ClearOne, Inc. Reports Fourth Quarter 2022 Financial Results
ClearOne (NASDAQ: CLRO) reported Q4 2022 results, showing a 44% revenue decline to $4.0 million compared to $7.2 million in Q4 2021, primarily due to manufacturing transition delays from China to Singapore. The legal settlement generated a one-time gain of $33.6 million, resulting in a GAAP net income of $24 million, or $0.97 per share. Non-GAAP operating expenses decreased by 24%, while gross profit fell 52% year-over-year to $1.3 million. Cash and equivalents dropped to $1.0 million, although recent settlements improved liquidity, providing over $56 million in cash. The company anticipates continued impact from manufacturing delays into Q1 2023.
- One-time legal settlement gain of $33.6 million bolsters cash position.
- Non-GAAP operating expenses decreased by 24%, indicating cost control.
- Increased unfulfilled backlog, suggesting strong future demand.
- 44% revenue decline due to delays in manufacturing transition.
- Gross profit margin decreased to 31%, down from 37% YoY.
- Cash position declined to $1 million compared to $4.1 million last year.
-
Records GAAP EPS of
after accounting for one-time legal settlement receivable of$0.83 $55 million - Delays in manufacturing transition contribute to revenue decrease even as unfulfilled orders keep growing
-
Overall revenue decreases by
44% -
Non-GAAP Opex declines by
24%
"The continued delays in the transition of our outsourced manufacturing from
Recent Highlights
-
On
January 30, 2023 , we introduced the new CHAT® 150 BT group speakerphone with USB and Bluetooth connectivity that enhances the conferencing experience for the ultimate in business class performance. With simple, instant connection to personal computers, mobile devices or Bluetooth-enabled desk phones, the CHAT® 150 BT group speakerphone provides users with an affordable way to upgrade home offices, executive offices, and mid-size meeting rooms with BYOD convenience and superior audio clarity for audio conferences and video meetings. The CHAT® 150 BT speakerphone also has an audio bridging feature that allows far end conference participants connected via a software conferencing application through USB, local users of the speakerphone, and far end callers on a mobile call connected through Bluetooth to all join the same call and hear each other clearly. Featuring a steerable microphone array with first-mic priority, the CHAT® 150 BT speakerphone intelligently activates the microphone closest to the person speaking, reducing interference from ambient noise. Like allClearOne microphone products, the CHAT® 150 BT speakerphone is compatible with popular collaboration platforms including Microsoft® Teams, Zoom™, WebEx™, Google® Meet™, and many more. The new BT model retains all the class-leading features of the original CHAT® 150 speakerphone, including Advanced Noise Cancellation, Full Duplex Distributed Echo Cancellation™ and Automatic Level Control algorithms, to ensure highly intelligible, natural audio capture and playback. It also supports NFC tap-to-pair and includes a wired USB connection for compatibility with the full variety of modern devices.
-
On
January 16, 2023 , we introduced UNITE 260 Pro camera, a professional grade 4K Ultra HD camera featuring both a 20X optical zoom and 16X digital zoom that allows users to capture every participant in all meeting, training, and learning environments it is deployed in. Compatible with all popular meeting applications like Microsoft® Teams, Zoom™, WebEx™, and Google® Meet™, the new camera features an AI-based smart face tracking mode that keeps a selected presenter in the frame as they move about the room. Alternatively, the camera’s AI-based auto framing mode always keeps an entire group in perfect view. With dual video outputs HDMI and IP, the UNITE 260 Pro Camera is an excellent choice for a hybrid environment: streaming content while simultaneously showing it live where the presentation is occurring.
-
In
November 2022 , we announced the introduction of UNITE 160, a new camera that offers cutting-edge 4K UHD performance with 12x optical zoom capabilities, remote-controlled mechanical pan and tilt as well as AI-powered smart face tracking and auto framing. This camera is designed to capture all participants in large rooms while enabling automated focus on a moving presenter, making it ideal for larger spaces including board rooms, training centers, conference rooms and classrooms. This new camera offers an integrated AI-based camera tracking solution for rooms that are a fit forClearOne's single Versa Lite CT and a single camera. This new lower-cost camera tracking configuration eliminates the need for a DSP mixer and a control system.
-
In
October 2022 , we announced the introduction of UNITE 60, a new wide angle 4K USB camera featuring AI-powered smart face and voice tracking, along with electronic PTZ (pan/tilt/zoom) capabilities. With a 120-degree field of view, and a plug-and-play USB 3.0 connection for video, control, and power, the new UNITE® 60 camera is ideally suited for rooms such as executive offices, huddle rooms, or smaller conference rooms. The UNITE 60 camera leverages a wide dynamic range and super-high SNR with advanced 2D and 3D noise reduction to deliver excellent visuals across varied lighting conditions. In addition to the AI auto-tracking feature, the camera can also be controlled via IR remote or UVC protocol. The camera can be paired with a wide variety of microphones and speakers.
