View Filing Data

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2012	May 01, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	UNIVERSAL ELECTRONICS INC
Entity Central Index Key	0000101984
Document Type	10-Q
Document Period End Date	Mar. 31, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		14,931,793

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 24,312	$ 29,372
Accounts receivable, net	73,817	82,184
Inventories, net	85,131	90,904
Prepaid expenses and other current assets	3,892	3,045
Deferred income taxes	6,502	6,558
Total current assets	193,654	212,063
Property, plant, and equipment, net	78,990	80,449
Goodwill	30,882	30,820
Intangible assets, net	32,005	32,814
Other assets	5,225	5,350
Deferred income taxes	8,085	7,992
Total assets	348,841	369,488
Current liabilities:
Accounts payable	40,224	55,430
Line of credit	2,000	2,000
Notes payable	12,200	14,400
Accrued sales discounts, rebates and royalties	5,314	6,544
Accrued income taxes	3,388	5,707
Accrued compensation	29,111	29,204
Deferred income taxes	61	50
Other accrued expenses	9,481	13,967
Total current liabilities	101,779	127,302
Long-term liabilities:
Deferred income taxes	11,206	11,056
Income tax payable	1,136	1,136
Other long-term liabilities	3	5
Total liabilities	114,124	139,499
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 5,000,000 shares authorized; none issued or outstanding
Common stock, $0.01 par value, 50,000,000 shares authorized; 21,263,655 and 21,142,915 shares issued on March 31, 2012 and December 31, 2011, respectively	213	211
Paid-in capital	176,069	173,701
Accumulated other comprehensive income	1,866	938
Retained earnings	155,648	154,016
Stockholders' equity before treasury stock	333,796	328,866
Less cost of common stock in treasury, 6,362,796 and 6,353,035 shares on March 31, 2012 and December 31, 2011, respectively	(99,079)	(98,877)
Total stockholders' equity	234,717	229,989
Total liabilities and stockholders' equity	$ 348,841	$ 369,488

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2012	Dec. 31, 2011
Consolidated Balance Sheets [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	21,263,655	21,142,915
Treasury stock, shares	6,362,796	6,353,035

Consolidated Income Statements (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Consolidated Income Statements [Abstract]
Net sales	$ 103,732	$ 105,712
Cost of sales	75,405	78,133
Gross profit	28,327	27,579
Research and development expenses	3,463	3,257
Selling, general and administrative expenses	22,552	21,787
Operating income	2,312	2,535
Interest expense, net	(37)	(85)
Other expense, net	(324)	(34)
Income before provision for income taxes	1,951	2,416
Provision for income taxes	(319)	(589)
Net income	$ 1,632	$ 1,827
Earnings per share:
Basic	$ 0.11	$ 0.12
Diluted	$ 0.11	$ 0.12
Shares used in computing earnings per share:
Basic	14,871	14,976
Diluted	15,108	15,383

Consolidated Comprehensive Income Statements (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Consolidated Comprehensive Income Statements [Abstract]
Net income	$ 1,632	$ 1,827
Other comprehensive income:
Change in foreign currency translation adjustment	928	2,699
Comprehensive income	$ 2,560	$ 4,526

- Definition

The change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources which are attributable to the reporting entity. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, but excludes any and all transactions which are directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent.

+ References

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-Publisher AICPA
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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

- Definition

Adjustment that results from the process of translating subsidiary financial statements and foreign equity investments into the reporting currency of the reporting entity, net of tax.

