SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): August 5, 2010

UNIVERSAL ELECTRONICS INC.

(Exact name of Registrant as specified in its charter)

Delaware		0-21044		33-0204817
(State or other jurisdiction		(Commission File No.)		(I.R.S. Employer
of incorporation or organization)				Identification No.)

6101 Gateway Drive
Cypress, California 90630
(Address of principal executive offices, with Zip Code)

(714) 820-1000
(Registrant’s telephone number, including area code):

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act

o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act

o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

 

 

TABLE OF CONTENTS

Item 2.02 Results of Operations and Financial Condition		1
Item 9.01 Financial Statements and Exhibits		1
SIGNATURES		2
INDEX TO EXHIBITS		3
EXHIBIT 99.1

Item 2.02		Results of Operations and Financial Condition

On August 5, 2010, Universal Electronics Inc. (“UEI”) is issuing a press release and holding a conference call regarding its financial results for the second quarter 2010. A copy of the press release is included as Exhibit 99.1 to this report.

Pursuant to General Instruction B2 of Form 8-K, the information contained in Exhibit 99.1 will be deemed furnished, and not “filed,” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as expressly set forth by specific reference in any such filing.

Item 9.01		Financial Statements and Exhibits

(c)

Exhibits. The following exhibit is furnished with this report.

99.1

Press Release of Universal Electronics Inc. dated August 5, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

INDEX TO EXHIBITS

Exhibit Number				Description
	99.1			Press Release dated August 5, 2010

Exhibit 99.1

Contacts: Paul Arling (UEI) 714.820.1000
Kirsten Chapman (IR Agency) 415.433.3777

Universal Electronics Reports Second Quarter 2010
Financial Results

CYPRESS, CA – August 5, 2010 – Universal Electronics Inc. (UEI), (NASDAQ: UEIC) reported financial results for the second quarter ended June 30, 2010.

“Our second quarter earnings were marked by consistent revenue performance, improved margins and our ability to manage expenses while continuing to invest in R&D” stated Paul Arling, UEI’s Chairman and CEO. “UEI’s focus on innovation drives our success in providing the control solutions and technologies that meet customers’ and consumers’ future needs. We have a strong track record of introducing breakthrough solutions that support ease-of-use and minimize the complexity of today’s home entertainment environment. We believe that our focus on affordable, ease of use solutions for consumers will result in benefits for our customers and, ultimately, our shareholders.”

Financial Results for the Quarter Ended June 30: 2010 Compared to 2009

•

Net sales were $78.9 million, compared to $78.3 million.

	•		Business Category revenue was $67.3 million, compared to $68.1 million. The Business Category contributed 85% of total net sales, compared to 87%.
	•		Consumer Category revenue was $11.6 million, compared to $10.2 million. The Consumer Category contributed 15% of total net sales, compared to 13%.

•

Gross margins were 34.8%, compared to 32.6%.

•

Total operating expenses were $20.1 million, compared to $19.8 million.

•

Operating income was $7.3 million, compared to $5.7 million.

•

Interest income was $17,000, compared to $127,000.

•

Net income was $4.8 million, or $0.34 per diluted share, compared to $3.8 million, or $0.27 per diluted share.

•

At June 30, 2010, cash and cash equivalents was $78.8 million.

Bryan Hackworth, UEI’s CFO, commented, “During the second quarter 2010, we increased the operating margin rate and grew cash flow from operations. We are confident we will continue to leverage our fixed cost structure and deliver strong earnings per diluted share growth in 2010.”

Six-month Period Financial Results: June 30, 2010 Compared to June 30, 2009

•

Net sales were $150.3 million, compared to $149.4 million.

•

Gross margins were 32.9%, compared to 31.4%.

•

Total operating expenses were $39.5 million, compared to $39.7 million.

•

Net income was $6.6 million, or $0.47 per diluted share, compared to $4.6 million, or $0.33 per diluted share.

Financial Outlook

For the third quarter of 2010, net sales are expected to range between $79.5 million and $83.5 million, compared to $83.2 million in the third quarter of 2009. The company anticipates gross margins for the third quarter of 2010 to be approximately 33% of sales, plus or minus one point, compared to 31.3% of sales in the third quarter of 2009. For the third quarter of 2010, operating expenses are expected to range from $19.3 million to $19.9 million, compared to third quarter 2009 operating expenses of $19.4 million. Earnings per diluted share for the third quarter of 2010 are expected to range from $0.32 to $0.36, compared to earnings per diluted share of $0.30 in the third quarter of 2009.

For the full 2010 year, the company expects net sales to range between $315.0 million and $325.0 million, compared to $317.6 million in 2009. Earnings per diluted share for 2010 are expected to range from $1.20 to $1.28, compared to earnings per diluted share of $1.05 in 2009.

