PR Newswire
SALT LAKE CITY, Aug. 9, 2017
SALT LAKE CITY, Aug. 9, 2017 /PRNewswire/ -- ClearOne (NASDAQ: CLRO), a global provider of audio and visual communication solutions, reported financial results for the three months and six months ended June 30, 2017.
"Our major product transition continued to impact the company resulting in a disappointing second quarter, notwithstanding the 34% sequential increase in revenues in Q2 from the new Converge® Pro 2 (CP2), which with our Beamforming Microphone Array 2 is our next generation conferencing platform," said Zee Hakimoglu, president and chief executive officer. "CP2 platform is taking longer than previous product ramps and extending the normal sales-cycle because of infringing activities and the additional training needed by AV consultants, integrators and large end-customers on significant changes between platforms, including new architecture, scalability, interoperability and user interfaces. At the end of Q1, we completed implementation of important software feature upgrades, enabling us to introduce the new platform to AV consultants to specify for future large-scale projects. We are making good progress with our AV practitioner channel partners for design/build projects and secured wins with well-known, leading companies. Along with sequential growth of the new platform, Q2 positives included video revenue growing 25% year-over-year and gross margins improving from 57% in Q1 to 59% in Q2.
"Over the last several years, we have launched new products building upon our core base in pro AV and establishing a complete value chain including professional microphones, video collaboration, and networked audio video streaming. Frequently recognized by the industry, in June we received three prestigious 'Best of Show' awards at InfoComm. During the quarter, we were awarded three new patents, one of which was our innovative patent on a system and method involving the combination of echo cancellation, beamforming microphone arrays, and smart beam selection--the technology underpinning the 'acoustic intelligence' of our ground-breaking Beamforming Microphone Array. We continued to take the necessary steps to enforce this strategic patent to remedy having to compete against our own patented technology, and to defend the validity of our patents.
"Our fundamentals are strong as a result of our award-winning product set, efficient operations and strong balance sheet. As we further our revenue expansion with CP2 platform and video, we expect to close the profitability gap. In addition, we continue to create shareholder value through our on-going repurchase program and dividend plan," concluded Hakimoglu.
2017 InfoComm Awards
InfoComm International®, the association representing the professional audiovisual and information communications industries worldwide, hosts the largest trade show of the industry.
Financial Summary
The Company uses certain non-GAAP financial measures and reconciles those to GAAP measures in the attached tables.
($ in 000, except per share) | Three months ended June 30, | | Six months ended June 30, | |||||||||||
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change | |||
GAAP | | | | | | | | | | | | |||
Revenue | $10,311 | | $11,966 | | -14% | | $21,989 | | $24,999 | | -12% | |||
Gross Profit | 6,069 | | 7,664 | | -21% | | 12,747 | | 16,129 | | -21% | |||
Operating Income (Loss) | (1,109) | | 1,320 | | -184% | | (1,635) | | 3,293 | | -150% | |||
Net Income (Loss) | (820) | | 955 | | -186% | | (1,288) | | 2,323 | | -155% | |||
Earnings (Loss) Per Share (Diluted) | (0.09) | | 0.10 | | -190% | | (0.15) | | 0.24 | | -163% | |||
Non-GAAP | | | | | | | | | | | | |||
Non-GAAP Gross Profit | $6,076 | | $7,671 | | -21% | | $12,761 | | $16,140 | | -21% | |||
Non-GAAP Operating Income | 136 | | 1,941 | | -93% | | 502 | | 4,462 | | -89% | |||
Non-GAAP Net Income (Loss) | (102) | | 1,405 | | -107% | | 47 | | 3,161 | | -99% | |||
Non-GAAP Adjusted EBITDA | 365 | | 2,206 | | -83% | | 999 | | 4,981 | | -80% | |||
Non-GAAP Earnings (Loss) per share (Diluted) | (0.01) | | 0.15 | | -107% | | 0.01 | | 0.33 | | -98% | |||
| | | | | | | | | | | |
Balance Sheet Highlights
At June 30, 2017, cash, cash equivalents and investments were $29.2 million, as compared with $38.5 million at December 31, 2016. A significant portion of this decrease can be attributed to legal expenses, share repurchases, dividend payments and higher investment in inventory related to the Converge Pro 2 platform and wireless microphones which is expected to flow back into cash in the near term. The Company continued to have no debt.
During Q2 of 2017, the Company paid a cash dividend of $0.07 per share and repurchased approximately 215,000 shares amounting to $2.1 million. As of June 30, 2017, the Company has acquired approximately 836,000 shares amounting to $9.2 million since this program commenced in March 2016 and was renewed and extended by the board in March 2017. The Company intends to continue to repurchase shares of its common stock under this program in the open market, subject to price, volume and other safe harbor restrictions. The Company also announced on August 7, 2017 a cash dividend of $0.07 per share for Q3 2017.
Conference Call Information
ClearOne senior management will host an investor conference call today, August 9th at 11:30 a.m. Eastern Time to review the company's financial results. The conference call will be available to interested parties by dialing +1- 877-369-6586 (domestic) or +1- 253-237-1165 (international). The conference ID is 60167958. The call will also be available through a live, listen-only audio Internet broadcast at http://investors.clearone.com/events.cfm. For those who are not available to listen to the live broadcast, the call will be archived on the same web site for at least three months.
About ClearOne
ClearOne is a global company that designs, develops and sells conferencing, collaboration, and network streaming & 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.
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.
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