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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________________ 
FORM 10-Q
_______________________________________ 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to            
Commission File Number: 0-21044
_______________________________________ 
UNIVERSAL ELECTRONICS INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware33-0204817
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
15147 N. Scottsdale Road, Suite H300, Scottsdale, Arizona 85254-2494
(Address of principal executive offices and zip code)
(480) 530-3000
(Registrant's telephone number, including area code)
_____________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareUEICThe NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes No ☒
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 13,749,676 shares of Common Stock, par value $0.01 per share, of the registrant were outstanding on November 3, 2020.



UNIVERSAL ELECTRONICS INC.
INDEX
 
Page
Number




Table of Contents
PART I. FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements (Unaudited)
UNIVERSAL ELECTRONICS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share-related data)
(Unaudited)
September 30, 2020December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents$67,146 $74,302 
Accounts receivable, net128,094 139,198 
Contract assets11,530 12,579 
Inventories115,750 145,135 
Prepaid expenses and other current assets5,768 6,733 
Income tax receivable1,536 805 
Total current assets329,824 378,752 
Property, plant and equipment, net84,549 90,732 
Goodwill48,526 48,447 
Intangible assets, net19,617 19,830 
Operating lease right-of-use assets18,678 19,826 
Deferred income taxes4,581 4,409 
Other assets2,842 2,163 
Total assets$508,617 $564,159 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$67,546 $102,588 
Line of credit50,000 68,000 
Accrued compensation22,890 43,668 
Accrued sales discounts, rebates and royalties10,183 9,766 
Accrued income taxes9,910 6,989 
Other accrued liabilities33,616 35,445 
Total current liabilities194,145 266,456 
Long-term liabilities:
Operating lease obligations13,284 15,639 
Contingent consideration250 4,349 
Deferred income taxes2,327 1,703 
Income tax payable1,368 1,600 
Other long-term liabilities688 13 
Total liabilities212,062 289,760 
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; 24,292,657 and 24,118,088 shares issued on September 30, 2020 and December 31, 2019, respectively
243 241 
Paid-in capital296,674 288,338 
Treasury stock, at cost, 10,437,363 and 10,174,199 shares on September 30, 2020 and December 31, 2019, respectively
(287,639)(277,817)
Accumulated other comprehensive income (loss)(25,555)(22,781)
Retained earnings312,832 286,418 
Total stockholders' equity296,555 274,399 
Total liabilities and stockholders' equity$508,617 $564,159 

The accompanying notes are an integral part of these consolidated financial statements.
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UNIVERSAL ELECTRONICS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited) 
Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Net sales$153,505 $200,724 $458,416 $578,783 
Cost of sales109,349 154,245 333,244 458,437 
Gross profit44,156 46,479 125,172 120,346 
Research and development expenses7,696 7,930 22,979 21,884 
Selling, general and administrative expenses26,214 32,422 77,441 94,598 
Operating income10,246 6,127 24,752 3,864 
Interest income (expense), net(268)(784)(1,272)(3,088)
Accrued social insurance adjustment  9,464  
Other income (expense), net(1,646)(148)(1,263)(426)
Income before provision for income taxes8,332 5,195 31,681 350 
Provision for income taxes2,164 2,526 5,267 3,747 
Net income (loss)$6,168 $2,669 $26,414 $(3,397)
Earnings (loss) per share:
Basic$0.44 $0.19 $1.90 $(0.25)
Diluted$0.43 $0.19 $1.86 $(0.25)
Shares used in computing earnings (loss) per share:
Basic13,92813,894 13,93513,861 
Diluted14,20514,17014,18913,861
The accompanying notes are an integral part of these consolidated financial statements.

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UNIVERSAL ELECTRONICS INC.
CONSOLIDATED COMPREHENSIVE INCOME (LOSS) STATEMENTS
(In thousands)
(Unaudited) 
Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Net income (loss)$6,168 $2,669 $26,414 $(3,397)
Other comprehensive income (loss):
Change in foreign currency translation adjustment5,005 (5,457)(2,774)(5,557)
Comprehensive income (loss)$11,173 $(2,788)$23,640 $(8,954)
The accompanying notes are an integral part of these consolidated financial statements.

