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Universal Electronics Reports Third Quarter 2014 Financial Results

November 6, 2014

– Increases
Gross Margin 210 Basis Points to 30.7% for the Third Quarter of 2014 –

– Grows
Operating Income 25% over the Third Quarter of 2013 –

SANTA ANA, CA– Universal Electronics Inc. (UEI), (NASDAQ: UEIC)
reported financial results for the three and nine months ended September 30,
2014.

Paul Arling, UEI’s Chairman and CEO, stated: “Our
third quarter 2014 performance reflects our ability to capture share in the
markets we serve. We continue to gain traction within the smart device channel
as some of the world’s largest companies around the globe select our advanced
device control technology and software. Our QuickSet® and Control Plus™
solutions are becoming the standard for powering the simple and almost
effortless setup and programming of a control device. By introducing next
generation solutions such as these, leveraging our core technologies and
world-renowned device code database and maintaining our commitment to
customer-focused innovation, we are working to ensure our success in the global
control technology market for years to come.”

Adjusted Pro Forma
Financial Results for the Three Months Ended September 30: 2014 Compared to
2013

•  
Net sales were $147.8 million, compared to $142.4
million.

•  
Business Category revenue was $135.2 million, compared
to $129.7 million. The Business Category contributed 91.5% of total net sales,
compared to 91.1%.

•  
Consumer Category revenue was $12.6 million, compared
to $12.7 million. The Consumer Category contributed 8.5% of total net sales,
compared to 8.9%.

•  
Gross margins were 30.7%, compared to 28.6%.

•  
Operating expenses were $28.9 million, compared to $27.6
million.

•  
Operating income was $16.4 million, compared to $13.2
million.

•  
Net income was $12.9 million, or $0.80 per diluted
share, compared to $10.7 million, or $0.68 per diluted share.

•  
At September 30, 2014, cash and cash equivalents
was $99.0 million.

Adjusted Pro Forma
Financial Results for the Nine Months Ended September 30: 2014 Compared to 2013

•  
Net sales were $423.9 million, compared to $393.2
million.

•  
Gross margins were 29.7%, compared to 28.4%.

•  
Operating expenses were $86.3 million, compared to
$79.6 million.

•  
Operating income was $39.7 million, compared to $32.0
million.

•  
Net income was $29.8 million, or $1.85 per diluted
share, compared to $23.6 million, or $1.53 per diluted share.

Financial
Outlook

For the fourth quarter of 2014, the company expects
net sales to range between $134.0 million and $142.0 million, compared to
$136.1 million in the fourth quarter of 2013. Adjusted pro forma earnings per
diluted share for the fourth quarter of 2014 are expected to range from $0.59
to $0.69, compared to adjusted pro forma earnings per diluted share of $0.55 in
the fourth quarter of 2013, which has been adjusted to reflect the exclusion of
stock-based compensation expense.

Bryan Hackworth, UEI’s CFO, stated: “Over the past
couple of years, we have stated the long-term profile of our business is one
with approximately 5% to 10% average annual revenue growth and with approximately
10% to 15% average annual earnings growth. 
However, given our success in embedding our technology in multiple smart
devices via pure licensing arrangements and/or embedded chip sales, our gross
and operating margins have expanded.  As
a result, our profile has changed and we believe we can continue to grow our
top line by an average of 5% to 10%, but we expect our earnings will grow by an
average of 10% to 20% annually.” 

Conference
Call Information

UEI’s management team will hold a conference call
today, Thursday, November 6, 2014 at 4:30 p.m. ET / 1:30 p.m. PT, to
discuss its third 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 22183829. 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 22183829.

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, stock-based compensation expense 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 across its entire
business and expansion of its share of the markets it serves, including its
core business and smart device channel (such as phones, tablets, TVs, IPTV
devices, game consoles, and wearables); the continued innovation of
next-generation solutions that are accepted by its customers and end users; the
continuation of benefits the company has experienced and anticipate due to the
licensing of the company’s technologies and patents, such as the company’s
QuickSet and Control Plus technologies; the benefits anticipated by management
from leveraging the company’s core technologies and device code database; the
continued adoption and selection of the company’s technologies and products by
the world’s largest companies in the home entertainment industries; 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.

– Tables – 

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