ClearOne Reports Fourth Quarter 2021 Financial Results
ClearOne (NASDAQ: CLRO) reported a 16% decline in Q4 revenue, totaling $7.2 million, compared to $8.6 million in Q4 2020, largely due to decreased demand for video products impacted by CARES Act funding. Despite this, core audio conferencing and microphone revenues grew, maintaining full-year revenues comparable to 2020. The GAAP net loss for Q4 2021 was $(2.3 million), translating to $(0.10 per share). ClearOne received awards for its innovative USB wireless mic system and continued successful patent litigation against Shure.
- Core audio conferencing revenue contributed to maintaining full-year revenues comparable to 2020.
- Awarded 2022 NSCA Excellence in Product Innovation for DIALOG® 10 USB, recognizing innovation in the industry.
- Strong performance of BMA Ceiling Tile solutions driving core business growth.
- 16% revenue decline year-over-year primarily due to video product sales.
- GAAP gross profit margin decreased to 37% from 42% year-over-year.
- Q4 2021 net loss of $(2.3 million) compared to net income of $5.5 million in Q4 2020.
- Beamforming Microphone Array (BMA) Ceiling Tile solutions drive core audio business growth year-over-year
-
Video products contribute to an overall revenue decline of
16% year-over-year - 2021 full-year revenue comparable to 2020 despite global chip shortage disruptions throughout 2021
- New Pro-AV USB Wireless Mic System, an industry first, wins prestigious 2022 NSCA Excellence in Product Innovation Award
- Another win added to a string of patent-related litigation victories against Shure
"We continue to generate impressive revenue growth in core audio conferencing and microphone products, energized by our rich lineup of powerful BMA 360 and BMA-CT based solutions. Q4 revenue from video products did not meet last year's demand levels that were boosted by CARES Act stimulus funding and caused the year-over-year video decline. However, our strategic emphasis on video-based solutions has not and will not be diminished as these still contributed a healthy
"Notwithstanding an appreciable decline in revenue from our video products, we finished the year with nearly equal revenue to last year due to the outstanding growth from our core audio conferencing and microphones. Importantly, this dynamic reinforces the resilience of our diverse product portfolio catering to the varying demands of our partners and end-users. Our gross margins in the fourth quarter declined due to increased material costs caused by mounting global supply chain constraints, including the worldwide shortage of semiconductors, and surging global inflation. Despite these extraordinary challenges significantly affecting our industry including our competitors, we continue to meet our partners' expectations of product availability with innovation, nimble response, and diligence. We have implemented plans to enhance our profitability and increase cash conservation that include product optimization, alternate materials sourcing, tougher fiscal controls, and product price increases," Hakimoglu added.
Recent Highlights
-
In
March 2022 , ClearOne’s new USB wireless mic system won the 2022 NSCA Excellence in Product Innovation Award. One of only seven winners in this prestigious award program, the DIALOG® 10 USB is the industry’s only pro-quality single-channel wireless microphone system with USB connectivity for webcasting and cloud-based collaboration such as Microsoft Teams, Zoom, WebEx, and GotoMeeting. -
In
