Universal Electronics Reports First Quarter 2013 Financial Results
May 2, 2013
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- Net sales increase 11% over first quarter 2012 -
- Adjusted pro forma operating income up 33% over first quarter 2012 -
“Our first quarter results reflect overall solid performance,” stated
Adjusted Pro Forma Financial Results for the Three Months Ended March 31: 2013 Compared to 2012
-
Net sales were
$114.7 million , compared to$103.7 million .-
Business Category revenue was
$104.6 million , compared to$92.4 million . The Business Category contributed 91.2% of total net sales, compared to 89.1%. -
Consumer Category revenue was
$10.1 million , compared to$11.3 million . The Consumer Category contributed 8.8% of total net sales, compared to 10.9%.
-
Business Category revenue was
- Gross margins were 28.6%, compared to 27.6%.
-
Operating expenses were
$27.7 million , compared to$24.8 million . -
Operating income was
$5.1 million , compared to$3.8 million . -
Net income was
$3.9 million , or$0.26 per diluted share, compared to$2.8 million , or$0.19 per diluted share. -
At March 31, 2013, cash and cash equivalents was
$28.7 million .
Financial Outlook
For the second quarter of 2013, the company expects net sales to range
between
Conference Call Information
UEI’s management team will hold a conference call today, Thursday,
May 2, 2013 at
Use of Non-GAAP Financial Metrics
Non-GAAP gross margins, Non-GAAP operating expenses, and Non-GAAP net income and earnings per share are supplemental measures of the company's performance that are not required by, and are not presented in accordance with GAAP. The non-GAAP information does not substitute for any performance measure derived in accordance with GAAP. Non-GAAP gross profit is defined as gross profit excluding depreciation expense related to the increase in fixed assets from cost to fair market value resulting from acquisitions. Non-GAAP operating expenses are defined as operating expenses excluding amortization of intangibles acquired and other employee related restructuring costs resulting from acquisitions. Non-GAAP net income is defined as net income from operations excluding the aforementioned items and the related tax effects. A reconciliation of non-GAAP financial results to GAAP results is included at the end of this press release.
About
Founded in 1986,
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 benefits anticipated by
the Company due to the continued strength of its core businesses; the
continued innovation of products and technologies that will attract new
customers in existing and new markets; the continued expansion of the
Company’s technologies into smart devices (such as smartphones, tablets,
smart TVs, game consoles and over-the-top-services); the continued
global general economic conditions; the benefits the Company
expects via the continued strength of its subscription broadcasting
businesses in certain geographic areas including the
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UNIVERSAL ELECTRONICS INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share-related data) (Unaudited) |
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March 31,
2013 |
December 31,
2012 |
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| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 28,724 | $ | 44,593 | ||||
| Accounts receivable, net | 88,713 | 91,048 | ||||||
| Inventories, net | 89,579 | 84,381 | ||||||
| Prepaid expenses and other current assets | 3,955 | 3,661 | ||||||
| Income tax receivable | 125 | 270 | ||||||
| Deferred income taxes | 5,196 | 5,210 | ||||||
| Total current assets | 216,292 | 229,163 | ||||||
| Property, plant, and equipment, net | 77,472 | 77,706 | ||||||
