Good day, ladies and gentlemen, and welcome to the Third Quarter 2014 Earnings Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Roger Pondel, Investor Relations of ClearOne. You may begin. .

Thanks, Nicole. Welcome, everyone, and thank you for joining us today to discuss ClearOne's 2014 Third Quarter Financial Results. On the call today are Zee Hakimoglu, President and CEO; and Narsi Narayanan, Senior Vice President of Finance..

First, some housekeeping measures before we begin. Please be advised that this call is being broadcast live on the Internet, at www.clearone.com. Playback will be available for at least 3 months and may be accessed on the Internet at ClearOne's website..

Before we begin, I would like also to make the cautionary statement and remind everyone that all of the information discussed on the call today is covered under the safe harbor provisions of the Litigation Reform Act.

The company's discussion today will include forward-looking information, reflecting management's current forecasts of certain aspects of the company's future, and the actual results could differ materially from those stated or implied..

And with that, it's my pleasure to turn the call over to Zee.

Zee?.

Thank you, Roger, and good morning, everyone. Thanks for joining us today to discuss our third quarter 2014 results..

We're pleased to report record revenue for the third quarter of 2014 and our ninth consecutive quarter of year-over-year revenue growth..

Revenue for the third quarter reached $15.7 million, representing an extraordinary 27% year-over-year growth. While many in our industry continue to experience revenue decline or, at best, experience flat revenue, ClearOne continues to show consistent and robust growth, proving that our strategy for growth is working..

It's important to note that this revenue growth has been achieved without sacrificing our high growth margin and profitability. ClearOne's strongest-ever lineup of audio and visual solutions have made this record-setting financial performance possible..

Our VIEW Pro enterprise streaming system, which we started shipping last quarter, exhibited positive momentum. VIEW Pro notched notable successes since its first shipment in Q2, including a marquee project win in Japan.

Our Spontania cloud-based media collaboration service continues to also gain acceptance worldwide and especially in the North American market, where it essentially had no market presence before being acquired by ClearOne..

Our gross profit margin also increased from 60% in the third quarter 2013 to 61% in the third quarter of 2014. This is also a significant improvement from a 57% growth margin in the second quarter of this year..

Operating expenses for the third quarter was $6.59 million when compared to $6.93 million in the second quarter..

Non-GAAP operating income increased year-over-year by an astonishing 15 -- 50%. Increases in taxes due to changes in forecast of our profitability mix across different tax jurisdictions around the world impacted net income for the third quarter of 2014. This limited the year-over-year growth in non-GAAP net income to 6%. .

Our recent acquisitions continue to contribute towards our success, evident from Sabine wireless microphones netting $1.3 million in revenue, and Spontania cloud-based media collaboration service adding 301k in bookings and 180k in revenue..

During the third quarter, ClearOne achieved an important intellectual property milestone when the company filed its 100th patent application in August. The company's intellectual property portfolio comprises present and future patent protection in 5 strategic categories.

These include audio signal processing, video conferencing, multimedia network streaming, wireless and industrial design. These patents were filed with the United States Patent and Trademark Office as well as with international patent agencies in Europe and the Asia Pacific region.

To date, 61 of these patents have been granted, with 39 more in process in these patent offices..

The intellectual property developed in-house and obtained through acquisitions over the past decade are strategically significant and will contribute to the future value of the company. We are committed to investing in the growth of our patent portfolio to promote continuous research, while protecting ClearOne's innovation.

We have a strong reputation in the industry for incorporating the latest new technologies into our expanding product line..

At the end of the third quarter, the company released 5 new models of digital wireless microphones for the European Union. These are expected to increase the footprint of our wireless microphones in Europe significantly.

This new series of digital wireless microphones from ClearOne has been redesigned with a unique method for data compression that reduces the occupied bandwidth by more than half from 500 kilohertz to 200 kilohertz per channel to comply with the European standard, without compromising the quality and fidelity of the audio signal..

