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Altigen Communications, Inc. Reports Third Quarter Fiscal 2021 Results

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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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