ClearOne Reports Record 2014 Fourth-Quarter and Full-Year Revenue and Increases Cash Dividend

Q4 Non-GAAP Diluted EPS Increased 79%

News provided by

ClearOne

Mar 12, 2015, 09:00 ET

SALT LAKE CITY, March 12, 2015 /PRNewswire/ --

Financial Highlights:

Fourth Quarter 2014 vs. 2013

  • Revenue up 8% to $15.4 million
  • Gross margin increased to 65%, up from 60%
  • Non-GAAP operating income up 33%
  • Non-GAAP net income up 77%
  • Non-GAAP adjusted EBITDA up 31%

Full Year 2014 vs. 2013

  • Revenue up 17% to $57.9 million, fifth consecutive year of growth
  • Non-GAAP operating income up 23%
  • Non-GAAP net income up 26%
  • Non-GAAP adjusted EBITDA up 21%

Financial Summary

(Dollars in thousands, except per share values)

Fourth Quarter

Year

2014

2013

Change

2014

2013

Change

Revenue

$

15,351

$

14,230

8%

$

57,909

$

49,592

17%

Gross Profit

9,917

8,549

16%

35,323

29,857

18%

Non-GAAP Operating Income

3,831

2,881

33%

10,309

8,404

23%

Non-GAAP Net Income

3,218

1,821

77%

7,206

5,710

26%

Non-GAAP Adjusted EBITDA

4,075

3,112

31%

11,324

9,331

21%

Non-GAAP Diluted EPS

$

0.34

$

0.19

79%

$

0.75

$

0.60

25%

ClearOne (NASDAQ: CLRO), a global provider of audio and visual communication solutions, today reported financial results for the fourth quarter and year ended December 31, 2014.

For the 2014 fourth quarter, revenue increased 8% to $15.4 million, compared with $14.2 million for the fourth quarter of 2013.  Gross profit rose to $9.9 million, or 65% of revenue, compared with $8.5 million, or 60% of revenue, for the fourth quarter of 2013. Non-GAAP operating income increased 33% to $3.8 million from $2.9 million for the fourth quarter of 2013. Non-GAAP net income increased 77% to $3.2 million, or $0.34 per diluted share, from $1.8 million, or $0.19 per diluted share, for the fourth quarter of 2013. Non-GAAP adjusted EBITDA increased 31% to $4.1 million, or $0.43 per diluted share, from $3.1 million, or $0.33 per diluted share, for the fourth quarter of 2013.

For the year ended December 31, 2014, revenue increased 17% to $57.9 million from $49.6 million for the prior year.  Gross profit increased 18% to $35.3 million, or 61% of revenue, compared with $29.9 million, or 60% of revenue, for the twelve months ended December 31, 2013.  Non-GAAP operating income increased 23% to $10.3 million from $8.4 million for the twelve months ended December 31, 2013.  Non-GAAP net income increased 26% to $7.2 million, or $0.75 per diluted share, from $5.7 million, or $0.60 per diluted share, for the twelve months ended December 31, 2013.  Non-GAAP adjusted EBITDA increased 21% to $11.3 million, or $1.18 per diluted share, from $9.3 million, or $0.99 per diluted share, for the twelve months ended December 31, 2013.

Cash, cash equivalents and investments totaled $33.6 million at December 31, 2014, down $9.1 million from $42.7 million at December 31, 2013 primarily due to the acquisitions of Sabine and Spontania, which closed in March and April of 2014, respectively.  ClearOne continues to have no debt.

"We are very pleased to report the highest fourth-quarter and full-year revenues in our company's history," said Zee Hakimoglu, President and Chief Executive Officer of ClearOne. "Sales of internally developed products, combined with revenues from acquisitions completed in 2014, contributed to our strong top line performance and improved gross margin. We made solid progress enhancing efficiencies and believe our current expense structure supports our existing operations, as well as anticipated growth.

"The bookings in 2014 from Spontania, a cloud-based media collaboration solution, were at the high end of our expectations, though revenues generated from wireless microphones were less than anticipated. The wireless microphones business is poised for higher growth with the recent launch of five new models for Europe that comply with European Union standards and the imminent launch of our new series of wireless microphone systems with Dante™ audio-over-Ethernet technology."

"Our investors can look forward to another year of strong revenue and profitability growth in 2015 as we remain focused on our vision for market success and execute on our strategy through operational discipline."

