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Document and Entity Information - USD ($)	6 Months Ended
Document and Entity Information - USD ($)	Jun. 30, 2011	Aug. 04, 2011	Jun. 30, 2010
Document and Entity Information [Abstract]
Entity Registrant Name	UNIVERSAL ELECTRONICS INC
Entity Central Index Key	0000101984
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 183,312,690
Entity Common Stock, Shares Outstanding		14,957,310

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 37,900	$ 54,249
Accounts receivable, net	87,733	86,304
Inventories, net	76,497	65,402
Prepaid expenses and other current assets	2,855	2,582
Deferred income taxes	6,195	5,896
Total current assets	211,180	214,433
Property, plant, and equipment, net	78,395	78,097
Goodwill	31,033	30,877
Intangible assets, net	34,358	35,994
Other assets	5,365	5,464
Deferred income taxes	7,479	7,806
Total assets	367,810	372,671
Current liabilities:
Accounts payable	59,705	56,086
Notes payable	20,600	35,000
Accrued sales discounts, rebates and royalties	6,135	7,942
Accrued income taxes	2,283	5,873
Accrued compensation	29,681	30,634
Deferred income taxes	49	0
Other accrued expenses	12,682	13,295
Total current liabilities	131,135	148,830
Long-term liabilities:
Deferred income taxes	11,547	11,369
Income tax payable	1,212	1,212
Other long-term liabilities	5	56
Total liabilities	143,899	161,467
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 5,000,000 shares authorized; none issued or outstanding	0	0
Common stock, $0.01 par value, 50,000,000 shares authorized; 21,029,169 and 20,877,248 shares issued on June 30, 2011 and December 31, 2010, respectively	210	209
Paid-in capital	170,788	166,940
Accumulated other comprehensive income (loss)	3,704	(489)
Retained earnings	142,018	134,070
Total stockholders' equity	316,720	300,730
Less cost of common stock in treasury, 6,048,261 and 5,926,071 shares on June 30, 2011 and December 31, 2010, respectively	(92,809)	(89,526)
Total stockholders' equity	223,911	211,204
Total liabilities and stockholders' equity	$ 367,810	$ 372,671

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2011	Dec. 31, 2010
Stockholders' equity:
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	21,029,169	20,877,248
Treasury stock, shares	6,048,261	5,926,071

Consolidated Income Statements (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Consolidated Income Statements [Abstract]
Net sales	$ 121,746	$ 78,892	$ 227,458	$ 150,268
Cost of sales	86,802	51,467	164,935	100,779
Gross profit	34,944	27,425	62,523	49,489
Research and development expenses	3,157	2,488	6,414	5,257
Selling, general and administrative expenses	23,477	17,621	45,264	34,229
Operating income	8,310	7,316	10,845	10,003
Interest (expense) income, net	(69)	17	(154)	100
Other (expense) income, net	(384)	(21)	(418)	22
Income before provision for income taxes	7,857	7,312	10,273	10,125
Provision for income taxes	(1,736)	(2,535)	(2,325)	(3,512)
Net income	$ 6,121	$ 4,777	$ 7,948	$ 6,613
Earnings per share:
Basic	$ 0.41	$ 0.35	$ 0.53	$ 0.48
Diluted	$ 0.40	$ 0.34	$ 0.52	$ 0.47
Shares used in computing earnings per share:
Basic	15,025	13,601	15,000	13,650
Diluted	15,407	13,929	15,395	14,011

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash provided by operating activities:
Net income	$ 7,948	$ 6,613
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	8,588	3,079
Provision for doubtful accounts	237	747
Provision for inventory write-downs	2,099	1,450
Deferred income taxes	645	33
Tax benefit from exercise of stock options and vested restricted stock	374	109
Excess tax benefit from stock-based compensation	(344)	(103)
Shares issued for employee benefit plan	396	375
Stock-based compensation	2,085	2,532
Changes in operating assets and liabilities:
Accounts receivable	262	3,872
Inventories	(11,409)	(6,368)
Prepaid expenses and other assets	(78)	307
Accounts payable and accrued expenses	(2,514)	2,992
Accrued income taxes	(3,696)	(1,909)
Net cash provided by operating activities	4,593	13,729
Cash (used for) provided by investing activities:
Term deposit		49,246
Acquisition of property, plant, and equipment	(5,554)	(3,041)
Acquisition of intangible assets	(513)	(749)
Net cash (used for) provided by investing activities	(6,067)	45,456
Cash used for financing activities:
Payment of debt	(14,400)
Proceeds from stock options exercised	1,212	257
Treasury stock purchased	(3,500)	(7,308)
Excess tax benefit from stock-based compensation	344	103
Net cash used for financing activities	(16,344)	(6,948)
Effect of exchange rate changes on cash	1,469	(2,415)
Net (decrease) increase in cash and cash equivalents	(16,349)	49,822
Cash and cash equivalents at beginning of period	54,249	29,016
Cash and cash equivalents at end of period	$ 37,900	$ 78,838

Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($)	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Consolidated Statements of Cash Flows [Abstract]
Income tax payments, net	$ 4,700,000	$ 5,600,000
Interest payment	$ 100,000	$ 0

