ueic-20231102
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 _______________________________________  
FORM 8-K
  _______________________________________  
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 2, 2023
  _______________________________________ 
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)  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)
_______________________________________ 

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))
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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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.





Item 2.02    Results of Operations and Financial Condition
Financial Results for the Quarter Ended September 30, 2023
On November 2, 2023, Universal Electronics Inc. ("UEI") issued a press release reporting financial results for the quarter ended September 30, 2023 and certain other information.
A copy of UEI's press release is attached as Exhibit 99 and incorporated herein by reference.
Item 8.01 Other Events
On October 26, 2023 the Board of Directors of Universal Electronics Inc. (the "Company") authorized a new share repurchase program (the "Share Repurchase Program"). Pursuant to the Share Repurchase Program, the Company may, from time to time, repurchase up to 1,000,000 shares of its common stock in privately negotiated and/or open-market transactions, including pursuant to plans complying with Rule 10b5-1 promulgated under the Securities Exchange Act of 1934. The Share Repurchase Program does not obligate the Company to repurchase any shares of its common stock, and any repurchases of shares will be subject to market and other conditions and may be discontinued at any time.
Item 9.01 Financial Statements and Exhibits
 
(d)Exhibits. The following exhibits are furnished with this report.
Exhibit No.    Description
99        Press Release of UEI, dated November 2, 2023 reporting financial results for the quarter ended September 30, 2023 and certain other information.
104         Cover Page to this Current Report on Form 8-K, formatted in Inline XBRL


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SIGNATURE
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 hereunto duly authorized.
 
  Universal Electronics Inc.
Date: November 2, 2023
  By: 
/s/ Bryan Hackworth
   Bryan Hackworth
   Chief Financial Officer
(Principal Financial Officer)


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Document

Exhibit 99
https://cdn.kscope.io/78dc2ace8cc3f71c4087ca2bb8da1af1-ueilogoa34.jpg

Universal Electronics Reports Financial Results for the Third Quarter 2023
– Authorizes Stock Repurchase Program for Up to 1 Million Shares –

SCOTTSDALE, AZ – November 2, 2023 – Universal Electronics Inc. (UEI) (NASDAQ: UEIC) reported financial results for the three and nine months ended September 30, 2023. Also, the Company’s Board of Directors authorized a stock repurchase program for up to one million shares.

Paul Arling, UEI’s chairman and CEO, said, “During the third quarter of 2023, we increased gross margin to a high for the year and managed costs to deliver bottom-line results within expectations. Our technology and innovations in the connected home markets are winning new business, which will support revenues that we expect to build throughout 2024 and 2025. The opportunities in the connected home space combined with the successful wins and multitude of projects we are working on give us conviction to initiate a stock buyback for up to one million shares.”

