- Records GAAP EPS of $0.83 after accounting for one-time
legal settlement receivable of $55 million
- Delays in manufacturing transition contribute to revenue
decrease even as unfulfilled orders keep growing
- Overall revenue decreases by 44%
- Non-GAAP Opex declines by 24%
ClearOne (NASDAQ: CLRO), a global provider of audio and visual
communication solutions, reported financial results for the three
and twelve month periods ended December 31, 2022.
"The continued delays in the transition of our outsourced
manufacturing from China to Singapore caused us to lose revenue on
our core audio conferencing products. This combined with the
decline in video products, especially our professional cameras,
contributed to a 44% decline in revenues. The delay in the
transition is expected to affect our 2023-Q1 revenues also.
However, with our recent legal settlements which have provided us
with over $56 million in cash (before paying taxes) and with our
new products that are expected to increase our market share due to
better interoperability features, we are confident that we will be
able to weather these difficult times. We also take comfort in the
fact that our unfilled backlog is continuing to increase as we
strive to satisfy our customers’ demand," said Derek Graham, CEO of
ClearOne.
Recent Highlights
- On January 30, 2023, we introduced the new CHAT® 150 BT group
speakerphone with USB and Bluetooth connectivity that enhances the
conferencing experience for the ultimate in business class
performance. With simple, instant connection to personal computers,
mobile devices or Bluetooth-enabled desk phones, the CHAT® 150 BT
group speakerphone provides users with an affordable way to upgrade
home offices, executive offices, and mid-size meeting rooms with
BYOD convenience and superior audio clarity for audio conferences
and video meetings. The CHAT® 150 BT speakerphone also has an audio
bridging feature that allows far end conference participants
connected via a software conferencing application through USB,
local users of the speakerphone, and far end callers on a mobile
call connected through Bluetooth to all join the same call and hear
each other clearly. Featuring a steerable microphone array with
first-mic priority, the CHAT® 150 BT speakerphone intelligently
activates the microphone closest to the person speaking, reducing
interference from ambient noise. Like all ClearOne microphone
products, the CHAT® 150 BT speakerphone is compatible with popular
collaboration platforms including Microsoft® Teams, Zoom™, WebEx™,
Google® Meet™, and many more. The new BT model retains all the
class-leading features of the original CHAT® 150 speakerphone,
including Advanced Noise Cancellation, Full Duplex Distributed Echo
Cancellation™ and Automatic Level Control algorithms, to ensure
highly intelligible, natural audio capture and playback. It also
supports NFC tap-to-pair and includes a wired USB connection for
compatibility with the full variety of modern devices.
- On January 16, 2023, we introduced UNITE 260 Pro camera, a
professional grade 4K Ultra HD camera featuring both a 20X optical
zoom and 16X digital zoom that allows users to capture every
participant in all meeting, training, and learning environments it
is deployed in. Compatible with all popular meeting applications
like Microsoft® Teams, Zoom™, WebEx™, and Google® Meet™, the new
camera features an AI-based smart face tracking mode that keeps a
selected presenter in the frame as they move about the room.
Alternatively, the camera’s AI-based auto framing mode always keeps
an entire group in perfect view. With dual video outputs HDMI and
IP, the UNITE 260 Pro Camera is an excellent choice for a hybrid
environment: streaming content while simultaneously showing it live
where the presentation is occurring.
- In November 2022, we announced the introduction of UNITE 160, a
new camera that offers cutting-edge 4K UHD performance with 12x
optical zoom capabilities, remote-controlled mechanical pan and
tilt as well as AI-powered smart face tracking and auto framing.
This camera is designed to capture all participants in large rooms
while enabling automated focus on a moving presenter, making it
ideal for larger spaces including board rooms, training centers,
conference rooms and classrooms. This new camera offers an
integrated AI-based camera tracking solution for rooms that are a
fit for ClearOne's single Versa Lite CT and a single camera. This
new lower-cost camera tracking configuration eliminates the need
for a DSP mixer and a control system.
