Strong Revenue, Earnings Momentum Continues
SALT LAKE CITY, Nov. 10, 2011 /PRNewswire/ -- ClearOne (NASDAQ: CLRO) today reported its financial results for the third quarter and nine months ended September 30, 2011.
For the third quarter ended September 30, 2011, revenue increased 11% to $11.5 million from $10.4 million for the 2010 third quarter. Gross profit rose 12% to $7.0 million, or 61% of revenue, from $6.3 million, or 60% of revenue, for the 2010 third quarter. Operating income climbed to $5.4 million from $781,000 for the prior year period. Net income increased to $3.4 million, or $0.36 per diluted share, from $987,000, or $0.11 per diluted share, for the 2010 third quarter. Financial results for the 2011 third quarter included a favorable judgment award of $3.7 million related to litigation against Biamp Systems Corp. for theft of ClearOne trade secrets. Non-GAAP operating income, which excludes the $3.7 million judgment, share based compensation, amortization of purchased intangibles, and certain legal expenses, was $1.8 million, an increase of 93% over non-GAAP operating income of $0.9 million for the same quarter last year. A reconciliation between GAAP and non-GAAP amounts can be found in the financial tables attached to this release.
"Our excellent operating performance continued into our 2011 third quarter, independent of the judgment award," said Zee Hakimoglu, President, Chief Executive Officer and Chairman of ClearOne. "The strong financial results were primarily driven by increased demand for our portfolio of products in North America and Asia-Pacific. Looking ahead, we have recently taken steps to further penetrate the markets we serve and add complementary products. During the quarter, we formed a strategic alliance to promote our full line of Professional AV and network-based StreamNet™ technology products to professional consultants involved in the design and installation of major audio-visual projects. In addition, we acquired MagicBox to form the only complete end-to-end digital signage content management, IP streaming and control solution."
For the first nine months of 2011, revenue increased 19% to $34.1 million from $28.7 million for the same period of 2009. Gross profit increased 19% to $20.4 million, or 60% of revenue, from $17.1 million, or 60% of revenue, for the comparable prior year period. Operating income rose to $8.4 million from $1.8 million during the same nine months of 2010. Non-GAAP operating income more than doubled to $5.8 million from $2.6 million for the comparable period last year. Net income grew to $5.5 million, or $0.59 per diluted share, compared with net income of $1.6 million, or $0.17 per diluted share, for the comparable prior-year period.
At September 30, 2011, the company had cash and cash equivalents of $13.1 million, and no debt. The cash position as of September 30, 2011 reflects the payment of $750,000 for the MagicBox acquisition.
ClearOne announced several significant developments during the quarter.
- In September, the company acquired MagicBox, Inc., a developer and marketer of a variety of hardware and software solutions to deliver digital content and information to digital displays. The acquisition is a part of the company's broader strategy to capitalize on emerging market opportunities as audio video, information technology, unified communications and traditional digital signage converge to meet enterprise and commercial multimedia needs.
- In August, the United States Court of Appeals for the Tenth Circuit issued an opinion, affirming a November 2008 jury verdict issued by a federal district court in favor of ClearOne against Biamp Systems Corp. for theft of ClearOne's trade secrets, including the federal district court's award of exemplary damages based upon the finding that Biamp's misappropriation was willful and malicious. The company is in the process of collecting its $3.7 million judgment against Biamp.
- Also in August, the company announced a strategic relationship with The Eig Group to implement a comprehensive national program promoting ClearOne's full line of Professional AV and network-based StreamNet™ technology products to professional consultants involved in the design and installation of major audio-visual projects.