- Total Revenue Increased 31%
Quarter-Over-Quarter, Supported by Continued Sequential and
Year-Over-Year OpEx Reductions -
- Progress with Backlog Shipments and New
Product Launches Improve Foundation for Growth in the Second Half
of 2023 -
ClearOne (NASDAQ: CLRO), a global provider of audio and visual
communication solutions, reported financial results for the
three-month period ended June 30, 2023.
“Our performance in the second quarter reflects our continued
focus on evolving our innovative communication solutions, supported
by our work to maintain an optimized cost structure,” said Derek
Graham, CEO of ClearOne. “We delivered strong sequential growth in
our revenue and gross profit margin, driven by increased shipments
of orders from the backlog due to improved manufacturing output
relative to the first quarter of this year. Though we remain
underway with the transition of our outsourced manufacturing from
China to Singapore—which continued to compress our revenue
performance year-over-year—we made progress with shipping backlog
orders for our core audio conferencing products. We continue to see
strong demand and minimal cancellations within our backlog, and we
believe we are on track to resolve our contract manufacturing
interruptions during the third quarter.
“We also continued to streamline our cost and capital structure.
During the second quarter, we reduced operating expenses both
sequentially and year-over-year, and we completed the distribution
of our special one-time cash dividend. Supported by our sequential
improvements, right-sized operational framework, and $22.1 million
in cash and investments at the end of the second quarter, we
believe we remain on track to drive improved top-line performance
in the second half of this year.”
Operational Highlights
- Launched the BMA 360D beamforming microphone array ceiling tile
that offers unrivaled audio performance and native compatibility
with any Dante®-enabled digital signal processor (DSP) mixer.
- Debuted the DIALOG® UVHF wireless microphone system, which
provides businesses and institutions with professional-quality
audio conferencing, video collaboration and sound reinforcement for
rooms of all sizes.
- Exhibited a comprehensive portfolio of conferencing,
collaboration and communication solutions at InfoComm 2023.
Products on display included the recently launched CHAT® 150 BT
Speakerphone, the Ceiling Microphone Array, CONVERGE® Huddle, LS5WT
Wall and LS6CT Ceiling Speakers, Versa Mediabar™ Video Soundbar,
COLLABORATE® Versa™ 60, and the UNITE® 60, 180 and 20 Pro
cameras.
Graham continued: “We maintained our cadence of new product
launches during the second quarter. Through unveiling our DIALOG®
UVHF wireless microphone system and BMA 360D beamforming microphone
array ceiling tile, we have expanded our selection of high-quality,
innovative audio solutions for rooms and enterprises of all sizes.
These solutions helped drive the strong reception our products
received at the Orlando InfoComm show in June. We were proud to
return to this significant industry trade show, and we look forward
to further enhancing our products’ visibility in the market.
“As we move into the second half of the year, we will continue
working to both increase our share and expand our addressable
segments of the professional AV market. During the third quarter,
we expect to begin shipping a Bluetooth group USB speakerphone and
a Dante®-enabled beamforming microphone solution that can
interoperate with most DSPs, and we expect these shipments to serve
as near-term revenue growth drivers. We aim to continue delivering
on our strategic initiatives as we expand our library of innovative
collaboration products.”
Financial Summary
The Company uses certain non-GAAP financial measures and
reconciles those to GAAP measures in the attached tables.
- Q2 2023 revenue was $5.5 million, compared to $7.4 million in
Q2 2022 and $4.2 million in Q1 2023. The 31% sequential increase
was driven by increased shipments of orders from the backlog due to
improved manufacturing output. The year-over-year decrease was
mainly due to sustained inventory sourcing and order fulfillment
challenges for the Company’s core audio conferencing and
beamforming microphone arrays as a result of ongoing delays in the
transition of outsourced manufacturing from China to
Singapore.
- GAAP gross profit in Q2 2023 was $1.8 million, compared to $2.8
million in Q2 2022 and $1.3 million in Q1 2023. GAAP gross profit
margin was 34% in Q2 2023, compared to 31% Q1 2023 and 38% in Q2
2022. Gross profit margin improved by approximately 300 basis
points sequentially due to the aforementioned quarter-over-quarter
revenue growth. Gross profit margin decreased year-over-year due to
increased administration and overhead costs as a percentage of
revenue, as well as increased inventory obsolescence costs.
- Operating expenses in Q2 2023 improved to $3.2 million,
compared to $4.5 million in Q2 2022 and $3.5 million in Q1 2023.
Non-GAAP operating expenses in Q2 2023 improved to $3.1 million
compared to $3.4 million in Q1 2023 and $4.0 million in Q2 2022.
The sequential and year-over-year decrease in non-GAAP operating
expenses was mainly due to the continued benefits of the
cost-cutting measures initiated in 2022.
