Altigen Communications, Inc. Reports First Quarter Results for Fiscal Year 2023

Rhea-AI Summary

Altigen Communications, Inc. (OTCQB:ATGN) reported a 26.6% revenue increase for Q1 FY2023, totaling $3.5 million, compared to $2.7 million in Q1 FY2022. Despite this growth, the company faced a GAAP net loss of ($0.2 million) with a loss per share of ($0.01). Non-GAAP results showed a net income of $0.04 million, translating to a diluted EPS of $0.00, down from $0.01 in the prior year. New product launches, including the MaxCloud UCaaS platform, were highlighted as key strategies for future profitability. However, gross margin decreased to 63.8% from 72.0%.

Positive

• Revenue increased 26.6% to $3.5 million.
• Launch of new UCaaS platform MaxCloud and updated CCaaS solution FrontStage.
• Expectation of future revenue growth and profit expansion.

Negative

• GAAP net loss of $0.2 million; loss per share of ($0.01).
• Gross margin decreased to 63.8%, down from 72.0%.
• Non-GAAP net income dropped 85.9% to $0.04 million.

Revenue increased 26.6%; GAAP Loss Per Share of ($0.01); Non-GAAP diluted EPS of $0.00

MILPITAS, CA / ACCESSWIRE / January 31, 2023 / Altigen Communications, Inc. (OTCQB:ATGN), a Silicon Valley-based cloud solutions provider for the Unified Communications as a Service (UCaaS), Contact Center as a Service (CCaaS) and our Customer Engagement as a Service (CEaaS) markets, announced today its financial results for the first quarter ended December 31, 2022.

Jerry Fleming, CEO of Altigen said: "Our first quarter results reflected the continuation of our efforts to manage our existing business at a break-even run rate, as we roll out new and updated products that we expect to drive future revenue and profit growth. During the quarter we have now launched our new UCaaS platform, MaxCloud, which is deployed in both Altigen's and Fiserv's datacenters, to serve our respective customers. We also launched a new version of our FrontStage CCaaS solution in conjunction with Fiserv, targeting financial services institutions. Finally, just after quarter close, we released a major new version of CoreInteract for Microsoft Teams enabling us to address our customer's requirements for a cost-effective departmental customer engagement platform.

"In summary, our business has remained stable while we've been working hard on the introduction of multiple new products. We are positioned to see a return to revenue growth, margin expansion and higher profits as these ramp."

First Quarter Highlights (Fiscal 2023 versus Fiscal 2022)

• Net Revenue increased 26.6% to $3.5 million;
• Gross margin decreased to 63.8%, compared with 72.0%;
• GAAP net loss and loss per share of ($0.2) million and ($0.01), respectively;
• Non-GAAP net income and non-GAAP diluted EPS of $0.04 million and $0.00, respectively, compared to $0.3 million and $0.01, respectively.

	Select Financial Metrics: FY23 versus FY22
(in thousands, except for EPS and percentages)		Fiscal 1Q23				Fiscal 1Q22				Change
Total Revenue		$	3,460			$	2,732				26.6	%
Cloud Services		$	1,822			$	1,910				-4.6	%
Professional and Other Services		$	1,174			$	138				750.7	%
Legacy Products		$	464			$	684				-32.2	%
Software Assurance		$	424			$	506				-16.2	%
Perpetual Software License		$	40			$	178				-77.5	%
GAAP Operating (Loss)/Income		$	(188	)		$	10			nm
Operating Margin			-5.4	%			0.4	%
Non-GAAP Operating (Loss)/Income		$	(156	)		$	66			nm
Non-GAAP Operating Margin			-4.5	%			2.4	%
GAAP Net Loss		$	(187	)		$	11			nm
GAAP (Loss)/Earnings Per Share		$	(0.01	)		$	0.00			nm
Non-GAAP Net Income		$	44			$	313				-85.9	%
Non-GAAP Diluted Earnings Per Share		$	0.00			$	0.01				-82.7	%
Adjusted EBITDA(1)		$	44			$	312				-85.9	%
Cash Flow from Operations		$	(167	)		$	110			nm
nm = not measurable/meaningful; *may not add up due to rounding

