8-K - Press Release 2013-Q3


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): October 24, 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 October 24, 2013, ClearOne, Inc. issued a press release announcing its financial results for the nine months ended September 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 October 24, 2013 titled “ClearOne Reports 2013 Third 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)
 
 
 
October 24, 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 Third-Quarter Financial Results

New Professional Product Sales Boost Company to Record Third-Quarter Revenues
SALT LAKE CITY, UTAH - October 24, 2013 - ClearOne (NASDAQ: CLRO) today reported its financial results for the third quarter ended September 30, 2013. Record results mark the fifth consecutive quarter of year-over-year revenue growth.
For the 2013 third quarter, revenue increased by 7% to $12.4 million, compared with $11.6 million for the third quarter of 2012. Gross profit was $7.4 million, or 60% of revenue, compared with $6.7 million, or 58% of revenue, for the third quarter of 2012. Non-GAAP operating income increased by 24% to $2.3 million from $1.9 million for the 2012 third quarter. Non-GAAP net income grew 36% to $1.7 million, or $0.18 per diluted share, from $1.2 million, or $0.13 per diluted share, last year. Non-GAAP adjusted EBITDA for the 2013 third quarter increased 24% to $2.6 million, or $0.28 per diluted share, from $2.1 million, or $0.23 per diluted share, a year ago.
For the nine months ended September 30, 2013, revenue rose by 6% to $35.4 million from $33.4 million for the same period in 2012. Gross profit was $21.3 million, or 60% of revenue, compared with $19.9 million, or 60% of revenue, for nine months ended September 30, 2012. Non-GAAP operating income for the nine months ended September 30, 2013 increased by 23% to $5.5 million from $4.5 million for the nine months ended September 30, 2012. Non-GAAP net income for the 2013 year-to-date period grew 41% to $3.9 million, or $0.41 per diluted share, from $2.8 million or $0.30 per diluted share, last year. Non-GAAP adjusted EBITDA increased 21% to $6.2 million, or $0.66 per diluted share, from $5.2 million, or $0.56 per diluted share, for the corresponding period a year ago.

Cash, cash equivalents and investments totaled $43.6 million at September 30, 2013, down from $55.5 million on December 31, 2012. This includes the final net amount retained from the December 2012, $45 million favorable settlement relating to auction-rate securities, after paying $13.8 million of associated income taxes and $6.75 million in attorneys' fees. The cash balance also includes $272,000 successfully recovered from money held in escrow related to the VCON acquisition.

The company continues to take a calculated approach to evaluating its options, consistent with the company’s strategy, to use this capital to maximize value to shareholders. This quarter, ClearOne advanced its stock repurchase plan, acquiring 144,000 shares, bringing the 2013 total repurchase amount to approximately $2.2 million against an allocation of $10 million.

“Despite the negative impact of continued macroeconomic weakness in EMEA and the U.S. Government sequestration, we posted strong results, thanks to our outstanding performance in North America and Asia Pacific,” said Zee Hakimoglu, President, Chief Executive Officer and Chairman of ClearOne. “This strong performance is a testament to our core strategy, which relies on a strategically-built portfolio of innovative products."

“This quarter, our suite of microphone products released during the last 12 months contributed significantly to the company’s growth, including ClearOne’s game-changing Beamforming Microphone Array,” Hakimoglu added. “We expect to see additional new product growth in coming quarters from our new video systems, which will begin shipping in the late fourth quarter.”









