Contacts: ClearOne
Investor Relations
(801) 303-3555
& #160; Robert Jaffe
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& #160; (310) 279-5980
CLEARONE REPORTS FISCAL 2006 FOURTH QUARTER AND FULL-YEAR
FINANCIAL RESULTS
Salt Lake City, UT - August 28, 2006 - ClearOne Communications, Inc. (OTC: CLRO.OB) today reported financial results for the fiscal 2006 fourth quarter and year ended June 30, 2006.
For fiscal 2006, revenue increased to $37.6 million from $31.6 million in fiscal 2005. Gross profit grew to $18.3 million from $16.7 million for the prior year period. Income from continuing operations was $166,000 versus $2.2 million for fiscal 2005. Net income in fiscal 2006 was $2.1 million, or $0.17 per diluted share, which included income from discontinued operations of $1.9 million. This compares with net income for the prior year of $16.1 million, or $1.30 per diluted share, which included income from discontinued operations of $13.9 million.
“During the past year we launched a number of new products, expanded our distribution channel and increased market share in the table top and professional conferencing space,” said Zee Hakimoglu, president and chief executive officer of ClearOne. “Together, these efforts helped fuel our top line growth of nearly 20 percent over the prior year. While our newer product lines generally have a lower gross margin than our professionally installed line of products, we believe they add attractive growth opportunities, allowing us to enter and further penetrate new segments of the audio conferencing market, and diversify our product portfolio.”
For the fiscal 2006 fourth quarter, revenue increased to $9.7 million from $9.1 million in the fiscal 2005 fourth quarter. Gross profit was $4.7 million compared with $5.1 million for the fourth quarter of fiscal 2005. Total operating expenses were $5.7 million compared with $6.2 million in the same quarter of the prior year. Loss from continuing operations was ($764,000) versus income from continuing operations of $2.2 million in the fiscal 2005 fourth quarter. Net loss was ($512,000), or ($0.04) per diluted share, which included income from discontinued operations of $252,000. This compares with net income for the prior year fourth quarter of $2.3 million, or $0.19 per diluted share, which included income from discontinued operations of $116,000.
At June 30, 2006, the company had cash, cash equivalents, and marketable securities of $21.8 million and no long-term debt.
About ClearOne
ClearOne is a communications solutions company that develops and sells audio conferencing systems and other related products for audio, video, and web conferencing applications. The reliability, flexibility, and performance of ClearOne’s comprehensive solutions create a natural communications environment, which saves organizations time and money by enabling more effective and efficient communication. For more information, visit ClearOne’s website 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 statements regarding the company’s ability to successfully commercialize newer products and enter new markets, 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.
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FINANCIAL TABLES FOLLOW
CLEARONE COMMUNICATIONS, INC. AND SUBSIDIARIES | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |
| (in thousands of dollars, except per share amount) | |
| (unaudited) | |
| | | | | | | | | | |
| | | Three Months Ended | | Years Ended | |
| | | June 30, | | June 30, | |
| | | 2006 | | 2005 | | 2006 | | 2005 | |
| | | | | | | | | | |
| Revenue | | $ | 9,730 | | $ | 9,103 | | $ | 37,632 | | $ | 31,645 | |
| Cost of goods sold | | | 5,071 | | | 4,026 | | | 19,284 | | | 14,951 | |
| Gross profit | | | 4,659 | | | 5,077 | | | 18,348 | | | 16,694 | |
| | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | |
| Marketing and selling | | | 2,324 | | | 2,492 | | | 7,866 | | | 9,070 | |
| Research and product development | | | 2,521 | | | 1,495 | | | 8,299 | | | 5,305 | |
| General and administrative | | | 820 | | | 1,379 | | | 5,108 | | | 5,489 | |
| Settlement in shareholders' class action | | | - | | | 563 | | | (1,205 | ) | | (2,046 | ) |
| Other operating expenses | | | - | | | 290 | | | - | | | 290 | |
| Total operating expenses | | | 5,665 | | | 6,219 | | | 20,068 | | | 18,108 | |
| Operating loss | | | (1,006 | ) | | (1,142 | ) | | (1,720 | ) | | (1,414 | ) |
| | | | | | | | | | | | | | |
| Other income (expense), net | | | 422 | | | 125 | | | 1,016 | | | 318 | |
| Loss from continuing operations before income taxes | | | (584 | ) | | (1,017 | ) | | (704 | ) | | (1,096 | ) |
| Benefit for income taxes | | | (180 | ) | | 3,219 | | | 870 | | | 3,248 | |
| Income (loss) from continuing operations | | | (764 | ) | | 2,202 | | | 166 | | | 2,152 | |
| | | | | | | | | | | | | | |
| Income from discontinued operations | | | 252 | | | 116 | | | 1,930 | | | 13,923 | |
| Net income (loss) | | $ | (512 | ) | $ | 2,318 | | $ | 2,096 | | $ | 16,075 | |
| | | | | | | | | | | | | | |
| Diluted earnings (loss) per common share from continuing operations | | $ | (0.06 | ) | $ | 0.18 | | $ | 0.01 | | $ | 0.17 | |
| Diluted earnings per common share from discontinued operations | | $ | 0.02 | | $ | 0.01 | | $ | 0.16 | | $ | 1.13 | |
| Diluted earnings (loss) per common share | | $ | (0.04 | ) | $ | 0.19 | | $ | 0.17 | | $ | 1.30 | |
| Diluted weighted average shares outstanding | | | 12,209,749 | | | 12,273,062 | | | 12,206,618 | | | 12,332,106 | |
| |
CONDENSED CONSOLIDATED BALANCE SHEETS | |
| (in thousands of dollars, except per share amount) | |
| (unaudited) | |
| | | | | | |
| | | June 30, | |
| | | 2006 | | 2005 | |
| | | | | | |
ASSETS | | | | | |
| Current assets: | | | | | | | |
| Cash and cash equivalents | | $ | 1,240 | | $ | 1,892 | |
| Marketable securities | | | 20,550 | | | 15,800 | |
| Accounts receivable | | | 7,784 | | | 6,859 | |
| Inventories | | | 7,025 | | | 5,806 | |
| Income tax receivable | | | 2,607 | | | 3,952 | |
| Other current assets | | | 383 | | | 570 | |
| Total current assets | | | 39,589 | | | 34,879 | |
| | | | | | | | |
| Property and equipment, net | | | 1,647 | | | 2,805 | |
| Intangibles, net | | | 154 | | | 322 | |
| Other assets | | | 15 | | | 15 | |
| Total assets | | $ | 41,405 | | $ | 38,021 | |
| | | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | |
| Current liabilities: | | | | | | | |
| Accounts payable | | $ | 2,597 | | $ | 2,163 | |
| Accrued liabilities | | | 2,397 | | | 5,622 | |
| Deferred product revenue | | | 5,871 | | | 5,055 | |
| Total current liabilities | | | 10,865 | | | 12,840 | |
| | | | | | | | |
| Deferred income taxes, net | | | 128 | | | 270 | |
| Total liabilities | | | 10,993 | | | 13,110 | |
| | | | | | | | |
| Shareholders' equity: | | | | | | | |
| Total shareholders' equity | | | 30,412 | | | 24,911 | |
| Total liabilities and shareholders' equity | | $ | 41,405 | | $ | 38,021 | |
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