UEIC Universal Electronics Inc

Universal Electronics Inc. (UEI) (NASDAQ: UEIC) reported financial results for the three and six months ended June 30, 2024.

“Our innovative wireless control solutions and patented technologies continue to capture design wins from major global household brands across all areas of the business,” said UEI Chairman and CEO Paul Arling. “Second quarter 2024 net sales were within guidance, even though some quarter-end orders were pushed out and shipped in early third quarter. Our pipeline of new product developments, recent design wins and new project engagements are laying the foundation for a strong future. We continue to fortify our business by fostering new and existing customer relationships, expanding our intellectual property portfolio and managing our expenses. We have nearly completed our two-year plan to optimize our global manufacturing footprint, which has yielded significantly higher margins. For the second quarter 2024, our gross margin percentage increased 580 basis points over the prior year quarter. As a result of these efforts, we expect to be profitable for the second half of 2024 and to deliver consistent sales and earnings growth into 2025, 2026 and beyond.”

Financial Results for the Three Months Ended June 30: 2024 Compared to 2023

• GAAP net sales were $90.5 million, compared to $107.4 million; Adjusted Non-GAAP net sales were $90.5 million, compared to $107.4 million.
• GAAP gross margins were 28.7%, compared to 22.9%; Adjusted Non-GAAP gross margins were 28.7%, compared to 22.9%.
• GAAP operating loss was $4.5 million, compared to $9.1 million; Adjusted Non-GAAP operating loss was $1.1 million, compared to $4.5 million.
• GAAP net loss was $8.2 million, or $0.63 per share, compared to $10.4 million, or $0.81 per share; Adjusted Non-GAAP net loss was $1.2 million, or $0.09 per share, compared to $3.1 million, or $0.24 per share.
• GAAP gross margin, operating loss and net loss for the three months ended June 30, 2024 include $1.4 million, equivalent to 160 basis points of gross margin or $0.09 per share (net of tax), of excess manufacturing overhead costs resulting from the continued transition of our global manufacturing footprint, specifically in Mexico and Vietnam, and depreciation related to the mark-up from cost to fair value of fixed assets acquired in business combinations ("excess manufacturing costs"). GAAP gross margin, operating loss and net loss for the three months ended June 30, 2023 include $2.7 million, equivalent to 250 basis points of gross margin or $0.18 per share (net of tax), of excess manufacturing costs.
• At June 30, 2024, cash and cash equivalents were $23.1 million. During the second quarter of 2024, the company repurchased approximately 27,000 shares in the open market for $0.3 million.

Financial Results for the Six Months Ended June 30: 2024 Compared to 2023

• GAAP net sales were $182.4 million, compared to $215.8 million; Adjusted Non-GAAP net sales were $182.4 million, compared to $215.8 million.
• GAAP gross margins were 28.5%, compared to 22.9%; Adjusted Non-GAAP gross margins were 28.5%, compared to 22.9%.
• GAAP operating loss was $11.4 million, compared to $68.7 million, including a $49.1 million non-cash charge for goodwill impairment; Adjusted Non-GAAP operating loss was $4.6 million, compared to $11.0 million.
• GAAP net loss was $16.8 million, or $1.30 per share, compared to $71.8 million including the aforementioned non-cash charge, or $5.61 per share; Adjusted Non-GAAP net loss was $4.6 million, or $0.36 per share, compared to $8.8 million, or $0.69 per share.
• GAAP gross margin, operating loss and net loss for the six months ended June 30, 2024 include $2.6 million, equivalent to 140 basis points of gross margin or $0.17 per share (net of tax), of excess manufacturing costs. GAAP gross margin, operating loss and net loss for the six months ended June 30, 2023 include $5.5 million, equivalent to 250 basis points of gross margin or $0.35 per share (net of tax), of excess manufacturing costs.

Financial Outlook

For the third quarter of 2024, the company expects GAAP net sales to range from $98.0 million to $108.0 million, compared to $107.1 million in the third quarter of 2023. GAAP loss per share for the third quarter of 2024 is expected to range from $0.33 to $0.23, compared to GAAP loss per share of $1.50 in the third quarter of 2023.

