- Overall Q2 revenue declines 5% year-over-year
- Core audio conferencing solutions post impressive revenue
growth
- Gross Margin increases marginally over Q1.
- Non-GAAP Operating expenses decrease 14%
year-over-year
ClearOne Inc. (NASDAQ: CLRO), a global provider of audio and
visual communication solutions, reported financial results for the
three and six months ended June 30, 2022.
"Our core audio conferencing products which include mixers and
BMA Ceiling Tile-based solutions posted impressive year over year
revenue growth in Q2. Our revenue performance was constrained due
to our inability to fully meet the demands of our channel as we
continue to fight the raw material shortages caused by the
unprecedented global supply chain crisis that hasn't spared our
industry," said Derek Graham, ClearOne's Interim CEO.
"We are fully prepared for the current challenges faced by
ClearOne and will prioritize returning ClearOne back to
profitability, energizing our employees to tap into their full
potential, and re-establishing ClearOne as a premium brand in our
industry and channels," Graham added.
Recent Highlights
- On May 25, 2022, ClearOne Board of Directors announced Derek
Graham as the Interim CEO, replacing Zee Hakimoglu.
- On May 27, 2022, the U.S. District Court of the District of
Delaware dismissed Shure’s tort claims with prejudice. Shure
dropped these claims on the eve of the trial that happened in
November 2021, in which ClearOne prevailed over Shure's
infringement claims. ClearOne argued that the dismissal of Shure's
tort claims should be with prejudice but Shure wanted the dismissal
to be without prejudice – in other words, Shure wanted to preserve
the ability to re-assert the claims later. The court ruled in
ClearOne's favor. Our motion seeking fees is still pending with the
Court.
Financial Summary
The Company uses certain non-GAAP financial measures and
reconciles those to GAAP measures in the attached tables.
- Revenue in 2022-Q2 was $7.4 million, compared to $7.7 million
in 2021-Q2 and $7.5 million in 2022-Q1. The decrease in
year-over-year revenue was primarily due to a 31% decline in video
products and a 3% decline in microphones, which were partially
offset by a 6% increase in audio conferencing. The increase in
revenue from core audio conferencing products continued to be
driven by solutions incorporating our BMA-CT and BMA 360
beamforming microphone array ceiling tiles and professional audio
mixers. Despite this year-over-year revenue growth in core audio
conferencing products, revenue from our audio conferencing products
and microphones remain far below levels achieved prior to
infringement of our strategic patents.
- GAAP gross profit in 2022-Q2 was $2.8 million compared to $3.4
million in 2021-Q2 and $2.8 million in 2022-Q1. GAAP gross profit
margin was 38.1% in 2022-Q2, compared to 44.3% in 2021-Q2 and 37.3%
in 2022-Q1. The gross profit margin was negatively impacted due to
increase in material costs due to continuing supply chain
constraints, which were partially offset by reduced freight and
tariff costs and a decrease in inventory obsolescence costs in
2022-Q2 Operating expenses in 2022-Q2 were $4.5 million, compared
to $4.9 million in 2021-Q2 and $4.7 million in 2022-Q1. Non-GAAP
operating expenses in 2022-Q2 were $3.7 million, compared to $4.3
million in 2021-Q2 and $4.0 million in 2022-Q1. The year over year
decrease in Non-GAAP operating expenses was mainly due to reduction
in employee related expenses and consultant expenses caused by a
decrease in headcount.
- GAAP net loss in 2022-Q2 was $0.3 million, or $0.01 per share,
compared to net loss of $1.6 million, or $0.08 per share, in
2021-Q2 and net loss of $2.0 million, or $0.08 per share, in
2022-Q1. The decrease in net loss was mainly due to the recognition
of $1.5 million in gain from the forgiveness of CARES Act Paycheck
Protection Program Loan.
- Non-GAAP net loss in 2022-Q2 was $1.1 million, or $0.04 per
share, compared to net loss of $1.0 million, or $0.05 per share, in
2021-Q2 and net loss of $1.3 million, or $0.05 per share, in
2022-Q1.
($ in 000, except per share)
Three months ended June
30,
Six months ended June
30,
2022
2021
Change in %
Favorable/(Adverse)
2022
2021
Change in %
Favorable/(Adverse)
GAAP
Revenue
$
7,375
$
7,735
(5
)
$
14,920
$
14,773
$
1
Gross profit
2,807
3,424
(18
)
5,623
6,427
(13
)
Operating expenses
4,456
4,910
9
9,125
9,437
3
Operating loss
(1,649
)
(1,486
)
(11
)
(3,502
)
(3,010
)
(16
)
Net loss
(257
)
(1,586
)
84
(2,224
)
(3,241
)
31
Diluted loss per share
(0.01
)
(0.08
)
88
(0.09
)
(0.17
)
47
Non-GAAP
Non-GAAP gross profit
$
2,809
$
3,426
(18
)
$
5,627
$
6,432
$
(13
)
Non-GAAP operating expenses
3,746
4,336
14
7,712
8,324
(7
)
Non-GAAP operating loss
(937
)
(910
)
(3
)
(2,085
)
(1,892
)
(10
)
Non-GAAP net loss
(1,073
)
(1,010
)
(6
)
(2,335
)
(2,123
)
(10
)
Non-GAAP Adjusted EBITDA
(892
)
(802
)
(11
)
(1,961
)
(1,688
)
(16
)
Non-GAAP loss per share (diluted)
(0.04
)
(0.05
)
20
(0.10
)
(0.11
)
14
Balance Sheet Highlights
As of June 30, 2022, cash, cash equivalents and investments were
$1.2 million, compared to $4.1 million as of December 31, 2021. As
of June 30, 2022, the Company carried $2.3 million in debt on
account of senior convertible notes issued in December 2019.
