SAN JOSE, CA -- (Marketwire) -- 11/14/12 -- AltiGen Communications, Inc. (OTCQX: ATGN), the leading provider of integrated Microsoft-based Unified Communications solutions, announced today its financial results for the fourth quarter and fiscal year ended September 30, 2012.

Fiscal Year 2012 Fourth Quarter Performance
Revenue for the fourth quarter of fiscal year 2012 was $3.5 million, in comparison to $4.3 million for the fourth quarter of fiscal year 2011, a decrease of 18.6%. During the fourth quarter of fiscal 2012, net loss from operations was $1.6 million, or a loss of $0.09 per share, compared to a net loss of $861,000, or a loss of $0.05 per share, for the fourth quarter of fiscal year 2011. The increase in net loss for 2012 was primarily the result of a one-time non-cash charge for excess inventory of approximately $1.1 million.

Gross margin for the fourth quarter of fiscal year 2012 was 35.9%, down from 64.2% in the fourth quarter of fiscal year 2011. The decrease in gross margin in the fourth quarter of 2012 compared with the prior-year fourth quarter was primarily due to an increase in excess inventory reserves of $1.1 million. Operating expenses were $2.9 million for the fourth quarter of fiscal year 2012, a decrease of 21.6% from $3.7 million in the fourth quarter of fiscal year 2011. Our expenses continued to decline due to our cost control measures executed over the past year.

Fiscal Year 2012 Full Year Performance
For the twelve months ended September 30, 2012, revenue was $16.9 million, compared to $17.7 million for fiscal 2011, a decrease of 4.5%. For fiscal 2012, net loss from operations was $1.8 million, or a loss of $0.11 per share, compared to a net loss of $2.7 million, or a loss of $0.16 per share, for fiscal 2011.

Gross margin was 60.1% for the twelve-month period of fiscal 2012, compared to 65.9% in the comparable period last year. The decrease in gross margin for 2012 was primarily due to the aforementioned increase in excess inventory reserves. Operating expenses were $11.9 million for fiscal year 2012, a decrease of 17.4% from $14.4 million for fiscal 2011. Our expenses continued to decline due to our cost control measures executed over the past year.

As of September 30, 2012, total cash and cash equivalents was $4.2 million and working capital was $1.3 million, compared to total cash and cash equivalents of $4.3 million and working capital of $2.1 million as of September 30, 2011.

"Our fiscal fourth quarter revenues reflect the continued softness in the overall premise PBX business. While we do not anticipate significant improvements in this business in the foreseeable future we do expect to see growth from our new MaxCloud hosted PBX business, which we plan to launch in calendar Q1," said Jeremiah Fleming, AltiGen's President & CEO. "MaxCloud, which leverages our all software MaxCS IP PBX, will enable AltiGen's base of more than 7,500 premise-based PBX systems to seamlessly migrate those systems to the cloud. AltiGen MaxCloud customers will benefit from greater functionality combined with lower overall communications costs."

"During the quarter we also experienced a significant slowdown in sales of the iFusion SmartStations due to the release of Apple's iPhone 5, as its new Lightning connector is not compatible with the previous Apple 30 pin connector. While we are continuing to sell the iFusions to iPhone 4 customers we are also diligently working to incorporate the new Lightning connector into these devices. This slowdown in unit sales has required us to make an allowance for excess inventory, for which the $1.1 non-cash charge was recorded in the quarter," said Mr. Fleming.

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 #403572. 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) 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
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 the continued market acceptance of our 100 percent Microsoft-based business phone systems and call center solutions; our ability to successfully launch our new MaxCloud hosted PBX business and our ability to incorporate the new Lightning connector into the iFusion SmartStation. 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, 2011. 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 2012    FY 2011    FY 2012    FY 2011
                                 ---------  ---------  ---------  ---------
Net Revenue                      $   3,530  $   4,346  $  16,941  $  17,672
Gross profit                         1,269      2,790     10,182     11,654

Research and development             1,225      1,557      4,756      6,220
Selling, general &
 administrative                      1,631      2,100      7,140      8,170
                                 ---------  ---------  ---------  ---------

Operating loss                      (1,587)      (867)    (1,714)    (2,736)

Interest and other income, net           2          6        (57)        37
                                 ---------  ---------  ---------  ---------

Net loss before tax                 (1,585)      (861)    (1,771)    (2,699)

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

Net loss after tax               $  (1,585) $    (861) $  (1,772) $  (2,700)
                                 =========  =========  =========  =========

Basic and diluted net loss per
 share                               (0.09)     (0.05)     (0.11)     (0.16)

Weighted average shares
 outstanding                        16,732     16,672     16,732     16,580

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                                       September 30, 2012 September 30, 2011
                                       ------------------ ------------------
Cash and cash equivalents              $            4,152 $            4,257
Short-term investments                                  -                  -
Accounts receivable, net                            1,452              1,230
Inventories                                         1,890              2,897
Other current assets                                  196                229
Net property and equipment                            338                793
Other long-term assets                                119                498
                                       ------------------ ------------------
Total Assets                           $            8,147 $            9,904
                                       ================== ==================

Current liabilities                    $            6,354 $            6,518
Long-term liabilities                                 200                383
Stockholders' equity                                1,593              3,003

                                       ------------------ ------------------
Total Liabilities and Stockholders'
 Equity                                $            8,147 $            9,904
                                       ================== ==================

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