Altigen Communications, Inc. Reports Full Year and Fourth Quarter Fiscal 2023 Results

MILPITAS, CA / ACCESSWIRE / December 14, 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 fourth quarter and year ended September 30, 2023.

Full Year Highlights (Fiscal 2023 versus Fiscal 2022)

• Net Revenue increased 15% to $13.7 million;

• Services revenue increased 117% to $4.3 million;

• Cloud services revenue was $7.6 million, relatively flat to the prior year;

• Gross margin decreased to 63.2%, compared with 68.1%;

• GAAP net loss was $3.3 million and diluted EPS of ($0.14), primarily driven by non-cash tax-related expense of $2.7 million due to expired and expiring net operating losses;

• Non-GAAP¹ net income and non-GAAP diluted EPS of $0.3 million and $0.01, respectively.

Fourth Quarter Highlights (Fiscal 2023 versus Fiscal 2022)

• Net Revenue of $3.5 million;

• Services revenue of $1.1 million;

• Cloud services revenue increased 2% to $2.0 million;

• Gross margin decreased to 62.4%, compared with 63.8%;

• GAAP net loss was $2.8 million and diluted EPS of ($0.11), primarily driven by the previously mentioned non-cash, tax-related adjustment of $2.7 million;

• Non-GAAP¹ net income and non-GAAP diluted EPS of $0.1 million and $0.01, respectively, compared to the prior year period of $0.2 million and $0.01, respectively. Non-GAAP net income excluded approximately $0.6 million of one-time, acquisition-related expenses during fiscal year 2022.

"Fiscal 2023 was a pivotal year for Altigen during which we launched a number of new cloud solutions while integrating the ZAACT Consulting acquisition into the company", said Jerry Fleming, Altigen President and CEO. "We now have the foundation firmly in place for our new UCaaS and CCaaS solutions, enabling the rollout of these solutions to both current and new prospective customers. During the latter part of the year we also kicked off development of the first of several AI initiatives, principally targeting financial services institutions. In summary, I believe the company is well positioned to drive business growth as we head into fiscal 2024."

	Select Financial Metrics: Fiscal 2023 versus Fiscal 2022
(in thousands, except for EPS and percentages)	Fiscal 4Q23			Fiscal 4Q22			Change			YTD FY2023			YTD FY2022			Change
Total Revenue	$	3,482		$	3,571			-2.5	%	$	13,681		$	11,891			15.1	%
Cloud Services		1,983			1,943			2.1	%		7,656			7,639			0.2	%
Services and Other		1,100			1,161			-5.3	%		4,301			1,979			117.3	%
Legacy Products		399			467			-14.6	%		1,724			2,273			-24.2	%
Software Assurance		353			417			-15.3	%		1,551			1,867			-16.9	%
Perpetual Software License		46			50			-8.0	%		173			406			-57.4	%
GAAP Operating Income/(Loss)	$	30		$	(659	)	nm			$	(436	)	$	(580	)	nm
Operating Margin		0.9			-18.5	%					-3.2	%		-4.9	%
Non-GAAP Operating Income/(Loss)	$	58		$	(62	)	nm			$	(317	)	$	99		nm
Non-GAAP Operating Margin		1.7	%		-1.7	%					-2.3	%		0.8	%
GAAP Net Loss	$	(2,813	)	$	(765	)	nm			$	(3,323	)	$	(698	)	nm
GAAP Loss Per Share	$	(0.11	)	$	(0.03	)	nm			$	(0.14	)	$	(0.03	)	nm
Non-GAAP Net Income	$	145		$	205			-29.3	%	$	324		$	1,084			-70.1	%
Non-GAAP Diluted Earnings Per Share	$	0.01		$	0.01		nm			$	0.01		$	0.04			-68.4	%
Adjusted EBITDA(1)	$	109		$	204			-46.6	%	$	252		$	1,082			-76.7	%
Cash Flow from Operations	$	(236	)	$	(8	)	nm			$	62		$	(18	)	nm
nm = not measurable/meaningful; *may not add up due to rounding

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.

