2013Q2PR-Finalv31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported): July 31, 2013
 

ClearOne, Inc.
(Exact Name of Registrant as Specified in Its Charter)
 
Utah
(State or Other Jurisdiction of Incorporation)

 
 
 
 
 
Utah
 
001-33660
 
87-0398877
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(I.R.S. Employer
Identification No.)


 
 
 
5225 Wiley Post Way, Suite 500
Salt Lake City, Utah
 
 
84116
(Address of principal executive offices)
 
(Zip Code)


(801) 975-7200
(Registrant's Telephone Number, Including Area Code)

Not applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[   ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[   ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[   ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[   ]  Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






Item 2.02. Results of Operations and Financial Condition

On July 31, 2013, ClearOne, Inc. issued a press release announcing its financial results for the six months ended June 30, 2013. The full text of the press release is attached as Exhibit 99.1
 
Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

Exhibit No.
 
Description
Exhibit 99.1
 
Press Release dated July 31, 2013 titled “ClearOne Reports 2013 Second Quarter Financial Results”.

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 

 
 
ClearOne, Inc.,
(Registrant)
 
 
 
August 2, 2013
By:
/s/ Zeynep Hakimoglu
 
 
Zeynep Hakimoglu
Chief Executive Officer
(Principal Executive Officer)


















Contact:
Brent Johnson
Investor Relations
801-303-3577
brent.johnson@clearone.com

ClearOne Reports 2013 Second Quarter Financial Results

Company Reports Fourth Consecutive Quarter of Year-over-Year Revenue Growth
SALT LAKE CITY, UTAH - July 31, 2013 - ClearOne (NASDAQ: CLRO) today reported its financial results for the three and six months ended June 30, 2013.

For the 2013 second quarter, revenue was $11.70 million, compared with $11.66 million for the second quarter of 2012. Gross profit was $6.9 million, or 59% of revenue, compared with $7.1 million, or 61% of revenue, for the second quarter of 2012. Non-GAAP operating income increased by 7% to $1.8 million from $1.7 million for the 2012 second quarter. Non-GAAP net income grew 40% to $1.2 million, or $0.13 per diluted share, from $885,000, or $0.10 per diluted share, last year. Non-GAAP Adjusted EBITDA for the 2013 second quarter increased 9% to $2.0 million, or $0.22 per diluted share, from $1.9 million, or $0.20 per diluted share, a year ago.

For the first half of 2013, revenue rose to $23.0 million from $21.8 million for the same period in 2012. Gross profit was $13.9 million, or 60% of revenue, compared with $13.2 million, or 61% of revenue, for the first half of 2012. Non-GAAP operating income for the first half of 2013 increased by 22% to $3.2 million from $2.6 million for the second half of 2012. Non-GAAP net income for the 2013 year-to-date period grew 46% to $2.2 million, or $0.23 per diluted share, from $1.5 million, or $0.16 per diluted share, last year. Non-GAAP Adjusted EBITDA for the first half of 2013 increased 18% to $3.6 million, or $0.38 per diluted share, from $3.1 million, or $0.33 per diluted share, for the corresponding period a year ago.

The reconciliation between GAAP and Non-GAAP measures is available in the tables attached to this release.

At June 30, 2013, the company had cash, cash equivalents, and investments of $41.6 million. The company continues to selectively evaluate modest acquisition and organic growth opportunities to complement its product portfolio.

"At the halfway mark for fiscal 2013, we are optimistic that our positive momentum will continue," said Zee Hakimoglu, President, Chief Executive Officer and Chairman of ClearOne. "Although the company’s performance in the Asia and EMEA markets continues to reflect a slowdown in growth and lingering macroeconomic uncertainty, we remain confident that the best is yet to come, as the market continues to recognize the value of the lower-cost software-based solutions that define the future in video and are addressed by the strong ClearOne offering."

