Universal Electronics Reports Fourth Quarter and Year End 2008 Financial Results
Feb 19, 2009
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“Our record fourth quarter sales once again illustrated our strengths,”
stated
“Looking ahead, we will continue to build the business for the long term and invest in our unique assets: our technology, our database and our people. We will further our strategy to leverage our portfolio of brands, our solid financial position and our strong reputation to stay several steps ahead of our competitors. We provide the innovative wireless controls that serve the ever-changing trends in the industry and complexity of the home,” added Arling.
Quarterly Financial Results: Fourth Quarter 2008 Compared to Fourth Quarter 2007
-
Net sales were
$78.7 million , compared to$66.2 million .-
Business Category revenue was
$65.1 million , compared to$48.1 million . The Business Category contributed 83% of total net sales, compared to 73%. -
Consumer Category revenue was
$13.6 million , compared to$18.2 million . The Consumer Category contributed 17% of total net sales, compared to 27%.
-
Business Category revenue was
- Gross margins were 32.2%, compared to 37.2%.
-
Total operating expenses were
$17.5 million , compared to$16.6 million . -
Net income was
$5.8 million , or$0.42 per diluted share, compared to$6.1 million , or$0.40 per diluted share. -
At
December 31 st, the cash and cash equivalents balance was$75.2 million .
Twelve-Month Period Financial Results
Ended
-
Net sales were
$287.1 million , compared to$272.7 million . - Gross margins were 33.5%, compared to 36.4%.
-
Total operating expenses were
$75.4 million , compared to$72.9 million . -
Net income was
$15.8 million , or$1.09 per diluted share, compared to$20.2 million , or$1.33 per diluted share.
Financial Outlook
For the first quarter of 2009, net sales are expected to range between
“Our gross margin projections for the first quarter of 2009 reflect the strengthening of the U.S. dollar versus the British pound and Euro; a lower contribution from our Consumer Category, which yields a higher gross margin than our Business Category; and consumers trending towards value oriented products that yield lower gross margins. However, we anticipate our gross margins will improve in 2009 through cost saving initiatives. In addition, we have new high-margin licensing agreements that we expect to close during 2009,” concluded Hackworth.
For the first quarter of 2009, operating expenses are expected to range
from
Management expects full year 2009 net sales to grow between 0% and 5%
from
Recent Highlights
-
Acquired from
Zilog Inc. certain patents and other intellectual property and assets related to its universal remote control business, including Zilog’s full library and database of infrared codes and software tools, for approximately$9.5 million in cash.-
Hired Dr.
Norman Sheridan , Zilog’s Executive Vice President of Technology and Operations and CTO. -
Hired personnel related to Zilog’s universal remote control
business in
the United States andAsia .
-
Hired Dr.
-
Introduced significant software upgrades to the NevoS70 and the
NevoQ50 wireless home control devices during the 2009 International
Consumer Electronics Show in January in
Las Vegas .
Conference Call Information
UEI’s management team will hold a conference call today,
About
Founded in 1986,
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 changes in wireless
control and semiconductor market conditions and demand; technological
and product development risks; the future performance of the acquired
technologies; the timing and success of the Company’s integration of the
patented and software technologies recently acquired with the Company’s
existing technologies, including the successful transition of recently
hired personnel and technology development; the ability to realize
anticipated synergies from the
| UNIVERSAL ELECTRONICS INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
|
(In thousands, except share-related data) |
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|
(Unaudited) |
||||||||
| December 31, | ||||||||
| 2008 | 2007 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 75,238 | $ | 86,610 | ||||
| Accounts receivable, net | 59,825 | 60,146 | ||||||
| Inventories, net | 43,675 | 34,906 | ||||||
| Prepaid expenses and other current assets | 3,461 | 1,874 | ||||||
| Deferred income taxes | 2,421 | 2,871 | ||||||
| Total current assets | 184,620 | 186,407 | ||||||
| Equipment, furniture and fixtures, net | 8,686 | 7,558 | ||||||
| Goodwill | 10,757 | 10,863 | ||||||
| Intangible assets, net | 5,637 | 5,700 | ||||||
| Other assets | 609 | 369 | ||||||
| Deferred income taxes | 7,246 | 6,388 | ||||||
| Total assets | $ | 217,555 | $ | 217,285 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 44,705 | $ | 29,382 | ||||
| Accrued sales discounts, rebates and royalties | 4,848 | 4,671 | ||||||
| Accrued income taxes | 2,334 | 1,720 | ||||||
| Accrued compensation | 3,617 | 3,737 | ||||||
| Other accrued expenses | 6,813 | 6,567 | ||||||
| Total current liabilities | 62,317 | 46,077 | ||||||
| Long-term liabilities: | ||||||||
| Deferred income taxes | 130 | 127 | ||||||
| Income tax payable | 1,442 | 1,506 | ||||||
| Other long term liabilities | 313 | 1,333 | ||||||