+ References

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+ Details

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash (used for) provided by operating activities:
Net income	$ 1,632	$ 1,827
Adjustments to reconcile net income to net cash (used for) provided by operating activities:
Depreciation and amortization	4,260	4,309
Provision for doubtful accounts	(17)	6
Provision for inventory write-downs	894	882
Deferred income taxes	124	124
Tax benefit from exercise of stock options and vested restricted stock	8	34
Excess tax benefit from stock-based compensation	(30)	(158)
Shares issued for employee benefit plan	121	156
Stock-based compensation	1,197	1,032
Changes in operating assets and liabilities:
Accounts receivable	8,934	10,559
Inventories	5,387	1,129
Prepaid expenses and other assets	(681)	(83)
Accounts payable and accrued expenses	(21,511)	(15,739)
Accrued income taxes	(2,343)	(3,930)
Net cash (used for) provided by operating activities	(2,025)	148
Cash used for investing activities:
Acquisition of property, plant, and equipment	(1,712)	(2,338)
Acquisition of intangible assets	(216)	(283)
Net cash used for investing activities	(1,928)	(2,621)
Cash used for financing activities:
Issuance of debt	5,000
Payment of debt	(7,200)	(7,200)
Proceeds from stock options exercised	1,151	101
Treasury stock purchased	(309)	(371)
Excess tax benefit from stock-based compensation	30	158
Net cash used for financing activities	(1,328)	(7,312)
Effect of exchange rate changes on cash	221	624
Net decrease in cash and cash equivalents	(5,060)	(9,161)
Cash and cash equivalents at beginning of period	29,372	54,249
Cash and cash equivalents at end of period	$ 24,312	$ 45,088

Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Consolidated Statements of Cash Flows [Abstract]
Income tax payments	$ 1.1	$ 4.7
Interest payments	$ 0.1	$ 0.1

Basis of Presentation and Significant Accounting Policies

3 Months Ended

Mar. 31, 2012

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 months ended March 31, 2012 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, 2011.

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 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, 2011 for a summary of our significant accounting policies.

New Accounting Pronouncements

The Financial Accounting Standards Board (“FASB”) did not issue any Accounting Standards Update (“ASU”) during the first quarter of 2012.

Recently Adopted Accounting Pronouncements

During June 2011, the FASB issued ASU No. 2011-05 which requires an entity to present 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. We adopted this ASU beginning January 1, 2012.

We adopted the following accounting standards during 2011, none of which had a material effect on our consolidated financial position and results of operations:

•

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. We adopted this ASU beginning January 1, 2011.

•

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. We adopted this ASU beginning January 1, 2011.

•

During October 2009, the FASB issued ASU No. 2009-14 to address accounting for arrangements that contain tangible products and software. We adopted this ASU beginning January 1, 2011.

•

During 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. We adopted this ASU beginning January 1, 2011.

- 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
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+ Details

Cash and Cash Equivalents

3 Months Ended

Mar. 31, 2012

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 March 31, 2012 and December 31, 2011 were the following:


	March 31, 2012								December 31, 2011
(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	$	24,312	$	—	$	—	$	24,312	$	29,372	$	—	$	—	$	29,372

On March 31, 2012, we had approximately $2.0 million, $3.4 million, $15.6 million, $0.2 million and $3.1 million of cash and cash equivalents in the United States, Europe, Asia, Cayman Islands, and South America, respectively.

On December 31, 2011, we had approximately $4.1 million, $7.6 million, $16.5 million, $0.1 million, and $1.1 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 and Cash Equivalents 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)
-Number 210
-Section 02
-Paragraph 1
-Article 5

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 7
-Footnote 1
-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 95
-Paragraph 8, 9, 10
-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 Staff Accounting Bulletin (SAB)
-Number Topic 6
-Section H
-Subsection 3

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Cash
-URI http://asc.fasb.org/extlink&oid=6506951

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Cash Equivalents
-URI http://asc.fasb.org/extlink&oid=6507016

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6367179&loc=d3e4273-108586

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.1)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
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-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 6.H.3)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13728-122682

+ Details

Accounts Receivable, Net and Revenue Concentrations

3 Months Ended

Mar. 31, 2012

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 March 31, 2012 and December 31, 2011:


(In thousands)	March 31, 2012			December 31, 2011
Trade receivables, gross	$	74,270		$	82,305
Allowance for doubtful accounts		(1,008	)		(1,021	)
Allowance for sales returns		(786	)		(981	)

Trade receivables, net		72,476			80,303
Other receivables		1,341			1,881

Accounts receivable, net	$	73,817		$	82,184

Allowance for Doubtful Accounts

Changes in the allowance for doubtful accounts during the three months ended March 31, 2012 and 2011 were the following:


