ClearOne, Inc. Reports Third Quarter 2021 Financial Results
SALT LAKE CITY, UTAH – November 12, 2021 – ClearOne Inc. (NASDAQ: CLRO), a global provider of audio and visual communication solutions, reported financial results for the three and nine months ended September 30, 2021.
"ClearOne continued to achieve solid revenue growth in core audio conferencing and microphone products, driven by our innovative BMA 360 and BMA-CT based solutions. Revenue from video products did not meet last year's demand levels boosted by CARES Act stimulus funding and caused the year over year revenue decline. However, we are confident of the growth potential for our video-based solutions," said Zee Hakimoglu, CEO and Chair of ClearOne.
"The jury’s unanimous verdict last week in our trial against Shure in Delaware is the latest in a string of litigation victories for ClearOne against Shure. We are very pleased that the jury found that ClearOne’s products did not infringe Shure's '723 patent and invalidated Shure's patent. Shure was using this '723 patent to retaliate against ClearOne, and the jury's verdict validates ClearOne's refusal to give in to Shure's tactics," Hakimoglu added.
"We were also successful in strengthening our balance sheet through further infusion of equity capital. The enthusiasm and the confidence displayed by the institutional investors in the recent $10 million common stock and warrant offering enables our continuing path of growth through innovation, cost management, and litigation management," Hakimoglu concluded.
Recent Highlights
Financial Summary
The Company uses certain non-GAAP financial measures and reconciles those to GAAP measures in the attached tables.
|
($ in 000, except per share) |
|
Three months ended September 30, |
|
Nine months ended September 30, | |||||||||||||||||
|
|
|
2021 |
|
|
2020 |
|
Positive/ Adverse Change |
|
2021 | 2020 |
Positive/ Adverse Change |
||||||||||
|
GAAP |
|
|
|
|
|
|
|
|
|||||||||||||
|
Revenue |
$ |
6,992 |
|
$ |
8,412 |
|
-17 |
% |
$ | 21,765 | $ | 20,503 | 6 | % | |||||||
|
Gross profit |
|
2,851 |
|
|
3,520 |
|
-19 |
% |
9,278 | 8,976 | 3 | % | |||||||||
|
Operating expenses |
|
4,860 |
|
|
4,680 |
|
-4 |
% |
14,297 | 13,726 | -4 | % | |||||||||
|
Operating loss |
|
(2,009 |
) |
|
(1,160 |
) |
-73 |
% |
(5,019 | ) | (4,750 | ) | -6 | % | |||||||
|
Net loss |
|
(2,169 |
) |
|
(1,260 |
) |
-72 |
% |
(5,410 | ) | (5,044 | ) | -7 | % | |||||||
|
Diluted loss per share |
|
(0.11 |
) |
|
(0.07 |
) |
-50 |
% |
(0.28 | ) | (0.30 | ) | 5 | % | |||||||
|
Non-GAAP |
|
|
|
|
|
|
|
|
|||||||||||||
|
Non-GAAP gross profit |
$ |
2,853 |
|
$ |
3,520 |
|
-19 |
% |
$ | 9,285 | $ | 8,978 | 3 | % | |||||||
|
Non-GAAP operating expenses |
|
4,244 |
|
4,232 |
|
0 |
% |
12,568 | 12,453 | -1 | % | ||||||||||
|
Non-GAAP operating loss |
|
(1,391 |
) |
|
(712 |
) |
-95 |
% |
(3,283 | ) | (3,475 | ) | 6 | % | |||||||
|
Non-GAAP net loss |
|
(1,551 |
) |
|
(812 |
) |
-91 |
% |
(3,674 | ) | (3,769 | ) | 3 | % | |||||||
|
Non-GAAP Adjusted EBITDA |
|
(1,295 |
) |
|
(589 |
) |
-119 |
% |
(3,266 | ) | (3,197 | ) | -2 | % | |||||||
|
Non-GAAP loss per share (diluted) |
|
(0.08 |
) |
|
(0.05 |
) |
-60 |
% |
(0.19 | ) | (0.22 | ) | 14 | % | |||||||
Balance Sheet Highlights
At September 30, 2021, cash, cash equivalents and investments were $10.6 million, as compared to $6.7 million at December 31, 2020. At September 30, 2021, the Company carried a debt of $5.8 million on account of senior convertible notes issued in December 2020, a Paycheck Protection Program (PPP) loan in April 2020 and a short-term bridge loan in 2021. The Company believes the entire PPP loan will be forgiven.
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 with 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, 2020 (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.
