ClearOne Reports 2013 Second Quarter Financial Results

            ClearOne Reports 2013 Second Quarter Financial Results

Company Reports Fourth Consecutive Quarter of Year-over-Year Revenue Growth

PR Newswire

SALT LAKE CITY, July 31, 2013

SALT LAKE CITY, July 31, 2013 /PRNewswire/ --ClearOne (NASDAQ: CLRO) today
reported its financial results for the three and six months ended June 30,
2013.

For the 2013 second quarter, revenue was $11.70 million, compared with $11.66
million for the second quarter of 2012. Gross profit was $6.9 million, or 59%
of revenue, compared with $7.1 million, or 61% of revenue, for the second
quarter of 2012. Non-GAAP operating income increased by 7% to $1.8 million
from $1.7 million for the 2012 second quarter. Non-GAAP net income grew 40% to
$1.2 million, or $0.13 per diluted share, from $885,000, or $0.10 per diluted
share, last year. Non-GAAP Adjusted EBITDA for the 2013 second quarter
increased 9% to $2.0 million, or $0.22 per diluted share, from $1.9 million,
or $0.20 per diluted share, a year ago.

For the first half of 2013, revenue rose to $23.0 million from $21.8 million
for the same period in 2012. Gross profit was $13.9 million, or 60% of
revenue, compared with $13.2 million, or 61% of revenue, for the first half of
2012. Non-GAAP operating income for the first half of 2013 increased by 22%
to $3.2 million from $2.6 million for the second half of 2012. Non-GAAP net
income for the 2013 year-to-date period grew 46% to $2.2 million, or $0.23 per
diluted share, from $1.5 million, or $0.16 per diluted share, last year.
Non-GAAP Adjusted EBITDA for the first half of 2013 increased 18% to $3.6
million, or $0.38 per diluted share, from $3.1 million, or $0.33 per diluted
share, for the corresponding period a year ago.

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

At June 30, 2013, the company had cash, cash equivalents, and investments of
$41.6 million. The company continues to selectively evaluate modest
acquisition and organic growth opportunities to complement its product
portfolio.

"At the halfway mark for fiscal 2013, we are optimistic that our positive
momentum will continue," said Zee Hakimoglu, President, Chief Executive
Officer and Chairman of ClearOne. "Although the company's performance in the
Asia and EMEA markets continues to reflect a slowdown in growth and lingering
macroeconomic uncertainty, we remain confident that the best is yet to come,
as the market continues to recognize the value of the lower-cost
software-based solutions that define the future in video and are addressed by
the strong ClearOne offering."

Recent highlights

  oClearOne made progress on an important strategic goal in the quarter by
    successfully signing major distribution partners in the EMEA region and
    the U.S. These new distribution partners expand the reach of ClearOne's
    unified communications and video products.
  oThe company continued to develop its unified media engine for its
    next-generation video products. This advanced technology will enhance the
    performance of the COLLABORATE® video conferencing and VIEW® multimedia
    streaming products, as well as contribute to stronger gross margins when
    the next-generation products launch.
  oClearOne took another leap ahead with the Pro Audio industry's most
    powerful innovation, the Beamforming Microphone Array, by adding expanded
    support for tabletop and wall applications.

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

                                               June 30, 2013 December 31, 2012
ASSETS
Current assets:
Cash and cash equivalents                      $    32,386   $      55,509
Marketable securities                          337           -
Receivables, net of allowance for doubtful     8,439         8,388
accounts of $55 and $60, respectively
Inventories, net                               12,304        10,873
Deferred income taxes                          3,148         3,148
Prepaid expenses and other assets              1,785         1,369
Total current assets                           58,399        79,287
Long-term inventories, net                     1,609         1,955
Property and equipment, net                    1,783         1,708
Long-term marketable securities                8,873         -
Intangibles, net                               3,996         4,258
Goodwill                                       3,472         3,472
Deferred income taxes                          1,195         1,195
Other assets                                   61            64
Total assets                                   $    79,388   $      91,939
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable                               $3,031        $2,302
Accrued liabilities                            2,009         2,143
Income taxes payable                           -             14,782
Deferred product revenue                       4,300         3,593
Total current liabilities                      9,340         22,820
Deferred rent                                  365           422
Other long-term liabilities                    2,028         2,029
Total liabilities                              11,733        25,271
Shareholders' equity:
Common stock, par value $0.001, 50,000,000
shares authorized, 9,080,060 and 9,163,462     9             9
shares issued and outstanding, respectively
Additional paid-in capital                     39,729        40,430
Accumulated other comprehensive loss           (87)          -
Retained earnings                              28,004        26,229
Total shareholders' equity                     67,655        66,668
Total liabilities and shareholders' equity     $    79,388   $      91,939