Conference Call Information

UEI’s management team will hold a conference call today, Thursday, August 5, 2010 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its second 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 89845448. 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 800-642-1687 and internationally, 706-645-9291. Enter access code 89845448.

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 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. 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.

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 continue developing innovative control solutions and technologies that are accepted by our customers and consumers; the continued leveraging of the Company’s fixed cost structure resulting in increased profitability and cash flow; general economic conditions; and other factors described in the Company’s 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 -

UNIVERSAL ELECTRONICS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share-related data)

(Unaudited)

		June 30,				December 31,
		2010				2009
ASSETS
Current assets:
Cash and cash equivalents		$	78,838			$	29,016
Term deposit			—				49,246
Accounts receivable, net			56,130				64,392
Inventories, net			43,927				40,947
Prepaid expenses and other current assets			2,315				2,423
Deferred income taxes			2,959				3,016
Total current assets			184,169				189,040
Equipment, furniture and fixtures, net			10,219				9,990
Goodwill			13,404				13,724
Intangible assets, net			11,422				11,572
Other assets			759				1,144
Deferred income taxes			7,761				7,837
Total assets		$	227,734			$	233,307
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	41,828			$	39,514
Accrued sales discounts, rebates and royalties			4,785				6,028
Accrued income taxes			957				3,254
Accrued compensation			5,345				4,619
Other accrued expenses			6,404				8,539
Total current liabilities			59,319				61,954
Long-term liabilities:
Deferred income taxes			139				153
Income tax payable			1,348				1,348
Other long-term liabilities			100				122
Total liabilities			60,906				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; 19,238,800 and 19,140,232 shares issued on June 30, 2010 and December 31, 2009, respectively			192				191
Paid-in capital			131,971				128,913
Accumulated other comprehensive (loss) income			(4,018	)			1,463
Retained earnings			125,602				118,989
			253,747				249,556
Less cost of common stock in treasury, 5,790,633 and 5,449,962 shares on June 30, 2010 and December 31, 2009, respectively			(86,919	)			(79,826	)
Total stockholders’ equity			166,828				169,730
Total liabilities and stockholders’ equity		$	227,734			$	233,307

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

(Unaudited)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
Net sales		$	78,892			$	78,303			$	150,268			$	149,429
Cost of sales			51,467				52,808				100,779				102,497
Gross profit			27,425				25,495				49,489				46,932
Research and development expenses			2,488				2,050				5,257				4,160
Selling, general and administrative expenses			17,621				17,758				34,229				35,549
Operating income			7,316				5,687				10,003				7,223
Interest income, net			17				127				100				266
Other (expense) income, net			(21	)			182				22				(186	)
Income before provision for income taxes			7,312				5,996				10,125				7,303
Provision for income taxes			(2,535	)			(2,180	)			(3,512	)			(2,691	)
Net income		$	4,777			$	3,816			$	6,613			$	4,612
Earnings per share:
Basic		$	0.35			$	0.28			$	0.48			$	0.34
Diluted		$	0.34			$	0.27			$	0.47			$	0.33
Shares used in computing earnings per share:
Basic			13,601				13,621				13,650				13,640
Diluted			13,929				13,981				14,011				13,907

UNIVERSAL ELECTRONICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

(Unaudited)

		Six Months Ended
		June 30,
		2010				2009
Cash provided by operating activities:
Net income		$	6,613			$	4,612
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			3,079				3,332
Provision for doubtful accounts			747				143
Provision for inventory write-downs			1,450				2,170
Deferred income taxes			33				(111	)
Tax benefit from exercise of stock options			109				301
Excess tax benefit from stock-based compensation			(103	)			(151	)
Shares issued for employee benefit plan			375				342
Stock-based compensation			2,532				2,081
Changes in operating assets and liabilities:
Accounts receivable			3,872				927
Inventories			(6,368	)			(3,021	)
Prepaid expenses and other assets			307				1,112
Accounts payable and accrued expenses			2,992				(1,603	)
Accrued income taxes			(1,909	)			(527	)
Net cash provided by operating activities			13,729				9,607
Cash provided by (used for) investing activities:
Term deposit			49,246				(49,199	)
Acquisition of equipment, furniture and fixtures			(3,041	)			(2,193	)
Acquisition of intangible assets			(749	)			(751	)
Acquisition of assets from Zilog, Inc.			—				(9,502	)
Net cash provided by (used for) investing activities			45,456				(61,645	)
Cash used for financing activities:
Proceeds from stock options exercised			257				1,557
Treasury stock purchased			(7,308	)			(3,873	)
Excess tax benefit from stock-based compensation			103				151
Net cash used for financing activities			(6,948	)			(2,165	)
Effect of exchange rate changes on cash			(2,415	)			342
Net increase (decrease) in cash and cash equivalents			49,822				(53,861	)
Cash and cash equivalents at beginning of period			29,016				75,238
Cash and cash equivalents at end of period		$	78,838			$	21,377