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 September 30, 2013
 
As of December 31, 2012
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
18,190

 
$
55,509

Marketable securities
2,017

 

Receivables, net of allowance for doubtful accounts of $94 and $60, respectively
8,442

 
8,388

Inventories, net
12,442

 
10,873

Deferred income taxes
3,148

 
3,148

Prepaid expenses and other assets
1,673

 
1,369

Total current assets
45,912

 
79,287

Long-term inventories, net
1,120

 
1,955

Long-term marketable securities
23,359

 

Property and equipment, net
2,006

 
1,708

Intangibles, net
3,854

 
4,258

Goodwill
3,472

 
3,472

Deferred income taxes
1,195

 
1,195

Other assets
77

 
64

Total assets
$
80,995

 
$
91,939

LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
3,632

 
$
2,302

Accrued liabilities
2,305

 
2,143

Income taxes payable

 
14,782

Deferred product revenue
4,105

 
3,593

Total current liabilities
10,042

 
22,820

Deferred rent
326

 
422

Other long-term liabilities
2,029

 
2,029

Total liabilities
12,397

 
25,271

Shareholders' equity:
 
 
 
Common stock, par value $0.001, 50,000,000 shares authorized, 9,004,901 and 9,163,462 shares issued and outstanding
9

 
9

Additional paid-in capital
38,955

 
40,430

Accumulated other comprehensive loss
(33
)
 

Retained earnings
29,667

 
26,229

Total shareholders' equity
68,598

 
66,668

Total liabilities and shareholders' equity
$
80,995

 
$
91,939








CLEARONE, INC.

UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in thousands, except per share values)

 
Quarter ended Sept 30,
 
Nine months ended Sept 30,
 
2013
 
2012
 
2013
 
2012
Revenue
$
12,366

 
$
11,573

 
$
35,362

 
$
33,382

Cost of goods sold
4,921

 
4,856

 
14,054

 
13,464

Gross profit
7,445

 
6,717

 
21,308

 
19,918

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Sales and marketing
2,220

 
1,821

 
6,575

 
6,209

Research and product development
1,788

 
1,959

 
5,497

 
5,996

General and administrative
1,405

 
1,470

 
4,639

 
4,561

Proceeds from litigation, net
(272
)
 

 
(272
)
 
(250
)
Total operating expenses
5,141

 
5,250

 
16,439

 
16,516

 
 
 
 
 
 
 
 
Operating income
2,304

 
1,467

 
4,869

 
3,402

Other income (expense), net
85

 
29

 
117

 
40

Income before income taxes
2,389

 
1,496

 
4,986

 
3,442

Provision for income taxes
726

 
492

 
1,548

 
1,310

Net income
$
1,663

 
$
1,004

 
$
3,438

 
$
2,132

 
 
 
 
 
 
 
 
Basic earnings per common share
$
0.18

 
$
0.11

 
$
0.38

 
$
0.23

Diluted earnings per common share
$
0.18

 
$
0.11

 
$
0.36

 
$
0.23

 
 
 
 
 
 
 
 
Basic weighted average shares outstanding
9,027,764

 
9,113,713

 
9,090,903

 
9,106,455

Diluted weighted average shares outstanding
9,406,941

 
9,193,574

 
9,485,808

 
9,219,161

 
 
 
 
 
 
 
 
Comprehensive income:
 
 
 
 
 
 
 
Net income
$
1,663

 
$
1,004

 
$
3,438

 
$
2,132

Unrealized gain (loss) on available-for-sale securities, net of tax
55

 

 
(33
)
 

   Comprehensive income
$
1,718

 
$
1,004

 
$
3,405

 
$
2,132







CLEARONE, INC
UNAUDITED NON-GAAP NET INCOME AND RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
(Dollars in thousands, except per share values)
 
 
Quarter ended Sept 30,
 
Nine months ended Sept 30,
 
 
2013
 
2012
 
2013
 
2012
Revenue
 
$
12,366

 
$
11,573

 
$
35,362

 
$
33,382

Cost of goods sold
 
4,919

 
4,854

 
14,048

 
13,461

Gross profit
 
7,447

 
6,719

 
21,314

 
19,921

 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
Sales and marketing
 
2,199

 
1,806

 
6,520

 
6,164

Research and product development
 
1,774

 
1,950

 
5,459

 
5,970

General and administrative
 
1,145

 
1,079

 
3,812

 
3,285

Proceeds from litigation
 

 

