Altigen Communications, Inc. Reports Third Quarter and Nine Months 2019 Financial Results

SAN JOSE, CA / ACCESSWIRE / July 24, 2019 / Altigen Communications, Inc. (OTCQB: ATGN), a Silicon Valley based Microsoft ISV and Cloud Solutions provider, announced today its financial results for the third quarter ended June 30, 2019.

Third Quarter 2019 Financial Results

Total revenue for fiscal 2019 third quarter grew 4% to $2.7 million, in comparison to $2.5 million in the preceding quarter, and compared to $2.6 million during the same period in fiscal 2018.

GAAP net income for the third quarter of fiscal 2019 was $612,000, or $0.02 per diluted share, compared with net income of $403,000, or $0.02 per diluted share in the preceding quarter, and compared to net income of $92,000, or $0.00 per diluted share during the same period a year ago. Non-GAAP net income for the third quarter of fiscal 2019 was $662,000, or $0.03 per diluted share, compared with non-GAAP net income of $440,000, or $0.02 per diluted share in the preceding quarter, and compared to non-GAAP net income of $458,000, or $0.02 per diluted share in the same period of the prior year.

GAAP operating expenses totaled $1.6 million for the third quarter of fiscal 2019, compared with $1.7 million in the preceding quarter, and compared with $2.0 million during the third quarter of fiscal 2018. Non-GAAP operating expenses totaled $1.5 million for the third quarter of fiscal 2019, compared with $1.6 million in the preceding quarter, and $1.7 million in the comparable period last year. The year-over-year expense decrease was primarily due to reduced litigation related costs. For additional information, please refer to the Company’s filings with the OTC Markets, including the Company’s most recent Quarterly Report filed on May 20, 2019.

Year-to-Date Financial Results

For the nine months of fiscal year 2019, revenue grew 9% to $7.9 million, in comparison to $7.3 million during the same period in fiscal 2018.

GAAP net income for the nine months ended June 30, 2019 was $1.6 million, or $0.06 per diluted share, compared with GAAP net income of $813,000, or $0.03 per diluted share in the prior year period. Non-GAAP net income for the nine months of fiscal year 2019 was $1.8 million, or $0.07 per diluted share, compared with non-GAAP net income of $1.2 million, or $0.05 per diluted share during the same period a year ago.

For the nine-month period ending June 30, 2019, GAAP operating expenses totaled $4.9 million, compared to $5.3 million during the same period a year ago, a decrease of $396,00, or 7%. Non-GAAP operating expenses decreased 4% to $4.7 million for the nine months of fiscal 2019, compared to $4.9 million for the same period in fiscal 2018. The expense decrease was primarily due to reduced litigation related costs. For additional information, please refer to the Company’s filings with the OTC Markets, including the Company’s most recent Quarterly Report filed on May 20, 2019.

Cash, Cash Equivalents and Restricted Cash

Our cash, cash equivalents and restricted cash totaled $4.6 million at June 30, 2019, compared to $4.7 million at the end of the second quarter of fiscal 2019.

Working capital was $3.4 million at the end of the third quarter of fiscal 2019, compared with $2.9 million at the end of the preceding quarter.

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. The excluded items represent stock-based compensation expense, depreciation and amortization expenses and other non-recurring or unusual items 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.

The following are explanations of each type of adjustment that we incorporate into non-GAAP financial measures:

Stock-based compensation expense

Stock-based compensation expense is impacted by the Company’s future hiring and retention needs and the future fair market value of the Company’s common stock, all of which are difficult to predict and subject to constant change. Furthermore, stock-based compensation expense is generally fixed at the time of grant, then amortized over a period of several years, and generally cannot be changed or influenced by management after the grant. The Company believes that the exclusion of stock-based compensation expense assists investors in the comparisons of operating results to peer companies. Stock-based compensation expense can vary significantly based on the timing, size and nature of awards granted.

Depreciation and amortization expenses

Depreciation and amortization expense includes the depreciation of property and equipment, as well as amortization of intangible assets. Such expenses are fixed at the time of an acquisition, then amortized over a period of several years. While depreciation and amortization are considered operating costs under GAAP, these expenses primarily represent non-cash current period expense which vary widely from company to company. Management believes that the exclusion of depreciation and amortization expense provides a supplemental measure of the Company’s ongoing operating performance.