	Trended Financial Information
(in thousands, except for EPS and percentages)	Fiscal 1Q22			Fiscal 2Q22			Fiscal 3Q22			Fiscal 4Q22			Fiscal 1Q23			FY22			YTD FY23
Total Revenue	$	2,732		$	2,558		$	3,029		$	3,571		$	3,460		$	11,890		$	3,460
Cloud Services	$	1,910		$	1,880		$	1,906		$	1,943		$	1,822		$	7,639		$	1,822
Professional and Other Services	$	138		$	124		$	555		$	1,161		$	1,174		$	1,978		$	1,174
Legacy Products	$	684		$	554		$	568		$	467		$	464		$	2,273		$	464
Software Assurance	$	506		$	471		$	473		$	417		$	424		$	1,867		$	424
Perpetual Software License	$	178		$	83		$	95		$	50		$	40		$	406		$	40
GAAP Operating (Loss)/Income	$	10		$	78		$	(9	)	$	(659	)	$	(188	)	$	(580	)	$	(188	)
Operating Margin		0.4	%		3.0	%		-0.3	%		-18.5	%		-5.4	%		-4.9	%		-5.4	%
Non-GAAP Operating (Loss)/Income	$	66		$	92		$	3		$	(62	)	$	(156	)	$	99		$	(156	)
Non-GAAP Operating Margin		2.4	%		3.6	%		0.1	%		-1.7	%		-4.5	%		0.8	%		-4.5	%
GAAP Net (Loss)/Income	$	11		$	65		$	(9	)	$	(764	)	$	(187	)	$	(697	)	$	(187	)
GAAP Diluted (Loss) / Earnings Per Share	$	0.00		$	0.00		$	(0.00	)	$	(0.03	)	$	(0.01	)	$	(0.03	)	$	(0.01	)
Non-GAAP Net Income	$	313		$	342		$	224		$	205		$	44		$	1,084		$	44
Non-GAAP Diluted Earnings Per Share	$	0.01		$	0.01		$	0.02		$	0.01		$	0.00		$	0.04		$	0.04
Adjusted EBITDA	$	312		$	342		$	224		$	204		$	44		$	1,082		$	44
*may not add up due to rounding

¹ Throughout this release, the use of Adjusted EBITDA and other non-GAAP financial measures are intended to provide useful information that supplements Altigen's results in accordance with GAAP. Please refer to the Reconciliation of Non-GAAP Financial Measure at the end of this release for an explanation of Altigen's formulation of Adjusted EBITDA and reconciliations to the most directly comparable GAAP measure.

Conference Call

Altigen will be discussing its financial results and outlook on a conference call today at 1:30 p.m. Pacific Time (4:30 a.m. ET). The conference call can be accessed by dialing (877) 545-0523 (domestic) or (973) 528-0016 (international), conference ID #766643. A live webcast will also be made available at www.altigen.com . To access the replay, dial (877) 481-4010 (domestic) or (919) 882-2331 (international), conference ID #47565. A web archive will be made available at www.altigen.com for 90 days following the call's conclusion.

About Altigen Communications

Altigen Communications Inc. (OTCQB:ATGN), based in Silicon Valley, is a leading Microsoft Cloud Solutions provider, delivering fully managed Cloud-based Unified Communications services based on the Microsoft platform. Our SIP trunk services, enterprise customer engagement and innovative cloud contact center solutions seamlessly integrate with Microsoft Teams to enhance and extend the business communications capabilities for our customers. Altigen's solutions are designed for high reliability, ease of use, seamless integration into Microsoft technologies, all delivered as fully managed cloud services. Our solutions are available through our global network of certified resellers. For more information, call 1-888-ALTIGEN or visit our website at www.altigen.com.

Safe Harbor Statement

This press release contains forward‐looking information. The statements are based on reasonable assumptions, beliefs and expectations of management and the Company provides no assurance that actual events will meet management's expectations. Furthermore, the forward-looking statements contained in this press release are based on the Company's views of future events and financial performances which are subject to known and unknown risks and uncertainties including, many of which are outside the Company's control. There can be no assurances that the Company will achieve expected results, and actual results may be materially different than expectations and from those stated or implied in forward-looking statements.

Please refer to the Company's most recent Annual Report filed with the OTCQB over-the-counter market for a further discussion of risks and uncertainties. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. The Company does not undertake any obligation to update any forward-looking statements.

Contact:
Brian Siegel, IRC, MBA
Senior Managing Director
Hayden IR
(346) 396-8696
brian@haydenir.com

ALTIGEN COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands)