 

 

Total operating expenses
 
5,118

 
4,835

 
15,791

 
15,419

 
 
 
 
 
 
 
 
 
Operating income
 
2,329

 
1,884

 
5,523

 
4,502

Other income (expense), net
 
85

 
29

 
117

 
40

Income before income taxes
 
2,414

 
1,913

 
5,640

 
4,542

Provision for income taxes
 
730

 
673

 
1,751

 
1,791

Non-GAAP Net income
 
$
1,684

 
$
1,240

 
$
3,889

 
$
2,751

 
 
 
 
 
 
 
 
 
Basic earnings per common share
 
$
0.19

 
$
0.14

 
$
0.43

 
$
0.30

Diluted earnings per common share
 
$
0.18

 
$
0.13

 
$
0.41

 
$
0.30

 
 
 
 
 
 
 
 
 
Basic weighted average shares outstanding
 
9,027,764

 
9,113,713

 
9,090,903

 
9,106,455

Diluted weighted average shares outstanding
 
9,406,941

 
9,193,574

 
9,485,808

 
9,219,161

 
 
 
 
 
 
 
 
 
GAAP Net Income
 
$
1,663

 
$
1,004

 
$
3,438

 
$
2,132

Adjustments:
 
 
 
 
 
 
 
 
Share-based compensation
 
79

 
65

 
205

 
176

Amortization of purchased intangibles
 
143

 
146

 
404

 
377

Legal expenses for litigation relating to indemnification of former officers, theft of our intellectual property claims and our claim for damages
 
50

 
162

 
234

 
526

Acquisition related expenses
 
25

 
44

 
83

 
271

Proceeds from litigation
 
(272
)
 

 
(272
)
 
(250
)
Total of adjustments before taxes
 
25

 
417

 
654

 
1,100

Income taxes affected by the above adjustments
 
4

 
181

 
203

 
481

      Total adjustments
 
21

 
236

 
451

 
619

 
 
 
 
 
 
 
 
 
Non-GAAP Net Income
 
$
1,684

 
$
1,240

 
$
3,889

 
$
2,751







CLEARONE, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED EBITDA
(Dollars in thousands, except per share values)
 
 
Quarter ended Sept 30,
 
Nine months ended Sept 30,
 
 
2013
 
2012
 
2013
 
2012
GAAP net income
 
$
1,663

 
$
1,004

 
$
3,438

 
$
2,132

Adjustments:
 
 
 
 
 
 
 
 
Provision for income taxes
 
726

 
492

 
1,548

 
1,310

Depreciation and amortization
 
337

 
337

 
983

 
991

Non-GAAP EBITDA
 
2,726

 
1,833

 
5,969

 
4,433

Proceeds from litigation, net of legal expenses and special bonus to officers
 
(272
)
 

 
(272
)
 
(250
)
Share-based compensation
 
79

 
65

 
205

 
176

Legal expenses for litigation relating to indemnification of former officers, theft of our intellectual property claims and our claim for damages
 
50

 
162

 
234

 
526

Acquisition related expenses
 
25

 
44

 
83

 
271

Non-GAAP Adjusted EBITDA
 
$
2,608

 
$
2,104

 
$
6,219

 
$
5,156

 
 
 
 
 
 
 
 
 
Basic weighted average shares outstanding
 
9,027,764

 
9,113,713

 
9,090,903

 
9,106,455

Diluted weighted average shares outstanding
 
9,406,941

 
9,193,574

 
9,485,808

 
9,219,161

 
 
 
 
 
 
 
 
 
Basic Non-GAAP Adjusted EBITDA per common share
 
$
0.29

 
$
0.23

 
$
0.68

 
$
0.57

Diluted Non-GAAP Adjusted EBITDA per common share
 
$
0.28

 
$
0.23

 
$
0.66

 
$
0.56