UEI’s CFO Bryan Hackworth added, “We are executing on our plan to control costs and optimize our manufacturing footprint, and these efforts are beginning to yield benefits. Our new facility in Vietnam is meeting its production efficiency targets, which enabled the closure of our southwestern China factory in September, approximately one quarter earlier than expected. These initiatives have positioned UEI to achieve improved operating efficiencies in the fourth quarter of 2023 and 2024. Additionally, cash flows provided by operating activities for the first nine months of 2023 were $20.1 million, which we used to reduce our net debt position to only $15 million by quarter end and to strengthen the balance sheet to support growth.”
Financial Results for the Three Months Ended September 30: 2023 Compared to 2022
GAAP net sales were $107.1 million, compared to $148.5 million; Adjusted Non-GAAP net sales were $107.1 million, compared to $148.5 million.
GAAP gross margins were 19.1%, compared to 29.9%; Adjusted Non-GAAP gross margins were 28.4%, compared to 30.8%.
GAAP operating loss was $14.0 million, compared to GAAP operating income of $11.5 million; Adjusted Non-GAAP operating income was $2.9 million, compared to $15.5 million.
GAAP net loss was $19.4 million, or $1.50 per share, compared to GAAP net income of $7.2 million or $0.57 per diluted share; Adjusted Non-GAAP net income was $1.1 million, or $0.08 per diluted share, compared to $12.6 million, or $1.00 per diluted share.
At September 30, 2023, cash and cash equivalents were $60.1 million.
Financial Results for the Nine Months Ended September 30: 2023 Compared to 2022
GAAP net sales were $322.9 million, compared to $420.0 million; Adjusted Non-GAAP net sales were $322.9 million, compared to $420.0 million.
GAAP gross margins were 21.6%, compared to 28.6%; Adjusted Non-GAAP gross margins were 26.4%, compared to 29.6%.
GAAP operating loss was $82.7 million, including a $49.1 million non-cash charge for goodwill impairment, which resulted from a decline in the companys market capitalization, compared to GAAP operating income of $16.4 million; Adjusted Non-GAAP operating loss was $2.6 million, compared to Adjusted Non-GAAP operating income of $33.4 million.
GAAP net loss was $91.1 million, including the aforementioned non-cash charge, or $7.10 per share, compared to GAAP net income of $7.3 million or $0.57 per diluted share; Adjusted Non-GAAP net loss was $3.2 million, or $0.25 per share, compared to Adjusted Non-GAAP net income of $27.1 million, or $2.12 per diluted share.
Financial Outlook
For the fourth quarter of 2023, the company expects GAAP net sales to range between $95.0 million and $105.0 million, compared to $122.8 million in the fourth quarter of 2022. GAAP loss per share for the fourth quarter of 2023 is expected to range from $0.51 to $0.41, compared to GAAP loss per share of $0.54 in the fourth quarter of 2022.
For the fourth quarter of 2023, the company expects Adjusted Non-GAAP net sales to range from $95.0 million and $105.0 million, compared to $122.8 million in the fourth quarter of 2022. Adjusted Non-GAAP earnings (loss) per share are expected to range from a loss of $0.05 per share to earnings of $0.05 per diluted share, compared to earnings per diluted share of $0.44 in the fourth quarter of
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2022. The fourth quarter 2023 Adjusted Non-GAAP earnings per diluted share estimate excludes $0.46 per share related to, among other things, excess manufacturing overhead costs, stock-based compensation, amortization of acquired intangibles, litigation costs, foreign currency gains and losses and the related tax impact of these adjustments. For a more detailed explanation of Non-GAAP measures, please see the Use of Non-GAAP Financial Metrics discussion and the Reconciliation of Adjusted Non-GAAP Financial Results, each located elsewhere in this press release.    
Conference Call Information
UEI’s management team will hold a conference call today, Thursday, November 2, 2023 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its third quarter 2023 earnings results, review recent activity and answer questions. To attend the call please register at https://register.vevent.com/register/BIbd15424e067d48b694ae4611a6e0c7f2 to receive a computer-generated dial-in number and a unique pin number. The conference call will also be broadcast live on the investor section of the UEI website where it will be available for replay for 90 days.
Use of Non-GAAP Financial Metrics
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, UEI provides Adjusted Non-GAAP information as additional information for its operating results. References to Adjusted Non-GAAP information are to non-GAAP financial measures. These measures are not required by, in accordance with, or an alternative for, GAAP and may be different from non-GAAP financial measures used by other companies. UEI’s management uses these measures for reviewing the financial results of UEI for budget planning purposes and for making operational and financial decisions. Management believes that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, help investors evaluate UEI’s core operating and financial performance and business trends consistent with how management evaluates such performance and trends. Additionally, management believes these measures facilitate comparisons with the core operating and financial results and business trends of competitors and other companies.
Adjusted Non-GAAP net sales is defined as net sales. Adjusted Non-GAAP gross profit is defined as gross profit excluding the impact of excess manufacturing overhead costs, factory transition costs, impairment, stock-based compensation expense, and depreciation expense related to the increase in fixed assets from cost to fair market value resulting from acquisitions. Adjusted Non-GAAP operating expenses are defined as operating expenses excluding stock-based compensation expense, amortization of intangibles acquired, costs associated with certain litigation efforts, goodwill impairment, impairment, factory restructuring costs and severance. Adjusted Non-GAAP net income is defined as net income excluding the aforementioned items, foreign currency gains and losses, the related tax effects of all adjustments, as well as a valuation allowance on certain deferred tax assets. Adjusted Non-GAAP earnings (loss) per diluted share is calculated using Adjusted Non-GAAP net income. A reconciliation of these financial measures to the most directly comparable GAAP financial measures is included at the end of this press release.
About Universal Electronics
Universal Electronics Inc. (NASDAQ: UEIC) is the global leader in wireless universal control solutions for home entertainment and smart home devices and designs, develops, manufactures, ships and supports hardware and software control and sensor technology solutions. UEI partners with many Fortune 500 customers, including Comcast, Vivint Smart Home, Samsung, LG, Sony and Daikin to serve video, telecommunications, security service providers, television, smart home and HVAC system manufacturers. For over 37 years, UEI has been pioneering breakthrough innovations such as voice control and QuickSet cloud, the world's leading platform for automated set-up and control of devices in the home. For more information, visit www.uei.com.
Contacts
Paul Arling, Chairman & CEO, UEI, 480-530-3000
Investors: Kirsten Chapman, LHA Investor Relations, uei@lhai.com, 415-433-3777
Forward-looking Statements
This press release and accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including net sales, profit margin and earnings trends, estimates and assumptions; our expectations about new product introductions; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those we identify below and other risk factors that we identify in our annual report on Form 10-K for the year ended December 31, 2022 and the periodic reports filed and furnished since then. Risks that could affect forward-looking statements in this press release include: our continued ability to timely develop and deliver products and technologies that will be accepted by our customers, both near- and long-term; our ability to attract new customers and to successfully capture sales in all markets we serve, including in the connected home market as anticipated by management; our ability to continue optimizing our manufacturing footprint and realize the lower
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concentration risks in the time frame and to the extent expected by management; our ability to manage through the continued supply chain constraints, inflationary pressures and macroeconomic conditions, including continued lower consumer spending; the continued commitment of our customers to their product development and ordering strategies and patterns that translate into greater demand for our technologies and products as anticipated by management; our ability to continue to manage our business, inventories and cash flows to achieve our net sales, margins and earnings through financial discipline, operational efficiency, product line management, liquidity requirements, capital expenditures and other investment spending expectations, including our ability to execute on our just announced stock repurchase program; the continued fluctuation in our market capitalization; the direct and indirect impact we may experience with respect to our business and financial results and management’s ability to anticipate and mitigate the impact stemming from the continued economic uncertainty affecting consumers’ confidence and spending, natural disasters or other events beyond our control, public health crises (including an outbreak of infectious disease), governmental actions, including the effects of political unrest, war, terrorist activities, or other hostilities; the effects and uncertainties and other factors more fully described in our reports filed with the SEC; and the effects that changes in or enhanced use of laws, regulations and policies may have on our business including the impact of trade regulations pertaining to importation of our products. Since it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results, the above list should not be considered a complete list. Further, any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release. We make these forward-looking statements as of November 2, 2023, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

