Sat, 24 Aug 2019

SAN JOSE, CA / ACCESSWIRE / April 18, 2019 / Altigen Communications, Inc. (OTCQB: ATGN), a Silicon Valley based provider of Hosted Skype for Business and Contact Center solutions, announced today its financial results for the second quarter ended March 31, 2019.

Second Quarter 2019 Financial Results

Revenue for the second quarter of fiscal 2019 was $2.5 million, compared to $2.8 million in the preceding quarter, and compared to $2.5 million in the prior year quarter. Gross margin in the second quarter of fiscal 2018 was 81.7%, compared to 82.9% in the preceding quarter, and compared to 84.3% during the second quarter of fiscal 2018. The decrease in gross margin was primarily attributable to a shift in our product mix.

GAAP net income for the second quarter of fiscal 2019 was $403,000, or $0.02 per diluted share, compared with net income of $612,000, or $0.02 per diluted share in the preceding quarter, and compared to net income of $383,000, or $0.02 per diluted share during the same period a year ago. Non-GAAP net income for the second quarter of fiscal 2019 was $440,000, or $0.02 per diluted share, compared with non-GAAP net income of $713,000, or $0.03 per diluted share in the preceding quarter, and compared to non-GAAP net income of $401,000, or $0.02 per diluted share in the same period of the prior year.

GAAP operating expenses totaled $1.7 million for the second quarter of fiscal 2019, the same as in the preceding quarter, and the second quarter of fiscal 2018. Non-GAAP operating expenses totaled $1.6 million for the second quarter of fiscal 2019, compared with $1.6 million in the preceding quarter, and $1.7 million in the comparable period last year.

Year-to-Date Financial Results

For the first six months of fiscal year 2019, revenue grew 11% to $5.3 million, in comparison to $4.8 million during the same period in fiscal 2018. Gross margin was 82.3% for the first six months of fiscal 2019, compared to 83.6% in the same period in 2018.

GAAP net income for the six months ended March 31, 2019 was $1.0 million, or $0.04 per diluted share, compared with GAAP net income of $721,000, or $0.03 per diluted share in the prior year period. Non-GAAP net income for the first six months of fiscal year 2019 was $1.2 million, or $0.05 per diluted share, compared with non-GAAP net income of $753,000, or $0.03 per diluted share during the same period a year ago.

GAAP operating expenses totaled $3.4 million for the six months of fiscal 2019, compared to $3.3 million during the same period a year ago. Non-GAAP operating expenses totaled $3.2 million for the six months of fiscal 2019 and 2018.

Cash, Cash Equivalents and Restricted Cash

Our cash, cash equivalents and restricted cash totaled $4.7 million at March 31, 2019, compared to $4.8 million at the end of the first quarter of fiscal 2019.

Working capital was $2.9 million at the end of the second quarter of fiscal 2019, compared with $2.8 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 (844) 369-8770 (domestic) or (862) 298-0840 (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 #46042. 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 enterprises. Our unique and feature rich Cloud PBX and Multi-channel Contact Center solutions natively integrate with Skype for Business and Office 365 to deliver business-critical functionalities required by SMBs and enterprises. 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, California. 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)


Second Quarter Ended
Six Months Ended
March 31,
March 31,
FY 2019
FY 2018
FY 2019
FY 2018
Net Revenue
$ 2,540 $ 2,456 $ 5,319 $ 4,773
Gross profit
2,076 2,070 4,379 3,992
Operating Expenses:
Research and development
646 748 1,260 1,450
Selling, general & administrative
1,017 940 2,097 1,820
Operating income
413 382 1,022 722
Other income/(expense), net
6 1 9 1
Net income before provision for income taxes
419 383 1,031 723
Income tax benefit (expense)
(16 ) - (16 ) (2 )
Net income
$ 403 $ 383 $ 1,015 $ 721
Per share data:
Basic
$ 0.02 $ 0.02 $ 0.04 $ 0.03
Diluted
$ 0.02 $ 0.02 $ 0.04 $ 0.03
Weighted average shares outstanding:
Basic
22,866 22,817 22,854 22,817
Diluted
25,650 24,921 25,364 24,537

Altigen Communications, Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands)


March 31,
2019
September 30,
2018
Cash, cash equivalents and restricted cash
$ 4,721 $ 3,080
Accounts receivable, net
365 531
Other current assets
241 1,622
Net property and equipment
837 405
Deferred tax asset
8,713 8,713
Other long-term assets
11 11
Total Assets
$ 14,888 $ 14,362
Current liabilities
$ 2,379 $ 2,928
Long-term liabilities
261 221
Stockholders' equity
12,248 11,213
Total liabilities and stockholders' equity
$ 14,888 $ 14,362

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


Second Quarter Ended
Six Months Ended
March 31,
March 31,
FY 2019
FY 2018
FY 2019
FY 2018
Net income (GAAP)
$ 403 $ 383 $ 1,015 $ 721
Adjustments:
Litigation
12 - 12 -
Section 382 study (1)
- - 65 -
Depreciation and amortization
20 11 47 20
Stock-based compensation
5 7 13 12
Net income (Non-GAAP)
$ 440 $ 401 $ 1,152 $ 753
Per share data:
Basic
$ 0.02 $ 0.02 $ 0.05 $ 0.03
Diluted
$ 0.02 $ 0.02 $ 0.05 $ 0.03
Weighted average shares outstanding:
Basic
22,866 22,817 22,854 22,817
Diluted
25,650 24,921 25,364 24,537

(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.

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