Basis of Presentation and Significant Accounting Policies	6 Months Ended
	Jun. 30, 2011
Basis of Presentation and Significant Accounting Policies [Abstract]
Basis of Presentation and Significant Accounting Policies	Note 1: Basis of Presentation and Significant Accounting Policies In the opinion of management, the accompanying consolidated financial statements of Universal Electronics Inc. and its wholly-owned subsidiaries contain all the adjustments necessary for a fair presentation of financial position, results of operations and cash flows for the periods presented. All such adjustments are of a normal recurring nature and certain reclassifications have been made to prior year amounts in order to conform to the current year presentation. Information and footnote disclosures normally included in financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. As used herein, the terms “Company,” “we,” “us” and “our” refer to Universal Electronics Inc. and its subsidiaries, unless the context indicates to the contrary. Our results of operations for the three and six months ended June 30, 2011 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the “Risk Factors,” “Management Discussion and Analysis of Financial Conditions and Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk,” and the “Financial Statements and Supplementary Data” and notes thereto included in Items 1A, 7, 7A, and 8, respectively, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2010. Estimates, Judgments and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates, judgments and assumptions, including those related to revenue recognition, allowance for sales returns and doubtful accounts, warranties, inventory valuation, business combination purchase price allocations, impairment of long-lived assets, intangible assets and goodwill, income taxes, accrued compensation and stock-based compensation expense. Actual results may differ from our expectations. Based on our evaluation, our estimates, judgments and assumptions may be adjusted as more information becomes available. Any adjustment may be material. See Note 2 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2010 for a summary of our significant accounting policies. New Accounting Pronouncements In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, “Presentation of Comprehensive Income.” ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in stockholders’ equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of ASU 2011-05 concerns presentation and disclosure only and will not have an impact on our consolidated results of operations and financial condition. In May 2011, the FASB issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”).” This pronouncement was issued to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and IFRS. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements. This pronouncement is effective for reporting periods beginning on or after December 15, 2011. The adoption of ASU 2011-04 is not expected to have a significant impact to our consolidated financial position or results of operations. Recently Adopted Accounting Pronouncements During January 2010, the FASB issued ASU No. 2010-6 to improve the disclosure and transparency of fair value measurements. These amendments clarify the level of disaggregation required, and the necessary disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. The amendments in the update are effective prospectively for interim and annual periods beginning on or after December 15, 2009, except for the separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements, which are effective for fiscal years beginning on or after December 15, 2010, and for interim periods within those fiscal years. We adopted the portion of this ASU that was effective beginning on or after December 15, 2010, beginning January 1, 2011. The adoption of this ASU did not have a material effect on our consolidated results of operations and financial condition. During December 2010, the FASB issued ASU No. 2010-29 to address diversity in practice regarding the interpretation of the pro forma revenue and earnings disclosure requirements for business combinations. ASC 805- 10-50-2(h) requires a public entity to disclose pro forma information for business combinations that occurred during the current annual reporting period. The disclosures include combined pro forma revenue and earnings as though the acquisition date for all business combinations during the year had been as of the beginning of the annual reporting period. If comparative financial statements are presented, the pro forma revenue and earnings of the combined entity should be reported as though the acquisition date for all business combinations that occurred during the current year had been as of the beginning of the comparable prior annual reporting period. In practice, some preparers have presented the pro forma information in their comparative financial statements as if the business combination that occurred in the current reporting period had occurred as of the beginning of each of the current and prior annual reporting periods. Other preparers have disclosed the pro forma information as if the business combination occurred at the beginning of the prior annual reporting period only, and carried forward the related adjustments, if applicable, through the current reporting period. The amendments in this update specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments in this update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments in this update are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. We adopted this ASU beginning January 1, 2011. The adoption of this ASU did not have a material effect on our consolidated results of operations and financial condition. In October 2009, the FASB issued ASU No. 2009-14 to address accounting for arrangements that contain tangible products and software. The amendments in this update clarify what guidance should be utilized in allocating and measuring revenue for products that contain software that is “more than incidental” to the product as a whole. Currently, products that contain software that is “more than incidental” to the product as a whole are within the scope of software accounting guidance. Software accounting guidance requires a vendor to use vendor-specific objective evidence (“VSOE”) of selling price to separate the software from the product and account for the two elements as a multiple-element arrangement. A vendor must sell, or intend to sell, a particular element separately to assert VSOE for that element. Third-party evidence for selling price is not allowed under the software accounting model. If a vendor does not have VSOE for the undelivered elements in the arrangement, the revenue associated with both the delivered and undelivered elements is combined into one unit of accounting. Any revenue attributable to the delivered elements is then deferred and recognized at a later date, which in many cases is as the undelivered elements are delivered by the vendor. This ASU addresses concerns that the current accounting model may not appropriately reflect the economics of the underlying transactions because no revenue is recognized for some products for which the vendor has already completed the related performance. In addition, this ASU addresses the concern that more software enabled products fall within the scope of the current software accounting model than was originally intended because of ongoing technical advancements. The amendments in the update are effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. We adopted this ASU beginning January 1, 2011. The adoption of this ASU did not have a material effect on our consolidated results of operations and financial condition. In October 2009, the FASB issued ASU No. 2009-13 to address the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than as a combined accounting unit. Current accounting guidance requires a vendor to use VSOE or third-party evidence (“TPE”) of selling price to separate deliverables in a multiple-deliverable arrangement. VSOE of selling price is the price charged for a deliverable when it is sold separately or, for a deliverable not yet being sold separately, the price established by management with the appropriate authority. If a vendor does not have VSOE for the undelivered elements in the arrangement, the revenue associated with both the delivered and undelivered elements is combined into one unit of accounting. Any revenue attributable to the delivered products is then deferred and recognized at a later date, which in many cases is as the undelivered elements are delivered by the vendor. An exception to this guidance exists if the vendor has VSOE or TPE of selling price for the undelivered elements in the arrangement but not for the delivered elements. In those situations, the vendor uses the residual value method to allocate revenue to the delivered element, which results in the allocation of the entire discount in the arrangement, if any, to the delivered element. This ASU addresses concerns that the current accounting model may not appropriately reflect the economics of the underlying transactions because sometimes no revenue is recognized for products for which the vendor has already completed the related performance. As a result of this amendment, multiple element arrangements will be separated into multiple units of accounting in more circumstances than under the existing accounting model. This amendment establishes a selling price hierarchy for determining the selling price of a deliverable. The selling price utilized for each deliverable will be based on VSOE if available, TPE if VSOE is not available, or estimated selling price if neither VSOE or TPE evidence is available. The residual method is eliminated. The amendments in the update are effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. We adopted this ASU beginning January 1, 2011. The adoption of this ASU did not have a material effect on our consolidated results of operations and financial condition.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 2-6
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Name Statement of Position (SOP)
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Cash and Cash Equivalents

6 Months Ended

Jun. 30, 2011

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents

Note 2: Cash and Cash Equivalents

Our cash and cash equivalents that were accounted for at fair value on a recurring basis on June 30, 2011 were the following:


	June 30, 2011								December 31, 2010
(In thousands)	Fair Value Measurement Using						Total		Fair Value Measurement Using						Total
Description	(Level 1)		(Level 2)		(Level 3)		Balance		(Level 1)		(Level 2)		(Level 3)		Balance
Cash and cash equivalents	$	37,900	$	—	$	—	$	37,900	$	54,249	$	—	$	—	$	54,249

On June 30, 2011, we had approximately $5.8 million, $7.8 million, $23.0 million, $0.4 million and $0.9 million of cash and cash equivalents in the United States, Europe, Asia, Cayman Islands, and South America, respectively. On December 31, 2010, we had approximately $6.5 million, $15.0 million, $27.8 million, $4.0 million, and $0.9 million of cash and cash equivalents in the United States, Europe, Asia, Cayman Islands and South America, respectively.

See Note 2 under the caption Cash, Cash Equivalents, and Term Deposit in our Annual Report on Form 10-K for further information regarding our accounting principles.

- Definition

The entire disclosure for cash and cash equivalent footnotes, which may include the types of deposits and money market instruments, applicable carrying amounts, restricted amounts and compensating balance arrangements. Cash and equivalents include: (1) currency on hand (2) demand deposits with banks or financial institutions (3) other kinds of accounts that have the general characteristics of demand deposits (4) short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments maturing within three months from the date of acquisition qualify.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
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+ Details

Accounts Receivable, net and Revenue Concentrations

6 Months Ended

Jun. 30, 2011

Accounts Receivable, net and Revenue Concentrations [Abstract]

Accounts Receivable, net and Revenue Concentrations

Note 3: Accounts Receivable, net and Revenue Concentrations

Accounts receivable, net consisted of the following on June 30, 2011 and December 31, 2010:


	June 30,			December 31,
(In thousands)	2011			2010
Trade receivables, gross	$	89,224		$	88,485
Allowance for doubtful accounts		(1,105	)		(878	)
Allowance for sales returns		(726	)		(1,366	)

Trade receivables, net		87,393			86,241
Other receivables		340			63

Accounts receivable, net	$	87,773		$	86,304

Allowance for Doubtful Accounts

Changes in the allowance for doubtful accounts during the three and six months ended June 30, 2011 and 2010 were the following:


	Balance at		Additions					Balance at
(In thousands)	Beginning of		to Costs and		(Write-offs)/			End of
Description	Period		Expenses		FX Effects			Period
Valuation account for trade receivables
Three months ended June 30, 2011	$	868	$	231	$	6		$	1,105
Three months ended June 30, 2010	$	2,387	$	585	$	(237	)	$	2,735

Changes in the allowance for doubtful accounts during the six months ended June 30, 2011 and 2010 were the following:


	Balance at		Additions					Balance at
(In thousands)	Beginning of		to Costs and		(Write-offs)/			End of
Description	Period		Expenses		FX Effects			Period
Valuation account for trade receivables
Six months ended June 30, 2011	$	878	$	238	$	(11	)	$	1,105
Six months ended June 30, 2010	$	2,423	$	715	$	(403	)	$	2,735

Sales Returns

The allowance for sales returns balance at June 30, 2011 and December 31, 2010 contained reserves for items returned prior to year-end, but were not completely processed, and therefore had not yet been removed from the allowance for sales returns balance. If these returns had been fully processed, the allowance for sales returns balance would have been approximately $0.7 million and $0.9 million on June 30, 2011 and December 31, 2010, respectively. The value of these returned goods was included in our inventory balance at June 30, 2011 and December 31, 2010.

Significant Customers

During the six months ended June 30, 2011, we had net sales to one significant customer which totaled to more than 10% of our net sales. During the three and six months ended June 30, 2010, we had net sales to two significant customers, that when combined with their subcontractors, each totaled to more than 10% of our net sales as follows:


	Three Months Ended June 30,
	2011				2010
	$ (thousands)		% of Net Sales		$ (thousands)		% of Net Sales
Customer A		—		—	$	8,674		11.0	%
Customer B		—		—	$	11,910		15.1	%


	Six Months Ended June 30,
	2011					2010
	$ (thousands)		% of Net Sales			$ (thousands)		% of Net Sales
Customer A		—		—		$	19,170		12.8	%
Customer B		—		—		$	19,916		13.3	%
Customer C	$	26,906		11.8	%		—		—

Trade receivables with these customers were the following on June 30, 2011 and December 31, 2010:


	June 30, 2011					December 31, 2010
			% of Accounts					% of Accounts
	$ (thousands)		Receivable, Net			$ (thousands)		Receivable, Net
Customer A	$	8,732		10.0	%	$	9,481		11.0	%
Customer B		—		—		$	4,786		5.5	%
Customer C	$	9,104		10.4	%		—		—

We had a third customer that accounted for greater than 10% of accounts receivable, net on December 31, 2010, but did not account for greater than 10% of net sales for the year then ended. Trade receivables with this customer amounted to $10.5 million, or 12.1%, of our accounts receivable, net on December 31, 2010.

