07/20/2020 | Press release | Distributed by Public on 07/20/2020 06:53
VANCOUVER, BC, Canada - July 20, 2020 - CounterPath Corporation (NASDAQ: CPAH) (TSX: PATH) (the 'Company' or 'CounterPath'), a global provider of award-winning Unified Communications and Collaboration (UCC) solutions for enterprises and service providers, today announced the financial and operating results for its fourth quarter and fiscal year ended April 30, 2020.
Fourth Quarter Fiscal 2020 Financial Highlights
Fiscal 2020 Financial Highlights
'Through the recently completed fiscal year, we experienced improvement in operations topped off by a strong fourth quarter,' said David Karp, CEO. 'Our operating performance improved by $4.4 million over the year due to revenue growth and reduced costs. I am proud of how our team responded this year, adjusting to challenging circumstances while continuing to grow revenue. The fourth quarter resulted in the highest quarterly billings level in the Company's history, driven by strong demand for our products to enable remote working. We achieved record recurring revenue of $6.3 million during the year, which will better position the Company for the future. We also announced a partnership to equip Honeywell handheld devices in various vertical markets, including health care, manufacturing, retail, and transportation with our unified communications applications. While we expect to carry forward momentum gained from the recent fourth quarter, we see our business settling and there continues to be uncertainty with respect to the outlook given the disruption to the economy that COVID-19 has caused.'
'In fiscal 2021, we expect to continue to benefit from the acceleration of the work at home movement. According to Nemertes Research, 71% of U.S. businesses are likely to continue to support work at home programs after the pandemic. Our focus in fiscal 2021 will be to continue growing our recurring revenue business. We will increase recurring revenue through the sale of Bria Solo, Bria Teams, and Bria Enterprise subscription offerings through our e-store, direct sales team, and channel partners. We will also focus on high-value vertical markets like call center, healthcare and retail where we can differentiate our solution through interoperability, configurability and security,' continued Karp.
Fiscal 2020 and Recent Business Highlights
Fiscal 2020 Financial Overview
(All amounts in U.S. dollars and in accordance with accounting principles generally accepted in the United States ('GAAP') unless otherwise specified).
Revenue was $12.1 million for the year ended April 30, 2020 compared to $10.8 million in the prior fiscal year. For fiscal 2020, software revenue was $5.2 million compared to $4.7 million in the prior year, subscription, support and maintenance revenue was $6.3 million compared to $5.4 million in the prior year, and professional services and other revenue was $0.7 million compared to $0.7 million in the prior year.
Operating expenses for the year ended April 30, 2020 were $12.9 million compared to $15.9 million in the prior year. Operating expenses for the year ended April 30, 2020 included non-cash stock-based compensation expense of $0.4 million (2019 - $0.5 million). Cost of sales was $2.1 million for the year ended April 30, 2020 compared to $2.2 million in the prior year. Sales and marketing expenses were $3.8 million for the year ended April 30, 2020 compared to $4.1 million in the prior year. For the year ended April 30, 2020, research and development expenses were $4.4 million and general and administrative expenses were $2.5 million compared to $5.5 million and $4.1 million, respectively, in the year ended April 30, 2019.
Interest and other income (expense), net for the year ended April 30, 2020 was ($0.3) million compared to $0.2 million for the year ended April 30, 2019. Interest and other income (expense), net for the year included a foreign exchange gain of $0.2 million, offset by interest expense of $0.3 million and a loss on the change in fair value of derivative instruments of $0.1 million. The foreign exchange gain (loss) represents the gain (loss) on account of translation of the intercompany accounts of the Company's subsidiary which are maintained in Canadian dollars and transactional gains and losses resulting from transactions denominated in currencies other than U.S. dollars.
Net loss for the year ended April 30, 2020 was $1.1 million, or $0.18 per share, compared to $5.0 million, or $0.84 per share, for last fiscal year. As at April 30, 2020, the Company had $2.4 million in cash, compared to $1.9 million as at April 30, 2019.
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 the statement that (1) record recurring revenue of $6.3 million during the year will better position the Company for the future; (2) while we expect to carry forward momentum gained from the recent fourth quarter, we see our business settling and there continues to be uncertainty with respect to the outlook given the disruption to the economy that COVID-19 has caused; (3) we expect to continue to benefit from the acceleration of the work at home movement; (4) our focus in fiscal 2021 will be to continue growing our recurring revenue business; (5) we will increase recurring revenue through the sale of Bria Solo, Bria Teams, and Bria Enterprise subscription offerings through our e-store, direct sales team, and channel partners; and (6) we will also focus on high-value vertical markets like call center, healthcare and retail where we can differentiate our solution through its interoperability, configurability and security. 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) any direct or indirect negative potential impact or harm that COVID-19 may actually have on the Company's business or its potential/current clients' businesses; (2) the lack of cash flow which may affect the Company's ability to continue as a going concern; (3) the variability in the Company's sales from reporting period to reporting period due to extended sales cycles as a result of selling the Company's products through channel partners or the length of time of deployment of the Company's products by its customers; (4) the Company's ability to manage its operating expenses, which may adversely affect its financial condition and ability to continue to operate as a going concern; (5) the Company's ability to remain competitive as other better financed competitors develop and release competitive products; (6) 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; (7) the impact of intellectual property litigation that could materially and adversely affect the Company's business; (8) the success by the Company of the sales of its current and new products; (9) the impact of technology changes on the Company's products and industry; (10) the failure to develop new and innovative products using the Company's technologies including the refresh of our Software-as-a Service (SaaS) solution; (11) the potential dilution to shareholders or overhang on the Company's share price of its outstanding stock options; and (12) continuation or acceleration of the work at home movement. 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 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.
CounterPath Corporation (NASDAQ: CPAH) is revolutionizing how people communicate in today's modern mobile workforce. Its award-winning Bria solutions for desktop and mobile devices enable organizations to leverage their existing PBX and hosted voice call servers to extend seamless and secure unified communications and collaboration services to users regardless of their location and network. CounterPath technology meets the unique requirements of several industries, including the contact center, retail, warehouse, hospitality, and healthcare verticals. Its solutions are deployed worldwide by 8×8, Airbnb, AmeriSave, Aspect, BT, Citibank, Comcast, Fusion, Fuze, Honeywell, Liberty Global, Windstream and others. Learn more at counterpath.com and follow us on Twitter @counterpath.
Chief Executive Officer
(TABLES TO FOLLOW)
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 loss from operations which excludes non-cash stock-based compensation relative to loss from operations calculated in accordance with GAAP and non-GAAP net loss which excludes non-cash stock-based compensation, foreign exchange gain (loss) and change in fair value of derivative instruments relative to net 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.