		December 31, 2022				September 30, 2022
ASSETS
Current assets:
Cash and cash equivalents		$	2,880			$	3,232
Accounts receivable, net			1,425				1,220
Other current assets			299				206
Total current assets			4,604				4,658
Property and equipment, net			6				7
Operating lease right-of-use assets			483				572
Goodwill			2,725				2,725
Intangible assets, net			1,836				1,882
Capitalized software development cost, net			1,363				1,331
Deferred tax asset			6,493				6,493
Other long-term assets			37				37
Total assets		$	17,547			$	17,705
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	46			$	53
Accrued compensation and benefits			332				364
Accrued expenses			618				530
Acquisition-related contingent consideration - current			500				500
Operating lease liabilities, current			366				383
Deferred revenue - current			631				566
Total current liabilities			2,493				2,396
Contingent consideration on acquired business - long-term			670				670
Operating lease liabilities - long-term			156				233
Deferred revenue - long-term			184				206
Total liabilities			3,503				3,505
Stockholders' equity:
Common stock			24				24
Treasury stock			(1,565	)			(1,565	)
Additional paid-in capital			72,702				72,671
Accumulated deficit			(57,117	)			(56,930	)
Total stockholders' equity			14,044				14,200
Total liabilities and stockholders' equity		$	17,547			$	17,705

ALTIGEN COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(amounts in thousands, except per share data)

		Three Months Ended
		December 31,
		2022				2021
Net revenue		$	3,460			$	2,732
Gross profit			2,208				1,966
Operating expenses:
Research and development			1,250				1,022
Selling, general & administrative			1,145				934
Operating (loss) income			(187	)			10
Other income/(expense), net			-				1
Net (loss) income before provision for income taxes			(187	)			11
Net (loss) income		$	(187	)		$	11
Per share data:
Basic		$	(0.01	)		$	0.00
Diluted		$	(0.01	)		$	0.00
Weighted average shares outstanding:
Basic			24,223				23,759
Diluted			24,223				25,533

ALTIGEN COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, amounts in thousands)

		Three Months Ended December 30,
		2022				2021
Cash flows from operating activities:
Net (loss) income		$	(187	)		$	11
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization			1				4
Amortization of intangible assets			46				44
Amortization of capitalized software			153				198
Stock-based compensation			31				56
Changes in operating assets and liabilities:
Accounts receivable and unbilled accounts receivable			(205	)			10
Prepaid expenses and other current assets			(93	)			(124	)
Other long-term assets			-				8
Accounts payable			(7	)			(50	)
Accrued expenses			51				(55	)
Deferred revenue			43				8
Net cash (used in)/ provided by operating activities			(167	)			110
Cash flows from investing activities:
Capitalized software development costs			(185	)			(103	)
Net cash used in investing activities			(185	)			(103	)
Cash flows from financing activities:
Proceeds from issuances of common stock			-				18
Net cash provided by financing activities			-				18
Net (decrease)/ increase in cash and cash equivalents			(352	)			25
Cash and cash equivalents, beginning of period			3,232				6,799
Cash and cash equivalents, end of period		$	2,880			$	6,824

ALTIGEN COMMUNICATIONS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(amounts in thousands, except per share data)

		Three Months Ended
		December 31,
		2022				2021
Reconciliation of GAAP to Non-GAAP Gross Profit:
GAAP gross profit		$	2,208			$	1,966
Amortization of capitalized software			137				162
Amortization of acquired customer relationships			40				44
Non-GAAP gross profit		$	2,385			$	2,172
Reconciliation of GAAP to Non-GAAP Expenses:
GAAP operating expenses		$	2,395			$	1,956
Depreciation and amortization			1				4
Amortization of capitalized software			16				35
Amortization of intangible assets			6				-
Stock-based compensation			31				56
Non-GAAP operating expenses		$	2,341			$	1,861
Reconciliation of GAAP to Non-GAAP Net Income:
GAAP net income		$	(187	)		$	11
Depreciation and amortization			1				4
Amortization of capitalized software			153				197
Amortization of intangible assets			46				44
Stock-based compensation			31				56
Non-GAAP net income		$	44			$	312
Per share data:
Basic		$	0.00			$	0.01
Diluted		$	0.00			$	0.01
Weighted average shares outstanding:
Basic			24,223				23,759
Diluted			25,632				25,533

SOURCE: Altigen Communications, Inc.

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FAQ

What were Altigen Communications' revenue figures for Q1 FY2023?

Altigen Communications reported revenue of $3.5 million for Q1 FY2023, a 26.6% increase from the previous year.

What was the loss per share reported by Altigen for Q1 FY2023?

The company reported a GAAP loss per share of ($0.01) for Q1 FY2023.

What significant product launches occurred recently for Altigen Communications?

Altigen launched the MaxCloud UCaaS platform and a new version of the FrontStage CCaaS solution during the quarter.

How did Altigen's gross margin change in Q1 FY2023?

Gross margin decreased to 63.8% in Q1 FY2023, down from 72.0% in the same quarter the previous year.

What is the outlook for Altigen Communications following the recent results?

Altigen's management expressed confidence in returning to revenue growth and profit expansion due to new product initiatives.