For the third quarter of 2024, the company expects Adjusted Non-GAAP net sales to range from $98.0 million to $108.0 million, compared to $107.1 million in the third quarter of 2023. Adjusted Non-GAAP earnings per diluted share is expected to range from $0.01 to $0.11 per share, compared to Adjusted Non-GAAP earnings per diluted share of $0.06 in the third quarter of 2023. The third quarter 2024 Adjusted Non-GAAP earnings per diluted share estimate excludes $0.34 per share related to, among other things, stock-based compensation, amortization of acquired intangibles, litigation costs, factory restructuring 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, August 8, 2024 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its second quarter 2024 earnings results, review recent activity and answer questions. To attend the call please register at https://edge.media-server.com/mmc/p/9am3dm57 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 and Additional Financial Information

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 stock-based compensation expense. 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, factory restructuring costs, goodwill impairment and severance. Adjusted Non-GAAP net income (loss) is defined as net income (loss) excluding the aforementioned items, foreign currency gains and losses, and the related tax effects of all adjustments. Adjusted Non-GAAP earnings (loss) per diluted share is calculated using Adjusted Non-GAAP net income (loss). A reconciliation of these financial measures to the most directly comparable GAAP financial measures is included at the end of this press release.

The company will no longer exclude excess manufacturing overhead costs resulting from the continued transition of its global manufacturing footprint, specifically in Mexico and Vietnam, and depreciation related to the mark-up from cost to fair value of fixed assets acquired in business combinations from its Adjusted Non-GAAP figures. This impacts Adjusted Non-GAAP gross profit, gross margin, operating income (loss), income (loss) before provision (benefit) from income taxes and net income (loss) in the quarterly results for 2023 and 2024. There is no impact to GAAP results. A reconciliation of these measures is posted on the website in the Q2 2024 Quarterly Results section.

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.

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, 2023 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 innovative wireless control solutions and technologies that are 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 climate control and connected home markets as anticipated by management; our ability to continue optimizing our manufacturing footprint and realize the lower concentration risks in the time frame and to the extent expected by management; our ability to maintain our market share in the traditional subscription broadcast market as expected by management; our ability to manage through the worldwide inflationary pressures and macroeconomic conditions; 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; our continued ability to successfully enforce our patented technology against Roku; 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 August 8, 2024, 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 –

 

UNIVERSAL ELECTRONICS INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share-related data)

(Unaudited)

 

 

 

June 30, 2024

 

December 31, 2023

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

23,128

 

 

$

42,751

 

Accounts receivable, net

 

 

98,800

 

 

 

112,596

 

Contract assets

 

 

3,274

 

 

 

4,240

 

Inventories

 

 

87,491

 

 

 

88,273

 

Prepaid expenses and other current assets

 

 

11,130

 

 

 

7,325

 

Income tax receivable

 

 

2,309

 

 

 

3,666

 

Total current assets

 

 

226,132

 

 

 

258,851

 

Property, plant and equipment, net

 

 

39,259

 

 

 

44,619

 

Intangible assets, net

 

 

25,200

 

 

 

25,349

 

Operating lease right-of-use assets

 

 

15,922

 

 

 

18,693

 

Deferred income taxes

 

 

6,086

 

 

 

6,787

 

Other assets

 

 

1,404

 

 

 

1,573

 

Total assets

 

$

314,003

 

 

$

355,872

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

55,518

 

 

$

57,033

 

Line of credit

 

 

41,000

 

 

 

55,000

 

Accrued compensation

 

 

18,870

 

 

 

20,305

 

Accrued sales discounts, rebates and royalties

 

 

4,103

 

 

 

5,796

 

Accrued income taxes

 

 

1,462

 

 

 

1,833

 

Other accrued liabilities

 

 

20,022

 

 

 

21,181

 

Total current liabilities

 

 

140,975

 

 

 

161,148

 

Long-term liabilities:

 

 

 

 

Operating lease obligations

 

 

10,386

 

 

 

12,560

 

Deferred income taxes

 

 

1,718

 

 

 

1,992

 

Income tax payable

 

 

434

 

 

 

435

 

Other long-term liabilities

 

 

719

 

 

 

817

 

Total liabilities

 

 

154,232

 

 

 

176,952

 

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; 25,627,084 and 25,346,383 shares issued on June 30, 2024 and December 31, 2023, respectively

 

 

256

 

 

 

253

 

Paid-in capital

 

 

340,962

 

 

 

336,938

 

Treasury stock, at cost, 12,654,970 and 12,459,845 shares on June 30, 2024 and December 31, 2023, respectively

 

 

(371,814

)

 

 

(369,973

)

Accumulated other comprehensive income (loss)

 

 

(25,251

)

 

 

(20,758

)

Retained earnings

 

 

215,618

 

 

 

232,460

 

Total stockholders’ equity

 

 

159,771

 

 

 

178,920

 

Total liabilities and stockholders’ equity

 

$

314,003

 

 

$

355,872

 

 

UNIVERSAL ELECTRONICS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net sales

$

90,452

 

 