– Tables Follow –
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UNIVERSAL ELECTRONICS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share-related data)
(Unaudited)
September 30, 2023December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents$60,079 $66,740 
Accounts receivable, net112,521 112,346 
Contract assets8,133 7,996 
Inventories93,462 140,181 
Prepaid expenses and other current assets5,809 6,647 
Income tax receivable2,387 4,130 
Total current assets282,391 338,040 
Property, plant and equipment, net46,613 62,791 
Goodwill— 49,085 
Intangible assets, net25,529 24,470 
Operating lease right-of-use assets17,777 21,599 
Deferred income taxes4,472 6,242 
Other assets1,558 1,936 
Total assets$378,340 $504,163 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$54,776 $71,373 
Line of credit75,000 88,000 
Accrued compensation21,707 20,904 
Accrued sales discounts, rebates and royalties5,060 6,477 
Accrued income taxes4,261 5,585 
Other accrued liabilities21,714 24,134 
Total current liabilities182,518 216,473 
Long-term liabilities:
Operating lease obligations11,553 15,027 
Deferred income taxes1,280 2,724 
Income tax payable723 723 
Other long-term liabilities739 810 
Total liabilities196,813 235,757 
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; 25,301,246 and 24,999,951 shares issued on September 30, 2023 and December 31, 2022, respectively253 250 
Paid-in capital334,683 326,839 
Treasury stock, at cost, 12,356,603 and 12,295,305 shares on September 30, 2023 and December 31, 2022, respectively(369,082)(368,194)
Accumulated other comprehensive income (loss)(23,889)(21,187)
Retained earnings239,562 330,698 
Total stockholders’ equity181,527 268,406 
Total liabilities and stockholders’ equity$378,340 $504,163 
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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,
 2023202220232022
Net sales$107,095 $148,482 $322,863 $419,993 
Cost of sales86,683 104,040 253,141 299,912 
Gross profit20,412 44,442 69,722 120,081 
Research and development expenses7,658 8,017 24,502 24,460 
Factory restructuring charges3,690 — 3,690 — 
Selling, general and administrative expenses23,097 24,928 75,144 79,188 
Goodwill impairment— — 49,075 — 
Operating income (loss)(14,033)11,497 (82,689)16,433 
Interest income (expense), net(1,216)(668)(3,288)(1,147)
Other income (expense), net(851)(54)(1,767)(388)
Income (loss) before provision for income taxes(16,100)10,775 (87,744)14,898 
Provision for income taxes3,262 3,541 3,392 7,586 
Net income (loss)$(19,362)$7,234 $(91,136)$7,312 
Earnings (loss) per share:
Basic$(1.50)$0.57 $(7.10)$0.58 
Diluted$(1.50)$0.57 $(7.10)$0.57 
Shares used in computing earnings (loss) per share:
Basic12,91112,65612,83912,709 
Diluted12,91112,69612,83912,797 


