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

Rhea-AI Summary

Altigen Communications reports 11% increase in revenue and contract extension with largest services customer

Positive

• Revenue increased 11%
• Contract extended with largest services customer

Negative

• None.

Revenue increased 11%; GAAP Loss Per Share of ($0.01); Non-GAAP diluted EPS of $0.00;

Contract extended with largest services customer

MILPITAS, CA / ACCESSWIRE / August 22, 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 third quarter ended June 30, 2023.

Third Quarter Highlights (Fiscal 2023 versus Fiscal 2022)

• Net Revenue increased 11% to $3.4 million;
• Gross margin decreased to 63.3%, compared with 67.8%;
• GAAP net loss and loss per share of ($0.2) million and ($0.01), respectively, compared to GAAP net loss and loss per share of ($0.01) million and ($0.00), respectively;
• Non-GAAP net income and non-GAAP diluted EPS of $0.1 million and $0.00, respectively, compared to $0.2 million and $0.01, respectively.

"Our cloud services revenues, which are still largely concentrated in our legacy solutions, continued to show an incremental increase quarter over quarter", said Jeremiah Fleming, Altigen President & CEO. "In addition, just after the quarter close, the contract with our largest consulting services customer was extended, which represents a significant increase to the prior contract value. We're pleased to see that our investments are starting to pay off and are looking forward to accelerating our growth as we continue to execute on our business plan."

1. Throughout this release, the use of non-GAAP financial measures is 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.

1. Throughout this release, the use of non-GAAP financial measures is 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.

Conference Call

Altigen will be discussing its financial results and outlook on a conference call today at 2:00 p.m. Pacific Time (5:00 p.m. ET). The conference call can be accessed by dialing (888) 506-0062 (domestic) or (973) 528-0011 (international), conference ID #294551. 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 #48984. 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, but not limited to, statements regarding our ability to successfully integrate acquired businesses and technologies and our ability to accelerate growth and business opportunities. 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:

Carolyn David
Vice President of Finance
Altigen Communications, Inc.
(408) 597-9033
www.altigen.com

ALTIGEN COMMUNICATIONS, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)

		June 30, 2023				September 30, 2022
ASSETS
Current assets:
Cash and cash equivalents		$	2,961			$	3,232
Accounts receivable, net			1,184				1,220
Other current assets			289				206
Total current assets			4,434				4,658
Property and equipment, net			4				7
Operating lease right-of-use assets			302				572
Goodwill			2,725				2,725
Intangible assets, net			1,745				1,882
Capitalized software development cost, net			1,261				1,331
Deferred tax asset			6,493				6,493
Other long-term assets			25				37
Total assets		$	16,989			$	17,705
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	33			$	53
Accrued compensation and benefits			678				364
Accrued expenses			519				530
Deferred consideration - current			12				500
Operating lease liabilities, current			309				383
Deferred revenue - current			473				566
Total current liabilities			2,024				2,396
Deferred consideration - long-term			670				670
Operating lease liabilities - long-term			23				233
Deferred revenue - long-term			156				206
Total liabilities			2,873				3,505
Stockholders' equity:
Common stock			24				24
Treasury stock			(1,565)				(1,565)
Additional paid-in capital			73,097				72,671
Accumulated deficit			(57,440)				(56,930)
Total stockholders' equity			14,116				14,200
Total liabilities and stockholders' equity		$	16,989			$	17,705

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

		Three Months Ended								Nine Months Ended
		June 30,								June 30,
		2023				2022				2023				2022
Net revenue		$	3,366			$	3,029			$	10,199			$	8,320
Gross profit			2,129				2,054				6,477				5,816
Operating expenses:
Research and development			1,330				1,252				3,879				3,153
Selling, general & administrative			946				811				3,063				2,583
Operating (loss) income			(147)				(9)				(465)				80
Interest expense			(36)				-				(36)				-
Interest and other income/ (expense), net			-				-				-				1
Net (loss) income before provision for income taxes			(183)				(9)				(501)				81
Income tax benefit (expense)			-				-				(9)				(14)
Net (loss) income		$	(183)			$	(9)			$	(510)			$	67
Per share data:
Basic		$	(0.01)			$	(0.00)			$	(0.02)			$	0.00
Diluted		$	(0.01)			$	(0.00)			$	(0.02)			$	0.00
Weighted average shares outstanding:
Basic			24,690				24124				24,426				23,946
Diluted			24,690				24,124				24,426				25,509

