SAN JOSE, CA--(Marketwired - Nov 19, 2014) - AltiGen Communications, Inc. (
Discontinued Operation
During the second quarter of fiscal year 2014, the Company made a strategic decision to discontinue and write-down its wholly-owned subsidiary business unit- China segment. As a result of this write-down, the financial results from that business unit are reported as discontinued operations in the financial tables of this press release. Prior year results have been retrospectively revised to reflect the discontinued operations. The parent company will continue to report results as continued operations. Furthermore, our operation has been categorized into two reportable business segments: North America and Rest of World.
Fourth Quarter Financial Results from Continuing Operations
Revenue for the fourth quarter of fiscal year 2014 was $2.5 million, in comparison to $2.4 million for the fourth quarter of fiscal year 2013, an increase of 2%. During the fourth quarter of fiscal 2014, net income from continuing operations was $146,000 or $0.01 per diluted share, compared to a net loss of $143,000 or a loss of $0.02 per share, for the fourth quarter of fiscal year 2013.
Gross margin for the fourth quarter of fiscal year 2014 was 61.6%, down from 69.4% in the fourth quarter of fiscal year 2013. The decrease in gross margin in the fourth quarter of 2014 compared with the prior-year fourth quarter was primarily due to an increase in excess inventory reserves of $290,000. During fiscal year 2014, we experienced a significant slowdown in sales of the iFusion SmartStations, which required us to make an allowance of $284,000 for excess inventory during the fourth quarter. Operating expenses were $1.7 million for the fourth quarter of fiscal year 2014, a decrease of 6% from $1.8 million in the fourth quarter of fiscal year 2013. The year-over-year decrease in operating expenses was driven by our cost control measures and continued focus on operating efficiencies.
In September 2014, the Company reversed a potential liability of $338,000 in connection with a license agreement that never finalized. The accrual was established in 2003 through fiscal year 2011. Based on a recent assessment, management believes that the Company's liability is highly improbable and therefore has reversed the accrual and reported the reversal as other income in the fourth quarter of fiscal 2014.
Full Year Fiscal 2014 Financial Results from Continuing Operations
For the twelve months ended September 30, 2014, revenue was $9.6 million, compared to $10.8 million for fiscal 2013, a decrease of 11%. For fiscal 2014, net loss from continuing operations was $6.7 million, or a loss of $0.30 per share, compared to a net loss of $1.3 million, or a loss of $0.08 per share, for fiscal 2013. The increase in net loss for 2014 was primarily the result of a one-time non-cash charge related to the write-down of our discontinued operations of $6.7 million in March 2014.
Gross margin was 69.0% for the twelve-month period of fiscal 2014, compared to 69.7% in the comparable period last year. Operating expenses were $7.2 million for fiscal year 2014, a decrease of 9% from $7.9 million for fiscal 2013. The decrease in operating expenses for 2014 was primarily due to the aforementioned focus on operating efficiencies and cost control measures.
The Company had total cash and cash equivalents of $3.8 million from its continuing operations as of September 30, 2014, compared to $2.9 million in the comparable period last year.
"We are pleased to have returned to top-line revenue growth and more importantly achieving profitability in the fiscal fourth quarter. Many of our long term initiatives, including the migration of our solutions to all software and transitioning to a Software as a Service business model, are now beginning to take shape," said Jeremiah J. Fleming, Chairman of the Board, President and Chief Executive Officer. "As we enter 2015, we remain focused on continued growth and enhancing profitability to the benefit of our shareholders."
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 http://www.altigen.com. To access the replay, dial (877) 660-6853 (domestic) or (201) 612-7415 (international), account #286 conference ID #13595668. 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. (
Safe Harbor Statement
The Forward-looking statements contained in this press release are based upon the Company's current expectations, beliefs, plans and assumptions, which are subject to a number of risks and uncertainties including, but not limited to: statements regarding market acceptance of our premise and cloud-based IP-PBX and Contact Center solutions and our ability of achieving growth and profitability. Actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected.