The loss of these customers or any other customer, either in the United States or abroad, due to their financial weakness or bankruptcy, or our inability to obtain orders or maintain our order volume with them, may have a material effect on our financial condition, results of operations and cash flows.

See Note 2 under the captions Revenue Recognition and Sales Allowances and Financial Instruments in our Annual Report on Form 10-K for further information regarding our accounting principles.

- Definition

The entire disclosure for claims held for amounts due a company. Examples include trade accounts receivables, notes receivables, loans receivables.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 3, 4
-Article 5

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 7
-Article 9

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 01-6
-Paragraph 13
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph k

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.3,4)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5074-111524

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5066-111524

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5162-111524

+ Details

Inventories, net and Significant Suppliers

6 Months Ended

Jun. 30, 2011

Inventories, net and Significant Suppliers [Abstract]

Inventories, net and Significant Suppliers

Note 4: Inventories, net and Significant Suppliers

Inventories, net consisted of the following on June 30, 2011 and December 31, 2010:


	June 30,			December 31,
(In thousands)	2011			2010
Raw materials	$	19,262		$	15,864
Components		16,397			10,358
Work in process		2,833			2,885
Finished goods		40,530			38,430
Reserve for excess and obsolete inventory		(2,525	)		(2,135	)

Inventories, net	$	76,497		$	65,402

Reserve for Excess and Obsolete Inventory

Changes in the reserve for excess and obsolete inventory during the three months ended June 30, 2011 and 2010 were composed of the following:


			Additions
	Balance at		Charged to								Balance at
(In thousands)	Beginning of		Costs and		Sell			Write-offs/			End of
Description	Period		Expenses⁽¹⁾		Through⁽²⁾			FX Effects			Period
Reserve for excess and obsolete inventory:
Three Months Ended June 30, 2011	$	2,272	$	960	$	(296	)	$	(411	)	$	2,525
Three Months Ended June 30, 2010	$	1,928	$	846	$	(310	)	$	(503	)	$	1,961

Changes in the reserve for excess and obsolete inventory during the six months ended June 30, 2011 and 2010 were composed of the following:


			Additions
	Balance at		Charged to								Balance at
(In thousands)	Beginning of		Costs and		Sell			Write-offs/			End of
Description	Period		Expenses⁽¹⁾		Through⁽²⁾			FX Effects			Period
Reserve for excess and obsolete inventory:
Six Months Ended June 30, 2011	$	2,135	$	1,749	$	(607	)	$	(752	)	$	2,525
Six Months Ended June 30, 2010	$	1,750	$	1,605	$	(423	)	$	(971	)	$	1,961


⁽¹⁾		The additions charged to costs and expenses does not include inventory directly written-off that was scrapped during production totaling $0.3 million and $0.2 million for the three months ended June 30, 2011 and 2010, respectively, and $0.4 million and $0.3 million for the six months ended June 30, 2011 and 2010, respectively. These amounts are production waste and are not included in management’s reserve for excess and obsolete inventory.

⁽²⁾		This column represents the gross book value of inventory items sold during the period that had been previously written down to zero net book value. Sell through is the result of differences between our judgment concerning the salability of inventory items during the excess and obsolete inventory review process and our subsequent experience.

Inventory write-downs for excess and obsolescence are a normal part of our business and result primarily from product life cycle estimation variances.

See Note 2 under the caption Inventories in our Annual Report on Form 10-K for further information regarding our accounting principles.

Significant Suppliers

We purchase integrated circuits, used principally in our wireless control products, from two main suppliers. The total purchased from one of these suppliers was greater than 10% of our total inventory purchases. Our purchases from three component and finished good suppliers each amounted to greater than 10% of our total inventory purchases for the three and six months ended June 30, 2010.

During the three months ended June 30, 2011 and 2010, the amounts purchased from these four suppliers were the following:


	Three Months Ended June 30,
	2011					2010
			% of Total					% of Total
			Inventory					Inventory
	$ (thousands)		Purchases			$ (thousands)		Purchases
Integrated circuit supplier	$	9,206		11.6	%	$	7,053		14.6	%
Component and finished good supplier A		—		—			10,761		22.2	%
Component and finished good supplier B ⁽¹⁾		—		—			11,023		22.9	%
Component and finished good supplier C		—		—			3,858		8.0	%

During the six months ended June 30, 2011 and 2010, the amounts purchased from these four suppliers were the following:


	Six Months Ended June 30,
	2011					2010
			% of Total					% of Total
			Inventory					Inventory
	$ (thousands)		Purchases			$ (thousands)		Purchases
Integrated circuit supplier	$	15,842		11.7	%	$	15,122		16.2	%
Component and finished good supplier A		—		—			20,154		21.5	%
Component and finished good supplier B ⁽¹⁾		—		—			18,590		19.9	%
Component and finished good supplier C		—		—			9,878		10.5	%

The total accounts payable to each of these suppliers on June 30, 2011 and December 31, 2010 were the following:


	June 30, 2011					December 31, 2010
			% of Accounts					% of Accounts
	$ (thousands)		Payable			$ (thousands)		Payable
Integrated circuit supplier	$	3,578		6.0	%	$	3,731		6.7	%
Component and finished good supplier A		—		—			9,172		16.4
Component and finished good supplier B⁽¹⁾		—		—			—		—
Component and finished good supplier C		—		—			—		—


⁽¹⁾		Component and finished good supplier B is Enson Assets Limited and its subsidiaries. See Note 18 for further information regarding our acquisition of Enson Assets Limited.

We have identified alternative sources of supply for these integrated circuits, components, and finished goods; however, there can be no assurance that we will be able to continue to obtain these inventory purchases on a timely basis. We generally maintain inventories of our integrated circuits, which may be utilized to mitigate, but not eliminate, delays resulting from supply interruptions. An extended interruption, shortage or termination in the supply of any of the components used in our products, a reduction in their quality or reliability, or a significant increase in the prices of components, would have an adverse effect on our operating results, financial condition and cash flows.

Related Party Vendor

We purchase certain printed circuit board assemblies (“PCBAs”) from a related party vendor. The vendor is considered a related party for financial reporting purposes because the Senior Vice President of Manufacturing of Enson Assets Limited (acquired November 3, 2010) owns 40% of this vendor. Our purchases from this vendor for the three and six months ended June 30, 2011 totaled approximately $2.2 million and $3.9 million, or 2.8% and 2.9% of total inventory purchases, respectively. Payable amounts outstanding to this vendor were approximately $1.8 million on June 30, 2011 and $1.6 million on December 31, 2010. Our payable terms and pricing with this vendor are consistent with the terms offered by other vendors in the ordinary course of business. The accounting policies that we apply to our transactions with our related party are consistent with those applied in transactions with independent third parties. Corporate management routinely monitors purchases from our related party vendor to ensure these purchases remain consistent with our business objectives.

Goodwill and Intangible Assets, Net

6 Months Ended

Jun. 30, 2011

Goodwill and Intangible Assets, Net [Abstract]

Goodwill and Intangible Assets, Net

Note 5: Goodwill and Intangible Assets, Net

Goodwill

Under the accounting guidance, the unit of accounting for goodwill is at a level of reporting referred to as a “reporting unit.” A reporting unit is either (1) an operating segment or (2) one level below an operating segment — referred to as a component. During the fourth quarter 2010, as a result of us flattening our management structure, and the acquisition of Enson we merged our international component with our domestic component. We no longer have separate management of the international component, and the financial results of our international component are not separate. In addition, these components have similar economic characteristics. As a result of these changes, our domestic and international components have been merged into our single operating segment.

The goodwill on June 30, 2011 and changes in the carrying amount of goodwill during the six months ended June 30, 2011 were the following:


(in thousands)
Balance at December 31, 2010	$	30,877
Goodwill adjustments ⁽¹⁾		156

Balance at June 30, 2011	$	31,033


⁽¹⁾		The adjustment included in international goodwill was the result of fluctuations in the foreign currency exchange rates used to translate the balance into U.S. dollars.