Recent highlights
•
ClearOne made progress on an important strategic goal in the quarter by successfully signing major distribution partners in the EMEA region and the U.S. These new distribution partners expand the reach of ClearOne’s unified communications and video products.
•
The company continued to develop its unified media engine for its next-generation video products. This advanced technology will enhance the performance of the COLLABORATE® video conferencing and VIEW® multimedia streaming products, as well as contribute to stronger gross margins when the next-generation products launch.



•
ClearOne took another leap ahead with the Pro Audio industry’s most powerful innovation, the Beamforming Microphone Array, by adding expanded support for tabletop and wall applications.

Non-GAAP Financial Measures
ClearOne provides non-GAAP financial information in the form of Non-GAAP net income, Adjusted 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 net income, Adjusted EBITDA and corresponding earnings per share excludes certain costs and expenses, the details of which are provided in the tables below 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 net income to GAAP net income is included with this news release.

About ClearOne

ClearOne is a global company that designs, develops and sells conferencing, collaboration, streaming and digital signage solutions for audio and visual communications. The performance and simplicity of its advanced comprehensive solutions offer unprecedented levels of functionality, scalability and reliability. 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 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, 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
June 30, 2013
 
As of
December 31, 2012
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
32,386

 
$
55,509

Marketable securities
337

 
-

Receivables, net of allowance for doubtful accounts of $55 and $60, respectively
8,439

 
8,388

Inventories, net
12,304

 
10,873

Deferred income taxes
3,148

 
3,148

Prepaid expenses and other assets
1,785

 
1,369

Total current assets
58,399

 
79,287

Long-term inventories, net
1,609

 
1,955

Property and equipment, net
1,783

 
1,708

Long-term marketable securities
8,873

 
      -

Intangibles, net
3,996

 
4,258

Goodwill
3,472

 
3,472

Deferred income taxes
1,195

 
1,195

Other assets
61

 
64

Total assets
$
79,388

 
$
91,939

 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
3,031

 
$
2,302

Accrued liabilities
2,009

 
2,143

Income taxes payable
      - 

 
14,782

Deferred product revenue
4,300

 
3,593

Total current liabilities
9,340

 
22,820

Deferred rent
365

 
422

Other long-term liabilities
2,028

 
2,029

Total liabilities
11,733

 
25,271

 
 
 
 
Shareholders' equity:
 
 
 
Common stock, par value $0.001, 50,000,000 shares authorized, 9,080,060 and 9,163,462 shares issued and outstanding, respectively
9

 
9

Additional paid-in capital
39,729

 
40,430

Accumulated other comprehensive loss
(87
)
 
      -

Retained earnings
28,004

 
26,229

Total shareholders' equity
67,655

 
66,668

Total liabilities and shareholders' equity
$
79,388

 
$
91,939







CLEARONE, INC.
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in thousands, except per share value)

 
Quarter ended June 30,
 
6 Months ended June 30,
 
2013
 
2012
 
2013
 
2012
Revenue
$
11,703

 
$
11,655

 
$
22,996

 
$
21,809

Cost of goods sold
4,839

 
4,562

 
9,133

 
8,608

Gross profit
6,864

 
7,093

 
13,863

 
13,201

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Sales and marketing
2,088

 
2,254

 
4,356

 
4,388

Research and product development
1,843

 
2,029

 
3,709

 
4,037

General and administrative
1,437

 
1,611

 
3,234

 
3,091

Proceeds from litigation, net
   - 

 
      - 

 
   - 

 
(250
)
Total operating expenses
5,368

 
5,894

 
11,299

 
11,266

 
 
 
 
 
 
 
 
Operating income
1,496

 
1,199

 
2,564

 
1,935

Other income (expense), net
47

 
(5
)
 
33

 
11

Income before income taxes
1,543

 
1,194

 
2,597

 
1,946

Provision for income taxes
498

 
544

 
822

 
818

Net income
$
1,045

 
$
650

 
$
1,775

 
$
1,128

 
 
 
 
 
 
 
 
Basic earnings per common share
$
0.11

 
$
0.07

 
$
0.19

 
$
0.12

Diluted earnings per common share
$
0.11

 
$
0.07

 
$
0.19

 
$
0.12

 
 
 
 
 
 
 
 