February 2022 we claimed another legal victory over Shure. The Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (PTO) issued a final written decision confirming the patentability of all claims of ClearOne’s importantU.S. Patent No. 10,728,653 (the “’653 Patent”). The ’653 Patent covers aspects of ClearOne’s revolutionary innovations in BMAs and relates to “a ceiling tile combined with [a] beamforming microphone array” that includes acoustic echo cancellation and “adaptive acoustic processing that automatically adjusts to a room configuration.” Shortly after the ’653 patent was issued in mid-2020, Shure initiated the case in yet another attempt to disrupt ClearOne’s patent rights, but the PTAB rejected each and every one of Shure’s seven challenges and is the latest in a long string of defeats for Shure. In 2019, theU.S. District Court for the Northern District of Illinois preliminarily enjoined Shure from infringing a differentClearOne patent,U.S. Patent No. 9,813,806, and then in 2020 held Shure in contempt of that injunction in case no. 17-cv-3078. InNovember 2021 , a jury in a different court, theU.S. District Court for the District of Delaware , found a Shure design patent asserted againstClearOne to be invalid and not infringed. -
In
February 2022 anotherClearOne patent was granted which is related to beamforming microphone arrays with acoustic echo cancellation. The patent, titled “Band-Limited Beamforming Microphone Array with Acoustic Echo Cancellation,” describes, among other things, a microphone array with one set of microphones used for beamforming, and one or more additional microphones that are not used for beamforming, but instead are used to enhance the audio performance of the microphone array. -
In early
February 2022 , we were awarded a new patent for a beamforming microphone array system with distributed processing. This patent claims a ceiling tile microphone array that can be physically separated from the processors running the beamforming algorithm. It enables a single computing engine to run multiple beamforming algorithms for multiple microphone arrays, which can lower the overall system cost compared to an integrated design that is limited to a single computing engine with a single microphone array. -
In early
February 2022 , our Versa Lite CT, a USB audio-enabled Beamforming Ceiling Tile Microphone that brings cost-effective and superb professional conferencing audio to small- and mid-sized spaces, receivedGoogle Meet certification.Google Meet ranks among the top 5 for growth in the cloud meetings and team collaboration market according toFrost & Sullivan . -
In January, at the Las Vegas Customer Electronics Show, CES 2022, the world’s most influential annual tech event, our home office Aura™ Xceed™ BMA was singled out for exceptional innovation with a CES Picks Award, presented by
Residential Systems magazine . -
In early
January 2022 , we introduced DIALOG® 10 USB, the industry's only pro-quality, single-channel wireless USB microphone system offering professional-quality audio with USB connectivity for webcasting and cloud-based collaboration. -
In
December 2021 , we were awarded two new patents for power over ethernet (PoE). These two PoE patents describe systems and methods for providing power to multiple devices such as networked IP phones, security cameras, PCs, and switches in a novel "daisy-chain" configuration, intelligently allocating power using the device's existing circuitry, thereby reducing cost, cabling, footprint, or all.
Financial Summary
The Company uses certain non-GAAP financial measures and reconciles those to GAAP measures in the attached tables.
-
Q4 2021 revenue was
