FILED PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933, AS AMENDED
FILING COMPANY: CLEARONE COMMUNICATIONS, INC., REGISTRATION NO. 333-82242
SUBJECT COMPANY: E.MERGENT, INC.
The following is a PowerPoint presentation given to members of the financial
community, including institutional investors, analysts and investment bankers.
ClearOne Communications
A market ready to explode
A company poised to leverage the opportunity
Frances Flood - President & CEO
Randall J. Wichinski - CFO
To the extent any statement presented herein deals with information
that is not historical, including statements regarding the growth of
ClearOne's core business segments domestically and internationally,
financial projections, potential revenue from strategic relationships,
new product development schedules, and projected growth rates of target
markets, such statement is necessarily forward-looking and made pursuant
to the safe harbor provisions of the Securities Litigation Reform Act
of 1995. As such, it is subject to the occurrence of many events outside
ClearOne's control that could cause ClearOne's results to differ materially
from those anticipated. Please see the risk factors contained in
ClearOne's reports filed with the SEC, including it's most recent annual
report on Form 10-K and its most recent quarterly report on Form 10-Q.
ClearOne Communications
o Founded as Gentner - 1981
o New man agement team - 1996
o 19 quarters of consecutive profitability
o 30%+ revenue growth - 4 consecutive years
o Technology - 65% revenue
o Services - 35% revenue
o 60% average gross profit margin
o Fortune Small Business (June 2001) - 7th Fastest Growing Company
o Forbes (October 2001) - 18th Best Small Company in America
ClearOne - A Brief History In Expanding Size of Market Opportunity
| | | | |
| | | | |
| |Video Conferencing| | |
| | $700 million | | |
| | | | |
| | | | | |
| | | | | |
- ----------------------------|--------------------------------------------------
| | | | | |
| | | | |
|*Broadcast-1981 | High-End Audio |Audio, Video, Data| Professional |
| $10 million --> Conferencing --> Conferencing --> Servoces |
| | $50 million | Services | Group |
| | | $2 billion | Multi-billion $ |
| | / | | | |
| |/ | | | |
- -------------------/--------|--------------------------------------------------
| /| | | | |
| | | | |
| Tabletop Audio | Pro-Audio Venues | | |
| Conferencing | $500 million | | |
| Systems | | | |
| $100 million | | | |
| | | | |
| | | | |
ClearOne's Objective
1) Own the greatest "Share of the Room" with Gentner(R)-brand
conferencing systems.
2) Own more "rooms" - or greater share of the enterprise - with complete
solution packages (small to large rooms, audio/video services, post
sales support).
3) Accomplish this through ClearOne/Gentner (or) ClearOne/Gentner
"inside" OEM market.
ClearOne - Solutions Company vs. Box Company
o Create, develop and manufacture the industry's best multi-media
conferencing systems - for corporate, education and government.
o Translate these technologies into clear value for our customers with
our network of service and solution professionals.
ClearOne Results
o Total Audio Conferencing Systems Market ($150 million):
-----
o 1996: 3%
o 2000: 17%
o High-End, Large-Room Audio Conferencing Systems ($50 million):
--------
o 2000: 51%
o Average Growth Rate - Services:
o 1997-2001: 86% year over year
o OEM - Peavey, XO, Telaid
---
o Acquired ClearOne 7/2000 - Audio/Video Technology
o Acquired Ivron Systems 10/2001 - Video Technology
o Acquiring E.mergent - Video Peripherals/Consulting
ClearOne Communications
----------------------------------
| | |
| ClearOne | E.mergent |
| | |
----------------------------------
|
--------------------------------------------
| |
--------------------------------- ---------------------------------
| | | | | |
| Gentner | Video Labs | | ClearOne | Acoustic |
| Technology | Technology | | Services | Services |
| Division | | | Group | |
| | | | | |
--------------------------------- ---------------------------------
ClearOne Communications
-----------------------------------
| | |
Audio/Visual | Gentner | Video Labs | Video Consultants/
| Technology | Technology | Set-Top
[Graphic Omitted] | (Installed) | (Set-Top) | [Graphic Omitted]
| | |
-----------------------------------
* Distributors
* Premier Dealers * Video Consultants/
* Consultants Set-Top Channel
* International * International Set-Top
* Pro Audio
* OEM
ClearOne Communications
- --------------------------------- -----------------------------------------
| | | | | |
| Gentner | Video Labs | | ClearOne | Acoustic |
| Technology | Technology | | Services | Services |
| Division | | | Group | |
| | | | | |
- --------------------------------- -----------------------------------------
* Audio, Video &
Data Conferenging
* Tech Support * Tech Support
* Help Desk * Help Desk
Technology + * Dealer Training * End User Training
* Business Consulting * Systems Consulting
* Rent-A-Tech * Systems Integration
* Systems Integration * Design Support
Support
Total Solution - Technology & Services
| | | |
Proactive Sales| | | |
Force - | Assist | | |
Generate Leads |Consultants & | | Professional |
for Dealers | Integrators |Share of Room |Services Group | Enterprise Sales
| | | |
|------------| | |----------| | |----------| | |-----------| | |-------------|
| | | | | | | | | | | | | |
| C.A.P. | | | Design & | | |Technology| | | Technical | | | Quality |
| Needs | | | Build | | |& Service | | | Support & | | | Assurance - |
| Assessment | | | | | |Solutions | | | End-User | | | Client ROI |
| | | | | | | | | | Education | | | |
|------------| | |----------| | |----------| | |-----------| | |-------------|
| | | |
Own Clients | Revenue | Own Rooms | Revenue | Sole Source for
| Opportunity |Better Margins| Opportunity | Conferencing
Own Enterprise | &/or | Faster | | Solutions
| Partnership | Development | Best-In-Class |
| | Time | Provider |
The Opportunity
o Audio Systems - 8% of rooms
o Video Systems - 2% of rooms
o Conferencing/multi-media - multi-billion dollar opportunity
o Manufacturers focus on hardware transaction by installation
o ClearOne - offers hardware and services solutions for the Enterprise
o Heightened awareness of conferencing
o Multi-nationals want One Solution Provider
Financials
'97 '98 '99 '00 '01 YTD
--- --- --- --- --- ---
Revenue $13.4 $17.3 $23.0 $30.9 $42.2 $23.8
(in millions) $39.9 (cont. ops.)