Contact:
Investor Relations
801-975-7200
investor_relations@clearone.com
http://investors.clearone.com
CLEARONE, INC
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except par value)
|
|
|
September 30, 2021 |
|
December 31, 2020 |
||||
|
ASSETS |
|
|
|
|
|
|
||
|
Current assets: |
|
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
9,161 |
|
$ |
3,803 |
||
|
Marketable securities |
|
|
713 |
|
|
1,117 |
||
|
Receivables, net of allowance for doubtful accounts of $505 and $506, respectively |
|
|
5,243 |
|
|
5,194 |
||
|
Inventories, net |
|
|
9,218 |
|
|
10,463 |
||
| Income tax receivable |
7,221 | 7,169 | ||||||
|
Prepaid expenses and other assets |
|
|
2,505 |
|
|
1,536 |
||
|
Total current assets |
|
|
34,061 |
|
|
29,282 |
||
|
Long-term marketable securities |
|
|
707 |
|
|
1,762 |
||
|
Long-term inventories, net |
|
|
3,313 |
|
|
4,590 |
||
|
Property and equipment, net |
|
|
688 |
|
|
906 |
||
|
Operating lease - right of use assets, net |
|
|
1,690 |
|
|
1,936 |
||
|
Intangibles, net |
|
|
23,179 |
|
|
19,248 |
||
|
Other assets |
|
|
4,599 |
|
|
4,599 |
||
|
Total assets |
|
$ |
68,237 |
|
$ |
62,323 |
||
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
||
|
Current liabilities: |
|
|
|
|
|
|
||
|
Accounts payable |
|
$ |
4,015 |
|
$ |
3,950 |
||
|
Accrued liabilities |
|
|
2,746 |
|
|
2,352 |
||
| Deferred product revenue | 57 | 123 | ||||||
|
Short-term debt |
|
|
3,504 |
|
|
672 |
||
|
Total current liabilities |
|
|
10,322 |
|
|
7,097 |
||
|
Long-term debt, net |
|
|
2,291 |
|
|
3,245 |
||
|
Operating lease liability, net of current |
|
|
1,181 |
|
|
1,489 |
||
|
Other long-term liabilities |
|
|
678 |
|
|
678 |
||
|
Total liabilities |
|
14,472 |
|
|
12,509 |
|||
|
|
|
|
|
|
|
|
||
|
Shareholders' equity: |
|
|
|
|
|
|
||
|
Common stock, par value $0.001, 50,000,000 shares authorized, 22,402,970 and 18,775,773 shares issued and outstanding, respectively |
|
|
22 |
|
|
19 |
||
|
Additional paid-in capital |
|
|
72,756 |
|
|
63,359 |
||
|
Accumulated other comprehensive loss |
|
|
(225 |
) |
|
(186 |
) | |
|
Accumulated deficit |
|
|
(18,788 |
) |
|
(13,378 |
) | |
|
Total shareholders' equity |
|
|
53,765 |
|
|
49,814 |
||
|
Total liabilities and shareholders' equity |
|
$ |
68,237 |
|
$ |
62,323 |
||
CLEARONE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Dollars in thousands, except per share values)
|
|
|
Three months ended September 30, |
Nine months ended September 30, | |||||||||||||
|
|
|
2021 |
|
2020 |
2021 | 2020 | ||||||||||
|
Revenue |
|
$ |
6,992 |
|
$ |
8,412 |
$ | 21,765 | $ | 20,503 | ||||||
|
Cost of goods sold |
|
|
4,141 |
|
|
4,892 |
12,487 | 11,527 | ||||||||
|
Gross profit |
|
|
2,851 |
|
|
3,520 |
9,278 | 8,976 | ||||||||
|
|
|
|
|
|
|
|
||||||||||
|
Operating expenses: |
|
|
|
|
|
|
||||||||||
|
Sales and marketing |
|
|
1,692 |
|
|
1,736 |
5,020 | 4,932 | ||||||||
|
Research and product development |
|
|
1,492 |
|
|
1,501 |
4,253 | 4,319 | ||||||||
|
General and administrative |
|
|
1,676 |
|
|
1,443 |
5,024 | 4,475 | ||||||||
|
Total operating expenses |
|
|
4,860 |
|
|
4,680 |
14,297 | 13,726 | ||||||||
|
|
|
|
||||||||||||||
|
Operating loss |
|
|
(2,009 |
) |
|
|
(1,160 |
) | (5,019 | ) | (4,750 | ) | ||||
|
Interest expense |
|
|
(150 |
) |
|
|
(108 |
) | (369 | ) | (325 | ) | ||||
|
Other income, net |
|
|
7 |
|
|
19 |
17 | 70 | ||||||||
|
|
|
|
|
|
|
|||||||||||
|
Loss before income taxes |
|
|
(2,152 |
) |
|
|
(1,249 |
) | (5,371 | ) | (5,005 | ) | ||||
|
|
|
|
|
|
|
|
||||||||||
|
Provision for income taxes |
|
|
17 |
|
|
11 |
39 | 39 | ||||||||
|
|
|
|
|
|
|
|
||||||||||
|
Net loss |
|
$ |
(2,169 |
) |
|
$ |
(1,260 |
) | $ | (5,410 | ) | $ | (5,044 | ) | ||
|
|
|
|
|
|
|
|
||||||||||
|
Basic weighted average shares outstanding |
|
|
19,449,283 |
|
|
17,000,215 |
19,002,758 | 16,768,088 | ||||||||
|
Diluted weighted average shares outstanding |
|
|
19,449,283 |
|
|
17,000,215 |
19,002,758 | 16,768,088 | ||||||||
|
|
|
|
|
|
||||||||||||
|
Basic loss per share |
|
$ |
(0.11 |
) |
|
$ |
(0.07 |
) | $ | (0.28 | ) | $ | (0.30 | ) | ||
|
Diluted loss per share |
|
$ |
(0.11 |
) |
|
$ |
(0.07 |
) | $ | (0.28 | ) | $ | (0.30 | ) | ||
|
|
|
|
|
|
|
|
||||||||||
|
Comprehensive loss: |
|
|
|
|
|
|
||||||||||
|
Net loss |
|
|
(2,169 |
) |
|
|
(1,260 |
) | (5,410 | ) | (5,044 | ) | ||||
|
Unrealized gain (loss) on available-for-sale securities, net of tax |
|
|
(8 |
) |
|
|
4 |
(13 | ) | 11 | ||||||
|
Change in foreign currency translation adjustment |
|
|
(4 |
) |
|
|
17 |
(26 | ) | (25 | ) | |||||
|
Comprehensive loss |
|
|
(2,181 |
) |
|
|
(1,239 |
) | (5,449 | ) | (5,058 | ) | ||||
CLEARONE, INC.