Please see Note 2 under the captions Goodwill and Fair-Value Measurements in our Annual Report on Form 10-K for further information regarding our accounting principles and the valuation methodology utilized.

Intangible Assets, net

The components of intangible assets, net on June 30, 2011 and December 31, 2010 were the following:


	June 30, 2011							December 31, 2010
			Accumulated							Accumulated
(In thousands)	Gross		Amortization			Net		Gross		Amortization			Net
Carrying amount⁽¹⁾:
Distribution rights (10 years)	$	417	$	(56	)	$	361	$	384	$	(51	)	$	333
Patents (10 years)		9,005		(4,926	)		4,079		8,612		(4,589	)		4,023
Trademarks and trade names (10 years) ⁽²⁾		2,834		(700	)		2,134		2,836		(565	)		2,271
Developed and core technology (5-15 years)		3,500		(554	)		2,946		3,500		(438	)		3,062
Capitalized software development costs (1-2 years)		1,974		(1,422	)		552		1,896		(1,165	)		731
Customer relationships (10-15 years)⁽³⁾		26,325		(2,039	)		24,286		26,349		(775	)		25,574

Total carrying amount	$	44,055	$	(9,697	)	$	34,358	$	43,577	$	(7,583	)	$	35,994


⁽¹⁾		This table excludes fully amortized intangible assets of $7.6 million and $7.6 million on June 30, 2011 and December 31, 2010, respectively.

⁽²⁾		As part of our acquisition of Enson Assets Limited during the fourth quarter of 2010, we purchased trademark and trade names valued at $2.0 million, which are being amortized ratably over ten years. Refer to Note 18 for further information regarding this purchase of trademark and trade names.

⁽³⁾		During the fourth quarter of 2010 as part of the Enson Assets Limited acquisition we purchased customer relationships valued at $23.3 million, which are being amortized ratably over ten years. Refer to Note 18 for further information regarding this purchase of these customer relationships.

Amortization expense is recorded in selling, general and administrative expenses, except amortization expense related to capitalized software development costs which is recorded in cost of sales. Amortization expense by income statement caption for the three and six months ended June 30, 2011 and 2010 is the following:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2011		2010		2011		2010
Cost of sales	$	126	$	109	$	257	$	225
Selling, general and administrative		954		312		1,895		623

Total amortization expense	$	1,080	$	421	$	2,152	$	848

Estimated future amortization expense related to our intangible assets on June 30, 2011, is the following:


(In thousands)
2011 (remaining 6 months)	$	2,141
2012		4,146
2013		3,852
2014		3,814
2015		3,751
Thereafter		16,654

Total	$	34,358

Intangibles Measured at Fair Value on a Nonrecurring Basis

We recorded impairment charges related to our intangible assets of $7 thousand and $8 thousand during the three and six months ended June 30, 2011. Impairment charges are recorded in selling, general and administrative expenses as a component of amortization expense, except impairment charges related to capitalized software development costs which are recorded in cost of sales. The fair value adjustments for intangible assets measured at fair value on a nonrecurring basis during the six months ended June 30, 2011 were comprised of the following:

Fair Value Measurement Using

Quoted Prices in

Active Markets

for Identical

Significant Other

Significant

(In thousands)

Six Months Ended

Assets

Observable Inputs

Unobservable Inputs

Total

Description

June 30, 2011

(Level 1)

(Level 2)

(Level 3)

Gains (Losses)

Patents, trademarks and trade names

6,213

—

6,213

)

We disposed of four patents and eleven trademarks with an aggregate carrying amount of $8 thousand resulting in impairment charges of $8 thousand during the six months ended June 30, 2011. We disposed of one patent and eight trademarks with an aggregate carrying amount of $7 thousand during the six months ended June 30, 2010. The intangible assets disposed of during the six months ended June 20, 2011 and 2010 no longer hold any probable future economic benefits and were written-off.

See Note 2 under the captions Long-Lived Assets and Intangible Assets Impairment, Capitalized Software Development Costs, and Fair-Value Measurements in our Annual Report on Form 10-K for further information regarding our accounting principles and valuation methodology utilized.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Notes Payable

6 Months Ended

Jun. 30, 2011

Notes Payable [Abstract]

Notes Payable

Note 6: Notes Payable

Notes payable on June 30, 2011 and December 31, 2010 were comprised of the following:


	Amount Outstanding
(In thousands)	June 30, 2011		December 31, 2010
U.S. Bank Term Loan Facility⁽¹⁾	$	20,600	$	35,000


⁽¹⁾		Under the U.S. Bank term loan, we may elect to pay interest based on the bank’s prime rate or LIBOR plus a fixed margin of 1.5%. The applicable LIBOR (1, 3, 6, or 12-month LIBOR) corresponds with the loan period we select. On June 30, 2011, the 1-month LIBOR plus the fixed margin was approximately 1.69% and the bank’s prime rate was 3.25%. If a LIBOR rate loan is prepaid prior to the completion of the loan period, we must pay the bank the difference between the interest the bank would have earned had prepayment not occurred and the interest the bank actually earned.

Our total interest expense on borrowings was $0.2 million and $0 during the six months ended June 30, 2011 and 2010, respectively.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2011
Income Taxes [Abstract]
Income Taxes	Note 7: Income Taxes We utilize our estimated annual effective tax rate to determine our provision for income taxes for interim periods. The income tax provision is computed by taking the estimated annual effective tax rate and multiplying it by the year-to-date pre-tax book income. We recorded income tax expense of $1.7 million and $2.5 million for the three months ended June 30, 2011 and 2010, respectively. Our effective tax rate was 22.1% and 34.7% during the three months ended June 30, 2011 and 2010, respectively. We recorded income tax expense of $2.3 million and $3.5 million for the six months ended June 30, 2011 and 2010, respectively. Our effective tax rate was 22.6% and 34.7% during the six months ended June 30, 2011 and 2010, respectively. On June 30, 2011, we had gross unrecognized tax benefits of approximately $6.0 million, including interest and penalties, of which approximately $5.4 million would affect the annual effective tax rate if these tax benefits are realized. Further, we are unaware of any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase within the next twelve months. However, based on federal, state and foreign statute expirations in various jurisdictions, we anticipate a decrease in unrecognized tax benefits of approximately $0.3 million within the next twelve months. We have elected to classify interest and penalties as a component of tax expense. Accrued interest and penalties of $0.2 million on June 30, 2011 and December 31, 2010 are included in our unrecognized tax benefits. We file income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. On June 30, 2011, the open statutes of limitations in our significant tax jurisdictions are as follows: federal 2006 through 2010, state 2006 through 2010, and non-U.S. 2002 through 2010. On June 30, 2011, our gross unrecognized tax benefits of $6.0 million are classified as long term because we do not anticipate the payment of cash related to those unrecognized tax benefits within one year. See Note 2 under the caption Income Taxes in our Annual Report on Form 10-K for further information regarding our accounting principles.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Accrued Compensation

6 Months Ended

Jun. 30, 2011

Accrued Compensation [Abstract]

Accrued Compensation

Note 8: Accrued Compensation

The components of accrued compensation on June 30, 2011 and December 31, 2010 are listed below:


(in thousands)	June 30, 2011		December 31, 2010
Accrued social insurance⁽¹⁾	$	19,604	$	20,360
Other accrued compensation		10,077		10,274

Total accrued compensation	$	29,681	$	30,634


⁽¹⁾		Effective January 1, 2008, the Chinese Labor Contract Law was enacted in the People’s Republic of China (“PRC”). This law mandated that PRC employers remit the applicable social insurance payments to their local government. Social insurance is comprised of various components such as pension, medical insurance, job injury insurance, unemployment insurance, and a housing assistance fund, and is administered in a manner similar to Social Security in the United States. This amount represents our estimate of the amounts due to the PRC government for social insurance on June 30, 2011 and December 31, 2010.

