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ClearOne Financial Update - Q1 2017

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ClearOne Financial Update - Q1 2017
    

By: -
15 May 2017
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Three months ago I reported a huge downdraft hitting ClearOne.  This quarter isn't much different.  The company reported total revenues for the quarter of $11.7M, down from $13.0M a year earlier.  Net income on a GAAP basis fell from +$1.37M to -$0.47M.  The ProAudio product line, which accounts for approximately 75% of the revenues, was down 15% year over year.

Strangely enough, you can see that the company's video business was up 60%, but in the earnings call management revealed that growth in video led to declining gross margins.  I quote, "The increase in share of video products in our revenue mix was also a factor impacting reduced growth profit margin."  I suspect that the company, which is a market leader in the audio arena, commands better margins in audio than it does in video.

So much for the bad news.  Here's reason to look up.

  • The company's new platform, Converge Pro 2, is gaining traction.
  • The company was awarded a new patent in April on a system and method involving the combination of echo cancellation and beamforming microphone arrays.  Much of the earnings call related to legal expenses, so it appears that this patent is defendable and the company has initiated a strategy to "ensure their intellectual property is respected by the industry."  Licensing fees anyone?
     

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