Universal Electronics Reports Fourth Quarter and Year-End 2014 Financial Results
February 19, 2015
- Increased Q4 2014 Net Income 29% Compared to Q4 2013 –
- Grew Full Year 2014 Net Income 27% Compared to Full Year 2013 -
- Increased Cash and Cash Equivalents to $112.5 Million at December 31, 2014 -
SANTA ANA, CA – Universal Electronics Inc. (UEI), (NASDAQ: UEIC) reported financial results for the three and twelve months ended December 31, 2014.
Paul Arling, UEI's Chairman and CEO, stated: “Our fourth quarter financial results reflect the strong performance across our entire business and closes out the most successful year in our history. Our innovative products and technologies continue to be adopted by industry-leading companies around the world. In subscription broadcasting, customers including Comcast, Cox, Charter, Cablevision and AT&T all introduced new products into the market featuring UEI solutions. We also gained traction with our embedded software solutions for smart devices as our technology was included in a breadth of products including TVs, set-top boxes, game consoles, smartphones and tablets.
“At the International Consumer Electronics Show in January, we demonstrated the next step in smart device integration as we introduced QuickSet 3.0 with Control Plus. This innovation enables the automation of set up for all home entertainment control devices and complete integration with compatible second screen apps. This latest innovation gets us even closer to the day where home entertainment control is completely automated and intuitive. Our solutions re-define exactly what a “remote control” is and what a remote control is able to do – a competitive differentiator that we believe will ensure our leadership position in the industry for years to come,” concluded Arling.
Adjusted Pro Forma Financial Results for the Three Months Ended December 31: 2014 Compared to 2013
- Net sales were $138.4 million, compared to $136.1 million.
- Business Category revenue was $120.7 million, compared to $117.2 million. The Business Category contributed 87.2% of total net sales, compared to 86.1%.
- Consumer Category revenue was $17.7 million, compared to $18.9 million. The Consumer Category contributed 12.8% of total net sales, compared to 13.9%.
- Gross margins were 30.3%, compared to 30.0%.
- Operating expenses were $29.1 million in both periods.
- Operating income was $12.8 million, compared to $11.8 million.
- Net income was $11.3 million, or $0.70 per diluted share, compared to $8.8 million, or $0.55 per diluted share.
- At December 31, 2014, cash and cash equivalents was $112.5 million.
Adjusted Pro Forma Financial Results for the Twelve Months Ended December 31: 2014 Compared to 2013
- Net sales were $562.3 million, compared to $529.4 million.
- Gross margins were 29.8%, compared to 28.8%.
- Operating expenses were $115.3 million, compared to $108.7 million.
- Operating income was $52.5 million, compared to $43.9 million.
- Net income was $41.1 million, or $2.55 per diluted share, compared to $32.4 million, or $2.08 per diluted share.
For the first quarter of 2015, the company expects net sales to range between $133.0 million and $141.0 million, compared to $129.8 million in the first quarter of 2014. Adjusted pro forma earnings per diluted share for the first quarter of 2015 are expected to range from $0.41 to $0.51, compared to adjusted pro forma earnings per diluted share of $0.40 in the first quarter of 2014. The company continues to expect the long-term financial profile of its business will reflect average annual sales growth of approximately 5% to 10%, and average annual earnings growth of approximately 10% to 20%.
Conference Call Information
UEI’s management team will hold a conference call today, Thursday, February 19, 2015 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its fourth quarter and year-end 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 77974818. 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 77974818.
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 and adjustments to certain deferred tax assets and liabilities resulting from tax law changes. 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 subscription broadcast business and smart device channel; the continued innovation of next-generation solutions (such as QuickSet 3.0 with Control Plus) that are accepted by its customers and end users; management’s ability to manage its business to achieve its revenue and earnings as guided; 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.