(In thousands) Description	Balance at Beginning of Period		Additions to Costs and Expenses			Write-offs/ FX Effects			Balance at End of Period
Valuation account for trade receivables
Three months ended March 31, 2012	$	1,021	$	(17	)	$	4		$	1,008
Three months ended March 31, 2011	$	878	$	6		$	(16	)	$	868

Sales Returns

The allowance for sales returns balance at March 31, 2012 and December 31, 2011 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 $0.5 million and $0.7 million on March 31, 2012 and December 31, 2011, respectively. The value of these returned goods was included in our inventory balance at March 31, 2012 and December 31, 2011.

Significant Customers

During the three months ended March 31, 2012, we had net sales to one significant customer, that when combined with its sub-contractors, totaled more than 10% of our net sales. During the three months ended March 31, 2011, we had net sales to one significant customer, that when combined with its sub-contractors, totaled more than 10% of our net sales as follows:


	Three Months Ended March 31,
	2012					2011
	$ (thousands)		% of Net Sales			$ (thousands)		% of Net Sales
DIRECTV	$	16,211		15.6	%		—		—
Sony		—		—		$	14,959		14.2	%

Trade receivables with these customers were the following on March 31, 2012 and December 31, 2011:


	March 31, 2012					December 31, 2011
	$ (thousands)		% of Accounts Receivable, Net			$ (thousands)		% of Accounts Receivable, Net
DIRECTV	$	7,074		9.6	%		—		—
Sony		—		—		$	7,064		8.6	%

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.

Inventories, Net and Significant Suppliers

3 Months Ended

Mar. 31, 2012

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 March 31, 2012 and December 31, 2011:


(In thousands)	March 31, 2012			December 31, 2011
Raw materials	$	15,207		$	17,014
Components		22,227			21,819
Work in process		1,749			1,071
Finished goods		49,176			54,447
Reserve for excess and obsolete inventory		(3,228	)		(3,447	)

Inventories, net	$	85,131		$	90,904

Reserve for Excess and Obsolete Inventory

Changes in the reserve for excess and obsolete inventory during the three months ended March 31, 2012 and 2011 were composed of the following:


(In thousands) Description	Balance at Beginning of Period		Additions Charged to Costs and Expenses⁽¹⁾		Sell Through⁽²⁾			Write-offs/ FX Effects			Balance at End of Period
Reserve for excess and obsolete inventory:
Three Months Ended March 31, 2012	$	3,447	$	718	$	(354	)	$	(583	)	$	3,228
Three Months Ended March 31, 2011	$	2,135	$	788	$	(311	)	$	(340	)	$	2,272

⁽¹⁾

The additions charged to costs and expenses does not include inventory directly written-off that was scrapped during production totaling $0.2 million and $0.1 million for the three months ended March 31, 2012 and 2011. 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, primarily from Samsung. The total purchased from Samsung was greater than 10% of our total inventory purchases for the three months ended March 31, 2012. In addition, our purchases from Samjin, a component and finished good supplier, amounted to greater than 10% of our total inventory purchases for the three months ended March 31, 2012. Our purchases from Samsung and Computime each amounted to greater than 10% of our total inventory purchases for the three months ended March 31, 2011.

During the three months ended March 31, 2012 and 2011, the amounts purchased from these three suppliers were the following:


	Three Months Ended March 31,
	2012					2011
	$ (thousands)		% of Total Inventory Purchases			$ (thousands)		% of Total Inventory Purchases
Samsung	$	5,216		10.3	%	$	6,636		11.8	%
Computime		—		—			5,691		10.1
Samjin		6,150		12.2			—		—

The total accounts payable to each of these suppliers on March 31, 2012 and December 31, 2011 were the following:


	March 31, 2012					December 31, 2011
	$ (thousands)		% of Accounts Payable			$ (thousands)		% of Accounts Payable
Samsung	$	937		2.3	%	$	1,725		3.1	%
Computime		—		—			1,431		2.6
Samjin		4,392		10.9			—		—

