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8-K - FORM 8-K - UNIVERSAL ELECTRONICS INC | a57740e8vk.htm |
EX-2.1 - EX-2.1 - UNIVERSAL ELECTRONICS INC | a57740exv2w1.htm |
EX-99.1 - EX-99.1 - UNIVERSAL ELECTRONICS INC | a57740exv99w1.htm |
Exhibit 99.2
Contacts: Paul Arling (UEI) 714.820.1000
Kirsten Chapman (IR Agency) 415.433.3777
Kirsten Chapman (IR Agency) 415.433.3777
Universal Electronics Reports Third Quarter 2010
Financial Results
- Also Announces Acquisition of Leading Remote Control Company
Under Separate Release Issued Today -
Financial Results
- Also Announces Acquisition of Leading Remote Control Company
Under Separate Release Issued Today -
CYPRESS, CA November 4, 2010 Universal Electronics Inc. (UEI), (NASDAQ: UEIC) reported
financial results for the third quarter ended September 30, 2010.
We are pleased to report our third quarter results were generally in line with our expectations,
stated Paul Arling, UEIs Chairman and CEO. Our business faced some headwinds in the developed
markets, most specifically in North American consumer electronics, but fared particularly well in
developing economies. Looking forward, we couldnt be more excited about the future of our
company, due in large part to the acquisition of Enson Assets Limited, including its subsidiaries
C.G. Development Limited and C.G. Technology Limited, which we also announced this afternoon.
Arling added, We expect this acquisition to place us squarely in the lead as the provider of
wireless control devices into the consumer electronics market. Additionally, this acquisition
significantly expands our product range, which will enable us to further penetrate the growing
Asian and Latin American subscription broadcast markets. Further, we have over six years of
experience working with the C.G. companies and know them well. They
have consistently been a
top supplier to UEI, due to its top-notch management team and experienced engineering group, whom
we welcome to the UEI team.
Financial Results for the Quarter Ended September 30: 2010 Compared to 2009
| Net sales were $79.0 million, compared to $83.2 million. |
§ | Business Category revenue was $66.2 million, compared to $67.0 million. The Business Category contributed 84% of total net sales, compared to 81%. | ||
§ | Consumer Category revenue was $12.8 million, compared to $16.2 million. The Consumer Category contributed 16% of total net sales, compared to 19%. |
| Gross margins were 32.6%, compared to 31.3%. | |
| Total operating expenses were $19.2 million, compared to $19.4 million. | |
| Operating income was $6.6 million, compared to $6.6 million. | |
| Interest expense was $1,000, compared to interest income of $110,000. | |
| Net income was $4.7 million, or $0.34 per diluted share, compared to $4.2 million, or $0.30 per diluted share. | |
| At September 30, 2010, cash and cash equivalents was $73.0 million. |
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Bryan Hackworth, UEIs CFO, said: While third quarter 2010 sales were down slightly relative to
the third quarter of 2009, we improved gross margins to 32.6% of sales and lowered our operating
expenses. As a result, we delivered operating margin improvement, increasing from 8.0% in the
third quarter of 2009 to 8.3% in the third quarter of 2010.
Nine-month Period Ended September 30: 2010 Compared to 2009
| Net sales were $229.3 million, compared to $232.6 million. | |
| Gross margins were 32.8%, compared to 31.4%. | |
| Total operating expenses were $58.6 million, compared to $59.1 million. | |
| Net income was $11.3 million, or $0.81 per diluted share, compared to $8.8 million, or $0.63 per diluted share. |
Financial Outlook
Today, it is expected the C.G. companies will add at least $140 million in annual revenue,
primarily in the OEM channel, to UEIs business in 2011, and at least $20 million in operating
income. The acquisition is expected to decrease the consolidated gross margin percentage by
approximately 2 percentage points; however, the consolidated operating margin percentage is
expected to increase by 2 percentage points. Overall, the acquisition is expected to result in at
least $1.00 in EPS accretion in 2011. The company expects to provide greater detail to its overall
forecast when it discloses its fourth quarter 2010 results in February 2011.
Including the C.G. acquisition in the forecast and based on historical results, fourth quarter of
2010 net sales are expected to range between $102.0 million and $108.0 million, compared to $84.9
million contributed from UEI in the fourth quarter of 2009 and approximately $13.9 million in sales
from C.G. for the comparable period corresponding to the acquisition. The comparable period for
C.G. is defined as sales from November 4th to December 31st, net of sales to
UEI.