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UNIVERSAL ELECTRONICS INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)
(Unaudited)
The following summarizes the changes in total equity for the three and nine months ended September 30, 2020:
 Common Stock
Issued
Common Stock
in Treasury
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Totals
 SharesAmountSharesAmount
Balance at December 31, 201924,118 $241 (10,174)$(277,817)$288,338 $(22,781)$286,418 $274,399 
Net income (loss)5,846 5,846 
Currency translation adjustment(7,009)(7,009)
Shares issued for employee benefit plan and compensation129 1 526 527 
Purchase of treasury shares(169)(6,291)(6,291)
Shares issued to directors9 1 (1) 
Employee and director stock-based compensation2,303 2,303 
Performance-based common stock warrants184 184 
Balance at March 31, 202024,256 243 (10,343)(284,108)291,350 (29,790)292,264 269,959 
Net income (loss)14,400 14,400 
Currency translation adjustment(770)(770)
Shares issued for employee benefit plan and compensation13  212 212 
Purchase of treasury shares(3)(114)(114)
Employee and director stock-based compensation2,291 2,291 
Performance-based common stock warrants154 154 
Balance at June 30, 202024,269 243 (10,346)(284,222)294,007 (30,560)306,664 286,132 
Net income (loss)6,168 6,168 
Currency translation adjustment5,005 5,005 
Shares issued for employee benefit plan and compensation15  220 220 
Purchase of treasury shares(91)(3,417)(3,417)
Shares issued to directors9    
Employee and director stock-based compensation2,260 2,260 
Performance-based common stock warrants187 187 
Balance at September 30, 202024,293 $243 (10,437)$(287,639)$296,674 $(25,555)$312,832 $296,555 
The accompanying notes are an integral part of these consolidated financial statements.






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UNIVERSAL ELECTRONICS INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)
(Unaudited)
The following summarizes the changes in total equity for the three and nine months ended September 30, 2019:
Common Stock
Issued
Common Stock
in Treasury
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Totals
SharesAmountSharesAmount
Balance at December 31, 201823,933 $239 (10,116)$(275,889)$276,103 $(20,281)$282,788 $262,960 
Net income (loss)(1,005)(1,005)
Currency translation adjustment1,733 1,733 
Shares issued for employee benefit plan and compensation78 1 346 347 
Purchase of treasury shares(43)(1,215)(1,215)
Shares issued to directors8  —  
Employee and director stock-based compensation1,918 1,918 
Performance-based common stock warrants434 434 
Balance at March 31, 201924,019 240 (10,159)(277,104)278,801 (18,548)281,783 265,172 
Net income (loss)(5,061)(5,061)
Currency translation adjustment(1,833)(1,833)
Shares issued for employee benefit plan and compensation17 — 273 273 
Purchase of treasury shares(5)(189)(189)
Shares issued to directors7    
Employee and director stock-based compensation2,273 2,273 
Performance-based common stock warrants236 236 
Balance at June 30, 201924,043 240 (10,164)(277,293)281,583 (20,381)276,722 260,871 
Net income (loss)2,669 2,669 
Currency translation adjustment(5,457)(5,457)
Shares issued for employee benefit plan and compensation29 1 255 256 
Purchase of treasury shares(7)(337)(337)
Stock options exercised20 411 411 
Shares issued to directors7    
Employee and director stock-based compensation2,527 2,527 
Performance-based common stock warrants711 711 
Balance at September 30, 201924,099 $241 (10,171)$(277,630)$285,487 $(25,838)$279,391 $261,651 
The accompanying notes are an integral part of these consolidated financial statements.

