AltiGen Communications, Inc. Reports Fourth Quarter and Fiscal Year 2016 Financial Results
Wednesday, November 30, 2016 4:05:12 PM ET
SAN JOSE, CA--(Marketwired - Nov 30, 2016) - AltiGen Communications, Inc. (OTCQX: ATGN), a leading provider of premise and cloud-based IP-PBX and Contact Center solutions, announced today its financial results for the fourth quarter and fiscal year ended September 30, 2016.
Fourth Quarter Financial Results from Continuing Operations
Revenue for the fourth quarter of fiscal year 2016 was $2.0 million, in comparison to $2.4 million in the same quarter last year. Gross margin rates improved in the fourth quarter of fiscal year 2016, rising to 87.6% compared to 81.5% for the fourth quarter last year. Although total revenue decreased by approximately 16% year-over-year in the fourth quarter of fiscal 2016, revenue generated from our cloud-based offering increased approximately 88% for the three months ended September 30, 2016, as compared to the same period of the prior year.
GAAP net loss for the fourth quarter of fiscal 2016 was $445,000, or $(0.02) per share, compared with GAAP net income of $209,000, or $0.01 per diluted share, for the comparable period of the prior year. Non-GAAP net income for the fourth quarter of fiscal 2016 was $104,000, or $0.00 per diluted share, compared with non-GAAP net income of $352,000, or $0.01 per diluted share for the fourth quarter of fiscal 2015. Operating expenses for the fourth quarter of fiscal 2016 totaled $2.2 million, compared to $1.7 million during the same period a year ago. During the fourth quarter of fiscal 2016, the company recorded a one-time litigation expense related to a civil lawsuit filed against the Company by a former Board member, Gilbert Hu. The lawsuit was filed on April 3, 2015 in the Superior Court of California, County of Santa Clara. On August 5, 2016, Mr. Hu was granted an interim award granting him relief for compensation claims along with court costs and attorneys fees. Based on our assessment, we estimated and recognized a liability for this award totaling $700,000, of which $543,000 was recorded in fiscal 2016 and $157,000 was recorded in fiscal 2014. This amount was estimated based on our current expectation and is subject to change. The increase in operating expenses from fiscal 2015 was attributable to the additional litigation expense required in connection with this award. Furthermore, the increase in our GAAP loss for the fourth quarter of fiscal 2016 was also attributable to Mr. Hus claim.
Full Year Fiscal 2016 Financial Results from Continuing Operations
For the twelve months ended September 30, 2016, revenue was $8.4 million, compared to $9.8 million for fiscal 2015. Gross margin increased 2.5 points to 82.8% for the twelve-month period of fiscal 2016, compared to 80.3% in the comparable period last year. Total revenue decreased approximately 14%, while our cloud-based offering increased 109% from fiscal 2015. The decrease in total revenue from fiscal 2015 was primarily attributable to a reduction of 60% in hardware sales. This shift is the result of the aforementioned planned transition to move away from hardware products in order to leverage our cloud-based offering.
GAAP net loss for fiscal 2016 was $810,000, or $(0.04) per share, compared with GAAP net income of $644,000, or $0.03 per diluted share for fiscal 2015. Non-GAAP net loss for fiscal 2016 was $1,000, or $(0.00) per share, compared with non-GAAP net income of $1.3 million, or $0.05 per diluted share for fiscal 2015. Operating expenses totaled $7.8 million for fiscal 2016, compared to $7.2 million for fiscal 2015. The increase in both operating expenses and net GAAP loss was attributable to estimated expenses arising from the aforementioned litigation.
Cash, Cash Equivalents and Restricted Cash
The Company had total cash and cash equivalents of $4.5 million from its continuing operations as of September 30, 2016, compared to $4.6 million in the comparable period last year.
According to Jeremiah Fleming, AltiGens President & CEO, "The decrease in total revenue in fiscal 2016 compared to fiscal 2015 was primarily the result of reduced hardware sales based on AltiGens strategic decision to exit the hardware business. For the twelve-month period ended September 30, 2016, hardware sales decreased approximately 60% versus the same period a year ago. While this planned transition impacts top line revenues and, to a lesser extent, gross profit, it enables us to focus on far more profitable software and cloud services solutions. We expect this trend to continue into the first and second quarters of fiscal year 2017. However, as we continue to experience favorable revenue shifts in these product lines, we expect to continue to see overall improved growth and profitability."
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 http://www.altigen.com . To access the replay, dial (877) 481-4010 (domestic) or (919) 882-2331 (international), account #286 conference ID #10125. A web archive will be made available at www.altigen.com for 90 days following the calls conclusion.
About AltiGen Communications
AltiGen Communications, Inc. (OTCQX: ATGN) is a leading provider of premise and cloud-based IP-PBX and Contact Center solutions headquartered in Silicon Valley, California. 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. For more information, call 1-888-ALTIGEN or visit the web site at www.altigen.com.
Safe Harbor Statement
The forward-looking statements contained in this press release are based on the Companys views of future events and financial performances, current expectations, beliefs, plans and assumptions, which are subject to a number of risks and uncertainties including, but not limited to, statements that reflect our current views with respect to our ability to attain sales growth and profitability. There can be no assurances that the Company will achieve expected results, and actual results may be materially less than expectations. Please refer to the Companys most recent Annual Report filed with the OTCQX 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.
AltiGen Communications, Inc.
Condensed Consolidated Statements of Operations
(Unaudited; amounts in thousands, except per share data)
Fourth Quarter Ended Twelve Months Ended
September 30, September 30,
FY 2016 FY 2015 FY 2016 FY 2015
Net Revenue $ 2,008 $ 2,389 $ 8,431 $ 9,800
Gross profit 1,759 1,946 6,980 7,872
Research and development 768 702 2,898 2,954
Selling, general & administrative 891 1,033 4,346 4,264
Litigation related expenses 543 - 543 -
Operating income (loss) (443) 211 (807) 654
Other income/(expense), net (2) (2) (9) (9)
Net income (loss) before provision for income taxes (445) 209 (816) 645
Provision for income taxes - - 6 1
Net income (loss) $ (445) $ 209 $ (810) $ 644
Basic and diluted net income (loss) per share $ (0.02) $ 0.01 $ (0.04) $ 0.03
Weighted average shares outstanding - basic 22,799 22,799 22,799 22,799
Weighted average shares outstanding - diluted 22,799 24,140 22,799 23,869
AltiGen Communications, Inc.
Condensed Consolidated Balance Sheets
(Amounts in thousands)
September 30, 2016 September 30, 2015
Cash and cash equivalents $ 4,490 $ 4,560
Accounts receivable, net 306 403
Inventories 38 341
Other current assets 95 54
Net property and equipment 125 126
Other long-term assets 36 31
Total Assets $ 5,090 $ 5,515
Current liabilities $ 3,800 $ 3,803
Long-term liabilities 322 200
Stockholders equity 968 1,512
Total liabilities and stockholders equity $ 5,090 $ 5,515