| Goodwill | 30,807 | 30,890 | ||||||
| Intangible assets, net | 28,975 | 29,835 | ||||||
| Other assets | 5,317 | 5,361 | ||||||
| Deferred income taxes | 7,202 | 6,369 | ||||||
| Total assets | $ | 366,065 | $ | 379,324 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 50,295 | $ | 59,831 | ||||
| Line of credit | — | — | ||||||
| Accrued compensation | 31,680 | 33,398 | ||||||
| Accrued sales discounts, rebates and royalties | 5,691 | 8,093 | ||||||
| Accrued income taxes | 2,779 | 3,668 | ||||||
| Deferred income taxes | 38 | 41 | ||||||
| Other accrued expenses | 9,564 | 10,644 | ||||||
| Total current liabilities | 100,047 | 115,675 | ||||||
| Long-term liabilities: | ||||||||
| Deferred income taxes | 10,549 | 10,687 | ||||||
| Income tax payable | 525 | 525 | ||||||
| Other long-term liabilities | 1,921 | 1,787 | ||||||
| Total liabilities | 113,042 | 128,674 | ||||||
| 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; 21,573,699 and 21,491,398 shares issued on March 31, 2013 and December 31, 2012, respectively | 216 | 215 | ||||||
| Paid-in capital | 182,611 | 180,607 | ||||||
| Accumulated other comprehensive income (loss) | (74 | ) | 1,052 | |||||
| Retained earnings | 173,515 | 170,569 | ||||||
| 356,268 | 352,443 | |||||||
| Less cost of common stock in treasury, 6,589,901 and 6,516,382 shares on March 31, 2013 and December 31, 2012, respectively | (103,245 | ) | (101,793 | ) | ||||
| Total stockholders’ equity | 253,023 | 250,650 | ||||||
| Total liabilities and stockholders’ equity | $ | 366,065 | $ | 379,324 | ||||
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UNIVERSAL ELECTRONICS INC. CONSOLIDATED INCOME STATEMENTS (In thousands, except per share amounts) (Unaudited) |
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Three Months Ended
March 31, |
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| 2013 | 2012 | |||||||
| Net sales | $ | 114,722 | $ | 103,732 | ||||
| Cost of sales | 82,173 | 75,405 | ||||||
| Gross profit | 32,549 | 28,327 | ||||||
| Research and development expenses | 4,241 | 3,463 | ||||||
| Selling, general and administrative expenses | 24,413 | 22,552 | ||||||
| Operating income | 3,895 | 2,312 | ||||||
| Interest income (expense), net | 9 | (37 | ) | |||||
| Other expense, net | (550 | ) | (324 | ) | ||||
| Income before provision for income taxes | 3,354 | 1,951 | ||||||
| Provision for income taxes | 408 | 319 | ||||||
| Net income | $ | 2,946 | $ | 1,632 | ||||
| Earnings per share: | ||||||||
| Basic | $ | 0.20 | $ | 0.11 | ||||
| Diluted | $ | 0.19 | $ | 0.11 | ||||
| Shares used in computing earnings per share: | ||||||||
| Basic | 14,965 | 14,871 | ||||||
| Diluted | 15,225 | 15,108 | ||||||
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UNIVERSAL ELECTRONICS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
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| Three months ended March 31, | ||||||||
| 2013 | 2012 | |||||||
| Cash provided by (used for) operating activities: | ||||||||
| Net income | $ | 2,946 | $ | 1,632 | ||||
| Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||||||||
| Depreciation and amortization | 4,374 | 4,260 | ||||||
| Provision for doubtful accounts | 24 | (17 | ) | |||||
| Provision for inventory write-downs | 573 | 894 | ||||||
| Deferred income taxes | (954 | ) | 124 | |||||
| Tax benefit from exercise of stock options and vested restricted stock | 2 | 8 | ||||||
| Excess tax benefit from stock-based compensation | (37 | ) | (30 | ) | ||||
| Shares issued for employee benefit plan | 255 | 121 | ||||||
| Stock-based compensation | 1,261 | 1,197 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 1,669 | 8,934 | ||||||
| Inventories | (6,066 | ) | 5,387 | |||||
| Prepaid expenses and other assets | (268 | ) | (681 | ) | ||||
