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ClearOne Communications Inc. (CLRO)
The Wall Street Analyst Forum
November 28, 2007 9:10 am ET
Zeynep Hakimoglu - Chairman, President and CEO
Greg LeClaire - VP of Finance and Corporate Secretary
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I'd like to talk about ClearOne, basically, three parts to this presentation. One, is to introduce you to the company, what we do; second part, I'd like to talk to you about where ClearOne thinks system market is going in our place in the marketplace; and third part would be how we plan to execute and capitalize in that emerging market.
So, ClearOne, as mentioned, we develop audio conferencing products. We are a products company. We're recognized in the conferencing marketplace as having the most comprehensive portfolio of audio conferencing products, expand its base of different application model, which I'll show you in a few minutes, and we have a broad portfolio of customers in channels that help us sell our products.
So just a little, a few tidbits about ClearOne. We are the global leader in installed audio products. We were recently listed on the NASDAQ back in August. We were founded in 1983. Our history is broadcast, and we moved from broadcast technology. We had equipment at Larry King, CNN, a lot of the old ABC, a lot of the old broadcast companies and got our place in audio that way, and moved on to conferencing.
We're headquartered in Salt Lake City, still there. We have a fiscal calendar that ends June 30th, and our revenues last fiscal year were about $40 million. We have about 100 employees. As I mentioned, we are a product company. That is our charter, and we have a very impressive Fortune 500 customer list.
I'm proud to say that ClearOne is one of the few companies, even though our market is not huge, smaller market, but we are, in fact, the global market leader for installed audio conferencing products. And very few companies can come up here and say at our side that we are, in fact, a global market leader with more than 50% global market share.
We introduced the tabletop products, tabletop conferencing [technical difficulty] to entry, I think it speaks to why we've maintained our 50% plus global market share.
First of all, our differentiator in terms of this product is our highly sophisticated digital signal processing technology. It is not purely a digital implementation. There are many analog aspects to the processing. So it's highly, highly specialized, very tough.
As you know, conferencing means that you've got to deploy it globally. Most companies that have conferencing have global deployment. Some of the larger Fortune 500 companies and today midsized companies have outsourced manufacturing, audit firms, etcetera. So, when you come out with a product, you absolutely have to have a global deployment. That takes money, lot of money, lot of time, lot of regulatory requirements when you go globally.
So that makes another barrier that is pretty tough. When we come out with a product, we go out global deployment. Without it, can't conference, not useful. A lot of small companies start with a conferencing product and they'll have US compliance, but US compliance isn't going to work. You've got to quickly come out.
Also audio is mission critical. You could look at video. We could have this presentation worst case with an audio presentation without data, without video. So in our deployments, which you'll see some of our customers are, it is mission critical. And when they have a problem, they know that they could pick up the phone and call and see what the issue is, unlike what we had experienced here.
You have a Board meeting. In fact, I had the pleasure of going to the board room of Boeing when they were using our equipment. And when the shuttle had its first episode, they couldn't get the video working and they got the audio working. And we had a team to make sure that they were online.
And audio is kind of, as I mentioned, an analog experience. Any startup, any new company that comes out and says, I'm going to go do this, it's tough, because every room is different. Some rooms have all glass, some rooms have domes, some rooms are long, some rooms have carpeting, some rooms are equipped chambers.
We have a very, very long history of data, which optimizes our digital signal processing so that we could basically go, build equipment that when you install the first time it works in any environment. So it's a tough business, but there are few strong players. We like to think of ourselves as one of them. We know who the others are.
We have an interesting product offering. You could see that while our 50% market share is over here on the right, which is the professional line, we have some legacy products there. In the last several years, we have made a decision that we really want to dominate the audio conferencing space as the market is emerging and we'll talk about that.
On the left you see our personal conferencing. This Chat 50 is about the size of a deck of card. It's foreign. It's for road warriors, small homes and offices desktops. It's basically a USB connection that you could plug into any phone.