Form 8K 2013-05-02

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): May 2, 2013
 
 
UNIVERSAL ELECTRONICS INC.
(Exact name of Registrant as specified in its charter)
 
 
 
 
 
 
 
 
Delaware
 
0-21044
 
33-0204817
(State or other jurisdiction
 
(Commission File No.)
 
(I.R.S. Employer
of incorporation or organization)
 
 
 
Identification No.)
201 E. Sandpointe Avenue, 8th Floor
Santa Ana, CA 92707
(Address of principal executive offices, with Zip Code)
(714) 918-9500
(Registrant’s telephone number, including area code):
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





TABLE OF CONTENTS
 
 
 
Item 2.02    Results of Operations and Financial Condition
1

Item 9.01    Financial Statements and Exhibits
1

SIGNATURES
2

INDEX TO EXHIBITS
3

EXHIBIT 99.1
 





Item 2.02    Results of Operations and Financial Condition
On May 2, 2013, Universal Electronics Inc. (“UEI”) is issuing a press release and holding a conference call regarding its financial results for the first quarter ended March 31, 2013. A copy of the press release is furnished as Exhibit 99.1 to this report.
Pursuant to General Instruction B2 of Form 8-K, the information contained in Exhibit 99.1 will be deemed furnished, and not “filed,” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as expressly set forth by specific reference in any such filing, or subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.
Use of Adjusted Pro Forma Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, UEI provides non-GAAP or Adjusted Pro Forma information in the press release as additional information for its operating results. References to Adjusted Pro Forma information are to non-GAAP pro forma measures. These measures are not in accordance with, or an alternative for, GAAP and may be different from non-GAAP measures used by other companies. UEI’s management believes that this presentation of Adjusted Pro Forma financial information provides useful information to management and investors regarding certain additional financial and business trends relating to its financial condition and results of operations. In addition, management uses these measures for reviewing the financial results of UEI and for budget planning purposes.
Item 9.01 Financial Statements and Exhibits
 
(d)
Exhibits. The following exhibit is furnished with this report.
99.1    Press Release of Universal Electronics Inc. dated May 2, 2013.




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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
 
 
Universal Electronics Inc.
 
 
 
 
Date: May 2, 2013
 
 
 
By:
 
/s/ Bryan Hackworth
 
 
 
 
 
 
Bryan Hackworth
 
 
 
 
 
 
Chief Financial Officer
(Principal Financial Officer)


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INDEX TO EXHIBITS

 
 
 
 
Exhibit Number
  
Description
99.1
  
Press Release Dated May 2, 2013


3
Exhibit 99.1 - 8K 2013-05-02


Exhibit 99.1
Contacts: Paul Arling (UEI) 714.918.9500
Becky Herrick (IR Agency) 415.433.3777


UNIVERSAL ELECTRONICS REPORTS FIRST QUARTER 2013 FINANCIAL RESULTS
- Net sales increase 11% over first quarter 2012 -
- Adjusted pro forma operating income up 33% over first quarter 2012 -
SANTA ANA, CA – May 2, 2013 – Universal Electronics Inc. (UEI), (NASDAQ: UEIC) reported financial results for the three months ended March 31, 2013.

