ClearOne Reports Second Quarter 2020 Financial Results
August 14 2020 - 9:10AM
ClearOne (NASDAQ: CLRO), a global provider of audio and visual
communication solutions, reported financial results for the three
and six month periods ended June 30, 2020.
"We posted solid double-digit sequential revenue
growth thanks to our innovative video products and BMA based
solutions. Sales performance of our ground-breaking new solutions
incorporating our Beamforming Microphone Array Ceiling Tile
was impressive given the challenges posed by the COVID-19
environment for global installed audio conferencing market," said
Zee Hakimoglu, CEO and Chair of ClearOne.
"The versatility of our solutions is highlighted
by the success of our video products which are tailor-made for
verticals like education and enterprises looking to professionally
equip their remote workforce. We believe our outlook for Q3 is very
positive as we have already recorded in excess of $5 million in
bookings that include shipped revenue and backlog, most of which we
expect to fulfill this quarter," Hakimoglu added.
"Our continuing investment in advanced
technologies has resulted in another significant patent
relating to beamforming microphone array technology awarded to us
by the US Patent and Trademark Office. This important patent
describes a ceiling tile microphone that includes beamforming,
acoustic echo cancellation, and adaptive acoustic processing that
automatically adjusts to a room configuration. There is no language
in the claims of the new patent limiting its scope to flush-mounted
ceiling tile beamforming microphone arrays, as opposed to non-flush
mounted ceiling tile beamforming microphone arrays,"
Hakimoglu concluded.
Financial Summary
The Company uses certain non-GAAP financial
measures and reconciles those to GAAP measures in the attached
tables.
- Q2 2020 revenue was
almost the same as revenue
in Q2 2019 at $6.4 million, compared to
$5.7 million in Q1 2020. The sequential increase was
mainly due to the increase in revenue from video products, personal
audio conferencing products and beamforming microphone array
products. Despite the sequential increase in Q2, the revenue from
our audio conferencing products and microphones are far below the
levels prior to infringement of our patents.
- GAAP gross profit
in Q2 2020 was $2.6 million compared to
$2.9 million in Q2 2019 and $2.8 million
in Q1 2020. GAAP gross profit margin was 41%
in Q2 2020, compared to 46%
in Q2 2019 and 49% in Q1 2020. Gross
profit margin decreased year over year mainly due to a shift in the
revenue mix, increased freight and tariff costs and increased
inventory obsolescence costs, partially offset by a decrease in
overhead costs. Sequential gross profit margin was negatively
impacted by a shift in our revenue mix in addition to factors like
higher tariff burden, higher freight costs and increased inventory
obsolescence costs.
- Operating expenses
in Q2 2020 were $4.5 million, compared to
$5.0 million in Q2 2019 and $4.6 million
in Q1 2020. Non-GAAP operating expenses
in Q2 2020 were $4.0 million, compared to
$4.7 million in Q2 2019 and $4.2 million
in Q1 2020. The majority of the sequential decline as
well as decrease in Q2 2020 operating expenses
over Q2 2019 is attributable to decreases in each of
trade-show related expenses, employee travel related expenses,
demonstration inventory expenses, and independent rep commissions
partially offset by an increase in employee benefits costs.
- GAAP net loss in Q2 2020 was
$1.9 million, or $0.12 per share, compared to net loss of $2.1
million, or $0.13 per share, in Q2 2019 and net loss of $1.8
million, or $0.11 per share, in Q1 2020. The decrease in net
loss in Q2 2020 compared to Q2 2019 was primarily
due to a decrease in operating costs partially offset by a
reduction in gross margin. The net loss in Q2 2020 does not
materially vary from the net loss in Q1 2020.
