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
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
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
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.