The forward-looking statements contained in this press release are also subject to unknown risks and uncertainties, including but not limited to, risks related to AltiGen's limited operating history. For a more detailed description of AltiGen's performance, please refer to AltiGen's audited Annual Report filed with the OTCQX over-the-counter market for the fiscal year ended September 30, 2013. Since these statements involve risks and uncertainties and are subject to change at any time, the Company's actual results could differ materially from expected results. Forward-looking statements speak only as of the date the statement was made. The Company does not undertake any obligation to update any forward-looking statements.
| AltiGen Communications, Inc. Condensed Consolidated Statements of Operations (Amounts in thousands, except per share data) |
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| Fourth Quarter Ended | Twelve Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| FY 2014 | FY 2013 (2) | FY 2014 | FY 2013 (2) | ||||||||||||
| Continuing operations: | |||||||||||||||
| Net Revenue (1) | $ | 2,473 | $ | 2,425 | $ | 9,576 | $ | 10,815 | |||||||
| Gross profit | 1,524 | 1,684 | 6,604 | 7,535 | |||||||||||
| Research and development | 691 | 780 | 2,874 | 3,059 | |||||||||||
| Selling, general & administrative | 1,022 | 1,041 | 4,325 | 4,872 | |||||||||||
| Operating loss from continuing operations | (189 | ) | (137 | ) | (595 | ) | (396 | ) | |||||||
| Interest and other income, net | 335 | (6 | ) | 326 | (15 | ) | |||||||||
| Net income (loss) before income taxes | 146 | (143 | ) | (269 | ) | (411 | ) | ||||||||
| Provision for income taxes | - | - | (1 | ) | (1 | ) | |||||||||
| Operating income (loss) from continuing operations after taxes | $ | 146 | $ | (143 | ) | $ | (270 | ) | $ | (412 | ) | ||||
| Discontinued Operations: | |||||||||||||||
| Operating loss from discontinued operations | - | (255 | ) | (361 | ) | (908 | ) | ||||||||
| Write-down of investment from discontinued operations | - | - | (6,331 | ) | - | ||||||||||
| Total operating loss from discontinued operations | $ | - | $ | (255 | ) | $ | ( 6,692 | ) | $ | (908 | ) | ||||
| Net income (loss) | $ | 146 | $ | (398 | ) | $ | (6,962 | ) | $ | (1,320 | ) | ||||
| Basic and diluted net income (loss) per share | $ | 0.01 | $ | (0.02 | ) | $ | (0.30 | ) | $ | (0.08 | ) | ||||
| Weighted average shares outstanding basic | 22,081 | 16,732 | 23,399 | 16,732 | |||||||||||
| Weighted average shares outstanding diluted | 22,081 | 16,732 | 23,399 | 16,732 | |||||||||||
| _________________________________ |
| (1) Net revenue from continuing operations includes revenue generated from the following segments: North America and Rest of World. |
| (2) Prior year results have been retrospectively revised to reflect the discontinued China operations for comparison purposes. |
| AltiGen Communications, Inc. Condensed Consolidated Balance Sheets (Amounts in thousands) |
|||||
| September 30, 2014 (Unaudited) |
September 30, 2013 (Adjusted) (1) | ||||
| Cash and cash equivalents | $ | 3,814 | $ | 2,942 | |
| Accounts receivable, net | 472 | 467 | |||
| Inventories | 476 | 1,020 | |||
| Other current assets | 68 | 164 | |||
| Net property and equipment | 145 | 122 | |||
| Other long-term assets | 36 | - | |||
| Assets of discontinued operations | - | 1,713 | |||
| Total Assets | $ | 5,011 | $ | 6,428 | |
| Current liabilities | $ | 4,573 | $ | 4,837 | |
| Long-term liabilities | 188 | 106 | |||
| Liabilities of discontinued operations | - | 1,004 | |||
| Stockholders' equity | 250 | 481 | |||
| Total Liabilities and Stockholders' Equity | $ | 5,011 | $ | 6,428 | |
| _________________________________ |
| (1) Prior year results have been retrospectively revised to reflect the discontinued China operations for comparison purposes. |