| Total liabilities | 64,202 | 49,043 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $.01 par value, 5,000,000 shares authorized; none issued or outstanding | — | — | ||||||
| Common stock, $.01 par value, 50,000,000 shares authorized; 18,715,833 and 18,547,019 shares issued at December 31, 2008 and 2007, respectively | 187 | 185 | ||||||
| Paid-in capital | 120,551 | 114,441 | ||||||
| Accumulated other comprehensive income | 750 | 11,221 | ||||||
| Retained earnings | 104,314 | 88,508 | ||||||
| 225,802 | 214,355 | |||||||
| Less cost of common stock in treasury, 5,070,319 and 3,975,439 shares at December 31, 2008 and 2007, respectively | (72,449 | ) | (46,113 | ) | ||||
| Total stockholders’ equity | 153,353 | 168,242 | ||||||
| Total liabilities and stockholders’ equity | $ | 217,555 | $ | 217,285 | ||||
| UNIVERSAL ELECTRONICS INC. | |||||||||||||||
| CONSOLIDATED INCOME STATEMENTS | |||||||||||||||
|
(In thousands, except per share amounts) |
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|
(Unaudited) |
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| Three Months Ended | Twelve Months Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
|
2008 |
2007 |
2008 |
2007 |
||||||||||||
|
Net sales |
$ |
78,693 |
$ |
66,222 |
$ |
287,100 |
$ |
272,680 |
|||||||
|
Cost of sales |
53,378 |
41,575 |
190,910 |
173,329 |
|||||||||||
|
Gross profit |
25,315 |
24,647 |
96,190 |
99,351 |
|||||||||||
|
Research and development |
1,858 |
2,159 |
8,160 |
8,820 |
|||||||||||
|
Selling, general and administrative expenses |
15,646 |
14,469 |
67,269 |
|
64,080 |
||||||||||
|
Operating expenses |
17,504 |
16,628 |
75,429 |
72,900 |
|||||||||||
|
Operating income |
7,811 |
8,019 |
20,761 |
26,451 |
|||||||||||
|
Interest income, net |
(368 |
) |
(905 |
) |
(3,017 |
) |
|
(3,104 |
) |
||||||
|
Other (income) expense, net |
(548 |
) |
127 |
(311 |
) |
|
(7 |
) |
|||||||
|
Income before income taxes |
8,727 |
8,797 |
24,089 |
|
29,562 |
||||||||||
|
Provision for income taxes |
(2,894 |
) |
(2,665 |
) |
(8,283 |
) |
|
(9,332 |
) |
||||||
|
Net income |
$ |
5,833 |
$ |
6,132 |
$ |
15,806 |
|
$ |
20,230 |
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| Earnings per share: | |||||||||||||||
| Basic | $ | 0.43 | $ | 0.42 | $ | 1.13 | $ | 1.40 | |||||||
| Diluted | $ | 0.42 | $ | 0.40 | $ | 1.09 | $ | 1.33 | |||||||
| Shares used in computing earnings per share: | |||||||||||||||
| Basic | 13,638 | 14,565 | 14,015 | 14,410 | |||||||||||
|
Diluted |
13,903 |
15,257 |
14,456 |
15,177 |
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| UNIVERSAL ELECTRONICS INC. | ||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
|
(In thousands) |
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|
(Unaudited) |
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| Year Ended December 31, | ||||||||||||
| 2008 | 2007 | 2006 | ||||||||||
| Cash provided by operating activities: | ||||||||||||
| Net income | $ | 15,806 | $ | 20,230 | $ | 13,520 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | 6,084 | 4,675 | 4,187 | |||||||||
| Provision for doubtful accounts | 442 | 23 | 210 | |||||||||
| Provision for inventory write-downs | 2,671 | 2,146 | 1,810 | |||||||||
| Deferred income taxes | (448 | ) | 219 | (637 | ) | |||||||
| Tax benefit from exercise of stock options | 431 | 3,339 | 827 | |||||||||
| Excess tax benefit | (344 | ) | (3,320 | ) | (275 | ) | ||||||
| Shares issued for employee benefit plan | 633 | 631 | 529 | |||||||||
| Stock-based compensation | 4,243 | 3,521 | 3,117 | |||||||||
| Write down of investment in private company | — | — | — | |||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | (1,478 | ) | (5,033 | ) | (7,120 | ) | ||||||
| Inventories | (12,219 | ) | (9,194 | ) | (280 | ) | ||||||
| Prepaid expenses and other assets | (1,888 | ) | 837 | 1,459 | ||||||||
| Accounts payable and accrued expenses | 15,557 | 3,982 | 2,546 | |||||||||
| Accrued income and other taxes | 662 | (2,119 | ) | (2,681 | ) | |||||||
| Net cash provided by operating activities | 30,152 | 19,937 | 17,212 | |||||||||
| Cash used for investing activities: | ||||||||||||
| Acquisition of equipment, furniture and fixtures | (5,945 | ) | (4,802 | ) | (4,057 | ) | ||||||
| Acquisition of intangible assets | (1,475 | ) | (1,381 | ) | (1,011 | ) | ||||||
| Net cash used for investing activities | (7,420 | ) | (6,183 | ) | (5,068 | ) | ||||||
| Cash provided by (used for) financing activities: | ||||||||||||
| Proceeds from stock options exercised | 1,158 | 12,597 | 7,497 | |||||||||
| Treasury stock purchased | (26,689 | ) | (14,519 | ) | (2,589 | ) | ||||||
| Excess tax benefit from stock-based compensation | 344 | 3,320 | 275 | |||||||||
| Net cash provided by (used for) financing activities | (25,187 | ) | 1,398 | 5,183 | ||||||||
| Effect of exchange rate changes on cash | (8,917 | ) | 5,383 | 5,107 | ||||||||
| Net increase in cash and cash equivalents | (11,372 | ) | 20,535 | 22,434 | ||||||||
| Cash and cash equivalents at beginning of year | 86,610 | 66,075 | 43,641 | |||||||||
| Cash and cash equivalents at end of year | $ | 75,238 | $ | 86,610 | $ | 66,075 | ||||||
Supplemental Cash Flow Information — Income taxes paid were
Source:
UEI
Paul Arling, 714-820-1000
or
IR Agency
Kirsten
Chapman, 415-433-3777