($ in 000, except per
share) |
|
Three months ended June 30, |
|
|
|
Six months ended June 30, |
|
|
|
2020 |
|
|
2019 |
|
Change |
|
|
|
2020 |
|
|
2019 |
|
Change |
|
GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
6,357 |
|
$ |
6,420 |
|
-1 |
% |
|
$ |
12,091 |
|
$ |
12,725 |
|
-5 |
% |
Gross profit |
|
2,618 |
|
|
2,939 |
|
-11 |
% |
|
|
5,456 |
|
|
5,643 |
|
-3 |
% |
Operating expenses |
|
4,457 |
|
|
5,043 |
|
-12 |
% |
|
|
9,046 |
|
|
10,138 |
|
-11 |
% |
Operating loss |
|
(1,839 |
) |
|
(2,104 |
) |
-13 |
% |
|
|
(3,590 |
) |
|
(4,495 |
) |
-20 |
% |
Net loss |
|
(1,937 |
) |
|
(2,098 |
) |
-8 |
% |
|
|
(3,784 |
) |
|
(4,447 |
) |
-15 |
% |
Diluted loss per share |
|
(0.12 |
) |
|
(0.13 |
) |
-8 |
% |
|
|
(0.23 |
) |
|
(0.27 |
) |
-15 |
% |
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross profit |
$ |
2,618 |
|
$ |
2,941 |
|
-11 |
% |
|
$ |
5,458 |
|
$ |
5,647 |
|
-3 |
% |
Non-GAAP operating
expenses |
|
4,034 |
|
|
4,654 |
|
-13 |
% |
|
|
8,220 |
|
|
9,313 |
|
-12 |
% |
Non-GAAP operating loss |
|
(1,416 |
) |
|
(1,713 |
) |
-17 |
% |
|
|
(2,762 |
) |
|
(3,666 |
) |
-25 |
% |
Non-GAAP net loss |
|
(1,514 |
) |
|
(1,707 |
) |
-11 |
% |
|
|
(2,956 |
) |
|
(3,618 |
) |
-18 |
% |
Non-GAAP Adjusted EBITDA |
|
(1,296 |
) |
|
(1,536 |
) |
-16 |
% |
|
|
(2,503 |
) |
|
(3,315 |
) |
-24 |
% |
Non-GAAP loss per share
(diluted) |
|
(0.09 |
) |
|
(0.10 |
) |
-10 |
% |
|
|
(0.18 |
) |
|
(0.22 |
) |
-18 |
% |
Balance Sheet Highlights
At June 30, 2020, cash, cash equivalents and
investments were $6.1 million, as compared with
$8.6 million at December 31, 2019. The Company carries a debt
of $3.8 million on account of senior convertible notes issued in
December 2019 and a Paycheck Protection Program (PPP) loan in April
2020. The Company intends to use the entire PPP loan amount
for qualifying expenses and to apply for forgiveness of the PPP
loan.
About ClearOne
ClearOne is a global company that designs,
develops and sells conferencing, collaboration, and network
streaming solutions for voice and visual communications. The
performance and simplicity of its advanced comprehensive solutions
offer unprecedented levels of functionality, reliability and
scalability. Visit ClearOne at www.clearone.com.
Non-GAAP Financial Measures
To supplement our consolidated financial
statements presented on a GAAP basis, ClearOne uses
non-GAAP measures of gross profit, operating income (loss), net
income (loss), adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA) and net income (loss) per
share, which are adjusted to exclude certain costs, expenses, gains
and losses we believe appropriate to enhance an overall
understanding of our past financial performance from period to
period and also our prospects for the future. These adjustments to
our current period GAAP results are made with the intent of
providing both management and investors a more complete
understanding of ClearOne’s underlying operational
results and trends and our marketplace performance. The non-GAAP
results are an indication of our baseline performance before
certain gains, losses, or other charges that are considered by
management to be outside of our core operating results. In
addition, these adjusted non-GAAP results are among the primary
indicators management uses as a basis for our planning and
forecasting of future periods. The presentation of this additional
non-GAAP financial information is not meant to be considered in
isolation or as a substitute for gross profit, operating income
(loss), net income (loss), income (loss) per share 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 financial measures to the most directly
comparable GAAP financial measures is included with this release
below.
Forward Looking Statements
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 and any statements of the plans and
objectives of management for future operations and forecasts of
future growth and value, 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. The information in this press release
should be read in conjunction with, and is modified in its entirety
by, the Annual Report on Form 10-K (the “10-K”) filed by the
Company for the same period with the Securities and Exchange
Commission (the “SEC”) and all of the Company’s other public
filings with the SEC (the “Public Filings”).
In particular, the financial information
contained herein is subject to and qualified by reference to the
financial statements contained in the 10-Q, including the footnotes
thereto, as well as the Company’s annual report on Form 10-K for
the year ended December 31, 2019 (the “10-K”), the footnotes
thereto and the limitations set forth therein. Investors may not
rely on the press release without reference to the 10-Q, the 10-K
and the Public Filings.
