Altigen Technologies Reports Second Quarter Results for Fiscal Year 2024

MILPITAS, CA / ACCESSWIRE / April 30, 2024 / Altigen Technologies (OTCQB:ATGN), a leading Silicon Valley-based Microsoft Cloud Communications Solutions provider, announced today its financial results for the second quarter ended March 31, 2024.

Second Quarter Fiscal 2024 Financial Results

• Net revenue for the second quarter of fiscal 2024 was $3.4 million, compared to $3.2 million in the preceding quarter, and compared to $3.4 million in the prior year quarter;

• Gross margin in the second quarter of fiscal 2024 was 61.3%, compared to 60.3% in the preceding quarter, and compared to 63.4% in the prior year quarter;

• For the second quarter of fiscal 2024, GAAP net loss was ($0.2) million, or ($0.01) per share, compared with GAAP net loss of ($0.3) million, or ($0.01) per share in the preceding quarter, and compared with GAAP net loss of ($0.1) million, or ($0.01) per share in the prior year quarter;

• Non-GAAP net loss for the second quarter of fiscal 2024 was ($0.07) million, or ($0.00) per share, compared with non-GAAP net loss of ($0.2) million, or ($0.01) per share, and compared with non-GAAP net income of $0.1 million, or $0.00 diluted EPS in the prior year quarter.

Jeremiah Fleming, Altigen President & CEO, commented, "We view this quarter as a pivotal moment in Altigen's business transformation. Our expenses are on a downward trajectory, and our new solutions are transitioning into the launch and monetization phases. Although there's still a lot of work to be done, the business is progressing in the right direction."

	Select Financial Metrics
(in thousands, except for EPS and percentages)		Fiscal 2Q24				Fiscal 1Q24				Change				Fiscal 2Q24				Fiscal 2Q23				Change
Total Revenue		$	3,360			$	3,240				3.7	%		$	3,360			$	3,373				-0.4	%
Cloud Services			1,817				1,890				-3.9	%			1,817				1,894				-4.1	%
Services an Other			1,183				996				18.8	%			1,183				1,028				15.1	%
Legacy Products			360				354				1.7	%			360				451				-20.2	%
Software Assurance			340				342				-0.6	%			340				390				-12.8	%
Perpetual Software License			20				12				66.7	%			20				61				-67.2	%
GAAP Operating Loss		$	(241	)		$	(343	)		nm				$	(241	)		$	(131	)		nm
Operating Margin			-7.2	%			-10.6	%							-7.2	%			-3.9	%
Non-GAAP Operating Loss		$	(225	)		$	(330	)		nm				$	(225	)		$	(101	)		nm
Non-GAAP Operating Margin			-6.7	%			-10.2	%							-6.7	%			-3.0	%
GAAP Net Loss		$	(236	)		$	(346	)		nm				$	(236	)		$	(140	)		nm
GAAP Loss Per Share		$	(0.01	)		$	(0.01	)		nm				$	(0.01	)		$	(0.01	)		nm
Non-GAAP Net (Loss)/Income		$	(72	)		$	(156	)		nm				$	(72	)		$	95				-175.8	%
Non-GAAP Diluted (Loss)/Earnings Per Share		$	(0.00	)		$	(0.01	)		nm				$	(0.00	)		$	0.00				-185.3	%
Adjusted EBITDA		$	(67	)		$	(159	)		nm				$	(67	)		$	95				-170.5	%
Cash Flow from Operations		$	(294	)		$	(498	)		nm				$	(294	)		$	560			nm

