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ClearOne Reports 2012 Fourth Quarter, Full Year Financial ResultsSALT LAKE CITY, Feb. 27, 2013 /PRNewswire via COMTEX/ -- ClearOne (NASDAQ: CLRO) today reported its financial results for the fourth quarter and full year ended December 31, 2012. For the 2012 fourth quarter, revenue increased 9% to $13.0 million from $12.0 million for the fourth quarter of 2011. Gross profit was $7.4 million, or 57% of revenue, compared with $7.1 million, or 59% of revenue, for the fourth quarter of 2011. Operating income was $39.1 million and net income was $24.5 million, or $2.67 per diluted share, which included $38.3 million of proceeds from litigation, net. For the prior year fourth quarter, operating income was $2.1 million and net income was $1.4 million, or $0.15 per diluted share. Non-GAAP net income, which excludes proceeds from litigation, share-based compensation and other non-operating items, was $1.2 million, or $0.13 per diluted share, compared with $1.5 million, or $0.17 per diluted share, for fourth quarter 2011. Non-GAAP Adjusted EBITDA was $2.9 million, or $0.31 per diluted share, compared with $2.6 million, or $0.28 per diluted share, for fourth quarter of 2011. For the 2012 full year, revenue was $46.4 million compared with $46.1 million for 2011. Gross profit was $27.3 million, or 59% of revenue, compared with $27.5 million, or 60% of revenue, for 2011. Operating income, which included $38.5 million of proceeds from litigation was $42.5 million and net income was $26.6 million, or $2.89 per diluted share. For the prior year, which included $3.7 million of proceeds from litigation, operating income was $10.6 million and net income was $6.9 million, or $0.75 per diluted share. Non-GAAP net income was $4.0 million, or $0.43 per diluted share, compared with $5.3 million, or $0.57 per diluted share, for 2011. Non-GAAP Adjusted EBITDA was $8.0 million, or $0.87 per diluted share, compared with $9.0 million, or $0.97 per diluted share, for 2011. The reconciliation between GAAP and Non-GAAP measures is available in the tables attached to this release. "We finished 2012 with a record performance due to substantial increase in demand for our products in North America. We are optimistic that our positive momentum will be not only sustained but further propelled by the introduction of new and innovative audio and video products into our channel," said Zee Hakimoglu, President, Chief Executive Officer and Chairman of ClearOne. "The strong cash position we currently enjoy has also allowed us to increase our commitment to our stock buy-back program. We will also carefully evaluate over time, opportunities available to us and use the cash for selective infusions of technology, sales & marketing, infrastructure, and other investments to fuel our growth, as well as acquisitions that may strategically fit our business and are accretive to our performance." At December 31, 2012, the company had cash and cash equivalents of $55.5 million, up from $16.7 million at the end of the prior year, and no debt. Recent Highlights: -- December 2012. The company settled an arbitration proceeding for $45.0 million, subject to a 15% contingency legal fee paid to ClearOne's litigation counsel. -- December 2012. The company established a distribution agreement with D&H Distributing, under which D&H will distribute ClearOne's new line of software-based video conferencing solutions and its USB, analog and VoIP conference phones to authorized technology resellers and retailers in North America. -- December 2012. The company announced its new WS800 Digital Wireless Microphone System to complement its professionally installed audio conferencing product lines. The microphone system uses radio-frequency digital wireless signal transmission technology with highly secure encryption and is optimized to work with CONVERGE® Pro and INTERACT® Pro products. -- January 2013. The company appointed video conferencing veteran Adi Regev as Vice President of its video conferencing business. Regev will be responsible for the strategic positioning, business development and growth of the company's COLLABORATE(TM) portfolio of software-based video conferencing products, which includes desktop video applications, room systems, and infrastructure and management solutions. -- February 2013. The company's Board of Directors approved an increase in the company's stock repurchase program to $10.0 million from $3.0 million of its outstanding shares of common stock in open market or privately negotiated transactions. 