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UNIVERSAL ELECTRONICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Nine Months Ended September 30,
 20232022
Cash flows from operating activities:
Net income (loss)$(91,136)$7,312 
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization17,549 18,079 
Provision for credit losses69 (204)
Deferred income taxes259 2,063 
Shares issued for employee benefit plan1,014 952 
Employee and director stock-based compensation6,833 7,575 
Impairment of goodwill49,075 — 
Impairment of long-lived assets7,794 — 
Changes in operating assets and liabilities:
Accounts receivable and contract assets(488)(11,901)
Inventories44,991 (8,477)
Prepaid expenses and other assets4,981 1,734 
Accounts payable and accrued liabilities(21,289)(17,201)
Accrued income taxes424 171 
Net cash provided by (used for) operating activities20,076 103 
Cash flows from investing activities:
Purchase of term deposit— (7,487)
Redemption of term deposit— 7,609 
Acquisition of net assets of Qterics, Inc.— (939)
Acquisitions of property, plant and equipment(6,840)(10,117)
Acquisitions of intangible assets(4,643)(4,719)
Net cash provided by (used for) investing activities(11,483)(15,653)
Cash flows from financing activities:
Borrowings under line of credit35,000 83,000 
Repayments on line of credit(48,000)(51,000)
Treasury stock purchased(888)(11,297)
Net cash provided by (used for) financing activities(13,888)20,703 
Effect of foreign currency exchange rates on cash and cash equivalents(1,366)(4,285)
Net increase (decrease) in cash and cash equivalents(6,661)868 
Cash and cash equivalents at beginning of period66,740 60,813 
Cash and cash equivalents at end of period$60,079 $61,681 
Supplemental cash flow information:
Income taxes paid$5,327 $5,034 
Interest paid$5,431 $1,204 
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UNIVERSAL ELECTRONICS INC.
RECONCILIATION OF ADJUSTED NON-GAAP FINANCIAL RESULTS
(In thousands, except per share amounts)
(Unaudited) 
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Net sales:
Net sales - GAAP$107,095 $148,482 $322,863 $419,993 
Adjusted Non-GAAP net sales$107,095 $148,482 $322,863 $419,993 
Cost of sales:
Cost of sales - GAAP$86,683 $104,040 $253,141 $299,912 
Excess manufacturing overhead and factory transition costs (1)
(2,168)(1,186)(7,569)(4,120)
Impairment of long-lived assets (2)
(7,723)— (7,723)— 
Stock-based compensation expense(31)(38)(93)(117)
Adjustments to acquired tangible assets (3)
(60)(60)(181)(181)
Adjusted Non-GAAP cost of sales76,701 102,756 237,575 295,494 
Adjusted Non-GAAP gross profit$30,394 $45,726 $85,288 $124,499 
Gross margin:
Gross margin - GAAP19.1 %29.9 %21.6 %28.6 %
Excess manufacturing overhead and factory transition costs (1)
2.0 %0.8 %2.3 %1.0 %
Impairment of long-lived assets (2)
7.2 %— %2.4 %— %
Stock-based compensation expense0.0 %0.0 %0.0 %0.0 %
Adjustments to acquired tangible assets (3)
0.1 %0.1 %0.1 %0.0 %
Adjusted Non-GAAP gross margin28.4 %30.8 %26.4 %29.6 %
Operating expenses:
Operating expenses - GAAP$34,445 $32,945 $152,411 $103,648 
Stock-based compensation expense(2,103)(2,401)(6,739)(7,457)
Amortization of acquired intangible assets(286)(296)(856)(872)
Litigation costs (4)
(176)— (1,604)(4,264)
Goodwill impairment (5)
— — (49,075)— 
Impairment of long-lived assets (2)
(100)— (100)— 
Factory restructuring charges (6)
(3,690)— (3,690)— 
Severance (7)
(569)— (2,455)— 
Adjusted Non-GAAP operating expenses$27,521 $30,248 $87,892 $91,055 
Operating income (loss):
Operating income (loss) - GAAP$(14,033)$11,497 $(82,689)$16,433 
Excess manufacturing overhead and factory transition costs (1)
2,168 1,186 7,569 4,120 
Impairment of long-lived assets (2)
7,823 — 7,823 — 
Stock-based compensation expense2,134 2,439 6,832 7,574 
Adjustments to acquired tangible assets (3)
60 60 181 181 
Amortization of acquired intangible assets286 296 856 872 
Litigation costs (4)
176 — 1,604 4,264 
Goodwill impairment (5)
— — 49,075 — 
Factory restructuring costs (6)
3,690 — 3,690 — 
Severance (7)
569 — 2,455 — 
Adjusted Non-GAAP operating income (loss)$2,873 $15,478 $(2,604)$33,444 
Adjusted pro forma operating income (loss) as a percentage of net sales2.7 %10.4 %(0.8)%8.0 %
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UNIVERSAL ELECTRONICS INC.
RECONCILIATION OF ADJUSTED NON-GAAP FINANCIAL RESULTS
(In thousands, except per share amounts)
(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Net income (loss):
Net income (loss) - GAAP$(19,362)$7,234 $(91,136)$7,312 
Excess manufacturing overhead and factory transition costs (1)
2,168 1,186 7,569 4,120 
Impairment of long-lived assets (2)
7,823 — 7,823 — 
Stock-based compensation expense2,134 2,439 6,832 7,574 
Adjustments to acquired tangible assets (3)
60 60 181 181 
Amortization of acquired intangible assets286 296 856 872 
Litigation costs (4)
176 — 1,604 4,264 
Goodwill impairment (5)
— — 49,075 — 
Factory restructuring costs (6)
3,690 — 3,690 — 
Severance (7)
569 — 2,455 — 
Foreign currency net (gain)/loss1,067 74 2,243 16 
Income tax provision on adjustments1,098 1,344 4,200 2,758 
Other income tax adjustments (8)
1,377 — 1,377 — 
Adjusted Non-GAAP net income (loss)$1,086 $12,633 $(3,231)$27,097 
Diluted shares used in computing earnings (loss) per share:
GAAP12,911 12,696 12,839 12,797 
Adjusted Non-GAAP12,951 12,696 12,839 12,797 
Diluted earnings (loss) per share:
Diluted earnings (loss) per share - GAAP$(1.50)$0.57 $(7.10)$0.57 
Total adjustments$1.58 $0.43 $6.85 $1.55 
Adjusted Non-GAAP diluted earnings (loss) per share$0.08 $1.00 $(0.25)$2.12 

