SALT LAKE CITY, Aug. 13 /PRNewswire-FirstCall/ -- ClearOne Communications, Inc. (Nasdaq: CLRO) today reported financial results for the second quarter ended June 30, 2010.

Revenue for the 2010 second quarter increased 41% to $9.9 million from $7.1 million in the same quarter of last year. Gross profit rose to $5.7 million, or 57% of revenue, from $3.2 million, or 45% of revenue, for the prior year period. Operating income was $520,000 compared to an operating loss of $946,000 in the same period of fiscal 2009. Net income was $353,000, or $0.04 per diluted share, versus net loss of $402,000, or $0.04 per diluted share, for the second quarter of 2009.

"In the 2010 second quarter, our overall financial performance improved primarily due to increased sales in each of our audio conferencing product lines and the contribution of revenue from NetStreams' products," said Zee Hakimoglu, president, chief executive officer and chairman of ClearOne. "We further strengthened the company's balance sheet during the second quarter, remaining debt free while growing our cash position by $1.5 million to $10.9 million even after fully absorbing NetStreams' operations and making investments in its sales channel and product development. In addition, we reduced our inventory by $1.3 million during the second quarter and $5.3 million, or 34%, over the last 12 months."

For the first six months of 2010, revenue increased 25% to $18.3 million from $14.7 million for the same period of 2009. Gross profit was $10.9 million, or 59% of revenue, from $7.2 million, or 49% of revenue, for the comparable prior year period. Operating income was $977,000 compared to an operating loss of $516,000 for the first six months of fiscal 2009. Net income was $570,000, or $0.06 per diluted share, versus net loss of $42,000, for the comparable prior period.

About ClearOne

ClearOne is a global communications solutions company that develops and sells conferencing, collaboration, streaming media and connectivity systems for audio, video, and web applications. The reliability, flexibility and performance of our advanced comprehensive solutions enhance the quality of life through better communication, education, and entertainment.

ClearOne develops, manufactures, markets and services a comprehensive line of high-quality audio conferencing products under personal, tabletop, premium and professional (installed audio) categories. The company occupies the number one position in the professional audio conferencing market with more than 50% of the global market share. ClearOne's conferencing solutions save organizations time and money by creating a natural environment for collaboration.

NetStreams, recently acquired by ClearOne, delivers the ultimate IP A/V experience by distributing high definition audio and video over TCP/IP networks. NetStreams' products, designed for commercial and residential use, offer unprecedented levels of performance, functionality, simplicity, reliability, and expandability. By combining audio/video content, meta-data and control signals into one stream and incorporating industry standards, NetStreams' newly patented StreamNet® solutions are a smart investment, enabling the Power of AV over IP(TM) - today.

NetStreams' StreamNet technology provides elegant solutions for streaming media & control applications such as digital signage, distribution of HD video and audio, LAN Cloud Matrix Switching(TM), and audio paging over data networks.

This release contains "forward-looking" statements that are based on present circumstances and on ClearOne's predictions with respect to events that have not occurred, that may not occur, or that may occur with different consequences and timing than those now assumed or anticipated. Such forward-looking statements, including statements regarding the company's ability to successfully commercialize newer products and enter new markets, are not guarantees of future performance or results and involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements. Such forward-looking statements are made only as of the date of this release and ClearOne assumes no obligation to update forward-looking statements to reflect subsequent events or circumstances. Readers should not place undue reliance on these forward-looking statements.

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FINANCIAL TABLES FOLLOW

                     CLEARONE COMMUNICATIONS, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF OPERATIONS
                   (in thousands of dollars, except per share amounts)
                                       (unaudited)

                          Three months ended              Six months ended
                          ------------------              ----------------
                    June 30, 2010  June 30, 2009 June 30, 2010  June 30, 2009
                    -------------  ------------- -------------  -------------
    Revenue                $9,937         $7,060       $18,293        $14,662
    Cost of
     goods sold             4,276          3,886         7,437          7,435
    Gross
     profit                 5,661          3,174        10,856          7,227
                            -----          -----        ------          -----

    Operating
     expenses:
    Sales and
     marketing              2,183          1,929         4,085          3,619
    Research
     and
     product
     development            1,744          2,111         3,648          3,921
    General and
     administrative         1,214          1,180         2,146          1,303
    Insurance
     settlement                 -         (1,100)            -         (1,100)
    Total
     operating
     expenses               5,141          4,120         9,879          7,743
                            -----          -----         -----          -----

    Operating
     income
     (loss)                   520           (946)          977           (516)

    Other
     income
     (expense),
     net                        -            225          (132)           285

    Income
     (loss)
     before
     income
     taxes                    520           (721)       845           (231)
    (Provision
     for)
     benefit
     from
     income
     taxes                   (167)           319       (275)           189
                             ----            ---          ----            ---
    Net income
     (loss)                  $353          $(402)         $570           $(42)
                             ====          =====          ====           ====

    Basic
     earnings
     (loss) per
     common
     share                  $0.04         $(0.05)     $0.06             $-
    Diluted
     earnings
     (loss) per
     common
     share                  $0.04         $(0.04)     $0.06             $-

    Basic
     weighted
     average
     shares
     outstanding        8,929,281      8,928,546  8,929,277      8,921,313
    Diluted
     weighted
     average
     shares
     outstanding        9,045,866      9,047,260  9,045,718      9,039,863

                         CLEARONE COMMUNICATIONS, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
              (in thousands of dollars, except per share amounts)

                                                    As of         As of
                                                   June 30,   December 31,
                                                     2010          2009
                                                  ---------   -------------
                        ASSETS
    Current assets:
    Cash and cash equivalents                        $10,906         $9,494
    Receivables, net of allowance for doubtful
     accounts of $191 and $103, respectively           8,429          6,571
    Inventories, net                                   6,176          6,236
    Deferred income taxes                              3,351          3,128
    Prepaid expenses and other assets                    556          1,609
                                                         ---          -----
      Total current assets                            29,418         27,038
                                                      ------         ------

    Long-term inventory                                4,178          6,412
    Property and equipment, net                        3,195          3,246
    Intangibles                                        2,920          3,095
    Goodwill                                             726            726
    Deferred income taxes                                852          1,037
    Other assets                                          21             21
      Total assets                                   $41,310        $41,575
                                                     =======        =======

         LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
    Accounts payable                                   2,592          2,304
    Accrued liabilities                                2,066          1,768
    Current maturities of long-term debt                   -          2,000
    Deferred product revenue                           5,033          4,707
                                                       -----          -----
      Total current liabilities                        9,691         10,779

    Deferred rent                                        603            466
    Other long-term liabilities                        1,188          1,232
      Total liabilities                               11,482         12,477
                                                      ------         ------

    Shareholders' equity:
     Common stock, par value $0.001, 50,000,000
      shares authorized, 8,929,314  and 8,929,134
      shares issued and outstanding, respectively          9              9
    Additional paid-in capital                        38,970         38,810
    Accumulated deficit                               (9,151)        (9,721)
      Total shareholders' equity                      29,828         29,098
                                                      ------         ------
      Total liabilities and shareholders' equity     $41,310        $41,575
                                                     =======        =======

    Contact:    ClearOne Communications, Inc.
                Investor Relations
                (801) 303-3555

SOURCE ClearOne Communications, Inc.