Universal Electronics Reports Second Quarter 2015 Financial Results
August 6, 2015
- Reported net sales of $147.6 million and EPS of $0.67 -
- Signed agreement to acquire the assets of Ecolink Intelligent Technology, Inc. -
SANTA ANA, CA – Universal Electronics Inc. (UEI), (NASDAQ: UEIC) reported financial results for the three and six months ended June 30, 2015.
Paul Arling, UEI's Chairman and CEO, stated: “Our second quarter financial results were in line with our expectations as we achieved net sales of $147.6 million and EPS of $0.67. It is important to note 2014 represented the most successful year in UEI’s history, making these 2015 results all the more impressive. We believe this is just the beginning. Today, we announced an agreement to acquire the assets of Ecolink, a leading provider of smart home solutions. Coupling these solutions with our existing products and technologies, we will enable the various devices in the increasingly complex home to be controlled by and/or communicate with each other. Most significantly for UEI, we now have a broader set of solutions to offer our existing service provider customers who are at the forefront of this trend.”
“In addition, just last week we reached an important milestone as QuickSet has now shipped in more than 150 million devices around the world. Industry-leading companies continue to adopt our products and technologies as they seek to provide consumers with increasingly advanced features for controlling their home entertainment devices. We saw below average order volumes from some of our customers in the second quarter as they depleted their existing inventories in advance of their new advanced product rollouts. We expect our customers to ramp up their orders for these new products in the second half of 2015.”
Adjusted Pro Forma Financial Results for the Three Months Ended June 30: 2015 Compared to 2014
- Net sales were $147.6 million, compared to $146.3 million.
- Business Category revenue was $135.5 million, compared to $132.7 million. The Business Category contributed 91.8% of total net sales, compared to 90.7%.
- Consumer Category revenue was $12.1 million, compared to $13.6 million. The Consumer Category contributed 8.2% of total net sales, compared to 9.3%.
- Gross margins were 27.5%, compared to 29.9%.
- Operating expenses were $27.0 million, compared to $29.3 million.
- Operating income was $13.5 million, compared to $14.5 million.
- Net income was $10.7 million, or $0.67 per diluted share, compared to $10.6 million, or $0.66 per diluted share.
- At June 30, 2015, cash and cash equivalents was $82.2 million.
Adjusted Pro Forma Financial Results for the Six Months Ended June 30: 2015 Compared to 2014
- Net sales were $280.3 million, compared to $276.2 million.
- Gross margins were 27.9%, compared to 29.2%.
- Operating expenses were $55.6 million, compared to $57.3 million.
- Operating income was $22.6 million, compared to $23.2 million.
- Net income was $18.2 million, or $1.13 per diluted share, compared to $17.0 million, or $1.05 per diluted share.
For the third quarter of 2015, the company expects net sales to range between $164.0 million and $172.0 million, compared to $147.8 million in the third quarter of 2014. Adjusted pro forma earnings per diluted share for the third quarter of 2015 are expected to range from $0.77 to $0.87, compared to adjusted pro forma earnings per diluted share of $0.80 in the third quarter of 2014.
Acquisition of Assets from Ecolink Intelligent Technology, Inc.
In a separate press release, UEI announced it has agreed to acquire the assets of U.S.-based Ecolink Intelligent Technology, a leading developer of smart home technology. The company designs, develops and manufactures a wide range of innovative and intelligent wireless security and home automation products dedicated to redefining the home security experience. Ecolink has over 20 years of combined experience in the residential security industry and holds more than 25 pending and issued patents.
Conference Call Information
UEI’s management team will hold a conference call today, Thursday, August 6, 2015 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its second quarter 2015 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 86195150. 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 code86195150.
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. 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 company’s ability to maintain and build its relationships with key customers; the company’s ability to anticipate the needs and wants of its customers and timely develop and deliver products that will meet those needs and wants; the timing of new product rollout orders from the company’s customers as anticipated by management; the continued trend of the home entertainment industry in providing consumers with more advanced technologies; the successful closing of the transaction between UEI and Ecolink and integration of their respective business lines; the timely development, delivery and market acceptance of products and technologies such as home security, home automation, wireless sensors and other technologies identified in this release; the continued penetration and growth of next generation consumer technologies; 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.
Paul Arling (UEI) 714.918.9500
Becky Herrick (IR Agency) 415.433.3777