ClearOne Reports 2013 First Quarter Financial Results

            ClearOne Reports 2013 First Quarter Financial Results

Company Reports Strongest Ever First-Quarter Revenues that Demonstrate
Traction from Newly Acquired Businesses

PR Newswire

SALT LAKE CITY, May 1, 2013

SALT LAKE CITY, May 1, 2013 /PRNewswire/ --ClearOne (NASDAQ: CLRO) today
reported its financial results for the first quarter ended March 31, 2013.

For the 2013 first quarter, revenue for the first time in the first quarter
surpassed $11 million, totaling $11.3 million compared with $10.2 million for
the first quarter of 2012, an increase of 11%. Gross profit was $7.0 million,
or 62% of revenue, compared with $6.1 million, or 60% of revenue, for the
first quarter of 2012. Non-GAAP operating income increased by 48% to $1.4
million compared with $953 thousand during the first quarter of 2012. Non-GAAP
net income grew 54% to $966 thousand, or $0.10 per diluted share, from $626
thousand, or $0.07 per diluted share. Non-GAAP Adjusted EBITDA increased 34%
to $1.6 million, or $0.17 per diluted share compared with $1.2 million, or
$0.13 per diluted share in the first quarter of 2012.

The reconciliation between GAAP and Non-GAAP measures is available in the
tables attached to this release.

At March 31, 2013, the company had cash and cash equivalents of $42.6 million,
down from $55.5 million on December 31, 2012. The cash position at the end of
the quarter reflects the final net amount retained from the December 2012 $45
million favorable settlement relating to auction-rate securities, after paying
$13.8 million of associated income taxes and $6.75 million in attorneys' fees.

"We are pleased that the results, which include record revenues for the
seasonally slower first quarter, reflect meaningful contributions from our
recent strategic acquisitions of video technology. Newly introduced
professional audio products also significantly contributed to this record
revenue," said Zee Hakimoglu, President, Chief Executive Officer and Chairman
of ClearOne. "Share of video products in our revenue mix has grown
significantly, reflecting its increasing importance to our future growth. We
continue to evaluate various measures to increase shareholder value, including
internal investments in technology, operations, sales and marketing, modest
strategic acquisitions, and other alternatives to benefit the company and all
shareholders."

The first quarter results do not consider the expected receipt of
approximately $500,000 in attorneys' fees previously paid to indemnify the
company's former CFO, as the Utah Supreme Court's favorable ruling was
received in April 2013, after the conclusion of the company's first quarter.

Recent highlights

  oFebruary 2013. The company introduced its new line of software-based video
    conferencing solutions to its established Professional AV channel
    distributors, which is expected to generate additional revenue in the
    remainder of 2013.
  oFebruary 2013. The company announced the promotion of David Traeger to
    Vice President, Professional Audio Visual Sales throughout North America
    and Latin America. Traeger will be responsible for developing and growing
    sales of ClearOne's full line of products, including the COLLABORATE^®
    suite of software-based video conferencing solutions, in the Professional
    AV channel.
  oMarch 2013. The company announced the shipment of its Beamforming
    Microphone Array to complement its professionally installed audio
    conferencing product lines. The Beamforming Microphone Array is the
    industry's first professional-grade microphone array with patent-pending
    audio beamforming with adaptive steering and next generation AEC
    technology.This unique product differentiates ClearOne in the market and
    is expected to drive higher adoption of ClearOne's CONVERGE^® line of
    professional audio products.
  oMarch 2013. The company announced the shipment of its new WS800 Digital
    Wireless Microphone System to complement its professionally installed
    audio conferencing product lines. The microphone system uses
    radio-frequency digital wireless signal transmission technology with
    highly secure encryption and is optimized to work with CONVERGE^® Pro and
    INTERACT^® Pro products. The introduction of this wireless microphone
    system provides partners with a more complete ClearOne branded solution
    set and further extends ClearOne's reach in the large Pro AV microphone
    market.