CLEARONE, INC.
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in thousands, except per share value)
                               Quarter ended June 30,  6 Months ended June 30,
                               2013        2012        2013        2012
Revenue                        $   11,703  $   11,655  $   22,996  $   21,809
Cost of goods sold             4,839       4,562       9,133       8,608
Gross profit                   6,864       7,093       13,863      13,201
Operating expenses:
Sales and marketing            2,088       2,254       4,356       4,388
Research and product           1,843       2,029       3,709       4,037
development
General and administrative     1,437       1,611       3,234       3,091
Proceeds from litigation, net  -           -           -           (250)
Total operating expenses       5,368       5,894       11,299      11,266
Operating income               1,496       1,199       2,564       1,935
Other income (expense), net    47          (5)         33          11
Income before income taxes     1,543       1,194       2,597       1,946
Provision for income taxes     498         544         822         818
Net income                     $   1,045   $   650     $   1,775   $   1,128
Basic earnings per common      $   0.11    $   0.07    $   0.19    $   0.12
share
Diluted earnings per common    $   0.11    $   0.07    $   0.19    $   0.12
share
Basic weighted average shares  9,093,461   9,107,420   9,122,996   9,102,786
outstanding
Diluted weighted average       9,459,495   9,226,426   9,499,452   9,224,727
shares outstanding
Net Income                     1,045       650         1,775       1,128
Comprehensive income:
Unrealized loss on available
for sale securities, net of    (87)        -           (87)        -
tax
Comprehensive income           $   958     $   650     $   1,688   $   1,128

CLEARONE, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
(Dollars in thousands, except per share value)
                Quarter ended June 30, 2013      Quarter ended June 30, 2012
                GAAP      Adjustments Non-GAAP   GAAP      Adjustments Non-GAAP
Revenue         $        $       $        $        $       $ 
                11,703    -          11,703    11,655    -          11,655
Cost of goods   4,839     (2)         4,837      4,562     -           4,562
sold
Gross profit    6,864     2           6,866      7,093     -           7,093
Operating
expenses:
Sales and       2,088     (19)        2,069      2,254     (17)        2,237
marketing
Research and
product         1,843     (13)        1,830      2,029     (10)        2,019
development
General and     1,437     (256)       1,181      1,611     (439)       1,172
administrative
Proceeds from   -                     -          -         -           -
litigation
Total operating 5,368     (288)       5,080      5,894     (466)       5,428
expenses
Operating       1,496     290         1,786      1,199     466         1,665
income
Other income    47        -           47         (5)       -           (5)
(expense), net
Income before   1,543     290         1,833      1,194     466         1,660
income taxes
Provision for   498       95          593        544       231         775
income taxes
Net income      $      $   195   $      $     $   235   $    
                1,045                 1,240     650                   885
Basic earnings  $                  $      $                 $    
per common      0.11                   0.14    0.07                  0.10
share
Diluted         $                  $      $                 $    
earnings per    0.11                   0.13    0.07                  0.10
common share
Basic weighted
average shares  9,093,461             9,093,461  9,107,420             9,107,420
outstanding
Diluted
weighted        9,459,495             9,459,495  9,226,426             9,226,426
average shares
outstanding
The adjustments
consist of the
following:
Share-based               $    67                       $    60
compensation
Amortization of
purchased                 118                              129
intangibles
Legal expenses
for litigation
relating to
indemnification
of former                 95                               237
officers,
intellectual
property claims
and our claim
for damages
Acquisition
related                   10                               40
expenses
Total of
adjustments               290                              466
before taxes
Income taxes
affected by the           95                               231
above
adjustments
Total                     $   195                       $   235
adjustments