On the video front. During the quarter, ClearOne also struck 2 separate partnerships with service providers to incorporate Spontania media collaboration platform into their workflow applications. One deals with health care, and the other with education.

The award-winning Spontania video and web collaboration engine can be easily incorporated into third-party workflow applications. Industries such as health care, education, enterprise, finance, government and others can take advantage of Spontania by integrating voice, video and web collaboration into their new or existing workflow processes. .

In today's collaboration environment, it's all about workflow integration and the need for the user to have all of their tools available within the environment that they are comfortable with.

Whether it's a doctor consulting a patient, a lawyer speaking to a client or a financial adviser working a trade with an investor, these connections are best accomplished within their familiar workflow applications.

ClearOne's cloud-based Spontania enables businesses to easily, affordably and seamlessly add advanced media capability, such as voice, video and web collaboration tools directly to their application, offering greater value to their customers..

In July, ClearOne was named TMCnet -- by TMCnet as a recipient of the 2014 Communications Solutions Product of the Year Award for our revolutionary Beamforming Microphone Array.

As one of TMC's most coveted awards, the Communications Solutions Product of the Year Award honors exceptional products and services that facilitate voice, data and video communications that were recently brought to the market.

TMC, by the way, is the world's leading business-to-business and integrated marketing media company that serves niche markets within the communications and technology industries. .

For new investors who may not know ClearOne's Beamforming Microphone Array, it is the world's first professional-grade directional microphone array with the beamforming and adaptive steering technology and with ClearOne's next-generation acoustic echo cancellation.

In the world of professional AV conferencing, our Beamforming Microphone Array, with its associated mixers, signal processors and echo canceling functions, represents the newest and the most advanced technological innovation in audio processing, and breaks new ground for enterprise conferencing, sound fidelity, clarity and intelligibility..

In September, ClearOne was also profiled in the prestigious CRN 2014 Network Connectivity Services Partner Program Guide for our ClearOne partner program. Each year, CRN highlights the industry leaders in the telecom, cloud and connectivity industries.

It also recognizes industry leaders such as ClearOne, ready, willing and able to help channel partners understand and benefit from technology convergence. CRN is the top new source for value-added resellers and the IT channel..

With this wrap-up of our recent highlights, I'd like to turn the call over to Narsi for a detailed discussion of our third quarter 2014 financial performance. Following Narsi's discussion, we will take questions for the remainder of the available time.

Narsi?.

Thank you, Zee, and good morning, everyone. Before I begin, I would like to point out 2 things. First, I will be discussing certain non-GAAP financial measures. A reconciliation of these non-GAAP measures to reported GAAP measures is included in the earnings release that went out this morning..

Now turning to our financial results for the third quarter of 2014. Please note, the following comparisons refer to third quarter of 2014 versus the same quarter of 2013. Net revenue increased to $15.7 million, making this quarter the strongest-ever third quarter in terms of revenue.

The revenue for third quarter increased by 27% compared to $12.4 million in 2013 third quarter. Gross profit was $9.6 million or 61% of revenue compared with $7.4 million or 60% of revenue..

Turning to operating expenses. Sales and marketing expense increased by 26% to $2.8 million from $2.2 million. The increase was mainly due to increased commissions to salespersons and independent reps. Sales and marketing reduced by 6% when compared to second quarter of 2014. .

Research and product development expense increased by about 29% to $2.3 million from $1.8 million in 2013. The increase was mainly due to increase in R&D projects costs and increase in headcount due to the acquisitions..

Non-GAAP G&A expense reduced by about 5% from $1.15 million in 2013 third quarter to $1.08 million in 2014 third quarter. Total non-GAAP operating expenses increased by 20% from $5.1 million in 2013 third quarter to $6.2 million in 2014 second quarter.

However, total non-GAAP operating expenses for the third quarter reduced by 5% when compared to second quarter of 2014. Non-GAAP operating income increased to $3.5 million from $2.3 million, an astounding increase of 50%.

Non-GAAP net income increased by 6% to $1.8 million or $0.19 per diluted share from $1.7 million or $0.18 per diluted share for the prior year period..

