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): April 29,
2008
ClearOne
Communications, Inc.
(Exact
Name of Registrant as Specified in Its Charter)
Utah
(State or
Other Jurisdiction of Incorporation)
|
000-17219
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87-0398877
|
|
|
(Commission
File Number)
|
(I.R.S.
employer
identification
number)
|
|
5225 Wiley Post Way, Suite 500
Salt Lake City, Utah
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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))
1
Item
2.02 Results of Operations and Financial Condition.
On April
29, 2008, ClearOne Communications, Inc. (the “Company”) issued a press release
announcing its financial results for the quarter ended March 31, 2008. The full
text of the Company’s press release is furnished herewith as Exhibit
99.1.
(d)
Exhibits.
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Title
of Document
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Location
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|
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99.1
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Press
Release dated April 29, 2008 captioned “ClearOne Reports Fiscal 2008 Third
Quarter Financial Results”
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This
Filing
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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.
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CLEARONE
COMMUNICATIONS, INC.
|
||
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Date: April
29, 2008
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By:
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/s/ Greg A. LeClaire
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Greg
A. LeClaire
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||
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Vice
President of Finance
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||
2
EXHIBIT 99.1
Contact:
ClearOne
Communications, Inc.
Greg
LeClaire
(801)
975-7200
CLEARONE
REPORTS FISCAL 2008 THIRD QUARTER FINANCIAL RESULTS
Salt Lake City, UT – April 29, 2008 –
ClearOne Communications, Inc. (NASDAQ: CLRO) today reported financial
results for the third quarter of fiscal 2008 ended March 31, 2008.
For the
fiscal 2008 third quarter, revenue decreased slightly to $9.2 million from $9.4
million in the same quarter of last year. Gross profit grew 11% to
$5.7 million, or 62% of revenue, from $5.2 million, or 55% of revenue, for the
prior year period. Operating income rose to $1.2 million from
$550,000 in the same quarter last year. Income from continuing
operations was $1.1 million, or $0.10 per diluted share, compared with $960,000
or $0.09 per diluted share, a year ago. Net income was $1.1 million,
or $0.10 per diluted share, which includes approximately $300,000 of costs
accrued for a contingent liability. This compares to net income in
the third quarter of fiscal 2007 of $1.2 million, or $0.11 per diluted share,
which includes income from discontinued operations of $263,000, or $0.02 per
diluted share.
Under a
share repurchase plan announced in August 2007, the company purchased
approximately 344,000 shares of its common stock for $1.7 million during the
fiscal 2008 third quarter.
“Revenue
decreased slightly due to lower sales of professional and premium audio products
partially offset by increased sales of our tabletop and personal conferencing
products,” said Zee Hakimoglu, president, chief executive officer and chairman
of ClearOne. “Despite the slight revenue decline, we realized higher
gross profit primarily as a result of the company reducing its reserve for
inventory obsolescence due to increased sales of our tabletop conferencing
products.”
For the
first nine months of fiscal 2008, revenue increased to $29.4 million from $28.9
million in the same period of fiscal 2007. Gross profit grew to $17.2
million from $15.5 million for the prior year period. Operating
income rose to $2.0 million from $1.8 million in the same period last
year. Income from continuing operations was $1.9 million, or $0.18
per diluted share, compared with income from continuing operations for the prior
year period of $2.7 million, or $0.23 per diluted share. Net income
was $1.9 million, or $0.18 per diluted share, which includes the establishment
of a $2.2 million accrual for a contingent liability associated with the
advancement of funds related to indemnification agreements with two former
officers. The company accrued $1.8 million in its first quarter and
an additional $400,000 in the subsequent two quarters of fiscal 2008,
representing the probable amount that as of the date of the financial statements
could be reasonably estimated of its liability, through trial. The
company has been advised that the trial date will be moved to either September
or December of 2008. This compares to net income in the prior year
period of $3.0 million, or $0.25 per diluted share, which includes income from
discontinued operations of $304,000, or $0.03 per diluted share.