$

107,391

 

 

$

182,352

 

 

$

215,768

 

Cost of sales

 

64,500

 

 

 

82,774

 

 

 

130,412

 

 

 

166,458

 

Gross profit

 

25,952

 

 

 

24,617

 

 

 

51,940

 

 

 

49,310

 

Research and development expenses

 

7,520

 

 

 

8,484

 

 

 

15,341

 

 

 

16,844

 

Selling, general and administrative expenses

 

21,330

 

 

 

25,265

 

 

 

45,341

 

 

 

52,047

 

Factory restructuring charges

 

1,555

 

 

 

—

 

 

 

2,619

 

 

 

—

 

Goodwill impairment

 

—

 

 

 

—

 

 

 

—

 

 

 

49,075

 

Operating income (loss)

 

(4,453

)

 

 

(9,132

)

 

 

(11,361

)

 

 

(68,656

)

Interest income (expense), net

 

(843

)

 

 

(1,097

)

 

 

(1,765

)

 

 

(2,072

)

Other income (expense), net

 

(89

)

 

 

(702

)

 

 

(169

)

 

 

(916

)

Income (loss) before provision for (benefit from) income taxes

 

(5,385

)

 

 

(10,931

)

 

 

(13,295

)

 

 

(71,644

)

Provision for (benefit from) income taxes

 

2,808

 

 

 

(520

)

 

 

3,547

 

 

 

130

 

Net income (loss)

$

(8,193

)

 

$

(10,411

)

 

$

(16,842

)

 

$

(71,774

)

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

Basic

$

(0.63

)

 

$

(0.81

)

 

$

(1.30

)

 

$

(5.61

)

Diluted

$

(0.63

)

 

$

(0.81

)

 

$

(1.30

)

 

$

(5.61

)

Shares used in computing earnings (loss) per share:

 

 

 

 

 

 

 

Basic

 

12,917

 

 

 

12,860

 

 

 

12,909

 

 

 

12,804

 

Diluted

 

12,917

 

 

 

12,860

 

 

 

12,909

 

 

 

12,804

 

 

UNIVERSAL ELECTRONICS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

Net income (loss)

 

$

(16,842

)

 

$

(71,774

)

Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:

 

 

 

 

Depreciation and amortization

 

 

9,143

 

 

 

11,707

 

Provision for credit losses

 

 

—

 

 

 

3

 

Deferred income taxes

 

 

112

 

 

 

142

 

Shares issued for employee benefit plan

 

 

663

 

 

 

725

 

Employee and director stock-based compensation

 

 

3,364

 

 

 

4,698

 

Impairment of goodwill

 

 

—

 

 

 

49,075

 

Impairment of long-lived assets

 

 

148

 

 

 

49

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable and contract assets

 

 

13,095

 

 

 

10,586

 

Inventories

 

 

(914

)

 

 

33,195

 

Prepaid expenses and other assets

 

 

(1,621

)

 

 

2,615

 

Accounts payable and accrued liabilities

 

 

(5,478

)

 

 

(26,542

)

Accrued income taxes

 

 

1,005

 

 

 

(1,224

)

Net cash provided by (used for) operating activities

 

 

2,675

 

 

 

13,255

 

Cash flows from investing activities:

 

 

 

 

Acquisitions of property, plant and equipment

 

 

(2,696

)

 

 

(5,807

)

Acquisitions of intangible assets

 

 

(2,308

)

 

 

(3,295

)

Net cash provided by (used for) investing activities

 

 

(5,004

)

 

 

(9,102

)

Cash flows from financing activities:

 

 

 

 

Borrowings under line of credit

 

 

35,000

 

 

 

25,000

 

Repayments on line of credit

 

 

(49,000

)

 

 

(38,000

)

Treasury stock purchased

 

 

(1,841

)

 

 

(855

)

Net cash provided by (used for) financing activities

 

 

(15,841

)

 

 

(13,855

)

Effect of foreign currency exchange rates on cash and cash equivalents

 

 

(1,453

)

 

 

(1,215

)

Net increase (decrease) in cash and cash equivalents

 

 

(19,623

)

 

 

(10,917

)

Cash and cash equivalents at beginning of period

 

 

42,751

 

 

 

66,740

 

Cash and cash equivalents at end of period

 

$

23,128

 

 

$

55,823

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

Income taxes paid

 

$

2,175

 

 

$

3,956

 

Interest paid

 

$

2,545

 

 

$

3,843

 

 

UNIVERSAL ELECTRONICS INC.

