Financial Performance - GAAP net sales for Q4 2024 were $110.5 million, a 13% increase from $97.6 million in Q4 2023[5] - For the full year 2024, GAAP net sales were $394.9 million, down from $420.5 million in 2023[5] - Net sales for Q4 2024 increased to $110,454 thousand, up 12.5% from $97,594 thousand in Q4 2023[20] - For the twelve months ended December 31, 2024, net sales were $394,879 million, down from $420,457 million in 2023, representing a decline of 6.1%[25] Income and Loss - Adjusted Non-GAAP net income for Q4 2024 was $2.6 million, or $0.20 per diluted share, compared to a net loss of $0.5 million, or $0.04 per share in Q4 2023[5] - Adjusted Non-GAAP net income for Q4 2024 was $2,624 million, a significant improvement from a loss of $(482) million in Q4 2023[27] - The company reported a GAAP net loss of $(4,529) million for Q4 2024, compared to a loss of $(7,102) million in Q4 2023[27] - Net loss for the year ended December 31, 2024, was $24,029 thousand, significantly reduced from $98,238 thousand in 2023[20] Margins and Profitability - GAAP gross margins for the full year 2024 improved to 28.9%, compared to 23.2% in 2023[5] - Adjusted Non-GAAP gross profit for Q4 2024 was $31,356 million, up from $27,870 million in Q4 2023, reflecting a gross margin of 28.4%[25] - Operating loss for the year was $15,297 thousand, an improvement from a loss of $85,301 thousand in 2023[20] - Operating loss for Q4 2024 was $(4,354) million, compared to $(2,612) million in Q4 2023, indicating a worsening operational performance[25] Cash and Assets - Cash and cash equivalents as of December 31, 2024, were $26.8 million[5] - Cash and cash equivalents decreased to $26,783 thousand at the end of 2024, down from $42,751 thousand at the end of 2023[22] - Total assets decreased to $323,354 thousand in 2024, down from $355,872 thousand in 2023[18] - Total liabilities decreased to $170,249 thousand in 2024, compared to $176,952 thousand in 2023[18] Future Projections - The company expects Q1 2025 GAAP net sales to range between $87.0 million and $97.0 million, compared to $91.9 million in Q1 2024[7] - Adjusted Non-GAAP loss per share for Q1 2025 is projected to be between $0.21 and $0.11, an improvement from a loss of $0.26 per share in Q1 2024[8] - The company is committed to maintaining projections for top and bottom-line growth for full-year 2025 and beyond[2] Research and Development - Research and development expenses for the year were $29,723 thousand, a decrease from $31,281 thousand in 2023[20] Shareholder Information - The company issued 366,557 additional shares, increasing total common stock to 25,712,940 shares in 2024[18] Product Development - The company showcased new products at CES 2025, focusing on consumer privacy and on-device AI processing, which received strong interest from customers[2] Cost Management - UEI's ongoing cost initiatives contributed to significant improvement in bottom line results compared to the prior year quarter[2] - The company incurred $4.5 million in excess manufacturing costs for the twelve months ended December 31, 2024, impacting gross margin by 110 basis points[27] Goodwill Impairment - Goodwill impairment of $49.1 million was recorded in 2023 due to market capitalization being significantly less than the carrying value of equity[29]

Company Overview - Universal Electronics (UEIC) shares increased by 7.4% to close at $9.76, following a notable trading volume, contrasting with a 10.5% loss over the past four weeks [1] - The company is experiencing growth due to strong customer relationships, product development initiatives, and market share expansion in the connected home and home entertainment markets [1] Earnings Expectations - Universal Electronics is projected to report quarterly earnings of $0.14 per share, reflecting a year-over-year increase of 100% [2] - Expected revenues for the upcoming quarter are $101.7 million, which is a 4.2% increase compared to the same quarter last year [2] Stock Performance Insights - The consensus EPS estimate for Universal Electronics has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [3] - The stock currently holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [3] Industry Context - Universal Electronics is part of the Zacks Electronics - Miscellaneous Products industry, which includes TD SYNNEX (SNX) [3] - TD SYNNEX's consensus EPS estimate has decreased by 1.5% over the past month to $2.87, representing a 4% decline compared to the previous year [4] - TD SYNNEX also holds a Zacks Rank of 3 (Hold) [4]