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, reliability and scalability. 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 Contact: Brent Johnson Investor Relations 801-303-3577 [email protected] CLEARONE INC. UNAUDITED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except par value) As of As of December 31, 2012 December 31, 2011 ASSETS Current assets: Cash and cash equivalents $ 55,509 $ 16,683 Receivables, net of allowance for doubtful accounts of $60 and $149, respectively 8,388 8,457 Inventories 10,873 12,565 Deferred income taxes 3,148 2,987 Prepaid expenses and other assets 1,369 740 Total current assets 79,287 41,432 Long-term inventories, net 1,955 1,905 Property and equipment, net 1,708 2,338 Intangibles, net 4,258 2,690 Goodwill 3,472 1,153 Deferred income taxes 1,195 -- Other assets 64 41 Total assets $ 91,939 $ 49,559 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,302 $ 2,814 Accrued liabilities 2,143 2,234 Income taxes payable 14,782 300 Deferred product revenue 3,593 3,404 Total current liabilities 22,820 8,752 Deferred income taxes - 101 Deferred rent 422 494 Other long-term liabilities 2,029 548 Total liabilities 25,271 9,895 Shareholders' equity: Common stock, par value $0.001, 50,000,000 shares authorized, 9,258,206 and 9,098,152 shares issued and outstanding, respectively 9 9 Additional paid-in capital 40,814 40,073 Treasury stock at cost - 94,744 as of December 31, 2012 (384) -- Retained earnings (accumulated deficit) 26,229 (418) Total shareholders' equity 66,668 39,664 Total liabilities and shareholders' equity $ 91,939 $ 49,559 CLEARONE INC. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share value) Quarter ended December 31, Year ended December 31, 2012 2011 2012 2011 Revenue $ 13,036 $ 11,965 $ 46,417 $ 46,067 Cost of goods sold 5,625 4,855 19,089 18,522 Gross profit 7,411 7,110 27,328 27,545 Operating expenses: Sales and marketing 1,903 1,846 8,112 8,120 Research and product development 2,265 1,880 8,261 7,128 General and administrative 2,374 1,262 6,934 5,427 Proceeds from litigation, net (38,250) - (38,500) (3,702) Total operating expenses (31,708) 4,988 (15,193) 16,973 Operating income 39,119 2,122 42,521 10,572 Other income (expense), net (7) 10 34 24 Income before income taxes 39,112 2,132 42,555 10,596 Provision for income taxes 14,598 711 15,908 3,667 Net income $ 24,514 $ 1,421 $ 26,647 $ 6,929 Basic earnings per common share $ 2.69 $ 0.16 $ 2.93 $ 0.77 Diluted earnings per common share $ 2.67 $ 0.15 $ 2.89 $ 0.75 Basic weighted average shares outstanding 9,109,552 9,095,333 9,107,234 9,027,934 Diluted weighted average shares outstanding 9,192,714 9,237,214 9,214,685 9,271,811 CLEARONE INC. UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (Dollars in thousands, except per share value) Quarter ended December 31, 2012 Quarter ended December 31, 2011 GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP Revenue $ 13,036 $ - $ 13,036 $ 11,965 $ - $ 11,965 Cost of goods sold 5,625 (3) 5,622 4,855 (43) 4,812 Gross profit 7,411 3 7,414 7,110 43 7,153 Operating expenses: Sales and marketing 1,903 (13) 1,890 1,846 (12) 1,834 Research and product development 2,265 (11) 2,254 1,880 (6) 1,874 General and administrative 2,374 (1,394) 980 1,262 (156) 1,106 Proceeds from litigation (38,250) 38,250 - - - - Total operating expenses (31,708) 36,832 5,124 4,988 (174) 4,814 Operating income 39,119 (36,829) 2,290 2,122 217 2,339 Other income (expense), net (7) - (7) 10 - 10 Income before income taxes 39,112 (36,829) 2,283 2,132 217 2,349 Provision