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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): November 1, 2007
UNIVERSAL ELECTRONICS INC.
(Exact name of Registrant as specified in its charter)
| Delaware (State or other jurisdiction of incorporation or organization) |
0-21044 (Commission File No.) |
33-0204817 (I.R.S. Employer Identification No.) |
6101 Gateway Drive
Cypress, California 90630
(Address of principal executive offices, with Zip Code)
Cypress, California 90630
(Address of principal executive offices, with Zip Code)
(714) 820-1000
(Registrant’s telephone number, including area code):
(Registrant’s telephone number, including area code):
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
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Item 2.02 Results of Operations and Financial Condition
On November 1, 2007 Universal Electronics Inc. (“UEI”) is issuing a press release and holding a
conference call regarding its financial results for the third quarter 2007. A copy of the press
release is included as Exhibit 99.1 to this report.
Pursuant to General Instruction B2 of Form 8-K, the information contained in Exhibit 99.1 will be
deemed furnished, and not “filed,” for purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the
Exchange Act or the Securities Act of 1933, as amended, except as expressly set forth by specific
reference in any such filing.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits. The following exhibit is furnished with this report.
99.1 Press Release of Universal Electronics Inc. dated November 1, 2007.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Universal Electronics Inc. |
||||
| Date: November 1, 2007 | By: | /s/ Bryan Hackworth | ||
| Bryan Hackworth | ||||
| Chief Financial Officer (Principal Financial Officer) |
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Exhibit 99.1
|
NEWS |
Contacts: Paul Arling (UEI) 714.820.1000
Kirsten Chapman (IR Agency) 415.433.3777
Kirsten Chapman (IR Agency) 415.433.3777
Universal Electronics Reports Third Quarter 2007 Financial Results
–Revenue Rises 15.7% to $69.0 Million, Delivering Strongest Third Quarter in History –
– Nine-month Revenue and Net Income Reach All-time Highs of $206.5 Million and $14.1 Million, Respectively-
CYPRESS, CA – November 1, 2007 – Universal Electronics Inc. (UEI), (NASDAQ: UEIC) announced
financial results for the third quarter and the nine-month period ended September 30, 2007.
“Strong execution has again delivered phenomenal financial results, with both the third quarter
revenue of $69.0 million and the nine-month revenue of $206.5 million achieving period records,”
stated Paul Arling, UEI’s chairman and chief executive officer. “In fact our revenue five-year
compounded annual growth rate exceeds 20 percent. While pleased with these accomplishments, we
remain focused on the future. The increasing transition from analog to digital and the continuing adoption of high
definition TVs and DVRs continue to fuel our business. Additionally, we are expanding our
reach into Asia with new customers, such as PCCW, as well as continuing to foster relationships
with existing subscription broadcasters and consumer electronics manufacturers.”
According to a study by Leichtman Research Group, Inc., DVRs are now in 20 percent of U.S.
households, up from only 2 percent in 2003, and are expected to grow to 60 million households by
2011. Also, In-Stat cited IPTV subscribers in Asia are expected to exceed 33 million by 2012, up
from 2.7 million in 2006.
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Third Quarter 2007 Financial Results
| • | Net sales for the third quarter of 2007 were $69.0 million, compared to $59.6 million for the same quarter last year. | |
| • | The Business Category contributed 81 percent of total sales and the Consumer Category contributed 19 percent, compared to 77 percent and 23 percent, respectively, in the third quarter of 2006. | |
| • | Gross margins were 37.3 percent, compared to 36.2 percent in last year’s third quarter. | |
| • | Operating income was $6.3 million, compared to operating income of $4.6 million for the same quarter last year. | |
| • | Net income for the 2007 third quarter was $4.9 million, or $0.32 per diluted share, compared to $3.5 million, or $0.25 per diluted share, for the third quarter of 2006. |
Net sales for the nine-month period ended September 30, 2007 were $206.5 million compared to $166.2
million for the first nine months of 2006. Net income for the first nine months of 2007 was $14.1
million, or $0.93 per diluted share, compared to $8.1 million, or $0.56 per diluted share, for the
same period last year.