(1)The three and nine months ended September 30, 2023 and 2022 include unabsorbed manufacturing overhead costs resulting from the expansion of our manufacturing facility in Mexico where products destined for the U.S. market are manufactured, exacerbated by a subsequent decline in production volume. These products destined for the U.S. market were previously manufactured in China. The three and nine months ended September 30, 2023 also include manufacturing inefficiencies associated with our new Vietnam factory which recently commenced operations in the latter part of June 2023. In addition, for the nine months ended September 30, 2023, we incurred normal start-up costs such as idle labor and training associated with this same factory prior to its commencement.
(2)The three and nine months ended September 30, 2023 include impairment charges relating to machinery and equipment and leasehold improvements associated with the closure of our southwestern China factory, which ceased operations in September 2023. In addition, we also incurred impairment charges relating to machinery and equipment at our Mexico factory as we are reducing its capacity due to lower demand.
(3)Consists of depreciation related to the mark-up from cost to fair value of fixed assets acquired in business combinations.
(4)Consists of expenses related to our various litigation matters involving Roku, Inc. and certain other related entities including three Federal District Court cases, two International Trade Commission investigations and the defense of various inter partes reviews and appeals before the US Patent and Trademark Board as well as other non-recurring legal matters.
(5)During the nine months ended September 30, 2023, we recorded a goodwill impairment charge of $49.1 million as a result of our market capitalization being significantly less than the carrying value of our equity.
(6)The three and nine months ended September 30, 2023 include severance and equipment moving costs associated with the closure of our southwestern China factory.