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UNIVERSAL ELECTRONICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 Nine Months Ended September 30,
 20202019
Cash provided by (used for) operating activities:
Net income (loss)$26,414 $(3,397)
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization22,857 23,734 
Provision for bad debts271 275 
Deferred income taxes503 2,273 
Shares issued for employee benefit plan959 876 
Employee and director stock-based compensation6,854 6,718 
Performance-based common stock warrants525 1,381 
Impairment of long-term assets57  
Accrued social insurance adjustment(9,464) 
Loss on sale of Ohio call center712  
Changes in operating assets and liabilities:
Accounts receivable and contract assets11,556 (11,117)
Inventories30,466 4,403 
Prepaid expenses and other assets601 5,507 
Accounts payable and accrued liabilities(50,507)11,686 
Accrued income taxes2,023 (2,418)
Net cash provided by (used for) operating activities43,827 39,921 
Cash provided by (used for) investing activities:
Acquisitions of property, plant and equipment(10,864)(15,854)
Acquisitions of intangible assets(5,254)(1,505)
Payment on sale of Ohio call center(500) 
Net cash provided by (used for) investing activities(16,618)(17,359)
Cash provided by (used for) financing activities:
Borrowings under line of credit70,000 57,500 
Repayments on line of credit(88,000)(71,000)
Proceeds from stock options exercised 411 
Treasury stock purchased(9,822)(1,741)
Contingent consideration payments in connection with business combinations(3,091)(4,251)
Net cash provided by (used for) financing activities(30,913)(19,081)
Effect of exchange rate changes on cash and cash equivalents(3,452)(1,959)
Net increase (decrease) in cash and cash equivalents(7,156)1,522 
Cash and cash equivalents at beginning of period74,302 53,207 
Cash and cash equivalents at end of period$67,146 $54,729 
Supplemental cash flow information:
Income taxes paid$3,242 $5,608 
Interest paid$1,404 $3,479 
The accompanying notes are an integral part of these consolidated financial statements.
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UNIVERSAL ELECTRONICS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Note 1 — Basis of Presentation
In the opinion of management, the accompanying consolidated financial statements of Universal Electronics Inc. and its 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 ("U.S. GAAP"), have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). 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 nine months ended September 30, 2020 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's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures About Market Risk," and the "Financial Statements and Supplementary Data" included in Items 1A, 7, 7A, and 8, respectively, of our Annual Report on Form 10-K for the year ended December 31, 2019.
Estimates, Judgments and Assumptions
The preparation of financial statements in conformity with U.S. GAAP 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 and assumptions, including those related to revenue recognition; allowance for bad debts; inventory valuation; our review for impairment of long-lived assets, intangible assets and goodwill; leases; business combinations; income taxes; stock-based compensation expense and performance-based common stock warrants.
The recent coronavirus ("COVID-19") pandemic and the mitigation efforts by governments to attempt to control its spread have created uncertainties and disruptions in the economic and financial markets. While we are not currently aware of events or circumstances that would require an update to our estimates, judgments or adjustments to the carrying values of our assets or liabilities, these estimates may change as developments occur and we obtain additional information. These future developments are highly uncertain and the outcomes are unpredictable. Actual results may differ from those estimates, and such differences may be material to the financial statements.
See Note 2 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 for a summary of our significant accounting policies.
Recently Adopted Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments", which updates existing guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the incurred loss impairment model with an expected loss impairment model. Accordingly, financial assets are presented at amortized costs net of an allowance for expected credit losses over the lifetime of the assets. We adopted this new guidance on January 1, 2020 using the modified retrospective method. The adoption did not require an implementation adjustment and did not materially impact our consolidated statement of financial position, results of operations and cash flows. See Note 3 for further discussion on our allowance for bad debts.
In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment", which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to the reporting unit. Our adoption on January 1, 2020 did not have a material impact on our consolidated statement of financial position, results of operations and cash flows.
In November 2019, the FASB issued ASU 2019-08, "Improvements - Share-based Consideration Payable to a Customer", which clarifies the accounting for share-based payments issued as sales incentives to customers. The guidance requires that stock-based compensation expense is recorded as a reduction in the transaction price on the basis of the grant-date fair value. The grant-date fair value is calculated using the provisions defined under Accounting Standards Codification "Stock Compensation". The transition provisions require that equity-classified awards be measured at the adoption date fair value if the
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UNIVERSAL ELECTRONICS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)

