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ClearOne Q4-2015

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ClearOne Q4-2015
    

By: -
18 Mar 2016
-
2 Comments

ClearOne announced Q4 revenues of $14.3M, down from $15.4M the year before, citing headwinds in Australia, China, Japan, South Korea, and parts of Europe (they missed Brazil?).  For the full year, revenues were flat at $57.8 vs $57.9 in Y2014.  The growth rate for the past two years (see chart) appears to be zero as well.

A couple of notes from the press release and the earnings call:

  • The company ended the year with a strong balance sheet including $39.8M in cash and cash equivalents.  With such a strong cash position, the company has i) increased its dividend to shareholders to $0.05 per share, up from $0.035 and ii) announced a $10M share buyback.  Whether this is via a private purchase agreement or by going out on the open market, the result should lead to a lower number of shares outstanding by nearly 10% and hence higher earnings per share and a higher share price.
  • In the category of “tell them what they want to believe,” according to the earnings call transcript, the company CEO claimed, “We’re new to video conferencing.  So we have to establish a reputation that our products are great…..”  Let the record show that that the company acquired a Boston-based video conferencing company (named ClearOne) in May of 2000 and in the intervening 16 years has made at least three additional acquisitions in the video space (Ivron, VCON, Spontania).  New they are not.

ClearOne is clearly one of the leaders in the professional audio space.  And pro-audio drives the business.  In the past six months ClearOne has been granted seven new patents by the U.S. Patent and Trade Office, and five or six of these are audio-related.  But the company has long-standing ambitions elsewhere.  If the company stands any chance at all in the video conferencing space, it’s not likely to be driven by UNITE 200 (not to be confused with Intel Unite).  The UNITE 200 is an interesting, new, and relatively expensive 1080p, 60fps, 12x PTZ camera (MSRP $1,849).  Whether this is priced “significantly lower than competitive models,” as the company claims, is left for the reader to discern.

Comments

Sirs, I dont have any feelings for ClearOne in either direction so there is no hidden agenda in the following question: Why do you consider this Video offering to be soo expensive? Not so long ago 1800,- would have been a super great price for a 12xPTZ camera alone. 2. If 10M gets them around 10% of stock buyback you (or whoever) values them at 100Mill total. Extrapolating from their latest 10-Q I assume the earnings will end up at around 7.5Mill for the full year. Isn't then a valuation around 12x earnings a little steep for a company with zero growth? P.S. I too didn't get the joke reg. "being new to video". It was a joke, or?? ;-)

A. market cap for clro as i write this response is 107M. I make it a point to never comment on share prices or P/E ratios. B. Being new to video was a bit sarcastic; the company has been in and out of video conferencing at least 4-5x over the past decade or more - can hardly claim to be NEW to video conferencing. C. If you look around a bit in today's market, you can decide for yourself whether $1800 for a PTZ camera is expensive or not. There are many that cost much less.