Achieves Records in Net Sales of $142.4 million and Adjusted Pro Forma EPS of $0.62
SANTA ANA, CA – November 7, 2013 – Universal Electronics Inc. (UEI), (NASDAQ: UEIC) reported financial results for the three and nine months ended September 30, 2013.
Paul Arling, UEI’s Chairman and CEO, stated: “Our record quarterly performance was supported by strength in subscription broadcasting as both domestic and international markets delivered growth. Leveraging our core business, technologies and patents, we have begun recording initial licensing sales from the fast-growing smart devices market. We are beginning to gain traction with the world’s largest mobile device manufacturers, gaming companies and over-the-top service providers to incorporate UEI’s advanced technology into an expanding array of consumer electronics devices. We remain very excited about the opportunities for UEI and our ability to connect and control new and advanced wireless technologies as the industry continues to evolve.”
Adjusted Pro Forma Financial Results for the Three Months Ended September 30: 2013 Compared to 2012
- Net sales were $142.4 million, compared to $124.9 million.
-
- Business Category revenue was $129.7 million, compared to $111.9 million. The Business Category contributed 91.1% of total net sales, compared to 89.6%.
-
- Consumer Category revenue was $12.7 million, compared to $13.0 million. The Consumer Category contributed 8.9% of total net sales, compared to 10.4%.
- Gross margins were 28.6%, compared to 29.4%.
- Operating expenses were $28.9 million, compared to $25.5 million.
- Operating income was $11.8 million, compared to $11.2 million.
- Net income was $9.7 million, or $0.62 per diluted share, compared to $8.1 million, or $0.54 per diluted share.
- At September 30, 2013, cash and cash equivalents, net of debt, was $44.6 million, compared to $34.4 million at September 30, 2012.
Adjusted Pro Forma Financial Results for the Nine Months Ended September 30: 2013 Compared to 2012
- Net sales were $142.4 million, compared to $124.9 million.
-
- Business Category revenue was $129.7 million, compared to $111.9 million. The Business Category contributed 91.1% of total net sales, compared to 89.6%.
- Consumer Category revenue was $12.7 million, compared to $13.0 million. The Consumer Category contributed 8.9% of total net sales, compared to 10.4%.
- Gross margins were 28.6%, compared to 29.4%.
- Operating expenses were $28.9 million, compared to $25.5 million.
- Operating income was $11.8 million, compared to $11.2 million.
- Net income was $9.7 million, or $0.62 per diluted share, compared to $8.1 million, or $0.54 per diluted share.
- At September 30, 2013, cash and cash equivalents, net of debt, was $44.6 million, compared to $34.4 million at September 30, 2012.
Adjusted Pro Forma Financial Results for the Nine Months Ended September 30: 2013 Compared to 2012
- Net sales were $393.2 million, compared to $345.3 million.
- Gross margins were 28.4%, compared to 28.5%.
- Operating expenses were $83.6 million, compared to $75.9 million.
- Operating income was $28.1 million, compared to $22.7 million.
- Net income was $20.8 million, or $1.35 per diluted share, compared to $17.1 million, or $1.13 per diluted share.
Financial Outlook
For the fourth quarter of 2013, the company expects net sales to range between $126.0 million and $134.0 million, compared to $117.8 million in the fourth quarter of 2012. Adjusted pro forma earnings per diluted share for the fourth quarter of 2013 are expected to range from $0.42 to $0.52, compared to adjusted pro forma earnings per diluted share of $0.42 in the fourth quarter of 2012.
Conference Call Information
UEI’s management team will hold a conference call today, Thursday, November 7, 2013 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its third quarter 2013 earnings results, review recent 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 86975386. 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 855-859-2056 and internationally, 404-537-3406. Enter access code 86975386.
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, employee related restructuring costs and certain costs incurred for years preceding the acquisition of Enson Assets Limited. Non-GAAP net income is defined as net income from operations excluding the aforementioned items and the related tax effects as well as additional reserves recorded resulting from a tax audit in Hong Kong for years preceding our acquisition of Enson Assets Limited. A reconciliation of non-GAAP financial results to GAAP results is included at the end of this press release.