Basic weighted average shares outstanding
9,093,461

 
9,107,420

 
9,122,996

 
9,102,786

Diluted weighted average shares outstanding
9,459,495

 
9,226,426

 
9,499,452

 
9,224,727

 
 
 
 
 
 
 
 
Net Income
1,045

 
650

 
1,775

 
1,128

Comprehensive income:
 
 
 
 
 
 
 
Unrealized loss on available for sale securities, net of tax
(87
)
 
      - 

 
(87
)
 
   - 

Comprehensive income
$
958

 
$
650

 
$
1,688

 
$
1,128






CLEARONE, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
(Dollars in thousands, except per share value)

 
Quarter ended June 30, 2013
 
Quarter ended June 30, 2012
 
GAAP
 
Adjustments
 
Non-GAAP
 
GAAP
 
Adjustments
 
Non-GAAP
Revenue
$
11,703

 
     - 

 
$
11,703

 
$
11,655

 
   - 

 
$
11,655

Cost of goods sold
4,839

 
(2
)
 
4,837

 
4,562

 
      - 

 
4,562

Gross profit
6,864

 
2

 
6,866

 
7,093

 
      - 

 
7,093

 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Sales and marketing
2,088

 
(19
)
 
2,069

 
2,254

 
(17
)
 
2,237

Research and product development
1,843

 
(13
)
 
1,830

 
2,029

 
(10
)
 
2,019

General and administrative
1,437

 
(256
)
 
1,181

 
1,611

 
(439
)
 
1,172

Proceeds from litigation
   -

 
 
 
   -

 
   - 

 
      - 

 
   - 

Total operating expenses
5,368

 
(288
)
 
5,080

 
5,894

 
(466
)
 
5,428

 
 
 
 
 
 
 
 
 
 
 
 
Operating income
1,496

 
290

 
1,786

 
1,199

 
466

 
1,665

Other income (expense), net
47

 
      - 

 
47

 
(5
)
 
      - 

 
(5
)
Income before income taxes
1,543

 
290

 
1,833

 
1,194

 
466

 
1,660

Provision for income taxes
498

 
95

 
593

 
544

 
231

 
775

Net income
$
1,045

 
$
195

 
$
1,240

 
$
650

 
$
235

 
$
885

 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per common share
$
0.11

 
 
 
$
0.14

 
$
0.07

 
 
 
$
0.10

Diluted earnings per common share
$
0.11

 
 
 
$
0.13

 
$
0.07

 
 
 
$
0.10

 
 
 
 
 
 
 
 
 
 
 
 
Basic weighted average shares outstanding
9,093,461

 
 
 
9,093,461

 
9,107,420

 
 
 
9,107,420

Diluted weighted average shares outstanding
9,459,495

 
 
 
9,459,495

 
9,226,426

 
 
 
9,226,426

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The adjustments consist of the following:
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
 
 
$
67

 
 
 
 
 
$
60

 
 
Amortization of purchased intangibles
 
 
118

 
 
 
 
 
129

 
 
Legal expenses for litigation relating to indemnification of former officers, intellectual property claims and our claim for damages
 
 
95

 
 
 
 
 
237

 
 
Acquisition related expenses
 
 
10

 
 
 
 
 
40

 
 
Total of adjustments before taxes
 
 
290

 
 
 
 
 
466

 
 
Income taxes affected by the above adjustments
 
 
95

 
 
 
 
 
231

 
 
Total adjustments
 
 
$
195

 
 
 
 
 
$
235

 
 







CLEARONE, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
(Dollars in thousands, except per share value)

 
6 months ended June 30, 2013
 
6 months ended June 30, 2012
 
GAAP
 
Adjustments
 
Non-GAAP
 
GAAP
 
Adjustments
 
Non-GAAP
Revenue
$
22,996

 
      - 

 
$
22,996

 
$
21,809

 
      - 

 
$
21,809

Cost of goods sold
9,133

 
(4
)
 
9,129

 
8,608

 
(1
)
 
8,607

Gross profit
13,863

 
4

 
13,867

 
13,201

 
1

 
13,202

 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Sales and marketing
4,356

 
(34
)
 