Other Accrued Expenses

6 Months Ended

Jun. 30, 2011

Other Accrued Expenses [Abstract]

Other Accrued Expenses

Note 9: Other Accrued Expenses

The components of other accrued expenses on June 30, 2011 and December 31, 2010 are listed below:


	June 30,		December 31,
(In thousands)	2011		2010
Accrued freight	$	2,110	$	1,350
Accrued professional fees		839		1,158
Accrued advertising and marketing		477		467
Deferred income taxes		—		57
Interest		100		99
Accrued third-party commissions		365		252
Accrued sales taxes and VAT		389		678
Tooling ⁽¹⁾		622		1,567
Utilities		311		340
Amount due to CG International Holdings Limited		5,138		5,138
Other		2,331		2,189

Total other accrued expenses	$	12,682	$	13,295


(1)		The tooling accrual balance relates to amounts capitalized within property, plant, and equipment, net on June 30, 2011 and December 31, 2010.

Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 10: Commitments and Contingencies

Indemnifications

We indemnify our directors and officers to the maximum extent permitted under the laws of the State of Delaware and we have entered into Indemnification Agreements with each of our directors and executive officers. In addition, we insure our individual directors and officers against certain claims and attorney’s fees and related expenses incurred in connection with the defense of such claims. The amounts and types of coverage may vary from period to period as dictated by market conditions. Management is not aware of any matters that require indemnification of its officers or directors.

Fair Price Provisions and Other Anti-Takeover Measures

Our Restated Certificate of Incorporation, as amended, contains certain provisions restricting business combinations with interested stockholders under certain circumstances and imposing higher voting requirements for the approval of certain transactions (“fair price” provisions). Any of these provisions may delay or prevent a change in control.

The “fair price” provisions require that holders of at least two-thirds of our outstanding shares of voting stock approve certain business combinations and significant transactions with interested stockholders.

Product Warranties

Changes in the liability for product warranty claim costs are presented below:


			Accruals
			(Reductions) for			Settlements
	Balance at		Warranties			(in Cash or in			Balance at
(In thousands)	Beginning of		Issued During			Kind) During			End of
Description	Period		the Period			the Period			Period
Six Months Ended June 30, 2011	$	71	$	(27	)	$	(38	)	$	6
Six Months Ended June 30, 2010	$	82	$	(63	)	$	(11	)	$	8

Litigation

On July 15, 2011, we filed a lawsuit against in the United States District Court, Central District of California (Universal Electronics Inc. v. Logitech, Inc., Logitech International S.A. and Logitech Europe S.A., SACV 11-1056-JVS(ANx)) alleging that the Logitech companies are infringing seventeen of our patent’s related to remote control technology. We have alleged that this complaint relates to multiple Logitech remote control products, including the Harmony H300, H650, H700, H900, One, H1100, Logitech Revue (for Google TV), Harmony remote apps for iOS and Android platforms, and other applications and/or programming for touch screen mobile devices. The Logitech companies have not yet answered our complaint.

There are no other pending legal proceedings to which we or any of our subsidiaries is a party or of which our respective property is the subject. However, as is typical in our industry and to the nature and kind of business in which we are engaged, from time to time, various claims, charges and litigation are asserted or commenced by third parties against us or by us against third parties arising from or related to product liability, infringement of patent or other intellectual property rights, breach of warranty, contractual relations, or employee relations. The amounts claimed may be substantial but may not bear any reasonable relationship to the merits of the claims or the extent of any real risk of court awards assessed against us or in our favor. However, no assurances can be made as to the outcome of any of these matters, nor can we estimate the range of potential losses to us. In our opinion, final judgments, if any, which might be rendered against us in potential or pending litigation would not have a material adverse effect on our financial condition or results of operations. Moreover, we believe that our products do not infringe any third parties’ patents or other intellectual property rights.

We maintain directors’ and officers’ liability insurance which insures our individual directors and officers against certain claims, as well as attorney’s fees and related expenses incurred in connection with the defense of such claims.

Long-Term Incentive Plan

Our Compensation Committee awarded a discretionary cash bonus of $1.0 million, to be paid out quarterly during 2009 and 2010. The Compensation Committee made this decision after reviewing the economic environment and our relative financial and operating performance. The Compensation Committee believed this bonus was in alignment with our stockholders’ interests as well as our performance, alignment and retention objectives. Each participant’s earned award vests in eight equal quarterly installments beginning June 30, 2009 and ending December 31, 2010. Approximately $0.3 million and 0.1 million was paid and expensed, respectively, during the six months ended June 30, 2010 to our executive management team. All amounts earned have been paid as of June 30, 2011 and December 31, 2010.

Non-Qualified Deferred Compensation Plan

We have adopted a non-qualified deferred compensation plan for the benefit of a select group of highly compensated employees. For each plan year a participant may elect to defer compensation in fixed dollar amounts or percentages subject to the minimums and maximums established under the plan. Generally, an election to defer compensation is irrevocable for the entire plan year. A participant is always fully vested in their elective deferrals and may direct these funds into various investment options available under the plan. These investment options are utilized for measurement purposes only, and may not represent the actual investment made by us. In this respect, the participant is an unsecured creditor of ours. On June 30, 2011 and December 31, 2010, the amounts deferred under the plan were immaterial to our financial statements.

Defined Benefit Plan

Our subsidiary in India maintains a defined benefit pension plan (“India Plan”) for local employees, which is consistent with local statutes and practices. The India Plan was adequately funded as of June 30, 2011 based on its latest actuarial report. The India Plan has an independent external manager that advises us of the appropriate funding contribution requirements to which we comply. On June 30, 2011, approximately 30% of our 130 employees in India had qualified for eligibility. Generally, an employee must be employed by the company for a minimum of five years before becoming eligible. At the time of eligibility we are liable, on termination, resignation or retirement, to pay the employee an amount equal to 15 days salary for each year of service completed. The total amount of liability outstanding on June 30, 2011 and December 31, 2010 for the India Plan was not material. During the three and six months ended June 30, 2011 and 2010, the net periodic benefit costs were also not material.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
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+ Details

Treasury Stock	6 Months Ended
Treasury Stock	Jun. 30, 2011
Comprehensive Income and Treasury Stock [Abstract]
Treasury Stock	Note 11: Treasury Stock During the six months ended June 30, 2011 and 2010, we repurchased 137,190 and 355,254 shares of our common stock at a cost of $3.5 million and $7.3 million, respectively. Repurchased shares are recorded as shares held in treasury at cost. We generally hold these shares for future use as our management and Board of Directors deem appropriate, including compensating our outside directors. During the six months ended June 30, 2011 and 2010, we issued 15,000 and 14,583 shares, respectively, to outside directors for services performed (see Note 14). On February 11, 2010, our Board of Directors authorized management to continue repurchasing up to an additional 1,000,000 shares of our issued and outstanding common stock. Repurchases may be made whenever we deem a repurchase is a good use of our cash and the price to be paid is at or below a threshold approved by our Board. As of June 30, 2011, we have repurchased 610,316 shares of our common stock under this authorization, leaving 389,684 shares available for repurchase.

Comprehensive Income

6 Months Ended

Jun. 30, 2011

Comprehensive Income and Treasury Stock [Abstract]

Comprehensive Income

Note 12: Comprehensive Income

The components of comprehensive income are listed below:


	Three Months Ended					Six Months Ended
	June 30,					June 30,
(In thousands)	2011		2010			2011		2010
Net income	$	6,121	$	4,777		$	7,948	$	6,613
Other comprehensive income (loss)
Foreign currency translations ⁽¹⁾		1,494		(3,361	)		4,193		(5,481	)

Comprehensive income	$	7,615	$	1,416		$	12,141	$	1,132


⁽¹⁾		The foreign currency translation gain of $4.2 million for the six months ended June 30, 2011 was due primarily to the weakening of the U.S. dollar against the Euro. The foreign currency translation loss of $5.5 million for the six months ended June 30, 2010 was due primarily to the strengthening of the U.S. dollar against the Euro. The U.S. dollar/Euro spot rate was 1.45 and 1.34 on June 30, 2011 and December 31, 2010, respectively, and 1.23 and 1.43 on June 30, 2010 and December 31, 2009, respectively.

See Note 2 under the caption Foreign Currency Translation and Foreign Currency Transactions in our Annual Report on Form 10-K for further information regarding our accounting principles.