Bryan Hackworth, the company’s chief financial officer, said, “During the third quarter, strong
Business Category demand again drove record revenue and earnings performance. Now, we expect a
record fourth quarter to close out what will be the best year in our company’s history.”
Financial Outlook
For the fourth quarter of 2007, revenue is expected to range between $70.0 million and $75.0
million, compared to $69.7 million in the fourth quarter of 2006. We expect Business Category sales
to range from $49.0 million to $52.0 million and Consumer Category sales to range from $20.5
million to $23.5 million. Gross margins for the fourth quarter of 2007 are expected to be
approximately 39.0 percent of sales plus or minus one percentage point. Operating expenses are
expected to range from $19.9 million to $20.5 million, and the tax rate is expected to range
between 31.5 percent and 33.5 percent. Earnings per diluted share, including approximately $700,000
of pre-tax compensation expense relating to stock options, are expected to range from $0.38 to
$0.42. This compares to $0.37 per diluted share in the fourth quarter of 2006.
Management narrowed the range for its full year 2007 estimates; total revenue is now expected to
range between $276.5 million and $281.5 million, reflecting growth of 17 percent to 19 percent over
last year. Business Category revenue is now expected to range between $215.6 million and $218.6
million, with Consumer Category revenue expected to range between $60.3 million and $63.3 million.
Operating expenses are expected to range between $76.2 million and $76.8 million. The tax rate is
expected to approximate 32.5 percent. Earnings per diluted share are expected to range between
$1.31 and $1.35, compared to $0.94 per diluted share for 2006, representing 39 percent to 44
percent growth.
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UEI’s Recent Highlights:
| • | Entered into an agreement with PCCW Limited to provide custom remote control devices to one of the largest communications providers in Asia, announced in September. | |
| • | Unveiled the NevoQ50™, NevoConnect™ NC-50 base station and NevoStudio Pro™ programming software to the Nevo family of universal control devices and solutions, with Z-wave™ functionality as well as infrared capability in September. |
Conference Call Information:
UEI’s management team will hold a conference call today, Thursday November 1, 2007, at 1:30 p.m.
Pacific Time to review the third quarter 2007 results and hold a question and answer session for
callers. To participate, call 1-800-622-9917 ten minutes prior to start time. International
dialers call 1-706-645-0366. The live call can also be accessed via the Internet through
Universal’s Web site at www.uei.com. If you are unable to participate, a replay will be available
via telephone for two business days beginning two hours after the call. To access, please dial
1-800-642-1687 or 1-706-645-9291 internationally, reservation number 20309783. The webcast replay
will be available at www.uei.com.
About Universal Electronics
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® brand name. UEI also delivers complete home control
solutions in the professional custom installation market under the brand name Nevo®, as
well as software solutions for digital media control and enjoyment in the consumer and OEM markets
under the brand SimpleCenter™.
Safe Harbor Statement
Except for the historical information contained herein, the matters discussed in this press
release are forward-looking statements that involve a number of risks and uncertainties. Among the
factors that could cause actual results to differ materially from those expressed herein are the
following: the failure of the company to continue experiencing the increased demand for our
products in connection with the continued adoption of advanced digital media and the growth trends
in DVR, HDTV and IPTV as we anticipate; the failure of the industry trends regarding tempering
seasonality to materialize as believed by management; the growth of, acceptance of, and the demand
for our products and technologies, including new products and our home connectivity line of
products and software, including the NevoQ50, NevoConnect NC-50 base station and NevoStudio Pro
programming software not materializing as we anticipate; our inability to design and develop new
and innovative products and features that find acceptance in the marketplace; the failure or delay
of the international markets, including Asia, to materialize as anticipated by management;
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the
possible dilutive effect our stock based compensation programs may have on our EPS and stock price;
our inability to deliver the new products and our home connectivity line of products and software
at the time and in the quantities we anticipate; the relationships with our customers not expanding
as we anticipate, including those that we have recently announced; our inability to obtain new
customers; and other factors listed from time to time in our press releases and SEC filings. All
forward looking statements included in this release are based upon information we have as of the
date of this release and we undertake no obligation to revise or update any forward-looking
statements in order to reflect events or circumstances that may arise after the date of this
release.