Net income for 2014 third quarter was negatively impacted by higher taxes. The higher taxes were due to changes in forecasts of our profitability mix across different tax jurisdictions around the world..

Non-GAAP adjusted EBITDA increased tremendously by 44% from $2.6 million to $3.8 million..

Let me turn my attention to financial results for the 9 months ended September 30, 2014. Please note, the following comparisons refer to the 9 months ended September 2014 versus the 9 months ended September 2013. Net revenue increased to $42.6 million from $35.3 million, an increase of 20%.

Gross profit was $25.4 million or 6% -- 60% of revenue compared with $21.3 million or 60% of revenue..

Turning to operating expenses. Sales and marketing expense increased by 30% to $8.5 million from $6.6 million. R&D expense increased by about 26% to $6.9 million from $5.5 million. Non-GAAP G&A expense reduced by 5% from $3.8 million to $3.6 million. Total non-GAAP operating expenses increased by 20% from $15.8 million in 2013 to $18.9 million in 2014.

Non-GAAP operating income increased to $6.5 million from $5.5 million, an increase of 17%. Non-GAAP net income was slightly higher at $4 million compared to $3 million in 2013. However, diluted non-GAAP net income per share remained at $0.41. Non-GAAP adjusted EBITDA increased by 17% from $6.2 million to $7.2 million..

Turning briefly to the balance sheet. Our balance sheet remains strong. At September 30, our cash and investments balance was $34.3 million, and we remain the 3. The cash balance reduced from $42.7 million at the end of December 31, mainly due to cash payments for both acquisitions, Sabine and Spontania, happening in the first quarter of 2014..

I would now like to turn the call back to Zee. Thank you. .

Thank you, Narsi. Our performance results reaffirm our vision and discipline to create a cohesive strategy for growth, for profitability and for market relevance..

The synergy generated from our diverse and comprehensive portfolio of products and technology have created a compelling ClearOne value proposition for our channel and our customers. We are energized and strengthened by our consistent strong performance, and will continue to sensibly execute on our vision for sustainable future growth..

Operator, I think we could go now to questions. .

[Operator Instructions] Our first question or comment comes from the line of Kara Anderson of B. Riley & Co. .

I'm just wondering if you could break out how the professional UC and video segments stood in the quarter. .

Okay. Pro made up 78% of the total income -- total revenue. UC made up 15% and video made up 7%. And Pro revenue growth was at -- let me see this -- was at 37%. Video grew at 42%, and UC went down by 11%. .

Our next question comes from the line of Chip Saye of AWH Capital. .

I have a question. I saw the growth in Sabine and Spontania.

Can you speak to what would be responsible for the double-digit growth outside of those 2 new product categories?.

Yes, I can speak to that. Those -- we talked about a synergy and a total ClearOne value chain. When we sell microphones that promotes more sales of our mixers and our other products, they work together -- altogether at the enterprise or for the application. So we're not just selling disparate pieces of products. They work together to promote each other.

And we get -- as they say, the whole is greater than the sum of the parts, and each complements each other and motivates our value-added resellers to sell complete solutions, where they can get paid faster, make more money. It's really the business value proposition that helps to promote each of the product lines.

You may recall, we came out with the beam former, which now connects directly with our COLLABORATE Room Pro media collaboration system. So again, highly complementary solutions. .

Okay. I have a question as it relates to the video, and Narsi just gave the number. The growth was 40-something percent, I think I heard him say.

Is that because of the VIEW Pro streaming system shipping in the quarter?.

It's a combination of our VIEW Pro and our COLLABORATE Room Pro and Spontania. All 3 contribute. .

Got that. Next question, could you talk about your inventories? I thought that you had a good leverage -- revenues up a nice percentage, and the inventories did not grow that much.

Can you talk about your inventories?.

I think as we have discussed before, we have -- I think our inventories are within the range that we think is comfortable. We don't see any risks to our inventory. And especially with Q4 coming, which is going to be -- we expect to be a big quarter. I think our inventory is at the right level, actually. .