	Trended Financial Information
(in thousands, except for EPS and percentages)		Fiscal 1Q22			Fiscal 2Q22			Fiscal 3Q22				Fiscal 4Q22			Fiscal 1Q23			Fiscal 2Q23			Fiscal 3Q23			Fiscal 4Q23			FY2022			FY2023
Total Revenue		$	2,733		$	2,558		$	3,029		$	3,571		$	3,460		$	3,373		$	3,366		$	3,482		$	11,891		$	13,681
Cloud Services			1,910			1,880			1,906			1,943			1,822			1,894			1,957			1,983			7,639			7,656
Services and Other			139			124			555			1,161			1,174			1,028			999			1,100			1,979			4,301
Legacy Products			684			554			568			467			464			451			410			399			2,273			1,724
Software Assurance			506			471			473			417			424			390			384			353			1,867			1,551
Perpetual Software License			178			83			95			50			40			61			26			46			406			173
GAAP Operating (Loss)/Income		$	10		$	78		$	(9	)	$	(659	)	$	(188	)	$	(131	)	$	(147	)	$	30		$	(580	)	$	(436	)
Operating Margin			0.4	%		3.0	%		-0.3	%		-18.5	%		-5.4	%		-3.9	%		-4.4	%		0.9	%		-4.9	%		-3.2	%
Non-GAAP Operating (Loss)/Income		$	66		$	92		$	3		$	(62	)	$	(156	)	$	(101	)	$	(118	)	$	58		$	99		$	(317	)
Non-GAAP Operating Margin			2.4	%		3.6	%		0.1	%		-1.7	%		-4.5	%		-3.0	%		-3.5	%		1.7	%		0.8	%		-2.3	%
GAAP Net (Loss)/Income		$	11		$	65		$	(9	)	$	(765	)	$	(187	)	$	(140	)	$	(183	)	$	(2,813	)	$	(698	)	$	(3,323	)
Non-GAAP Net Income		$	313		$	342		$	224		$	205		$	44		$	95		$	40		$	145		$	1,084		$	324
Non-GAAP Diluted Earnings Per Share		$	0.01		$	0.01		$	0.01		$	0.01		$	0.00		$	0.00		$	0.00		$	0.01		$	0.04		$	0.01
Adjusted EBITDA(1)		$	312		$	342		$	224		$	204		$	44		$	95		$	4		$	109		$	1,082		$	252
nm = not measurable/meaningful; *may not add up due to rounding

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 #875058. 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 #49595. 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 drive business growth in fiscal 2024 and beyond, our ability to successfully integrate acquired businesses and technologies, and our ability to accelerate business opportunities and to achieve increased market acceptance for our service offerings. There can be no assurances that the Company will achieve the 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)
		September 30, 2023				September 30, 2022
ASSETS
Current assets:
Cash and cash equivalents		$	2,641			$	3,232
Accounts receivable, net			1,495				1,220
Other current assets			236				206
Total current assets			4,372				4,658
Property and equipment, net			3				7
Operating lease right-of-use assets			301				572
Goodwill			2,725				2,725
Intangible assets, net			1,568				1,882
Capitalized software development cost, net			1,215				1,331
Deferred tax asset			3,737				6,493
Other long-term assets			-				37
Total assets		$	13,921			$	17,705
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	58			$	53
Accrued compensation and benefits			417				364
Accrued expenses			455				530
Deferred consideration - current			510				500
Operating lease liabilities - current			324				383
Deferred revenue - current			477				566
Total current liabilities			2,241				2,396
Deferred consideration - long-term			208				670
Operating lease liabilities - long-term			-				233
Deferred revenue - long-term			134				206
Total liabilities			2,583				3,505
Stockholders' equity:
Common stock			24				24
Treasury stock			(1,565	)			(1,565	)
Additional paid-in capital			73,133				72,671
Accumulated deficit			(60,254	)			(56,930	)
Total stockholders' equity			11,338				14,200
Total liabilities and stockholders' equity		$	13,921			$	17,705