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 (“Enson”) owns 40% of this vendor. Our purchases from this vendor for the three months ended March 31, 2012 totaled approximately $1.4 million or 2.7% of total inventory purchases. Our purchases from this vendor for the three months ended March 31, 2011 totaled $1.7 million or 3.0% of total inventory purchases. Payable amounts outstanding to this vendor were approximately $1.0 million and $1.9 million on March 31, 2012 and December 31, 2011, respectively. Our payment 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

3 Months Ended

Mar. 31, 2012

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, we merged our international component with our domestic component. We no longer have segment 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 balance on March 31, 2012 and the changes in the carrying amount of goodwill during the three months ended March 31, 2012 were the following:


(in thousands)
Balance at December 31, 2011	$	30,820
Goodwill adjustment ⁽¹⁾		62

Balance at March 31, 2012	$	30,882

⁽¹⁾	The adjustment, which relates to international goodwill, was the result of fluctuations in the foreign currency exchange rates used to translate the balances 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 March 31, 2012 and December 31, 2011 were the following:


	March 31, 2012							December 31, 2011
(In thousands)	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Carrying amount⁽¹⁾:
Distribution rights (10 years)	$	383	$	(51	)	$	332	$	372	$	(50	)	$	322
Patents (10 years)		7,772		(3,591	)		4,181		9,488		(5,306	)		4,182
Trademarks and trade names (10 years)		2,837		(913	)		1,924		2,837		(821	)		2,016
Developed and core technology (5-15 years)		3,500		(729	)		2,771		3,500		(671	)		2,829
Capitalized software development costs (1-2 years)		1,050		(681	)		369		1,515		(1,108	)		407
Customer relationships (10-15 years)		26,370		(3,942	)		22,428		26,367		(3,309	)		23,058

Total carrying amount	$	41,912	$	(9,907	)	$	32,005	$	44,079	$	(11,265	)	$	32,814

⁽¹⁾	This table excludes fully amortized intangible assets of $10.5 million and $8.1 million on March 31, 2012 and December 31, 2011, respectively.

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 months ended March 31, 2012 and 2011 is the following:


	Three Months Ended March 31,
(In thousands)	2012		2011
Cost of sales	$	81	$	131
Selling, general and administrative		958		941

Total amortization expense	$	1,039	$	1,072

Estimated future amortization expense related to our intangible assets, net at March 31, 2012, is the following:


(In thousands)
2012 (remaining 9 months)	$	3,136
2013		4,013
2014		3,864
2015		3,794
2016		3,758
Thereafter		13,440

Total	$	32,005

Intangibles Measured at Fair Value on a Nonrecurring Basis

We did not record any material impairment charges related to our intangible assets during the three months ended March 31, 2012. 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 three months ended March 31, 2012 were composed of the following:


			Fair Value Measurement Using
(In thousands) Description	March 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)
Patents, trademarks and trade names	$	6,105	$	—	$	—	$	6,105	$	—

We disposed of eight patents with an immaterial aggregate carrying amount during the three months ended March 31, 2012. We disposed of one patent and 10 trademarks with an aggregate carrying amount of $1 thousand resulting in impairment charges of $1 thousand during the three months ended March 31, 2011.

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 and Line of Credit

3 Months Ended

Mar. 31, 2012

Notes Payable and Line of Credit [Abstract]

Notes Payable and Line of Credit

Note 6: Notes Payable and Line of Credit

Notes payable and line of credit on March 31, 2012 and December 31, 2011 were composed of the following:


	Amount Outstanding
(In thousands)	March 31, 2012		December 31, 2011
U.S. Bank Term Loan Facility⁽¹⁾	$	12,200	$	14,400
U.S. Bank Revolving Credit Line⁽²⁾		2,000		2,000

Total debt	$	14,200	$	16,400

⁽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 March 31, 2012, the 1-month LIBOR plus the fixed margin was approximately 1.7% and the bank’s prime rate was 3.25%. If a LIBOR rate loan is prepaid prior to the completion of the loan period, the Company 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.

