ClearOne Releases Financial Results for Third Quarter 2020
- Overall revenue grows by 40% year-over-year
- Overall revenue grows by 32% quarter-over-quarter sequentially
- Video products and Beamforming Microphone Array Ceiling Tile based solutions drive year-over-year and sequential revenue growth
SALT LAKE CITY, Nov. 24, 2020 /PRNewswire/ -- ClearOne (NASDAQ: CLRO), a global provider of audio and visual communication solutions, reported financial results for the three and nine month periods ended September 30, 2020.
"We achieved outstanding sequential and year-over-year revenue growth thanks to our appealing video products and innovative BMA based solutions. Our revenue growth amidst a global pandemic demonstrates the resilience of our product portfolio. Our wide-ranging suite of audio and video solutions are well suited for traditional offices as well as the burgeoning work-from-home remote offices," said Zee Hakimoglu, CEO and Chair of ClearOne.
"Last month, we introduced the BMA 360, our new flagship Beamforming Microphone Array in ceiling tile format. We believe that it has set an audio performance standard that is unrivalled in the industry and that is far superior to any other BMA solution in the market. The BMA 360 is based on a dramatically new approach to beamforming that provides a new beam topology to easily achieve distortion-free, full 360-degree coverage of any room shape and any seating arrangement using ClearOne Audio Intelligence™. The integrated features in the BMA 360 significantly reduce system design complexity, simplify installation, consume less rack space, and lower system cost," Hakimoglu added.
"On September 1, 2020, the U.S. District Court of the Northern District of Illinois held that 'Shure has violated the preliminary injunction order and is found in contempt because it designed the MXA910-A in such a way that allows it to be easily installed flush in most ceiling grids.' The Court also opined that, '[t]he record is clear and convincing that Shure-through its design choices-violated the injunction order by allowing integrators to install the MXA910-A in the enjoined flush configuration.' Ultimately, the Court ordered that 'Shure shall no longer manufacture, market, or sell the MXA910-A ... .' Though Shure has filed for appeal, this order of contempt is a significant victory for ClearOne in our resolute effort to hold Shure accountable for its action and to enforce our hard-earned intellectual property rights. Our motion to accuse Shure's MXA910-US of infringing the '806 Patent is still pending with the Court," Hakimoglu concluded.
Financial Summary
The Company uses certain non-GAAP financial measures and reconciles those to GAAP measures in the attached tables.
- Revenue in Q3 2020 was $8.4 million, compared to $6.0 million in Q3 2019 and million $6.4 in Q2 2020. The increase in year-over-year as well as sequential revenues was mainly due to the increase in revenue from video products, personal audio conferencing products and beamforming microphone array products. Despite this revenue growth in Q3 2020, revenue from our audio conferencing products and microphones are far below the levels prior to infringement of our patents.
- GAAP gross profit in Q3 2020 was $3.5 million compared to $2.5 million in Q3 2019 and $2.6 million in Q2 2020. GAAP gross profit margin was 41.8% in Q3 2020, compared to 42.3% in Q3 2019 and 41.2% in Q2 2020. Gross profit margin remained fairly consistent through the compared periods.
- Operating expenses in Q3 2020 were $4.7 million, compared to $4.6 million in Q3 2019 and $4.5 million in Q2 2020. Non-GAAP operating expenses in Q3 2020 were $4.2 million, compared to $4.2 million in Q3 2019 and $4.0 million in Q2 2020. The sequential increase in operating expenses is mainly due to the increase in commissions paid to employees and independent reps.
- GAAP net loss in Q3 2020 was $1.3 million, or $0.07 per share, compared to net loss of $2.0 million, or $0.12 per share, in Q3 2019 and net loss of $1.9 million, or $0.12 per share, in Q2 2020. The sequential and year-over-year decline in GAAP net loss was primarily due to increase in gross profit attributable to increase in revenue.
($ in 000, except per share) |
Three months ended |
Nine months ended |
|||||||||||||||
2020 |
2019 |
Change |
2020 |
2019 |
Change |
||||||||||||
GAAP |
|||||||||||||||||
Revenue |
$ |
8,412 |
$ |
5,992 |
40 |
% |
$ |
20,503 |
$ |
18,717 |
10 |
% |
|||||
Gross profit |
3,520 |
2,537 |
39 |
% |
8,976 |
8,180 |
10 |
% |
|||||||||
Operating expenses |
4,680 |
4,635 |
1 |
% |
13,726 |
14,773 |
-7 |
% |
|||||||||
Operating loss |
(1,160) |
(2,098) |
-45 |
% |
(4,750) |
(6,593) |
-28 |
% |
|||||||||
Net loss |
(1,260) |
(1,976) |
-36 |
% |
(5,044) |
(6,423) |
-21 |
% |
|||||||||
Diluted loss per share |
(0.07) |
(0.12) |
-38 |
% |
(0.30) |
(0.39) |
-22 |
% |
|||||||||
Non-GAAP |
|||||||||||||||||
Non-GAAP gross profit |
$ |
3,520 |
$ |
2,539 |
39 |
% |
$ |
8,978 |
$ |
8,186 |
10 |
% |
|||||
Non-GAAP operating expenses |
4,232 |
4,235 |
0 |
% |
12,453 |
13,548 |
-8 |
% |
|||||||||
Non-GAAP operating loss |
(712) |
(1,696) |
-58 |
% |
(3,475) |
(5,362) |
-35 |
% |
|||||||||
Non-GAAP net loss |
(812) |
(1,574) |
-48 |
% |
(3,769) |
(5,192) |
-27 |
% |
|||||||||
Non-GAAP Adjusted EBITDA |
(589) |
(1,437) |
59 |
% |
(3,197) |
(4,752) |
33 |
% |
|||||||||
Non-GAAP loss per share (diluted) |
(0.05) |
(0.09) |
-44 |
% |
(0.22) |
(0.31) |
-28 |
% |
|||||||||
Balance Sheet Highlights
At September 30, 2020, cash, cash equivalents and investments were $8.6 million, as compared with the same amount at December 31, 2019. The Company carries a debt of $5.0 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.
SOURCE ClearOne
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