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): February 24, 2011

UNIVERSAL ELECTRONICS INC.

(Exact name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)		0-21044 (Commission File No.)		33-0204817 (I.R.S. Employer 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
EX-99.1

Item 2.02 Results of Operations and Financial Condition

On February 24, 2011, Universal Electronics Inc. (“UEI”) is issuing a press release and holding a conference call regarding its financial results for the fourth quarter and for the full year ended December 31, 2010. A copy of the press release is furnished 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, or subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, UEI provides non-GAAP or Adjusted Pro Forma information in the press release as additional information for its operating results. References to Adjusted Pro Forma information are to non-GAAP pro forma measures. These measures are not in accordance with, or an alternative for, GAAP and may be different from non-GAAP measures used by other companies. UEI’s management believes that this presentation of Adjusted Pro Forma financial information provides useful information to management and investors regarding certain additional financial and business trends relating to its financial condition and results of operations. In addition, management uses these measures for reviewing the financial results of UEI and for budget planning purposes..

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 February 24, 2011.

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 February 24, 2011

Contacts: Paul Arling (UEI) 714.820.1000
Becky Herrick (IR Agency) 415.433.3777

Universal Electronics Reports Fourth Quarter and Year
End 2010 Financial Results
- - Reports Strong Fourth Quarter 2010 Net Sales of $102.5 million -
- - Expects 2011 Net Sales of between $475 Million and $500 Million —

CYPRESS, CA — February 24, 2010 — Universal Electronics Inc. (UEI), (NASDAQ: UEIC) reported financial results for the fourth quarter and year ended December 31, 2010.

“A key component of our success in 2010 has been our ability to create innovative, practical and simple control devices that enhance the home entertainment experience and meet the future needs of consumers,” stated Paul Arling, UEI’s Chairman and CEO. “During the fourth quarter we experienced many benefits from our acquisition of Enson Assets Limited. We further established our footprint in the Asian market, added several significant customers to our roster and, perhaps more importantly, significantly expanded relationships with some of our existing customers through our acquisition.”

Arling added, “This year at the 2011 Consumer Electronics Show (CES), UEI offered visitors to our booth a glimpse into the evolution of the remote control over the past 25 years and into the future with live demonstrations and interactive displays of products and control technology. We featured the expansion of our QuickSet technology showing intelligent automated set-up as well as control technology that transforms tablets and smart phones into A/V control devices. We also introduced our Low Energy IR Engine (LowEIR) technology which is a unique integration of silicon and software that significantly reduces the power required for remote control operation, thus reducing the usage of batteries. Looking ahead, we intend to continue building our leadership position by leveraging our world-class wireless control technology to drive growth in both the markets we currently serve, as well as new markets worldwide.”

Use of Adjusted Pro Forma Financial Metrics

As of the quarter ended December 31, 2010, UEI is providing Adjusted Pro Forma metrics to assist its investors in assessing UEI’s current and future operations in the way the company evaluates its operations. We incurred certain expenses in the fourth quarter of 2010, some of which will continue to be incurred as a direct result of its recent acquisition of Enson Assets Limited, which the company believes do not reflect its true operating results. These expenses include:

•

Amortization expense relating to intangible assets acquired;

•

Depreciation expense relating to the increase in fixed assets from cost to fair market value;

•

Fair value adjustments to finished goods inventories; and

•

Other direct acquisition costs including such items as professional services and other employee-related expenses.

The company’s operating results for the prior year do not include expenses related to its acquisition of Enson Assets Limited. As such, GAAP results are provided in the prior year comparisons below.

Financial Results for the Quarter Ended December 31: 2010 Compared to 2009

•

Net sales were $102.5 million, compared to $84.9 million.

•

Business Category net sales were $89.1 million, compared to $66.4 million. The Business Category contributed 86.9% of total net sales, compared to 78.2%.

•

Consumer Category net sales were $13.4 million, compared to $18.5 million. The Consumer Category contributed 13.1% of total net sales, compared to 21.8%.

•

Adjusted Pro Forma gross margins were 29.7%, compared to gross margins of 33.7%.

•

Adjusted Pro Forma total operating expenses were $22.4 million, compared to operating expenses of $20.5 million.

•

Adjusted Pro Forma operating income was $8.0 million, compared to operating income of $8.1 million.

•

Adjusted Pro Forma net income was $6.6 million, or $0.45 per diluted share, compared to net income of $5.8 million, or $0.42 per diluted share.

•

At December 31, 2010, cash and cash equivalents was $54.2 million.

Financial Results for the Twelve-months Ended December 31: 2010 Compared to 2009

•

Net sales were $331.8 million, compared to $317.6 million.

•

Adjusted Pro Forma gross margins were 31.8%, compared to gross margins of 32.0%.

•

Adjusted Pro Forma total operating expenses were $81.0 million, compared to operating expenses of $79.7 million.

•

Adjusted Pro Forma operating income was $24.6 million, compared to operating income of $21.9 million.