- Tables Follow-
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UNIVERSAL ELECTRONICS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| September 30, | December 31, | ||||||||||
| 2007 | 2006 | ||||||||||
ASSETS |
|||||||||||
Current assets: |
|||||||||||
Cash and cash equivalents |
$ | 84,498 | $ | 66,075 | |||||||
Accounts receivable, net |
60,602 | 51,867 | |||||||||
Inventories, net |
32,552 | 26,459 | |||||||||
Prepaid expenses and other current assets |
2,776 | 2,722 | |||||||||
Prepaid income taxes |
5,303 | — | |||||||||
Deferred income taxes |
3,019 | 3,069 | |||||||||
Total current assets |
188,750 | 150,192 | |||||||||
Equipment, furniture and fixtures, net |
6,902 | 5,899 | |||||||||
Goodwill |
10,805 | 10,644 | |||||||||
Intangible assets, net |
5,783 | 5,587 | |||||||||
Other assets |
272 | 221 | |||||||||
Deferred income taxes |
5,520 | 6,065 | |||||||||
Total assets |
$ | 218,032 | $ | 178,608 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|||||||||||
Current liabilities: |
|||||||||||
Accounts payable |
$ | 32,972 | $ | 20,153 | |||||||
Accrued sales discounts/rebates |
4,918 | 4,498 | |||||||||
Accrued income taxes |
— | 4,483 | |||||||||
Accrued compensation |
4,278 | 7,430 | |||||||||
Other accrued expenses |
7,580 | 7,449 | |||||||||
Total current liabilities |
49,748 | 44,013 | |||||||||
Deferred income taxes |
128 | 103 | |||||||||
Accrued income taxes |
6,860 | — | |||||||||
Other long term liabilities |
1,113 | 275 | |||||||||
Total liabilities |
57,849 | 44,391 | |||||||||
Stockholders’ equity: |
|||||||||||
Common stock |
183 | 175 | |||||||||
Paid-in capital |
109,626 | 94,733 | |||||||||
Accumulated other comprehensive income |
9,047 | 2,759 | |||||||||
Retained earnings |
82,441 | 68,514 | |||||||||
Common stock held in treasury |
(41,114 | ) | (31,964 | ) | |||||||
Total stockholders’ equity |
160,183 | 134,217 | |||||||||
Total liabilities and stockholders’ equity |
$ | 218,032 | $ | 178,608 | |||||||
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UNIVERSAL ELECTRONICS INC.
CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share amounts)
(Unaudited)
CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share amounts)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
Net sales |
$ | 68,961 | $ | 59,612 | $ | 206,458 | $ | 166,155 | ||||||||
Cost of sales |
43,224 | 38,033 | 131,754 | 106,506 | ||||||||||||
Gross profit |
25,737 | 21,579 | 74,704 | 59,649 | ||||||||||||
Research and development expenses |
2,070 | 1,809 | 6,661 | 5,574 | ||||||||||||
Selling, general and administrative expenses |
17,393 | 15,142 | 49,611 | 42,274 | ||||||||||||
Operating expenses |
19,463 | 16,951 | 56,272 | 47,848 | ||||||||||||
Operating income |
6,274 | 4,628 | 18,432 | 11,801 | ||||||||||||
Interest income, net |
879 | 437 | 2,199 | 1,058 | ||||||||||||
Other income (expense), net |
13 | (30 | ) | 134 | (602 | ) | ||||||||||
Income before provision for income taxes |
7,166 | 5,035 | 20,765 | 12,257 | ||||||||||||
Provision for income taxes |
(2,251 | ) | (1,502 | ) | (6,667 | ) | (4,169 | ) | ||||||||
Net income |
$ | 4,915 | $ | 3,533 | $ | 14,098 | $ | 8,088 | ||||||||
Earnings per share: |
||||||||||||||||
Basic |
$ | 0.34 | $ | 0.26 | $ | 0.98 | $ | 0.59 | ||||||||
Diluted |
$ | 0.32 | $ | 0.25 | $ | 0.93 | $ | 0.56 | ||||||||
Shares used in computing earnings per share: |
||||||||||||||||
Basic |
14,508 | 13,845 | 14,358 | 13,763 | ||||||||||||
Diluted |
15,280 | 14,415 | 15,149 | 14,336 | ||||||||||||
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