- Published: 13 December 2017
- Written by Editor
CounterPath Reports Second Quarter Fiscal 2018 Financial Results
Recent Business Highlights
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Won a Request For Proposal (RFP) and entered into a contract with one of the world’s largest communication service providers with tens of millions of users.
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Signed a distribution agreement with India-based TaraSpan, a leading Unified Communication solutions provider, to sell CounterPath’s Bria Stretto subscription services throughout India.
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Announced that Estech Systems, Inc. (ESI) has selected the CounterPath Bria and Stretto solution for their premise based IP 900 PBX deployments.
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Awarded patent No. US 9,774,695 by the U.S. Patent and Trademark Office. Titled “Enhanced Presence Detection For Routing Decisions.” This patent optimizes the routing of calls, messages and other communication based upon a user’s real-time presence information from both broadband and mobile network.
- Announced that a multi-billion dollar international health care information technology company has entered into a contract to integrate the CounterPath SDK for high quality voice into their mobile application that has been deployed into thousands of hospitals and critical care facilities.
Financial Overview
(All amounts are in U.S. dollars and in accordance with accounting principles generally accepted in the United States (“GAAP”) unless otherwise specified - unaudited.)
Revenue was $3.4 million for the quarter ended October 31, 2017 compared to $2.8 million for the same quarter last fiscal year. Software revenue was $1.8 million compared to $1.2 million for the same quarter last fiscal year. Subscription, support and maintenance revenue was $1.0 million compared to $1.0 million for the same quarter last fiscal year. Professional services and other revenue was $0.6 million compared to $0.6 million for the same quarter last fiscal year.
Operating expenses for the quarter ended October 31, 2017 were $3.5 million compared to $3.5 million for the same quarter last fiscal year. Operating expenses for the quarter ended October 31, 2017 included a non-cash stock-based compensation expense of $0.1 million (2016 - $0.2 million). Sales and marketing expenses were $1.0 million for the quarter ended October 31, 2017 compared to $1.0 million for the same quarter last fiscal year. For the quarter ended October 31, 2017, research and development expenses were $1.3 million and general and administrative expenses were $0.7 million compared to $1.2 million and $0.9 million, respectively, for same quarter last fiscal year.
Foreign exchange gain for the quarter ended October 31, 2017 was $0.2 million compared to foreign exchange gain of $0.2 million for the same quarter last fiscal year. The foreign exchange gain (loss) represents the gain (loss) on account of translation of the intercompany accounts of CounterPath’s subsidiary which are maintained in Canadian dollars and transactional gains and losses resulting from transactions denominated in currencies other than U.S. dollars.
The net income for the quarter ended October 31, 2017 was $0.2 million, or $0.03 per share, compared to a net loss of $0.6 million, or $0.12 per share, for the same quarter last fiscal year. As of October 31, 2017, the Company had $1.7 million in cash, compared to $2.1 million at April 30, 2017.
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 including: (1) the plans of the Company’s customer, an international tier one service provider, to deploy the Company’s software in the coming quarters; and (2) the Company’s expectation that it will launch of a collaboration product in the coming quarters and that customer growth will continue to accelerate. 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 its customers; (2) the Company’s ability to manage its operating expenses, which may adversely affect its financial condition; (3) the Company’s ability to remain competitive as other better financed competitors develop and release competitive products; (4) a decline in the Company’s stock price or insufficient investor interest in the Company’s securities which may impact the Company’s ability to raise additional financing as required or may cause the Company to be delisted from a stock exchange on which its common stock trades; (5) the impact of intellectual property litigation that could materially and adversely affect the Company’s 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 industry; (8) the failure to develop new and innovative products using the Company’s technologies; and (9) the potential dilution to shareholders or overhang on the Company’s share price of its outstanding stock options. Readers should also refer to the risk disclosures outlined in the Company’s quarterly reports on Form 10-Q, the Company’s 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 http://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 Unified Communications solutions are changing the face of telecommunications. An industry and user favorite, Bria softphones for desktop, tablet and mobile devices, together with Stretto Platform™ server solutions, enable operators, OEMs and enterprises large and small around the globe to offer a seamless and unified over-the-top (OTT) communications experience across both fixed and mobile networks. The Bria and Stretto combination enables an improved user experience as an overlay to the most popular UC and IMS telephony and applications servers on the market today. 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 AT&T, Avaya, BroadSoft, BT, Cisco Systems, GENBAND, Metaswitch Networks, Mitel, NEC, Network Norway, Nokia, Rogers and Verizon. Visit www.counterpath.com.