“Our first quarter results reflect overall solid performance,” stated Paul Arling, UEI's Chairman and CEO. “Subscription broadcasting remains a strong contributor to sales, particularly in the Americas and Europe where subscribers continue to upgrade and add new services. Our core businesses also remain strong, and we are gaining traction by embedding our technologies into new categories including smart devices such as smartphones, tablets, smart TVs, game consoles and over-the-top services. Interfaces are becoming more dynamic and complex, presenting significant opportunities for UEI as we are the recognized leader in providing comprehensive yet simple device control technologies. We are talking to all the major players in the midst of their development plans, and the future has never looked brighter.”
Adjusted Pro Forma Financial Results for the Three Months Ended March 31: 2013 Compared to 2012
Net sales were $114.7 million, compared to $103.7 million.
Business Category revenue was $104.6 million, compared to $92.4 million. The Business Category contributed 91.2% of total net sales, compared to 89.1%.
Consumer Category revenue was $10.1 million, compared to $11.3 million. The Consumer Category contributed 8.8% of total net sales, compared to 10.9%.
Gross margins were 28.6%, compared to 27.6%.
Operating expenses were $27.7 million, compared to $24.8 million.
Operating income was $5.1 million, compared to $3.8 million.
Net income was $3.9 million, or $0.26 per diluted share, compared to $2.8 million, or $0.19 per diluted share.
At March 31, 2013, cash and cash equivalents was $28.7 million.
Financial Outlook
For the second quarter of 2013, the company expects net sales to range between $124.0 million and $130.0 million, compared to $116.7 million in the second quarter of 2012. Adjusted pro forma earnings per diluted share for the second quarter of 2013 are expected to range from $0.36 to $0.46, compared to adjusted pro forma earnings per diluted share of $0.41 in the second quarter of 2012.
Conference Call Information
UEI’s management team will hold a conference call today, Thursday, May 2, 2013 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its first quarter 2013 earnings results, review recent activity and answer questions. To access the call in the U.S. please dial 877-655-6895 and for international calls dial 706-758-0299 approximately 10 minutes prior to the start of the conference. The conference ID is 44476932. The conference call will also be broadcast live over the Internet and available for replay for one year at www.uei.com. In addition, a replay of the call will be available via telephone for two business days, beginning two hours after the call. To listen to the replay, in the U.S., please dial 855-859-2056 and internationally, 404-537-3406. Enter access code 44476932.

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Use of Non-GAAP Financial Metrics
Non-GAAP gross margins, Non-GAAP operating expenses, and Non-GAAP net income and earnings per share are supplemental measures of the company's performance that are not required by, and are not presented in accordance with GAAP. The non-GAAP information does not substitute for any performance measure derived in accordance with GAAP. Non-GAAP gross profit is defined as gross profit excluding depreciation expense related to the increase in fixed assets from cost to fair market value resulting from acquisitions. Non-GAAP operating expenses are defined as operating expenses excluding amortization of intangibles acquired and other employee related restructuring costs resulting from acquisitions. Non-GAAP net income is defined as net income from operations excluding the aforementioned items and the related tax effects. A reconciliation of non-GAAP financial results to GAAP results is included at the end of this press release.

About Universal Electronics Inc.
Founded in 1986, Universal Electronics Inc. (UEI) is the global leader in wireless control technology for the connected home. UEI designs, develops, and delivers innovative solutions that enable consumers to control entertainment devices, digital media, and home systems. The company's broad portfolio of patented technologies and database of infrared control software have been adopted by many Fortune 500 companies in the consumer electronics, subscription broadcast, and computing industries. UEI sells and licenses wireless control products through distributors and retailers under the One For All® brand name. For additional information, please visit our website at www.uei.com.

Safe Harbor Statement
This press release contains forward-looking statements that are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. Words and expressions reflecting something other than historical fact are intended to identify forward-looking statements. These forward-looking statements involve a number of risks and uncertainties, including the benefits anticipated by the Company due to the continued strength of its core businesses; the continued innovation of products and technologies that will attract new customers in existing and new markets; the continued expansion of the Company's technologies into smart devices (such as smartphones, tablets, smart TVs, game consoles and over-the-top-services); the continued global general economic conditions; the benefits the Company expects via the continued strength of its subscription broadcasting businesses in certain geographic areas including the Americas and Europe; and other factors described in the Company's filings with the U.S. Securities and Exchange Commission. The actual results the Company achieves may differ materially from any forward-looking statement due to such risks and uncertainties. The Company undertakes no obligations to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

– Tables Follow –





2



UNIVERSAL ELECTRONICS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share-related data)
(Unaudited)
 