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 1Q23				Fiscal 2Q23				Fiscal 3Q23				Fiscal 4Q23				Fiscal 1Q24				Fiscal 2Q24				FY2023				FY2024
Total Revenue		$	3,460			$	3,373			$	3,366			$	3,482			$	3,240			$	3,360			$	13,681			$	6,600
Cloud Services			1,822				1,894				1,957				1,983				1,890				1,817				7,656				3,707
Services and Other			1,174				1,028				999				1,100				996				1,183				4,301				2,179
Legacy Products			464				451				410				399				354				360				1,724				714
Software Assurance			424				390				384				353				342				340				1,551				682
Perpetual Software License			40				61				26				46				12				20				173				32
GAAP Operating (Loss)/Income		$	(188	)		$	(131	)		$	(147	)		$	30			$	(343	)		$	(241	)		$	(436	)		$	(584	)
Operating Margin			-5.4	%			-3.9	%			-4.4	%			0.9	%			-10.6	%			-7.2	%			-3.2	%			-8.8	%
Non-GAAP Operating (Loss)/Income		$	(156	)		$	(101	)		$	(118	)		$	58			$	(330	)		$	(225	)		$	(317	)		$	(555	)
Non-GAAP Operating Margin			-4.5	%			-3.0	%			-3.5	%			1.7	%			-10.2	%			-6.7	%			-2.3	%			-8.4	%
GAAP Net Loss		$	(187	)		$	(140	)		$	(183	)		$	(2,813	)		$	(346	)		$	(236	)		$	(3,323	)		$	(582	)
Non-GAAP Net (Loss)/Income		$	44			$	95			$	40			$	145			$	(156	)		$	(72	)		$	324			$	(228	)
Non-GAAP Diluted (Loss)/Earnings Per Share		$	0.00			$	0.00			$	0.00			$	0.01			$	(0.01	)		$	(0.00	)		$	0.01			$	(0.01	)
Adjusted EBITDA		$	44			$	95			$	4			$	109			$	(159	)		$	(67	)		$	252			$	(226	)

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 6:00 a.m. Pacific Time (9:00 a.m. ET). The conference call can be accessed by dialing (877) 545-0523 (domestic) or (973) 528-0016 (international), conference ID #235719. 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 #50498. A web archive will be made available at www.altigen.com for 90 days following the call's conclusion.

About Altigen Technologies

Altigen Technologies (OTCQB: ATGN) is focused on driving digital transformation in today's modern workplace. Our Cloud Communications solutions and Technology Consulting services empower companies of all sizes to elevate customer engagement, increase employee productivity and improve operational efficiency. We're headquartered in Silicon Valley with operations strategically located in five countries spanning three continents. 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 effectively sustain and manage future expenses and achieve future profitability. 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. CONSOLIDATED BALANCE SHEETS (In thousands)
		March 31, 2024				September 30, 2023
		(unaudited)				(1)
ASSETS
Current assets:
Cash and cash equivalents		$	1,624			$	2,641
Accounts receivable, net			1,890				1,495
Other current assets			361				236
Total current assets			3,875				4,372
Property and equipment, net			1				3
Operating lease right-of-use assets			237				301
Goodwill			2,725				2,725
Intangible assets, net			1,476				1,568
Capitalized software development cost, net			1,209				1,215
Deferred tax asset			3,737				3,737
Other long-term assets			12				-
Total assets		$	13,272			$	13,921
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	118			$	58
Accrued compensation and benefits			371				417
Accrued expenses			435				455
Deferred consideration - current			522				510
Operating lease liabilities - current			173				324
Deferred revenue - current			433				477
Total current liabilities			2,052				2,241
Deferred consideration - long-term			214				208
Operating lease liabilities - long-term			74				-
Deferred revenue - long-term			148				134
Total liabilities			2,488				2,583
Stockholders' equity:
Common stock			24				24
Treasury stock			(1,565	)			(1,565	)
Additional paid-in capital			73,161				73,133
Accumulated deficit			(60,836	)			(60,254	)
Total stockholders' equity			10,784				11,338
Total liabilities and stockholders' equity		$	13,272			$	13,921

