ClearOne Reports 2011 Second Quarter Financial Results

SALT LAKE CITY, Aug. 9, 2011 /PRNewswire/ -- ClearOne (NASDAQ: CLRO) today reported financial results for the second quarter ended June 30, 2011.

For the 2011 second quarter, revenues were a record $11.9 million, compared to $9.9 million for the 2010 second quarter.  Revenue for the 2011 second quarter increased year over year by 20%.  

Gross profit for the 2011 second quarter increased by 26% to a record $7.2 million, or 60% of revenue, from $5.7 million, or 57% of revenue, for the 2010 second quarter. Operating income increased by a record 260% to $1.9 million from $520,000 for the prior year period. Net income increased by 274% to $1.3 million, or $0.14 per diluted share, from $353,000, or $0.04 per diluted share, for the 2010 second quarter.  Non-GAAP net income increased by 165% to $1.7 million, or $0.18 per diluted share, from $629,000, or $0.07 per diluted share, for the 2010 second quarter.  The reconciliation between GAAP and Non-GAAP net income is available in the tables attached to this release.

For the first six months of 2011, revenue increased 23% to $22.6 million from $18.3 million for the same period of 2010. Gross profit increased by 24% to $13.5 million, or 60% of revenue, from $10.9 million, or 59% of revenue, for the comparable prior year period. Operating income in the first half of 2011 tripled to $3.1 million from $1.0 million during the same six months of 2010. Net income grew by 274% to $2.1 million, or $0.23 per diluted share, versus net income of $570,000, or $0.06 per diluted share, for the comparable prior period.  Non-GAAP net income for the 2011 first half increased by 146% to $2.8 million, or $0.30 per diluted share, from $1.1 million, or $0.13 per diluted share, for the 2010 first half.  The reconciliation between GAAP and Non-GAAP net income is available in the tables attached to this release.

At June 30, 2011, the company had cash and cash equivalents of $12.4 million and no debt.

On August 8, 2011 the United States Court of Appeals for the Tenth Circuit issued an opinion, affirming a November 2008 jury verdict issued by a federal district court in favor of ClearOne against Biamp Systems Corp. ("Biamp"), for theft of ClearOne's trade secrets, including the federal district court's award of exemplary damages based upon the finding that Biamp's misappropriation was willful and malicious.  The amount of ClearOne's judgment against Biamp is estimated to be $3.7 million and has not been included in any of the financial statements included with this news release. The Tenth Circuit Court of Appeals is yet to rule upon ClearOne's request for additional awards of interest and attorney fees.

"ClearOne continued to achieve record breaking year-over-year financial performance in the second quarter," said Zee Hakimoglu, President, Chief Executive Officer and Chairman of ClearOne.  "Increase in revenue was propelled by strong growth in North America and Asia including India. Our outstanding revenue growth was the result of our ability to leverage our product and market strengths while our profitability was due to our commitment to financial discipline."

"Our continuing strong performance provides us a solid platform to invest in new technologies, leverage opportunities in the unified communications industry, expand into complementary markets and retain our leadership position in our core products."

ClearOne announced several new products, strategic partnerships and other significant activities during the second quarter. In June, the company introduced several new products and product enhancements in the areas of unified communications and IP-based multimedia distribution.

This includes ClearOne's COLLABORATE™, an all-in-one voice, video, and data collaboration solution designed for organizations using unified communications software or popular web conferencing services. Now integrated with StreamNet™ technology, the COLLABORATE is available for the first time with an optional VIEW™ Multimedia Receiver, so users can consume rich, high definition multimedia content from anywhere on the enterprise network, including live feeds, when the COLLABORATE unit is not being used for conferencing.

Also in June, ClearOne expanded The Power of AV over IP™ as it introduced complete DVI/HDMI and digital signage solutions that allow installers to design AV and signage networks with virtually unlimited number of digital sources and displays.

As ClearOne raises its industry profile, it has forged strategic relationships to reinforce standards and compatibility. The company recently joined the AVnu Alliance™ industry forum which promotes IEEE Audio Video Bridging (AVB) standards.  ClearOne joins the growing list of industry stakeholders in the Automotive, Professional, and Consumer Electronics industries who promote AVB and its role in delivering the highest quality AV experience.

ClearOne was also added to the Russell Microcap® Index, acknowledging the company's effort to increase its market value. The Russell Microcap Index is constructed to provide a comprehensive and unbiased barometer for the microcap and smallcap segments trading on national exchanges.

Non-GAAP Financial Measures

ClearOne provides non-GAAP financial information in the form of Non-GAAP net income and 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 and EPS excludes certain costs and expenses, the details of which are provided in the tables below containing the reconciliation between GAAP and Non-GAAP net income. 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 communications solutions company that develops and sells conferencing, collaboration, multi-media streaming and connectivity systems for audio, video, and web applications. The reliability, flexibility and performance of our advanced comprehensive solutions enhance the quality of life through better communication, education, and entertainment.

We develop, manufacture, market, and service a comprehensive line of high-quality audio conferencing products under personal, tabletop, premium and professional categories. We occupy the number one position in the global professional audio conferencing market with nearly 50% of the global market share. Our conferencing solutions save organizations time and money by creating a natural environment for collaboration.

NetStreams, a ClearOne brand of residential products, delivers the ultimate IP A/V experience by distributing high definition audio and video over TCP/IP networks. NetStreams' products, designed for commercial and residential use, offer unprecedented levels of performance, functionality, simplicity, reliability, and expandability. By combining audio/video content, meta-data and control signals into one stream and incorporating industry standards, NetStreams' newly patented StreamNet® solutions are a smart investment, enabling the Power of AV over IP™ – today.

NetStreams' StreamNet technology provides elegant solutions for streaming media & control applications such as digital signage, distribution of HD video and audio, LAN Cloud Matrix Switching™, and audio paging over data networks.

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 statements regarding the potential of COLLABORATE ™and other recently launched products 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.

Contact:
Jeff LeFevre
Investor Relations
801-303-3438
[email protected]

SOURCE ClearOne