 
March 31,
2013
 
December 31,
2012
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
28,724

 
$
44,593

Accounts receivable, net
 
88,713

 
91,048

Inventories, net
 
89,579

 
84,381

Prepaid expenses and other current assets
 
3,955

 
3,661

Income tax receivable
 
125

 
270

Deferred income taxes
 
5,196

 
5,210

Total current assets
 
216,292

 
229,163

Property, plant, and equipment, net
 
77,472

 
77,706

Goodwill
 
30,807

 
30,890

Intangible assets, net
 
28,975

 
29,835

Other assets
 
5,317

 
5,361

Deferred income taxes
 
7,202

 
6,369

Total assets
 
$
366,065

 
$
379,324

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
50,295

 
$
59,831

Line of credit
 

 

Accrued compensation
 
31,680

 
33,398

Accrued sales discounts, rebates and royalties
 
5,691

 
8,093

Accrued income taxes
 
2,779

 
3,668

Deferred income taxes
 
38

 
41

Other accrued expenses
 
9,564

 
10,644

Total current liabilities
 
100,047

 
115,675

Long-term liabilities:
 
 
 
 
Deferred income taxes
 
10,549

 
10,687

Income tax payable
 
525

 
525

Other long-term liabilities
 
1,921

 
1,787

Total liabilities
 
113,042

 
128,674

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; 21,573,699 and 21,491,398 shares issued on March 31, 2013 and December 31, 2012, respectively
 
216

 
215

Paid-in capital
 
182,611

 
180,607

Accumulated other comprehensive income (loss)
 
(74
)
 
1,052

Retained earnings
 
173,515

 
170,569

 
 
356,268

 
352,443

Less cost of common stock in treasury, 6,589,901 and 6,516,382 shares on March 31, 2013 and December 31, 2012, respectively
 
(103,245
)
 
(101,793
)
Total stockholders’ equity
 
253,023

 
250,650

Total liabilities and stockholders’ equity
 
$
366,065

 
$
379,324


3



UNIVERSAL ELECTRONICS INC.
CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share amounts)
(Unaudited)
 
 
 
Three Months Ended
March 31,
 
 
2013
 
2012
Net sales
 
$
114,722

 
$
103,732

Cost of sales
 
82,173

 
75,405

Gross profit
 
32,549

 
28,327

Research and development expenses
 
4,241

 
3,463

Selling, general and administrative expenses
 
24,413

 
22,552

Operating income
 
3,895

 
2,312

Interest income (expense), net
 
9

 
(37
)
Other expense, net
 
(550
)
 
(324
)
Income before provision for income taxes
 
3,354

 
1,951

Provision for income taxes
 
408

 
319

Net income
 
$
2,946

 
$
1,632

Earnings per share:
 
 
 
 
Basic
 
$
0.20

 
$
0.11

Diluted
 
$
0.19

 
$
0.11

Shares used in computing earnings per share:
 
 
 
 
Basic
 
14,965

 
14,871

Diluted
 
15,225

 
15,108















4



UNIVERSAL ELECTRONICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 
 
Three Months Ended March 31,
 
 
2013
 
2012
Cash provided by (used for) operating activities:
 
 
 
 
Net income
 
$
2,946

 
$
1,632

Adjustments to reconcile net income to net cash provided by (used for) operating activities:
 
 
 
 
Depreciation and amortization
 
4,374

 
4,260

Provision for doubtful accounts
 
24

 
(17
)
Provision for inventory write-downs
 
573

 
894

Deferred income taxes
 
(954
)
 
124

Tax benefit from exercise of stock options and vested restricted stock
 
2

 
8

Excess tax benefit from stock-based compensation
 
(37
)
 
(30
)
Shares issued for employee benefit plan
 
255

 
121

Stock-based compensation
 
1,261

 
1,197

Changes in operating assets and liabilities:
 
 
 
