ClearOne Communications, Inc. (NASDAQ:CLRO) today reported solid growth

in sales and earnings for the second quarter of fiscal 2008 ended

December 31, 2007.

Revenue for the fiscal 2008 second quarter increased 7% to $10.8 million

from $10.1 million in the same quarter of last year. Gross profit grew

21% to $6.4 million, or 59% of revenues, from $5.2 million, or 52% of

revenues, for the prior year period. Operating income rose to $1.9

million from $915,000 in the same quarter last year. Net income advanced

to $1.8 million, or $0.16 per diluted share, from $1.1 million, or $0.09

per diluted share, a year ago.

Under a share repurchase plan announced in August 2007, the company

purchased approximately 181,000 shares of its common stock during the

fiscal 2008 second quarter and 88,000 shares in the fiscal first quarter.

"The improved performance primarily reflected

increased sales of our professional audio conferencing products, which

carry our highest margins," said Zee

Hakimoglu, president, chief executive officer and chairman of ClearOne. "Gross

profit in the quarter also benefited from lower inventory obsolescence

reserve requirements and lower unfavorable manufacturing variances than

in last year's second quarter. These factors,

combined with the reduced number of shares outstanding, contributed to

the 80% increase in our earnings per share."

For the first six months of fiscal 2008, revenue increased to $20.2

million from $19.5 million in the same period of fiscal 2007. Gross

profit grew to $11.5 million from $10.3 million for the prior year

period. Operating income was $809,000 compared with operating income of

$1.2 million in the same period last year. Net income was $858,000, or

$0.08 per diluted share, compared with net income for the prior year

period of $1.8 million, or $0.15 per diluted share.

Financial results for the first half of fiscal 2008 include the

establishment of a $1.9 million accrual for a contingent liability. The

company accrued $1.8 million in its first quarter and an additional

$115,000 in its second quarter 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, associated with

the advancement of funds related to indemnification agreements with two

former officers. The company has been advised that the trial date has

been moved to April 21, 2008.

At December 31, 2007, the company had cash, cash equivalents, and

marketable securities of $22.7 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.

http://www.b2i.us/irpass.asp?BzID=509&to=ea&s=0

CLEARONE COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of dollars, except per share amounts)
		(unaudited)			(audited)
		December 31,			June 30,
		2007			2007
ASSETS
Current assets:
Cash and cash equivalents		$3,014			$2,782
Marketable securities		19,676			19,871
Accounts receivable, net of allowance for doubtful accounts of $60 and $54, respectively		7,790			8,025
Deposit, Bond for Preliminary Injunction		910			0
Note Receivable		126			163
Inventories, net		6,792			7,263
Deferred income taxes		124			0
Prepaid expenses		512			213
Total current assets		38,944			38,317
Property and equipment, net		2,651			2,694
Note Receivable - long-term		0			43
Other assets		9			9
Total assets		$41,604			$41,063
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$1,295			$1,745
Accrued taxes		0			660
Accrued liabilities		3,048			1,874
Deferred product revenue		4,980			4,872
Total current liabilities		9,323			9,151
Deferred rent		777			855
Deferred income taxes, net		124			0
Other long-term liabilities		1,084			619
Total liabilities		11,308			10,625
Shareholders' equity:
Common stock, par value $0.001, 50,000,000 shares authorized, 10,771,165 and 10,861,920 shares issued and outstanding, respectively		11			11
Additional paid-in capital		46,877			47,582
Accumulated deficit		(16,592	)		(17,155	)
Total shareholders' equity		30,296			30,438
Total liabilities and shareholders' equity		$41,604			$41,063

CLEARONE COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands of dollars, except per share amounts)
		Three Months Ended												Six Months Ended
		December 31,						December 31,						December 31,						December 31,
		2007						2006						2007						2006
					% of Revenue						% of Revenue						% of Revenue						% of Revenue
Product Revenue:		$	10,787		100	%		$	10,107		100	%		$	20,229		100	%		$	19,518		100	%
Cost of goods sold:
Total cost of goods sold			4,414		41	%			4,860		48	%			8,714		43	%			9,176		47	%
Gross profit			6,373		59	%			5,247		52	%			11,515		57	%			10,342		53	%
Operating expenses:
Marketing and selling			1,578		15	%			1,789		18	%			3,180		16	%			3,707		19	%
General and administrative			1,198		11	%			688		7	%			4,093		20	%			1,497		8	%
Research and product development			1,678		16	%			1,855		18	%			3,433		17	%			3,934		20	%
Total operating expenses			4,454		41	%			4,332		43	%			10,706		53	%			9,138		47	%
Operating income			1,919		18	%			915		9	%			809		4	%			1,204		6	%
Other income, net:
Interest income			296		3	%			283		3	%			610		3	%			590		3	%
Other, net			15		0	%			37		0	%			43		0	%			62		0	%
Total other income (expense), net			311		3	%			320		3	%			653		3	%			652		3	%
Income (loss) from continuing operations before income taxes			2,230		21	%			1,235		12	%			1,462		7	%			1,856		10	%
(Provision) benefit from income taxes			-449		-4	%			-155		-2	%			-620		-3	%			-136		-1	%
Income (loss) from continuing operations			1,781		17	%			1,080		11	%			842		4	%			1,720		9	%
Income from discontinued operations			1		0	%			4		0	%			16		0	%			41		0	%
Net income (loss)		$	1,782		17	%		$	1,084		11	%		$	858		4	%		$	1,761		9	%
Basic earnings per common share		$	0.16					$	0.09					$	0.08					$	0.15
Diluted earnings per common share		$	0.16					$	0.09					$	0.08					$	0.15
Basic weighted average shares			10,840,193						11,922,641						10,900,725						12,053,745
Diluted weighted average shares			10,941,491						11,957,706						11,012,239						12,100,794