ClearOne (NASDAQ: CLRO), a global provider of audio and visual
communication solutions, reported financial results for the
three-month period ended March 31, 2023.
“During the first quarter, we maintained our focus on developing
unique products that meet our partner and end user needs, supported
by a leaner, improved cost structure,” said Derek Graham, CEO of
ClearOne. “We have continued to support a growing backlog for our
core audio conferencing products, as well as roll out the new CHAT®
150 BT group speakerphone, and UNITE 260 Pro camera products we
introduced in January. Though our first quarter revenues remained
pressured by the ongoing transition of our outsourced manufacturing
from China to Singapore, we expect our revenue performance to
improve in the second half of this year. We will continue working
to increase our market share and deliver long-term value to our
investors in the year ahead.
“The recent announcement of a special dividend by our Board of
Directors further signifies our commitment to rewarding our
investors. Our strong balance sheet, especially our cash position
after paying the special dividend, provides us the necessary ramp
to launch our products, build strong teams, and compete effectively
in the market."
Recent Highlights
- On May 8, 2023, the Company announced that the Company’s Board
of Directors had declared a special one-time cash dividend of $1.00
per share of the Company’s common stock or eligible warrants,
payable on May 31, 2023 to shareholders of record on May 22, 2023.
The ex-dividend date for this distribution is June 1, 2023, in
accordance with FINRA UPC (Uniform Practice Code) Rule 11140. This
dividend distribution is expected to generate cash outflows of
approximately $29.0 million.
Financial Summary
The Company uses certain non-GAAP financial measures and
reconciles those to GAAP measures in the attached tables.
Q1 2023 revenue was $4.2 million, compared to $7.5 million in Q1
2022 and $4.0 million in Q4 2022. The sequential and year-over-year
decrease was mainly due to (a) a decline in revenue from video
products due to decline in demand and (b) continued order
fulfillment challenges for our core audio conferencing and
beamforming microphone arrays as a result of ongoing delays in the
transition of our outsourced manufacturing from China to
Singapore.
- Gross profit in Q1 2023 was $1.3 million, compared to $2.8
million in Q1 2022 and $1.3 million in Q4 2022. Gross profit margin
was 31% in Q1 2023 and Q4 2022, compared to 37% in Q1 2022. Gross
profit margin decreased year-over-year due to increased
administration and overhead costs as a percentage of revenue due to
significantly reduced revenue.
- Operating expenses in Q1 2023 were $3.5 million, compared to
$4.7 million in Q1 2022 and $3.9 million in Q4 2022. Non-GAAP
operating expenses in Q1 2023, as well as Q4 2022, were $3.4
million, compared to $4.0 million in Q1. The decrease in
year-over-year non-GAAP operating expenses was mainly due to
additional cost-cutting measures initiated in 2022.
- GAAP net loss in Q1 2023 was $0.8 million, or $0.03 per share,
compared to a net loss of $2.0 million, or $0.08 per share, in Q1
2022 and a net income of $24.0 million, or $0.97 per share, in Q4
2022. The year-over-year decrease in net loss was primarily due to
the recognition of a $1.35 million gain from a legal settlement in
Q1 2023 and the aforementioned reduction in operating expenses,
partially offset by the reduction in gross profit. The sequential
change from net income to net loss was primarily due to the
recognition of a gain of $33.6 million related to the one-time
legal settlement receivable of $55 million, partially offset by
operating losses and provision for income tax in Q4 2022 .
- Non-GAAP net loss in Q1 2023 was $2.0 million, or $0.09 per
share, compared to a Non-GAAP net loss of $1.3 million, or $0.05
per share, in Q1 2022 and a Non-GAAP net loss of $2.3 million, or
$0.09 per share, in Q4 2022. The year-over-year increase in
Non-GAAP net loss was due to the reduction in gross margin caused
by significant decrease in revenues, partially offset by reduction
in operating expenses. The sequential reduction in Non-GAAP net
loss was primarily due to the reduction of bonuses in Q1 2023.
($ in 000, except per share)
Three months ended March
31,
2023
2022
Change in %
Favorable/
(Adverse)
GAAP
Revenue
$
4,178
$
7,545
(45
)
Gross profit
1,315
2,816
(53
)
Operating expenses
3,504
4,669
25
Operating loss
(2,189
)
(1,853
)
(18
)
Net loss
(832
)
(1,967
)
58
Diluted loss per share
(0.03
)
(0.08
)
63
Non-GAAP
Non-GAAP operating expenses
3,365
3,966
15
Non-GAAP operating loss
(2,048
)
(1,148
)
(78
)
Non-GAAP net loss
(2,041
)
(1,262
)
(62
)
Non-GAAP Adjusted EBITDA
(1,678
)
(1,069
)
(57
)
Non-GAAP diluted loss per share
(0.09
)
(0.05
)
(80
)
Balance Sheet Highlights
As of March 31, 2023, cash, cash equivalents and investments
were $59.0 million, as compared with $1.0 million as of December
31, 2022. As of March 31, 2023, the Company carried an aggregate
debt of $1.7 million on account of senior convertible notes issued
in December 2019. The Company’s cash position was strengthened by
the receipts in excess of $56 million in the first quarter of 2023
pursuant to legal settlements. The Company also repaid the
short-term bridge loan in January 2023.
