– Increases Net Sales 7% and Net Income 31% Compared to the Second Quarter of 2013 –
Universal Electronics Inc. (UEI), (NASDAQ: UEIC) reported financial results for the three and six months ended June 30, 2014.
Paul Arling, UEI’s Chairman and CEO, stated: “Our strong performance in 2014 continued in the second quarter as we expanded our share of the global wireless control technology market. Supported by ongoing strength in our core business and traction in the smart device channel, we grew net sales 7% while yielding a 31% increase in the bottom line. In the past 27 years, we have established the most widely deployed and world-renowned device code database making UEI the global leader in the wireless control technology market. This competitive advantage, along with our continued focus on delivering innovative, next-generation solutions, has proven successful as we grew at a compound annual growth rate of 15% for both sales and earnings over the last decade and we just recorded our 66th consecutive quarter of profitability. We believe now more than ever that we are well positioned to continue expanding our footprint in the high-growth markets we serve.”
Adjusted Pro Forma Financial Results for the Three Months Ended June 30: 2014 Compared to 2013
- Net sales were $146.3 million, compared to $136.1 million.
- Business Category revenue was $132.7 million, compared to $124.2 million. The Business Category contributed 90.7% of total net sales, compared to 91.3%.
- Consumer Category revenue was $13.6 million, compared to $11.9 million. The Consumer Category contributed 9.3% of total net sales, compared to 8.7%.
- Gross margins were 29.9%, compared to 28.0%.
- Operating expenses were $29.3 million, compared to $25.6 million.
- Operating income was $14.5 million, compared to $12.5 million.
- Net income was $10.6 million, or $0.66 per diluted share, compared to $8.1 million, or $0.53 per diluted share.
- At June 30, 2014, cash and cash equivalents was $87.6 million.
Adjusted Pro Forma Financial Results for the Six Months Ended June 30: 2014 Compared to 2013
- Net sales were $276.2 million, compared to $250.8 million.
- Gross margins were 29.2%, compared to 28.3%.
- Operating expenses were $57.3 million, compared to $52.1 million.
- Operating income was $23.2 million, compared to $18.9 million.
- Net income was $17.0 million, or $1.05 per diluted share, compared to $12.9 million, or $0.84 per diluted share.
For the third quarter of 2014, the company expects net sales to range between $149.0 million and $157.0 million, compared to $142.4 million in the third quarter of 2013. Adjusted pro forma earnings per diluted share for the third quarter of 2014 are expected to range from $0.70 to $0.80, compared to adjusted pro forma earnings per diluted share of $0.68 in the third quarter of 2013, which has been adjusted to reflect the exclusion of stock-based compensation expense.
Conference Call Information
UEI’s management team will hold a conference call today, Thursday, August 7, 2014 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its second quarter 2014 earnings results, review recent activity and answer questions. To access the call in the U.S. please dial 877-843-0414 and for international calls dial 315-625-3071 approximately 10 minutes prior to the start of the conference. The conference ID is 75517052. 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 75517052.
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 stock-based compensation expense. 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 across its entire business and expansion of its share of the markets it serves, including its core business and smart device channel (such as smartphones, tablets, smart TVs, IPTV devices, game consoles, smartwatches and over-the-top-services); the continued innovation of next-generation solutions that are accepted by its customers and end users; the continued acceptance by its customers of its device code database; and the 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.
Paul Arling (UEI) 714.918.9500
Becky Herrick (IR Agency) 415.433.3777
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