measurement date has not been established prior to the adoption date. This guidance impacts the measurement date of our performance-based common stock warrants. The measurement periods for the first two successive two-year periods of our outstanding performance-based common stock warrants were completed prior to adoption and were not impacted by this updated guidance. The measurement period for the final two-year period began on January 1, 2020, and accordingly, we measured the fair value of the award as of our adoption date on January 1, 2020. We adopted this guidance using the modified retrospective method. Our adoption did not result in a cumulative adjustment in our consolidated statement of financial position. See Note 15 for further discussion on the performance-based common stock warrants.
Recent Accounting Updates Not Yet Effective
In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes", which, among other provisions, eliminates certain exceptions to existing guidance related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This guidance also requires an entity to reflect the effect of an enacted change in tax laws or rates in its effective income tax rate in the first interim period that includes the enactment date of the new legislation, aligning the timing of recognition of the effects from enacted tax law changes on the effective income tax rate with the effects on deferred income tax assets and liabilities. Under existing guidance, an entity recognizes the effects of the enacted tax law change on the effective income tax rate in the period that includes the effective date of the tax law. The guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of this guidance on our consolidated statement of financial position, results of operations and cash flows.
Note 2 — Cash and Cash Equivalents
Cash and cash equivalents were held in the following geographic regions:
(In thousands)September 30, 2020December 31, 2019
North America$14,693 $16,751 
People's Republic of China ("PRC")15,05413,700
Asia (excluding the PRC)12,29121,691
Europe16,8029,081
South America8,30613,079
Total cash and cash equivalents
$67,146 $74,302 

Note 3 — Revenue and Accounts Receivable, Net

Revenue Details
The pattern of revenue recognition was as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)2020201920202019
Goods and services transferred at a point in time$127,657 $152,453 $365,902 $429,461 
Goods and services transferred over time25,84848,27192,514149,322 
Net sales$153,505 $200,724 $458,416 $578,783 
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UNIVERSAL ELECTRONICS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)

Our net sales to external customers by geographic area were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)2020201920202019
United States$64,367 $107,546 $203,981 $313,029 
Asia (excluding PRC)27,92329,613 86,04379,157 
Europe26,11923,38872,62569,510
People's Republic of China25,62523,70463,65366,465
Latin America4,5468,28112,65226,187 
Other4,9258,19219,46224,435 
Total net sales$153,505 $200,724 $458,416 $578,783 
Specific identification of the customer billing location was the basis used for attributing revenues from external customers to geographic areas.
Net sales to the following customers totaled more than 10% of our net sales:
 Three Months Ended September 30,
20202019
 $ (thousands)% of Net Sales$ (thousands)% of Net Sales
Comcast Corporation$32,533 21.2 %$30,419 15.2 %
Sony Corporation
$15,927 10.4 % 
(1)
 
(1)
Ring L.L.C. 
(1)
 
(1)
$21,050 10.5 %
Nine Months Ended September 30,
20202019
$ (thousands)% of Net Sales$ (thousands)% of Net Sales
Comcast Corporation$95,014 20.7 %$91,058 15.7 %
(1)Net sales to this customer did not total more than 10% of our total net sales in the indicated period.
Accounts Receivable, Net
Accounts receivable, net were as follows:
(In thousands)September 30, 2020December 31, 2019
Trade receivables, gross$122,882 $130,888 
Allowance for bad debts(1,797)(1,492)
Allowance for sales returns(618)(623)
Net trade receivables120,467 128,773 
Other7,627 10,425 
Accounts receivable, net$128,094 $139,198 
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UNIVERSAL ELECTRONICS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)

Allowance for Bad Debts
Changes in the allowance for bad debts were as follows:
(In thousands)Nine Months Ended September 30,
20202019
Balance at beginning of period$1,492 $1,121 
Additions to costs and expenses271 275 
Write-offs/Foreign exchange effects34 (104)
Balance at end of period$1,797 $1,292 
Trade receivables associated with these significant customers that totaled more than 10% of our accounts receivable, net were as follows:
September 30, 2020December 31, 2019
$ (thousands)% of Accounts Receivable, Net$ (thousands)% of Accounts Receivable, Net
Comcast Corporation$25,390 19.8 % 
(1)
 
(1)
DISH Network Corporation 
(1)
 
(1)
$14,677 10.5 %
(1)Trade receivables associated with this customer did not total more than 10% of our accounts receivable, net at the dates set forth.
Note 4 — Inventories and Significant Suppliers
Inventories were as follows:
(In thousands)September 30, 2020December 31, 2019
Raw materials$36,784 $56,352 
Components17,215 24,599 
Work in process4,075 1,526 
Finished goods57,676 62,658 
Inventories$115,750 $145,135 

