Universal Electronics Reports First Quarter 2013 Financial Results
Universal Electronics Reports First Quarter 2013 Financial Results
- Net sales increase 11% over first quarter 2012 -
- Adjusted pro forma operating income up 33% over first quarter 2012 -
SANTA ANA, Calif.--(BUSINESS WIRE)-- Universal Electronics Inc. (UEI), (NAS: UEIC) reported financial results for the three months ended March 31, 2013.
"Our first quarter results reflect overall solid performance," stated Paul Arling, UEI's Chairman and CEO. "Subscription broadcasting remains a strong contributor to sales, particularly in the Americas and Europe where subscribers continue to upgrade and add new services. Our core businesses also remain strong, and we are gaining traction by embedding our technologies into new categories including smart devices such as smartphones, tablets, smart TVs, game consoles and over-the-top services. Interfaces are becoming more dynamic and complex, presenting significant opportunities for UEI as we are the recognized leader in providing comprehensive yet simple device control technologies. We are talking to all the major players in the midst of their development plans, and the future has never looked brighter."
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%.
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 $124.0 million and $130.0 million, compared to $116.7 million in the second quarter of 2012. Adjusted pro forma earnings per diluted share for the second quarter of 2013 are expected to range from $0.36 to $0.46, compared to adjusted pro forma earnings per diluted share of $0.41 in the second quarter of 2012.
Conference Call Information
UEI's management team will hold a conference call today, Thursday, May 2, 2013 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its first 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 44476932. 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 44476932.
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 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. For additional information, please 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; 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 Americas and Europe; 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.
UNIVERSAL ELECTRONICS INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share-related data) (Unaudited) | ||||||||
March 31, 2013 | December 31, 2012 | |||||||
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 | ||||
UNIVERSAL ELECTRONICS INC. CONSOLIDATED INCOME STATEMENTS (In thousands, except per share amounts) (Unaudited) | ||||||||
Three Months Ended March 31, | ||||||||
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 | ||||||
UNIVERSAL ELECTRONICS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) | ||||||||
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 | ||||
UNIVERSAL ELECTRONICS INC. RECONCILIATION OF ADJUSTED PRO FORMA FINANCIAL RESULTS (In thousands) (Unaudited) | ||||||||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
GAAP | Adjustments | Adjusted Pro Forma | GAAP | Adjustments | Adjusted Pro Forma | |||||||||||||||||||
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 | ||||||||||||||||||||