- In October 2022, we announced the introduction of UNITE 60, a
new wide angle 4K USB camera featuring AI-powered smart face and
voice tracking, along with electronic PTZ (pan/tilt/zoom)
capabilities. With a 120-degree field of view, and a plug-and-play
USB 3.0 connection for video, control, and power, the new UNITE® 60
camera is ideally suited for rooms such as executive offices,
huddle rooms, or smaller conference rooms. The UNITE 60 camera
leverages a wide dynamic range and super-high SNR with advanced 2D
and 3D noise reduction to deliver excellent visuals across varied
lighting conditions. In addition to the AI auto-tracking feature,
the camera can also be controlled via IR remote or UVC protocol.
The camera can be paired with a wide variety of microphones and
speakers.
Financial Summary
The Company uses certain non-GAAP financial measures and
reconciles those to GAAP measures in the attached tables.
- Q4 2022 revenue was $4.0 million, compared to $7.2 million in
Q4 2021 and $6.3 million in Q3 2022. The decrease in year-over-year
revenue as well as in sequential revenue was mainly due to (a) a
decline in revenue from video products due to decline in demand and
(b) our inability to fulfill the demand for our core audio
conferencing and beamforming microphone arrays due to ongoing
delays with the transition of our outsourced manufacturing from
China to Singapore.
- GAAP gross profit in Q4 2022 was $1.3 million, compared to $2.6
million in each of Q4 2021 and Q3 2022. GAAP gross profit margin
was 31% in Q4 2022, compared to 37% in Q4 2021 and 41% in Q3 2022.
Gross Profit margin decreased year over year as well as
sequentially mainly due to increase in material costs due to supply
chain constraints and increased administration costs as a
percentage of revenue partially offset by reduction in inventory
obsolescence and freight and tariff costs.
- Operating expenses in Q4 2022 were $3.9 million, compared to
$5.1 million in Q4 2021 and $3.7 million in Q3 2022. Non-GAAP
Operating expenses in Q4 2022 were $3.4 million, compared to $4.4
million in Q4 2021 and $3.0 million in Q3 2022. The decrease in
year-over-year as well as sequential Non-GAAP Operating expenses
was mainly due to the deep-cost cutting measures initiated in 2022
partially offset by an increase in bonuses for executives and other
employees.
- GAAP net income in Q4 2022 was $24.0 million, or $0.97 per
share, compared to a net loss of $(2.3) million, or $(0.10) per
share, in Q4 2021 and a net loss of $1.2 million, or $0.05 per
share, in Q3 2022. The change from net loss to net income both
year-over-year and sequentially was primarily due to the
recognition of a gain of $33.6 million related to the one-time
legal settlement receivable of $55 million net of unamortized
capitalized legal expenses of $21.4 million. This gain was
partially offset by operating loss and provision for income
tax.
($ in 000, except per share)
Three months ended December
31,
Year ended December
31,
2022
2021
Change in % Favorable/
(Adverse)
2022
2021
Change in % Favorable/
(Adverse)
GAAP
Revenue
$
4,021
$
7,202
(44
)
$
25,205
$
28,967
(13
)
Gross profit
1,264
2,638
52
9,457
11,916
(21
)
Operating expenses
3,854
5,114
25
16,679
19,411
14
Operating loss
(2,590
)
(2,476
)
(5
)
(7,222
)
(7,495
)
4
Net income (loss)
24,028
(2,284
)
1,152
20,556
(7,694
)
367
Diluted income (loss) per share
0.97
(0.10
)
1,070
0.83
(0.39
)
313
Non-GAAP
Non-GAAP operating expenses
3,358
4,429
24
14,062
16,996
17
Non-GAAP operating loss
(2,092
)
(1,788
)
(17
)
(4,597
)
(5,070
)
9
Non-GAAP net income (loss)
(2,292
)
(1,596
)
(44
)
(5,165
)
(5,269
)
2
Non-GAAP Adjusted EBITDA
(2,062
)
(1,678
)
(23
)
(4,383
)
(4,660
)
6
Non-GAAP diluted loss per share
(0.09
)
(0.07
)
(29
)
(0.19
)
(0.27
)
30
Balance Sheet Highlights
As of December 31, 2022, cash, cash equivalents and investments
were $1.0 million, as compared with $4.1 million as of December 31,
2021. As of December 31, 2022, the Company carried an aggregate
debt of $3.9 million on account of senior convertible notes issued
in December 2019, and a short-term bridge loan obtained in Q4 2022.