Contacts:
David Karp
Chief Financial Officer, CounterPath
This email address is being protected from spambots. You need JavaScript enabled to view it.
(604) 628-9364
(TABLES TO FOLLOW)
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COUNTERPATH CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Stated in U.S. Dollars) (Unaudited) |
||||||
| October 31, | April 30, | |||||
| 2017 | 2017 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 1,682,132 | $ | 2,071,019 | ||
| Accounts receivable (net of allowance for doubtful accounts of $179,926 and $80,232, respectively) | 3,818,622 | 2,133,469 | ||||
| Prepaid expenses and deposits | 170,640 | 170,853 | ||||
| Total current assets | 5,671,394 | 4,375,341 | ||||
| Deposits | 98,481 | 91,400 | ||||
| Equipment | 129,200 | 125,813 | ||||
| Goodwill | 6,831,467 | 6,440,955 | ||||
| Other assets | 208,444 | 199,637 | ||||
| Total Assets | $ | 12,938,986 | $ | 11,233,146 | ||
| Liabilities and Stockholders’ Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable and accrued liabilities | $ | 1,912,904 | $ | 1,825,528 | ||
| Accrued warranty | 60,660 | 54,365 | ||||
| Customer deposits | 4,680 | 6,211 | ||||
| Unearned revenue | 2,372,559 | 2,134,948 | ||||
| Total current liabilities | 4,350,803 | 4,021,052 | ||||
| Deferred lease inducements | 19,366 | 23,022 | ||||
| Unrecognized tax liability | 9,763 | 9,763 | ||||
| Total liabilities | 4,379,932 | 4,053,837 | ||||
| Stockholders’ equity: | ||||||
| Preferred stock, $0.001 par value | ||||||
| Authorized: 100,000,000 | ||||||
| Issued and outstanding: October 31, 2017 – nil; April 30, 2017 – nil | – | – | ||||
| Common stock, $0.001 par value | ||||||
| Authorized: 10,000,000 | ||||||
| Issued and outstanding: | ||||||
| October 31, 2017 – 5,499,150; April 30, 2017 – 5,005,245 | 5,499 | 5,005 | ||||
| Treasury stock | (2 | ) | (60 | ) | ||
| Additional paid-in capital | 73,282,856 | 71,680,575 | ||||
| Accumulated deficit | (61,474,714 | ) | (60,481,015 | ) | ||
| Accumulated other comprehensive loss – currency translation adjustment | (3,254,585 | ) | (4,025,196 | ) | ||
| Total stockholders’ equity | 8,559,054 | 7,179,309 | ||||
| Liabilities and Stockholders’ Equity | $ | 12,938,986 | $ | 11,233,146 | ||
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COUNTERPATH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Stated in U.S. Dollars) (Unaudited) |
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| Three Months Ended | Six Months Ended | ||||||||||||
| October 31, | October 31, | ||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||
| Revenue: | |||||||||||||
| Software | $ | 1,816,867 | $ | 1,242,860 | $ | 3,515,760 | $ | 2,898,863 | |||||
| Subscription, support and maintenance | 981,619 | 957,891 | 1,948,681 | 1,913,187 | |||||||||
| Professional services and other | 612,079 | 550,362 | 1,058,930 | 965,057 | |||||||||
| Total revenue | 3,410,565 | 2,751,113 | 6,523,371 | 5,777,107 | |||||||||
| Operating expenses: | |||||||||||||