The company anticipates gross margins for the fourth quarter of 2010 to be approximately 31.0% of
sales, plus or minus one point. For the fourth quarter of 2010, operating expenses are expected to
range from $23.6 million to $24.4 million, including approximately $1 million expenses related to
the acquisition. Earnings per diluted share for the fourth quarter of 2010 are expected to range
from $0.43 to $0.49. Earnings per diluted share were $0.42 in the fourth quarter of 2009.
Full year 2010 net sales including the C.G. acquisition are expected to range between $331.3
million and $337.3 million, compared to $317.6 million from UEI in 2009 and approximately $13.9
million from C.G. for the aforementioned comparable period. Earnings per diluted share for 2010
are expected to range from $1.24 to $1.30. Earnings per diluted share were $1.05 in 2009.
Conference Call Information
UEIs management team will hold a conference call today, Thursday, November 4, 2010 at 4:30 p.m. ET
/ 1:30 p.m. PT, to discuss its third quarter 2010 earnings results, review the quarterly 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 18361101. The conference call will also be broadcast live
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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 800-642-1687 and internationally, 706-645-9291.
Enter access code 18361101.
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 companys
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. UEI also delivers complete home control solutions in
the professional custom installation market under the brand name Nevo®. For additional
information, please visit our website at www.uei.com.
About Enson Assets Limited
Enson Assets Limited, through its wholly-owned subsidiaries C.G. Development Limited and C.G.
Technology Limited is principally engaged in the design, development, manufacture and sale of
remote control units. The manufacturing business commenced with the establishment of the Panyu
Plant in 1992. C.G. is a global market leader in the manufacturing of remote control units with a
renowned global customer base, which is comprised of industry leading brands of home appliance and
consumer electronics companies.
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 ability of the Company to successfully integrate the operations of Enson and its subsidiaries
into our operations, the failure of Enson to perform in accordance with our expectations; the
continued development of innovative control solutions and technologies that are accepted by our
customers and consumers; the continued leveraging of the Companys fixed cost structure resulting
in increased profitability and cash flow; general economic conditions; and other factors described
in the Companys 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.
Tables Follow
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UNIVERSAL ELECTRONICS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share-related data)
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share-related data)
(Unaudited)
September | December | |||||||
30, | 31, | |||||||
2010 | 2009 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 23,447 | $ | 29,016 | ||||
Term deposit |
49,536 | 49,246 | ||||||
Accounts receivable, net |
57,990 | 64,392 | ||||||
Inventories, net |
44,615 | 40,947 | ||||||
Prepaid expenses and other current assets |
1,594 | 2,423 | ||||||
Income tax receivable |
480 | | ||||||
Deferred income taxes |
2,938 | 3,016 | ||||||
Total current assets |
180,600 | 189,040 | ||||||
Equipment, furniture and fixtures, net |
10,913 | 9,990 | ||||||
Goodwill |
13,609 | 13,724 | ||||||
Intangible assets, net |
11,323 | 11,572 | ||||||
Other assets |
757 | 1,144 | ||||||
Deferred income taxes |
7,853 | 7,837 | ||||||
Total assets |
$ | 225,055 | $ | 233,307 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 30,969 | $ | 39,514 | ||||
Accrued sales discounts, rebates and royalties |
6,692 | 6,028 | ||||||
Accrued income taxes |
| 3,254 | ||||||
Accrued compensation |
5,650 | 4,619 | ||||||
Other accrued expenses |
6,088 | 8,539 | ||||||
Total current liabilities |
49,399 | 61,954 | ||||||
Long-term liabilities: |
||||||||
Deferred income taxes |
159 | 153 | ||||||
Income tax payable |
1,348 | 1,348 | ||||||
Other long-term liabilities |
78 | 122 | ||||||
Total liabilities |
50,984 | 63,577 | ||||||
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; 19,270,607 and 19,140,232 shares
issued on September 30, 2010 and December 31,
2009, respectively |
193 | 191 | ||||||
Paid-in capital |
133,078 | 128,913 | ||||||
Accumulated other comprehensive (loss) income |
(168 | ) | 1,463 | |||||
Retained earnings |
130,304 | 118,989 | ||||||
263,407 | 249,556 | |||||||
Less cost of common stock in treasury, 5,921,136
and 5,449,962 shares on September 30, 2010 and
December 31, 2009, respectively |
(89,336 | ) | (79,826 | ) | ||||
Total stockholders equity |
174,071 | 169,730 | ||||||
Total liabilities and stockholders equity |
$ | 225,055 | $ | 233,307 | ||||
4
UNIVERSAL ELECTRONICS INC.
CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share amounts)
(Unaudited)
CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net sales |
$ | 79,007 | $ | 83,182 | $ | 229,275 | $ | 232,611 | ||||||||
Cost of sales |
53,289 | 57,112 | 154,068 | 159,609 | ||||||||||||
Gross profit |
25,718 | 26,070 | 75,207 | 73,002 | ||||||||||||
Research and development expenses |
2,687 | 2,251 | 7,944 | 6,411 | ||||||||||||
Selling, general and administrative expenses |
16,465 | 17,175 | 50,694 | 52,724 | ||||||||||||
Operating income |
6,566 | 6,644 | 16,569 | 13,867 | ||||||||||||
Interest (expense) income, net |
(1 | ) | 110 | 99 | 376 | |||||||||||
Other income (expense), net |
40 | 25 | 62 | (161 | ) | |||||||||||
Income before provision for income taxes |
6,605 | 6,779 | 16,730 | 14,082 | ||||||||||||
Provision for income taxes |
(1,903 | ) | (2,556 | ) | (5,415 | ) | (5,247 | ) | ||||||||
Net income |
$ | 4,702 | $ | 4,223 | $ | 11,315 | $ | 8,835 | ||||||||
Earnings per share: |
||||||||||||||||
Basic |
$ | 0.35 | $ | 0.31 | $ | 0.83 | $ | 0.65 | ||||||||
Diluted |
$ | 0.34 | $ | 0.30 | $ | 0.81 | $ | 0.63 | ||||||||
Shares used in computing earnings per share: |
||||||||||||||||
Basic |
13,417 | 13,687 | 13,572 | 13,656 | ||||||||||||
Diluted |
13,671 | 14,008 | 13,897 | 13,940 | ||||||||||||
5
UNIVERSAL ELECTRONICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended | ||||||||
September 30, | ||||||||
2010 | 2009 | |||||||
Cash provided by operating activities: |
||||||||
Net income |
$ | 11,315 | $ | 8,835 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
4,660 | 5,019 | ||||||
Provision for doubtful accounts |
661 | 181 | ||||||
Provision for inventory write-downs |
1,914 | 2,861 | ||||||
Deferred income taxes |
17 | (297 | ) | |||||
Tax benefit from exercise of stock options |
102 | 374 | ||||||
Excess tax benefit from stock-based compensation |
(131 | ) | (198 | ) | ||||
Shares issued for employee benefit plan |
375 | 530 | ||||||
Stock-based compensation |
3,757 | 3,184 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
4,508 | 4,474 | ||||||
Inventories |
(6,069 | ) | (1,931 | ) | ||||
Prepaid expenses and other assets |
1,158 | 883 | ||||||
Accounts payable and accrued expenses |
(8,229 | ) | (3,241 | ) | ||||
Accrued income taxes |
(3,407 | ) | 202 | |||||
Net cash provided by operating activities |
10,631 | 20,876 | ||||||
Cash used for investing activities: |
||||||||
Term deposit |
(290 | ) | (49,125 | ) | ||||
Acquisition of equipment, furniture and fixtures |
(4,449 | ) | (4,142 | ) | ||||
Acquisition of intangible assets |
(1,061 | ) | (988 | ) | ||||
Acquisition of assets from Zilog, Inc. |
| (9,502 | ) | |||||
Net cash used for investing activities |
(5,800 | ) | (63,757 | ) | ||||
Cash used for financing activities: |
||||||||
Proceeds from stock options exercised |
257 | 2,412 | ||||||
Treasury stock purchased |
(9,835 | ) | (5,242 | ) | ||||
Excess tax benefit from stock-based compensation |
131 | 198 | ||||||
Net cash used for financing activities |
(9,447 | ) | (2,632 | ) | ||||
Effect of exchange rate changes on cash |
(953 | ) | 374 | |||||
Net decrease in cash and cash equivalents |
(5,569 | ) | (45,139 | ) | ||||
Cash and cash equivalents at beginning of period |
29,016 | 75,238 | ||||||
Cash and cash equivalents at end of period |
$ | 23,447 | $ | 30,099 | ||||
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