⁽²⁾

Under the U.S. Bank secured revolving credit line, we may elect to pay interest based on the bank’s prime rate or LIBOR plus a fixed margin of 1.8%. The applicable LIBOR (1, 3, 6, or 12-month LIBOR) corresponds with the loan period we select. At March 31, 2012, the 1-month LIBOR plus the fixed margin was approximately 2.0% 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. We may prepay prime rate loans in whole or in part at any time without a premium or penalty.

Our total interest expense on borrowings was $0.1 million during each of the three months ended March 31, 2012 and 2011.

Income Taxes

3 Months Ended

Mar. 31, 2012

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 $0.3 million and $0.6 million for the three months ended March 31, 2012 and 2011, respectively. Our effective tax rate was 16.4% and 24.4% during the three months ended March 31, 2012 and 2011, respectively. The decline in our effective tax rate is due to the reversal of unrecognized tax benefits originally recorded in 2008 and 2009 which amounted to $0.2 million.

On March 31, 2012, we had gross unrecognized tax benefits of approximately $5.4 million, including interest and penalties, of which approximately $4.8 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 $0.1 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 March 31, 2012 and December 31, 2011 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 March 31, 2012, the open statutes of limitations in our significant tax jurisdictions are as follows: federal 2008 through 2011, state 2007 through 2011, and non-U.S. 2005 through 2011. On March 31, 2012, our gross unrecognized tax benefits of $5.4 million, which included $0.2 million of interest, 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
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-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
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-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
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-Topic 740
-SubTopic 10
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-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Accrued Compensation

3 Months Ended

Mar. 31, 2012

Accrued Compensation [Abstract]

Accrued Compensation

Note 8: Accrued Compensation

The components of accrued compensation on March 31, 2012 and December 31, 2011 are as follows:


(in thousands)	March 31, 2012		December 31, 2011
Accrued social insurance⁽¹⁾	$	19,956	$	20,027
Accrued salary/wages		4,482		4,084
Accrued vacation/holiday		2,226		1,943
Accrued bonus⁽²⁾		615		1,140
Accrued commission		143		461
Accrued medical insurance claims		388		300
Other accrued compensation		1,301		1,249

Total accrued compensation	$	29,111	$	29,204

⁽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 composed 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 March 31, 2012 and December 31, 2011.

⁽²⁾

Accrued bonus contains an accrual for an extra month of salary (“13^th month salary”) to be paid to employees in certain geographies where it is the customary business practice. This 13^th month salary is paid to these employees if they remain employed with us through December 31 of each year. The total accrued for the 13^th month salary is $0.2 million and $0.4 million on March 31, 2012 and December 31, 2011, respectively. The remaining accrued bonus for 2012 is the estimated amount that will be paid to non-executive and executive level employees. Executive management was not paid bonuses related to the year ended December 31, 2011.

Other Accrued Expenses

3 Months Ended

Mar. 31, 2012

Other Accrued Expenses [Abstract]

Other Accrued Expenses

Note 9: Other Accrued Expenses

The components of other accrued expenses on March 31, 2012 and December 31, 2011 are as follows:


(In thousands)	March 31, 2012		December 31, 2011
Amount due to CG International Holdings Limited ⁽¹⁾	$	2,138	$	5,138
Freight		1,899		2,220
Professional fees		885		992
Tooling ⁽²⁾		661		459
Duties		453		667
Advertising and marketing		405		415
Utilities		319		327
Third-party commissions		288		401
Property, plant, and equipment ⁽³⁾		103		30
Interest		65		81
Sales taxes and VAT		174		710
Other		2,091		2,527

Total other accrued expenses	$	9,481	$	13,967

⁽¹⁾

We made an additional payment of $1.0 million to CG International Holdings Limited during April 2012 related to the $5.0 million holdback that was originally recorded as of the acquisition date. See Note 21 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2011 for further information regarding our acquisition of Enson.

⁽²⁾	The tooling accrual balance relates to unearned revenue for tooling that will be sold to customers.

⁽³⁾	The property, plant and equipment accrual balance relates to amounts capitalized within property, plant, and equipment, net.