•

Adjusted Pro Forma net income was $17.9 million, or $1.27 per diluted share, compared to net income of $14.7 million, or $1.05 per diluted share.

Financial Outlook

Bryan Hackworth, UEI’s CFO, said, “The integration of Enson Assets Limited has gone very well, and in many cases better than anticipated. We expect by the end of 2011 to have retired our debt balance, which would further strengthen our balance sheet.”

For the first quarter of 2011, net sales are expected to range between $105.0 million and $111.0 million, compared to $71.4 million in the first quarter of 2010. The company anticipates Adjusted Pro Forma gross margins for the first quarter of 2011 to be approximately 28.5% of sales, plus or minus one point, compared to a gross margin of 30.9% of sales in the first quarter of 2010. For the first quarter of 2011, Adjusted Pro Forma operating expenses are expected to range from $24.5 million to $25.3 million, compared to first quarter 2010 operating expenses of $19.4 million. Adjusted Pro Forma earnings per diluted share for the first quarter of 2011 are expected to range from $0.26 to $0.32, compared to earnings per diluted share of $0.13 in the first quarter of 2010.

For the full 2011 year, net sales are expected to range between $475 million and $500 million, compared to $331.8 million in 2010. Adjusted Pro Forma earnings per diluted share for 2011 are expected to range from $2.15 to $2.35, compared to Adjusted Pro Forma earnings per diluted share of $1.27 in 2010.

Conference Call Information

UEI’s management team will hold a conference call today, Thursday, February 24, 2011 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its fourth quarter and year-end 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 42163908. 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 42163908.

Adjusted Pro Forma Financial Measures

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the company provides non-GAAP or Adjusted Pro Forma information as additional information for its operating results. References to Adjusted Pro Forma information are to non-GAAP pro forma measures. These measures are not in accordance with, or an alternative for, GAAP and may be different from non-GAAP measures used by other companies. The company’s management believes that this presentation of Adjusted Pro Forma financial information provides useful information to management and investors regarding certain additional financial and business trends relating to its financial condition and results of operations. In addition, management uses these measures for reviewing the financial results of the company and for budget planning purposes.

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 successfully integrate the operations of Enson and its subsidiaries into our operations, the failure of Enson and its subsidiaries 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 Company’s fixed cost structure resulting in increased profitability and cash flow; the continued strength of our balance sheet; 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)

		December 31,
		2010				2009
ASSETS
Current assets:
Cash and cash equivalents		$	54,249			$	29,016
Term deposit			—				49,246
Accounts receivable, net			86,304				64,392
Inventories, net			65,402				40,947
Prepaid expenses and other current assets			2,582				2,423
Deferred income taxes			6,256				3,016
Total current assets			214,793				189,040
Property, plant, and equipment , net			78,097				9,990
Goodwill			30,379				13,724
Intangible assets, net			35,994				11,572
Other assets			5,464				1,144
Deferred income taxes			7,806				7,837
Total assets		$	372,533			$	233,307
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	56,086			$	39,514
Notes payable			35,000				—
Accrued sales discounts, rebates and royalties			7,942				6,028
Accrued income taxes			5,873				3,254
Accrued compensation			28,199				4,619
Other accrued expenses			15,592				8,539
Total current liabilities			148,692				61,954
Long-term liabilities:
Deferred income taxes			11,369				153
Income tax payable			1,212				1,348
Other long-term liabilities			56				122
Total liabilities			161,329				63,577
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; 20,877,248 and 19,140,232 shares issued at December 31, 2010 and 2009, respectively			209				191
Paid-in capital			166,940				128,913
Accumulated other comprehensive (loss) income			(489	)			1,463
Retained earnings			134,070				118,989
			300,730				249,556
Less cost of common stock in treasury, 5,926,071 and 5,449,962 shares at December 31, 2010 and 2009, respectively			(89,526	)			(79,826	)
Total stockholders’ equity			211,204				169,730
Total liabilities and stockholders’ equity		$	372,533			$	233,307

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

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2010				2009				2010				2009
Net sales		$	102,505			$	84,939			$	331,780			$	317,550
Cost of sales			73,863				56,329				227,931				215,938
Gross profit			28,642				28,610				103,849				101,612
Research and development expenses			2,765				2,280				10,709				8,691
Selling, general and administrative expenses			21,145				18,250				71,839				70,974
Operating income			4,732				8,080				21,301				21,947
Interest income, net			(65	)			95				34				471
Other income (expense), net			461				(80	)			523				(241	)
Income before provision for income taxes			5,128				8,095				21,858				22,177
Provision for income taxes			1,362				2,255				6,777				7,502
Net income		$	3,766			$	5,840			$	15,081			$	14,675
Earnings per share:
Basic		$	0.26			$	0.43			$	1.10			$	1.07
Diluted		$	0.26			$	0.42			$	1.07			$	1.05
Shares used in computing earnings per share:
Basic			14,344				13,700				13,764				13,667
Diluted			14,737				14,063				14,106				13,971