for income taxes 14,598 (13,540) 1,058 711 110 821 Net income $ 24,514 $ (23,289) $ 1,225 $ 1,421 $ 107 $ 1,528 Basic earnings per common share $ 2.69 $ 0.13 $ 0.16 $ 0.17 Diluted earnings per common share $ 2.67 $ 0.13 $ 0.15 $ 0.17 Basic weighted average shares outstanding 9,109,552 9,109,552 9,095,333 9,095,333 Diluted weighted average shares outstanding 9,192,714 9,192,714 9,237,214 9,237,214 The adjustments consist of the following: Share-based compensation $ 65 $ 56 Amortization of purchased intangibles 301 130 Legal expenses for litigation relating to indemnification of former officers, intellectual property claims and our claim for damages 376 31 Acquisition related expenses 57 - Proceeds from litigation, net of legal expenses and special bonus to key litigation participants (37,628) - Total of adjustments before taxes (36,829) 217 Income taxes affected by the above adjustments (13,540) 110 Total adjustments $ (23,289) $ 107 CLEARONE INC. (Dollars in thousands, except per share value) UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP NET INCOME Year ended December 31, 2012 Year ended December 31, 2011 GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP Revenue $ 46,417 $ - $ 46,417 $ 46,067 $ - $ 46,067 Cost of goods sold 19,089 (6) 19,083 18,522 (43) 18,479 Gross profit 27,328 6 27,334 27,545 43 27,588 Operating expenses: Sales and marketing 8,112 (58) 8,054 8,120 (25) 8,095 Research and product development 8,261 (37) 8,224 7,128 (18) 7,110 General and administrative 6,934 (2,670) 4,264 5,427 (1,207) 4,220 Proceeds from litigation (38,500) 38,500 - (3,702) 3,702 - Total operating expenses (15,193) 35,735 20,542 16,973 2,452 19,425 Operating income 42,521 (35,729) 6,792 10,572 (2,409) 8,163 Other income (expense), net 34 - 34 24 - 24 Income before income taxes 42,555 (35,729) 6,826 10,596 (2,409) 8,187 Provision for income taxes 15,908 (13,059) 2,849 3,667 (805) 2,862 Net income $ 26,647 $ (22,670) $ 3,977 $ 6,929 $ (1,604) $ 5,325 Basic earnings per common share $ 2.93 $ 0.44 $ 0.77 $ 0.59 Diluted earnings per common share $ 2.89 $ 0.43 $ 0.75 $ 0.57 Basic weighted average shares outstanding 9,107,234 9,107,234 9,027,934 9,027,934 Diluted weighted average shares outstanding 9,214,685 9,214,685 9,271,811 9,271,811 The adjustments consist of the following: Share-based compensation $ 241 $ 187 Amortization of purchased intangibles 679 393 Legal expenses for litigation relating to indemnification of former officers, intellectual property claims and our claim for damages 902 872 Acquisition related expenses 327 - Proceeds from litigation, net of legal expenses and special bonus to key litigation participants (37,878) (3,861) Total of adjustments before taxes (35,729) (2,409) Income taxes affected by the above adjustments (13,059) (805) Total adjustments $ (22,670) $ (1,604) CLEARONE INC. (Dollars in thousands, except per share value) UNAUDITED RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDA Quarter ended December 31, Year ended December 31, 2012 2011 2012 2011 GAAP net income $ 24,514 $ 1,421 $ 26,647 $ 6,929 Adjustments: Provision for income taxes 14,598 711 15,908 3,667 Depreciation and amortization 874 348 1,864 1,220 Non-GAAP EBITDA 39,986 2,480 44,419 11,816 Proceeds from litigation, net of legal expenses and special bonus to officers (37,628) - (37,878) (3,861) Share-based compensation 65 56 241 187 Legal expenses for litigation relating to indemnification of former officers, intellectual property claims and our claim for damages 376 31 902 872 Acquisition related expenses 57 - 327 - Non-GAAP Adjusted EBITDA $ 2,856 $ 2,567 $ 8,011 $ 9,014 Basic weighted average shares outstanding 9,109,552 9,095,333 9,107,234 9,027,934 Diluted weighted average shares outstanding 9,192,714 9,237,214 9,214,685 9,271,811 Basic Adjusted EBITDA per common share $ 0.31 $ 0.28 $ 0.88 $ 1.00 Diluted Adjusted EBITDA per common share $ 0.31 $ 0.28 $ 0.87 $ 0.97 SOURCE ClearOne http://rt.prnewswire.com/rt.gif NewsItemId=LA67518&Transmission_Id=201302270926PR_NEWS_USPR_____LA67518&DateId=20130227 |