Other non-recurring or unusual charges

The Company has excluded certain other expenses that are the result of other, non-comparable events to measure operating performance. These events arise outside of the ordinary course of continuing operations. Given the unique nature of the matters relating to these costs, the Company believes these items are not normal operating expenses. For example, legal settlements and judgments vary significantly, in their nature, size and frequency, and, due to this volatility, the Company believes the costs associated with legal settlements and judgments are not normal operating expenses. The Company believes that the exclusion of such out-of-the-ordinary-course amounts provides supplemental information to assist in the comparison of the financial results of the Company from period to period and, therefore, provides useful supplemental information to investors.

Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation. They should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.

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) 645-4404 (domestic) or (862) 298-0720 (international). A live webcast will also be made available at http://www.altigen.com. To access the replay, dial (877) 481-4010 (domestic) or (919) 882-2331 (international), conference ID #49979. 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), a leading Microsoft Cloud Solutions provider, delivers fully managed Unified Communications services, combining Hosted Skype for Business, Advanced Cloud PBX, and Innovative Cloud Contact Center applications with seamless integration to Office 365 for small-to-medium sized businesses and mid-size to large enterprises. Our robust suite of applications integrate with Skype for Business, Microsoft Teams and Office 365 to deliver unparalleled capabilities to organizations using these Microsoft solutions. With thousands of customers around the world, Altigen solutions are designed for high reliability, ease of use, seamless integration to Microsoft infrastructure technologies, and are built on a scalable, open standards platform. Altigen’s worldwide headquarters is in Silicon Valley, CA. For more information, call 1-888- ALTIGEN or visit the web site 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, many of which are outside of 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:
Carolyn David
Vice President of Finance
Altigen Communications, Inc.
Phone: 408-597-9033
www.altigen.com

Altigen Communications, Inc.
Condensed Consolidated Statements of Operations
(Unaudited; amounts in thousands, except per share data)

Third Quarter Ended

Nine Months Ended

June 30,

FY 2019

FY 2018

FY 2019

FY 2018

Net Revenue

$
2,651

$
2,553

$
7,970

$
7,327

Gross profit

2,136

2,142

6,515

6,134

Operating Expenses:

Research and development

675

733

1,935

2,183

Selling, general & administrative

890

973

2,974

2,793

Litigation

–

342

Operating income

571

1,593

816

Other income/(expense), net

(1
)

–

Net income before provision for income taxes

614

1,645

816

Income tax benefit (expense)

(2
)

(1
)

(18
)

(3
)

Net income

$
612

$
92

$
1,627

$
813

Per share data:

Basic

$
0.03

$
0.00

$
0.07

$
0.04

Diluted

$
0.02

$
0.00

$
0.06

$
0.03

Weighted average shares outstanding:

Basic

22,887

22,833

22,865

22,812

Diluted

25,876

25,047

25,759

24,731

Altigen Communications, Inc.

Condensed Consolidated Balance Sheets

(amounts in thousands)

June 30, 2019

September 30, 2018

Cash, cash equivalents and restricted cash

$
4,614

$
3,080

Accounts receivable, net

446

531

Other current assets

318

1,622

Net property and equipment

1,054

405

Deferred tax asset

8,713

Other long-term assets

Total Assets

$
15,181

$
14,362

Current liabilities

$
2,017

$
2,928

Long-term liabilities

299

221

Stockholders??? equity

12,865

11,213

Total liabilities and stockholders??? equity

$
15,181

$
14,362

Reconciliation of GAAP and Non-GAAP Financial Measures (amounts in thousands, except per share data)

Third Quarter Ended

Nine Months Ended

June 30,

FY 2019

FY 2018

FY 2019

FY 2018

Net income (GAAP)

$
612

$
92

$
1,627

$
813

Adjustments:

Litigation

–

342

Section 382 study (1)

–

Depreciation and amortization

105

Stock-based compensation

Net income (Non-GAAP)

$
662

$
458

$
1,826

$
1,211

Per share data:

Basic

$
0.03

$
0.02

$
0.08

$
0.05

Diluted

$
0.03

$
0.02

$
0.07

$
0.05

Weighted average shares outstanding:

Basic

22,887

22,833

22,865

22,812

Diluted

25,876

25,047

25,759

24,731

(1) During the first quarter of fiscal 2019, the Company performed a section 382 ownership change analysis to determine if there were any limitations on the utilization of its NOLs.

SOURCE: Altigen Communications, Inc.

ReleaseID: 553268

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