ClearOne Reports First Quarter 2010 Financial Results

ClearOne Reports First Quarter 2010 Financial Results

SALT LAKE CITY, May 17 /PRNewswire-FirstCall/ -- ClearOne Communications, Inc. (NASDAQ:CLRO) today reported financial results for the first quarter ended March 31, 2010.

Revenue for the 2010 first quarter increased to $8.4 million from $7.6 million in the same quarter of last year. Gross profit grew to $5.2 million, or 62% of revenue, from $4.1 million, or 53% of revenue, for the prior year period, primarily due to reduction in inventory write-offs and obsolescence. Operating income was $457,000 compared with $430,000 in the same period of fiscal 2009. Net income was $217,000, or $0.02 per diluted share, compared with $360,000, or $0.04 per diluted share.

"In the 2010 first quarter, revenue increased primarily due to the addition of NetStreams products to our portfolio, new product introductions and the continued rise in sales of our personal products," said Zee Hakimoglu, president, chief executive officer and chairman of ClearOne. "Operating expenses increased as we continued to make investments in both NetStreams sales channel and product development. We reduced general and administrative (G&A) expenses, if the reversal of contingent liabilities is excluded from G&A expenses in last year's first quarter, largely due to lower legal costs. Furthermore, we trimmed long-term inventory levels by more than $1.0 million and our cash position remained strong at $9.4 million, even after repaying $2 million of debt assumed as part of the NetStreams acquisition."

About ClearOne

ClearOne is a global communications solutions company that develops and sells conferencing, collaboration, streaming media and connectivity systems and other related products for audio, video, and web applications. The reliability, flexibility, and performance of our comprehensive solutions enhance the quality of life through better communication, education and entertainment.

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, including statements regarding the company's ability to successfully commercialize newer products and enter new markets, 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 ClearOne assumes no obligation to update forward-looking statements to reflect subsequent events or circumstances. Readers should not place undue reliance on these forward-looking statements.

Contact: ClearOne Communications, Inc.
Investor Relations
(801) 303-3555

http://www.b2i.us/irpass.asp?BzID=509&to=ea&s=0

FINANCIAL TABLES FOLLOW

CLEARONE COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)

(unaudited) (audited)
March 31, 2010 December 31, 2009
-------------- ------------------
ASSETS
Current assets:
Cash and cash equivalents $9,428 $9,494
Receivables, net of allowance
for doubtful accounts 6,636 6,571
Inventories, net 6,468 6,236
Deferred income taxes 3,152 3,128
Prepaid expenses and other
assets 760 1,609
--- -----
Total current assets 26,444 27,038

Long-term inventories 5,172 6,412
Property and equipment, net 3,059 3,246
Intangibles, net 3,008 3,095
Goodwill 726 726
Long-term deferred tax asset 1,093 1,037
Other assets 21 21
Total assets $39,523 $41,575
======= =======

LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable $1,586 $2,304
Accrued liabilities 2,131 1,768
Current maturities of long-
term debt - 2,000
Deferred product revenue 4,836 4,707
----- -----
Total current liabilities 8,553 10,779

Deferred rent 428 466
Other long-term liabilities 1,152 1,232
Total liabilities 10,133 12,477
------ ------

Total shareholders' equity 29,390 29,098
Total liabilities and
shareholders' equity $39,523 $41,575
======= =======

CLEARONE COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands of dollars, except per share amounts)
(unaudited)

Quarters ended
March 31,
--------------
2010 2009
---- ----

Revenue $8,356 $7,602
Cost of goods sold 3,161 3,549
Gross profit 5,195 4,053
----- -----

Operating expenses:
Sales & Marketing 1,902 1,690
Research and product development 1,904 1,810
General and administrative 932 123
Total operating expenses 4,738 3,623
----- -----

Operating income (loss) 457 430

Other expense (income), net (132) 60
---- ---

Income before income taxes 325 490
Provision for income taxes (108) (130)
---- ----
Net Income 217 360
--- ---

Basic earnings (loss) per common
share $0.02 $0.04
Diluted earnings (loss) per common
share $0.02 $0.04

Basic weighted average shares
outstanding 8,929,174 8,914,000
Diluted weighted average shares
outstanding 9,036,225 9,032,383

Source: ClearOne Communications, Inc.

CONTACT: ClearOne Communications, Inc., Investor Relations,
+1-801-303-3555

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