Got it. Okay, Narsi.

While I got you here, can you talk about the tax rate? What kind of tax rate do you anticipate for Q4?.

Our current -- the effective tax rate of 40%. It depends on many things. And we -- I don't have a late forecast, but I don't expect it to change significantly in the coming quarter. .

So you think it'll be similar to this quarter? Or would it be the 40%?.

Yes. The 40%, that's the year-to-date effective tax rate. That's the right number to go with, actually. .

Okay. And this is back for Zee again or you, too, Narsi. I had a question as it relates -- I saw you bought back some stock in the quarter. And you still have a pretty sizable amount out there, given the decline in the stock price for the last few months and your excellent performance.

Could you speak to stock buyback versus acquisitions? I know you'd -- we're still probably looking for revenue enhancing and growth acquisitions, but could you talk about how you value -- how you view those 2 now?.

I don't think there is necessarily a change. We have a stock buyback plan that we put in place, and we adhere to the plan and we're executing on the plan. That's number one. On acquisitions, acquisitions still remain a very valuable part of our growth strategy. Both of those are in balance.

On one hand, we need to continue to look at growing the company in a meaningful way in the market, and acquisitions are critical to that. At the same time, we enjoy the benefit of having cash to use for stock buybacks. We try to balance it in a way so that we could ensure our future growth. .

[Operator Instructions] Our next question comes from the line of Michael Kay of Kay Associates. .

I was just wondering, just related to the previous question to an extent.

There -- not necessarily myself, but there are some in the investment community who feel that money could better be used in other ways than buying back a company's stock that is kind of like an artificial way of affecting price share and that will -- it shows a lack of creativity.

So would you comment on that, where in the sense that there could be other ways to use the cash available than buying back the company's stock?.

I -- as we've mentioned in prior calls, we really try to do a balance. We try to spend on our own operational expenses. We haven't gone overboard in sales and marketing. That's an area that is always ripe for more spending. I think we don't go overboard in buying our stock. We've had a few couple -- I believe we've had a couple of tenders.

If I recall, we've had at least one. And so we try to balance it. Once we put a stock buyback in place, we like to exercise it. But we want to do -- whatever we do, we want to spend our money in terms of what will grow the company and bring the most stock -- most value back to our shareholders. We have a limited float.

And our limited float is always a challenge in terms of our buyback, and we follow best practices on what we can or can't buy. I think it's an important component of our use of cash. But it's -- I can tell you this. If it was only a stock buyback, we could not keep up with the changes in the market. It's really a dynamic market.

We're in a wonderful opportunity to capitalize on it. I don't know if you've seen some of our peers' conference calls, but we have a lot to say of our future, and so our investments have to focus on our future. .

Our next question comes from the line of Alan Mitrani of Sylvan Lake Asset Management. .

Zee, can you about what you're seeing in the marketplace right now in terms of Europe? Have you seen any slowdown there in terms of the weakness in the euro and because of the weakness in some of the economies that they're seeing? Just give us your take on that. .

I think I'll defer that to Narsi, who has some figures. But I would tend to say that there's definitely a weakness that is apparent in both EMEA and Asia. But you go right ahead, Narsi. .

Actually, EMEA is kind of flat, especially given our product portfolio. That was a surprise to us. In fact, that also contributed to some of our tax issues. But EMEA, it came as a surprise to us, especially considering how strong EMEA was in Q2. Q2 -- Q3 was flat. It was kind of a surprise.

And we are keeping our fingers crossed for Q4, especially with the EMEA. APAC came in strong in Q2, but -- sorry, I meant Q3, actually, Q3. But we are also getting reports from our field as to the challenges that they have for this quarter.

We'll try our best, but these are things we need to factor in when we think about the expectations for Q4, actually. .