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. For additional information, 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 benefits anticipated by the Company due to the continued strength of its core businesses, technologies and patents; the continued innovation of products and advanced technologies that will attract new customers in existing and new markets, including advanced wireless products and platforms; the continued expansion of the Company’s technologies into smart devices (such as smartphones, tablets, smart TVs, IPTV devices, game consoles and over-the-top-services) and the continued growth of the smart device markets; the Company’s continued ability to successfully license its technologies into the growing smart device markets; the benefits the Company expects via the continued strength of its subscription broadcasting businesses, both domestically and internationally; and other factors described in the Company’s filings with the U.S. Securities and Exchange Commission. The actual results 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 –
UNIVERSAL ELECTRONICS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share-related data)
(Unaudited)
|
September 30, |
December 31, |
|||||||
|
ASSETS |
||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ |
44,602 |
$ |
44,593 |
||||
| Accounts receivable, net |
103,466 |
91,048 |
||||||
| Inventories, net |
103,579 |
84,381 |
||||||
| Prepaid expenses and other current assets |
3,573 |
3,661 |
||||||
| Income tax receivable |
12 |
270 |
||||||
| Deferred income taxes |
5,102 |
5,210 |
||||||
| Total current assets |
260,334 |
229,163 |
||||||
| Property, plant, and equipment, net |
76,662 |
77,706 |
||||||
| Goodwill |
30,961 |
30,890 |
||||||
| Intangible assets, net |
27,632 |
29,835 |
||||||
| Other assets |
5,096 |
5,361 |
||||||
| Deferred income taxes |
6,252 |
6,369 |
||||||
| Total assets | $ |
406,937 |
$ |
379,324 |
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ |
57,153 |
$ |
59,831 |
||||
| Line of credit |
— |
— |
||||||
| Accrued compensation |
35,529 |
33,398 |
||||||
| Accrued sales discounts, rebates and royalties |
7,165 |
8,093 |
||||||
| Accrued income taxes |
2,756 |
3,668 |
||||||
| Deferred income taxes |
56 |
41 |
||||||
| Other accrued expenses |
10,550 |
10,644 |
||||||
| Total current liabilities |
113,209 |
115,675 |
||||||
| Long-term liabilities: | ||||||||
| Deferred income taxes |
10,549 |
10,687 |
||||||
| Income tax payable |
525 |
525 |
||||||
| Other long-term liabilities |
2,082 |
1,787 |
||||||
| Total liabilities |
126,365 |
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; 22,133,206 and 21,491,398 shares issued on September 30, 2013 and December 31, 2012, respectively |
221 |
215 |
||||||
| Paid-in capital |
194,360 |
180,607 |
||||||
| Accumulated other comprehensive income (loss) |
2,641 |
1,052 |
||||||
| Retained earnings |
187,979 |
170,569 |
||||||
|
385,201 |
352,443 |
|||||||
| Less cost of common stock in treasury, 6,634,641 and 6,516,382 shares on September 30, 2013 and December 31, 2012, respectively |
(104,629 |
) |
(101,793 |
) | ||||
| Total stockholders’ equity |
280,572 |
250,650 |
||||||
| Total liabilities and stockholders’ equity | $ |
406,937 |
$ |
379,324 |
||||
UNIVERSAL ELECTRONICS INC.
CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share amounts)
(Unaudited)
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||
|
2013 |
2012 |
2013 |
2012 |
|||||||||||||
| Net sales | $ |
142,389 |
$ |
124,871 |
$ |
393,220 |
$ |
345,307 |
||||||||
| Cost of sales |
101,940 |
88,433 |
282,386 |
247,572 |
||||||||||||
| Gross profit |
40,449 |
36,438 |
110,834 |
97,735 |
||||||||||||
| Research and development expenses |
4,182 |
3,521 |
12,463 |
10,408 |
||||||||||||
| Selling, general and administrative expenses |
25,796 |
23,383 |
74,029 |
69,015 |
||||||||||||
| Operating income |
10,471 |
9,534 |
24,342 |
18,312 |
||||||||||||
| Interest income (expense), net |
47 |
(24 |
) |
60 |
(112 |
) | ||||||||||
| Other income (expense), net |
(717 |
) |
(65 |
) |
(2,897 |
) |
(515 |
) | ||||||||
| Income before provision for income taxes |
9,801 |
9,445 |
21,505 |
17,685 |
||||||||||||
| Provision for income taxes |
1,178 |
2,595 |
4,095 |
4,050 |
||||||||||||
| Net income | $ |
8,623 |
$ |
6,850 |
$ |
17,410 |
$ |
13,635 |
||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ |
0.56 |
$ |
0.46 |
$ |
1.15 |
$ |
0.91 |
||||||||
| Diluted | $ |
0.55 |
$ |
0.45 |
$ |
1.13 |
$ |
0.90 |
||||||||
| Shares used in computing earnings per share: | ||||||||||||||||
| Basic |
15,324 |
14,984 |
15,129 |
14,931 |
||||||||||||
| Diluted |
15,743 |
15,099 |
15,462 |
15,087 |
||||||||||||
Contacts: Paul Arling (UEI) 714.918.9500
Becky Herrick (IR Agency) 415.433.3777