Financial Summary
The Company uses certain non-GAAP financial measures and reconciles those to GAAP measures in the attached tables.
-
Q4 2022 revenue was
, compared to$4.0 million in Q4 2021 and$7.2 million in Q3 2022. The decrease in year-over-year revenue as well as in sequential revenue was mainly due to (a) a decline in revenue from video products due to decline in demand and (b) our inability to fulfill the demand for our core audio conferencing and beamforming microphone arrays due to ongoing delays with the transition of our outsourced manufacturing from$6.3 million China toSingapore .
-
GAAP gross profit in Q4 2022 was
, compared to$1.3 million in each of Q4 2021 and Q3 2022. GAAP gross profit margin was$2.6 million 31% in Q4 2022, compared to37% in Q4 2021 and41% in Q3 2022. Gross Profit margin decreased year over year as well as sequentially mainly due to increase in material costs due to supply chain constraints and increased administration costs as a percentage of revenue partially offset by reduction in inventory obsolescence and freight and tariff costs.
-
Operating expenses in Q4 2022 were
, compared to$3.9 million in Q4 2021 and$5.1 million in Q3 2022. Non-GAAP Operating expenses in Q4 2022 were$3.7 million , compared to$3.4 million in Q4 2021 and$4.4 million in Q3 2022. The decrease in year-over-year as well as sequential Non-GAAP Operating expenses was mainly due to the deep-cost cutting measures initiated in 2022 partially offset by an increase in bonuses for executives and other employees.$3.0 million
-
GAAP net income in Q4 2022 was
, or$24.0 million per share, compared to a net loss of$0.97 , or$(2.3) million per share, in Q4 2021 and a net loss of$(0.10) , or$1.2 million per share, in Q3 2022. The change from net loss to net income both year-over-year and sequentially was primarily due to the recognition of a gain of$0.05 related to the one-time legal settlement receivable of$33.6 million net of unamortized capitalized legal expenses of$55 million . This gain was partially offset by operating loss and provision for income tax.$21.4 million
($ in 000, except per share) |
Three months ended |
|
Year ended |
|||||||||||||||||||
|
2022 |
|
2021 |
|
Change in %
|
|
2022 |
|
2021 |
|
Change in %
|
|||||||||||
GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenue |
$ |
4,021 |
|
$ |
7,202 |
|
(44 |
) |
$ |
25,205 |
|
$ |
28,967 |
|
(13 |
) |
||||||
Gross profit |
|
1,264 |
|
|
2,638 |
|
52 |
|
9,457 |
|
|
11,916 |
|
(21 |
) |
|||||||
Operating expenses |
|
3,854 |
|
|
5,114 |
|
25 |
|
16,679 |
|
|
19,411 |
|
14 |
||||||||
Operating loss |
|
(2,590 |
) |
|
(2,476 |
) |
(5 |
) |
|
(7,222 |
) |
|
(7,495 |
) |
4 |
|||||||
Net income (loss) |
|
24,028 |
|
(2,284 |
) |
1,152 |
|
20,556 |
|
(7,694 |
) |
367 |
|
|||||||||
Diluted income (loss) per share |
|
0.97 |
|
(0.10 |
) |
1,070 |
|
0.83 |
|
(0.39 |
) |
313 |
|
|||||||||
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Non-GAAP operating expenses |
|
3,358 |
|
|
4,429 |
|
24 |
|
14,062 |
|
|
16,996 |
|
17 |
||||||||
Non-GAAP operating loss |
|
(2,092 |
) |
|
(1,788 |
) |
(17 |
) |
|
(4,597 |
) |
|
(5,070 |
) |
9 |
|||||||
Non-GAAP net income (loss) |
|
(2,292 |
) |
|
(1,596 |
) |
(44 |
) |
|
(5,165 |
) |
|
(5,269 |
) |
2 |
|||||||
Non-GAAP Adjusted EBITDA |
|
(2,062 |
) |
|
(1,678 |
) |
(23 |
) |
|
(4,383 |
) |
|
(4,660 |
) |
6 |
|||||||
Non-GAAP diluted loss per share |
|
(0.09 |
) |
|
(0.07 |
) |
(29 |
) |
|
(0.19 |
) |
|
(0.27 |
) |
30 |
|||||||
Balance Sheet Highlights
As of
About
Non-GAAP Financial Measures
To supplement our consolidated financial statements presented on a GAAP basis,