UNAUDITED RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(Dollars in thousands, except per share values)
|
|
|
Three months ended September 30, |
Nine months ended September 30, | |||||||||||||
|
|
|
2021 |
|
2020 |
2021 | 2020 | ||||||||||
|
GAAP gross profit |
|
$ |
2,851 |
|
$ |
3,520 |
$ | 9,278 | $ | 8,976 | ||||||
|
Stock-based compensation |
|
|
2 |
|
|
— |
7 | 2 | ||||||||
|
Non-GAAP gross profit |
|
$ |
2,853 |
|
$ |
3,520 |
$ | 9,285 | $ | 8,978 | ||||||
|
|
|
|
|
|
|
|
||||||||||
|
GAAP operating loss |
|
$ |
(2,009 |
) |
|
$ |
(1,160 |
) | $ | (5,019 | ) | $ | (4,750 | ) | ||
|
Stock-based compensation |
|
|
36 |
|
|
2 |
100 | 55 | ||||||||
|
Amortization of intangibles |
|
|
582 |
|
|
446 |
1,636 | 1,220 | ||||||||
|
Non-GAAP operating loss |
|
$ |
(1,391 |
) |
|
$ |
(712 |
) | $ | (3,283 | ) | $ | (3,475 | ) | ||
|
|
|
|
|
|
|
|
||||||||||
|
GAAP net loss |
|
$ |
(2,169 |
) |
|
$ |
(1,260 |
) | $ | (5,410 | ) | $ | (5,044 | ) | ||
|
Stock-based compensation |
|
|
36 |
|
|
2 |
100 | 55 | ||||||||
|
Amortization of intangibles |
|
|
582 |
|
|
446 |
1,636 | 1,220 | ||||||||
|
Non-GAAP net loss |
|
$ |
(1,551 |
) |
|
$ |
(812 |
) | $ | (3,674 | ) | $ | (3,769 | ) | ||
|
|
|
|
|
|
|
|
||||||||||
|
GAAP net loss |
|
$ |
(2,169 |
) |
|
$ |
(1,260 |
) | $ | (5,410 | ) | $ | (5,044 | ) | ||
|
Number of shares used in computing GAAP loss per share (diluted) |
|
|
19,449,283 |
|
|
17,000,215 |
19,002,758 | 16,768,088 | ||||||||
|
GAAP loss per share (diluted) |
|
$ |
(0.11 |
) |
|
$ |
(0.07 |
) | $ | (0.28 | ) | $ | (0.30 | ) | ||
|
Non-GAAP net loss |
|
$ |
(1,551 |
) |
|
$ |
(812 |
) | $ | (3,674 | ) | $ | (3,769 | ) | ||
|
Number of shares used in computing Non-GAAP loss per share (diluted) |
|
|
19,449,283 |
|
|
17,000,215 |
19,002,758 | 16,768,088 | ||||||||
|
Non-GAAP loss per share (diluted) |
|
$ |
(0.08 |
) |
|
$ |
(0.05 |
) | $ | (0.19 | ) | $ | (0.22 | ) | ||
|
|
|
|
|
|
|
|
||||||||||
|
GAAP net loss |
|
$ |
(2,169 |
) |
|
$ |
(1,260 |
) | $ | (5,410 | ) | $ | (5,044 | ) | ||
|
Stock-based compensation |
|
|
36 |
|
|
2 |
100 | 55 | ||||||||
|
Depreciation |
|
|
89 |
|
|
104 |
— | 208 | ||||||||
|
Amortization of intangibles |
|
|
582 |
|
|
446 |
1,636 | 1,220 | ||||||||
| Interest expense |
150 |
108 |
369 | 325 | ||||||||||||
|
Provision for income taxes |
|
|
17 |
|
|
11 |
39 | 39 | ||||||||
|
Non-GAAP Adjusted EBITDA |
|
$ |
(1,295 |
) |
|
$ |
(589 |
) | $ | (3,266 | ) | $ | (3,197 | ) | ||
| 6 |