 
Accounts receivable
 
1,669

 
8,934

Inventories
 
(6,066
)
 
5,387

Prepaid expenses and other assets
 
(268
)
 
(681
)
Accounts payable and accrued expenses
 
(14,345
)
 
(21,511
)
Accrued income and other taxes
 
(731
)
 
(2,343
)
Net cash provided by (used for) operating activities
 
(11,297
)
 
(2,025
)
Cash used for investing activities:
 
 
 
 
Acquisition of property, plant, and equipment
 
(3,058
)
 
(1,712
)
Acquisition of intangible assets
 
(291
)
 
(216
)
Net cash used for investing activities
 
(3,349
)
 
(1,928
)
Cash provided by (used for) financing activities:
 
 
 
 
Issuance of debt
 
13,500

 
5,000

Payment of debt
 
(13,500
)
 
(7,200
)
Proceeds from stock options exercised
 
593

 
1,151

Treasury stock purchased
 
(1,558
)
 
(309
)
Excess tax benefit from stock-based compensation
 
37

 
30

Net cash provided by (used for) financing activities
 
(928
)
 
(1,328
)
Effect of exchange rate changes on cash
 
(295
)
 
221

Net increase (decrease) in cash and cash equivalents
 
(15,869
)
 
(5,060
)
Cash and cash equivalents at beginning of year
 
44,593

 
29,372

Cash and cash equivalents at end of year
 
$
28,724

 
$
24,312

 
 
 
 
 
Supplemental Cash Flow Information:
 
 
 
 
Income taxes paid
 
$
1,682

 
$
1,094

Interest payments
 
$
22

 
$
95




5



UNIVERSAL ELECTRONICS INC.
RECONCILIATION OF ADJUSTED PRO FORMA FINANCIAL RESULTS
(In thousands)
(Unaudited)
 
 
 
Three Months Ended
March 31, 2013
 
Three Months Ended
March 31, 2012
 
 
GAAP
 
Adjustments
 
Adjusted
Pro Forma
 
GAAP
 
Adjustments
 
Adjusted
Pro Forma
Net sales
 
$
114,722

 
$

 
$
114,722

 
$
103,732

 
$

 
$
103,732

Cost of sales (1)
 
82,173

 
(277
)
 
81,896

 
75,405

 
(277
)
 
75,128

Gross profit
 
32,549

 
277

 
32,826

 
28,327

 
277

 
28,604

Research and development expenses
 
4,241

 

 
4,241

 
3,463

 

 
3,463

Selling, general and administrative expenses (2)
 
24,413

 
(921
)
 
23,492

 
22,552

 
(1,232
)
 
21,320

Operating income
 
3,895

 
1,198

 
5,093

 
2,312

 
1,509

 
3,821

Interest expense, net
 
9

 

 
9

 
(37
)
 

 
(37
)
Other expense, net
 
(550
)
 

 
(550
)
 
(324
)
 

 
(324
)
Income before provision for income taxes
 
3,354

 
1,198

 
4,552

 
1,951

 
1,509

 
3,460

Provision for income taxes (3)
 
408

 
212

 
620

 
319

 
304

 
623

Net income
 
$
2,946

 
$
986

 
$
3,932

 
$
1,632

 
$
1,205

 
$
2,837

Earnings per share diluted
 
$
0.19

 
$
0.06

 
$
0.26

 
$
0.11

 
$
0.08

 
$
0.19

 

(1) 
To reflect depreciation expense of $0.3 million for each of the three months ended March 31, 2013 and 2012, related to the mark-up in fixed assets from cost to fair value as a result of acquisitions.
(2) 
To reflect amortization expense for each of the three months ended March 31, 2013 and 2012, related to intangible assets acquired as part of acquisitions. Also, in the first quarter of 2013 and 2012, an additional $0.2 million and $0.5 million, respectively, was incurred representing other employee related restructuring costs.
(3) 
To reflect the tax effect of the adjustments.



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