, compared to$7.2 million in Q4 2020 and$8.6 million in Q3 2021. The decrease in year-over-year revenue was mainly due to a significant decline in revenues from video products partially offset by an increase in revenues from core audio conferencing products and microphones. The increase in revenue from core audio conferencing products and microphones continued to be driven by our new solutions incorporating our beamforming BMA-CT and BMA 360 array ceiling tiles and professional audio mixers. Revenue from video products and personal audio conferencing products declined year over year due to reduced demand for these products compared to the demand in the latter half of 2020 when the demand for work from home and learn from home markets was boosted by stimulus funding through the CARES Act. Despite this year-over-year revenue growth in Q4 2021 from core audio conferencing products and microphones, revenue from our core audio conferencing products and microphones remains far below levels achieved before the infringement of our strategic patents.$7.0 million -
GAAP gross profit in Q4 2021 was
, compared to$2.6 million in Q4 2020 and$3.6 million in Q3 2021. GAAP gross profit margin was$2.9 million 37% in Q4 2021, compared to42% in Q4 2020 and41% in Q3 2021. Gross Profit margin decreased year over year mainly due to increased material costs caused by the global supply chain constraints and surging inflation partially offset by a reduction in inventory obsolescence and freight and tariff costs. Gross Profit margin decreased sequentially mainly due to increased material costs and increased freight and tariff costs partially offset by a reduction in inventory obsolescence costs. -
Operating expenses in Q4 2021 were
, compared to$5.1 million in Q4 2020 and$4.4 million in Q3 2021. Non-GAAP Operating expenses in Q4 2021 were$4.9 million , compared to$4.4 million in Q4 2020 and$3.9 million in Q3 2021. The year-over-year increase in Non-GAAP Operating expenses was mainly due to an increase in R&D project expenses, incurring of one-time employment termination costs, an increase in legal expenses, and bonuses paid to executives.$4.2 million -
GAAP net loss in Q4 2021 was
, or$(2.3) million per share, compared to a net income of$(0.10) , or$5.5 million per share, in Q4 2020 and a net loss of$0.29 , or$2.2 million per share, in Q3 2021. The change from a net income in Q4 2020 to a net loss in Q4 2021 is primarily due to a reduction in tax benefit from$0.11 in Q4 2020 to$6.5 million in Q4 2021 and a decrease in revenue and gross profit. Tax benefit in Q4 2020 primarily arose out of the carryback of net operating losses that became possible due to the enactment of the CARES Act.$0.3 million
($ in 000, except per share) |
Three months ended |
|
Year ended |
|||||||||||||||||||
2021 |
|
|
2020 |
|
Change in % |
|
2021 |
|
|
2020 |
|
Change in % |
||||||||||
Favorable/(Adverse) |
Favorable/(Adverse) |
|||||||||||||||||||||
GAAP | ||||||||||||||||||||||
Revenue | $ | 7,202 |
|
$ | 8,566 |
|
(16 |
) |
$ | 28,967 |
|
$ | 29,069 |
|
- |
|
||||||
Gross profit | 2,638 |
|
3,583 |
|
(26 |
) |
11,916 |
|
12,559 |
|
(5 |
) |
||||||||||
Operating expenses | 5,114 |
|
4,400 |
|
(16 |
) |
19,411 |
|
18,126 |
|
(7 |
) |
||||||||||
Operating loss | (2,476 |
) |
(817 |
) |
(203 |
) |
(7,495 |
) |
(5,567 |
) |
(35 |
) |
||||||||||
Net income (loss) | (2,284 |
) |
5,549 |
|
(141 |
) |
(7,694 |
) |
505 |
|
NM |
|
||||||||||
Diluted income (loss) per share | (0.10 |
) |
0.29 |
|
(134 |
) |
(0.39 |
) |
0.03 |
|
NM |
|
||||||||||
Non-GAAP | ||||||||||||||||||||||
Non-GAAP gross profit | $ | 2,641 |
|
$ | 3,583 |
|
(26 |
) |
$ | 11,926 |
|
$ | 12,561 |
|
(5 |
) |
||||||
Non-GAAP operating expenses | 4,429 |
|
3,919 |
|
(13 |
) |
16,996 |
|
16,369 |
|
(4 |
) |
||||||||||
Non-GAAP operating loss | (1,788 |
) |
(336 |
) |
(432 |