Commitments and Contingencies

3 Months Ended

Mar. 31, 2012

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 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 directors or officers.

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:


(In thousands) Description	Balance at Beginning of Period		Accruals (Reductions) for Warranties Issued During the Period			Settlements (in Cash or in Kind) During the Period		Balance at End of Period
Three Months Ended March 31, 2012	$	6		—			—	$	6
Three Months Ended March 31, 2011	$	71	$	(27	)	$	3	$	47

Litigation

On July 15, 2011, we filed a lawsuit against Logitech, Inc., Logitech International S.A. and Logitech Europe S.A. 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 patents 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. We are seeking monetary relief for the infringement, including enhanced damages due to the willfulness of the Logitech companies’ actions, injunctive relief to enjoin the Logitech companies from further infringing, including contributory infringement and/or inducing infringement, and attorney’s fees. In its answer, filed on November 3, 2011, the Logitech companies generally denied all of our allegations of infringement and counterclaimed that we are infringing five of their patents. On November 24, 2011, we answered the Logitech companies’ counterclaims, generally denying all of their allegations of infringement, and we are vigorously defending ourselves against these counterclaims.

On March 2, 2012, we filed a lawsuit against Universal Remote Control, Inc. (“URC”) in the United States District Court, Central District of California (Universal Electronics Inc. v. Universal Remote Control, Inc., SACV12-0039 AG (JPRx)) alleging that URC is infringing, directly and indirectly, four of our patents related to remote control technology. We have alleged that this complaint relates to multiple URC remote control products, including the URC model numbers UR5U-9000L, WR7 and other remote controls with different model names or numbers, but with substantially the same designs, features, and functionalities. We are seeking monetary relief for the infringement, including enhanced damages due to the willfulness of URC’s actions, injunctive relief to enjoin URC from further infringing, including contributory infringement and/or inducing infringement, and attorney’s fees. URC has 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.

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 March 31, 2012 and December 31, 2011, 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 pension plan was adequately funded on March 31, 2012 and December 31, 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. At March 31, 2012, approximately 41 percent of our India subsidiary employees had qualified for eligibility. An individual must be employed by our India subsidiary for a minimum of five years before becoming eligible. Upon the termination, resignation or retirement of an eligible employee, we are liable to pay the employee an amount equal to 15 days salary for each full year of service completed. The total amount of liability outstanding at March 31, 2012 and December 31, 2011 for the India Plan is not material. During the three months ended March 31, 2012 and 2011, the net periodic benefit costs were also not material.

- Definition

The entire disclosure for commitments and contingencies.

+ References

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-Name FASB Interpretation (FIN)
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+ Details

Treasury Stock

3 Months Ended

Mar. 31, 2012

Treasury Stock [Abstract]

Treasury Stock

Note 11: Treasury Stock

During the three months ended March 31, 2012 and 2011, we repurchased 17,261 and 13,222 shares of our common stock at a cost of $0.3 million and $0.4 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 three months ended March 31, 2012 and 2011, we issued 7,500 and 7,500 shares, respectively, to outside directors for services performed (see Note 13).

On February 11, 2010, our Board of Directors authorized management to repurchase up to 1,000,000 shares of our issued and outstanding common stock. As of March 31, 2012, we have repurchased 947,351 shares of our common stock under this authorization, leaving 52,649 shares available for repurchase.

On October 26, 2011, our Board of Directors authorized management to repurchase an additional 1,000,000 shares of our issued and outstanding common stock. We have not repurchased any shares under the Board authorization approved on October 26, 2011.

Business Segment and Foreign Operations

3 Months Ended

Mar. 31, 2012

Business Segment and Foreign Operations [Abstract]

Business Segment and Foreign Operations

Note 12: 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. 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 only have a single operating and reportable segment.

