AltiGen Communications Reports Record Third Quarter Fiscal 2008 Revenue

- Delivered Revenue of $4.8 Million, Up 15% over Third Quarter 2007 -

FREMONT, Calif., July 23 /PRNewswire-FirstCall/ -- AltiGen Communications,
Inc. (Nasdaq: ATGN), a leading provider of VoIP business phone systems and
Unified Communications solutions for small-to-medium businesses (SMBs),
including companies with multiple distributed locations, branch offices and
call centers, reported its financial results for the fiscal 2008 third quarter
ended June 30, 2008.
Gilbert Hu, AltiGen's CEO, said, "Our fiscal third quarter revenue of $4.8
million grew 15 percent over last year and is the highest fiscal third quarter
revenue in our history. We continue to grow revenue in this challenging
environment by driving new system sales by expanding our base of resellers,
distributors and strategic partners. By introducing new revenue sources, such
as the software assurance and premier service plans, we are building recurring
revenue streams that are improving gross margins and contributing cash flow.
In fact, at June 30, 2008, deferred revenue from our new service plans was
$1.4 million and enrollment grew to 2,600 customers, up over 85 percent
sequentially."
"To drive revenue growth, we are proactively investing in product
development, sales and marketing," stated Jeremiah Fleming, AltiGen's
president and COO. "We continue to unveil highly competitive products for the
unified communications (UC) solution and VoIP markets as part of our plan to
drive new revenue growth. At the Microsoft Worldwide Partner Conference in
Houston earlier this month, we launched the MAX Communications Server 6.0, our
next generation UC solution, and received great interest and rave reviews. To
capitalize on this position, we have leveraged our distribution relationship
with SYNNEX Corporation to also include a focus on the Microsoft channel.
Through our growing distribution relationship with Jenne, we will focus on
larger VoIP resellers to sell AltiGen's more scalable IP PBX solution."
"We are expanding our relationships with international distributors, too,"
Fleming added. "Boport Tele-Communication BV has created a unit dedicated
exclusively to AltiGen products. Operating under the registered name AltiGen
Benelux, it recently signed a distribution agreement with Televersal, a large
distributor of VoIP telecommunications products in the Benelux region.
Televersal will be responsible for the distribution of the Max1000 to its
reseller channel, gaining more exposure for our high quality and easy to
install IP PBX phone systems."
Financial Results
Revenue for the fiscal 2008 third quarter was $4.8 million, compared to
$4.2 million in the year ago and $4.7 million in the previous quarter. Gross
margins were at 58.8 percent, compared to 55.6 percent last quarter and 53.4
percent a year ago. Operating expenses totaled $3.9 million, compared to $3.8
million last quarter and $2.9 million in the year ago quarter, reflecting the
increased investment in research and development and sales and marketing. Net
loss for the third quarter of fiscal 2008 was $1.0 million, or $0.07 per
share, compared to $1.1 million, or $0.07 per share, in the second quarter and
$526,000, or $0.03 per share in the same quarter last year.
Phil McDermott, AltiGen's CFO, said, "We are managing our cash
conservatively and our balance sheet remains strong. We are driving toward
profitability and are making progress toward our near-term objective of
positive cash flow. In fact, during the quarter, we were cash flow neutral. At
June 30, 2008, our cash and short-term investments were $9.5 million and we
carried no long-term debt."
Revenue for the first nine months of 2008 was $13.8 million, compared to
$12.7 million in first nine months of 2007. Net loss for the first nine months
of fiscal 2008 was $3.1 million or $0.20 per share, compared to a net loss of
$791,000 or $0.05 per share in the prior year period.
Earnings Conference Call
AltiGen will conduct a conference call with investment professionals at
2:00 PM Pacific Time (5:00 PM Eastern Time) today, July 23, 2008 to discuss
AltiGen's results of operations for the third quarter. Dial (800) 895-0198
(domestic) or (785) 424-1053 (international) to listen in to the call. The
conference call ID is "7AltiGen." A live webcast will also be made available
at http://www.altigen.com. A telephonic replay will be available approximately
one hour after the call through July 25, 2008. To access the replay, dial
(800) 283-4605 or (402) 220-0874. A web archive will be made available at
http://www.altigen.com for 90 days following the call's conclusion.
About AltiGen Communications
AltiGen Communications, Inc. (NASDAQ: ATGN) is a leading provider of VoIP
business phone systems and Microsoft-based Unified Communications solutions
for small-to-medium businesses (SMBs), including companies with multiple
distributed locations, branch offices and call centers. AltiGen's scalable,
integrated, and easy to manage all-in-one unified communications solutions
enable an array of applications like standards based SIP VoIP phones and
servers, unified messaging, voicemail, call recording, conferencing, call
activity reporting and mobility solutions that leverage both the Internet and
the public telephone network to take advantage of the convergence of voice and
data communications. AltiGen's systems are designed with an open architecture
and are built on an industry standard platform. This adherence to widely used
standards allows products to integrate with and leverage the existing
technology investment of partners and customers. For more information, call
1-888-ALTIGEN or visit the web site at http://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 Voice
over IP telephone systems, the successful introduction of our new MAX
Communications Server 6.0, the successful expanded partnerships with Synnex
Corporation and Jenne, our ability to penetrate the Benelux region with Boport
Tel-Communication and Televersal, and our ability to achieve cash flow
positive in the near term and profitability. 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, 2007 and all subsequent current
reports on Form 8-K and quarterly reports on Form 10-Q. 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.
(Tables Follow)

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

Third Quarter Ended Nine Months Ended
June 30 June 30
FY 2008 FY 2007 FY 2008 FY 2007
Net Revenue $4,812 $4,181 $13,784 $12,698
Gross profit 2,827 2,233 7,853 6,835

Research and development 1,137 860 3,087 2,502
Selling, general &
administrative 2,764 2,009 8,128 5,459

Operating loss (1,074) (636) (3,362) (1,126)

Interest and other income,
net 45 114 236 346

Net loss before tax $(1,029) $(522) $(3,126) $(780)

Provision for income tax - 4 - 11

Net loss after tax $(1,029) $(526) $(3,126) $(791)

Basic and diluted net
loss per share $(0.07) $(0.03) $(0.20) $(0.05)

Weighted average shares
outstanding 15,697 15,505 15,734 15,266

Condensed Consolidated Balance Sheets
(Amounts in thousands)
(Unaudited)

June 30, 2008 September 30, 2007

Cash and cash equivalents $7,580 $6,111
Short-term investments 1,899 3,796
Accounts receivable, net 2,196 2,656
Inventories 1,958 1,567
Other current assets 372 237
Net property and equipment 465 506
Other long-term assets 292 377
Total Assets $14,762 $15,250

Current liabilities $4,874 $2,816
Long-term liabilities 42 89
Stockholders' equity 9,846 12,345

Total Liabilities and
Stockholders' Equity $14,762 $15,250

SOURCE AltiGen Communications, Inc.

Phil McDermott, CFO of AltiGen Communications, +1-510-252-9712,
pmcdermott@altigen.com; or Kirsten Chapman or Cathy Mattison, Investor
Relations, both of Lippert-Heilshorn & Associates, +1-415-433-3777,
cmattison@lhai.com, for AltiGen Communications, Inc.