News Details


Universal Electronics Reports Strong Fourth Quarter and Year-End 2004 Financial Results

Feb 17, 2005 |

Annual Net Sales Grew 31 Percent and Net Income Increased 45 Percent Compared to 2003

CYPRESS, Calif.--(BUSINESS WIRE)--Feb. 17, 2005--Leading wireless technology developer Universal Electronics Inc. (UEI)(NASDAQ:UEIC) today announced financial results for the fourth quarter and year ended December 31, 2004.

Net sales for the fourth quarter of 2004 were $51.7 million compared to $35.5 million for the same quarter last year. The $16.2 million increase in sales from fourth quarter 2003 to fourth quarter 2004 was primarily attributable to original equipment manufacturer (OEM) sales both in the United States and abroad. Operating income increased 74 percent during the fourth quarter 2004 to $5.7 million. Net income for the 2004 fourth quarter was $3.7 million, or $0.26 per diluted share, compared to $2.5 million, or $0.17 per diluted share, for the fourth quarter of 2003.

Net sales for the year-ended December 31, 2004 were $158.4 million compared to $120.5 million for the year ended December 31, 2003. Operating income increased to $13.5 million and grew 58 percent compared to last year. Net income for the year 2004 was $9.1 million, or $0.65 per diluted share, compared to $6.3 million, or $0.45 per diluted share, for the year 2003.

"2004 was a year of strong revenue and earnings growth for UEI," stated Paul Arling, the company's chairman and chief executive officer. "Net sales in the fourth quarter increased 46 percent from last year as a result of strong retail sales, growth in our worldwide OEM business and the continued strengthening of customer relationships across our entire business. As we look toward the future, our broadening technology base combined with the acquisition of SimpleDevices, illustrates the lead our technologies have in today's home."

"Our successful execution of our sales, operational and product plans led to our strong growth in 2004," said Rob Lilleness, UEI's president and chief operating officer. "In 2005, we are excited about leveraging our industry-leading connectivity software and intellectual property to continue to expand in our core market. In addition, we will introduce customizable and digital media solutions into the custom installer marketplace with our NevoSL product, which we unveiled at the International Consumer Electronics Show in January."

Bernie Pitz, UEI's chief financial officer, added, "In 2004, despite the repurchase of 495,000 shares for approximately $6.7 million, our investment in technology and the acquisition of SimpleDevices in October for $12.5 million, we closed the year with $42.5 million in cash and cash equivalents. In addition, our gross margin remained on target at 39.1 percent for the fourth quarter and 38.9 percent for the full year 2004."

Conference Call Information:

UEI's management team will hold a conference call today, Thursday February 17, 2005 at 1:30 p.m. Pacific Time to review year-end results and hold a question and answer session for callers. To participate call 1-800-622-9917 ten minutes prior to start time. International dialers call 1-706-645-0366. The live call can also be accessed via the Internet through Universal's Web site at If you are unable to participate, a replay will be available beginning at 7:30 p.m. Eastern Time on February 17, 2005 until 11:59 p.m. Eastern Time on February 21, 2005. To access, please dial 1-800-642-1687 and international 706-645-9291, reservation number 3443774. The web cast replay will be available at

About Universal Electronics

Universal Electronics Inc., based in Southern California, develops firmware and turnkey solutions as well as software designed to enable consumers to wirelessly connect, control and interact with an increasingly complex home environment. The company's primary markets include original equipment manufacturers (OEMs) in consumer electronics and personal computing, as well as multiple system operators in the cable and satellite subscription broadcasting markets. Over the past 16 years, the company has developed a broad portfolio of patented technologies and the industry's leading database of home connectivity software that it licenses to its customers, including many leading Fortune 500 companies. In addition, UEI sells its universal wireless control products and other audio/visual accessories through its European headquarters in The Netherlands, and to distributors and retailers in Europe, Asia, Latin America, South Africa and Australia/New Zealand under the One For All(R) brand name. More information about UEI can be obtained at

Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially from those expressed herein are the following: the failure of the company's business lines to grow and expand in the manner anticipated by the company's management; the failure of the company's customers to grow and expand as anticipated by the company's management; the strength of the Euro as compared to the U.S. Dollar continuing in a manner similar to that experienced during 2004; the growth of, acceptance of and the demand for the company's products and technologies, including new products such as NevoSL, in various markets and geographical regions, including the computing, cable, satellite, consumer electronics, OEM, retail and interactive TV and home automation industries, not materializing as believed by the company's management; the company's inability to add profitable complementary products which are accepted by the market place; the inability by the company to continue to maintain its operating costs at acceptable levels through its cost containment efforts; the company's European subsidiaries continuing to grow and expand its product lines as in the past; the continued strength of the company's balance sheet including the ability to obtain payments from its customers on a timely basis; the inability of the company to continue selling its products or licensing its technologies at higher or profitable margins throughout 2005 and beyond; the failure of the various markets and industries to grow or emerge as rapidly or as successfully as believed by the company's management; the inability of the company to obtain orders or maintain its order volume with its new and existing customers; the possible dilutive effect the company's stock option programs may have on the company's EPS and stock price; the effect of factors (including domestic and global economic environments and natural and other events) beyond the company's control that increase the cost of manufacturing and/or delivering the company's products; the inability of the company to deliver the NevoSL at the time and in the quantities anticipated by the company's management, or to continue to obtain adequate quantities of component parts or secure adequate factory production capacity on a timely basis; and other factors listed from time to time in the company's press releases and SEC filings. The company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

                      UNIVERSAL ELECTRONICS INC.
                            (In thousands)

                                                   December  December
                                                      31,       31,
                                                     2004      2003
Current assets:
 Cash and cash equivalents                          $42,472   $58,481
 Accounts receivable, net                            38,763    30,501
 Inventories                                         23,862    19,386
 Prepaid expenses and other current assets            1,907     1,108
 Income tax receivable                                1,158     1,167
 Deferred income taxes                                3,216     2,544
                                                   --------- ---------
    Total current assets                            111,378   113,187

Equipment, furniture and fixtures, net                3,732     3,475
Goodwill                                             10,655     3,348
Intangible assets, net                                6,550     3,431
Other assets                                          2,935     1,445
Deferred income taxes                                 5,035     1,281
                                                   --------- ---------
    Total assets                                   $140,285  $126,167
                                                   ========= =========

Current liabilities:
 Accounts payable                                   $17,559   $13,754
 Accrued income taxes                                 4,370     4,504
 Accrued compensation                                 5,914     2,923
 Other accrued expenses                               8,454     9,815
                                                   --------- ---------
    Total current liabilities                        36,297    30,996

Long term liabilities
 Deferred income taxes                                  107         0
                                                   --------- ---------
  Total liabilities                                  36,404    30,996

Stockholders' equity:
  Common stock                                          166       164
  Paid-in capital                                    78,872    75,805
  Accumulated other comprehensive income (loss)       3,571       298
  Retained earnings                                  45,293    36,179
  Deferred stock-based compensation                    (168)      (42)
  Common stock held in treasury                     (23,853)  (17,233)
                                                   --------- ---------
    Total stockholders' equity                      103,881    95,171
                                                   --------- ---------
    Total liabilities and stockholders' equity     $140,285  $126,167
                                                   ========= =========

                      UNIVERSAL ELECTRONICS INC.
               (In thousands, except per share amounts)

                                   Three Months        Twelve Months
                                      Ended                Ended
                                   December 31,         December 31,

                                    2004     2003      2004      2003
                                 -------- -------- --------- ---------

Net sales                        $51,711  $35,537  $158,380  $120,468

Cost of sales                     31,467   22,057    96,800    74,168
                                 -------- -------- --------- ---------

Gross profit                      20,244   13,480    61,580    46,300

Research and Development           1,533    1,159     5,625     4,700

Selling, general and
    administrative expenses       12,964    9,020    42,415    33,026
                                 -------- -------- --------- ---------

Operating expenses                14,497   10,179    48,040    37,726
                                 -------- -------- --------- ---------

Operating income                   5,747    3,301    13,540     8,574

Interest income, net                (198)    (182)     (723)     (583)

Other (income) expense, net          483     (243)      540      (338)
                                 -------- -------- --------- ---------

Income before income taxes         5,462    3,726    13,723     9,495

Provision for income taxes        (1,742)  (1,267)   (4,609)   (3,228)
                                 -------- -------- --------- ---------

Net income                        $3,720   $2,459    $9,114    $6,267
                                 ======== ======== ========= =========

Earnings per share:
     Basic                         $0.27    $0.18     $0.67     $0.46
                                 ======== ======== ========= =========

     Diluted                       $0.26    $0.17     $0.65     $0.45
                                 ======== ======== ========= =========

Shares used in computing earnings
 per share:

     Basic                        13,580   13,835    13,567    13,703
                                 ======== ======== ========= =========

     Diluted                      14,206   14,187    14,100    14,007
                                 ======== ======== ========= =========

CONTACT: Universal Electronics Inc.
Paul Arling, 714-820-1000
Kirsten Chapman, 415-433-3777 (IR Agency)
SOURCE: Universal Electronics Inc.


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