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 and the
possible outcomes of litigation, 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, 2021 (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.
CLEARONE, INC
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except par
value)
June 30, 2022
December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
1,203
$
1,071
Marketable securities
—
1,790
Receivables, net of allowance for doubtful
accounts of $326 and $326, respectively
4,112
4,991
Inventories, net
9,858
10,033
Income tax receivable
7,535
7,535
Prepaid expenses and other assets
2,924
4,021
Total current assets
25,632
29,441
Long-term marketable securities
—
1,220
Long-term inventories, net
2,985
3,567
Property and equipment, net
614
744
Operating lease - right of use assets,
net
1,237
1,537
Intangibles, net
24,289
25,086
Other assets
4,592
4,597
Total assets
$
59,349
$
66,192
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
2,047
$
5,388
Accrued liabilities
2,570
2,549
Deferred product revenue
43
54
Short-term debt
810
3,481
Total current liabilities
5,470
11,472
Long-term debt, net
1,184
1,535
Operating lease liability, net of
current
717
1,026
Other long-term liabilities
655
655
Total liabilities
8,026
14,688
Shareholders' equity:
Common stock, par value $0.001, 50,000,000
shares authorized, 23,952,555 and 22,410,126 shares issued and
outstanding, respectively
24
22
Additional paid-in capital
74,861
72,795
Accumulated other comprehensive loss
(266
)
(241
)
Accumulated deficit
(23,296
)
(21,072
)
Total shareholders' equity
51,323
51,504
Total liabilities and shareholders'
equity
$
59,349
$
66,192
CLEARONE, INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
(Dollars in thousands, except per
share values)
Three months ended June
30,
Six months ended June
30,
2022
2021
2022
2021
Revenue
$
7,375
$
7,735
$
14,920
$
14,773
Cost of goods sold
4,568
4,311
9,297
8,346
Gross profit
2,807
3,424
5,623
6,427
Operating expenses:
Sales and marketing
1,562
1,755
3,122
3,328
Research and product development
1,177
1,487
2,530
2,761
General and administrative
1,717
1,668
3,473
3,348
Total operating expenses
4,456
4,910
9,125
9,437
Operating loss
(1,649
)
(1,486
)
(3,502
)
(3,010
)
Interest expense
(94
)
(107
)
(195
)
(219
)
Other income, net
1,505
15
1,508
10
Loss before income taxes
(238
)
(1,578
)
(2,189
)
(3,219
)
Provision for income taxes
19
8
35
22
Net loss
$
(257
)
$
(1,586
)
$
(2,224
)
(3,241
)
Basic weighted average shares
outstanding
23,948,631
18,775,817
23,923,110
18,775,795
Diluted weighted average shares
outstanding
23,948,631
18,775,817
23,923,110
18,775,795
Basic loss per share
$
(0.01
)
$
(0.08
)
$
(0.09
)
$
(0.17
)
Diluted loss per share
$
(0.01
)
$
(0.08
)
$
(0.09
)
$
(0.17
)
Comprehensive loss:
Net loss
(257
)
(1,586
)
(2,224
)
(3,241
)
Unrealized gain (loss) on
available-for-sale securities, net of tax
26
(3
)
(2
)
(5
)
Change in foreign currency translation
adjustment
(12
)
(10
)
(23
)
(22
)
Comprehensive loss
(243
)
(1,599
)
(2,249
)
(3,268
)
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,
2022
2021
2022
2021
GAAP gross profit
$
2,807
$
3,424
$
5,623
$
6,427
Stock-based compensation
2
2
4
5
Non-GAAP gross profit
$
2,809
$
3,426
$
5,627
$
6,432
GAAP operating loss
$
(1,649
)
$
(1,486
)
$
(3,502
)
(3,010
)
Stock-based compensation
30
33
65
64
Amortization of intangibles
682
543
1,352
1,054
Non-GAAP operating loss
$
(937
)
$
(910
)
$
(2,085
)
$
(1,892
)
GAAP net loss
$
(257
)
$
(1,586
)
$
(2,224
)
(3,241
)
Stock-based compensation
30
33
65
64
Amortization of intangibles
682
543
1,352
1,054
CARES Act PPP loan forgiveness
(1,528
)
—
(1,528
)
—
Non-GAAP net loss
$
(1,073
)
$
(1,010
)
$
(2,335
)
$
(2,123
)
GAAP net loss
$
(257
)
$
(1,586
)
$
(2,224
)
$
(3,241
)
Number of shares used in computing GAAP
loss per share (diluted)
23,948,631
18,775,817
23,923,110
18,775,795
GAAP loss per share (diluted)
$
(0.01
)
$
(0.08
)
$
(0.09
)
$
(0.17
)
Non-GAAP net loss
$
(1,073
)
$
(1,010
)
$
(2,335
)
$
(2,123
)
Number of shares used in computing
Non-GAAP loss per share (diluted)
23,948,631
18,775,817
23,923,110
18,775,795
Non-GAAP loss per share
(diluted)
$
(0.04
)
$
(0.05
)
$
(0.10
)
(0.11
)
GAAP net loss
$
(257
)
$
(1,586
)
$
(2,224
)
$
(3,241
)
Stock-based compensation
30
33
65
64
Depreciation
68
93
144
194
Amortization of intangibles
682
543
1,352
1,054
Interest expense
94
107
195
219
CARES Act PPP loan forgiveness
(1,528
)
—
(1,528
)
—
Provision for income taxes
19
8
35
22
Non-GAAP Adjusted EBITDA
$
(892
)
$
(802
)
$
(1,961
)
$
(1,688
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220809005473/en/
Bob Griffin 801-975-7200 investor_relations@clearone.com
http://investors.clearone.com
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