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ClearOne Communications Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 17, 2010 02:16PM
ClearOne Communications Inc. (CLRO) filed Quarterly Report for the period ended 2010-03-31.
Highlight of Business Operations:
The deep recession that affected the global economy continues to impact our financial condition. However, we are seeing encouraging signs of sustainable improvement. Our revenue during the quarter ended March 31, 2010 (“2010 Q1”) increased to $8.4 million from $7.6 million in the quarter ended March 31, 2009 (“2009 Q1”). The gross profit also increased by $1.1 million from $4.1 million in 2009 Q1 to $5.2 million in 2010 Q1. Net Income decreased by approximately $143,000 from $360,000 in 2009 Q1 to $217,000 in 2010 Q1. Please refer to detailed discussions that follow.
2010 Q1 operating expenses were about $4.7 million, an increase of about $1.1 million from $3.6 million in 2009 Q1 or an increase of 30% over 2009 Q1 expenses.
General and Administrative (“G&A”) Expenses. G&A expenses include employee-related costs, professional service fees, allocations of overhead expenses, litigation costs, and corporate administrative costs, including finance, information technology and human resources. G&A expenses during 2010 Q1 increased to approximately $932,000 when compared to approximately $123,000 during 2009 Q1. 2010 Q1 and 2009 Q1 G&A expenses were 11% and 2% of sales, respectively. The increase in 2010 Q1 was due primarily to higher legal expenses, partially offset by lower payroll and employee related expenses. During 2009 Q1 approximately $1.1 million of accrued legal expenses were reversed resulting in the reduction of G&A expenses to that extent. We continue to incur high legal expenses due to litigation to protect our intellectual property and to defend ourselves from indemnification claims made by former officers.
Other income, net, includes interest income, interest expense, gain (loss) on the disposal of assets, and currency gain (loss). Other expense, net during 2010 Q1 was approximately $132,000 compared to other income of approximately $60 during 2009 Q1. This increase was primarily due to a loss of approximately $111,000 incurred on disposal of fixed assets and interest expense of approximately $50,000.
As of March 31, 2010, our cash and cash equivalents were approximately $9.4 million, a reduction of approximately $0.1 million compared to cash and cash equivalents of approximately $9.5 million as of December 31, 2009.
Net cash flows provided by investing activities were approximately $185,000 in 2010 Q1, made up of the receipt of $350,000 of final working capital adjustment from the sellers of NetStreams, Inc. offset by the purchase of equipment of approximately $165,000. Net cash flows provided by investing activities in 2009 Q1 were higher due to sales of marketable securities of $8.7 million.
Stocks Discussed: CLRO,