Significant Suppliers
We purchase integrated circuits, components and finished goods from multiple sources. Purchases from the following supplier totaled more than 10% of our total inventory purchases:
Three Months Ended September 30,
20202019
$ (thousands)% of Total Inventory Purchases$ (thousands)% of Total Inventory Purchases
Qorvo International Pte Ltd.$8,472 13.0 % 
(1)
 
(1)
Nine Months Ended September 30,
20202019
$ (thousands)% of Total Inventory Purchases$ (thousands)% of Total Inventory Purchases
Qorvo International Pte Ltd.$29,679 13.4 % 
(1)
 
(1)
(1)Purchases associated with this supplier did not total more than 10% of our total inventory purchases for the indicated period
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UNIVERSAL ELECTRONICS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)

The supplier that totaled more than 10% of our accounts payable, was as follows:
September 30, 2020December 31, 2019
$ (thousands)% of Accounts Payable$ (thousands)% of Accounts Payable
Zhejiang Zhen You Electronics Co. Ltd. 
(1)
 
(1)
$11,394 11.1 %
(1)Accounts payable associated with this supplier did not total more than 10% of our accounts payable at the dates set forth.

Note 5 — Leases

We have entered into various operating lease agreements for automobiles, offices and manufacturing facilities throughout the world. At September 30, 2020, our operating leases had remaining lease terms of up to 40 years.
Lease balances within our consolidated balance sheet were as follows:
(In thousands)September 30, 2020December 31, 2019
Assets:
Operating lease right-of-use assets$18,678 $19,826 
Liabilities:
Other accrued liabilities$5,802 $4,903 
Long-term operating lease obligations13,284 15,639 
Total lease liabilities$19,086 $20,542 
Operating lease expense, including variable and short-term lease costs which were insignificant to the total, operating lease cash flows and supplemental cash flow information were as follows:
(In thousands)Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Cost of sales$513 $574 $1,285 $1,627 
Selling, general and administrative expenses976 1,036 2,994 3,324 
Total operating lease expense$1,489 $1,610 $4,279 $4,951 
Operating cash outflows from operating leases$1,617 $1,537 $4,685 $5,197 
Operating lease right-of-use assets obtained in exchange for lease obligations$1,935 $1,131 $2,121 $2,655 

The weighted average remaining lease liability term and the weighted average discount rate were as follows:
September 30, 2020December 31, 2019
Weighted average lease liability term (in years)3.84.3
Weighted average discount rate4.18 %4.50 %
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UNIVERSAL ELECTRONICS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)


The following table reconciles the undiscounted cash flows for each of the first five years and thereafter to the operating lease liabilities recognized in our consolidated balance sheet at September 30, 2020. The reconciliation excludes short-term leases that are not recorded on the balance sheet.
(In thousands)September 30, 2020
2020 (remaining 3 months)$1,462 
20216,671 
20225,671 
20232,835 
20241,765 
Thereafter2,281 
Total lease payments20,685 
Less: imputed interest(1,599)
Total lease liabilities$19,086 
At September 30, 2020, we had one operating lease with a five-year term that had not yet commenced. The total initial lease liability, which is immaterial to the balance sheet, is not reflected within the above maturity schedule.
Note 6 — Goodwill and Intangible Assets, Net
Goodwill
Changes in the carrying amount of goodwill were as follows:
(In thousands) 
Balance at December 31, 2019$48,447 
Foreign exchange effects79 
Balance at September 30, 2020$48,526 
 
Intangible Assets, Net
The components of intangible assets, net were as follows:
 September 30, 2020December 31, 2019
(In thousands)
Gross (1)
Accumulated
Amortization (1)
Net
Gross (1)
Accumulated
Amortization (1)
Net
Distribution rights$336 $(241)$95 $322 $(210)$112 
Patents20,962 (7,294)13,668 16,587 (6,491)10,096 
Trademarks and trade names2,786 (2,435)351 2,785 (2,205)580 
Developed and core technology4,080 (2,971)1,109 12,480 (10,016)2,464 
Capitalized software development costs254  254    
Customer relationships31,233 (27,093)4,140 32,534 (25,956)6,578 
Total intangible assets, net$59,651 $(40,034)$19,617 $64,708 $(44,878)$19,830