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 and the possible outcomes of litigation, 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
|
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(Dollars in thousands, except par value) |
||||||||
|
|
|
||||||
ASSETS |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
$ |
984 |
|
$ |
1,071 |
|
||
Marketable securities |
|
— |
|
|
1,790 |
|
||
Legal settlement receivable |
|
55,000 |
|
|
— |
|
||
Receivables, net of allowance for doubtful accounts of |
|
3,603 |
|
|
4,991 |
|
||
Inventories, net |
|
8,961 |
|
|
10,033 |
|
||
Income tax receivable |
|
1,071 |
|
|
7,535 |
|
||
Prepaid expenses and other assets |
|
7,808 |
|
|
4,021 |
|
||
Total current assets |
|
77,427 |
|
|
29,441 |
|
||
Long-term marketable securities |
|
— |
|
|
1,220 |
|
||
Long-term inventories, net |
|
2,707 |
|
|
3,567 |
|
||
Property and equipment, net |
|
383 |
|
|
744 |
|
||
Operating lease - right of use assets, net |
|
1,047 |
|
|
1,537 |
|
||
Intangibles, net |
|
2,071 |
|
|
25,086 |
|
||
Other assets |
|
115 |
|
|
4,597 |
|
||
Total assets |
$ |
83,750 |
|
$ |
66,192 |
|
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
$ |
1,284 |
|
$ |
5,388 |
|
||
Accrued liabilities |
|
3,041 |
|
|
2,549 |
|
||
Deferred product revenue |
|
63 |
|
|
54 |
|
||
Short-term debt |
|
3,732 |
|
|
3,481 |
|
||
Total current liabilities |
|
8,120 |
|
|
11,472 |
|
||
Long-term debt |
|
— |
|
|
1,535 |
|
||
Operating lease liability |
|
492 |
|
|
1,026 |
|
||
Other long-term liabilities |
|
1,008 |
|
|
655 |
|
||
Total liabilities |
|
9,620 |
|
|
14,688 |
|
||
|
|
|
|
|
|
|
||
Shareholders' equity: |
|
|
|
|
|
|
||
Common stock, par value |
|
24 |
|
|
22 |
|
||
Additional paid-in capital |
|
74,910 |
|
|
72,795 |
|
||
Accumulated other comprehensive loss |
|
(288 |
) |
|
(241 |
) |
||
Accumulated deficit |
|
(516 |
) |
|
(21,072 |
) |
||
Total shareholders' equity |
|
74,130 |
|
51,504 |
|
|||
Total liabilities and shareholders' equity |
$ |
83,750 |
$ |
66,192 |
|
|||
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) |
||||||||||||||||
(Dollars in thousands, except per share values) |
||||||||||||||||
|
|
|
|
|
||||||||||||
|
Three months ended
|
Year ended
|
||||||||||||||
|
2022 |
2021 |
2022 |
2021 |
||||||||||||
Revenue |
$ |
4,021 |
|
$ |
7,202 |
|
$ |
25,205 |
|
$ |
28,967 |
|
||||
Cost of goods sold |
|
2,757 |
|
|
4,564 |
|
|
15,748 |
|
|
17,051 |
|
||||
Gross profit |
|
1,264 |
|
|
2,638 |
|
|
9,457 |
|
|
11,916 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing |
|
1,244 |
|
|
1,716 |
|
|
5,517 |
|
|
6,736 |
|
||||
Research and product development |
|
984 |
|
|
1,541 |
|
|
4,390 |
|
|
5,794 |
|
||||
General and administrative |
|
1,626 |
|
|
1,857 |
|
|
6,772 |
|
|
6,881 |
|
||||
Total operating expenses |
|
3,854 |
|
|
5,114 |
|
|
16,679 |
|
|
19,411 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating loss |
|
(2,590 |
) |
|
(2,476 |
) |
|
(7,222 |
) |
|
(7,495 |
) |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
(135 |
) |
|
(145 |
) |
|
(420 |
) |
|
(514 |
) |
||||
Other income, net |
|
33,597 |
|
|
15 |
|
|
35,102 |
|
|
32 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) before income taxes |
|
30,872 |
|
(2,606 |
) |
|
27,460 |
|
(7,977 |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Provision for (benefit from) income taxes |
|
6,844 |
|
(322 |
) |
|
6,904 |
|
(283 |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) |
$ |
24,028 |
$ |
(2,284 |
) |
$ |
20,556 |
$ |
(7,694 |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic weighted average shares outstanding |
|
23,952,590 |
|
|
22,403,408 |
|
|
23,937,962 |
|
|
19,859,817 |
|
||||
Diluted weighted average shares outstanding |
|