The Company’s cash position was strengthened by the receipts in
excess of $56 million in the first quarter of 2023 pursuant to
legal settlements. The Company also repaid the short-term bridge
loan in January 2023.
About ClearOne
ClearOne is a global company that designs, develops, and sells
conferencing, collaboration, and network streaming solutions for
voice and visual communications. The performance and simplicity of
its advanced comprehensive solutions offer unprecedented levels of
functionality, reliability, and scalability. Visit ClearOne 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 in this release below.
Forward Looking Statements
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 and any
statements of the plans and objectives of management for future
operations and forecasts of future growth and value and the
possible outcomes of litigation, 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. The information in this press release
should be read in conjunction with and is modified in its entirety
by, the Annual Report on Form 10-K (the “10-K”) filed by the
Company for the same period with the Securities and Exchange
Commission (the “SEC”) and all of the Company’s other public
filings with the SEC (the “Public Filings”).
In particular, the financial information contained herein is
subject to and qualified by reference to the financial statements
contained in the 10-Q, including the footnotes thereto, as well as
the Company’s annual report on Form 10-K for the year ended
December 31, 2022 (the “10-K”), the footnotes thereto and the
limitations set forth therein. Investors may not rely on the press
release without reference to the 10-Q, the 10-K, and the Public
Filings.
CLEARONE, INC
CONSOLIDATED BALANCE
SHEETS
(Dollars in thousands, except par
value)
December 31, 2022
December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
984
$
1,071
Marketable securities
—
1,790
Legal settlement receivable
55,000
—
Receivables, net of allowance for doubtful
accounts of $326
3,603
4,991
Inventories, net
8,961
10,033
Income tax receivable
1,071
7,535
Prepaid expenses and other assets
7,808
4,021
Total current assets
77,427
29,441
Long-term marketable securities
—
1,220
Long-term inventories, net
2,707
3,567
Property and equipment, net
383
744
Operating lease - right of use assets,
net
1,047
1,537
Intangibles, net
2,071
25,086
Other assets
115
4,597
Total assets
$
83,750
$
66,192
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
1,284
$
5,388
Accrued liabilities
3,041
2,549
Deferred product revenue
63
54
Short-term debt
3,732
3,481
Total current liabilities
8,120
11,472
Long-term debt
—
1,535
Operating lease liability
492
1,026
Other long-term liabilities
1,008
655
Total liabilities
9,620
14,688
Shareholders' equity:
Common stock, par value $0.001, 50,000,000
shares authorized, 23,955,767 and 22,410,126 shares issued and
outstanding
24
22
Additional paid-in capital
74,910
72,795
Accumulated other comprehensive loss
(288
)
(241
)
Accumulated deficit
(516
)
(21,072
)
Total shareholders' equity
74,130
51,504
Total liabilities and shareholders'
equity
$
83,750
$
66,192
CLEARONE, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Dollars in thousands, except per