As of
March 31, 2008, ClearOne has reclassified its entire balance of auction rate
securities (ARSs), $12.25 million, from short-term to long-term securities
following failed auctions occurring since February 2008. The company
continues to hold these securities and the issuers are paying interest at the
maximum contractual rate. Based on current credit market conditions,
it is likely that future auctions related to these securities will be
unsuccessful in the near term. ClearOne determined there was a
decline in the fair value of its ARS investments of $764,000, which, in
accordance with SFAS No. 115, Accounting for Certain Investments in Debt and
Equity Securities, and related guidance issued by FASB and the SEC, was deemed
temporary and recognized as an unrealized loss in the other comprehensive income
section of the Company’s income statement. ClearOne believes that the underlying
securities or collateral have not been affected and any lack of liquidity in its
ARSs will not impact its ability to fund its operations.
About
ClearOne
ClearOne
is a communications solutions company that develops and sells audio conferencing
systems and other related products for audio, video, and web conferencing
applications. The reliability, flexibility, and performance of
ClearOne’s comprehensive solutions create a natural communications environment,
which saves organizations time and money by enabling more effective and
efficient communication. For more information, visit ClearOne’s
website 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 statements regarding the company’s ability to successfully
commercialize newer products and enter new markets, 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.
# #
#
FINANCIAL
TABLES FOLLOW
1
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CLEARONE
COMMUNICATIONS, INC.
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||||||||
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CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
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(in
thousands of dollars, except per share amounts)
|
||||||||
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(unaudited)
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(audited)
|
|||||||
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March
31,
|
June
30,
|
|||||||
|
2008
|
2007
|
|||||||
|
ASSETS
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||||||||
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Current
assets:
|
||||||||
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Cash
and cash equivalents
|
$ | 8,566 | $ | 2,782 | ||||
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Marketable
securities
|
821 | 19,871 | ||||||
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Accounts
receivable, net of allowance for doubtful accounts
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7,005 | 8,025 | ||||||
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of
$60 and $54, respectively
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||||||||
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Deposit,
Bond for Preliminary Injunction
|
908 | 0 | ||||||
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Note
Receivable
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85 | 163 | ||||||
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Inventories,
net
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7,318 | 7,263 | ||||||
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Income
tax receivable
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8 | 0 | ||||||
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Deferred
income taxes
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203 | 0 | ||||||
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Prepaid
expenses
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485 | 213 | ||||||
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Total
current assets
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25,399 | 38,317 | ||||||
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Long-term
Securities
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11,486 | 0 | ||||||
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Property
and equipment, net
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2,678 | 2,694 | ||||||
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Intangible
Assets, net
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49 | 0 | ||||||
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Note
Receiveable - long-term
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0 | 43 | ||||||
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Other
assets
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9 | 9 | ||||||
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Total
assets
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$ | 39,621 | $ | 41,063 | ||||
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LIABILITIES
AND SHAREHOLDERS' EQUITY
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||||||||
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Current
liabilities:
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||||||||
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Accounts
payable
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$ | 1,924 | $ | 1,745 | ||||
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Accrued
taxes
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0 | 660 | ||||||
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Accrued
liabilities
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2,372 | 1,874 | ||||||
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Deferred
product revenue
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4,206 | 4,872 | ||||||
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Total
current liabilities
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8,502 | 9,151 | ||||||
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Deferred
rent
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739 | 855 | ||||||
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Deferred
income taxes, net
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203 | 0 | ||||||
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Other
long-term liabilities
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1,040 | 619 | ||||||
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Total
liabilities
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10,484 | 10,625 | ||||||
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Shareholders'
equity:
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||||||||
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Common
stock, par value $0.001, 50,000,000 shares authorized,
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||||||||
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10,444,810
and 10,861,920 shares issued and outstanding, respectively
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10 | 11 | ||||||
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Additional
paid-in capital
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45,422 | 47,582 | ||||||
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Accumulated
other comprehensive loss
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(764 | ) | 0 | |||||
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Accumulated
deficit
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(15,531 | ) | (17,155 | ) | ||||
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Total
shareholders' equity
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29,137 | 30,438 | ||||||
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Total
liabilities and shareholders' equity
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$ | 39,621 | $ | 41,063 | ||||
2
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CLEARONE
COMMUNICATIONS, INC.
