Financial News

Altigen Communications, Inc. Reports Third Quarter Fiscal 2021 Results

MILPITAS, CA / ACCESSWIRE / July 27, 2021 / Altigen Communications, Inc. (OTCQB:ATGN), a Silicon Valley-based Unified Communications as-a-service (UCaaS) and Contact Center as-a-service (CCaaS) Cloud Solutions provider for Microsoft Teams, today announced financial results for the third quarter ended June 30, 2021.

Third Quarter Fiscal 2021 Results

  • Net revenue totaled $2.8 million, a 6% sequential increase from the second fiscal quarter and a 6% decrease compared to last year;
  • Cloud services revenue of $2.0 million, a 6% sequential increase from the second fiscal quarter and a 1% decrease compared to last year;
  • Gross margin of 70.0% versus 72.8% in the second fiscal quarter and 77.4% compared to last year;
  • GAAP net income and diluted earnings per share of $0.9 million and $0.04, respectively, compared to $0.4 million, or $0.02, respectively, last year. GAAP net income for fiscal 2021 includes a one-time non-cash gain on debt extinguishment of $0.8 million related to the forgiveness of the Company's PPP loan;
  • Non-GAAP net income and diluted earnings per share of $0.5 million and $0.02, respectively, compared to $0.8 million and $0.03, respectively, last year;
  • Cash and cash equivalents of $6.5 million as of June 30, 2021.

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, amortization of capitalized software, 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 (877) 407-8031 (domestic) or (201) 689-8031 (international). 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 #42108. 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 provider of Cloud-based Unified Communications solutions built on Microsoft technologies. Altigen's all software solutions include hosted PBX, enterprise routing and queuing, call recording, and complete omni-channel contact center solutions. We also provide cost-effective integrated SIP communications services in conjunction with our solutions in order to deliver a complete end-to-end, fully managed cloud service for our customers and partners. 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, 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
Managing Director
Hayden IR
(346) 396-8696

ALTIGEN COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands)


 
 June 30, 2021  September 30, 2020 
Cash and cash equivalents
 $6,456  $6,659 
Accounts receivable, net
  504   413 
Other current assets
  193   158 
Property and equipment, net
  32   44 
Operating lease right-of-use
  899   875 
Intangible assets, net
  476   607 
Capitalized software, net
  1,848   1,804 
Deferred tax asset
  7,905   7,905 
Other long-term assets
  45   30 
Total assets
 $18,358  $18,495 

 
        
Current liabilities
 $2,015  $2,936 
Long-term liabilities
  825   907 
Stockholders' equity
  15,518   14,652 
Total liabilities and stockholders' equity
 $18,358  $18,495 

 
        
ALTIGEN COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
 
 Three Months Ended  Nine Months Ended 
 
 June 30,  June 30, 
 
 2021  2020  2021  2020 
Net revenue
 $2,848  $3,018  $5,348  $8,795 
Gross profit
  1,995   2,335   5,920   6,771 
Operating expenses:
                
Research and development
  955   649   2,740   1,967 
Selling, general & administrative
  861   1,068   2,959   3,199 
Litigation
  -   188   313   188 
Operating income (loss)
  179   430   (92)  1,417 
Gain on extinguishment of PPP Loan (1)
  804   -   804   - 
Other income/(expense), net
  -   6   -   21 
Net income before provision for income taxes
  983   436   711   1,438 
Income tax benefit (expense)
  (1)  (10)  (11)  (13)
Net income
 $982  $426  $701  $1,425 
 
                
Per share data:
                
Basic
 $0.04  $0.02  $0.03  $0.06 
Diluted
 $0.04  $0.02  $0.03  $0.06 
Weighted average shares outstanding:
                
Basic
  23,360   22,975   23,186   22,937 
Diluted
  25,669   26,445   25,507   25,403 

(1) During the third quarter of fiscal 2021, the Company recorded a non-cash gain on debt extinguishment of $804,200 related to the forgiveness of the Company's PPP loan which originated during the third quarter of fiscal 2020.

ALTIGEN COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, amounts in thousands)

 
 
Nine Months Ended
June 30,
 
 
 2021  2020 
Cash flows from operating activities:      
Net income
 $701  $1,425 
 
        
Adjustments to reconcile net income to net cash from operating activities:
        
Depreciation and amortization
  23   30 
Amortization of intangible assets
  131   122 
Amortization of capitalized software
  456   228 
Stock-based compensation
  94   13 
Gain from extinguishment of debt - PPP loan
  (804)  - 
 
        
Changes in operating assets and liabilities:
        
Accounts receivable and unbilled accounts receivable
  (91)  (168)
Prepaid expenses and other current assets
  (35)  58 
Accounts payable
  8   40 
Accrued expenses
  (62)  69 
Deferred revenue
  (169)  (66)
Net cash provided by operating activities
  252   1,751 
 
        
Cash flows from investing activities:
        
Purchases of property and equipment
  (11)  - 
Changes in long-term deposits
  (15)  6 
Acquisition of intangible assets
  -   (81)
Capitalized software development costs
  (500)  (745)
Net cash used in investing activities
  (526)  (820)
 
        
Cash flows from financing activities:
        
Proceeds from issuances of common stock
  71   15 
Proceeds from Paycheck Protection Program Loan
  -   804 
Net cash provided by financing activities
  71   819 
Net (decrease)/increase in cash and cash equivalents
  (203)  1,750 
Cash and cash equivalents, beginning of period
  6,659   4,357 
Cash and cash equivalents, end of period
 $6,456  $6,107 
 
        

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

  Three Months Ended  Nine Months Ended 
  June 30,  June 30, 
  2021  2020  2021  2020 
Reconciliation of GAAP to Non-GAAP Gross Profit:
            
GAAP gross profit
 1,995  2,335  5,920  6,771 
Amortization of capitalized software
  131   57   321   152 
Acquisition related expenses
  43   42   131   122 
Non-GAAP gross profit
 2,169  2,434  6,372  7,045 
                 
Reconciliation of GAAP to Non-GAAP Expenses:
                
GAAP operating expenses
 1,816  1,905  6,012  5,354 
Litigation
  -   188   313   188 
Depreciation and amortization
  6   10   23   30 
Amortization of capitalized software
  56   29   135   76 
Stock-based compensation
  38   5   94   13 
Non-GAAP operating expenses
 1,716  1,673  5,447  5,047 
                 
Reconciliation of GAAP to Non-GAAP Net Income:
                
GAAP net income
 982  426  701  1,425 
Litigation
  -   188   313   188 
Depreciation and amortization
  6   10   23   30 
Amortization of capitalized software
  187   86   456   228 
Stock-based compensation
  38   5   94   13 
Acquisition related expenses
  43   42   131   122 
Gain on extinguishment of PPP Loan (1)
  (804)  -   (804)  - 
Deferred tax asset valuation allowance
  1   10   11   13 
Non-GAAP net income
 453  767  925  2,019 
                 
Per share data:
                
Basic
 0.02  0.03  0.04  0.09 
Diluted
 0.02  0.03  0.04  0.08 
Weighted average shares outstanding:
                
Basic
  23,360   22,975   23,186   22,937 
Diluted
  25,669   25,445   25,507   25,403 

(1) During the third quarter of fiscal 2021, the Company recorded a non-cash gain on debt extinguishment of $804,200 related to the forgiveness of the Company's PPP loan which originated during the third quarter of fiscal 2020.

SOURCE: AltiGen Communications, Inc.



View source version on accesswire.com:
https://www.accesswire.com/657244/Altigen-Communications-Inc-Reports-Third-Quarter-Fiscal-2021-Results

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