CLEARONE, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
(Dollars in thousands, except per share value)
                6 months ended June 30, 2013     6 months ended June 30, 2012
                GAAP      Adjustments Non-GAAP   GAAP      Adjustments Non-GAAP
Revenue         $        $      $        $        $      $  
                22,996    -           22,996     21,809    -           21,809
Cost of goods   9,133     (4)         9,129      8,608     (1)         8,607
sold
Gross profit    13,863    4           13,867     13,201    1           13,202
Operating
expenses:
Sales and       4,356     (34)        4,322      4,388     (30)        4,358
marketing
Research and
product         3,709     (24)        3,685      4,037     (17)        4,020
development
General and     3,234     (567)       2,667      3,091     (885)       2,206
administrative
Proceeds from   -         -           -          (250)     250         -
litigation
Total operating 11,299    (625)       10,674     11,266    (682)       10,584
expenses
Operating       2,564     629         3,193      1,935     683         2,618
income
Other income    33        -           33         11        -           11
(expense), net
Income before   2,597     629         3,226      1,946     683         2,629
income taxes
Provision for   822       199         1,021      818       300         1,118
income taxes
Net income      $      $    430 $      $      $    383 $    
                1,775                 2,205      1,128                 1,511
Basic earnings  $                 $      $                 $    
per common      0.19                   0.24     0.12                   0.17
share
Diluted         $                 $      $                 $    
earnings per    0.19                   0.23     0.12                   0.16
common share
Basic weighted
average shares  9,122,996             9,122,996  9,102,786             9,102,786
outstanding
Diluted
weighted        9,499,452             9,499,452  9,224,727             9,224,727
average shares
outstanding
The adjustments
consist of the
following:
Share-based               $   126                        $   111
compensation
Amortization of
purchased                 261                              231
intangibles
Legal expenses
for litigation
relating to
indemnification
of former
officers,
intellectual              184                              364
property claims
and our claim
for damages
Amortization of
purchased
intangibles
Acquisition
related                   58                               227
expenses
Proceeds from
litigation, net
of legal
expenses and              -                                (250)
special bonus
to key
litigation
participants
Total of
adjustments               629                              683
before taxes
Income taxes
affected by the           199                              300
above
adjustments
Total                     $    430                      $    383
adjustments

CLEARONE, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED EBITDA
(Dollars in thousands, except per share value)
                              Quarter ended June 30,   6 Months ended June 30,
                              2013        2012         2013        2012
GAAP net income               $       $       $        $  
                              1,045      650          1,775       1,128
Adjustments:
Provision for income taxes    498         544          822         818
Depreciation and              323         342          646         654
amortization
Non-GAAP EBITDA               1,866       1,536        3,243       2,600
Proceeds from litigation,
net of legal expenses and     -           -            -           (250)
special bonus to officers
Share-based compensation      67          60           126         111
Legal expenses for
litigation relating to
indemnification of former     95          237          184         364
officers, intellectual
property claims and our
claim for damages
Acquisition related expenses  10          40           58          227
Non-GAAP Adjusted EBITDA      $       $         $        $  
                              2,038      1,873       3,611       3,052
Basic weighted average        9,093,461   9,107,420    9,122,996   9,102,786
shares outstanding
Diluted weighted average      9,459,495   9,226,426    9,499,452   9,224,727
shares outstanding
Basic Adjusted EBITDA per     $      $        $       $   
common share                  0.22       0.21        0.40        0.34
Diluted Adjusted EBITDA per   $      $        $       $   
common share                  0.22       0.20        0.38        0.33

SOURCE ClearOne

Website: http://www.clearone.com
 
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