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 
-0-
-0- Jul/10/2014 12:50 GMT
 
 
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