Increased Cash Dividend

In December, the company announced its first-ever cash dividend of $0.10 per share for 2014; the dividend was paid in January 2015. For the first quarter of 2015, the Board of Directors has approved an increased quarterly cash dividend of $0.035 per share which will be distributed in April 2015.

Spontania Robust Performance in Action

During the quarter, ClearOne's carrier-grade cloud-based video collaboration software, Spontania, was selected as the exclusive video collaboration technology provider for the 2014-2015 Barcelona World Race, the first and only two crew member per boat, non-stop, around the world regatta. The competition began on December 31, 2014, and is expected to finish near the end of March, 2015, with participants relying on the Spontania to provide reliable video connections from numerous remote high seas locations with severe connectivity challenges. Spontania automatically adapts to any environment to deliver reliable communications from anywhere.

New Video Camera Launch

In December, the company launched UNITE™ PTZ Camera, an affordable, professional-grade, high-resolution 1080p60 camera that can connect directly to any standard PC or laptop through USB 3.0, eliminating the need for adapters or converters. It offers an outstanding, high-performance value compared to other, more expensive solutions on the market and works with all of ClearOne's media collaboration solutions and network streaming applications.

Non-GAAP Financial Measures

ClearOne provides non-GAAP financial information in the form of non-GAAP operating income, non-GAAP net income, Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") and corresponding 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 operating income, non-GAAP net income, Adjusted EBITDA and corresponding earnings per share excludes certain costs and expenses, the details of which are provided below in the tables containing the reconciliation between GAAP and non-GAAP financial measures.  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 financial measures to the most directly comparable GAAP financial measures is included with this release.

About ClearOne

ClearOne is a global company that designs, develops and sells conferencing, collaboration, streaming and digital signage solutions for voice and visual communications.  The performance and simplicity of its advanced comprehensive solutions offer unprecedented levels of functionality, reliability and scalability.  More information about the company can be found at www.clearone.com.

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 the anticipated growth of Sabine, the company's operating expense structure, the payment of future dividends, acquisitions or investments the company may make to fuel growth, the purchase of common stock under the company's stock repurchase program 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.

http://investors.clearone.com 

CLEARONE, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except par value)


As of December 31, 2014

As of December 31, 2013

ASSETS


Current assets:


Cash and cash equivalents

$

7,440

$

17,192

Marketable securities

6,994

3,200

Receivables, net of allowance for doubtful accounts of $58 and $129, respectively

9,916

9,378

Inventories, net

12,766

10,758

Distributor channel inventories

1,698

1,520

Deferred income taxes

4,013

3,325

Prepaid expenses and other assets

2,143

2,693

Total current assets

44,970

48,066

Long-term marketable securities

19,162

22,326

Long-term inventories, net

876

551

Property and equipment, net

2,039

1,825

Intangibles, net

7,896

3,710

Goodwill

12,969

3,472

Deferred income taxes

1,374

1,024

Other assets

117

87

Total assets

$

89,403

$

81,061

LIABILITIES AND SHAREHOLDERS' EQUITY


Current liabilities:


Accounts payable

$

3,057

$

2,730

Accrued liabilities

2,870

1,761

Deferred product revenue

5,004

4,158

Total current liabilities

10,931

8,649

Deferred rent

248

286

Other long-term liabilities

2,208

1,791

Total liabilities

13,387

10,726

Shareholders' equity:


Common stock, par value $0.001, 50,000,000 shares authorized, 9,097,827 and 
    8,986,080 shares issued and outstanding

9

9

Additional paid-in capital

44,939

41,311

Accumulated other comprehensive income (loss)

(8)

23

Retained earnings

31,076

28,992

Total shareholders' equity

76,016

70,335

Total liabilities and shareholders' equity

$

89,403

$

81,061

CLEARONE, INC.

UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS

(Dollars in thousands, except per share values)


Quarter ended December 31,

Year ended December 31,

2014

2013

2014

2013

Revenue

$

15,351

$

14,230

$

57,909

$

49,592

Cost of goods sold

5,434

5,681

22,586

19,735

Gross profit

9,917

8,549

35,323

29,857








Operating expenses:






Sales and marketing

2,723

2,321

11,227

8,896

Research and product development

2,083

2,065

8,969

7,562

General and administrative

1,901

1,777

7,152

6,416

Proceeds from litigation, net

—

(367)

—

(639)

Total operating expenses

6,707

5,796

27,348

22,235








Operating income

3,210

2,753

7,975

7,622

Other income, net

38

30

254

147

Income before income taxes

3,248

2,783

8,229

7,769

Provision for income taxes

550

1,042

2,633

2,590

Net income

$

2,698

$

1,741

$

5,596

$

5,179








Basic earnings per common share

$

0.30

$

0.19

$

0.61

$

0.57

Diluted earnings per common share

$

0.28

$

0.19

$

0.58

$

0.55








Basic weighted average shares outstanding

9,118,977

8,985,518

9,166,769

9,064,340

Diluted weighted average shares outstanding

9,510,957

9,340,741

9,581,326

9,455,518








Comprehensive income:






Net income

$

2,698

$

1,741

$

5,596

$

5,179

Unrealized gain(loss) on available-for-sale securities,

net of tax

(45)

56

15

23

Change in foreign currency translation adjustment

 

(45)

—

(45)

—

   Comprehensive income

$

2,608

$

1,797

$

5,566

$

5,202

CLEARONE, INC.

UNAUDITED RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

(Dollars in thousands, except per share values)


Quarter ended December 31,

Year ended December 31,

2014

2013

2014

2013

Revenue

$

15,351

$

14,230

$

57,909

$

49,592

Cost of goods sold

5,430

5,678

22,576

19,726

Gross profit

9,921

8,552

35,333

29,866








Operating expenses:






Sales and marketing

2,696

2,302

11,140

8,822

Research and product development

2,060

2,052

8,913

7,511

General and administrative

1,334

1,317

4,971

5,129

Total operating expenses

6,090

5,671

25,024

21,462








Non-GAAP operating income

3,831

2,881

10,309

8,404

Other income, net

38

30

254

147

Income before income taxes

3,869

2,911

10,563

8,551

Provision for income taxes

651

1,090

3,357

2,841

Non-GAAP Net income

$

3,218

$

1,821

$

7,206

$

5,710








Basic Non-GAAP earnings per common share

$

0.35

$

0.20

$

0.79

$

0.63

Diluted Non-GAAP earnings per common share

$

0.34

$

0.19

$

0.75

$

0.60








Basic weighted average shares outstanding

9,118,977

8,985,518

9,166,769

9,064,340

Diluted weighted average shares outstanding

9,510,957

9,340,741

9,581,326

9,455,518








GAAP Net Income

$

2,698

$

1,741

$

5,596

$

5,179

Adjustments:






Share-based compensation

135

91

401

296

Amortization of purchased intangibles

337

143

1,210

547

Legal expenses for litigation relating to indemnification
of former officers, theft of our intellectual property claims and
our claim for damages

19

98

135

332

Acquisition related expenses

129

163

588

246

Proceeds from litigation

—

(367)

—

(639)

Total of adjustments before taxes

620

128

2,334

782

Income taxes affected by the above adjustments

100

48

724

251

      Total adjustments

520

80

1,610

531

Non-GAAP Net Income

$

3,218

$

1,821

$

7,206

$

5,710

CLEARONE, INC.

UNAUDITED RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDA

(Dollars in thousands, except per share values)


Quarter ended December 31,

Year ended December 31,

2014

2013

2014

2013

GAAP net income

$

2,698

$

1,741

$

5,596

$

5,179

Adjustments:






Provision for income taxes

550

1,042

2,633

2,590

Depreciation and amortization

544

344

1,971

1,327

Non-GAAP EBITDA

3,792

3,127

10,200

9,096

Proceeds from litigation

—

(367)

—

(639)

Share-based compensation

135

91

401

296

Legal expenses for litigation relating to indemnification of
   former officers, theft of our intellectual property claims
   and our claim for damages

19

98

135

332

Acquisition related expenses

129

163

588

246

Non-GAAP Adjusted EBITDA

$

4,075

$

3,112

$

11,324

$

9,331








Basic weighted average shares outstanding

9,118,977

8,985,518

9,166,769

9,064,340

Diluted weighted average shares outstanding

9,510,957

9,340,741

9,581,326

9,455,518








Basic Non-GAAP Adjusted EBITDA per common share

$

0.45

$

0.35

$

1.24

$

1.03

Diluted Non-GAAP Adjusted EBITDA per common share

$

0.43

$

0.33

$

1.18

$

0.99

Contact:
Investor Relations
801-975-7200
[email protected]

SOURCE ClearOne

Related Links

http://www.clearone.com