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

		Year Ended December 31,
		2010				2009				2008
Cash provided by operating activities:
Net income		$	15,081			$	14,675			$	15,806
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			8,059				6,801				6,084
Provision for doubtful accounts			770				363				442
Provision for inventory write-downs			2,510				3,480				2,671
Deferred income taxes			(2,209	)			(1,141	)			(448	)
Tax benefit from exercise of stock options and vested restricted stock			231				408				431
Excess tax benefit from stock-based compensation			(290	)			(250	)			(344	)
Shares issued for employee benefit plan			565				741				633
Stock-based compensation			4,966				4,312				4,243
Changes in operating assets and liabilities:
Accounts receivable			13,464				(4,206	)			(1,478	)
Inventories			(4,099	)			(354	)			(12,219	)
Prepaid expenses and other assets			917				552				(1,888	)
Accounts payable and accrued expenses			142				(2,096	)			15,557
Accrued income and other taxes			(4,542	)			702				662
Net cash provided by operating activities			35,565				23,987				30,152
Cash used for investing activities:
Acquisition of Enson Assets Limited, net of cash acquired			(74,133	)			—				—
Term deposit			49,246				(49,246	)			—
Acquisition of Property, plant, and equipment			(8,440	)			(6,171	)			(5,945	)
Acquisition of intangible assets			(1,378	)			(1,172	)			(1,475	)
Acquisition of assets from Zilog, Inc.			—				(9,502	)			—
Net cash used for investing activities			(34,705	)			(66,091	)			(7,420	)
Cash (used for) provided by financing activities:
Issuance of notes payable			31,167				—				—
Proceeds from stock options exercised			1,964				3,275				1,158
Treasury stock purchased			(10,146	)			(7,747	)			(26,689	)
Excess tax benefit from stock—based compensation			290				250				344
Net cash (used for) provided by financing activities			23,275				(4,222	)			(25,187	)
Effect of exchange rate changes on cash			1,098				104				(8,917	)
Net (decrease) increase in cash and cash equivalents			25,233				(46,222	)			(11,372	)
Cash and cash equivalents at beginning of year			29,016				75,238				86,610
Cash and cash equivalents at end of year		$	54,249			$	29,016			$	75,238

UNIVERSAL ELECTRONICS INC.
RECONCILIATION OF ADJUSTED PRO FORMA FINANCIAL RESULTS
(In thousands)
(Unaudited)

		Three Months Ended												Three Months Ended
		December 31, 2010												December 31, 2009
										Adjusted												Adjusted
		GAAP				Adjustments				Pro Forma				GAAP				Adjustments				Pro Forma
Net sales		$	102,505			$	—			$	102,505			$	84,939			$	—			$	84,939
Cost of sales (1)			73,863				(1,799	)			72,064				56,329				—				56,329
Gross profit			28,642				1,799				30,441				28,610				—				28,610
Research and development expenses			2,765				—				2,765				2,280				—				2,280
Selling, general and administrative expenses (2)			21,145				(1,498	)			19,647				18,250				—				18,250
Operating income			4,732				3,297				8,029				8,080				—				8,080
Interest income, net			(65	)			—				(65	)			95				—				95
Other income (expense), net			461				—				461				(80	)			—				(80	)
Income before provision for income taxes			5,128				3,297				8,425				8,095				—				8,095
Provision for income taxes (3)			1,362				487				1,849				2,255				—				2,255
Net income		$	3,766			$	2,810			$	6,576			$	5,840			$	—			$	5,840
Earnings per share diluted		$	0.26			$	0.19			$	0.45			$	0.42			$	—			$	0.42

		Twelve Months Ended												Twelve Months Ended
		December 31, 2010												December 31, 2009
										Adjusted												Adjusted
		GAAP				Adjustments				Pro Forma				GAAP				Adjustments				Pro Forma
Net sales		$	331,780			$	—			$	331,780			$	317,550			$	—			$	317,550
Cost of sales (1)			227,931				(1,799	)			226,132				215,938				—				215,938
Gross profit			103,849				1,799				105,648				101,612				—				101,612
Research and development expenses			10,709				—				10,709				8,691				—				8,691
Selling, general and administrative expenses (2)			71,839				(1,498	)			70,341				70,974				—				70,974
Operating income			21,301				3,297				24,598				21,947				—				21,947
Interest income, net			34				—				34				471				—				471
Other income (expense), net			523				—				523				(241	)			—				(241	)
Income before provision for income taxes			21,858				3,297				25,155				22,177				—				22,177
Provision for income taxes (3)			6,777				487				7,264				7,502				—				7,502
Net income		$	15,081			$	2,810			$	17,891			$	14,675			$	—			$	14,675
Earnings per share diluted		$	1.07			$	0.20			$	1.27			$	1.05			$	—			$	1.05