GPM 49% 52% 57% 61% 59% 59.8%
ROA (5.1%) 16.9% 22.1% 27.9% 27%
ROE (9.8%) 26.8% 30.5% 32.0% 29%
EPS $(0.05) $0.18 $0.30 $0.54 $0.70 $0.31
$0.61 (cont. ops)
Our Most Powerful Resource - Our People
o Options vest on EPS targets
o FY02 $0.89
o FY03 $1.45
o FY04 $1.75
o FY05 $2.00
o ESPP
o Diversity
o Seasoned management team
FORWARD LOOKING INFORMATION
This presentation contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1993, as amended and are subject to the Safe Harbor
provisions created by such statutes. Such statements include statements about
ClearOne's beliefs, plans, intentions and strategies, including ClearOne's
expectations about the potential benefit of the merger of ClearOne with
E.mergent, Inc. and the anticipated integration of E.mergent, its products,
customer base and distribution channels with ClearOne. Such statements are not
guarantees of the future performance of ClearOne or the combined company. They
are based on ClearOne's current expectations, forecasts and assumptions
resulting from information currently available to ClearOne. These
forward-looking statements involve risks and uncertainties that could cause
actual outcomes and results to differ materially from the results and
expectations described. With regard to the proposed merger, while the companies
have executed a definitive merger agreement, there is no assurance that the
parties will complete the transaction. In the event that the companies do not
receive the necessary shareholder approvals or fail to satisfy conditions for
closing, the transaction will terminate. Further, if the merger is completed,
ClearOne may experience difficulties in introducing or integrating acquired
products into new or existing ClearOne products or difficulties in capitalizing
on new distribution channels or an expanded customer base. Additional risks and
uncertainties include, but are not limited to conditions in the financial
markets relevant to the proposed merger, the failure to achieve expected
synergies, efficiencies and cost-savings of operations, discontinuity of
component supply or availability, risk of price fluctuation, loss of major
customers, fluctuations in operating results, changes in technology,
competition, the ability to manage rapid growth, the ability to manage business
and personnel integration, risks associated with international sales and
operations, the ability to retain key personnel and intellectual property rights
enforcement. The revenues and earnings of ClearOne and the combined company, and
their ability to achieve their planned business objectives, will be subject to
such factors, which make estimation of future operating results uncertain. For a
further list and description of risks and uncertainties, see the reports filed
with the Securities and Exchange Commission by ClearOne, specifically ClearOne's
most recently filed Form 10-Q, and 10-K, and well as the Form S-4 Registration
Statement filed by ClearOne in connection with the merger. ClearOne disclaims
any intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
ClearOne has filed with the SEC a registration statement that includes a
preliminary proxy statement/prospectus for the merger. The registration
statement and proxy statement/prospectus contain important information about
ClearOne, E.mergent, the merger and related matters, including detailed risk
factors. The information contained in the initial registration statement and
preliminary proxy statement/prospectus is not complete and may be changed.
E.mergent intends to mail a definitive proxy statement/prospectus to its
stockholders in connection with seeking their approval of the merger. Investors
and security holders are urged to read the definitive registration statement and
proxy statement/prospectus carefully because they contain important information.
Investors and security holders may obtain free copies of the registration
statement and the proxy statement/prospectus through the web site maintained by
the SEC at http://www.sec.gov, or by directing a request to ClearOne at 1825
Research Way, Salt Lake City, UT 84119, attention: Bryce Benson, telephone (801)
975-7200, or to E.mergent at 5960 Golden Hills Drive, Golden Valley, MN 55416,
attention Jill Larson, telephone (736) 417-4257. In addition to the registration
statement and the proxy statement/prospectus, ClearOne and E.mergent file
annual, quarterly and special reports, proxy statements and other information
with the SEC. Investors and security holders may read and obtain free copies of
any such reports, statements and other information through the web site
maintained by the SEC, or by contacting ClearOne and E.mergent at the addresses
listed above.
E.mergent, its directors and certain of its executive officers may be considered
participants in the solicitation of proxies in connection with the merger.
Information concerning the participants in the solicitation is set forth in the
ClearOne's registration statement and will be set forth in the final proxy
statement/prospectus when it becomes available.