SAN JOSE, CA / ACCESSWIRE / January 23, 2019 / Altigen Communications, Inc. (OTCQB: ATGN), a Silicon Valley based provider of Hosted Skype for Business and Contact Center solutions, announced today its financial results for the first quarter ended December 31, 2018.
First Quarter Fiscal 2019 Financial Highlights
- Revenue was $2.8 million, a 20% increase over the prior year first quarter
- Net income was $612,000 GAAP, $648,000 non-GAAP
- Working capital increased 20% to $2.8 million
Financial Results
Total revenue for the first quarter of fiscal 2019 was $2.8 million, compared to $2.7 million in the preceding quarter, and compared to $2.3 million in the prior year quarter, representing an increase of 4% and 20%, respectively. Gross margin in the first quarter of fiscal 2019 was 82.9%, compared to 83.1% in the preceding quarter, and compared to 82.9% in the comparable period last year.
GAAP net income for the first quarter of fiscal 2019 was $612,000, or $0.02 per diluted share, compared with GAAP net income of $9.0 million, or $0.36 per diluted share in the preceding quarter, and compared to GAAP net income of $338,000, or $0.01 per diluted share in the same period in 2018. Non-GAAP net income for the first quarter of fiscal 2019 was $648,000, or $0.03 per diluted share, compared with non-GAAP net income of $614,000, or $0.02 per diluted share in the preceding quarter, and compared to non-GAAP net income of $352,000, or $0.01 per diluted share in the same period a year ago. As previously disclosed, The Company's fourth quarter financial results include the reversal of a portion of the valuation allowance recorded against the deferred tax assets of the Company. This reversal resulted in the recognition of a one-time income tax benefit in the fourth quarter of fiscal 2018 of approximately $8.7 million. For additional information, please refer to the Company's filings with the OTCQB over-the-counter market, including the Company's most recent Annual Report filed on December 31, 2018.
GAAP operating expenses totaled $1.7 million for the first quarter of fiscal 2019, compared with $1.9 million in the preceding quarter, a slight decrease of $197,000, or 10%, and compared with $1.6 million during the first quarter of fiscal 2018. Non-GAAP operating expenses for the first quarter of fiscal 2019 totaled $1.7 million, compared with $1.6 million in the preceding quarter, and $1.6 million in the comparable period last year.
Cash, Cash Equivalents and Restricted Cash
Our cash, cash equivalents and restricted cash totaled $4.8 million at the end of the first quarter, compared to $3.1 million at the end of the preceding quarter. Working capital increased 20% to $2.8 million at the end of the first quarter, compared with $2.3 million at September 30, 2018.
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, 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 (866) 682-6100 (domestic) or (862) 298-0702 (international). A live webcast will also be made available at http://www.altigen.com. To access the replay, dial (877) 481-4010 (domestic) or (919) 882-2331 (international), conference ID #42043. 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), a leading Microsoft Cloud Solutions provider, delivers fully managed Unified Communications services, combining Hosted Skype for Business, Advanced Cloud PBX, and Innovative Cloud Contact Center applications with seamless integration to Office 365 for small-to-medium sized businesses and enterprises. Our unique and feature rich Cloud PBX and Multi-channel Contact Center solutions natively integrate with Skype for Business and Office 365 to deliver business-critical functionalities required by SMBs and enterprises. With thousands of customers around the world, Altigen solutions are designed for high reliability, ease of use, seamless integration to Microsoft infrastructure technologies, and are built on a scalable, open standards platform. Altigen's worldwide headquarters is in Silicon Valley, California. For more information, call 1-888- ALTIGEN or visit the web site 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 of 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:
Carolyn David
Vice President of Finance
Altigen Communications, Inc.
Phone: 408-597-9033
www.altigen.com
Altigen Communications, Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands, except per share data)
| First Quarter Ended | ||||||||
| December 31, | ||||||||
| 2018 | 2017 | |||||||
| Net revenue | $ | 2,779 | $ | 2,317 | ||||
| Gross profit | 2,303 | 1,922 | ||||||
| Operating Expenses: | ||||||||
| Research and development | 614 | 702 | ||||||
| Selling, general & administrative | 1,079 | 880 | ||||||
| Operating income | 610 | 340 | ||||||
| Other income/(expense), net | 2 | - | ||||||
| Net income before provision for income taxes | 612 | 340 | ||||||
| Income tax benefit (expense) | - | (2 | ) | |||||
| Net income | $ | 612 | $ | 338 | ||||
| Per share data: | ||||||||
| Basic | $ | 0.03 | $ | 0.01 | ||||
| Diluted | $ | 0.02 | $ | 0.01 | ||||
| Weighted average shares outstanding: | ||||||||
| Basic | 22,842 | 22,799 | ||||||
| Diluted | 24,918 | 23,983 | ||||||
Altigen Communications, Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands)
| December 31, 2018 | September 30, 2018 | |||||||
| Cash, cash equivalents and restricted cash | $ | 4,857 | $ | 3,080 | ||||
| Accounts receivable, net | 487 | 531 | ||||||
| Other current assets | 233 | 1,622 | ||||||
| Net property and equipment | 602 | 405 | ||||||
| Deferred tax asset | 8,713 | 8,713 | ||||||
| Other long-term assets | 11 | 11 | ||||||
| Total Assets | $ | 14,903 | $ | 14,362 | ||||
| Current liabilities | $ | 2,814 | $ | 2,928 | ||||
| Long-term liabilities | 256 | 221 | ||||||
| Stockholders' equity | 11,833 | 11,213 | ||||||
| Total liabilities and stockholders' equity | $ | 14,903 | $ | 14,362 | ||||
Reconciliation of GAAP and Non-GAAP Financial Measures (amounts in thousands, except per share data)
| First Quarter Ended | ||||||||
| December 31 | ||||||||
| 2018 | 2017 | |||||||
| Net income (GAAP) | $ | 612 | $ | 338 | ||||
| Adjustments: | ||||||||
| Depreciation and amortization | 28 | 8 | ||||||
| Stock-based compensation | 8 | 6 | ||||||
| Net income (Non-GAAP) | $ | 648 | $ | 352 | ||||
| Per share data: | ||||||||
| Basic | $ | 0.03 | $ | 0.02 | ||||
| Diluted | $ | 0.03 | $ | 0.01 | ||||
| Weighted average shares outstanding: | ||||||||
| Basic | 22,842 | 22,799 | ||||||
| Diluted | 24,918 | 23,983 | ||||||
SOURCE: Altigen Communications, Inc.
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