- Definition

The entire disclosure for comprehensive income. Includes, but is not limited to, the following: 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income. Components of comprehensive income include: (1) foreign currency translation adjustments; (2) gains (losses) on foreign currency transactions that are designated as, and are effective as, economic hedges of a net investment in a foreign entity; (3) gains (losses) on intercompany foreign currency transactions that are of a long-term-investment nature, when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting enterprise's financial statements; (4) change in the market value of a futures contract that qualifies as a hedge of an asset reported at fair value; (5) unrealized holding gains (losses) on available-for-sale securities and that resulting from transfers of debt securities from the held-to-maturity category to the available-for-sale category; (6) a net loss recognized as an additional pension liability not yet recognized as net periodic pension cost; and (7) the net gain (loss) and net prior service cost or credit for pension plans and other postretirement benefit plans.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 130
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Business Segment and Foreign Operations

6 Months Ended

Jun. 30, 2011

Business Segment and Foreign Operations [Abstract]

Business Segment and Foreign Operations

Note 13: Business Segment and Foreign Operations

Reportable Segment

An operating segment, in part, is a component of an enterprise whose operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. Operating segments may be aggregated only to a limited extent. We operate in a single operating and reportable segment.

Our chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues for purposes of making operating decisions and assessing financial performance. Accordingly, we consider ourselves to be a single reporting segment.

Foreign Operations

Our sales by geographic area were the following:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2011		2010		2011		2010
Net sales
United States	$	30,912	$	30,508	$	61,422	$	59,430
International:
People’s Republic of China		29,220		6,019		52,786		9,460
United Kingdom		5,610		12,829		11,529		24,680
Argentina		1,521		1,316		2,264		2,777
Australia		332		—		556		—
Brazil		1,919		400		2,414		644
Canada		2,659		3,108		5,217		6,627
France		1,255		823		2,108		1,282
Germany		1,466		1,824		3,126		3,586
Israel		800		714		1,610		1,718
Italy		540		320		1,296		954
Japan		10,681		1,166		21,275		1,970
South Korea		1,435		935		4,864		1,955
Malaysia		4,484		—		9,498		8
Netherlands		368		546		590		546
Portugal		699		1,203		800		1,711
Singapore		7,448		4,118		12,028		8,607
South Africa		1,755		2,149		2,378		3,060
Spain		968		1,278		2,053		2,579
Taiwan		6,283		2,118		11,346		3,763
Thailand		4,995		1,748		7,471		3,910
All other		6,396		5,770		10,827		11,001

Total international		90,834		48,384		166,036		90,838

Total net sales	$	121,746	$	78,892	$	227,458	$	150,268

Specific identification of the customer location was the basis used for attributing revenues from external customers to individual countries.

Long-lived asset information is the following:


	June 30,		December 31,
(In thousands)	2011		2010
Long-lived tangible assets:
United States	$	4,231	$	4,654
People’s Republic of China		75,663		75,053
All other countries		3,866		3,854

Total	$	83,760	$	83,561

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 131
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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+ Details

Stock-Based Compensation

6 Months Ended

Jun. 30, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 14: Stock-Based Compensation

Stock-based compensation expense for each employee and director is presented in the same income statement caption as their cash compensation. Stock-based compensation expense by income statement caption for the three and six months ended June 30, 2011 and 2010 is the following:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2011		2010		2011		2010
Cost of sales	$	2	$	14	$	11	$	28
Research and development		44		105		136		243
Selling, general and administrative		1,007		1,228		1,938		2,261

Stock-based compensation expense before income taxes	$	1,053	$	1,347	$	2,085	$	2,532

Selling, general and administrative expense includes pre-tax stock-based compensation related to stock option awards granted to outside directors of $0 and $0.1 million for the three months ended June 30, 2011 and 2010, respectively. During the six months ended June 30, 2011 and 2010, pre-tax stock-based compensation related to options granted to directors was $0.1 million and $0.2 million, respectively.

Selling, general and administrative expense also includes stock-based compensation related to restricted stock awards granted to outside directors of $0.1 million and $0.2 million for the three months ended June 30, 2011 and 2010, respectively. During the six months ended June 30, 2011 and 2010, stock-based compensation related to restricted stock awards granted to outside directors was $0.2 million and $0.3 million, respectively.

The income tax benefit from the recognition of stock-based compensation for the three months ended June 30, 2011 and 2010 was $0.3 million and $0.5 million, respectively. The income tax benefit from the recognition of stock-based compensation for the six months ended June 30, 2011 and 2010 was $0.7 million and $0.9 million, respectively.

Stock Options

During the six months ended June 30, 2011 the Compensation Committee and Board of Directors granted 107,600 stock options, including 92,600 to our Named Executive Officers, with an aggregate grant date fair value of $1.5 million under various stock incentive plans. The stock options granted to employees during 2011 consisted of the following:

(In thousands, except share amounts)

Number of

Grant

Shares

Date

Stock Option

Underlying

Fair

Grant Date

Options

Value

Vesting Period

January 26, 2011

15,000

192

4-Year Vesting Period (25% each year)

April 6, 2011

92,600

1,286

3-Year Vesting Period (8.33% each quarter)

107,600

1,478

During the six months ended June 30, 2011 we recognized $0.1 million of pre-tax stock-based compensation expense related to our 2011 stock option grants.

The assumptions we utilized in the Black-Scholes option pricing model and the resulting weighted average fair values of stock option grants were the following:


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011			2010		2011			2010
Weighted average fair value of grants⁽¹⁾	$	13.89		$	—	$	13.74		$	11.35
Risk-free interest rate		2.33	%		—		2.29	%		2.37	%
Expected volatility		52.28	%		—		52.25	%		50.01	%
Expected life in years		5.03			—		5.03			4.95


⁽¹⁾		The weighted average fair value of grants was calculated utilizing the stock options granted during each respective period.

Stock option activity during the six months ended June 30, 2011 was the following:


						Weighted-
						Average
				Weighted-		Remaining
	Number of			Average		Contractual		Aggregate
	Options			Exercise		Term		Intrinsic Value
	(thousands)			Price		(In years)		$ (thousands)
Outstanding on December 31, 2010		1,525		$	18.78
Granted		108			28.97
Exercised		(74	)		16.36			$	758
Forfeited/cancelled/ expired		(10	)		20.46

Outstanding on June 30, 2011		1,549		$	19.59		5.25	$	9,989

Vested and expected to vest on June 30, 2011		1,531		$	19.55		5.21	$	9,943
Exercisable on June 30, 2011		1,207		$	18.62		4.29	$	8,807

The aggregate intrinsic value in the table above represents the total pre-tax value that option holders would have received had all option holders exercised their options on June 30, 2011. The aggregate intrinsic value is the difference between the closing price of Universal Electronics Inc.’s common stock on the last trading day of the second quarter of 2011 and the option exercise price, multiplied by the number of in-the-money options. This amount will change based on the fair market value of our stock. The total intrinsic value of options exercised for the three months ended June 30, 2011 and 2010, was $0.6 million and $0.04 million, respectively. The total intrinsic value of options exercised for the six months ended June 30, 2011 and 2010, was $0.8 million and $0.1 million, respectively.

On June 30, 2011, there was $2.9 million of unrecognized pre-tax stock-based compensation expense related to non-vested stock options which we expect to recognize over a weighted-average period of 2.4 years.

Restricted Stock

During the six months ended June 30, 2011 the Compensation Committee and Board of Directors granted 43,900 restricted stock awards to our Named Executive Officers with an aggregate grant date fair value of $1.3 million under the 2006 Stock Incentive Plan. The restricted stock awards consisted of the following:

(In thousands, except share amounts)

Number of

Grant

Shares

Date

Restricted Stock

Underlying

Fair

Grant Date

Options

Value

Vesting Period

April 6, 2011

43,900

1,284

3-Year Vesting Period (8.33% each quarter)

43,900

1,284

During the six months ended June 30, 2011 we recognized $0.1 million of pre-tax stock-based compensation expense related to our 2011 restricted stock award grants.

Non-vested restricted stock award activity during the six months ended June 30, 2011 (including restricted stock issued to directors as described in Note 11) was the following:


				Weighted-
	Shares			Average
	Granted			Grant Date
	(thousands)			Fair Value
Non-vested on December 31, 2010		195		$	17.30
Granted		44			29.25
Vested		(78	)		15.45
Forfeited		(2	)		16.22

Non-vested on June 30, 2011		159		$	21.51

At June 30, 2011, we expect to recognize $2.9 million of unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock awards over a weighted-average period of 2.1 years.