ALTIGEN COMMUNICATIONS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)

		Nine Months Ended June 30,
		2023				2022
Cash flows from operating activities:
Net (loss) income		$	(510	)		$	67
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization			3				12
Amortization of intangible assets			137				131
Amortization of capitalized software			450				573
Stock-based compensation			90				82
Changes in operating assets and liabilities:
Accounts receivable and unbilled accounts receivable			36				(205	)
Prepaid expenses and other current assets			(83	)			(158	)
Other long-term assets			12				8
Accounts payable			(20	)			(12	)
Accrued expenses			325				1,154
Deferred revenue			(142	)			3
Net cash provided by operating activities			298				1,655
Cash flows from investing activities:
Acquisition of business			(225	)			(4,655	)
Capitalized software development costs			(380	)			(386	)
Net cash used in investing activities			(605	)			(5,041	)
Cash flows from financing activities:
Proceeds from issuances of common stock			36				35
Net cash provided by financing activities			36				35
Net increase in cash and cash equivalents			(271	)			(3,351	)
Cash and cash equivalents, beginning of period			3,232				6,799
Cash and cash equivalents, end of period		$	2,961			$	3,448

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

		Three Months Ended								Nine Months Ended
		June 30,								June 30,
		2023				2022				2023				2022
Reconciliation of GAAP to Non-GAAP Gross Profit:
GAAP gross profit		$	2,129			$	2,054			$	6,477			$	5,816
Amortization of capitalized software			134				153				407				482
Acquisition related expenses			40				43				120				131
Non-GAAP gross profit		$	2,303			$	2,250			$	7,004			$	6,429
Reconciliation of GAAP to Non-GAAP Expenses:
GAAP operating expenses		$	2,276			$	2,063			$	6,942			$	5,736
Depreciation and amortization			1				3				3				12
Amortization of capitalized software			13				20				43				91
Amortization of intangible assets			6				-				18				-
Stock-based compensation			29				13				90				82
Non-GAAP operating expenses		$	2,227			$	2,027			$	6,788			$	5,551
Reconciliation of GAAP to Non-GAAP Net Income:
GAAP net (loss) income		$	(183)			$	(9)			$	(510)			$	67
Depreciation and amortization			1				3				3				12
Amortization of capitalized software			147				173				450				573
Amortization of intangible assets			46				43				138				131
Stock-based compensation			29				13				90				82
Deferred tax asset valuation allowance			-				-				9				14
Non-GAAP net income		$	40			$	223			$	180			$	879
Per share data:
Basic		$	0.00			$	0.01			$	0.01			$	0.04
Diluted		$	0.00			$	0.01			$	0.01			$	0.03
Weighted average shares outstanding:
Basic			24,690				24,124				24,426				23,946
Diluted			25,691				25,599				25,514				25,509

Non-GAAP Financial Measures

In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of our core operating performance on a period-to-period basis. These non-GAAP financial measures exclude stock-based compensation expense, amortization of acquired intangible assets, depreciation and amortization expenses, acquisition-related costs, change in deferred tax asset valuation allowance, litigation costs and other non-recurring or unusual charges or benefits that may arise from time to time that we do not consider to be directly related to core operating performance. We use non-GAAP measures to evaluate the core operating performance of our business and to perform financial planning. Since we find these measures to be useful, we believe that investors benefit from seeing results reviewed by management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with our GAAP financials, provide useful information to investors by facilitating: (i) the comparability of our on-going operating results over the periods presented and (ii) the ability to identify trends in our underlying business.

SOURCE: Altigen Communications, Inc.

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