- GAAP net loss in Q2 2023 was $(1.0) million, or $(0.04) per
share, compared to a net loss of $(0.3) million, or $(0.01) per
share, in Q2 2022 and a net loss of $(0.8) million, or $(0.03) per
share, in Q1 2023. The sequential increase in net loss was
primarily due to the recognition of a $1.35 million gain from a
legal settlement in Q1 2023. The year-over-year increase in net
loss was primarily due to the aforementioned year-over-year
decrease in revenue and gross profit, along with the recognition of
$1.5 million in gain from the forgiveness of CARES Act Paycheck
Protection Program Loan in the year-ago quarter, partially offset
by a decrease in operating expenses and increase in interest
income.
- Non-GAAP net loss in Q2 2023 improved to $(0.9) million, or
$(0.04) per share, compared to a Non-GAAP net loss of $(1.1)
million, or $(0.04) per share, in Q2 2022 and a Non-GAAP net loss
of $(2.0) million, or $(0.09) per share, in Q1 2023. The sequential
and year-over-year improvements were driven by the aforementioned
operating expense reductions.
($ in 000, except per share)
Three months ended June
30,
Six months ended June
30,
2023
2022
Change in %
Favorable/ (Adverse)
2023
2022
Change in % Favorable/
(Adverse)
GAAP
Revenue
$
5,483
$
7,375
(26
)
$
9,661
$
14,920
(35
)
Gross profit
1,848
2,807
(34
)
3,163
5,623
(44
)
Operating expenses
3,203
4,456
28
6,707
9,125
26
Operating loss
(1,355
)
(1,649
)
18
(3,544
)
(3,502
)
(1
)
Net loss
(1,019
)
(257
)
(296
)
(1,851
)
(2,224
)
17
Diluted loss per share
(0.04
)
(0.01
)
(300
)
(0.08
)
(0.09
)
11
Non-GAAP
Non-GAAP operating expenses
$
3,051
$
3,746
19
$
6,416
$
7,712
(17
)
Non-GAAP operating loss
(1,202
)
(937
)
(28
)
(3,250
)
(2,085
)
(56
)
Non-GAAP net loss
(865
)
(1,073
)
19
(2,907
)
(2,335
)
(24
)
Non-GAAP Adjusted EBITDA
(710
)
(892
)
20
(2,389
)
(1,961
)
(22
)
Non-GAAP diluted loss per share
(0.04
)
(0.04
)
-
(0.12
)
(0.10
)
(20
)
Balance Sheet Highlights
As of June 30, 2023, cash, cash equivalents and investments were
$22.1 million, as compared with $1.0 million as of December 31,
2022. As of June 30, 2023, the Company carried an aggregate debt of
$1.4 million on account of senior convertible notes issued in
December 2019.
On May 31, 2023, the Company completed the distribution of a
special one-time cash dividend of $1.00 per share of its common
stock or eligible warrants, as declared on May 8, 2023. The
dividend distribution generated cash outflows of approximately
$29.0 million.
Nasdaq Minimum Bid Price Requirement
On August 1, 2023, ClearOne received a letter from the Listing
Qualifications Department of the Nasdaq Stock Market informing the
Company that because the closing bid price for its common stock was
below $1.00 for 30 consecutive trading days, the Company is not in
compliance with the minimum bid price requirement for continued
listing on the Nasdaq Capital Market, as set forth in Nasdaq
Marketplace Rule 5550(a)(2) (the “Minimum Bid Price
Requirement”).
In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), the
Company has a period of 180 calendar days from August 1, 2023, or
until January 29, 2024, to regain compliance with the Minimum Bid
Price Requirement. If at any time before January 29, 2024, the
closing bid price of the Company’s common stock closes at or above
$1.00 per share for a minimum of 10 consecutive trading days (which
number days may be extended by Nasdaq), Nasdaq will provide written
notification that the Company has achieved compliance with the
Minimum Bid Price Requirement, and the matter would be
resolved.
