ClearOne, Inc. revenue dropped on 32.6% while EBITDA Margin increased on 4.0 pp from -35.1% to -31.0%
04/15/2019 • About ClearOne, Inc. (
$CLRO) • By InTwits
ClearOne, Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- ClearOne, Inc. is a company in decline: 2018 revenue growth was -32.6%, 5 years revenue CAGR was -10.7%
- The company operates at negative EBITDA Margin: -31.0%
- ClearOne, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.2%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: $0m in FY2018, $0m in FY2017, $1m in FY2016, $1m in FY2015, $3m in FY2014
- The company has unprofitable business model: ROIC is -20.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
ClearOne, Inc.'s Revenue dropped on 32.6%. Annual revenue decline showed slowdown in 18Q4 - revenue dropped on 22.1%. Revenue decline was accelerating on average at -11.3 pp per annum in 2014-2018. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 4.0 pp from -35.1% to -31.0% in 2018. EBITDA Margin stuck to a declining trend at -15.3 pp per annum in 2014-2018.
Gross Margin decreased on 9.9 pp from 57.4% to 47.5% in 2018. During the last 5 years Gross Margin topped in 2015 at 63.5% and was declining since that time. SG&A as a % of Revenue surged on 12.9 pp from 43.4% to 56.3% in 2018. SG&A as a % of Revenue followed a growing trend at 6.1 pp per annum in 2014-2018.
Net Income margin dropped on 25.4 pp from -33.9% to -59.3% in 2018. Net Income margin stuck to a declining trend at -18.3 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.2% in 2018. The company showed small growth in CAPEX/Revenue of 0.57 pp from 0.62% in 2015 to 1.2% in 2018. For the last three years the average CAPEX/Revenue was 1.4%.
Return on investment
The company operates at negative ROIC (-20.0%) and ROE (-30.7%). ROIC increased on 6.2 pp from -26.2% to -20.0% in 2018. ROE decreased on 9.5 pp from -21.1% to -30.7% in 2018. ROIC declined at -10.1 pp per annum in the last 5 years. ROE followed a declining trend at -10.6 pp per annum in 2014-2018.
Leverage (Debt)
The company has no debt. Cash jumped on 101%.
Management team
The company's CEO is Zeynep Hakimoglu "Zee". Zeynep Hakimoglu "Zee" is a founder and has 12 years tenure with the company.
Financial and operational results
FY ended 12/31/2018
ClearOne, Inc. ($CLRO) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 57.909 | 57.796 | 48.637 | 41.804 | 28.156 | -32.6% |
| Gross Profit | 35.323 | 36.719 | 29.487 | 24.009 | 13.371 | -44.3% |
| SG&A | 18.379 | 18.139 | 17.357 | 18.157 | 15.858 | -12.7% |
| EBITDA | 9.947 | 12.320 | 5.439 | -14.662 | -8.737 | |
| Net Income | 5.596 | 6.776 | 2.444 | -14.172 | -16.687 | |
Balance Sheet
|
|---|
| Cash | 7.440 | 13.412 | 12.100 | 5.571 | 11.211 | 101.2% |
| Short Term Debt | 1.780 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.642 | 0.359 | 0.730 | 0.638 | 0.336 | -47.3% |
Ratios
|
|---|
| Revenue growth | 16.8% | -0.2% | -15.8% | -14.0% | -32.6% | |
| EBITDA growth | 18.3% | 23.9% | -55.9% | -369.6% | -40.4% | |
|
|---|
| Gross Margin | 61.0% | 63.5% | 60.6% | 57.4% | 47.5% | -9.9% |
| EBITDA Margin | 17.2% | 21.3% | 11.2% | -35.1% | -31.0% | 4.0% |
| SG&A, % of revenue | 31.7% | 31.4% | 35.7% | 43.4% | 56.3% | 12.9% |
| Net Income Margin | 9.7% | 11.7% | 5.0% | -33.9% | -59.3% | -25.4% |
| CAPEX, % of revenue | 1.1% | 0.6% | 1.5% | 1.5% | 1.2% | -0.3% |
|
|---|
| ROIC | 10.9% | 13.3% | 4.7% | -26.2% | -20.0% | 6.2% |
| ROE | 7.6% | 8.5% | 3.1% | -21.1% | -30.7% | -9.5% |
| Net Debt/EBITDA | -0.6x | -1.1x | -2.2x | | |
ClearOne, Inc. ($CLRO) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 7 | 7 | 7 | 7 | | -37.6% | -32.4% | -36.7% | -22.1% |
| EBITDA | -2 | -3 | -2 | -2 | | | | | |
