ClearOne Reports Fiscal 2006 Fourth Quarter and Full-Year Financial Results.SALT LAKE CITY -- ClearOne Communications Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). : CLRO CLRO Corporation of London Record Office .OB) today reported financial results for the fiscal 2006 fourth quarter and year ended June June: see month. 30, 2006. For fiscal 2006, revenue increased to $37.6 million from $31.6 million in fiscal 2005. Gross profit grew to $18.3 million from $16.7 million for the prior year period. Income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the was $166,000 versus $2.2 million for fiscal 2005. Net income in fiscal 2006 was $2.1 million, or $0.17 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, which included income from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $1.9 million. This compares with net income for the prior year of $16.1 million, or $1.30 per diluted share, which included income from discontinued operations of $13.9 million. "During the past year we launched a number of new products, expanded our distribution channel and increased market share in the table top and professional conferencing See teleconferencing. space," said Zee Hakimoglu, president and chief executive officer of ClearOne. "Together, these efforts helped fuel our top line growth of nearly 20 percent over the prior year. While our newer product lines generally have a lower gross margin than our professionally installed line of products, we believe they add attractive growth opportunities, allowing us to enter and further penetrate new segments of the audio conferencing See audioconferencing. market, and diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. our product portfolio." For the fiscal 2006 fourth quarter, revenue increased to $9.7 million from $9.1 million in the fiscal 2005 fourth quarter. Gross profit was $4.7 million compared with $5.1 million for the fourth quarter of fiscal 2005. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were $5.7 million compared with $6.2 million in the same quarter of the prior year. Loss from continuing operations was ($764,000) versus income from continuing operations of $2.2 million in the fiscal 2005 fourth quarter. Net loss was ($512,000), or ($0.04) per diluted share, which included income from discontinued operations of $252,000. This compares with net income for the prior year fourth quarter of $2.3 million, or $0.19 per diluted share, which included income from discontinued operations of $116,000. At June 30, 2006, the company had cash, cash equivalents, and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has of $21.8 million and no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered 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 A videoconferencing session via the Internet. In order to interact with other participants, attendees use either a Web application or an application downloaded into their client machines. 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 Web site at www.clearone.com. This release contains "forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. " statements that are based on present circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , 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.
CLEARONE COMMUNICATIONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands of dollars, except per share amount)
(unaudited)
Three Months Ended Years Ended
June 30, June 30,
----------------------- -----------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Revenue $9,730 $9,103 $37,632 $31,645
Cost of goods sold 5,071 4,026 19,284 14,951
----------- ----------- ----------- -----------
Gross profit 4,659 5,077 18,348 16,694
----------- ----------- ----------- -----------
Operating expenses:
Marketing and selling 2,324 2,492 7,866 9,070
Research and product
development 2,521 1,495 8,299 5,305
General and
administrative 820 1,379 5,108 5,489
Settlement in
shareholders' class
action - 563 (1,205) (2,046)
Other operating
expenses - 290 - 290
----------- ----------- ----------- -----------
Total operating
expenses 5,665 6,219 20,068 18,108
----------- ----------- ----------- -----------
Operating loss (1,006) (1,142) (1,720) (1,414)
Other income
(expense), net 422 125 1,016 318
----------- ----------- ----------- -----------
Loss from continuing
operations before
income taxes (584) (1,017) (704) (1,096)
Benefit for income
taxes (180) 3,219 870 3,248
----------- ----------- ----------- -----------
Income (loss) from
continuing operations (764) 2,202 166 2,152
Income from
discontinued
operations 252 116 1,930 13,923
----------- ----------- ----------- -----------
Net income (loss) $(512) $2,318 $2,096 $16,075
=========== =========== =========== ===========
Diluted earnings
(loss) per common
share from continuing
operations $(0.06) $0.18 $0.01 $0.17
Diluted earnings per
common share from
discontinued
operations $0.02 $0.01 $0.16 $1.13
Diluted earnings
(loss) per common
share $(0.04) $0.19 $0.17 $1.30
Diluted weighted
average shares
outstanding 12,209,749 12,273,062 12,206,618 12,332,106
CLEARONE COMMUNICATIONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of dollars, except per share amount)
(unaudited)
June 30,
------------------
2006 2005
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $1,240 $1,892
Marketable securities 20,550 15,800
Accounts receivable 7,784 6,859
Inventories 7,025 5,806
Income tax receivable 2,607 3,952
Other current assets 383 570
-------- --------
Total current assets 39,589 34,879
Property and equipment, net 1,647 2,805
Intangibles, net 154 322
Other assets 15 15
-------- --------
Total assets $41,405 $38,021
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,597 $2,163
Accrued liabilities 2,397 5,622
Deferred product revenue 5,871 5,055
-------- --------
Total current liabilities 10,865 12,840
Deferred income taxes, net 128 270
-------- --------
Total liabilities 10,993 13,110
-------- --------
Shareholders' equity:
Total shareholders' equity 30,412 24,911
-------- --------
Total liabilities and shareholders' equity $41,405 $38,021
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