RECONCILIATION OF ADJUSTED NON-GAAP FINANCIAL RESULTS

(In thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net sales:

 

 

 

 

 

 

 

 

Net sales - GAAP

 

$

90,452

 

 

$

107,391

 

 

$

182,352

 

 

$

215,768

 

Adjusted Non-GAAP net sales

 

$

90,452

 

 

$

107,391

 

 

$

182,352

 

 

$

215,768

 

 

 

 

 

 

 

 

 

 

Cost of sales:

 

 

 

 

 

 

 

 

Cost of sales - GAAP (1)

 

$

64,500

 

 

$

82,774

 

 

$

130,412

 

 

$

166,458

 

Stock-based compensation expense

 

 

(20

)

 

 

(26

)

 

 

(47

)

 

 

(62

)

Adjusted Non-GAAP cost of sales

 

 

64,480

 

 

 

82,748

 

 

 

130,365

 

 

 

166,396

 

Adjusted Non-GAAP gross profit

 

$

25,972

 

 

$

24,643

 

 

$

51,987

 

 

$

49,372

 

 

 

 

 

 

 

 

 

 

Gross margin:

 

 

 

 

 

 

 

 

Gross margin - GAAP (1)

 

 

28.7

%

 

 

22.9

%

 

 

28.5

%

 

 

22.9

%

Stock-based compensation expense

 

 

0.0

%

 

 

0.0

%

 

 

0.0

%

 

 

0.0

%

Adjusted Non-GAAP gross margin

 

 

28.7

%

 

 

22.9

%

 

 

28.5

%

 

 

22.9

%

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Operating expenses - GAAP

 

$

30,405

 

 

$

33,749

 

 

$

63,301

 

 

$

117,966

 

Stock-based compensation expense

 

 

(1,441

)

 

 

(2,132

)

 

 

(3,318

)

 

 

(4,636

)

Amortization of acquired intangible assets

 

 

(219

)

 

 

(284

)

 

 

(467

)

 

 

(570

)

Litigation costs (2)

 

 

(71

)

 

 

(270

)

 

 

(357

)

 

 

(1,428

)

Factory restructuring charges (3)

 

 

(1,555

)

 

 

—

 

 

 

(2,618

)

 

 

—

 

Goodwill impairment (4)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(49,075

)

Severance (5)

 

 

—

 

 

 

(1,886

)

 

 

—

 

 

 

(1,886

)

Adjusted Non-GAAP operating expenses

 

$

27,119

 

 

$

29,177

 

 

$

56,541

 

 

$

60,371

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

Operating income (loss) - GAAP (1)

 

$

(4,453

)

 

$

(9,132

)

 

$

(11,361

)

 

$

(68,656

)

Stock-based compensation expense

 

 

1,461

 

 

 

2,158

 

 

 

3,365

 

 

 

4,698

 

Amortization of acquired intangible assets

 

 

219

 

 

 

284

 

 

 

467

 

 

 

570

 

Litigation costs (2)

 

 

71

 

 

 

270

 

 

 

357

 

 

 

1,428

 

Factory restructuring costs (3)

 

 

1,555

 

 

 

—

 

 

 

2,618

 

 

 

—

 

Goodwill impairment (4)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

49,075

 

Severance (5)

 

 

—

 

 

 

1,886

 

 

 

—

 

 

 

1,886

 

Adjusted Non-GAAP operating income (loss)

 

$

(1,147

)

 

$

(4,534

)

 

$

(4,554

)

 

$

(10,999

)

 

 

 

 

 

 

 

 

 

Adjusted pro forma operating income (loss) as a percentage of net sales

 

 

(1.3

)%

 

 

(4.2

)%

 

 

(2.5

)%

 

 

(5.1

)%

 

UNIVERSAL ELECTRONICS INC.

RECONCILIATION OF ADJUSTED NON-GAAP FINANCIAL RESULTS

(In thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net income (loss):

 

 

 

 

 

 

 

 

Net income (loss) - GAAP (1)

 

$

(8,193

)

 

$

(10,411

)

 

$

(16,842

)

 

$

(71,774

)

Stock-based compensation expense

 

 

1,461

 

 

 

2,158

 

 

 

3,365

 

 

 

4,698

 

Amortization of acquired intangible assets

 

 

219

 

 

 

284

 

 

 

467

 

 

 

570

 

Litigation costs (2)

 

 

71

 

 

 

270

 

 

 

357

 

 

 

1,428

 

Factory restructuring costs (3)

 

 

1,555

 

 

 

—

 

 

 

2,618

 

 

 

—

 

Goodwill impairment (4)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

49,075

 

Severance (5)

 

 

—

 

 

 

1,886

 

 

 

