CounterPath Reports Fourth Quarter and Fiscal 2014 Financial Results

 CounterPath Reports Fourth Quarter and Fiscal 2014 Financial Results  NEWS RELEASE TRANSMITTED BY Marketwired  FOR: CounterPath Corporation  NASDAQ SYMBOL:  CPAH TSX SYMBOL:  CCV  JULY 10, 2014  CounterPath Reports Fourth Quarter and Fiscal 2014 Financial Results  Company Records 41% Increase in Revenue over Previous Quarter  VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 10, 2014) - 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 fourth quarter and fiscal year ended April 30, 2014.   Fourth Quarter Financial Highlights  /T/  --  Quarterly revenue of $3.7 million, compared to revenue of $2.6 million  for the previous quarter and $4.0 million for the fourth quarter of  fiscal year 2013.   --  GAAP gross margin of 84%. Non-GAAP gross margin of 85%.   --  Non-GAAP loss from operations of $0.3 million compared to Non-GAAP  income from operations of $0.04 million for the fourth quarter of fiscal  year 2013.   --  Net loss of $0.4 million, or $0.01 per share, compared to a net income  of $0.1 million, or $0.00 per share, for the fourth quarter of fiscal  year 2013.   --  Non-GAAP net loss of $0.03 million, or $0.00 per share, compared to non-    GAAP net income of $0.05 million, or $0.00 per share, for the fourth  quarter of fiscal year 2013.   --  Cash of $7.2 million as of April 30, 2014.   /T/  Fiscal 2014 Financial Highlights  /T/  --  Annual revenue of $11.7 million, compared to $15.2 million for fiscal  2013.   --  GAAP and non-GAAP gross margin of 81%.   --  Non-GAAP loss from operations of $4.1 million compared to a non-GAAP  loss from operations of $0.4 million last fiscal year.   --  Net loss of $5.9 million, or $0.14 per share, compared to a net income  of $0.5 million, $0.01 per share, last fiscal year.   --  Non-GAAP net loss of $4.8 million or $0.11 per share, compared to a non-    GAAP net loss of $0.3 million or $0.01 per share last fiscal year.   /T/  Management Commentary  "We posted strong sequential revenue growth in the fourth quarter as we leveraged our market position and refined our sales strategy," said Donovan Jones, President and Chief Executive Officer. "This year, we increased our focus on enterprise sales by expanding our direct sales force, by launching our Master Distribution Program with a network of over 30,000 Value Added Resellers and by entering the Mobile Device Management Market. We also brought certain key deals in-house, providing greater visibility and control over key reference accounts, especially in Europe where we are experiencing a resurgence of interest in our Operator OTT solutions. Looking ahead into fiscal 2015, we will continue to build our channel and further develop our sales organization as we return to growth in key markets."  Recent Business Highlights  /T/  --  Announced new channel partner, MegaPath, a leading provider of managed  data, voice, security and cloud services to small, medium and enterprise  businesses.   --  Announced plans to enter the Desktop as a Service (DaaS) and Virtual  Desktop Integration (VDI) markets in partnership with Teradici to  provide a unified communications solution for virtual workspaces.   --  Strengthened intellectual property portfolio with award of US patent No.  8,737,351 titled "Methods and Systems for Reducing MAC layer Handoff  Latency in Wireless Networks".   --  Enhanced product line with the launch of our Bria 4 softphone client  with new and advanced unified communications features for enterprises,  including streamlined messaging, full-screen video calling, screen  sharing capabilities and Microsoft Outlook(R) integration.   --  Announced that CounterPath was again named one of the Top 10 Mobile  Technology companies in Canada by Branham Group in the 2014 Edition of  the Branham300.   --  Renewed our normal course issuer bid, positioning the company to  continue repurchasing its shares on the open market and demonstrating  management's ongoing belief that the shares are currently trading in a  price range that does not adequately reflect their underlying value.   --  Launched Bria Cloud, our cloud based subscription service for small to  medium sized businesses, simplifying the sales and deployment processes  for our partners and customers, while positioning the company to  generate more recurring revenue in the future.   --  Entered into a licensing and distribution agreement with Gryphon  Networks, a provider of fully automated, integrated and real-time sales  intelligence and marketing compliance solutions for dispersed sales and  marketing organizations.   --  Signed distribution agreement with channel partner ABP Technology, a  leading value-added distributor of IP Telephony and unified  communication solutions provider with over 10,000 value-added resellers  in North America and Latin America.   /T/  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 fourth quarter and fiscal year ended April 30, 2014. 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.cnw.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 taped rebroadcast will be available to listeners until 12 a.m. ET on July 20, 2014. To access the rebroadcast, please dial 416-849-0833 or 1-855-859-2056 and enter passcode 59001105, 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, outlook, expectations or intentions regarding the future such as the following: (1) Looking ahead into fiscal 2015, we will continue to build our channel and further develop our sales organization as we return to growth in key markets.  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 variability in CounterPath's sales from reporting period to reporting period due to extended sales cycles as a result of selling CounterPath's products through channel partners or the length of time of deployment of CounterPath's products by our customers (2) the Company's ability to manage 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 competitors 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.   /T/  COUNTERPATH CORPORATION                            CONDENSED CONSOLIDATED BALANCE SHEETS                      (Stated in U.S. Dollars)                           April 30,      April 30,   2014           2013   ------------   ------------   Assets                                                                         Current assets:                                                             Cash                                       $   7,172,798  $  11,229,595   Accounts receivable (net of allowance for                                 doubtful accounts of $240,681 (2013 -                                    $456,051))                                    3,401,491      4,640,620   Prepaid expenses and deposits                    161,627        139,591   ------------   ------------   Total current assets                          10,735,916     16,009,806   Deposits                                           125,267        125,160    Equipment                                          154,293        167,986    Derivative instruments                                   -          9,830    Goodwill                                         8,018,578      8,660,930    Other assets                                       102,836         82,165   ------------   ------------  Total Assets                                   $  19,136,890  $  25,055,877   ------------   ------------   ------------   ------------   Liabilities and Stockholders' Equity                                           Current liabilities:                                                        Accounts payable and accrued liabilities   $   2,326,763  $   2,363,311   Derivative instruments                                 -         93,057   Unearned revenue                               1,625,826      1,442,511   Customer deposits                                  9,553          9,553   Accrued warranty                                  69,159         91,151   ------------   ------------   Total current liabilities                      4,031,301      3,999,583   Deferred lease inducements                               -         30,110    Unrecognized tax benefit                            25,631         98,575   ------------   ------------   Total liabilities                              4,056,932      4,128,268   ------------   ------------   Stockholders' equity:                                                        Preferred stock, $0.001 par value                                           Authorized: 100,000,000                                                   Issued and outstanding: April 30, 2014 -                                  0; April 30, 2013 - 1                                 -              -    Common stock, $0.001 par value                                              Authorized: 100,000,000                                                   Issued:                                                                   April 30, 2014 - 42,599,869; April 30,                                    2013 - 41,958,350                                42,600         41,959    Treasury stock                                         (16)           (79)   Additional paid-in capital                      66,910,540     66,191,140    Accumulated deficit                            (50,889,038)   (44,974,491)   Accumulated other comprehensive income                                      (loss) - currency translation adjustment         (984,128)      (330,920)  ------------   ------------   Total stockholders' equity                    15,079,958     20,927,609   ------------   ------------  Liabilities and Stockholders' Equity           $  19,136,890  $  25,055,877   ------------   ------------   ------------   ------------   COUNTERPATH CORPORATION                            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                (Stated in U.S. Dollars)                            (unaudited)                   (audited)          Three Months Ended              Year Ended          April 30,                   April 30,           -------------------------   -------------------------   2014          2013          2014          2013      -----------   -----------   -----------   -----------  Revenue:                                                                       Software           $  2,473,851  $  2,707,194  $  7,035,323  $  9,164,107    Service               1,197,912     1,316,086     4,646,625     6,075,816   -----------   -----------   -----------   -----------   Total revenue       3,671,763     4,023,280    11,681,948    15,239,923   -----------   -----------   -----------   -----------  Operating expenses:                                                            Cost of sales                                                               (includes                                                                  depreciation of                                                            $74,955 (2013 -                                                            $67,669) and                                                               amortization of                                                            intangible assets                                                          of $nil (2013 -                                                            $39,003))              572,265       553,545     2,231,222     2,276,777    Sales and                                                                   marketing            1,272,276     1,269,839     5,112,026     4,463,292    Research and                                                                development          1,430,479     1,410,401     5,508,516     5,503,928    General and                                                                 administrative         911,434       955,806     4,033,984     4,452,214   -----------   -----------   -----------   -----------   Total operating                                                           expenses           4,186,454     4,189,591    16,885,748    16,696,211   -----------   -----------   -----------   -----------  Loss from operations     (514,691)     (166,311)   (5,203,800)   (1,456,288) Interest and other                                                            income (expense),                                                            net                                                                           Interest and other                                                          income                 (39,828)        6,131        64,630       141,391    Interest expense           (138)         (387)       (1,732)       (1,135)   Foreign exchange                                                            gain (loss)            296,895           966      (670,570)        2,539    Fair value                                                                  adjustment on                                                              derivative                                                                 instruments            (99,458)      261,173       (87,339)    1,785,773   -----------   -----------   -----------   -----------  Net income (loss)                                                             for the year before                                                          income taxes            (357,220)      101,572    (5,898,811)      472,280    Income tax expense            -             -       (15,736)            -   -----------   -----------   -----------   -----------  Net income (loss)                                                             for the year        $   (357,220) $    101,572  $ (5,914,547) $    472,280   -----------   ===========   ===========   ===========   Net income (loss)                                                             per share:                                                                    Basic              $      (0.01) $       0.00  $      (0.14) $       0.01    Diluted            $      (0.01) $       0.00  $      (0.14) $      (0.01)  Weighted average                                                            common shares                                                              outstanding:                                                                Basic                42,399,045    41,933,750    42,126,733    41,519,117    Diluted              42,399,045    44,387,217    42,126,733    41,637,025   /T/  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 margin 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 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)  /T/  Three Months Ended       Twelve Months Ended     April 30,                April 30,          ----------------------  ------------------------   2014        2013         2014         2013      ----------  ----------  -----------  -----------  Non-GAAP gross margin:                                                        Revenue                  $ 3,671,763 $ 4,023,280 $ 11,681,948 $ 15,239,923   Less:                                                                      Cost of sales              572,265     553,545    2,231,222    2,276,777   ----------  ----------  -----------  -----------   GAAP gross profit        $ 3,099,498 $ 3,469,735 $  9,450,726 $ 12,963,146   Percentage of revenue                                                         (gross margin)                  84%         86%          81%          85%   GAAP gross profit        $ 3,099,498 $ 3,469,735 $  9,450,726 $ 12,963,146   Plus:                                                                      Stock-based                                                                compensation               17,488      14,360       62,515       33,577   Amortization of                                                            intangible assets                       9,697                    39,003   ----------  ----------  -----------  -----------   Non-GAAP gross profit    $ 3,116,986 $ 3,493,792 $  9,513,241 $ 13,035,726   Percentage of revenue                                                       (Non-GAAP gross                                                            margin)                        85%         87%          81%          86%   Three Months Ended          Twelve Months Ended     April 30,                   April 30,           -------------------------   -------------------------   2014          2013          2014          2013      -----------   -----------   -----------   -----------  Non-GAAP income                                                               (loss) from                                                                  operations:                                                                  GAAP income (loss)                                                          from operations   $   (514,691) $   (166,311) $ (5,203,800) $ (1,456,288)   Plus:                                                                        Stock-based                                                                 compensation           223,441       195,896     1,071,467     1,008,004    Amortization of                                                             intangible assets                      9,697                      39,003   ------------- -------------   -----------   -----------    Non-GAAP income                                                             (loss) from                                                                operations        $   (291,250) $     39,282  $ (4,132,333) $   (409,281)  Three Months Ended          Twelve Months Ended     April 30,                   April 30,           -------------------------   -------------------------   2014          2013          2014          2013      -----------   -----------   -----------   -----------  Non-GAAP net income                                                           (loss):                                                                      GAAP net income                                                             (loss)            $   (357,220) $    101,572  $(5,914,547)  $    472,280    Plus:                                                                        Stock-based                                                                 compensation           223,441       195,896     1,071,467     1,008,004    Amortization of                                                             intangible assets                      9,697                      39,003    Fair value                                                                  adjustment on                                                              derivative                                                                 instruments             99,458      (261,174)       87,339    (1,785,774)  -----------   -----------   -----------   -----------    Non-GAAP net                                                                income (loss)     $    (34,321) $     45,991  $ (4,755,741) $   (266,487)  GAAP net income                                                             (loss) per share:                                                          Basic            $      (0.01) $       0.00  $      (0.14) $       0.01   Diluted          $      (0.01) $       0.00  $      (0.14) $      (0.01)  Non-GAAP net                                                                income (loss) per                                                          share:                                                                     Basic            $       0.00  $       0.00  $      (0.11) $      (0.01)  Diluted          $       0.00  $       0.00  $      (0.11) $      (0.01)  /T/  -30- FOR FURTHER INFORMATION PLEASE CONTACT:  CounterPath Corporation David Karp Chief Financial Officer (604) 628-9364 dkarp@counterpath.com or CounterPath Corporation Steve Hards Vice President Investor Relations (604) 637-6498 shards@counterpath.com  INDUSTRY:  Telecom - Telecommunication Services  SUBJECT:  ERN 
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