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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
Date of Report (date of earliest event reported): August 7, 2008
UNIVERSAL ELECTRONICS INC.
(Exact name of Registrant as specified in its charter)
         
Delaware   0-21044   33-0204817
(State or other jurisdiction   (Commission File No.)   (I.R.S. Employer
of incorporation or organization)       Identification No.)
6101 Gateway Drive
Cypress, California 90630
(Address of principal executive offices, with Zip Code)
(714) 820-1000
(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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 EXHIBIT 99.1

 


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Item 2.02 Results of Operations and Financial Condition
On August 7, 2008 Universal Electronics Inc. (“UEI”) is issuing a press release and holding a conference call regarding its financial results for the second quarter 2008. 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 August 7, 2008.

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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: August 7, 2008  By:   /s/ Bryan Hackworth    
    Bryan Hackworth   
    Chief Financial Officer
(Principal Financial Officer) 
 
 

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INDEX TO EXHIBITS
     
Exhibit Number   Description
99.1
  Press Release dated August 7, 2008

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exv99w1
Exhibit 99.1
(UNIVERSAL ELECTRONICS NEWS LOGOS)
Contacts: Paul Arling (UEI) 714.820.1000
Kirsten Chapman (IR Agency) 415.433.3777
Universal Electronics Reports Second Quarter 2008
Financial Results
— Posts Sales of $70.7 Million and Net Income of $3.5 Million —
CYPRESS, CA — August 7, 2008 — Universal Electronics Inc. (UEI), (NASDAQ: UEIC) announced financial results for the second quarter and six months ended June 30, 2008.
“During the quarter, we continued to consistently execute our strategy and delivered revenue of $70.7 million and EPS of $0.24,” stated Paul Arling, UEI’s Chairman and CEO. “Our customer wins and new products, coupled with our strong existing business, are on track to generate record results with revenue expected to grow between 12% and 16% compared to 2007. This quarter, we secured additional customers including Onkyo Corporation and Audiovox Accessories Corporation.”
“In addition, we introduced the Delta; a universal remote control that powers digital-to-analog (DTA) converters. In fact, it is scheduled to ship to major set-top manufacturers for deployment with subscription broadcasters in the fall of 2008, which we expect to generate substantial revenue in the fourth quarter of 2008. Also, at IFA, the world’s largest consumer electronics show in Germany in September, we intend to launch products that offer a new consumer friendly feature of both on-device and web-based set up for unparalleled convenience in remote control technology. These are a few examples demonstrating how our technology solutions drive growth by providing wireless control products for the worldwide movement toward digital home entertainment technologies,” concluded Arling.

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Quarterly Financial Results: Second Quarter 2008 Compared to Second Quarter 2007
  Net sales were $70.7 million, compared to $71.5 million.
  Business Category revenue was $56.8 million, compared to $60.5 million. The second quarter of 2007 was exceptionally strong due to the ramp in purchases prior to the mid-year OCAP deadline. The Business Category contributed 80% of total net sales, compared to 85%.
  Consumer Category revenue was $13.9 million, compared to $11.0 million. The Consumer Category contributed 20% of total net sales, compared to 15%.
  Gross margins were 34.3%, compared to 34.5%.
  Net income was $3.5 million, or $0.24 per diluted share, compared to $4.5 million, or $0.30 per diluted share.
  At June 30th, the cash and cash equivalents balance was $88.2 million.
Bryan Hackworth, UEI’s CFO, commented “During the second quarter, we generated cash flow from operations of $11.8 million, repurchased approximately 254,000 shares of our common stock for $6 million, and increased cash and cash equivalents by $4.8 million from March 31st. Overall, we executed as planned in the second quarter and we continue to be confident about the second half of the year due to several customer wins, increased market share with existing customers, and new product launches.”
Six-month Period Financial Results: June 30, 2008 Compared to June 30, 2007
  Net sales were $131.9 million, compared to $137.5 million.
  Gross margins were 34.8%, compared to 35.6%.
  Operating income was $7.0 million, compared to $12.2 million.
  Net income was $6.0 million, or $0.40 per diluted share, compared to $9.2 million, or $0.61 per diluted share.
Recent Highlights
  Began shipping UEI-developed universal remotes with several new Onkyo A/V receivers and are slated to ship additional models later this year. Models cover a range including entry level and custom installation home theater systems and audio receivers.
  Entered multifaceted relationship with Audiovox Accessories, completed a smooth transfer of the UEI One-for-All retail brand to Audiovox to manage in North America and are on track to begin delivery of integrated circuits for all of its remote control devices in the third quarter as planned.
  Unveiled Delta universal two-device remote designed to be preprogrammed to a DTA converter and programmed by the user to operate his or her TV. Delta includes comprehensive coverage for TV brands sold in North America.

