ClearOne Reports Fiscal 2008 Third Quarter Financial Results.SALT LAKE CITY -- ClearOne Communications, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CLRO CLRO Corporation of London Record Office ) today reported financial results for the third quarter of fiscal 2008 ended March 31, 2008. For the fiscal 2008 third quarter, revenue decreased slightly to $9.2 million from $9.4 million in the same quarter of last year. Gross profit grew 11% to $5.7 million, or 62% of revenue, from $5.2 million, or 55% of revenue, for the prior year period. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. rose to $1.2 million from $550,000 in the same quarter last year. 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 $1.1 million, or $0.10 per diluted share, compared with $960,000 or $0.09 per diluted share, a year ago. Net income was $1.1 million, or $0.10 per diluted share, which includes approximately $300,000 of costs accrued for a contingent liability Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. . This compares to net income in the third quarter of fiscal 2007 of $1.2 million, or $0.11 per diluted share, which includes 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 $263,000, or $0.02 per diluted share. Under a share repurchase plan share repurchase plan A corporation's plan for buying back a predetermined number of its own shares in the open market. Institution of a share repurchase plan derives from management's view that the company has limited outside investment opportunities and announced in August 2007, the company purchased approximately 344,000 shares of its common stock for $1.7 million during the fiscal 2008 third quarter. "Revenue decreased slightly due to lower sales of professional and premium audio products partially offset by increased sales of our tabletop and personal conferencing products," said Zee Hakimoglu, president, chief executive officer and chairman of ClearOne. "Despite the slight revenue decline, we realized higher gross profit primarily as a result of the company reducing its reserve for inventory obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. due to increased sales of our tabletop conferencing products." For the first nine months of fiscal 2008, revenue increased to $29.4 million from $28.9 million in the same period of fiscal 2007. Gross profit grew to $17.2 million from $15.5 million for the prior year period. Operating income rose to $2.0 million from $1.8 million in the same period last year. Income from continuing operations was $1.9 million, or $0.18 per diluted share, compared with income from continuing operations for the prior year period of $2.7 million, or $0.23 per diluted share. Net income was $1.9 million, or $0.18 per diluted share, which includes the establishment of a $2.2 million accrual for a contingent liability associated with the advancement of funds related to indemnification agreements with two former officers. The company accrued $1.8 million in its first quarter and an additional $400,000 in the subsequent two quarters 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. The company has been advised that the trial date will be moved to either September or December of 2008. This compares to net income in the prior year period of $3.0 million, or $0.25 per diluted share, which includes income from discontinued operations of $304,000, or $0.03 per diluted share. As of March 31, 2008, ClearOne has reclassified its entire balance of auction rate securities (ARSs), $12.25 million, from short-term to long-term securities following failed auctions occurring since February 2008. The company continues to hold these securities and the issuers are paying interest at the maximum contractual rate. Based on current credit market conditions, it is likely that future auctions related to these securities will be unsuccessful in the near term. ClearOne determined there was a decline in the fair value of its ARS investments of $764,000, which, in accordance with SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 115, Accounting for Certain Investments in Debt and Equity Securities, and related guidance issued by FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). and the SEC, was deemed temporary and recognized as an unrealized loss Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. in the other comprehensive income section of the Company's income statement. ClearOne believes that the underlying securities or collateral have not been affected and any lack of liquidity in its ARSs will not impact its ability to fund its operations. About ClearOne ClearOne is a communications solutions company that develops and sells audio conferencing See audioconferencing. 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 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 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. http://www.b2i.us/irpass.asp?BzID=509&to=ea&s=0 [TABLE OMITTED] [TABLE OMITTED] |
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