Foreign Operations

Our net sales to external customers by geographic area for the three months ended March 31, 2012 and 2011 were the following:


	Three Months Ended March 31,
(In thousands)	2012		2011
Net sales:
United States	$	34,170	$	30,510
International:
People’s Republic of China		15,211		23,566
Argentina		2,243		743
Australia		307		224
Brazil		3,890		495
Canada		3,344		2,558
France		594		853
Germany		1,848		1,660
Israel		587		810
Italy		420		756
Japan		9,055		10,594
Korea		2,724		3,429
Malaysia		3,343		5,014
Netherlands		952		222
Portugal		301		101
Singapore		2,506		4,580
South Africa		799		623
Spain		840		1,085
Taiwan		3,389		5,063
Thailand		5,766		2,476
United Kingdom		4,778		5,919
All other		6,665		4,431

Total international		69,562		75,202

Total net sales	$	103,732	$	105,712

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

Long-lived asset information is the following:


(In thousands)	March 31, 2012		December 31, 2011
Long-lived tangible assets:
United States	$	3,556	$	3,530
People’s Republic of China		76,892		78,466
All other countries		3,767		3,803

Total	$	84,215	$	85,799

- 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.

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

Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 13: 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 months ended March 31, 2012 and 2011 is the following:


	Three Months Ended March 31,
(In thousands)	2012		2011
Cost of sales	$	—	$	9
Research and development		70		92
Selling, general and administrative		1,127		931

Stock-based compensation expense before income taxes	$	1,197	$	1,032

Selling, general and administrative expense also includes pre-tax stock-based compensation related to stock option awards granted to outside directors of $0.01 million and $0.1 million for the three months ended March 31, 2012 and 2011, respectively. Selling, general and administrative expense includes stock-based compensation related to restricted stock awards granted to outside directors of $0.2 million and $0.1 million for the three months ended March 31, 2012 and 2011, respectively.

The income tax benefit from the recognition of stock-based compensation for each of the three months ended March 31, 2012 and 2011 was $0.4 million.

Stock Options

During the three months ended March 31, 2012, the Compensation Committee and Board of Directors granted 148,200 stock options to our Named Executive Officers with an aggregate grant date fair value of $1.4 million under various stock incentive plans. The stock options granted consisted of the following:


(In thousands, except share amounts)
Stock Option Grant Date	Number of Shares Underlying Options		Grant Date Fair Value		Vesting Period
February 8, 2012		148,200	$	1,430	3-Year Vesting Period (8.33% each quarter)

		148,200	$	1,430

During the quarter ended March 31, 2012 we recognized $0.1 million of pre-tax stock-based compensation expense related to our 2012 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 March 31,
	2012			2011
Weighted average fair value of grants⁽¹⁾	$	9.65		$	12.78
Risk-free interest rate		0.86	%		2.04	%
Expected volatility		55.25	%		52.04	%
Expected life in years		5.14			5.04

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

Stock option activity during the three months ended March 31, 2012 was the following:


	Number of Options (thousands)			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (In years)		Aggregate Intrinsic Value $ (thousands)
Outstanding on December 31, 2011		1,502		$	19.53
Granted		148			20.09
Exercised		(73	)		15.80			$	179
Forfeited/cancelled/expired		(13	)		16.17

Outstanding on March 31, 2012		1,564		$	19.79		5.30	$	4,195

Vested and expected to vest on March 31, 2012		1,557		$	19.77		5.29	$	4,192
Exercisable on March 31, 2012		1,193		$	19.02		4.22	$	3,956

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 March 31, 2012. 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 first quarter of 2012 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 March 31, 2012 and 2011, was $0.2 million and $0.1 million, respectively.

At March 31, 2012, there was $3.3 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 2.2 years.

Restricted Stock

During the three months ended March 31, 2012, the Compensation Committee and Board of Directors granted 71,300 restricted stock awards to our Named Executive Officers with an aggregate grant date fair value of $1.4 million under the 2010 Stock Incentive Plan. The restricted stock awards consisted of the following:


(In thousands, except share amounts)
Restricted Stock Grant Date	Number of Shares Underlying Options		Grant Date Fair Value		Vesting Period
February 8, 2012		71,300	$	1,432	3-Year Vesting Period (8.33% each quarter)

		71,300	$	1,432

During the three months ended March 31, 2012, we recognized $0.1 million of pre-tax stock-based compensation expense related to our 2012 restricted stock award grants.