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 in 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, 2022 (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 CONSOLIDATED BALANCE
SHEETS
(Dollars in thousands, except par
value)
March 31,
2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
59,006
$
984
Legal settlement receivable
—
55,000
Receivables, net of allowance of $326
3,541
3,603
Inventories, net
8,395
8,961
Income tax receivable
—
1,071
Prepaid expenses and other assets
3,635
7,808
Total current assets
74,577
77,427
Long-term inventories, net
2,885
2,707
Property and equipment, net
356
383
Operating lease - right of use assets,
net
1,259
1,047
Intangibles, net
1,995
2,071
Other assets
112
115
Total assets
$
81,184
$
83,750
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
1,820
$
1,284
Accrued liabilities
2,454
3,041
Deferred product revenue
71
63
Short-term debt
1,556
3,732
Total current liabilities
5,901
8,120
Operating lease liability, net of
current
949
492
Other long-term liabilities
1,008
1,008
Total liabilities
7,858
9,620
Shareholders' equity:
Common stock, par value $0.001, 50,000,000
shares authorized, 23,955,767 shares issued and outstanding
24
24
Additional paid-in capital
74,933
74,910
Accumulated other comprehensive loss
(283
)
(288
)
Accumulated deficit
(1,348
)
(516
)
Total shareholders' equity
73,326
74,130
Total liabilities and shareholders'
equity
$
81,184
$
83,750
CLEARONE, INC.
UNAUDITED CONSOLIDATED
STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(Dollars in thousands, except per
share values)
Three months ended
March 31,
2023
2022
Revenue
$
4,178
$
7,545
Cost of goods sold
2,863
4,729
Gross profit
1,315
2,816
Operating expenses:
Sales and marketing
1,192
1,560
Research and product development
1,043
1,353
General and administrative
1,269
1,756
Total operating expenses
3,504
4,669
Operating loss
(2,189
)
(1,853
)
Interest expense
(292
)
(101
)
Other income, net
1,666
3
Loss before income taxes
(815
)
(1,951
)
Provision for income taxes
17
16
Net loss
$
(832
)
$
(1,967
)
Basic weighted average shares
outstanding
23,955,767
23,897,305
Diluted weighted average shares
outstanding
23,955,767
23,897,305
Basic loss per share
$
(0.03
)
$
(0.08
)
Diluted loss per share
$
(0.03
)
$
(0.08
)
Comprehensive loss:
Net loss
$
(832
)
$
(1,967
)
Unrealized loss on available-for-sale
securities, net of tax
—
(28
)
Change in foreign currency translation
adjustment
5
(11
)
Comprehensive loss
$
(827
)
$
(2,006
)
CLEARONE, INC.
UNAUDITED RECONCILIATION OF
GAAP MEASURES TO NON-GAAP MEASURES
(Dollars in thousands, except per
share values)
Three months ended March
31,
2023
2022
GAAP operating loss
$
(2,189
)
$
(1,853
)
Stock-based compensation
23
35
Amortization of intangibles
118
670
Non-GAAP operating loss
$
(2,048
)
$
(1,148
)
GAAP net loss
$
(832
)
$
(1,967
)
Stock-based compensation
23
35
Amortization of intangibles
118
670
Other income adjustment
(1,350
)
—
Non-GAAP net loss
$
(2,041
)
$
(1,262
)
GAAP net loss
$
(832
)
$
(1,967
)
Number of shares used in computing GAAP
diluted loss per share
23,955,767
23,897,305
GAAP diluted loss per share
$
(0.03
)
$
(0.08
)
Non-GAAP net loss
$
(2,041
)
$
(1,262
)
Number of shares used in computing
Non-GAAP diluted loss per share
23,955,767
23,897,305
Non-GAAP diluted loss per share
$
(0.09
)
$
(0.05
)
GAAP net loss
$
(832
)
$
(1,967
)
Stock-based compensation
23
35
Interest expense
292
101
Depreciation
54
76
Amortization of intangibles
118
670
Other income adjustment
(1,350
)
—
Provision for (benefit from) income
taxes
17
16
Non-GAAP Adjusted EBITDA
$
(1,678
)
$
(1,069
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230516006104/en/
Narsi Narayanan 385-426-0565 investor_relations@clearone.com
http://investors.clearone.com
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