Contacts: ClearOne Communications, Inc.
Investor Relations
(801) 303-3555
Robert Jaffe
PondelWilkinson Inc.
(310) 279-5980
CLEARONE REPORTS FISCAL 2007 SECOND QUARTER FINANCIAL RESULTS
Salt Lake City, UT - January 25, 2007 - ClearOne Communications, Inc. (OTC: CLRO.OB) today reported financial results for the second quarter of fiscal 2007 ended December 31, 2006.
For the fiscal 2007 second quarter, revenue increased to $10.1 million from $9.1 million in the same quarter of last year. Gross profit grew to $5.2 million from $4.6 million for the prior year period. Operating income was $915,000 compared with an operating loss of $413,000 in the same quarter last year. Net income was $1.1 million, or $0.09 per diluted share, compared with net income for the prior year period of $81,000, or $0.01 per diluted share, which included income from discontinued operations of $157,000.
“During the second quarter, higher revenues and enhanced gross margins led to a significantly improved bottom line,” said Zee Hakimoglu, president and chief executive officer of ClearOne. “We also successfully completed a tender offer, repurchasing more than one million shares of the company’s common stock, and took an important step to facilitate future growth by moving to a new corporate headquarters that has increased space for product development.”
For the first six months of fiscal 2007, revenue increased to $19.5 million from $17.9 million in the same period of fiscal 2006. Gross profit grew to $10.3 million from $9.4 million for the prior year period. Operating income was $1.2 million compared with operating income of $174,000 in the same period last year. Net income was $1.8 million, or $0.15 per diluted share, compared with net income for the prior year period of $2.1 million, or $0.17 per diluted share, which included income from discontinued operations of $1.2 million.
At December 31, 2006, the company had cash, cash equivalents, and marketable securities of $18.3 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
| |
CONDENSED CONSOLIDATED BALANCE SHEETS | |
(Unaudited) | |
(in thousands of dollars, except per share amounts) | |
| | | | | | |
| | | December 31, | | June 30, | |
| | | 2006 | | 2006 | |
ASSETS | | | | | |
| Current assets: | | | | | | | |
| Cash and cash equivalents | | $ | 1,840 | | $ | 1,240 | |
| Marketable securities | | | 16,500 | | | 20,550 | |
| Accounts receivable | | | 7,682 | | | 7,784 | |
| Note receivable | | | 156 | | | - | |
| Inventories, net | | | 5,909 | | | 6,614 | |
| Income tax receivable | | | 2,392 | | | 2,607 | |
| Deferred income taxes, net | | | 87 | | | 128 | |
| Prepaid expenses | | | 322 | | | 255 | |
| Net Assets of Discontinued Operations | | | - | | | 565 | |
| Total current assets | | | 34,888 | | | 39,743 | |
| | | | | | | | |
| Property and equipment, net | | | 2,817 | | | 1,647 | |
| Note receivable - long-term | | | 126 | | | - | |
| Other assets | | | 22 | | | 15 | |
| Total assets | | $ | 37,853 | | $ | 41,405 | |
| | | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | |
| Current liabilities: | | | | | | | |
| Accounts payable | | $ | 2,083 | | $ | 2,597 | |
| Accrued liabilities | | | 2,152 | | | 2,397 | |
| Deferred product revenue | | | 4,711 | | | 5,871 | |
| Total current liabilities | | | 8,946 | | | 10,865 | |
| | | | | | | | |
| Deferred Rent | | | 933 | | | - | |
| Deferred income taxes, net | | | 87 | | | 128 | |
| Total liabilities | | | 9,966 | | | 10,993 | |
| | | | | | | | |
| Shareholders' equity: | | | | | | | |
| Common stock, par value $0.001, 50,000,000 shares authorized, | | | | | | | |