Contact:Investor
Relations801-975-7200investor_relations@clearone.comhttp://investors.clearone.com
CLEARONE,
INC.CONSOLIDATED BALANCE SHEETS(Dollars
in thousands, except par value)
|
|
June 30, 2020 |
|
|
December 31, 2019 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,106 |
|
|
$ |
4,064 |
|
Marketable securities |
|
|
2,841 |
|
|
|
3,026 |
|
Receivables, net of allowance
for doubtful accounts of $455 and $424, respectively |
|
|
5,792 |
|
|
|
5,468 |
|
Inventories, net |
|
|
8,224 |
|
|
|
11,441 |
|
Prepaid expenses and other
assets |
|
|
957 |
|
|
|
1,184 |
|
Total current assets |
|
|
19,920 |
|
|
|
25,183 |
|
Long-term marketable
securities |
|
|
1,130 |
|
|
|
1,517 |
|
Long-term inventories,
net |
|
|
6,510 |
|
|
|
6,284 |
|
Property and equipment,
net |
|
|
1,050 |
|
|
|
1,044 |
|
Operating lease - right of use
assets, net |
|
|
2,227 |
|
|
|
2,459 |
|
Intangibles, net |
|
|
17,141 |
|
|
|
14,009 |
|
Other assets |
|
|
4,593 |
|
|
|
4,614 |
|
Total assets |
|
$ |
52,571 |
|
|
$ |
55,110 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
3,172 |
|
|
$ |
2,871 |
|
Accrued liabilities |
|
|
2,782 |
|
|
|
3,205 |
|
Deferred product revenue |
|
|
201 |
|
|
|
173 |
|
Total current liabilities |
|
|
6,155 |
|
|
|
6,249 |
|
Senior convertible notes |
|
|
3,819 |
|
|
|
2,222 |
|
Operating lease liability, net
of current |
|
|
1,767 |
|
|
|
2,021 |
|
Other long-term
liabilities |
|
|
111 |
|
|
|
140 |
|
Total liabilities |
|
|
11,852 |
|
|
|
10,632 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
Common stock, par value
$0.001, 50,000,000 shares authorized, 16,655,207 and 16,650,725
shares issued and outstanding |
|
|
17 |
|
|
|
17 |
|
Additional paid-in
capital |
|
|
58,580 |
|
|
|
58,520 |
|
Accumulated other
comprehensive loss |
|
|
(211 |
) |
|
|
(176 |
) |
Accumulated deficit |
|
|
(17,667 |
) |
|
|
(13,883 |
) |
Total shareholders'
equity |
|
|
40,719 |
|
|
|
44,478 |
|
Total liabilities and
shareholders' equity |
|
$ |
52,571 |
|
|
$ |
55,110 |
|
CLEARONE,
INC.CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS(Dollars in thousands, except per share
values)
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
|
$ |
6,357 |
|
|
$ |
6,420 |
|
|
$ |
12,091 |
|
|
$ |
12,725 |
|
Cost of goods sold |
|
|
3,739 |
|
|
|
3,481 |
|
|
|
6,635 |
|
|
|
7,082 |
|
Gross profit |
|
|
2,618 |
|
|
|
2,939 |
|
|
|
5,456 |
|
|
|
5,643 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
1,457 |
|
|
|
2,261 |
|
|
|
3,196 |
|
|
|
4,214 |
|
Research and product
development |
|
|
1,474 |
|
|
|
1,307 |
|
|
|
2,818 |
|
|
|
2,894 |
|
General and
administrative |
|
|
1,526 |
|
|
|
1,475 |
|
|
|
3,032 |
|
|
|
3,030 |
|
Total operating expenses |
|
|
4,457 |
|
|
|
5,043 |
|
|
|
9,046 |
|
|
|
10,138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(1,839 |
) |
|
|
(2,104 |
) |
|
|
(3,590 |
) |
|
|
(4,495 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(109 |
) |
|
|
— |
|
|
|
(217 |
) |
|
|
— |
|
Other income, net |
|
|
16 |
|
|
|
51 |
|
|
|
51 |
|
|
|
93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
(1,932 |
) |
|
|
(2,053 |
) |
|
|
(3,756 |
) |
|
|
(4,402 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
|
5 |
|
|
|
45 |
|
|
|
28 |
|
|
|
45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(1,937 |
) |
|
$ |
(2,098 |
) |
|
$ |
(3,784 |
) |
|
$ |
(4,447 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
outstanding |
|
|
16,650,774 |
|
|
|
16,630,770 |
|
|