| Accounts payable and accrued expenses | (14,345 | ) | (21,511 | ) | ||||
| Accrued income and other taxes | (731 | ) | (2,343 | ) | ||||
| Net cash provided by (used for) operating activities | (11,297 | ) | (2,025 | ) | ||||
| Cash used for investing activities: | ||||||||
| Acquisition of property, plant, and equipment | (3,058 | ) | (1,712 | ) | ||||
| Acquisition of intangible assets | (291 | ) | (216 | ) | ||||
| Net cash used for investing activities | (3,349 | ) | (1,928 | ) | ||||
| Cash provided by (used for) financing activities: | ||||||||
| Issuance of debt | 13,500 | 5,000 | ||||||
| Payment of debt | (13,500 | ) | (7,200 | ) | ||||
| Proceeds from stock options exercised | 593 | 1,151 | ||||||
| Treasury stock purchased | (1,558 | ) | (309 | ) | ||||
| Excess tax benefit from stock-based compensation | 37 | 30 | ||||||
| Net cash provided by (used for) financing activities | (928 | ) | (1,328 | ) | ||||
| Effect of exchange rate changes on cash | (295 | ) | 221 | |||||
| Net increase (decrease) in cash and cash equivalents | (15,869 | ) | (5,060 | ) | ||||
| Cash and cash equivalents at beginning of year | 44,593 | 29,372 | ||||||
| Cash and cash equivalents at end of year | $ | 28,724 | $ | 24,312 | ||||
| Supplemental Cash Flow Information: | ||||||||
| Income taxes paid | $ | 1,682 | $ | 1,094 | ||||
| Interest payments | $ | 22 | $ | 95 | ||||
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UNIVERSAL ELECTRONICS INC. RECONCILIATION OF ADJUSTED PRO FORMA FINANCIAL RESULTS (In thousands) (Unaudited) |
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Three Months Ended March 31, 2013 |
Three Months Ended March 31, 2012 |
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| GAAP | Adjustments |
Adjusted
Pro Forma |
GAAP | Adjustments |
Adjusted
Pro Forma |
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| Net sales | $ | 114,722 | $ | — | $ | 114,722 | $ | 103,732 | $ | — | $ | 103,732 | ||||||||||||
| Cost of sales (1) | 82,173 | (277 | ) | 81,896 | 75,405 | (277 | ) | 75,128 | ||||||||||||||||
| Gross profit | 32,549 | 277 | 32,826 | 28,327 | 277 | 28,604 | ||||||||||||||||||
| Research and development expenses | 4,241 | — | 4,241 | 3,463 | — | 3,463 | ||||||||||||||||||
| Selling, general and administrative expenses (2) | 24,413 | (921 | ) | 23,492 | 22,552 | (1,232 | ) | 21,320 | ||||||||||||||||
| Operating income | 3,895 | 1,198 | 5,093 | 2,312 | 1,509 | 3,821 | ||||||||||||||||||
| Interest expense, net | 9 | — | 9 | (37 | ) | — | (37 | ) | ||||||||||||||||
| Other expense, net | (550 | ) | — | (550 | ) | (324 | ) | — | (324 | ) | ||||||||||||||
| Income before provision for income taxes | 3,354 | 1,198 | 4,552 | 1,951 | 1,509 | 3,460 | ||||||||||||||||||
| Provision for income taxes (3) | 408 | 212 | 620 | 319 | 304 | 623 | ||||||||||||||||||
| Net income | $ | 2,946 | $ | 986 | $ | 3,932 | $ | 1,632 | $ | 1,205 | $ | 2,837 | ||||||||||||
| Earnings per share diluted | $ | 0.19 | $ | 0.06 | $ | 0.26 | $ | 0.11 | $ | 0.08 | $ | 0.19 | ||||||||||||
| (1) | To reflect depreciation expense of $0.3 million for each of the three months ended March 31, 2013 and 2012, related to the mark-up in fixed assets from cost to fair value as a result of acquisitions. | |
| (2) | To reflect amortization expense for each of the three months ended March 31, 2013 and 2012, related to intangible assets acquired as part of acquisitions. Also, in the first quarter of 2013 and 2012, an additional $0.2 million and $0.5 million, respectively, was incurred representing other employee related restructuring costs. | |
| (3) | To reflect the tax effect of the adjustments. |
Source:
Universal Electronics Inc.
Paul Arling, 714-918-9500
or
Becky
Herrick, 415-433-3777 (IR Agency)