24,947,851 |
|
|
22,403,408 |
|
|
25,189,147 |
|
|
19,859,817 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic income (loss) per share |
$ |
1.00 |
$ |
(0.10 |
) |
$ |
0.86 |
$ |
(0.39 |
) |
||||||
Diluted income (loss) per share |
$ |
0.97 |
$ |
(0.10 |
) |
$ |
0.83 |
$ |
(0.39 |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) |
|
24,028 |
|
(2,284 |
) |
|
20,556 |
|
(7,694 |
) |
||||||
Unrealized loss on available-for-sale securities, net of tax |
|
— |
|
(15 |
) |
|
(2 |
) |
|
(28 |
) |
|||||
Change in foreign currency translation adjustment |
|
(22 |
) |
|
(1 |
) |
|
(45 |
) |
|
(27 |
) |
||||
Comprehensive income (loss) |
|
24,006 |
|
(2,300 |
) |
|
20,509 |
|
(7,749 |
) |
||||||
|
||||||||||||||||
UNAUDITED RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES |
||||||||||||||||
(Dollars in thousands, except per share values) |
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
Three months ended
|
|
Year ended
|
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
GAAP operating loss |
$ |
(2,590 |
) |
$ |
(2,476 |
) |
$ |
7,222 |
$ |
(7,495 |
) |
|||||
Stock-based compensation |
|
24 |
|
|
37 |
|
|
113 |
|
|
137 |
|
||||
Amortization of intangibles |
|
474 |
|
|
651 |
|
|
2,512 |
|
|
2,288 |
|
||||
Non-GAAP operating loss |
$ |
(2,092 |
) |
$ |
(1,788 |
) |
$ |
(4,597 |
) |
$ |
(5,070 |
) |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP net income (loss) |
$ |
24,028 |
$ |
(2,284 |
) |
$ |
20,556 |
$ |
(7,694 |
) |
||||||
Stock-based compensation |
|
24 |
|
|
37 |
|
|
113 |
|
|
137 |
|
||||
Amortization of intangibles |
|
474 |
|
|
651 |
|
|
2,512 |
|
|
2,288 |
|
||||
Other income adjustment |
|
(33,623 |
) |
|
— |
|
|
(35,151 |
) |
|
— |
|
||||
Tax effect |
|
6,805 |
|
|
— |
|
|
6,805 |
|
|
— |
|
||||
Non-GAAP net income (loss) |
$ |
(2,292 |
) |
$ |
(1,596 |
) |
$ |
(5,165 |
) |
$ |
(5,269 |
) |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP net income (loss) |
$ |
24,028 |
$ |
(2,284 |
) |
$ |
20,556 |
$ |
(7,694 |
) |
||||||
Number of shares used in computing GAAP diluted income (loss) per share |
|
24,947,851 |
|
|
22,403,408 |
|
|
25,189,147 |
|
|
19,859,817 |
|
||||
GAAP diluted income (loss) per share |
$ |
0.97 |
$ |
(0.10 |
) |
$ |
0.83 |
$ |
(0.39 |
) |
||||||
Non-GAAP net income (loss) |
$ |
(2,292 |
) |
$ |
(1,596 |
) |
$ |
(5,165 |
) |
$ |
(5,269 |
) |
||||
Number of shares used in computing Non-GAAP diluted income (loss) per share |
|
24,947,851 |
|
|
22,403,408 |
|
|
25,189,147 |
|
|
19,859,817 |
|
||||
Non-GAAP diluted income (loss) per share |
$ |
(0.09 |
) |
$ |
(0.07 |
) |
$ |
(0.19 |
) |
$ |
(0.27 |
) |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP net income (loss) |
$ |
24,028 |
$ |
(2,284 |
) |
$ |
20,556 |
$ |
(7,694 |
) |
||||||
Stock-based compensation |
|
24 |
|
|
37 |
|
|
113 |
|
|
137 |
|
||||
Interest expense |
|
135 |
|
|
145 |
|
|
420 |
|
|
514 |
|
||||
Depreciation |
|
56 |
|
|
95 |
|
|
263 |
|
|
378 |
|
||||
Amortization of intangibles |
|
474 |
|
|
651 |
|
|
2,512 |
|
|
2,288 |
|
||||
Other income adjustment |
|
(33,623 |
) |
|
— |
|
|
(35,151 |
) |
|
— |
|
||||
Provision for (benefit from) income taxes |
|
6,844 |
|
(322 |
) |
|
6,904 |
|
(283 |
) |
||||||
Non-GAAP Adjusted EBITDA |
$ |
(2,062 |
) |
$ |
(1,678 |
) |
$ |
(4,383 |
) |
$ |
(4,660 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230331005495/en/
385-426-0565
investor_relations@clearone.com
http://investors.clearone.com
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FAQ
What were ClearOne's Q4 2022 earnings results?
How did manufacturing delays impact ClearOne's revenue?
What is ClearOne's outlook for 2023?
What positive developments did ClearOne report?