| 11,072,349 and 12,184,727 shares issued and outstanding, respectively | | | 11 | | | 12 | |
| Additional paid-in capital | | | 48,479 | | | 52,764 | |
| Accumulated deficit | | | (20,603 | ) | | (22,364 | ) |
| Total shareholders' equity | | | 27,887 | | | 30,412 | |
| Total liabilities and shareholders' equity | | $ | 37,853 | | $ | 41,405 | |
| |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |
(Unaudited) | |
(in thousands of dollars, except per share amounts) | |
| | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended | |
| | | December 31, | | December 31, | | December 31, | | December 31, | |
| | | 2006 | | 2005 | | 2006 | | 2005 | |
| | | | | | | | | | |
| Product Revenue: | | $ | 10,107 | | $ | 9,102 | | $ | 19,518 | | $ | 17,880 | |
| | | | | | | | | | | | | | |
| Cost of goods sold: | | | 4,860 | | | 4,470 | | | 9,176 | | | 8,484 | |
| Gross profit | | | 5,247 | | | 4,632 | | | 10,342 | | | 9,396 | |
| | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | |
| Marketing and selling | | | 1,789 | | | 1,810 | | | 3,707 | | | 3,622 | |
| General and administrative | | | 688 | | | 1,457 | | | 1,497 | | | 3,228 | |
| Settlement in shareholders' class action | | | - | | | - | | | - | | | (1,205 | ) |
| Research and product development | | | 1,855 | | | 1,778 | | | 3,934 | | | 3,577 | |
| Total operating expenses | | | 4,332 | | | 5,045 | | | 9,138 | | | 9,222 | |
| | | | | | | | | | | | | | |
| Operating income (loss) | | | 915 | | | (413 | ) | | 1,204 | | | 174 | |
| | | | | | | | | | | | | | |
| Other income (expense), net: | | | | | | | | | | | | | |
| Interest income | | | 283 | | | 186 | | | 590 | | | 345 | |
| Other, net | | | 37 | | | 5 | | | 62 | | | 12 | |
| Other income (expense), net: | | | 320 | | | 191 | | | 652 | | | 357 | |
| | | | | | | | | | | | | | |
| Income (loss) from continuing operations before income taxes | | | 1,235 | | | (222 | ) | | 1,856 | | | 531 | |
| (Provision) benefit from income taxes | | | (155 | ) | | 146 | | | (136 | ) | | 368 | |
| Income (loss) from continuing operations | | | 1,080 | | | (76 | ) | | 1,720 | | | 899 | |
| | | | | | | | | | | | | | |
| Discontinued operations: | | | | | | | | | | | | | |
| Income from discontinued operations | | | 20 | | | 100 | | | 75 | | | 218 | |
| Gain on disposal of discontinued operations | | | (13 | ) | | 150 | | | (10 | ) | | 1,646 | |
| Income tax provision | | | (3 | ) | | (93 | ) | | (24 | ) | | (695 | ) |
| Income from discontinued operations: | | | 4 | | | 157 | | | 41 | | | 1,169 | |
| | | | | | | | | | | | | | |
| Net income | | $ | 1,084 | | $ | 81 | | $ | 1,761 | | $ | 2,068 | |
| | | | | | | | | | | | | | |
| Basic earnings per common share from continuing operations | | $ | 0.09 | | $ | (0.01 | ) | $ | 0.14 | | $ | 0.08 | |
| Diluted earnings per common share from continuing operations | | $ | 0.09 | | $ | (0.01 | ) | $ | 0.14 | | $ | 0.07 | |
| | | | | | | | | | | | | | |
| Basic earnings per common share from discontinued operations | | $ | 0.00 | | $ | 0.01 | | $ | 0.00 | | $ | 0.10 | |
| Diluted earnings per common share from discontinued operations | | $ | 0.00 | | $ | 0.01 | | $ | 0.00 | | $ | 0.10 | |
| | | | | | | | | | | | | | |
| Basic earnings per common share | | $ | 0.09 | | $ | 0.01 | | $ | 0.15 | | $ | 0.18 | |
| Diluted earnings per common share | | $ | 0.09 | | $ | 0.01 | | $ | 0.15 | | $ | 0.17 | |
| | | | | | | | | | | | | | |
| Basic weighted average shares | | | 11,922,641 | | | 12,184,727 | | | 12,053,745 | | | 11,734,485 | |
| Diluted weighted average shares | | | 11,957,706 | | | 12,195,466 | | | 12,100,794 | | | 12,230,035 | |
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