On July 15, 2011, the Board of Directors granted certain executives, other than our Named Executive Officers, 100,000 restricted stock awards under the 2010 Stock Incentive Plan. The awards were granted as part of long-term incentive compensation to assist us with meeting our performance and retention objectives. The grant is subject to a three-year vesting period (8.33% each quarter). The total grant date fair value of these awards was $2.5 million. In addition, on July 1, 2011, we granted our Directors 30,000 restricted stock awards under the 2010 Stock Incentive Plan. The awards were granted as part of our Director’s annual compensation. The grant is subject to a one-year vesting period (25% each quarter). The total grant date fair value of the restricted stock awards to our Directors was $0.8 million.

See Note 2 under the caption Stock-Based Compensation in our Annual Report on Form 10-K for further information regarding our accounting principles.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

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+ Details

Other Income (Expense), net

6 Months Ended

Jun. 30, 2011

Other Income (Expense), net [Abstract]

Other Income (Expense), net

Note 15: Other Income (Expense), net

The components of other income (expense), net for the three and six months ended June 30, 2011 and 2010 are the following:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands)	2011			2010			2011			2010
Net gain (loss) on foreign currency exchange contracts⁽¹⁾	$	108		$	(272	)	$	447		$	(306	)
Net gain on foreign currency exchange transactions		—			247			353			321
Other (expense) income		(492	)		4			(1,218	)		7

Other (expense) income, net	$	(384	)	$	(21	)	$	(418	)	$	22


⁽¹⁾		This represents the losses and gain incurred on foreign currency hedging derivatives (see Note 17 for further details).

Earnings Per Share

6 Months Ended

Jun. 30, 2011

Earnings Per Share [Abstract]

Earnings Per Share

Note 16: Earnings Per Share

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares and dilutive potential common shares, which includes the dilutive effect of stock options and restricted stock grants. Dilutive potential common shares for all periods presented are computed utilizing the treasury stock method.

In the computation of diluted earnings per common share for the three months ended June 30, 2011 and 2010, we have excluded 484,889 and 527,587 stock options, respectively, with exercise prices greater than the average market price of the underlying common stock, because their inclusion would have been anti-dilutive. Furthermore, for the three months ended June 30, 2011 and 2010, we have excluded 42,177 and 195,492 of unvested shares of restricted stock, respectively, whose combined unamortized fair value and excess tax benefits were greater in each of those periods than the average market price of the underlying common stock, as their effect would be anti-dilutive.

In the computation of diluted earnings per common share for the six months ended June 30, 2011 and 2010, we have excluded 431,561 and 473,299 stock options, respectively, with exercise prices greater than the average market price of the underlying common stock, because their inclusion would have been anti-dilutive. Furthermore, for the six months ended June 30, 2011 and 2010, we have excluded 21,827 and 198,001 of unvested shares of restricted stock, respectively, whose combined unamortized fair value and excess tax benefits were greater in each of those periods than the average market price of the underlying common stock, as their effect would be anti-dilutive.

Basic and diluted earnings per share for the three and six months ended June 30, 2011 and 2010, are calculated as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands, except per-share amounts)	2011		2010		2011		2010
BASIC
Net income	$	6,121	$	4,777	$	7,948	$	6,613

Weighted-average common shares outstanding		15,025		13,601		15,000		13,650

Basic earnings per share	$	0.41	$	0.35	$	0.53	$	0.48

DILUTED
Net income	$	6,121	$	4,777	$	7,948	$	6,613

Weighted-average common shares outstanding for basic		15,025		13,601		15,000		13,650
Dilutive effect of stock options and restricted stock		382		328		395		361

Weighted-average common shares outstanding on a diluted basis		15,407		13,929		15,395		14,011

Diluted earnings per share	$	0.40	$	0.34	$	0.52	$	0.47

Derivatives

6 Months Ended

Jun. 30, 2011

Derivatives [Abstract]

Derivatives

Note 17: Derivatives

Derivatives Measured at Fair Value on a Recurring Basis

We are exposed to market risks from foreign currency exchange rates, which may adversely affect our operating results and financial position. Our foreign currency exposures are primarily concentrated in the Brazilian Real, British Pound, Chinese Yuan Renminbi, Euro, Hong Kong dollar, Indian Rupee, and Singapore dollar. We periodically enter into foreign currency exchange contracts with terms normally lasting less than nine months to protect against the adverse effects that exchange rate fluctuations may have on our foreign currency denominated receivables, payables, cash flows and reported income. Derivative financial instruments are used to manage risk and are not used for trading or other speculative purposes. We do not use leveraged derivative financial instruments and these derivatives have not qualified for hedge accounting.

The gains and losses on both the derivatives and the foreign currency-denominated balances are recorded as foreign exchange transaction gains or losses and are classified in other (expense) income, net. Derivatives are recorded on the balance sheet at fair value. The estimated fair values of our derivative financial instruments represent the amount required to enter into offsetting contracts with similar remaining maturities based on quoted market prices.

We have determined that the fair value of our derivatives is derived from level 2 inputs in the fair value hierarchy. See Note 2 under the captions Derivatives and Fair-Value Measurements in our Annual Report on Form 10-K for further information concerning the accounting principles and valuation methodology utilized.

The following table sets forth our financial assets that were accounted for at fair value on a recurring basis on June 30, 2011:


			Fair Value Measurement Using
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
(In thousands)			Assets		Inputs		Inputs
Description	June 30, 2011		(Level 1)		(Level 2)		(Level 3)
Foreign currency exchange futures contracts	$	69	$	—	$	69	$	—

	$	69	$	—	$	69	$	—

We held foreign currency exchange contracts which resulted in a net pre-tax gain of approximately $0.1 million and a net pre-tax loss of $0.3 million for the three months ended June 30, 2011 and 2010, respectively. For the six months ended June 30, 2011 and 2010, we had a net pre-tax gain of $0.4 million and a net pre-tax loss of $0.3 million, respectively.

Futures Contracts

We held one USD/Euro futures contract with a notional value of $7.5 million and a forward rate of $1.4378 USD/Euro on June 30, 2011. We held the Euro position on this contract, which settled on July 29, 2011. The gain on this contract as of June 30, 2011 was $69 thousand and was included in prepaid expenses and other current assets. This contract was settled at a gain of $4 thousand resulting in a loss of $65 thousand during July 2011.

We held one USD/Euro futures contract with a notional value of $4.0 million and a forward rate of $1.3073 USD/Euro at December 31, 2010. We held the Euro position on this contract, which settled on January 28, 2011. The gain on this contract as of December 31, 2010 was $87 thousand and is included in prepaid expenses and other current assets. This contract was settled at a gain of $198 thousand resulting in a gain of $111 thousand in January 2011.

We held one USD/Indian Rupee futures contract with a notional value of INR133.5 million and a forward rate of INR45.47 INR/USD at December 31, 2010. We held the USD position on this contract, which settled on January 28, 2011. The loss on this contract as of December 31, 2010 was $43 thousand and is included in other accrued expenses. This contract was settled at a gain of $10 thousand resulting in a gain of $53 thousand in January 2011.

We held one USD/Chinese Yuan Renminbi futures contract with a notional value of $1.0 million and a forward rate of CNY6.6819 CNY/USD at December 31, 2010. We held the USD position on this contract, which settled on January 24, 2011. The loss on this contract as of December 31, 2010 was $11 thousand and is included in other accrued expenses. This contract was settled at a loss of $14 thousand resulting in a loss of $3 thousand in January 2011.

We held one USD/Chinese Yuan Renminbi futures contract with a notional value of $1.0 million and a forward rate of CNY6.6681 CNY/USD at December 31, 2010. We held the USD position on this contract, which was scheduled to settle on February 24, 2011. The contract was terminated on January 21, 2011. The loss on this contract as of December 31, 2010 was $13 thousand and is included in other accrued expenses. This contract was settled on the termination date at a loss of $16 thousand resulting in a loss of $3 thousand in January 2011.

We held one USD/Euro futures contract with a notional value of $1.5 million and a forward rate of $1.4386 USD/Euro at December 31, 2009. We held the Euro position on this contract, which settled on January 15, 2010. The loss on this contract as of December 31, 2009 was $5 thousand and is included in other accrued expenses. This contract was settled at a gain of $11 thousand resulting in a gain of $16 thousand in January 2010.

