2018 Q3 – ClearOne

Current Highlights

  • Revenues and profits continue to be under assault, with company management claiming the cause is patent infringement.
  • Focus on cash management with multiple elements: cost savings (headcount), inventory management, elimination of the stock dividend, and a rights offering to current shareholders.
  • ClearOne reported revenues of $6.7M compared to $10.6M in the same quarter last year.
  • Focus on patent litigation continues, with costs being capitalized vs. expensed.

Results Timeline

Q3-2018 vs. Q3-2017 Changes

Comments and Reflections

Been down so long it looks like up to me.

The negative numbers across the board say it all.  It’s hard to look at these results as anything but an unfolding disaster.  The slope of the revenue line in our graph is not encouraging.

ClearOne designs, develops, and sells conferencing, collaboration, streaming and digital signage solutions for audio and visual communications.  The company derives most of its revenue from professional audio conferencing products, but has extended its product line to adjacent markets – microphones, video conferencing products and services, and networked media streaming.  Unfortunately, it appears that the extensions have not gained any significant traction while the base market remains small.

Bottom line:  As we reported last time, ClearOne is betting on three developments:

1. The product transition phase is about to end and that Converge Pro 2 will take them to the promised land of revenue growth;

2. Their legal team will be successful in the patent courts;

3. The company’s channel network will remain loyal as the collaboration industry continues to evolve.

The company has burned through over $8 million in cash in the past nine months, leaving it with a cash balance at the end of Q3 of $10.3 million.  The product transition, patent litigation, and channel program don’t have forever to come to fruition.  It’s possible that we are witness to a corporate disappearing act.