Non-vested restricted stock award activity during the three months ended March 31, 2012 (including restricted stock issued to directors as described in Note 11) was the following:


	Shares Granted (thousands)			Weighted- Average Grant Date Fair Value
Non-vested on December 31, 2011		205		$	24.43
Granted		71			20.09
Vested		(37	)		22.31
Forfeited		(3	)		21.16

Non-vested on March 31, 2012		236		$	23.49

At March 31, 2012, we expect to recognize $4.9 million of unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock awards over a weighted-average period of 2.2 years.

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
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+ Details

Other Expense, Net

3 Months Ended

Mar. 31, 2012

Other Expense, Net [Abstract]

Other Expense, Net

Note 14: Other Expense, Net

The components of other expense, net for the three months ended March 31, 2012 and 2011 are the following:


	Three Months Ended March 31,
(In thousands)	2012			2011
Net gain on foreign currency exchange contracts⁽¹⁾	$	40		$	339
Net loss on foreign currency exchange transactions		(449	)		(726	)
Other income		85			353

Other expense, net	$	(324	)	$	(34	)

⁽¹⁾	This represents the losses incurred on foreign currency hedging derivatives (see Note 16 for further details).

Earnings Per Share

3 Months Ended

Mar. 31, 2012

Earnings Per Share [Abstract]

Earnings Per Share

Note 15: 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 March 31, 2012 and 2011, we have excluded 707,023 and 378,232 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 March 31, 2012 and 2011, we have excluded 156,542 and 1,476 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 months ended March 31, 2012 and 2011 are calculated as follows:


	Three Months Ended March 31,
(In thousands, except per-share amounts)	2012		2011
BASIC
Net income	$	1,632	$	1,827

Weighted-average common shares outstanding		14,871		14,976

Basic earnings per share	$	0.11	$	0.12

DILUTED
Net income	$	1,632	$	1,827

Weighted-average common shares outstanding for basic		14,871		14,976
Dilutive effect of stock options and restricted stock		237		407

Weighted-average common shares outstanding on a diluted basis		15,108		15,383

Diluted earnings per share	$	0.11	$	0.12

Derivatives

3 Months Ended

Mar. 31, 2012

Derivatives [Abstract]

Derivatives

Note 16: 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 Argentine Peso, 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, 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 March 31, 2012:


			Fair Value Measurement Using
(In thousands) Description	March 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Foreign currency exchange futures contracts	$	85	$	—	$	85	$	—

	$	85	$	—	$	85	$	—

We held foreign currency exchange contracts which resulted in a net pre-tax gain of approximately $0.04 million and a net pre-tax gain of $0.3 million for the three months ended March 31, 2012 and 2011, respectively.

Futures Contracts

We held one USD/Euro futures contract with a notional value of $6.0 million and a forward rate of $1.3148 USD/Euro at March 31, 2012. We held the Euro position on this contract, which settled on April 20, 2012. The gain on this contract as of March 31, 2012 was $85 thousand and is included in prepaid expenses and other current assets. This contract was settled at a loss of $30 thousand resulting in a loss of $115 thousand in April 2012.

We held one USD/Chinese Yuan Renminbi futures contract with a notional value of $10.0 million and a forward rate of CNY 6.353 CNY/USD at December 31, 2011. We held the USD position on this contract, which settled on January 13, 2012. The gain on this contract as of December 31, 2011 was $46 thousand and is included in prepaid expenses and other current assets. This contract was settled at a gain of $59 thousand resulting in a gain of $13 thousand in January 2012.

We held one USD/Euro futures contract with a notional value of $6.5 million and a forward rate of $1.3091 USD/Euro at December 31, 2011. We held the Euro position on this contract, which settled on January 20, 2012. The loss on this contract as of December 31, 2011 was $67 thousand and is included in other accrued expenses. This contract was settled at a loss of $125 thousand resulting in a loss of $58 thousand in January 2012.

- 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

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+ Details