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    Kara Anderson

    Research Analyst at B. Riley FBR, Inc.

    Kara Anderson's questions to CLEARONE (CLRO) leadership

    Kara Anderson's questions to CLEARONE (CLRO) leadership • Q3 2017

    Question

    Kara Anderson of B. Riley FBR, Inc. inquired about the future implications for operating expenses from increased marketing, the sales cycle progress for the CONVERGE Pro 2 (CP2) product, and the reasons behind the significant increases in both prepaid expenses and inventory levels during the quarter.

    Answer

    CEO Zee Hakimoglu stated that sales and marketing spending would be managed vigilantly, with an expected increase of no more than 20% for the year. She also noted that CP2 is seeing more quoting opportunities as interest in the older CP1 diminishes. VP of Finance Narsi Narayanan clarified that the rise in 'prepaid expenses' was actually a deferred tax asset from a goodwill write-off. He explained that inventory levels rose due to a strategic decision to honor supplier commitments to protect margins and relationships, with inventory expected to decline and convert to cash starting in Q1 2018.

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    Kara Anderson's questions to CLEARONE (CLRO) leadership • Q3 2017

    Question

    Kara Anderson inquired about the future impact of increased marketing on operating expenses, the sales cycle progress for the new CONVERGE Pro 2 (CP2) product, and the reasons behind the sequential increases in prepaid expenses and inventory levels.

    Answer

    President and CEO Zeynep Hakimoglu stated that sales and marketing spending would be managed vigilantly, not expecting an increase greater than 20% for the year. She also noted that CP2 adoption was progressing well, with diminishing interest in the older CP1 and a strong pipeline of new opportunities. SVP of Finance Narsi Narayanan clarified that the rise in 'prepaid expenses' was actually a deferred tax asset from a goodwill write-off. He explained that inventory levels were intentionally maintained to preserve supplier relationships and profitability, with an expected decline starting in Q1 2018.

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    Kara Anderson's questions to CLEARONE (CLRO) leadership • Q2 2017

    Question

    Kara Anderson from B Riley inquired about ClearOne's full-year cash flow expectations, particularly in light of the ongoing legal expenses.

    Answer

    Narsi Narayanan, VP of Finance and Corporate Secretary, responded that the company does not provide guidance on cash flow. He noted that while legal expenses are unpredictable and depend on the opposing parties' strategies, the company is committed to taking all necessary actions to protect its patents.

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    Kara Anderson's questions to CLEARONE (CLRO) leadership • Q1 2017

    Question

    Kara Anderson of B. Riley and Company inquired about the reasons for the recent gross margin compression, the potential for margins to return to over 60%, a breakdown of revenue by product category with contribution percentages, and the specific amount of litigation expenses for the quarter.

    Answer

    President and CEO Zee Hakimoglu explained that gross margins were impacted by strategic price reductions on the legacy CONVERGE Pro 1 platform to maintain sales momentum ahead of the new CONVERGE Pro 2 launch. She added that the new platform is more competitively priced and the growing mix of lower-margin video products also contributed to the decline. SVP of Finance Narsi Narayanan provided the year-over-year revenue breakdown: Pro Audio at 75% of revenue (down 15%), UC Endpoints at 11% (down 23%), and Video at 14% (up 60%). Regarding litigation, he noted the cost was not broken out but is part of the non-GAAP adjustment in the earnings release.

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