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ClearOne Communications, Inc. Form 8-K dated 10/26/2006
 

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 26, 2006
 

ClearOne Communications, Inc.
(Exact Name of Registrant as Specified in Its Charter)
 
Utah
(State or Other Jurisdiction of Incorporation)

000-17219 
  
87-0398877
(Commission File Number)
  
(I.R.S. employer
identification number)

1825 Research Way, Salt Lake City, Utah
  
84119
(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))
 

 
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Item 2.02 Results of Operations and Financial Condition.

On October 26, 2006, ClearOne Communications, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter ended September 30, 2006. The full text of the Company’s press release is furnished herewith as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.
 
(d) Exhibits.

Exhibit No.
Title of Document
Location
99.1
Press Release dated October 26, 2006 captioned “ClearOne Reports Fiscal 2007 First Quarter Financial Results.”
This Filing


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 COMMUNICATIONS, INC.
     
     
     
Date: October 26, 2006
By:
/s/ Greg A. LeClaire
   
Greg A. LeClaire
   
Vice President of Finance
     
 
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Exhibit 99.1 - Press Release dated October 26, 2006 captioned "ClearOne Reports Fiscal 2007 First Quarter Financial Results."
Contacts:  ClearOne Communications, Inc.
Investor Relations
(801) 303-3555
 
Robert Jaffe
PondelWilkinson Inc.
(310) 279-5980

CLEARONE REPORTS FISCAL 2007 FIRST QUARTER FINANCIAL RESULTS

Salt Lake City, UT - October 26, 2006 - ClearOne Communications, Inc. (OTC: CLRO.OB) today reported financial results for the first quarter of fiscal 2007 ended September 30, 2006.
 
For the fiscal 2007 first quarter, revenue increased to $9.4 million from $8.8 million in the same quarter of last year. Gross profit grew to $5.1 million from $4.8 million for the prior year period. Operating income was $289,000 compared with $587,000 in the same quarter last year which included a $1.2 million benefit related to the settlement in a shareholders’ class action lawsuit. Net income was $677,000, or $0.06 per diluted share compared with net income for the prior year period of $2.0 million, or $0.16 per diluted share, which included income from discontinued operations of $1.0 million. In August 2006, ClearOne sold its document and educational camera product line, which is now reflected in the company’s financial statements as discontinued operations.
 
“In addition to the solid top line and gross margin improvement, we realized a significant reduction in general and administrative costs mainly as result of the termination of the SEC investigation and related professional fees,” said Zee Hakimoglu, president and chief executive officer of ClearOne. “We are focused on positioning ClearOne for continued growth and profitability. Over the last couple of months, we divested our camera product line to focus on our core business, authorized a stock buy-back and added industry savvy professionals to our management team. In addition, our stock began trading on the OTC Bulletin Board moving up from the Pink Sheets after becoming current with our required SEC filings.”
 
At September 30, 2006, the company had cash, cash equivalents, and marketable securities of $22.3 million and no long-term debt.
 
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


CLEARONE COMMUNICATIONS, INC.
  
CONDENSED CONSOLIDATED BALANCE SHEETS
  
(Unaudited)
  
(in thousands of dollars, except per share amounts)
  
           
   
September 30,
  
June 30,
  
   
2006
  
2006
  
           
ASSETS
          
Current assets:
          
Cash and cash equivalents
  
$
1,734
  
$
1,240
  
Marketable securities
    
20,550
   
20,550
 
Accounts receivable
    
7,300
   
7,784
 
Note receivable
    
153
   
-
 
Inventories, net
    
6,179
   
6,614
 
Income tax receivable
    
2,548
   
2,607
 
Deferred income taxes, net
    
94
   
128
 
Prepaid expenses
    
188
   
255
 
Assets held for sale
    
-
   
565
 
Total current assets
    
38,746
   
39,743
 
               
Property and equipment, net
    
1,473
   
1,647
 
Note receivable - long-term
    
166
   
-
 
Other assets
    
22
   
15
 
Total assets
  
$
40,407
  
$
41,405
  
               
LIABILITIES AND SHAREHOLDERS' EQUITY
              
Current liabilities:
              
Accounts payable
  
$
1,643
  
$
2,597
  
Accrued liabilities
    
2,136
   
2,397
 
Deferred product revenue
    
5,249
   
5,871
 
Total current liabilities
    
9,028
   
10,865
 
               
Deferred income taxes, net
    
94
   
128
 
Total liabilities
    
9,122
   
10,993
 
               
Shareholders' equity:
              
Common stock, par value $0.001, 50,000,000 shares authorized,
              
  12,185,427 and 11,264,233 shares issued and outstanding, respectively
    
12
   
12
 
Additional paid-in capital
    
52,997
   
52,764
 
Treasury stock
    
(37
)
  
-
 
Accumulated deficit
    
(21,687
)
  
(22,364
)
Total shareholders' equity
    
31,285
   
30,412
 
Total liabilities and shareholders' equity
  
$
40,407
  
$
41,405
  


2


CLEARONE COMMUNICATIONS, INC.
  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
 
(Unaudited)
  
(in thousands of dollars, except per share amounts)
  
           
   
Three Months Ended
  
   
September 30,
  
September 30,
  
   
2006
  
2005
  
           
Product Revenue:
  
$
9,411
  
$
8,778
  
               
Cost of goods sold:
              
Product
    
4,205
   
3,921
 
Product inventory write-offs
    
111
   
93
 
Total cost of goods sold
    
4,316
   
4,014
 
Gross profit
    
5,095
   
4,764
 
               
Operating expenses:
              
Marketing and selling
    
1,918
   
1,812
 
General and administrative
    
809
   
1,771
 
Settlement in shareholders' class action
    
-
   
(1,205
)
Research and product development
    
2,079
   
1,799
 
Total operating expenses
    
4,806
   
4,177
 
               
Operating income (loss)
    
289
   
587
 
               
Other income (expense), net:
              
Interest income
    
307
   
159
 
Other, net
    
25
   
7
 
Total other income (expense), net
    
332
   
166
 
               
Income (loss) from continuing operations before income taxes
    
621
   
753
 
(Provision) benefit from income taxes
    
19
   
222
 
Income (loss) from continuing operations
    
640
   
975
 
               
Discontinued operations:
              
Income from discontinued operations
    
55
   
118
 
Gain on disposal of discontinued operations
    
3
   
1,496
 
Income tax provision
    
(21
)
  
(602
)
Income from discontinued operations
    
37
   
1,012
 
               
Net income
  
$
677
  
$
1,987
  
               
Basic earnings per common share from continuing operations
  
$
0.05
  
$
0.09
  
Diluted earnings per common share from continuing operations
  
$
0.05
  
$
0.08
  
               
Basic earnings per common share from discontinued operations
  
$
0.00
  
$
0.09
  
Diluted earnings per common share from discontinued operations
  
$
0.00
  
$
0.08
  
               
Basic earnings per common share
  
$
0.06
  
$
0.18
  
Diluted earnings per common share
  
$
0.06
  
$
0.16
  
               
Basic weighted average shares
   
12,184,849
   
11,284,244
 
Diluted weighted average shares
    
12,231,744
   
12,278,664
 
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