News Release

Printer Friendly Version View printer-friendly version << Back

Universal Electronics Reports Second Quarter 2010 Financial Results

CYPRESS, Calif., Aug 05, 2010 (BUSINESS WIRE) --

Universal Electronics Inc. (UEI) (NASDAQ:UEIC) reported financial results for the second quarter ended June 30, 2010.

"Our second quarter earnings were marked by consistent revenue performance, improved margins and our ability to manage expenses while continuing to invest in R&D," stated Paul Arling, UEI's Chairman and CEO. "UEI's focus on innovation drives our success in providing the control solutions and technologies that meet customers' and consumers' future needs. We have a strong track record of introducing breakthrough solutions that support ease-of-use and minimize the complexity of today's home entertainment environment. We believe that our focus on affordable, ease of use solutions for consumers will result in benefits for our customers and, ultimately, our shareholders."

Financial Results for the Quarter Ended June 30: 2010 Compared to 2009

  • Net sales were $78.9 million, compared to $78.3 million.
    • Business Category revenue was $67.3 million, compared to $68.1 million. The Business Category contributed 85% of total net sales, compared to 87%.
    • Consumer Category revenue was $11.6 million, compared to $10.2 million. The Consumer Category contributed 15% of total net sales, compared to 13%.
  • Gross margins were 34.8%, compared to 32.6%.
  • Total operating expenses were $20.1 million, compared to $19.8 million.
  • Operating income was $7.3 million, compared to $5.7 million.
  • Interest income was $17,000, compared to $127,000.
  • Net income was $4.8 million, or $0.34 per diluted share, compared to $3.8 million, or $0.27 per diluted share.
  • At June 30, 2010, cash and cash equivalents was $78.8 million.

Bryan Hackworth, UEI's CFO, commented, "During the second quarter 2010, we increased the operating margin rate and grew cash flow from operations. We are confident we will continue to leverage our fixed cost structure and deliver strong earnings per diluted share growth in 2010."

Six-month Period Financial Results: June 30, 2010 Compared to June 30, 2009

  • Net sales were $150.3 million, compared to $149.4 million.
  • Gross margins were 32.9%, compared to 31.4%.
  • Total operating expenses were $39.5 million, compared to $39.7 million.
  • Net income was $6.6 million, or $0.47 per diluted share, compared to $4.6 million, or $0.33 per diluted share.

Financial Outlook

For the third quarter of 2010, net sales are expected to range between $79.5 million and $83.5 million, compared to $83.2 million in the third quarter of 2009. The company anticipates gross margins for the third quarter of 2010 to be approximately 33% of sales, plus or minus one point, compared to 31.3% of sales in the third quarter of 2009. For the third quarter of 2010, operating expenses are expected to range from $19.3 million to $19.9 million, compared to third quarter 2009 operating expenses of $19.4 million. Earnings per diluted share for the third quarter of 2010 are expected to range from $0.32 to $0.36, compared to earnings per diluted share of $0.30 in the third quarter of 2009.

For the full 2010 year, the company expects net sales to range between $315.0 million and $325.0 million, compared to $317.6 million in 2009. Earnings per diluted share for 2010 are expected to range from $1.20 to $1.28, compared to earnings per diluted share of $1.05 in 2009.

Conference Call Information

UEI's management team will hold a conference call today, Thursday, August 5, 2010 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its second quarter 2010 earnings results, review the quarterly activity and answer questions. To access the call in the U.S. please dial 877-655-6895 and for international calls dial 706-758-0299 approximately 10 minutes prior to the start of the conference. The conference ID is 89845448. The conference call will also be broadcast live over the Internet and available for replay for one year at www.uei.com. In addition, a replay of the call will be available via telephone for two business days, beginning two hours after the call. To listen to the replay, in the U.S., please dial 800-642-1687 and internationally, 706-645-9291. Enter access code 89845448.

About Universal Electronics Inc.

Founded in 1986, Universal Electronics Inc. (UEI) is the global leader in wireless control technology for the connected home. UEI designs, develops, and delivers innovative solutions that enable consumers to control entertainment devices, digital media, and home systems. The company's broad portfolio of patented technologies and database of infrared control software have been adopted by many Fortune 500 companies in the consumer electronics, subscription broadcast, and computing industries. UEI sells and licenses wireless control products through distributors and retailers under the One For All(R) brand name. UEI also delivers complete home control solutions in the professional custom installation market under the brand name Nevo(R). For additional information, please visit our website at www.uei.com.

