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