SOURCE: AltiGen Communications, Inc.

AltiGen Communications, Inc.

January 26, 2011 16:00 ET

AltiGen Communications, Inc. Reports First Quarter Fiscal 2011 Financial Results

SAN JOSE, CA--(Marketwire - January 26, 2011) - AltiGen Communications, Inc. (OTCQX: ATGN) (PINKSHEETS: ATGN), the leading provider of integrated Microsoft-based Unified Communications solutions, today reported financial results for its fiscal 2011 first quarter ended December 31, 2010.

First Quarter Financial Highlights:

-- First quarter revenue of $4.6 million

-- Gross margin improved to 67.6%

-- Net (P&L) cash loss decreased to $233,000

-- Ending cash balance of $6.8 million

Jeremiah Fleming, AltiGen's President and Chief Executive Officer, stated, "We are pleased with the progress we made this quarter. We reduced our net loss by more than 40% versus the previous quarter. At the same time, we improved our cash position by approximately $300,000 this quarter. We've been gaining a lot of traction with both larger enterprise customers and service providers, and are now beginning to experience tangible results associated with these efforts."

Revenue for the first quarter of fiscal 2011 was $4.6 million, compared to $3.8 million in the preceding quarter, and compared to $4.2 million during the same period in fiscal 2010. Gross margin in the first quarter of fiscal 2011 was 67.6%, compared to 67.4% in the preceding quarter, and compared to 66.6% for the same period in fiscal 2010. Operating expenses totaled $3.5 million, compared to $3.3 million in both the preceding quarter and during the same period in fiscal 2010.

Net loss for the first quarter of fiscal 2011 was $372,000, or a loss of $0.02 per share, compared to a net loss of $638,000, or a loss of $0.04 per share in the preceding quarter, and compared to a net loss of $470,000, or a loss of $0.03 per share during the first quarter of fiscal 2010. Total cash and cash equivalents, plus short term investments at December 31, 2010 were $6.8 million, compared to $6.5 million at September 30, 2010.

Conference Call

AltiGen will conduct a conference call with investment professionals at 2:00 p.m. Pacific Time (5:00 p.m. ET) today, January 26, 2011 to discuss AltiGen's results of operations for the fiscal 2011 first quarter. Dial (877) 407-8031 (domestic) or (201) 689-8031 (international) to listen in to the call. A live webcast will also be made available at www.altigen.com. To access the replay, dial (877) 660-6853 (domestic) or (201) 612-7415 (international), account #286 conference ID #365724. 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. (OTCQX: ATGN) (PINKSHEETS: ATGN) is a leading provider of 100% Microsoft-based VoIP business phone systems and Unified Communications solutions. Having more than 10,000 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, with international operations based in Shanghai, China. Local sales, service and support are provided by AltiGen's worldwide network of over 300 certified partners. 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 statements within the meaning of Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding the continued market acceptance of our 100 percent Microsoft-based business phone systems and call center solutions, AltiGen's favorable business outlook, and our ability to gain traction with both large enterprise customers and service providers. These statements reflect management's current expectation. However, actual results could differ materially as a result of unknown risks and uncertainties, including but not limited to, risks related to AltiGen's limited operating history. For a more detailed description of these and other risks and uncertainties affecting AltiGen's performance, please refer to AltiGen's Annual Report on Form 10-K for the fiscal year ended September 30, 2010. All forward-looking statements in this press release are based on information available to AltiGen as of the date hereof and AltiGen assumes no obligation to update these forward-looking statements.

                       AltiGen Communications, Inc.
              Condensed Consolidated Statements of Operations
              (Amounts in thousands, except per share data)
                                (Unaudited)

                                              First Quarter Ended
                                                 December 31,
                                    ------------------  ------------------
                                          FY 2011             FY 2010
                                    ------------------  ------------------
Net Revenue                         $            4,607  $            4,221
Gross profit                                     3,116               2,810

Research and development                         1,497               1,147
Selling, general & administrative                1,997               2,154
                                    ------------------  ------------------

Operating loss                                    (378)               (491)

Interest and other income, net                       7                  22
                                    ------------------  ------------------

Net loss before tax                               (371)               (469)

Provision for income tax                             1                   1
                                    ------------------  ------------------

Net loss after tax                  $             (372) $             (470)
                                    ==================  ==================

Basic and diluted net loss per
 share                                           (0.02)              (0.03)

Weighted average shares outstanding             16,495              16,293





                                     December 31, 2010  September 30, 2010
                                    ------------------  ------------------
Cash and cash equivalents           $            4,031  $            3,776
Short-term investments                           2,748               2,748
Accounts receivable, net                         1,291               1,018
Inventories                                      1,158               1,385
Other current assets                               237                 345
Net property and equipment                         739                 613
Other long-term assets                             478                 476
                                    ------------------  ------------------
Total Assets                        $           10,682  $           10,361
                                    ==================  ==================

Current liabilities                 $            5,623  $            5,085
Long-term liabilities                              457                 469
Stockholders' equity                             4,602               4,807

                                    ------------------  ------------------
Total Liabilities and Stockholders'
 Equity                             $           10,682  $           10,361
                                    ==================  ==================