I think what we're doing in the interim, of course, is looking at other areas. We're focusing our attention to the Middle East, which is a burgeoning economy, I will say, and something like what China was, I would say, 15, 20 years ago. So we're focusing our efforts there. We opened a very small office in Dubai so that we could service that market.

We're also trying to make a push into both Latin America and South America as well as Africa. Those are markets -- certainly, they're not the size of the EMEA market, but they're significant markets that are ripe for future sales development. And we're focusing our efforts in those markets to make up for whatever happens in Europe and APAC.

I should add that the third quarter for EMEA is usually a slower quarter because of the summer vacations and the holidays that the Europeans love to enjoy. And let's see. And it could be that -- the first quarter for APAC is often a bit slower because of all the holidays in Asia.

They tend to be a bit seasonal, but there is definitely a hint of some pullback. .

Narsi, can you remind us what percent of your sales are in EMEA for this last year and fiscal year '13, as well as maybe in this last quarter?.

Okay, give me a second. I'm looking. .

Roughly. Okay. I'll ask another question while you can check that. .

I can tell you, actually. 2013, APAC was about 18%. EMEA was about 13%. This year, so far, APAC has been 18%, and EMEA has been about 12%. .

10%, okay. So EMEA is not as... .

12%.

No. He said 12%, 1-2 percent. .

Oh, 12%, okay. I appreciate it. Got it. So it's becoming a diminishing forecast. It is not a... .

Slightly. It's not that bad. .

Okay. Can you talk about -- we talk about this all the time, but I do think your balance sheet has gotten better. I think you're becoming opportunistic with the buyback. But again, I have to echo the issues that I think you guys could be doing more as it relates to returning capital to shareholders.

Can you talk about the possibility of some sort of special dividend, given that you're still pretty over-capitalized with 40% of your entire market cap in cash and generating cash?.

As we already said, we have not ruled out any of those things. But at the same time, we are still looking at the future, especially with the -- this big overhang of interest rate cuts -- interest rate hikes, actually, I'm meant to say hikes, and the China slowdown and everything.

We wanted to make sure that we are not giving up cash in a volatile time, actually. I think that's important. And we also have not ruled out other possibilities, like Zee already discussed about buyback, things like that. I think none of those things are ruled out, but we have not made up our mind, actually.

At least, management -- from management point of view, we have not made up our mind to do one way or the other. .

Okay. I just -- and also, is there a reason why -- I realized the history.

But is there a reason why now, given that almost all the litigation is done and you're now a reporting company and things are back on track, where your Annual Meeting has to be held at the end of the year, given that your calendar year is December? It just seems like just bad governance now for shareholders to wait that long to have to deal with this.

.

It's just a -- the timing issue. We had the June close. We had -- we tried 1 year to push the things up, and it's also the amount of the effort we have to put in from the management side to get enough voters to show up -- to get a quorum, all those things. We have a lot of things on our plate.

And doing this around the same time as immediately after reporting our 10-K puts a lot of pressure. But it's another -- and we were also busy on acquisitions in the last couple of years. The acquisitions came right around the time we were reporting our 10-K, and it was putting enormous pressure.

But it's on our -- list to move the Annual Meetings up, not immediately to the usual -- the April-May time frame, at least, by 2 or 3 months... .

Incrementally. .

Incrementally, and then be aligned with -- like everybody else, actually. We don't have any special motive to keep it at the end of the year. It was simply because that's how we used to have it in our internal calendar about how we distribute our workload and everything centered around different events.

And this seems to happen at the end of the year, actually. It's -- we have it on our calendar. It has some [indiscernible] filing issues. We have to do to 8-K to let shareholders know that it has to move to a different date other than the usual date. We are looking into it. Maybe in next Annual Meeting, we will move it up by a few months.

And then in the next couple of years, it'll be like anybody else, actually. But I don't think you're... .

I would appreciate that. I think that would be -- I think your shareholders would appreciate it, too. .

Yes, you're correct on that. And it's definitely been the subject of discussion. And it's our -- it's in our interest to move it up as quickly as we can. .