ClearOne intends to continue actively monitoring the closing bid
price for its common stock between now and January 29, 2024, and
the Company will consider available options to resolve the
deficiency and regain compliance with the Minimum Bid Price
Requirement. Further details can be found in ClearOne’s related
Form 8-K filed on August 3, 2023 and in the Company’s Form 10-Q for
the three and six months ended June 30, 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
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except par
value)
June 30, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
15,086
$
984
Current marketable securities
6,408
—
Legal settlement receivable
—
55,000
Receivables, net of allowance of $326
4,232
3,603
Inventories, net
7,547
8,961
Income tax receivable
6,381
1,071
Prepaid expenses and other assets
4,273
7,808
Total current assets
43,927
77,427
Long-term marketable securities
586
—
Long-term inventories, net
3,361
2,707
Property and equipment, net
614
383
Operating lease - right of use assets,
net
1,171
1,047
Intangibles, net
1,903
2,071
Other assets
114
115
Total assets
$
51,676
$
83,750
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
2,435
$
1,284
Accrued liabilities
2,587
3,041
Deferred product revenue
52
63
Short-term debt
1,380
3,732
Total current liabilities
6,454
8,120
Operating lease liability, net of
current
848
492
Other long-term liabilities
1,008
1,008
Total liabilities
8,310
9,620
Shareholders' equity:
Common stock, par value $0.001, 50,000,000
shares authorized, 23,958,979 and 23,955,767 shares issued and
outstanding, respectively
24
24
Additional paid-in capital
45,979
74,910
Accumulated other comprehensive loss
(270
)
(288
)
Accumulated deficit
(2,367
)
(516
)
Total shareholders' equity
43,366
74,130
Total liabilities and shareholders'
equity
$
51,676
$
83,750
CLEARONE, INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
(Dollars in thousands, except per
share amounts)
Three months ended June
30,
Six months ended June
30,
2023
2022
2023
2022
Revenue
$
5,483
$
7,375
$
9,661
$
14,920
Cost of goods sold
3,635
4,568
6,498
9,297
Gross profit
1,848
2,807
3,163
5,623
Operating expenses:
Sales and marketing
1,323
1,562
2,515
3,122
Research and product development
873
1,177
1,916
2,530
General and administrative
1,007
1,717
2,276
3,473
Total operating expenses
3,203
4,456
6,707
9,125
Operating loss
(1,355
)
(1,649
)
(3,544
)
(3,502
)
Interest expense
(91
)
(94
)
(383
)
(195
)
Other income, net
437
1,505
2,103
1,508
Loss before income taxes
(1,009
)
(238
)
(1,824
)
(2,189
)
Provision for income taxes
10
19
27
35
Net loss
$
(1,019
)
$
(257
)
$
(1,851
)
$
(2,224
)
Basic weighted average shares
outstanding
23,955,802
23,948,631
23,955,785
23,923,110
Diluted weighted average shares
outstanding
23,955,802
23,948,631
23,955,785
23,923,110
Basic loss per share
$
(0.04
)
$
(0.01
)
$
(0.08
)
$
(0.09
)
Diluted loss per share
$
(0.04
)
$
(0.01
)
$
(0.08
)
$
(0.09
)
Comprehensive loss:
Net loss
$
(1,019
)
$
(257
)
$
(1,851
)
$
(2,224
)
Unrealized loss on available-for-sale
securities, net of tax
14
26
14
(2
)
Change in foreign currency translation
adjustment
(1
)
(12
)
4
(23
)
Comprehensive loss
$
(1,006
)
$
(243
)
$
(1,833
)
$
(2,249
)
CLEARONE, INC.
UNAUDITED RECONCILIATION OF
GAAP MEASURES TO NON-GAAP MEASURES
(Dollars in thousands, except per
share values)
Three months ended June
30,
Six months ended June
30,
2023
2022
2023
2022
GAAP operating loss
$
(1,355
)
$
(1,649
)
$
(3,544
)
$
(3,502
)
Stock-based compensation
25
30
47
65
Amortization of intangibles
129
682
247
1,352
Non-GAAP operating loss
$
(1,201
)
$
(937
)
$
(3,250
)
$
(2,085
)
GAAP net loss
$
(1,019
)
$
(257
)
$
(1,851
)
$
(2,224
)
Stock-based compensation
25
30
47
65
Amortization of intangibles
129
682
247
1,352
Other income adjustment
—
—
(1,350
)
—
CARES Act PPP loan forgiveness
—
(1,528
)
—
(1,528
)
Non-GAAP net loss
$
(865
)
$
(1,073
)
$
(2,907
)
$
(2,335
)
GAAP net loss
$
(1,019
)
$
(257
)
$
(1,851
)
$
(2,224
)
Number of shares used in computing GAAP
diluted loss per share
23,955,802
23,948,631
23,955,785
23,923,110
GAAP diluted loss per share
$
(0.04
)
$
(0.01
)
$
(0.08
)
$
(0.09
)
Non-GAAP net loss
$
(865
)
$
(1,073
)
$
(2,907
)
$
(2,335
)
Number of shares used in computing
Non-GAAP diluted loss per share
23,955,802
23,948,631
23,955,785
23,923,110
Non-GAAP diluted loss per share
$
(0.04
)
$
(0.04
)
$
(0.12
)
$
(0.10
)
GAAP net loss
$
(1,019
)
$
(257
)
$
(1,851
)
$
(2,224
)
Stock-based compensation
25
30
47
65
Interest expense
91
94
383
195
Depreciation
54
68
108
144
Amortization of intangibles
129
682
247
1,352
Other income adjustment
—
—
(1,350
)
—
CARES Act PPP loan forgiveness
—
(1,528
)
—
(1,528
)
Provision for (benefit from) income
taxes
10
19
27
35
Non-GAAP Adjusted EBITDA
$
(710
)
$
(892
)
$
(2,389
)
$
(1,961
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230810341687/en/
Company Contact Narsi Narayanan 385-426-0565
investor_relations@clearone.com http://investors.clearone.com
Investor Relations Contact Matt Glover or Jackie Keshner
Gateway Group, Inc. (949) 574-3860 CLRO@Gateway-grp.com
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