ALTIGEN COMMUNICATIONS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
		Three Months Ended								Twelve Months Ended
		September 30,								September 30,
		2023				2022				2023				2022
Net revenue		$	3,482			$	3,571			$	13,681			$	11,891
Gross profit			2,172				2,277				8,648				8,093
Operating expenses:
Research and development			1,187				1,497				5,066				4,651
Selling, general & administrative			955				1,439				4,018				4,022
Operating income (loss)			30				(659	)			(436	)			(580	)
Interest expense			(37	)			-				(73	)			-
Interest and other income			1				-				1				1
Net (loss) income before provision for income taxes			(6	)			(659	)			(508	)			(579	)
Income tax benefit (expense) (1)			(2,807	)			(105	)			(2,816	)			(119	)
Net (loss) income		$	(2,813	)		$	(764	)		$	(3,324	)		$	(698	)
Per share data:
Basic		$	(0.11	)		$	(0.03	)		$	(0.14	)		$	(0.03	)
Diluted		$	(0.11	)		$	(0.03	)		$	(0.14	)		$	(0.03	)
Weighted average shares outstanding:
Basic			24,917				24,223				24,550				24,016
Diluted			24,917				25,701				24,550				25,561

1. The Company's fourth quarter fiscal year 2023 and 2022 results include a non-cash tax expense of approximately $2.7 million and $0.1 million, respectively, related to the Company's income tax rate which differs from its statutory rate primarily due to expired net operating losses.

ALTIGEN COMMUNICATIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, amounts in thousands)
		Twelve Months Ended September 30,
		2023				2022
Cash flows from operating activities:
Net loss		$	(3,324	)		$	(698	)
Adjustments to reconcile net income to net cash from operating activities:
Impairment of capitalized software			-				189
Impairment of intangible assets			131				-
Loss on disposal of property, equipment and other assets			-				5
Depreciation and amortization			4				15
Deferred income tax expense			2,756				104
Amortization of intangible assets			183				221
Amortization of capitalized software			587				743
Stock-based compensation			119				93
Changes in operating assets and liabilities:
Accounts receivable and unbilled accounts receivable			(275	)			(624	)
Prepaid expenses and other current assets			(30	)			5
Other long-term assets			37				8
Accounts payable			5				(33	)
Accrued expenses			30				44
Deferred revenue			(161	)			(90	)
Net cash provided by (used in) operating activities			62				(18	)
Cash flows from investing activities:
Acquisition of business			-				(2,990	)
Capitalized software development costs			(471	)			(594	)
Net cash used in investing activities			(471	)			(3,584	)
Cash flows from financing activities:
Payment related to business acquisition			(225	)			-
Proceeds from issuances of common stock			43				35
Net cash provided by (used in) financing activities			(182	)			35
Net decrease in cash and cash equivalents			(591	)			(3,567	)
Cash and cash equivalents, beginning of period			3,232				6,799
Cash and cash equivalents, end of period		$	2,641			$	3,232

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

		Three Months Ended								Twelve Months Ended
		September 30,								September 30,
		2023				2022				2023			2022
Reconciliation of GAAP to Non-GAAP Gross Profit:
GAAP gross profit		$	2,172			$	2,277		$	8,648		$	8,093
Amortization of capitalized software			124				151			531			633
Amortization of acquired customer relationships			40				82			160			213
Non-GAAP gross profit		$	2,336			$	2,510		$	9,339		$	8,939
Reconciliation of GAAP to Non-GAAP Expenses:
GAAP operating expenses		$	2,142			$	2,936		$	9,084		$	8,673
Acquisition related expenses			-				587			-			587
Depreciation and amortization			1				7			4			20
Amortization of capitalized software			13				18			56			109
Amortization of intangible assets			6				8			24			8
Stock-based compensation			29				11			119			93
Non-GAAP operating expenses		$	2,093			$	2,305		$	8,881		$	7,856
Reconciliation of GAAP to Non-GAAP Net Income:
GAAP net loss		$	(2,813	)		$	(764	)	$	(3,324	)	$	(698	)
Acquisition related expenses			-				587			-			587
Depreciation and amortization			1				7			4			20
Amortization of capitalized software			137				169			587			743
Amortization of intangible assets			46				90			184			221
Stock-based compensation			29				11			119			93
Deferred tax asset valuation allowance			2,745				105			2,754			119
Non-GAAP net income		$	145			$	205		$	324		$	1,085
Per share data:
Basic		$	0.01			$	0.01		$	0.01		$	0.05
Diluted		$	0.01			$	0.01		$	0.01		$	0.04
Weighted average shares outstanding:
Basic			24,917				24,223			24,550			24,016
Diluted			26,122				25,701			25,663			25,561

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.

View the original press release on accesswire.com