| Net Income | -2 | -2 | -10 | -3 | | | | | |
Balance Sheet
|
|---|
| Cash | 6 | 4 | 3 | 11 | | -35.4% | 21.1% | -16.3% | 101.2% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 56.2% | 46.6% | 44.6% | 42.2% | | -0.9% | -12.2% | -17.0% | -9.2% |
| EBITDA Margin | -28.3% | -37.1% | -28.6% | -30.3% | | -27.2% | -30.0% | 95.6% | -22.8% |
| Net Income Margin | -25.3% | -31.0% | -151.8% | -35.2% | | -21.3% | -23.1% | -63.9% | 3.8% |
Peers in Communications Equipment
Below we provide ClearOne, Inc. benchmarking against other companies in Communications Equipment industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Ribbon Communications Inc. ($RBBN) | | | | 30.6% | 75.2% |
| Extreme Networks, Inc. ($EXTR) | | 6.4% | -4.4% | 13.2% | 64.4% |
| Optical Cable Corporation ($OCC) | | -11.3% | -12.2% | -0.8% | 37.0% |
| ParkerVision Inc ($PRKR) | | | 37,601.2% | -97.5% | 35.0% |
| Network-1 Technologies, Inc. ($NTIP) | | 34.6% | 292.9% | -74.7% | 34.4% |
| |
|---|
| Median (66 companies) | | 0.5% | 7.6% | 5.6% | 3.5% |
|---|
| ClearOne, Inc. ($CLRO) | | -0.2% | -15.8% | -14.0% | -32.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| F5 Networks, Inc. ($FFIV) | 82.1% | 82.7% | 83.1% | 83.1% | 83.3% |
| Radware Ltd. ($RDWR) | 82.1% | 82.4% | 81.8% | 81.3% | 82.2% |
| Radcom Ltd. ($RDCM) | 63.2% | 76.8% | 69.6% | 71.8% | 74.0% |
| Casa Systems, Inc. ($CASA) | | 70.8% | 69.1% | 73.4% | 73.4% |
| NetScout Systems, Inc. ($NTCT) | 78.7% | 79.2% | 65.6% | 70.2% | 72.4% |
| |
|---|
| Median (67 companies) | 41.4% | 41.3% | 43.7% | 41.0% | 40.5% |
|---|
| ClearOne, Inc. ($CLRO) | 61.0% | 63.5% | 60.6% | 57.4% | 47.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Network-1 Technologies, Inc. ($NTIP) | 35.5% | 33.7% | 50.6% | 37.8% | 42.8% |
| InterDigital, Inc. ($IDCC) | 50.8% | 58.1% | 73.6% | 67.3% | 41.9% |
| EchoStar Corporation ($SATS) | 25.7% | 39.7% | 40.3% | 38.1% | 37.4% |
| Ubiquiti Networks, Inc. ($UBNT) | 34.7% | 25.5% | 37.3% | 34.3% | 32.8% |
| Ituran Location and Control Ltd. ($ITRN) | 32.4% | 30.5% | 29.9% | 29.9% | 30.4% |
| |
|---|
| Median (65 companies) | 5.3% | 4.7% | 5.5% | 6.5% | 5.4% |
|---|
| ClearOne, Inc. ($CLRO) | 17.2% | 21.3% | 11.2% | -35.1% | -31.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Resonant Inc. ($RESN) | | | 132.5% | 124.8% | 245.2% |
| ViaSat, Inc. ($VSAT) | 22.8% | 26.5% | 26.7% | 33.0% | 32.1% |
| Applied Optoelectronics, Inc. ($AAOI) | 31.5% | 30.1% | 19.0% | 17.5% | 26.9% |
| EchoStar Corporation ($SATS) | 19.7% | 43.8% | 39.9% | 30.9% | 26.5% |
| Finisar Corporation ($FNSR) | 11.3% | 11.9% | 9.4% | 9.7% | 16.8% |
| |
|---|
| Median (65 companies) | 2.3% | 2.3% | 2.0% | 1.9% | 1.7% |
|---|
| ClearOne, Inc. ($CLRO) | 1.1% | 0.6% | 1.5% | 1.5% | 1.2% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| F5 Networks, Inc. ($FFIV) | 33.9% | 40.8% | 43.1% | 46.9% | 47.9% |
| Ubiquiti Networks, Inc. ($UBNT) | 61.4% | 31.5% | 41.5% | 38.5% | 39.1% |
| Motorola Solutions, Inc. ($MSI) | -16.1% | 18.9% | 26.4% | 39.5% | 35.3% |
| Ituran Location and Control Ltd. ($ITRN) | 50.9% | 46.8% | 50.1% | 48.5% | 35.1% |
| Casa Systems, Inc. ($CASA) | | | 43.2% | 39.7% | 21.9% |
| |
|---|
| Median (70 companies) | 1.2% | 2.0% | 2.2% | 2.2% | 0.7% |
|---|
| ClearOne, Inc. ($CLRO) | 10.9% | 13.3% | 4.7% | -26.2% | -20.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Extreme Networks, Inc. ($EXTR) | | | -2.2x | -1.5x | 7.1x |
| ViaSat, Inc. ($VSAT) | 3.4x | 2.5x | 3.2x | 2.5x | 5.8x |
| CommScope Holding Company, Inc. ($COMM) | 2.3x | 9.6x | 4.3x | 4.6x | 4.4x |
| Inseego Corp. ($INSG) | | | | | 3.9x |
| Finisar Corporation ($FNSR) | -0.3x | 0.2x | -0.5x | 1.6x | 3.8x |
| |
|---|
| Median (46 companies) | -0.8x | -0.6x | -0.8x | -0.7x | -0.1x |
|---|