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||||||||||||||||||||||||||||||||
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CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
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||||||||||||||||||||||||||||||||
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(Unaudited)
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||||||||||||||||||||||||||||||||
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(in
thousands of dollars, except per share amounts)
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||||||||||||||||||||||||||||||||
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Three Months Ended
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Nine Months Ended
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|||||||||||||||||||||||||||||||
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March
31,
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March
31,
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March
31,
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March
31,
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|||||||||||||||||||||||||||||
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2008
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2007
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2008
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2007
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|||||||||||||||||||||||||||||
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%
of Revenue
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%
of Revenue
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%
of Revenue
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%
of Revenue
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|||||||||||||||||||||||||||||
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Product
Revenue:
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$ | 9,163 | 100% | $ | 9,355 | 100% | $ | 29,393 | 100% | $ | 28,873 | 100% | ||||||||||||||||||||
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Cost
of goods sold
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3,439 | 38% | 4,190 | 45% | 12,153 | 41% | 13,366 | 46% | ||||||||||||||||||||||||
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Gross
profit
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5,724 | 62% | 5,165 | 55% | 17,240 | 59% | 15,507 | 54% | ||||||||||||||||||||||||
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Operating
expenses:
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||||||||||||||||||||||||||||||||
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Sales
& Marketing
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1,640 | 18% | 2,004 | 21% | 4,820 | 16% | 5,711 | 20% | ||||||||||||||||||||||||
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General
& administrative
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1,183 | 13% | 763 | 8% | 5,276 | 18% | 2,260 | 8% | ||||||||||||||||||||||||
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Research
and product development
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1,701 | 19% | 1,848 | 20% | 5,134 | 17% | 5,782 | 20% | ||||||||||||||||||||||||
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Total
operating expenses
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4,524 | 49% | 4,615 | 49% | 15,230 | 52% | 13,753 | 48% | ||||||||||||||||||||||||
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Operating
income
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1,200 | 13% | 550 | 6% | 2,010 | 7% | 1,754 | 6% | ||||||||||||||||||||||||
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Other
income, net:
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196 | 2% | 577 | 6% | 848 | 3% | 1,229 | 4% | ||||||||||||||||||||||||
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Income
from continuing operations before income taxes
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1,396 | 15% | 1,127 | 12% | 2,858 | 10% | 2,983 | 10% | ||||||||||||||||||||||||
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(Provision)
for income taxes
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(335 | ) | -4% | (167 | ) | -2% | (955 | ) | -3% | (303 | ) | -1% | ||||||||||||||||||||
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Income
from continuing operations
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1,061 | 12% | 960 | 10% | 1,903 | 6% | 2,680 | 9% | ||||||||||||||||||||||||
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Income
from discontinued operations:
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- | 0% | 263 | 3% | 16 | 0% | 304 | 1% | ||||||||||||||||||||||||
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Net
income
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$ | 1,061 | 12% | $ | 1,223 | 13% | $ | 1,919 | 7% | $ | 2,984 | 10% | ||||||||||||||||||||
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Three Months Ended
|
Nine Months Ended
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|||||||||||||||||||||||||||||||
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March
31,
|
March
31,
|
March
31,
|
March
31,
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|||||||||||||||||||||||||||||
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2008
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2007
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2008
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2007
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|||||||||||||||||||||||||||||
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Diluted
earnings per common share from continuing operations
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$ | 0.10 | $ | 0.09 | $ | 0.18 | $ | 0.23 | ||||||||||||||||||||||||
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Diluted
earnings per common share from discontinued operations
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$ | - | $ | 0.02 | $ | - | $ | 0.03 | ||||||||||||||||||||||||
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Diluted
earnings per common share
|
$ | 0.10 | $ | 0.11 | $ | 0.18 | $ | 0.25 | ||||||||||||||||||||||||
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Basic
weighted average shares
|
10,651,352 | 10,994,607 | 10,818,205 | 11,705,853 | ||||||||||||||||||||||||||||
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Diluted
weighted average shares
|
10,747,317 | 11,101,791 | 10,921,932 | 11,770,145 | ||||||||||||||||||||||||||||
3