derivative liability attributable to warrants issued to investors in the June 14, 2011 financing.
At October 31, 2011, the Company had $7.2 million in cash, compared to $1.7 million at April 30, 2011. At October 31, 2011, the Company’s working capital was $7.1 million, compared to $1.4 million at April 30, 2011.
Subsequent to the end of the quarter, on December 14, 2011, the Company granted 1,000,000 stock options to employees, including a total of 400,000 stock options to two officers pursuant to its stock option plan. Each stock option entitles the holder thereof the right to purchase one share of common stock at a price to be set at the closing price on December 14, 2011. The options vest in the amount of 12.5% on the date which is six months from the date of grant and then beginning in the seventh month at 1/42 per month for 42 months, after which time the options will be fully vested.
CounterPath Corporation is an award-winning 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), Mobilkom Austria, Avaya, BroadSoft, Cisco Systems, GENBAND, Metaswitch and Mitel.
For more information please 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 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. 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.
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) With Apple’s iOS and Google’s Android mobile and tablet operating systems representing over 67% of worldwide market share of the smartphone segment, CounterPath is well positioned to be a leading provider of consumer to enterprise grade, mobile softphone applications; and (2) We intend to continue investing in developing leading solutions to address the market opportunity fueled by global wireline and wireless operators.
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 Company’s ability to remain competitive as other better financed parties develop and release competitive products, (2) lack of cash flow which may adversely affect our operations, (3) general economic conditions as they affect CounterPath and its current and prospective customers, including a continued downturn in general economic conditions internationally, (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 our industry, (6) the impact of intellectual property litigation that could materially and adversely affect our business (7) the failure to develop new and innovative products using the Company’s technologies, (8) a decline in our 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, and (9) the potential dilution to shareholders or overhang on our share price of our 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.
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Chief Financial Officer
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