Safe Harbor Statement

This press release contains forward-looking statements that are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995.Words and expressions reflecting something other than historical fact are intended to identify forward-looking statements. These forward-looking statements involve a number of risks and uncertainties, including the ability of the Company to continue developing innovative control solutions and technologies that are accepted by our customers and consumers; the continued leveraging of the Company's fixed cost structure resulting in increased profitability and cash flow; general economic conditions; and other factors described in the Company's filings with the U.S. Securities and Exchange Commission.The actual results that the Company achieves may differ materially from any forward looking statement due to such risks and uncertainties.The Company undertakes no obligations to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

UNIVERSAL ELECTRONICS INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share-related data)

(Unaudited)

June 30,

2010

December 31,

2009

ASSETS
Current assets:
Cash and cash equivalents $ 78,838 $ 29,016
Term deposit -- 49,246
Accounts receivable, net 56,130 64,392
Inventories, net 43,927 40,947
Prepaid expenses and other current assets 2,315 2,423
Deferred income taxes 2,959 3,016
Total current assets 184,169 189,040
Equipment, furniture and fixtures, net 10,219 9,990
Goodwill 13,404 13,724
Intangible assets, net 11,422 11,572
Other assets 759 1,144
Deferred income taxes 7,761 7,837
Total assets $ 227,734 $ 233,307
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 41,828 $ 39,514
Accrued sales discounts, rebates and royalties 4,785 6,028
Accrued income taxes 957 3,254
Accrued compensation 5,345 4,619
Other accrued expenses 6,404 8,539
Total current liabilities 59,319 61,954
Long-term liabilities:
Deferred income taxes 139 153
Income tax payable 1,348 1,348
Other long-term liabilities 100 122
Total liabilities 60,906 63,577
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 5,000,000 shares authorized; none issued or outstanding -- --
Common stock, $0.01 par value, 50,000,000 shares authorized; 19,238,800 and 19,140,232 shares issued on June 30, 2010 and December 31, 2009, respectively 192 191
Paid-in capital 131,971 128,913
Accumulated other comprehensive (loss) income (4,018 ) 1,463
Retained earnings 125,602 118,989
253,747 249,556
Less cost of common stock in treasury, 5,790,633 and 5,449,962 shares on June 30, 2010 and December 31, 2009, respectively (86,919 ) (79,826 )
Total stockholders' equity 166,828 169,730
Total liabilities and stockholders' equity $ 227,734 $ 233,307

UNIVERSAL ELECTRONICS INC.

CONSOLIDATED INCOME STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

2010 2009 2010 2009
Net sales $ 78,892 $ 78,303 $ 150,268 $ 149,429
Cost of sales 51,467 52,808 100,779 102,497
Gross profit 27,425 25,495 49,489 46,932
Research and development expenses 2,488 2,050 5,257 4,160
Selling, general and administrative expenses 17,621 17,758 34,229 35,549
Operating income 7,316 5,687 10,003 7,223
Interest income, net 17 127 100 266
Other (expense) income, net (21 ) 182 22 (186 )
Income before provision for income taxes 7,312 5,996 10,125 7,303
Provision for income taxes (2,535 ) (2,180 ) (3,512 ) (2,691 )
Net income $ 4,777 $ 3,816 $ 6,613 $ 4,612
Earnings per share:
Basic $ 0.35 $ 0.28 $ 0.48 $ 0.34
Diluted $ 0.34 $ 0.27 $ 0.47 $ 0.33
Shares used in computing earnings per share:
Basic 13,601 13,621 13,650 13,640
Diluted 13,929 13,981 14,011 13,907

UNIVERSAL ELECTRONICS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Six Months Ended

June 30,

2010 2009
Cash provided by operating activities:
Net income $ 6,613 $ 4,612
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 3,079 3,332
Provision for doubtful accounts 747 143
Provision for inventory write-downs 1,450 2,170
Deferred income taxes 33 (111 )
Tax benefit from exercise of stock options 109 301
Excess tax benefit from stock-based compensation (103 ) (151 )
Shares issued for employee benefit plan 375 342
Stock-based compensation 2,532 2,081
Changes in operating assets and liabilities:
Accounts receivable 3,872 927
Inventories (6,368 ) (3,021 )
Prepaid expenses and other assets 307 1,112
Accounts payable and accrued expenses 2,992 (1,603 )
Accrued income taxes (1,909 ) (527 )
Net cash provided by operating activities 13,729 9,607
Cash provided by (used for) investing activities:
Term deposit 49,246 (49,199 )
Acquisition of equipment, furniture and fixtures (3,041 ) (2,193 )
Acquisition of intangible assets (749 ) (751 )
Acquisition of assets from Zilog, Inc. -- (9,502 )
Net cash provided by (used for) investing activities 45,456 (61,645 )
Cash used for financing activities:
Proceeds from stock options exercised 257 1,557
Treasury stock purchased (7,308 ) (3,873 )
Excess tax benefit from stock-based compensation 103 151
Net cash used for financing activities (6,948 ) (2,165 )
Effect of exchange rate changes on cash (2,415 ) 342
Net increase (decrease) in cash and cash equivalents 49,822 (53,861 )
Cash and cash equivalents at beginning of period 29,016 75,238
Cash and cash equivalents at end of period $ 78,838 $ 21,377

SOURCE: Universal Electronics Inc.

UEI
Paul Arling, 714-820-1000
or
Kirsten Chapman, 415-433-3777 (IR Agency)