Also, Zee, maybe again, I'm going to come back to this. Because now that you guys have good financial footing, we've dealt with the legacy issues, you're buying in stock, you made acquisitions which seem to be contributing, I want to understand as a shareholder.

We still have seen the stock basically be flat for a long time, and it seems, to us, to be undervalued. So -- and I'm sure to you as well. And yet, I want to understand.

You have to maybe give us a better pathway in the next couple of years, next few quarters, where you think this revenue growth can go and what kind of sustainable revenue growth you can have with the mix that you have currently.

Because if it's continually buying companies that's 3x revenues in order to trade in your company at $0.90 on the trading dollar, we're going to lose our shirts over time.

So the real issue is, how do you get your valuation up to where you think is appropriate or find a way to let someone else do it over time? Because you can't keep buying companies with 3x revenues and not have it being reflected in the stock price over a period of time. And I've been a shareholder for years, and I've watched you guys.

And I like what you're doing, but I'm frustrated that it just doesn't translate into the stock. I'm not talking over 5 and 6 years, when you had issues with accounting. I'm talking just over the last few years, where you've cleaned up a lot of this and it's gotten back to a growth track. .

Well, I -- to be perfectly clear, we bought technologies. We haven't bought operating companies. We buy critical technologies that are critical for our growth, and each one has taken considerable time, although it had a fabulous core to integrate into our products. And there is no shortcut.

There is no silver bullet to get there faster, easier or cheaper. It's just the reality that we live in. We've been fortunate to make the right choices that are absolutely critical to our growth. If you were to deduct away all our new products and our technologies and our acquisitions, it's not a matter of simple subtraction.

We would be not relevant to the market, period. We have to appreciate the synergy. There are many companies. We could look at -- I don't want to name names today. There's no point in it. But if you look at any relevant technology company that's in our market or in adjacent market, none are overnight shining stars. Just doesn't happen.

We're a small high-tech company. I think we're showing phenomenal growth. If we have had an issue, it has been some legacy, which as you -- as you pointed out rightly, is past, thankfully, through a lot of hard work of the team. And number two is that market -- we're not a -- it's not like a lottery.

We're restricted with still a bit of a hindrance, which is minimal float, a small number of stocks. On one hand, investment bankers and market analysts are interested in companies with a big large float and easier trades to get in and to get out of.

We still have some of these issues that what we hope is, through our inherent growth, we will get out of that, okay? It's just the way it is. If -- looking at the assets of our company, we are certainly not diminishing in our assets. We're here -- in fact, I read an interesting article in the Financial Times called short-termism.

And I'm not implying that your wish is for short-term success. But our jobs as management, we are committed to long-term growth as opposed to favoring short-term profits. And I think -- I think we've done a pretty good job of getting there.

Our core technology purchases, even though we buy companies, we're buying technology so that you -- we can enjoy the growth that we're seeing. And again, we're still primarily Pro. So I'm optimistic, I appreciate your patience. I think the value of the company, yes, is not still there in terms of the stock price.

But we're working very hard to get it there, and we're committed to enjoy a higher valuation just as you would. .

So again, so just to understand that. I appreciate your insight. I said, if that's the case, can you give us some sort of road map so that we can focus on the long term in terms of what you think is sustainable revenue growth, where you see this business in 2 to 5 years, potentially? Just share with us the vision.

Because -- and maybe even the asset value, what you think, the company, if it's trading at $9 and 5x this year's EBITDA, and if you -- tomorrow, you turned around and sold it, could -- would someone buy it for 10x EBITDA? You have to share with the shareholders, in my opinion.

If we're going to take this, at least, where our road map could be so that we know where -- how to measure you over time. .

Alan, this is -- let me go first. Zee may defer from my perspective on where you will see the value and where we are headed, but with slight difference as we both share some of the things inherently.

I think the wireless microphones business that we recently acquired has a very high probability of contributing to big revenue increases in the near future. I think -- I'm going by the probability and the mix with the growth track. The next one, I think, is going to be our streaming products.

