CounterPath Sees Q4 Sales $3.6M-$4M vs $3.8M Est., FY20 Sales $11.6M-$12M vs $14.6MEst.; Says Experienced 'a solid uptake across our business this quarter'

Author: Benzinga Newsdesk | April 23, 2020 07:49am

VANCOUVER, BC / ACCESSWIRE / April 23, 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 that it is providing an update on the impact of COVID-19 on the Company.

The COVID-19 global public health emergency has resulted in strong demand for CounterPath products and services so far during the fourth quarter ending April 30, 2020. CounterPath solutions enabled many businesses, including essential services, to continue to communicate remotely. Bria Solo, Bria Teams, and Bria Enterprise have all experienced growth propelled by the immediate need of end-users to work from home with a secure and a reliable solution providing voice and video calling, messaging, screen sharing and collaboration. All go-to-market routes have been strong, including the on-line stores, the channel partner program, and direct sales from the Company's in-house sales team.

Increased demand has resulted from both new customers and existing customers. For example, new customers include a large U.S. federal government entity that purchased Bria Enterprise as part of an effort to support on-site and remote workers, while a major North American airline selected a carrier partner leveraging the CounterPath Bria solution to deliver a remote call center agent solution. CounterPath solutions are also being deployed in essential service environments such as by health care solution providers to enable communication between health professionals within hospital environments.

As a result of these developments, the Company is providing guidance for the fourth quarter and the year ending April 30, 2020.

(All amounts in U.S. dollars and in accordance with accounting principles generally accepted in the United States unless otherwise specified).

Fourth Quarter Ended April 30, 2020 Guidance (unaudited)

• Revenue of $3.6 million to $4.0 million, resulting in growth of 26% to 40% compared to the fourth quarter of fiscal 2019.
• Income from operations of $0.4 million to $0.8 million compared to loss from operations of $1.0 million for the fourth quarter of fiscal 2019.

Fiscal Year Ended April 30, 2020 Guidance (unaudited)

• Revenue of $11.6 million to $12.0 million, resulting in growth of 8% to 12% compared to fiscal 2019.
• Loss from operations of $0.8 million to $1.2 million compared to loss from operations of $5.2 million for fiscal 2019.

"We experienced a solid uptake across our business this quarter while seamlessly implementing our own successful work from home policy using Bria to facilitate customer demand" said David Karp, Chief Executive Officer. I am extremely proud of the team's response in supporting our customers through this difficult period. As a result of the increase in orders and service levels, all of the Company's operations have been running at near full capacity. It has been a transitional year as our operating costs declined while our revenue grew throughout the year, capped off by what is expected to be an exceptional fourth quarter. While certainly some of the increase in revenue from the COVID-19 pandemic will be temporary, the immediate need we are seeing could turn into a lasting trend in the Telecommunications sector. According to Gartner, 74% of companies plan to permanently shift at least 5% of the work force to work remotely post COVID-19[1]. Aside from the benefit realized from the increase in demand from COVID-19, the Company continues to execute its business plan and is operationally stronger as we finish this fiscal year."

The Company intends to provide its audited financial results in July 2020.

The above unaudited financial information reflects management's current preliminary revenue and operating income (loss) estimates based on its internal reporting, is subject to the completion of its audit, and is subject to change. In addition, they are based on a number of assumptions, including but not limited to the assumptions regarding foreign exchange rates and that the demand for the Company's products will continue to be strong until April 30, 2020. The financial results for the Company's fourth quarter and full fiscal year ending April 30, 2020 could differ materially from the preliminary estimates provided in this news release, which are subject to revision based on the completion of the accounting and financial reporting processes necessary to finalize the Company's audited consolidated financial statements as of and for the year ended April 30, 2020. Estimates of results are inherently uncertain and subject to change, and we

Posted In: CPAH TSX:PATH