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(7)The three and nine months ended September 30, 2023 includes severance costs associated with a reduction in headcount at our corporate offices.
(8)The three and nine months ended September 30, 2023 include a $1.4 million valuation allowance recorded against the deferred tax assets at our southwestern China entity as a result of its closure.



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UNIVERSAL ELECTRONICS INC.
RECONCILIATION OF ADJUSTED NON-GAAP FINANCIAL OUTLOOK AND FINANCIAL RESULTS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended December 31,
20232022
Low RangeHigh RangeActual
Net sales:
Net sales - GAAP$95,000 $105,000 $122,758 
Total adjustments (1)
— — — 
Adjusted Non-GAAP net sales$95,000 $105,000 $122,758 
Diluted earnings (loss) per share:
Diluted earnings (loss) per share - GAAP$(0.51)$(0.41)$(0.54)
Total adjustments (2)
$0.46 $0.46 $0.99 
Adjusted Non-GAAP diluted earnings (loss) per share$(0.05)$0.05 $0.44 
(1)The three months ended December 31, 2023 and 2022 do not include any Non-GAAP adjustments to net sales.
(2)The three months ended December 31, 2023 and 2022 includes adjustments for excess manufacturing overhead costs, factory transition costs, stock-based compensation expense, depreciation expense related to the increase in fixed assets from cost to fair market value resulting from acquisitions, amortization of acquired intangibles, costs associated with certain litigation efforts, foreign currency gains and losses and the related tax impact of these adjustments.
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