- Definition

The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 45
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 50
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+ Details

Business Combination

6 Months Ended

Jun. 30, 2011

Business Combination [Abstract]

Business Combination

Note 18: Business Combination

Enson Assets Limited

On November 3, 2010, our subsidiary, UEI Hong Kong Private Limited, entered into a stock purchase agreement with CG International Holdings Limited (“CG”) to acquire all of the issued shares in the capital of Enson Assets Limited (“Enson”) for total consideration of approximately $125.9 million. This transaction closed on November 4, 2010. The consideration consisted of $95.1 million in cash and 1,460,000 of newly issued shares of UEI common stock. A total of $5.0 million of the purchase price was held back at the closing to provide for any additional payments required by CG as a result of Enson’s failure to meet both a net asset target and an earnings target (see “Contingent Consideration” below) and also to support indemnification claims that could be made by us within one year following the closing of this acquisition. We have included the $5.0 million that was held back in the purchase price allocation, since it is probable that we will owe the full amount to CG. The $5.0 million is included in our other accrued liabilities balance at June 30, 2011 and December 31, 2010.

Consideration

The sources of the consideration were the following:


(In thousands)			Percentage of
Source Description	Amount		Consideration
Existing cash and cash equivalents	$	54,138		43.0	%
Funds from new U.S. Bank Secured Term Loan (see Note 6)		35,000		27.8
Funds from new U.S. Bank Secured Revolving Credit Line (see Note 6)		6,000		4.8
Newly issued shares of Universal Electronics Inc. common stock		30,762		24.4

	$	125,900		100	%

Contingent Consideration

Net Asset Target on November 3, 2010

To the extent that Enson’s net assets were less than $68.5 million on November 3, 2010, CG would have had to pay us the difference, plus interest. To the extent that the Enson net assets were greater than $68.5 million we would pay CG the difference, plus interest. This calculation was finalized during the first quarter of 2011 when the auditor issued their report on Enson’s November 3, 2010 Statement of Net Assets. On November 3, 2010, Enson’s net assets, as defined by the stock purchase agreement, were $68.6 million. As such, the total consideration and the goodwill recognized to acquire Enson increased $0.1 million from December 31, 2010 to June 30, 2011. On May 5, 2011, we received a Dispute Notice from CG, pursuant to the Stock Purchase Agreement, outlining their disagreement with certain tax estimates included within Enson’s Statement of Net Assets on November 3, 2010. We disagree with CG; however, depending on the ultimate resolution of this dispute, the total purchase consideration may increase by up to $1.5 million.

Earnings Target for the Twelve Months Ending June 30, 2011

To the extent that Enson’s earnings for the twelve months ended June 30, 2011 are less than $16.2 million, CG will have to pay us an amount equal to the product of (a) the difference between Enson’s earnings and $16.2 million, multiplied by (b) one and one half, plus interest. CG is required to make this payment within five business days of the issuance of the auditor’s report on Enson’s accounts.

For the purposes of this calculation, Enson’s earnings are defined as Enson’s consolidated profit before tax for the twelve months ending June 30, 2011 excluding certain agreed upon adjustments, including without limitation, the following items: profit related to UEIC sales, investment income, other income, other expenses, other gains and losses, and interest expenses.

On the date of this filing, the auditors have not yet issued their report on Enson’s accounts; however, we do not anticipate that any amounts will be owed by CG.

Acquisition Costs

We recognized $0.7 million of total acquisition costs related to the Enson transaction in selling, general and administrative expenses during the quarter ended December 31, 2010. The acquisition costs consisted primarily of legal and investment banking services.

In addition to the costs incurred to acquire Enson, during January 2011 our Compensation Committee approved a discretionary bonus of $0.4 million to be awarded to certain employees directly involved in the acquisition process. This discretionary bonus was ratified by our Board of Directors during February 2011, and was paid during March 2011. The entire amount was included in accrued compensation at December 31, 2010.

Preliminary Purchase Price Allocation

Under the acquisition method of accounting, the acquisition date fair value of the consideration transferred is allocated to the net tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date. Management’s preliminary purchase price allocation on November 4, 2010 (the Enson acquisition date) is the following:


	Weighted
	Average	Preliminary
(in thousands)	Estimated Lives	Fair Value
Cash & cash equivalents		$	20,866
Inventories			23,469
Accounts receivable			37,625
Prepaid expenses and other current assets			738
Property, plant and equipment	20 years		66,644
Deferred income taxes			2,619
Other assets			3,409
Interest bearing liabilities			(4,227	)
Non-interest bearing liabilities			(67,879	)

Net tangible assets acquired			83,264
Customer relationships	10 years		23,300
Trademark and trade name	10 years		2,000
Goodwill			17,336

Total estimated purchase price		$	125,900

Management’s preliminary determination of the fair value of the tangible and intangible assets acquired and liabilities assumed are based on estimates and assumptions that are subject to change. During the measurement period, if information becomes available which would indicate adjustments are required to the purchase price allocation, such adjustments will be included in the purchase price allocation retrospectively. The measurement period can extend as long as one year from the acquisition date. We have made two adjustments to the preliminary purchase price allocation since December 31, 2010. We increased the purchase consideration and goodwill by $0.1 million as a result of the issuance of the auditor’s report on Enson’s November 3, 2010 Statement of Net Assets (see “Net Asset Target on November 3, 2010” above), and we increased goodwill and decreased the deferred income taxes acquired by $0.4 million as a result of certain deferred tax assets not expected to be realized. We are currently evaluating the results of the earnings target as defined in the stock purchase agreement; however, we do not believe this will result in an adjustment to the preliminary purchase price accounting. In addition, on May 5, 2011, we received a Dispute Notice from CG, pursuant to the Stock Purchase Agreement, outlining their disagreement with certain tax estimates included within Enson’s Statement of Net Assets on November 3, 2010. We disagree with CG; however, depending on the ultimate resolution of this dispute, the total purchase consideration may increase by up to $1.5 million.

Intangible Assets Subject to Amortization

Of the total estimated purchase price, $83.3 million has been allocated to net tangible assets acquired, $17.3 million has been allocated to goodwill, and $25.3 million has been allocated to identifiable intangible assets acquired. The identified intangible assets consist of $23.3 million assigned to customer relationships and $2.0 million assigned to trademark and trade name. UEI expects to amortize the fair value of Enson’s customer relationships on a straight-line basis over an estimated life of 10 years. UEI expects to amortize the value of Enson’s trademark and trade name on a straight-line basis over an estimated life of ten years. The customer relationships and trademark and trade name amortization will not be deductible for tax purposes.

Goodwill

Goodwill represents the excess of the purchase consideration over the estimated fair value of identifiable tangible and intangible assets acquired. Goodwill from this transaction of $17.3 million will not be amortized, but will be analyzed for impairment on at least an annual basis in accordance with U.S. GAAP. We review our goodwill for impairment annually on December 31 and whenever events or changes in circumstances indicate that an impairment loss may have occurred. Of the total goodwill recorded, none is expected to be deductible for tax purposes.

Pro forma Results (Unaudited)

The following unaudited pro forma financial information presents the combined results of our operations and the operations of the Enson acquisition as if this transaction occurred at the beginning of the period indicated.

Pro forma results were as follows for the three and six months ended June 30, 2010:


	Three Months Ended		Six Months Ended
(in thousands, except per share information)	June 30, 2010		June 30, 2010
Net sales	$	114,178	$	216,261
Net income	$	7,845	$	12,913
Basic and diluted net income per share:
Basic	$	0.52	$	0.86
Diluted	$	0.51	$	0.84

The unaudited pro forma financial information is not intended to represent or be indicative of the consolidated results of operations that would have been achieved had the acquisition actually been completed as of the date presented, and should not be taken as a projection of the future consolidated results of our operations.

Adjustments to reduce net income of $3.5 million and $5.1 million for the three and six months ended June 30, 2010 have been made to the combined results of operations for the three and six months ended June 30, 2010. These adjustments reflect primarily acquisition costs, interest on the term loan and line of credit, amortization of acquired intangible assets, amortization and depreciation of the fair value adjustments to prepaid land and property, plant, and equipment. All adjustments have been made net of their related tax effects.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 88-16
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141
-Paragraph 51, 52
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Appendix F
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+ Details