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Financial Outlook
For the third quarter of 2008, net sales are expected to range between $78.5 million and $82.5 million, compared to $69.0 million in the third quarter of 2007. Management expects Business Category sales to range from $61.0 million to $64.0 million, compared to $55.9 million in 2007, and Consumer Category sales to range from $16.5 million to $19.5 million, compared to $13.1 million in 2007. Gross margins for the third quarter of 2008 are expected to be approximately 35.0% of sales plus or minus one point. Operating expenses are expected to be between $19.9 million and $20.5 million, including employee stock based compensation charges of approximately $774,000, and the tax rate is expected to be between 33% and 35% of pre-tax income. GAAP earnings per diluted share are expected to range from $0.39 to $0.43, compared to $0.32 per diluted share in the third quarter of 2007.
Management continues to expect record revenue and EPS. For the full year 2008, net sales are expected to grow between 12% and 16%, reaching between $305 million and $316 million, up from $273 million. Business Category revenue is expected to increase 9% to 14% and Consumer Category revenue is expected to increase 15% to 33%. Operating expenses are expected to be between $77 million and $81 million, and the tax rate is expected to range from 33% to 35% of pre-tax income, resulting in GAAP EPS between $1.50 and $1.57 per diluted share, an increase of 13% to 18% over the $1.33 per diluted share earned in 2007.
Conference Call Information
UEI’s management team will hold a conference call today, Thursday, August 7, 2008 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its second quarter 2008 earnings results, review the quarterly activity and answer questions. To participate in the U.S. please dial 800-622-9917 and internationally dial 706-645-0366 approximately 10 minutes prior to the start of the conference. The live call can also be accessed over the Internet through UEI’s Web site at www.uei.com and will be available for replay for a 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 55656076.
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® 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

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markets under the brand SimpleCenter™. For additional information, visit our web site 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 timely development, ordering, delivery and market acceptance of products and technologies identified in this release; the Company’s continued ability to design products in a fashion that results in its technology being accepted by the Company’s customers and the end users; the continued importance of the Company’s database of infrared codes and other technologies; the continued growth in the markets identified in this release to occur as anticipated by management; the continued strength and growth of the Company and of its customers, including those recently announced; the success of the new contracts and business relationships as identified in this release; as and other factors described in the Company’s filings with the 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.
— Tables Follow

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UNIVERSAL ELECTRONICS INC.
CONSOLIDATED BALANCE SHEETS

(In thousands, except share-related data)
(Unaudited)
                 
    June 30,     December 31,  
    2008     2007  
ASSETS
               
Current assets:
               
Cash and cash equivalents
  $ 88,215     $ 86,610  
Accounts receivable, net
    58,464       60,146  
Inventories, net
    42,650       34,906  
Prepaid expenses and other current assets
    3,072       1,874  
Deferred income taxes
    2,876       2,871  
 
           
Total current assets
    195,277       186,407  
Equipment, furniture and fixtures, net
    9,008       7,558  
Goodwill
    11,043       10,863  
Intangible assets, net
    5,537       5,700  
Other assets
    394       369  
Deferred income taxes
    6,645       6,388  
 
           
Total assets
  $ 227,904     $ 217,285  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
 
               
Current liabilities:
               
Accounts payable
  $ 40,829     $ 29,382  
Accrued sales discounts, rebates and royalties
    4,446       4,671  
Accrued income taxes
    2,631       1,720  
Accrued compensation
    3,568       3,737  
Other accrued expenses
    5,921       6,567  
 
           
Total current liabilities
    57,395       46,077  
 
               
Long-term liabilities:
               
Deferred income taxes
    148       127  
Income tax payable
    1,506       1,506  
Other long-term liabilities
    1,263       1,333  
 