) |
(5,070 |
) |
(3,810 |
) |
(33 |
) |
||||||||||
Non-GAAP net income (loss) | (1,596 |
) |
6,030 |
|
(126 |
) |
(5,269 |
) |
2,262 |
|
(333 |
) |
||||||||||
Non-GAAP Adjusted EBITDA | (1,823 |
) |
(331 |
) |
(451 |
) |
(5,174 |
) |
(3,745 |
) |
(38 |
) |
||||||||||
Non-GAAP diluted income (loss) per share | (0.07 |
) |
0.32 |
|
(122 |
) |
(0.27 |
) |
0.13 |
|
(304 |
) |
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 |
|
$ |
1,071 |
|
|
$ |
3,803 |
|
Marketable securities |
|
|
1,790 |
|
|
|
1,117 |
|
Receivables, net of allowance for doubtful accounts of |
|
|
4,991 |
|
|
|
5,194 |
|
Inventories, net |
|
|
10,033 |
|
|
|
10,463 |
|
Income tax receivable |
|
|
7,535 |
|
|
|
7,169 |
|
Prepaid expenses and other assets |
|
|
4,021 |
|
|
|
1,536 |
|
Total current assets |
|
|
29,441 |
|
|
|
29,282 |
|
Long-term marketable securities |
|
|
1,220 |
|
|
|
1,762 |
|
Long-term inventories, net |
|
|
3,567 |
|
|
|
4,590 |
|
Property and equipment, net |
|
|
744 |
|
|
|
906 |
|
Operating lease - right of use assets, net |
|
|
1,537 |
|
|
|
1,936 |
|
Intangibles, net |
|
|
25,086 |
|
|
|
19,248 |
|
Other assets |
|
|
4,597 |
|
|
|
4,599 |
|
Total assets |
|
$ |
66,192 |
|
|
$ |
62,323 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
5,388 |
|
|
$ |
3,950 |
|
Accrued liabilities |
|
|
2,549 |
|
|
|
2,352 |
|
Deferred product revenue |
|
|
54 |
|
|
|
123 |
|
Short-term debt |
|
|
3,481 |
|
|
|
672 |
|
Total current liabilities |
|
|
11,472 |
|
|
|
7,097 |
|
Long-term debt |
|
|
1,535 |
|
|
|
3,245 |
|
Operating lease liability |
|
|
1,026 |
|
|
|
1,489 |
|
Other long-term liabilities |
|
|
655 |
|
|
|
678 |
|
Total liabilities |
|
|
14,688 |
|
|
|
12,509 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
Common stock, par value |
|
|
22 |
|
|
|
19 |
|
Additional paid-in capital |
|
|
72,795 |
|
|
|
63,359 |
|
Accumulated other comprehensive loss |
|
|
(241 |
) |
|
|
(186 |
) |
Accumulated deficit |
|
|
(21,072 |
) |
|
|
(13,378 |
) |
Total shareholders' equity |
|
|
51,504 |
|
|
|
49,814 |
|
Total liabilities and shareholders' equity |
|
$ |
66,192 |
|
|
$ |
62,323 |
|
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) |
||||||||||||||||
(Dollars in thousands, except per share values) |
||||||||||||||||
|
|
Three months ended
|
|
|
Year ended |
|
||||||||||
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
Revenue |
|
$ |
7,202 |
|
|
$ |
8,566 |
|
|
$ |
28,967 |
|
|
$ |
29,069 |
|
Cost of goods sold |
|
|
4,564 |
|
|
|
4,983 |
|
|
|
17,051 |
|
|
|
16,510 |
|
Gross profit |
|
|
2,638 |
|
|
|
3,583 |
|
|
|
11,916 |
|
|
|
12,559 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
1,716 |
|
|
|
1,796 |
|
|
|
6,736 |
|
|
|
6,728 |
|
Research and product development |
|
|
1,541 |
|
|
|
1,193 |
|
|
|
5,794 |
|
|
|
5,512 |
|
General and administrative |
|
|
1,857 |
|
|
|
1,411 |
|
|
|
6,881 |
|
|
|
5,886 |
|
Total operating expenses |
|
|
5,114 |
|
|
|
4,400 |
|
|
|
19,411 |
|
|
|
18,126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(2,476 |
) |
|
|
(817 |
) |
|
|
(7,495 |
) |
|
|
(5,567 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(145 |
) |
|
|
(111 |
) |
|
|
(514 |
) |
|
|
(436 |
) |
Other income, net |
|
|
15 |
|
|
|
9 |
|
|
|
32 |
|
|
|
79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
(2,606 |
) |
|
|
(919 |
) |
|
|
(7,977 |
) |
|
|
(5,924 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (benefit from) income taxes |
|
|
(322 |
) |
|
|
(6,468 |
) |
|
|
(283 |
) |
|
|
(6,429 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(2,284 |
) |
|
$ |
5,549 |
|
$ |
(7,694 |
) |
|
$ |
505 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding |
|
|
22,403,408 |
|
|
|
18,771,306 |
|
|
|
19,859,817 |