|
16,650,750 |
|
|
|
16,630,684 |
|
Diluted weighted average
shares outstanding |
|
|
16,650,774 |
|
|
|
16,630,770 |
|
|
|
16,650,750 |
|
|
|
16,630,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share |
|
$ |
(0.12 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.27 |
) |
Diluted loss per share |
|
$ |
(0.12 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.27 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(1,937 |
) |
|
|
(2,098 |
) |
|
|
(3,784 |
) |
|
|
(4,447 |
) |
Unrealized gain on available-for-sale securities, net of tax |
|
|
30 |
|
|
|
84 |
|
|
|
7 |
|
|
|
154 |
|
Change in foreign currency translation adjustment |
|
|
(8 |
) |
|
|
9 |
|
|
|
(42 |
) |
|
|
(17 |
) |
Comprehensive loss |
|
|
(1,915 |
) |
|
|
(2,005 |
) |
|
|
(3,819 |
) |
|
|
(4,310 |
) |
CLEARONE, INC.UNAUDITED
RECONCILIATION OF GAAP MEASURES TO NON-GAAP
MEASURES(Dollars in thousands, except per share
values)
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
GAAP gross profit |
|
$ |
2,618 |
|
|
$ |
2,939 |
|
|
$ |
5,456 |
|
|
$ |
5,643 |
|
Stock-based compensation |
|
|
— |
|
|
|
2 |
|
|
|
2 |
|
|
|
4 |
|
Non-GAAP gross
profit |
|
$ |
2,618 |
|
|
$ |
2,941 |
|
|
$ |
5,458 |
|
|
$ |
5,647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
loss |
|
$ |
(1,839 |
) |
|
$ |
(2,104 |
) |
|
$ |
(3,590 |
) |
|
$ |
(4,495 |
) |
Stock-based compensation |
|
|
17 |
|
|
|
55 |
|
|
|
54 |
|
|
|
129 |
|
Amortization of
intangibles |
|
|
406 |
|
|
|
336 |
|
|
|
774 |
|
|
|
700 |
|
Non-GAAP operating
loss |
|
$ |
(1,416 |
) |
|
$ |
(1,713 |
) |
|
$ |
(2,762 |
) |
|
$ |
(3,666 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss |
|
$ |
(1,937 |
) |
|
$ |
(2,098 |
) |
|
$ |
(3,784 |
) |
|
$ |
(4,447 |
) |
Stock-based compensation |
|
|
17 |
|
|
|
55 |
|
|
|
54 |
|
|
|
129 |
|
Amortization of
intangibles |
|
|
406 |
|
|
|
336 |
|
|
|
774 |
|
|
|
700 |
|
Non-GAAP net
loss |
|
$ |
(1,514 |
) |
|
$ |
(1,707 |
) |
|
$ |
(2,956 |
) |
|
$ |
(3,618 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss |
|
$ |
(1,937 |
) |
|
$ |
(2,098 |
) |
|
$ |
(3,784 |
) |
|
$ |
(4,447 |
) |
Number of shares used in
computing GAAP loss per share (diluted) |
|
|
16,650,774 |
|
|
|
16,630,770 |
|
|
|
16,650,750 |
|
|
|
16,630,684 |
|
GAAP loss per share
(diluted) |
|
$ |
(0.12 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.27 |
) |
Non-GAAP net loss |
|
$ |
(1,514 |
) |
|
$ |
(1,707 |
) |
|
$ |
(2,956 |
) |
|
$ |
(3,618 |
) |
Number of shares used in
computing Non-GAAP loss per share (diluted) |
|
|
16,650,774 |
|
|
|
16,630,770 |
|
|
|
16,650,750 |
|
|
|
16,630,684 |
|
Non-GAAP loss per
share (diluted) |
|
$ |
(0.09 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.22 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss |
|
$ |
(1,937 |
) |
|
$ |
(2,098 |
) |
|
$ |
(3,784 |
) |
|
$ |
(4,447 |
) |
Stock-based compensation |
|
|
17 |
|
|
|
55 |
|
|
|
54 |
|
|
|
129 |
|
Depreciation |
|
|
104 |
|
|
|
126 |
|
|
|
208 |
|
|
|
258 |
|
Amortization of
intangibles |
|
|
406 |
|
|
|
336 |
|
|
|
774 |
|
|
|
700 |
|
Interest expense |
|
|
109 |
|
|
|
— |
|
|
|
217 |
|
|
|
— |
|
Provision for (benefit from)
income taxes |
|
|
5 |
|
|
|
45 |
|
|
|
28 |
|
|
|
45 |
|
Non-GAAP Adjusted
EBITDA |
|
$ |
(1,296 |
) |
|
$ |
(1,536 |
) |
|
$ |
(2,503 |
) |
|
$ |
(3,315 |
) |
ClearOne (NASDAQ:CLRO)
Historical Stock Chart
From Mar 2024 to Apr 2024
ClearOne (NASDAQ:CLRO)
Historical Stock Chart
From Apr 2023 to Apr 2024