           
Total liabilities
    60,312       49,043  
 
           
 
               
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; 18,615,390 and 18,547,019 shares issued at June 30, 2008 and December 31, 2007, respectively
    186       185  
Paid-in capital
    117,559       114,441  
Accumulated other comprehensive income
    18,804       11,221  
Retained earnings
    94,476       88,508  
 
           
 
    231,025       214,355  
 
               
Less cost of common stock in treasury, 4,718,093 and 3,975,439 shares at June 30, 2008 and December 31, 2007, respectively
    (63,433 )     (46,113 )
 
           
Total stockholders’ equity
    167,592       168,242  
 
           
Total liabilities and stockholders’ equity
  $ 227,904     $ 217,285  
 
           
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UNIVERSAL ELECTRONICS INC.
CONSOLIDATED INCOME STATEMENTS

(In thousands, except per share amounts)
(Unaudited)
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2008     2007     2008     2007  
Net sales
  $ 70,684     $ 71,478     $ 131,875     $ 137,497  
Cost of sales
    46,472       46,852       85,928       88,530  
 
                       
Gross profit
    24,212       24,626       45,947       48,967  
 
                               
Research and development expenses
    2,121       2,269       4,317       4,591  
Selling, general and administrative expenses
    17,734       16,385       34,590       32,218  
 
                       
 
                               
Operating income
    4,357       5,972       7,040       12,158  
Interest income, net
    893       732       1,790       1,320  
Other (expense) income, net
    (2 )     27       180       121  
 
                       
 
                               
Income before provision for income taxes
    5,248       6,731       9,010       13,599  
Provision for income taxes
    (1,753 )     (2,185 )     (3,042 )     (4,416 )
 
                       
Net income
  $ 3,495     $ 4,546     $ 5,968     $ 9,183  
 
                       
 
                               
Earnings per share:
                               
Basic
  $ 0.25     $ 0.31     $ 0.42     $ 0.64  
 
                       
Diluted
  $ 0.24     $ 0.30     $ 0.40     $ 0.61  
 
                       
 
                               
Shares used in computing earnings per share:
                               
Basic
    14,033       14,437       14,256       14,282  
 
                       
Diluted
    14,547       15,262       14,755       15,084  
 
                       
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UNIVERSAL ELECTRONICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
(Unaudited)
                 
    Six Months Ended  
    June 30,  
    2008     2007  
Cash provided by operating activities:
               
Net income
  $ 5,968     $ 9,183  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    2,892       2,160  
Provision for doubtful accounts
    64       10  
Provision for inventory write-downs
    973       952  
Provision for deferred income taxes
    (171 )     853  
Tax benefit from exercise of stock options
    171       1,960  
Excess tax benefit from stock-based compensation
    (134 )     (1,091 )
Shares issued for employee benefit plan
    282       394  
Stock-based compensation
    2,311       1,481  
Changes in operating assets and liabilities:
               
Accounts receivable
    4,173       (7,103 )
Inventories
    (7,462 )     (1,419 )
Prepaid expenses and other assets
    (1,112 )     (586 )
Accounts payable and accrued expenses
    8,795       1,566  
Accrued income taxes
    639       (3,476 )
 
           
Net cash provided by operating activities
    17,389       4,884  
 
           
 
               
Cash used for investing activities:
               
Acquisition of equipment, furniture and fixtures
    (3,457 )     (2,050 )
Acquisition of intangible assets
    (505 )     (635 )
 
           
Net cash used for investing activities
    (3,962 )     (2,685 )
 
           
 
               
Cash (used for) provided by financing activities:
               
Proceeds from stock options exercised
    525       8,037  
Treasury stock purchased
    (17,489 )     (2,413 )
Excess tax benefit from stock-based compensation
    134       1,091  
 
           
Net cash (used for) provided by financing activities
    (16,830 )     6,715  
 
           
 
               
Effect of exchange rate changes on cash
    5,008       1,450  
 
           
 
               
Net increase in cash and cash equivalents
    1,605       10,364  
 
               
Cash and cash equivalents at beginning of period
    86,610       66,075  
 
           
 
               
Cash and cash equivalents at end of period
  $ 88,215     $ 76,439  
 
           
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