—

 

 

 

1,886

 

Foreign currency (gain)/loss

 

 

354

 

 

 

744

 

 

 

458

 

 

 

1,176

 

Income tax provision on adjustments

 

 

3,341

 

 

 

2,016

 

 

 

4,967

 

 

 

4,102

 

Adjusted Non-GAAP net income (loss)

 

$

(1,192

)

 

$

(3,053

)

 

$

(4,610

)

 

$

(8,839

)

 

 

 

 

 

 

 

 

 

Diluted shares used in computing earnings (loss) per share:

 

 

 

 

 

 

 

 

GAAP

 

 

12,917

 

 

 

12,860

 

 

 

12,909

 

 

 

12,804

 

Adjusted Non-GAAP

 

 

12,917

 

 

 

12,860

 

 

 

12,909

 

 

 

12,804

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share - GAAP (1)

 

$

(0.63

)

 

$

(0.81

)

 

$

(1.30

)

 

$

(5.61

)

Total adjustments

 

$

0.54

 

 

$

0.57

 

 

$

0.95

 

 

$

4.92

 

Adjusted Non-GAAP diluted earnings (loss) per share

 

$

(0.09

)

 

$

(0.24

)

 

$

(0.36

)

 

$

(0.69

)

(1)

GAAP gross margin, operating loss and net loss for the three months ended June 30, 2024 include $1.4 million, equivalent to 160 basis points of gross margin or $0.09 per share (net of tax), of excess manufacturing overhead costs resulting from the continued transition of our global manufacturing footprint, specifically in Mexico and Vietnam, and depreciation related to the mark-up from cost to fair value of fixed assets acquired in business combinations ("excess manufacturing costs"). GAAP gross margin, operating loss and net loss for the three months ended June 30, 2023 include $2.7 million, equivalent to 250 basis points of gross margin or $0.18 per share (net of tax), of excess manufacturing costs.

 

 

 

GAAP gross margin, operating loss and net loss for the six months ended June 30, 2024 include $2.6 million, equivalent to 140 basis points of gross margin or $0.17 per share (net of tax), of excess manufacturing costs. GAAP gross margin, operating loss and net loss for the six months ended June 30, 2023 include $5.5 million, equivalent to 250 basis points of gross margin or $0.35 per share (net of tax), of excess manufacturing costs.

 

 

(2)

The three and six months ended June 30, 2024 and 2023, include 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. In addition, the three and six months ended June 30, 2023 include $0.2 million and $1.2 million, respectively, of expenses associated with non-recurring legal matters involving internal investigations at our manufacturing plants.

 

 

(3)

The three and six months ended June 30, 2024 include severance and other exit costs associated with the closure of our southwestern China factory and the downsizing of our Mexico factory.

 

 

(4)

The six months ended June 30, 2023 includes 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.

 

 

(5)

The three and six months ended June 30, 2023 include severance costs associated with a reduction in headcount at our corporate offices.

 

UNIVERSAL ELECTRONICS INC.

RECONCILIATION OF ADJUSTED NON-GAAP FINANCIAL OUTLOOK AND FINANCIAL RESULTS

(In thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

 

Low Range

 

High Range

 

Actual

Net sales:

 

 

 

 

 

 

Net sales - GAAP

 

$

98,000

 

 

$

108,000

 

 

$

107,095

 

Total adjustments (1)

 

 

—

 

 

 

—

 

 

 

—

 

Adjusted Non-GAAP net sales

 

$

98,000

 

 

$

108,000

 

 

$

107,095

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share:

 

 

 

 

 

 

Diluted earnings (loss) per share - GAAP

 

$

(0.33

)

 

$

(0.23

)

 

$

(1.50

)

Total adjustments (2)

 

$

0.34

 

 

$

0.34

 

 

$

1.56

 

Adjusted Non-GAAP diluted earnings (loss) per share

 

$

0.01

 

 

$

0.11

 

 

$

0.06

 

(1)

The three months ended September 30, 2024 and 2023 do not include any Non-GAAP adjustments to net sales.

 

 

(2)

The three months ended September 30, 2024 and 2023 include adjustments for stock-based compensation expense, amortization of acquired intangibles, costs associated with certain litigation efforts, factory restructuring costs, foreign currency gains and losses and the related tax impact of these adjustments. The three months ended September 30, 2023 also includes adjustments for impairment, severance and a valuation allowance on certain deferred tax assets.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240808583056/en/

UEI: Bryan Hackworth, CFO, UEI, 480-530-3000 Investors: Kirsten Chapman, LHA Investor Relations, uei@lhai.com, 415-433-3777