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ClearOne Communications Inc. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: April 2, 2012 11:11AM
ClearOne Communications Inc. (CLRO) filed Annual Report for the period ended 2011-12-31. Clearone Comm has a market cap of $40.92 million; its shares were traded at around $4.5 with a P/E ratio of 4.95 and P/S ratio of 0.99.
Highlight of Business Operations:Our revenue was $46.1 million for the year ended December 31, 2011 compared to $41.3 million for the comparable period. Revenue during 2011 increased by approximately $4.8 million, or 12%, from the comparable period. The increase in revenue was primarily the result of increases in sales volume in our professional, personal and premium product categories. Revenue from professional, personal and premium products increased in 2011 by 10%, 19% and 35% respectively. Additional revenue in 2011 from MagicBox products was approximately $353,000. These increases in revenue were partially offset by an 8% decrease in revenue from tabletop conferencing products. Revenue from NetStreams products remained flat. The share of professional products in our revenue mix stayed the same in both periods at 60%. The share of personal and premium products in the revenue mix increased from 22% in 2010 to 25% in 2011.
We evaluate, at each quarter-end, the inventory in the distribution channel through information provided by certain of our distributors. The level of inventory in the channel will fluctuate up or down each quarter based upon our distributors individual operations. Accordingly, each quarter-end revenue deferral is calculated and recorded based upon the underlying channel inventory at quarter-end. During 2011 and 2010, the change in deferred revenue based on the movement of inventory in the channel was a recognition of revenue of $902,000 and $401,000, respectively.
Our gross profit during 2011 was approximately $27.5 million compared to approximately $24.6 million in the comparable period, an increase of 12%. This increase in gross profit is in line with the similar increase in revenue. Gross profit margins (GPM), or gross profit as a percentage of sales, were uniformly 60% in both 2011 and 2010.
Operating profits (losses), or income from operations, is the surplus after operating expenses are deducted from gross profits. Operating expenses include sales and marketing (S&M) expenses, research and product development (R&D) expenses and general and administrative (G&A) expenses. Total operating expenses were approximately $17.0 million in 2011 compared to approximately $22.8 million during the comparable period. Following is a more detailed discussion of expenses related to sales and marketing, research and product development, general and administrative, and other items.
Research and Product Development. R&D expenses include research and development, product line management, engineering services, and test and application expenses, including employee-related costs, outside services, expensed materials, depreciation, and an allocation of overhead expenses. Total R&D expenses were approximately $7.1 million in 2011 compared to approximately $7.7 million during the comparable period. As a percentage of revenue, R&D expenses were 15.5% in 2011 compared to 18.7% in 2010. The decrease in R&D expenses was primarily due to a reduction in the facilities and information technology-related costs allocated to R&D and also due to a decrease in the expenditures on R&D projects.
Stocks Discussed: CLRO,