ClearOne Reports First Quarter 2020 Financial Results
| ● | BMA CT drives year-over-year Pro Audio revenue growth |
| ● | Q1 Non-GAAP Operating expenses declined by 10% year-over-year |
| ● | Overall revenue down 9% year-over-year. |
“Despite the economic challenges posed by the COVID-19 pandemic, our innovative Beamforming Microphone Array Ceiling Tile (BMA CT) continued to be popular driving year-over-year growth in revenue of Pro Audio products,” said
“We added another benchmark to our lineup of technology achievements with the recent award of a new strategic patent relating to power transmission for Power over Ethernet (PoE) systems by the
"On the legal front, we thwarted Shure's misguided efforts to stop our most innovative products from reaching our customers. During a worldwide pandemic, Shure asked a court in
Financial Summary
The Company uses certain non-GAAP financial measures and reconciles those to GAAP measures in the attached tables.
- Q1 2020 revenue was
$5 .7 million, compared to$6 .3 million in Q1 2019 and$6 .3 million in Q4 2019. The year-over-year decrease is mainly due to decline in revenue from video products partially offset by increase in revenue from audio conferencing products and microphones. The year-over-year growth in audio conferencing products and microphones was largely due to significant increase in revenue from our recently introduced BMA-CT even though the revenue from our audio conferencing products and microphones are far below the levels prior to infringement of our patents. - GAAP gross profit in Q1 2020 was
$2 .8 million compared to$2 .7 million in Q1 2019 and$3 .0 million in Q4 2019. GAAP gross profit margin was 49% in Q1 2020, compared to 43% in Q1 2019 and 48% in Q4 2019. Gross profit margin increased year over year mainly due to decreases in material costs, overhead costs and inventory adjustments. - Operating expenses in Q1 2020 were
$4 .6 million, compared to$5 .1 million in Q1 2019 and$5 .0 million in Q4 2019. Non-GAAP operating expenses in Q1 2020 were$4 .2 million, compared to$4 .7 million in Q1 2019 and$4 .6 million in Q4 2019. The majority of the decrease in Q1 2020 operating expenses over Q1 2019 is attributable to decreases in employee-related costs including benefits and commissions and marketing expenses, partially offset by increases in trade-show related costs and legal expenses. The sequential decline in operating expenses is mainly due to decrease in audit and accounting fees and sales tax accruals offset by increases in legal expenses and trade show related expenses. - GAAP net loss in Q1 2020 was
$1.8 million , or$0.11 per share, compared to net loss of$2.3 million , or$0.14 per share, in Q1 2019 and net loss of$2.0 million , or$0.12 per share, in Q4 2019. The decrease in net loss in Q1 2020 compared to Q1 2019 was mainly due to decrease in operating expenses and due to increase in gross profit.
| ($ in 000, except per share) | Three months ended |
|||||||||
| 2020 | 2019 | Change | ||||||||
| GAAP | ||||||||||
| Revenue | $ | 5,734 | $ | 6,305 | -9 | % | ||||
| Gross profit | 2,838 | 2,704 | 5 | % | ||||||
| Operating expenses | 4,589 | 5,095 | 10 | % | ||||||
| Operating loss | (1,751) | (2,391) | 27 | % | ||||||
| Net loss | (1,847) | (2,349) | 21 | % | ||||||
| Diluted loss per share | (0.11) | (0.14) | 21 | % | ||||||
| Non-GAAP | ||||||||||
| Non-GAAP gross profit | $ | 2,840 | $ | 2,706 | -5 | % | ||||
| Non-GAAP operating expenses | 4,186 | 4,659 | 10 | % | ||||||
| Non-GAAP operating loss | (1,346) | (1,953) | 31 | % | ||||||
| Non-GAAP net loss | (1,442) | (1,911) | 25 | % | ||||||
| Non-GAAP Adjusted EBITDA | (1,207) | (1,779) | 32 | % | ||||||
| Non-GAAP loss per share (diluted) | (0.09) | (0.11) | 18 | % | ||||||
Balance Sheet Highlights
At
The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted on
About
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, 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
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
Contact:
Investor Relations
801-975-7200
investor_relations@clearone.com
http://investors.clearone.com
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except par value)
2020 |
December 31, 2019 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 2,855 | $ | 4,064 | ||||
| Marketable securities | 3,342 | 3,026 | ||||||