|
|
|
17,271,629 |
|
Diluted weighted average shares outstanding |
|
|
22,403,408 |
|
|
|
18,829,341 |
|
|
|
19,859,817 |
|
|
|
17,325,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per share |
|
$ |
(0.10 |
) |
|
$ |
0.30 |
|
$ |
(0.39 |
) |
|
$ |
0.03 |
||
Diluted income (loss) per share |
|
$ |
(0.10 |
) |
|
$ |
0.29 |
|
$ |
(0.39 |
) |
|
$ |
0.03 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
(2,284 |
) |
|
|
5,549 |
|
|
(7,694 |
) |
|
|
505 |
||
Unrealized gain (loss) on available-for-sale securities, net of tax |
|
|
(15 |
) |
|
|
(3 |
) |
|
|
(28 |
) |
|
|
8 |
|
Change in foreign currency translation adjustment |
|
|
(1 |
) |
|
|
7 |
|
|
|
(27 |
) |
|
|
(18 |
) |
Comprehensive income (loss) |
|
|
(2,300 |
) |
|
|
5,553 |
|
|
(7,749 |
) |
|
|
495 |
UNAUDITED RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (Dollars in thousands, except per share values) |
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
Three months ended |
|
|
Year ended |
|
||||||||||
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
GAAP gross profit |
|
$ |
2,638 |
|
|
$ |
3,583 |
|
|
$ |
11,916 |
|
|
$ |
12,559 |
|
Stock-based compensation |
|
|
3 |
|
|
|
— |
|
|
|
10 |
|
|
|
2 |
|
Non-GAAP gross profit |
|
$ |
2,641 |
|
|
$ |
3,583 |
|
|
$ |
11,926 |
|
|
$ |
12,561 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating loss |
|
$ |
(2,476 |
) |
|
$ |
(817 |
) |
|
$ |
(7,495 |
) |
|
$ |
(5,567 |
) |
Stock-based compensation |
|
|
37 |
|
|
|
7 |
|
|
|
137 |
|
|
|
63 |
|
Amortization of intangibles |
|
|
651 |
|
|
|
474 |
|
|
|
2,288 |
|
|
|
1,694 |
|
Non-GAAP operating loss |
|
$ |
(1,788 |
) |
|
$ |
(336 |
) |
|
$ |
(5,070 |
) |
|
$ |
(3,810 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) |
|
$ |
(2,284 |
) |
|
$ |
5,549 |
|
$ |
(7,694 |
) |
|
$ |
505 |
||
Stock-based compensation |
|
|
37 |
|
|
|
7 |
|
|
|
137 |
|
|
|
63 |
|
Amortization of intangibles |
|
|
651 |
|
|
|
474 |
|
|
|
2,288 |
|
|
|
1,694 |
|
Non-GAAP net income (loss) |
|
$ |
(1,596 |
) |
|
$ |
6,030 |
|
$ |
(5,269 |
) |
|
$ |
2,262 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) |
|
$ |
(2,284 |
) |
|
$ |
5,549 |
|
$ |
(7,694 |
) |
|
$ |
505 |
||
Number of shares used in computing GAAP diluted income (loss) per share |
|
|
22,403,408 |
|
|
|
18,829,341 |
|
|
|
19,859,817 |
|
|
|
17,325,351 |
|
GAAP diluted income (loss) per share |
|
$ |
(0.10 |
) |
|
$ |
0.29 |
|
$ |
(0.39 |
) |
|
$ |
0.03 |
||
Non-GAAP net income (loss) |
|
$ |
(1,596 |
) |
|
$ |
6,030 |
|
$ |
(5,269 |
) |
|
$ |
2,262 |
||
Number of shares used in computing Non-GAAP diluted income (loss) per share |
|
|
22,403,408 |
|
|
|
18,829,341 |
|
|
|
19,859,817 |
|
|
|
17,325,351 |
|
Non-GAAP diluted income (loss) per share |
|
$ |
(0.07 |
) |
|
$ |
0.32 |
|
$ |
(0.27 |
) |
|
$ |
0.13 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) |
|
$ |
(2,284 |
) |
|
$ |
5,549 |
|
$ |
(7,694 |
) |
|
$ |
505 |
||
Stock-based compensation |
|
|
37 |
|
|
|
7 |
|
|
|
137 |
|
|
|
63 |
|
Depreciation |
|
|
95 |
|
|
|
107 |
|
|
|
378 |
|
|
|
422 |
|
Amortization of intangibles |
|
|
651 |
|
|
|
474 |
|
|
|
2,288 |
|
|
|
1,694 |
|
Provision for (benefit from) income taxes |
|
|
(322 |
) |
|
|
(6,468 |
) |
|
|
(283 |
) |
|
|
(6,429 |
) |
Non-GAAP Adjusted EBITDA |
|
$ |
(1,823 |
) |
|
$ |
(331 |
) |
|
$ |
(5,174 |
) |
|
$ |
(3,745 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220418005222/en/
801-975-7200
investor_relations@clearone.com
http://investors.clearone.com
Source:
FAQ
What were ClearOne's Q4 2021 earnings results?
How did ClearOne's revenue perform in 2021 compared to 2020?
What drove the decline in ClearOne's revenue in Q4 2021?
What awards did ClearOne win recently?