I think these -- that will be huge, with lesser probability than wireless mics because it needs more education from the buyers to get into it. .

But they're long-term projects [indiscernible]. .

When do the streaming products come out?.

They're long-term projects. .

These 2 will be big revenue generators. We are not talking about $5 million, $10 million over a year from where we are, actually. These are tens of millions of dollars, which would put us on a track to double our revenue very quickly, actually. Third component, of course, is video conferencing.

Why I'm putting video conferencing third? Because it's a very competitive space. We think we have all the technologies that are required to compete there, but it's a lot of hard work. We are not going to discount our own chances. But I -- it's a hard space, that's why I'm putting it at the third spot. But all 3 have enormous potential.

Don't -- we also launched the -- I'll let Zee talk about that, actually. .

We recently launched and we will be shipping at the end of November, it's our plan, a very, very important product that's generated out of our current Pro product line. It's called the CONVERGE Matrix. It is a sound distribution system.

The sound distribution market, according to Frost & Sullivan, is probably 15x to 20x the size of the conferencing market, where we enjoy our greatest revenue. It emanates -- the product emanates from our CONVERGE Pro. It's an extremely important product. It's an extremely large market.

It's an extremely complementary market, and we couldn't have done it without our CONVERGE Pro in the first place. So we have many big-ticket items that, on their own, are going to be, as Narsi pointed out, significant revenue generators, which gladly work or adapted to our existing channel, and that's key. We are not building new businesses.

But these are projects that are not like the chat phones or the max phones. These are projects for consultants. Kick the tires, inspect the parts, install it, et cetera. They're systems.

We are essentially going into the systems business, which is the most -- the business that I came from, quite frankly, which is a lucrative, high-ticket, high-revenue, valuable market that not everyone can accomplish.

Again, looking at our peers and where they need to go, we entered the video conferencing market with a solution that's unlike anything in the market today, and we think that it will have significant contribution. But since our acquisitions have taken place over the years, those need to get ripe, but they're significant.

Our team is enthusiastic, and our partners -- we just had an EMEA partner conference in Europe last week -- 2 weeks ago, and I came back, and our partners say the same thing. ClearOne is not the company it used to be. And great companies do take time, I'm afraid. It takes longer than we all want.

I would love to, as much as anyone else, see the stock price show value. But with consistent growth and profitability, I think we're going to see it sooner than we have in the past. .

Okay. I appreciate that. By the way, so this CONVERGE Matrix, I was just looking at it. You're saying it's basically a longer lead time product but higher ASPs. When do you start... .

No, no. It's not necessarily higher ASPs. It's bigger projects. These go into stadiums, very large hotels, large venues, where you're distributing sound. For every, say -- for every 10 conference rooms, it's probably more than that. I'm just talking about conference rooms. One may need echo cancellation, the other 9 just need sound distribution.

So the ASPs are about the same on a channel basis, but the... .

But if you take one project, they are huge projects. .

The projects -- they're huge projects. .

[indiscernible].

And when do you think you'll have your first sale in this business?.

Pardon?.

When do you think you could make your first sale in this product?.

Well, we -- I think that we're going to start making sales at the end of the year on our demo unit. .

And then I think Q1, we will... .

Yes. Q1, we will start seeing revenue. Just like on the StreamNet, we have some large projects designed by consultants on our streaming project. But it -- but they're going to deploy it. They spec it. .

Typically, in my experience with ClearOne, I have seen it takes 3 quarters for us to see a noticeable revenue increase. I have seen this happen with -- when we introduced INTERACT. I have seen this happen with ceiling mics, beam former mics. It is typical with the area of Pro AV business works.

And if we go by the same logic, you'll see sizable revenue contributions from these products in 2015 Q3, actually. .

[Operator Instructions] I'm showing no further questions at this time. .

Okay. We appreciate your continued interest in ClearOne. And if you have any further questions, please contact us at ClearOne Investor Relations. Thank you. We thank you for your attention. .

Thank you. .

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Have a great day, everyone..