| Receivables, net of allowance for doubtful accounts of |
4,575 | 5,468 | ||||||
| Inventories, net | 10,350 | 11,441 | ||||||
| Prepaid expenses and other assets | 1,082 | 1,184 | ||||||
| Total current assets | 22,204 | 25,183 | ||||||
| Long-term marketable securities | 1,095 | 1,517 | ||||||
| Long-term inventories, net | 5,746 | 6,284 | ||||||
| Property and equipment, net | 966 | 1,044 | ||||||
| Operating lease - right of use assets, net | 2,332 | 2,459 | ||||||
| Intangibles, net | 15,411 | 14,009 | ||||||
| Other assets | 4,592 | 4,614 | ||||||
| Total assets | $ | 52,346 | $ | 55,110 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,475 | $ | 2,871 | ||||
| Accrued liabilities | 2,723 | 3,205 | ||||||
| Deferred product revenue | 207 | 173 | ||||||
| Total current liabilities | 5,405 | 6,249 | ||||||
| Senior convertible notes | 2,272 | 2,222 | ||||||
| Operating lease liability | 1,915 | 2,021 | ||||||
| Other long-term liabilities | 140 | 140 | ||||||
| Total liabilities | 9,732 | 10,632 | ||||||
| Shareholders' equity: | ||||||||
| Common stock, par value |
17 | 17 | ||||||
| Additional paid-in capital | 58,560 | 58,520 | ||||||
| Accumulated other comprehensive loss | (233) | (176) | ||||||
| Accumulated deficit | (15,730) | (13,883) | ||||||
| Total shareholders' equity | 42,614 | 44,478 | ||||||
| Total liabilities and shareholders' equity | $ | 52,346 | $ | 55,110 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Dollars in thousands, except per share values)
| Three months ended |
||||||||
| 2020 | 2019 | |||||||
| Revenue | $ | 5,734 | $ | 6,305 | ||||
| Cost of goods sold | 2,896 | 3,601 | ||||||
| Gross profit | 2,838 | 2,704 | ||||||
| Operating expenses: | ||||||||
| Sales and marketing | 1,739 | 1,953 | ||||||
| Research and product development | 1,344 | 1,587 | ||||||
| General and administrative | 1,506 | 1,555 | ||||||
| Total operating expenses | 4,589 | 5,095 | ||||||
| Operating loss | (1,751) | (2,391) | ||||||
| Interest expense | (108) | — | ||||||
| Other income, net | (73) | 42 | ||||||
| Loss before income taxes | (1,824) | (2,349) | ||||||
| Provision for (benefit from) income taxes | 23 | — | ||||||
| Net loss | $ | (1,847) | $ | (2,349) | ||||
| Basic weighted average shares outstanding | 16,650,725 | 16,630,597 | ||||||
| Diluted weighted average shares outstanding | 16,650,725 | 16,630,597 | ||||||
| Basic loss per share | $ | (0.11) | $ | (0.14) | ||||
| Diluted loss per share | $ | (0.11) | $ | (0.14) | ||||
| Comprehensive loss: | ||||||||
| Net loss | (1,847) | (2,349) | ||||||
| Unrealized gain (loss) on available-for-sale securities, net of tax | (23) | 70 | ||||||
| Change in foreign currency translation adjustment | (34) | (27) | ||||||
| Comprehensive loss | (1,904) | (2,306) | ||||||
UNAUDITED RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(Dollars in thousands, except per share values)
| Three months ended |
||||||||
| 2020 | 2019 | |||||||
| GAAP gross profit | $ | 2,838 | $ | 2,704 | ||||
| Stock-based compensation | 2 | 2 | ||||||
| Non-GAAP gross profit | $ | 2,840 | $ | 2,706 | ||||
| GAAP operating loss | $ | (1,751) | $ | (2,391) | ||||
| Stock-based compensation | 37 | 74 | ||||||
| Amortization of intangibles | 368 | 364 | ||||||
| Non-GAAP operating loss | $ | (1,346) | $ | (1,953) | ||||
| GAAP net loss | $ | (1,847) | $ | (2,349) | ||||
| Stock-based compensation | 37 | 74 | ||||||
| Amortization of intangibles | 368 | 364 | ||||||
| Non-GAAP net loss | $ | (1,442) | $ | (1,911) | ||||
| GAAP net loss | $ | (1,847) | $ | (2,349) | ||||
| Number of shares used in computing GAAP loss per share (diluted) | 16,650,725 | 16,630,597 | ||||||
| GAAP loss per share (diluted) | $ | (0.11) | $ | (0.14) | ||||
| Non-GAAP net loss | $ | (1,442) | $ | (1,911) | ||||
| Number of shares used in computing Non-GAAP loss per share (diluted) | 16,650,725 | 16,630,597 | ||||||
| Non-GAAP loss per share (diluted) | $ | (0.09) | $ | (0.11) | ||||
| GAAP net loss | $ | (1,847) | $ | (2,349) | ||||
| Stock-based compensation | 37 | 74 | ||||||
| Depreciation | 104 | 132 | ||||||
| Amortization of intangibles | 368 | 364 | ||||||
| Interest expense | 108 | — | ||||||
| Provision for (benefit from) income taxes | 23 | — | ||||||
| Non-GAAP Adjusted EBITDA | $ | (1,207) | $ | (1,779) | ||||
Source: ClearOne, Inc.