share values)
Three months ended December
31,
Year ended December
31,
2022
2021
2022
2021
Revenue
$
4,021
$
7,202
$
25,205
$
28,967
Cost of goods sold
2,757
4,564
15,748
17,051
Gross profit
1,264
2,638
9,457
11,916
Operating expenses:
Sales and marketing
1,244
1,716
5,517
6,736
Research and product development
984
1,541
4,390
5,794
General and administrative
1,626
1,857
6,772
6,881
Total operating expenses
3,854
5,114
16,679
19,411
Operating loss
(2,590
)
(2,476
)
(7,222
)
(7,495
)
Interest expense
(135
)
(145
)
(420
)
(514
)
Other income, net
33,597
15
35,102
32
Income (loss) before income taxes
30,872
(2,606
)
27,460
(7,977
)
Provision for (benefit from) income
taxes
6,844
(322
)
6,904
(283
)
Net income (loss)
$
24,028
$
(2,284
)
$
20,556
$
(7,694
)
Basic weighted average shares
outstanding
23,952,590
22,403,408
23,937,962
19,859,817
Diluted weighted average shares
outstanding
24,947,851
22,403,408
25,189,147
19,859,817
Basic income (loss) per share
$
1.00
$
(0.10
)
$
0.86
$
(0.39
)
Diluted income (loss) per share
$
0.97
$
(0.10
)
$
0.83
$
(0.39
)
Comprehensive income (loss):
Net income (loss)
24,028
(2,284
)
20,556
(7,694
)
Unrealized loss on available-for-sale
securities, net of tax
—
(15
)
(2
)
(28
)
Change in foreign currency translation
adjustment
(22
)
(1
)
(45
)
(27
)
Comprehensive income (loss)
24,006
(2,300
)
20,509
(7,749
)
CLEARONE, INC.
UNAUDITED RECONCILIATION OF
GAAP MEASURES TO NON-GAAP MEASURES
(Dollars in thousands, except per
share values)
Three months ended December
31,
Year ended December
31,
2022
2021
2022
2021
GAAP operating loss
$
(2,590
)
$
(2,476
)
$
7,222
$
(7,495
)
Stock-based compensation
24
37
113
137
Amortization of intangibles
474
651
2,512
2,288
Non-GAAP operating loss
$
(2,092
)
$
(1,788
)
$
(4,597
)
$
(5,070
)
GAAP net income (loss)
$
24,028
$
(2,284
)
$
20,556
$
(7,694
)
Stock-based compensation
24
37
113
137
Amortization of intangibles
474
651
2,512
2,288
Other income adjustment
(33,623
)
—
(35,151
)
—
Tax effect
6,805
—
6,805
—
Non-GAAP net income (loss)
$
(2,292
)
$
(1,596
)
$
(5,165
)
$
(5,269
)
GAAP net income (loss)
$
24,028
$
(2,284
)
$
20,556
$
(7,694
)
Number of shares used in computing GAAP
diluted income (loss) per share
24,947,851
22,403,408
25,189,147
19,859,817
GAAP diluted income (loss) per
share
$
0.97
$
(0.10
)
$
0.83
$
(0.39
)
Non-GAAP net income (loss)
$
(2,292
)
$
(1,596
)
$
(5,165
)
$
(5,269
)
Number of shares used in computing
Non-GAAP diluted income (loss) per share
24,947,851
22,403,408
25,189,147
19,859,817
Non-GAAP diluted income (loss) per
share
$
(0.09
)
$
(0.07
)
$
(0.19
)
$
(0.27
)
GAAP net income (loss)
$
24,028
$
(2,284
)
$
20,556
$
(7,694
)
Stock-based compensation
24
37
113
137
Interest expense
135
145
420
514
Depreciation
56
95
263
378
Amortization of intangibles
474
651
2,512
2,288
Other income adjustment
(33,623
)
—
(35,151
)
—
Provision for (benefit from) income
taxes
6,844
(322
)
6,904
(283
)
Non-GAAP Adjusted EBITDA
$
(2,062
)
$
(1,678
)
$
(4,383
)
$
(4,660
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230331005495/en/
Narsi Narayanan 385-426-0565 investor_relations@clearone.com
http://investors.clearone.com
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