4,322

 
4,388

 
(30
)
 
4,358

Research and product development
3,709

 
(24
)
 
3,685

 
4,037

 
(17
)
 
4,020

General and administrative
3,234

 
(567
)
 
2,667

 
3,091

 
(885
)
 
2,206

Proceeds from litigation
   -

 
      - 

 
   -

 
(250
)
 
250

 
   -

Total operating expenses
11,299

 
(625
)
 
10,674

 
11,266

 
(682
)
 
10,584

 
 
 
 
 
 
 
 
 
 
 
 
Operating income
2,564

 
629

 
3,193

 
1,935

 
683

 
2,618

Other income (expense), net
33

 
      - 

 
33

 
11

 
      - 

 
11

Income before income taxes
2,597

 
629

 
3,226

 
1,946

 
683

 
2,629

Provision for income taxes
822

 
199

 
1,021

 
818

 
300

 
1,118

Net income
$
1,775

 
$
430

 
$
2,205

 
$
1,128

 
$
383

 
$
1,511

 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per common share
$
0.19

 
 
 
$
0.24

 
$
0.12

 
 
 
$
0.17

Diluted earnings per common share
$
0.19

 
 
 
$
0.23

 
$
0.12

 
 
 
$
0.16

 
 
 
 
 
 
 
 
 
 
 
 
Basic weighted average shares outstanding
9,122,996

 
 
 
9,122,996

 
9,102,786

 
 
 
9,102,786

Diluted weighted average shares outstanding
9,499,452

 
 
 
9,499,452

 
9,224,727

 
 
 
9,224,727

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The adjustments consist of the following:
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
 
 
$
126

 
 
 
 
 
$
111

 
 
Amortization of purchased intangibles
 
 
261

 
 
 
 
 
231

 
 
Legal expenses for litigation relating to indemnification of former officers, intellectual property claims and our claim for damages
 
 
184

 
 
 
 
 
364

 
 
Acquisition related expenses
 
 
58

 
 
 
 
 
227

 
 
Proceeds from litigation, net of legal expenses and special bonus to key litigation participants
 
 
      - 

 
 
 
 
 
(250
)
 
 
Total of adjustments before taxes
 
 
629

 
 
 
 
 
683

 
 
Income taxes affected by the above adjustments
 
 
199

 
 
 
 
 
300

 
 
Total adjustments
 
 
$
430

 
 
 
 
 
$
383

 
 





CLEARONE, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED EBITDA
(Dollars in thousands, except per share value)

 
Quarter ended June 30,
 
6 Months ended June 30,
 
2013

 
2012

 
2013

 
2012

GAAP net income
$
1,045

 
$
650

 
$
1,775

 
$
1,128

Adjustments:
 
 
 
 
 
 
 
Provision for income taxes
498

 
544

 
822

 
818

Depreciation and amortization
323

 
342

 
646

 
654

Non-GAAP EBITDA
1,866

 
1,536

 
3,243

 
2,600

Proceeds from litigation, net of legal expenses and special bonus to officers
   -

 
   -

 
   -

 
(250
)
Share-based compensation
67

 
60

 
126

 
111

Legal expenses for litigation relating to indemnification of former officers, intellectual property claims and our claim for damages
95

 
237

 
184

 
364

Acquisition related expenses
10

 
40

 
58

 
227

Non-GAAP Adjusted EBITDA
$
2,038

 
$
1,873

 
$
3,611

 
$
3,052

 
 
 
 
 
 
 
 
Basic weighted average shares outstanding
9,093,461

 
9,107,420

 
9,122,996

 
9,102,786

Diluted weighted average shares outstanding
9,459,495

 
9,226,426

 
9,499,452

 
9,224,727

 
 
 
 
 
 
 
 
Basic Adjusted EBITDA per common share
$
0.22

 
$
0.21

 
$
0.40

 
$
0.34

Diluted Adjusted EBITDA per common share
$
0.22

 
$
0.20

 
$
0.38

 
$
0.33