Universal Electronics Inc. Reports Third Quarter 2012 Financial Results
November 8, 2012
November 08, 2012
Contacts: Paul Arling (UEI) 714.820.1000
Becky Herrick (IR Agency) 415.433.3777
SANTA ANA, CA – Universal Electronics Inc. (UEI), (NASDAQ: UEIC) reported financial results for the three and nine months ended September 30, 2012.
“Contributing to our solid 2012 third quarter was our strong performance in subscription broadcasting and continued success in international markets,” stated Paul Arling, UEI's Chairman and CEO. “While consumer-centric regions such as the U.S., Western Europe and Japan remain challenged due to weaker than expected TV sales, we are leveraging our global capabilities to expand our presence into promising new regions such as Latin America, Eastern Europe and parts of Asia where we see market opportunities.”
“During the quarter, we began providing our embedded app technology to multiple leading smart phone manufacturers. We are constantly developing the innovative technologies that facilitate simple control within the ever-changing home entertainment environment. It is the consistent execution of this strategy that has brought us success over the last 25 years, and what we believe will drive our success in the years to come.”
Financial Results for the Three Months Ended September 30: 2012 Compared to 2011
- Net sales were $124.9 million, compared to $123.5 million.
- Business Category revenue was $111.9 million, compared to $111.3 million.
The Business Category contributed 89.6% of total net sales, compared to 90.1%.
- Consumer Category revenue was $13.0 million, compared to $12.2 million.
The Consumer Category contributed 10.4% of total net sales, compared to 9.9%.
- Adjusted pro forma gross margins were 29.4%, compared to 27.9%.
- Adjusted pro forma operating expenses were $25.5 million, compared to $24.0 million.
- Adjusted pro forma operating income was $11.2 million, compared to $10.5 million.
- Adjusted pro forma net income was $8.1 million, or $0.54 per diluted share, compared to $8.0 million, or $0.53 per diluted share.
- At September 30, 2012, cash and cash equivalents was $41.2 million.
Financial Results for the Nine Months Ended September 30: 2012 Compared to 2011
- Net sales were $345.3 million, compared to $351.0 million.
- Adjusted pro forma gross margins were 28.5%, compared to 27.8%.
- Adjusted pro forma operating expenses were $75.9 million, compared to $74.0 million.
- Adjusted pro forma operating income was $22.7 million, compared to $23.5 million.
- Adjusted pro forma net income was $17.1 million, or $1.13 per diluted share, compared to $17.7 million, or $1.15 per diluted share.
Bryan Hackworth, UEI’s CFO, stated: “While we continue to experience strong sales growth in subscription broadcasting both domestically and internationally, as well as in our Consumer Category, the consumer electronics channel has remained challenging. Several large Japanese consumer electronics customers have recently reduced their 2012 outlook for the second time this year, which adversely affects our sales in this channel.”
For the fourth quarter of 2012, the company expects net sales to range between $113.0 million and $119.0 million, compared to $117.6 million in the fourth quarter of 2011. Adjusted pro forma earnings per diluted share for the fourth quarter of 2012 are expected to range from $0.37 to $0.47, compared to adjusted pro forma earnings per diluted share of $0.40 in the fourth quarter of 2011.
For the full 2012 year, the company expects net sales to range between $458.0 million and
$464.0 million, compared to $468.6 million in 2011. Adjusted pro forma earnings per diluted share for 2012 are expected to range from $1.50 to $1.60, compared to adjusted pro forma earnings per diluted share of $1.55 in 2011.
Conference Call Information
UEI’s management team will hold a conference call today, Thursday, November 8, 2012 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its third quarter 2012 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 40161724. 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 40161724.
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 charges related to the write-up of inventory and depreciation related to the acquisition. Non-GAAP operating expenses is defined as cash operating expenses excluding acquisition costs, amortization of intangibles, other employee related restructuring costs as well as costs associated with moving our corporate headquarters from Cypress, CA to Santa Ana, CA. Non-GAAP net income is net income from operations excluding the aforementioned items. 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 StatementThis 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 Company’s ability to retain and gain market share; the Company’s ability to attract new customers and retain and expand our relationships with its existing customers; acceptance by consumers of the Company’s innovative tablet and smartphone embedded applications; the continued global general economic conditions;the benefits the Company expects via the growth of new markets in certain geographic areas including Latin America, Asia-Pacific region, and Eastern Europe; and other factors described in the Company's filings with the U.S. Securities and Exchange Commission. The actual results that 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.