| Cost of sales (includes depreciation of $3,168 (2016 – $5,419)) | 380,822 | 476,547 | 769,065 | 973,663 | |||||||||
| Sales and marketing | 1,031,227 | 988,540 | 2,035,511 | 1,950,409 | |||||||||
| Research and development | 1,329,437 | 1,150,515 | 2,690,910 | 2,309,176 | |||||||||
| General and administrative | 714,598 | 871,608 | 1,607,185 | 1,853,079 | |||||||||
| Total operating expenses | 3,456,084 | 3,487,210 | 7,102,671 | 7,086,327 | |||||||||
| Loss from operations | (45,519 | ) | (736,097 | ) | (579,300 | ) | (1,309,220 | ) | |||||
| Interest and other income (expense), net: | |||||||||||||
| Interest and other income | – | 173 | – | 186 | |||||||||
| Interest expense | (162 | ) | – | (215 | ) | – | |||||||
| Foreign exchange gain/(loss) | 204,515 | 171,904 | (414,184 | ) | 381,103 | ||||||||
| Net income (loss) for the period | $ | 158,834 | $ | (564,020 | ) | $ | (993,699 | ) | $ | (927,931 | ) | ||
| Net income (loss) per share: | |||||||||||||
| Basic | $ | 0.03 | $ | (0.12 | ) | $ | (0.19 | ) | $ | (0.20 | ) | ||
| Diluted | $ | 0.03 | $ | (0.12 | ) | $ | (0.19 | ) | $ | (0.20 | ) | ||
| Weighted average common shares outstanding: | |||||||||||||
| Basic | 5,487,765 | 4,554,226 | 5,262,359 | 4,552,371 | |||||||||
| Diluted | 5,892,580 | 4,554,226 | 5,262,359 | 4,552,371 | |||||||||
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 income (loss) from operations which excludes non-cash stock-based compensation 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 and foreign exchange gain (loss) 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)
| Three Months Ended | Six Months Ended | |||||||||||
| October 31, | October 31, | |||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||
| Non-GAAP income (loss) from operations: | ||||||||||||
| GAAP income (loss) from operations | $ | (45,519 | ) | $ | (736,097 | ) | $ | (579,300 | ) | $ | (1,309,220 | ) |
| Plus: | ||||||||||||
| Stock-based compensation | 110,627 | 236,967 | 406,959 | 551,190 | ||||||||
| Non-GAAP income (loss) from operations | $ | 65,108 | $ | (499,130 | ) | $ | (172,341 | ) | $ | (758,030 | ) | |
| Three Months Ended | Six Months Ended | |||||||||||
| October 31, | October 31, | |||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||
| Non-GAAP net income (loss): | ||||||||||||
| GAAP net income (loss) | $ | 158,834 | $ | (564,020 | ) | $ | (993,699 | ) | $ | (927,931 | ) | |
| Plus: | ||||||||||||
| Stock-based compensation | 110,627 | 236,967 | 406,959 | 551,190 | ||||||||
| Foreign exchange gain (loss) | (204,515 | ) | (171,904 | ) | 414,184 | (381,103 | ) | |||||
| Non-GAAP net income (loss) | $ | 64,946 | $ | (498,957 | ) | $ | (172,556 | ) | $ | (757,844 | ) | |
| GAAP net income (loss) per share: | ||||||||||||
| Basic and diluted | $ | 0.03 | $ | (0.12 | ) | $ | (0.19 | ) | $ | (0.20 | ) | |
| Non-GAAP net income (loss) per share: | ||||||||||||
| Basic and diluted | $ | 0.01 | $ | (0.11 | ) | $ | (0.03 | ) | $ | (0.17 | ) | |
