Universal Electronics Reports Second Quarter 2017 Financial Results

August 3, 2017

SANTA ANA, CA – Universal Electronics Inc. (UEI), (NASDAQ: UEIC) reported financial results for the three and six months ended June 30, 2017.

“Our second quarter 2017 financial results were in line with our expectations; net sales increased 3%, operating income grew 8% and EPS increased 5% over last year’s second quarter,” stated Paul Arling, UEI's Chairman and CEO. “Major cable operators such as Comcast, Cox and Shaw continue to upgrade their customers to new offerings such as the X1 Entertainment Operating System® and X1 Voice Remote. Additional operators, on a worldwide basis, are now progressing through the design and testing stages of advanced home entertainment and home control platforms powered by UEI technology. Our customers are introducing platforms with new connection protocols and a new suite of devices – such as home security and sensing, and energy monitoring and management – all of which can now be centrally and simply controlled. By enabling that connection, UEI continues to gain momentum supplying the industry with the solutions that serve the increasingly complex smart home environment. Due to our long-standing relationships with the world’s leading subscription broadcasters and consumer electronics OEMs, our diverse portfolio of technologies and solutions, as well as our long history of innovation, UEI is well positioned to capitalize on this long-term growth opportunity.”

Financial Results for the Three Months Ended June 30: 2017 Compared to 2016

  • GAAP net sales were $177.6 million, compared to $171.0 million; Adjusted Non-GAAP net sales were $177.9 million, compared to $172.2 million.
  • GAAP gross margins were 24.6%, compared to 25.4%; Adjusted Non-GAAP gross margins were 25.9%, compared to 26.1%.
  • GAAP operating income was $7.3 million, compared to $8.0 million; Adjusted Non-GAAP operating income was $15.8 million, compared to $14.7 million.
  • GAAP net income was $4.7 million, or $0.32 per diluted share, compared to $6.6 million or $0.45 per diluted share; Adjusted Non-GAAP net income was $11.4 million, or $0.78 per diluted share, compared to $10.9 million, or $0.74 per diluted share.
  • At June 30, 2017, cash and cash equivalents were $49.7 million, compared to $50.6 million at December 31, 2016.

Financial Results for the Six Months Ended June 30: 2017 Compared to 2016

  • GAAP net sales were $339.0 million, compared to $321.6 million; Adjusted Non-GAAP net sales were $340.2 million, compared to $323.7 million.
  • GAAP gross margins were 25.0%, compared to 25.2%; Adjusted Non-GAAP gross margins were 26.3%, compared to 25.9%.
  • GAAP operating income was $6.9 million, compared to $11.0 million; Adjusted Non-GAAP operating income was $27.5 million, compared to $24.0 million.
  • GAAP net income was $4.8 million, or $0.33 per diluted share, compared to $9.3 million or $0.63 per diluted share; Adjusted Non-GAAP net income was $20.6 million, or $1.40 per diluted share, compared to $17.7 million, or $1.20 per diluted share.

Financial Outlook

For the third quarter of 2017, the company expects GAAP net sales to range between $178 million and $186 million, compared to $169.2 million in the third quarter of 2016. GAAP earnings per diluted share for the third quarter of 2017 is expected to range from $0.50 to $0.60, compared to GAAP earnings per diluted share of $0.53 in the third quarter of 2016.

For the third quarter of 2017, the company expects Adjusted Non-GAAP net sales to range between $178 million and $186 million, compared to $170.3 million in the third quarter of 2016. Adjusted Non-GAAP earnings per diluted share are expected to range from $0.80 to $0.90, compared to Adjusted Non-GAAP earnings per diluted share of $0.93 in the third quarter of 2016. The third quarter Adjusted Non-GAAP earnings per diluted share estimate excludes $0.30 per share related to stock-based compensation, amortization of acquired intangibles, factory inefficiencies at an underutilized factory, severance related to the consolidation of manufacturing facilities, changes in contingent consideration related to acquisitions, and income tax adjustments.

Conference Call Information

UEI’s management team will hold a conference call today, Thursday, August 3, 2017 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its second quarter 2017 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 56476115. The conference call will also be broadcast live at www.uei.com where it will be available for replay for one year. In addition, a replay 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 dial 404-537-3406. The access code is 56476115.

Use of Non-GAAP Financial Metrics

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, UEI provides Adjusted Non-GAAP information as additional information for its operating results. References to Adjusted Non-GAAP information are to non-GAAP financial measures. These measures are not required by, in accordance with, or an alternative for, GAAP and may be different from non-GAAP financial measures used by other companies. UEI’s management uses these measures for reviewing the financial results of UEI, for budget planning purposes, and for making operational and financial decisions and believes that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, helps investors evaluate UEI’s core operating and financial performance and business trends consistent with how management evaluates such performance and trends.  Additionally, management believes these measures facilitate comparisons with the core operating and financial results and business trends of competitors and other companies.

Adjusted Non-GAAP net sales is defined as net sales excluding the impact of stock-based compensation for performance-based warrants. Adjusted Non-GAAP gross profit is defined as gross profit excluding stock-based compensation expense, cost of goods sold and depreciation expense related to the increase in inventories and fixed assets from cost to fair market value resulting from acquisitions, amortization of intangibles acquired, and excess manufacturing overhead. Adjusted Non-GAAP operating expenses are defined as operating expenses excluding amortization of intangibles acquired, stock-based compensation expense, employee related restructuring costs, litigation settlement costs and changes in contingent consideration related to acquisitions as well as other acquisition related costs and nonrecurring items. Adjusted Non-GAAP net income is defined as net income excluding the aforementioned items, foreign currency gains and losses, and the related tax effects of all adjustments, as well as the income tax effects of nondeductible projected losses to be incurred as a result of the shutdown of the company’s Guangzhou factory. Adjusted Non-GAAP diluted earnings per share attributable to Universal Electronics Inc. is calculated using Adjusted Non-GAAP net income attributable to Universal Electronics Inc. A reconciliation of these financial measures to the most directly comparable GAAP financial measures is included at the end of this press release.

About Universal Electronics

Universal Electronics Inc. is the worldwide leader in universal control and sensing technologies for the smart home. For more information, please visit www.uei.com/about.

Note on Forward-looking Statements

This press release and accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including net sales, profit margin and earnings trends, estimates and assumptions; our expectations about new product introductions; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those we identify below and other risk factors that we identify in our most recent annual report on Form 10-K and the periodic reports filed thereafter. Risks that could affect forward-looking statements in this press release include changes in market conditions; the continued adoption of our advanced control technologies by our customers as anticipated by management, the convergence of smart home devices and technologies as anticipated by management, the introduction and acceptance of next-generation home entertainment platforms as expected by management, the pace of the economy; competitive conditions in the industries we serve, including the smart home and residential and commercial security industries; and relationships with our customers and our ability to attract new customers, our ability to successfully and profitably transition our manufacturing operations, and our continued ability to maintain and/or improve our margins and cost effective operations. Any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release. We make these forward-looking statements as of August 3, 2017. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

– Tables Are Here – 

Contacts:

Paul Arling (UEI) 714.918.9500

Becky Herrick (IR Agency) 415.433.3777

Press Contact

Benny Canady
UEI Corporate Marketing and Public Relations
714-918-9500

Contact Us

News Archive
2017
2016
2015
2014
2013
2012