ALTIGEN COMMUNICATIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, amounts in thousands)
		Six Months Ended March 31,
		2024				2023
Cash flows from operating activities:
Net loss		$	(582	)		$	(327	)
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization			2				2
Amortization of intangible assets			92				92
Amortization of capitalized software			232				303
Stock-based compensation			28				61
Changes in operating assets and liabilities:
Accounts receivable and unbilled accounts receivable			(395	)			275
Prepaid expenses and other current assets			(125	)			(94	)
Other long-term assets			(12	)			12
Accounts payable			60				(5	)
Accrued expenses			(62	)			188
Deferred revenue			(29	)			(114	)
Net cash (used in) provided by operating activities			(791	)			393
Cash flows from investing activities:
Capitalized software development costs			(226	)			(285	)
Net cash used in investing activities			(226	)			(285	)
Cash flows from financing activities:
Proceeds from issuances of common stock			-				36
Net cash provided by financing activities			-				36
Net increase/(decrease) in cash and cash equivalents			(1,017	)			144
Cash and cash equivalents, beginning of period			2,641				3,232
Cash and cash equivalents, end of period		$	1,624			$	3,376

ALTIGEN COMMUNICATIONS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (amounts in thousands, except per share data)
		Three Months Ended								Six Months Ended
		March 31,								March 31,
		2024				2023				2024				2023
Net revenue		$	3,360			$	3,373			$	6,600			$	6,833
Gross profit			2,061				2,140				4,015				4,348
Operating expenses:
Research and development			1,202				1,299				2,438				2,550
Selling, general & administrative			1,100				972				2,161				2,116
Operating loss			(241	)			(131	)			(584	)			(318	)
Other income/(expense), net			5				-				2				-
Net loss before provision for income taxes			(236	)			(131	)			(582	)			(318	)
Income tax benefit (expense)			-				(9	)			-				(9	)
Net loss		$	(236	)		$	(140	)		$	(582	)		$	(327	)
Per share data:
Basic		$	(0.01	)		$	(0.01	)		$	(0.02	)		$	(0.01	)
Diluted		$	(0.01	)		$	(0.01	)		$	(0.02	)		$	(0.01	)
Weighted average shares outstanding:
Basic			24,919				24,367				24,919				24,294
Diluted			24,919				24,367				24,919				24,294

ALTIGEN COMMUNICATIONS, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED) (amounts in thousands, except per share data)
		Three Months Ended								Six Months Ended
		March 31,								March 31,
		2024				2023				2024				2023
Reconciliation of GAAP to Non-GAAP Gross Profit:
GAAP gross profit		$	2,061			$	2,140			$	4,015			$	4,348
Amortization of capitalized software			91				136				209				273
Acquisition related expenses			40				40				80				80
Non-GAAP gross profit		$	2,192			$	2,316			$	4,304			$	4,701
Reconciliation of GAAP to Non-GAAP Expenses:
GAAP operating expenses		$	2,302			$	2,271			$	4,599			$	4,666
Depreciation and amortization			1				1				2				2
Amortization of capitalized software			11				14				23				30
Amortization of intangible assets			6				6				12				12
Stock-based compensation			16				30				28				61
Non-GAAP operating expenses		$	2,268			$	2,220			$	4,534			$	4,561
Reconciliation of GAAP to Non-GAAP Net Income:
GAAP net loss		$	(236	)		$	(140	)		$	(582	)		$	(327	)
Depreciation and amortization			1				1				2				2
Amortization of capitalized software			102				150				232				303
Amortization of intangible assets			46				46				92				92
Stock-based compensation			16				30				28				61
Deferred tax asset valuation allowance			-				9				-				9
Non-GAAP net (loss) income		$	(71	)		$	96			$	(228	)		$	140
Per share data:
Basic		$	(0.00	)		$	0.00			$	(0.01	)		$	0.01
Diluted		$	(0.00	)		$	0.00			$	(0.01	)		$	0.01
Weighted average shares outstanding:
Basic			24,919				24,367				24,919				24,294
Diluted			24,919				25,497				24,919				25,574

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 Technologies

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