SALT LAKE CITY, Nov. 8, 2017 /PRNewswire/ — ClearOne (NASDAQ: CLRO), a global provider of audio and visual communication solutions, reported financial results for the three months and nine months ended September 30, 2017.

“In the third quarter, we delivered several sequential improvements,” said Zee Hakimoglu, president and chief executive officer. “The total revenue increase was driven by a large order that included a mix of video and pro-audio products with video products dominating the mix, demonstrating our total solution strategy. The percentage of Converge^® Pro 2 (CP2) in our professional audio revenue mix increased. Also, video product revenue grew 56% as we continue to capitalize on the migration to software-based video conferencing applications. We remain very confident in our product set, which continues to receive awards. Going into the fourth quarter, we are confident 2018 will shape up to be a better year.”

Frost & Sullivan recognizes ClearOne.

• ClearOne received the 2017 Award for Converged Audio and Video Conferencing Competitive Strategy Innovation and Leadership in September. This award cited the company’s diverse video collaboration product and services portfolio for its ability to cater to businesses of varying sizes, industries, and technology requirements with a high degree of customization. The robust breadth and depth of ClearOne’s audio conferencing solutions, visual collaboration systems, and feature-rich cloud unified communications and collaboration services position ClearOneas an all-inclusive provider with end-to-end offerings.
• New analysis released in October in the Global Audio Conferencing Endpoints Market, Forecast to 2021 found ClearOne continued to lead the installed audio conferencing space in 2016 with a market share of 53.8%.

Financial Summary
The Company uses certain non-GAAP financial measures and reconciles those to GAAP measures in the attached tables.

• Q3 2017 revenue was $10.6 million, compared to $12.9 million in Q3 2016 and $10.3 million in Q2 2017. The year-over-year decrease reflects continuing transition to the next generation professional audio conferencing platform and the price reductions to corresponding legacy products. Sequential revenue increase was due to the fulfillment of a large order that included a mix of video and pro-audio products.
• GAAP gross profit in Q3 2017 was $6.5 million, compared to $7.7 million in Q3 2016 and $6.1 million in Q2 2017. GAAP gross profit margin was 62% in Q3 2017, compared to 59% in Q3 2016 and 59% in Q2 2017. Non-GAAP gross profit margin was 62% in Q3 2017, compared to 62% in Q3 2016 and 59% in Q2 2017. Sequential improvement in gross margin was largely due to higher than usual gross margin from the large order that was fulfilled in Q3 2017.
• Based on the results of the Company’s recent impairment analysis triggered by the fall in the Company’s stock price and recent financial results, the Company determined that goodwill and an intangible asset were impaired and recognized impairment charges amounting to $13.4 million.
• Operating expenses in Q3 2017 were $20.0 million which included impairment charges of $13.4 million, compared to $6.2 million in Q3 2016 and $7.2 million in Q2 2017. The majority of the increase in operating expenses over Q3 2016 is attributable primarily to impairment charges and the increase in sales & marketing spend partly reduced by lower G&A due to capitalization of legal expenses related to patent litigation.
• Net loss in Q3 2017 was $9.3 million, or $1.09 per diluted share, compared to net income of $1.2 million, or $0.13 per diluted share, in Q3 2016 and net loss of $0.8 million, or $0.09 per diluted share, in Q2 2017.
• Non-GAAP net income was $0.8 million, or $0.09 per diluted share, in Q3 2017, compared to non-GAAP net income of $2.0 million, or $0.22 per diluted share, in Q3 2016, and non-GAAP net loss of $0.1 million, or $(0.01) per diluted share, in Q2 2017. 

Balance Sheet Highlights
At September 30, 2017, cash, cash equivalents and investments were $23.4 million, as compared with $38.5 million at December 31, 2016. A significant portion of this decrease can be attributed to patent litigation expenses, share repurchases, dividend payments and higher investment in inventory related to the Converge Pro 2 platform and wireless microphones which is expected to flow back into cash in the near term. The Company continued to have no debt.  

During Q3 of 2017, the Company paid a cash dividend of $0.07 per share and repurchased approximately 140,000 shares amounting to $1.1 million. As of September 30, 2017, the Company has acquired approximately 976,000 shares amounting to $10.2 million since this program commenced in March 2016and was renewed and extended by the board in March 2017. The Company intends to continue to repurchase shares of its common stock under this program in the open market, subject to price, volume and other safe harbor restrictions.

Conference Call Information
ClearOne senior management will host an investor conference call today, November 8^th at 11:30 a.m. Eastern Time to review the company’s financial results. The conference call will be available to interested parties by dialing +1- 877-369-6586 (domestic) or +1- 253-237-1165 (international). The conference ID is 98043789. The call will also be available through a live, listen-only audio Internet broadcast at http://investors.clearone.com/events.cfm. For those who are not available to listen to the live broadcast, the call will be archived on the same web site for at least three months.