Non-GAAP Financial Measures
ClearOne provides non-GAAP financial information in the form of Non-GAAP net
income, Adjusted EBITDA and corresponding earnings per share to investors to
supplement GAAP financial information. ClearOne believes that excluding
certain items from GAAP results allows ClearOne's management to better
understand ClearOne's consolidated financial performance from period to period
as management does not believe that the excluded items are reflective of
underlying operating performance. Non-GAAP net income, Adjusted EBITDA and
corresponding earnings per share excludes certain costs and expenses, the
details of which are provided in the tables below containing the
reconciliation between GAAP and Non-GAAP financial measures. The exclusion of
these items in the non-GAAP presentation should not be interpreted as implying
that these items are non-recurring, infrequent, or unusual. ClearOne believes
non-GAAP financial measures will provide investors with useful information to
help them evaluate ClearOne's operating results and projections. This
non-GAAP financial information is not meant to be considered in isolation or
as a substitute for operating income, net income or other financial measures
prepared in accordance with GAAP. There are limitations to the use of
non-GAAP financial measures. Other companies, including companies in
ClearOne's industry, may calculate non-GAAP financial measures differently
than ClearOne does, limiting the usefulness of those measures for comparative
purposes. A detailed reconciliation of Non-GAAP net income to GAAP net income
is included with this news release.

About ClearOne
ClearOne is a global company that designs, develops and sells conferencing,
collaboration, streaming and digital signage solutions for audio and visual
communications. The performance and simplicity of its advanced comprehensive
solutions offer unprecedented levels of functionality, scalability and
reliability. More information about the company can be found at
www.clearone.com.

This release contains "forward-looking" statements that are based on present
circumstances and on ClearOne's predictions with respect to events that have
not occurred, that may not occur, or that may occur with different
consequences and timing than those now assumed or anticipated. Such
forward-looking statements, including acquisitions or investments the company
may make to fuel growth, the purchase of common stock under the company's
stock repurchase program and any statements of the plans and objectives of
management for future operations, are not guarantees of future performance or
results and involve risks and uncertainties that could cause actual events or
results to differ materially from the events or results described in the
forward-looking statements. Such forward-looking statements are made only as
of the date of this release and ClearOne assumes no obligation to update
forward-looking statements to reflect subsequent events or circumstances.
Readers should not place undue reliance on these forward-looking statements.

http://investors.clearone.com

Contact:
Brent Johnson
Investor Relations
801-303-3577
brent.johnson@clearone.com





CLEARONE, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except par value)


                                                  As of          As of

                                                  Mar. 31, 2013  Dec. 31, 2012
ASSETS
Current assets:
Cash and cash equivalents                         $   42,580     $   55,509
Receivables, net of allowance for doubtful        7,927          8,388
accounts of $60 and $60, respectively
Inventories, net                                  11,604         10,873
Deferred income taxes                             3,148          3,148
Prepaid expenses and other assets                 1,793          1,369
Total current assets                              67,052         79,287
Long-term inventories, net                        1,813          1,955
Property and equipment, net                       1,790          1,708
Intangibles, net                                  4,115          4,258
Goodwill                                          3,472          3,472
Deferred income taxes                             1,195          1,195
Other assets                                      62             64
Total assets                                      $   79,499     $   91,939
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable                                  $   3,912      $   2,302
Accrued liabilities                               2,005          2,143
Income taxes payable                              —              14,782
Deferred product revenue                          4,192          3,593
Total current liabilities                         10,109         22,820
Deferred rent                                     401            422
Other long-term liabilities                       2,029          2,029
Total liabilities                                 12,539         25,271
Shareholders' equity:
Common stock, par value $0.001, 50,000,000 shares
authorized, 9,105,029 and 9,163,462 shares issued 9              9
and outstanding
Additional paid-in capital                        39,991         40,430
Retained earnings                                 26,960         26,229
Total shareholders' equity                        66,960         66,668
Total liabilities and shareholders' equity        $   79,499     $   91,939





CLEARONE, INC.

UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS

(Dollars in thousands, except per share value)


                                            Three months ended Mar. 31,
                                            2013            2012
Revenue                                     $   11,293      $   10,154
Cost of goods sold                          4,294           4,046
Gross profit                                6,999           6,108
Operating expenses:
Sales and marketing                         2,267           2,134
Research and product development            1,866           2,008
General and administrative                  1,797           1,480
Proceeds from litigation, net               —               (250)
Total operating expenses                    5,930           5,372
Operating income                            1,069           736
Other income (expense), net                 (14)            16
Income before income taxes                  1,055           752
Provision for income taxes                  324             274
Net income                                  $   731         $   478
Basic earnings per common share             $   0.08        $   0.05
Diluted earnings per common share           $   0.08        $   0.05
Basic weighted average shares outstanding   9,152,859       9,098,152
Diluted weighted average shares outstanding 9,394,181       9,246,310





CLEARONE, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP NET INCOME

(Dollars in thousands, except per share value)


                 Three months ended Mar. 31, 2013     Three months ended Mar. 31, 2012
                 GAAP        Adjustments  Non-GAAP    GAAP        Adjustments  Non-GAAP
Revenue          $  11,293   $   —        $  11,293   $  10,154   $   —        $  10,154
Cost of goods    4,294       (2)          4,292       4,046       (1)          4,045
sold
Gross profit     6,999       2            7,001       6,108       1            6,109
Operating
expenses:
Sales and        2,267       (15)         2,252       2,134       (13)         2,121
marketing
Research and
product          1,866       (11)         1,855       2,008       (7)          2,001
development
General and      1,797       (311)        1,486       1,480       (446)        1,034
administrative
Proceeds from    —           —            —           (250)       250          —
litigation
Total operating  5,930       (337)        5,593       5,372       (216)        5,156
expenses
Operating        1,069       339          1,408       736         217          953
income
Other income     (14)        —            (14)        16          —            16
(expense), net
Income before    1,055       339          1,394       752         217          969
income taxes
Provision for    324         104          428         274         69           343
income taxes
Net income       $  731      $   235      $  966      $  478      $   148      $  626
Basic earnings
per common       $  0.08                  $  0.11     $  0.05                  $  0.07
share
Diluted
earnings per     $  0.08                  $  0.10     $  0.05                  $  0.07
common share
Basic weighted
average shares   9,152,859                9,152,859   9,098,152                9,098,152
outstanding
Diluted
weighted         9,394,181                9,394,181   9,246,310                9,246,310
average shares
outstanding
The adjustments
consist of the
following:
Share-based                  $   59                               $   51
compensation
Amortization of
purchased                    143                                  102
intangibles
Legal expenses
for litigation
relating to
indemnification
of former
officers, theft              89                                   127
of our
intellectual
property claims
and our claim
for damages
Acquisition
related                      48                                   187
expenses
Proceeds from
litigation, net
of legal
expenses and                 —                                    (250)
special bonus
to key
litigation
participants
Total of
adjustments                  339                                  217
before taxes
Income taxes
affected by the              104                                  69
above
adjustments
Total                        $   235                              $   148
adjustments





CLEARONE, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED EBITDA

(Dollars in thousands, except per share value)


                                                   Three months ended Mar. 31,
                                                   2013            2012
GAAP net income                                    $   731         $   478
Adjustments:
Provision for income taxes                         324             274
Depreciation and amortization                      323             312
Non-GAAP EBITDA                                    1,378           1,064
Proceeds from litigation, net of legal expenses    —               (250)
and special bonus to officers
Share-based compensation                           59              51
Legal expenses for litigation relating to
indemnification of former officers, theft of our   89              127
intellectual property claims and our claim for
damages
Acquisition related expenses                       48              187
Non-GAAP Adjusted EBITDA                           $   1,574       $   1,179
Basic weighted average shares outstanding          9,152,859       9,098,152
Diluted weighted average shares outstanding        9,394,181       9,246,310
Basic Adjusted EBITDA per common share             $   0.17        $   0.13
Diluted Adjusted EBITDA per common share           $   0.17        $   0.13

SOURCE ClearOne

Website: http://www.clearone.com
 
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