Core Insights - Investors in the Electronics - Miscellaneous Products sector should consider Universal Electronics (UEIC) and Garmin (GRMN) for potential value opportunities [1] Valuation Metrics - Universal Electronics has a forward P/E ratio of 15.07, while Garmin has a forward P/E of 27.98 [5] - UEIC has a PEG ratio of 1, indicating a favorable expected EPS growth rate, compared to Garmin's PEG ratio of 1.30 [5] - UEIC's P/B ratio is 0.83, significantly lower than Garmin's P/B of 5.48, suggesting that UEIC is undervalued relative to its book value [6] Zacks Rank and Value Grades - Universal Electronics holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Garmin has a Zacks Rank of 3 (Hold) [3] - UEIC has a Value grade of B, whereas Garmin has a Value grade of D, reflecting stronger valuation metrics for UEIC [6][7] Conclusion - Given the stronger estimate revision activity and more attractive valuation metrics, Universal Electronics is positioned as the superior option for value investors at this time [7]

Core Viewpoint - The comparison between Universal Electronics (UEIC) and Rockwell Automation (ROK) indicates that UEIC is currently more attractive to value investors due to its stronger valuation metrics and Zacks Rank [1][3][7]. Valuation Metrics - UEIC has a forward P/E ratio of 14.56, significantly lower than ROK's forward P/E of 29.41, suggesting that UEIC is undervalued relative to ROK [5]. - The PEG ratio for UEIC is 0.97, indicating a favorable valuation when considering expected earnings growth, while ROK's PEG ratio stands at 2.89, suggesting it may be overvalued [5]. - UEIC's P/B ratio is 0.80, which is much lower than ROK's P/B ratio of 8.51, further highlighting UEIC's undervaluation [6]. Zacks Rank and Style Scores - UEIC holds a Zacks Rank of 2 (Buy), reflecting positive revisions to earnings estimates, while ROK has a Zacks Rank of 3 (Hold), indicating a less favorable outlook [3][7]. - The Value grade for UEIC is B, whereas ROK has a Value grade of D, reinforcing the notion that UEIC is a better option for value investors [6][7].

Financial Data and Key Metrics Changes - The company reported its Q3 2024 financial results, with specific metrics and performance indicators to be discussed in detail during the call [1][3]. Business Line Data and Key Metrics Changes - The management is expected to provide insights into various business lines, particularly focusing on design wins in connected home and home entertainment markets, including climate control and HVAC [6]. Market Data and Key Metrics Changes - The company aims to capture market opportunities through innovative solutions, which will be elaborated upon in the financial results presentation [6]. Company Strategy and Development Direction - The company is focusing on the development and delivery of unique solutions, particularly through its TIDE platform, to enhance its position in the connected home and home entertainment sectors [6]. Management Comments on Operating Environment and Future Outlook - Management will discuss forward-looking statements regarding the company's future financial performance and the potential impact of market conditions on its operations [5]. Other Important Information - The call includes a caution regarding forward-looking statements, indicating that actual results may differ from projections [5]. Q&A Session Summary Question: What are the expectations for design wins in the connected home market? - Management will address the company's strategy to continue capturing design wins in this sector, emphasizing innovative solutions [6].

Group 1: Earnings Performance - Universal Electronics reported quarterly earnings of $0.10 per share, missing the Zacks Consensus Estimate of $0.15 per share, but showing an improvement from $0.08 per share a year ago, resulting in an earnings surprise of -33.33% [1] - The company posted revenues of $102.07 million for the quarter ended September 2024, which was 0.48% below the Zacks Consensus Estimate and a decrease from $107.1 million year-over-year [2] - Over the last four quarters, Universal Electronics has surpassed consensus EPS estimates two times [2] Group 2: Stock Performance and Outlook - Universal Electronics shares have declined approximately 10.2% since the beginning of the year, contrasting with the S&P 500's gain of 24.3% [3] - The company's earnings outlook will be crucial for determining future stock movements, with current consensus EPS estimates for the coming quarter at $0.18 on revenues of $101.47 million, and for the current fiscal year at -$0.04 on revenues of $386.41 million [7] - The estimate revisions trend for Universal Electronics is mixed, currently resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Group 3: Industry Context - The Electronics - Miscellaneous Products industry, to which Universal Electronics belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net sales for the three months ended September 30, 2024, were $102,073,000, a decrease of 4.8% compared to $107,095,000 for the same period in 2023[34]. - For the nine months ended September 30, 2024, net sales totaled $284,425,000, down 11.9% from $322,863,000 in the prior year[34]. - The company reported a net loss of $2.658 million for the three months ended September 30, 2024, compared to a net loss of $19.362 million for the same period in 2023[107]. - Basic earnings (loss) per share for the three months ended September 30, 2024, was $(0.20), compared to $(1.50) for the same period in 2023[107]. - Net loss for the nine months ended September 30, 2024, was $19.5 million, an improvement from a net loss of $91.1 million for the same period in 2023[156]. Cash and Liquidity - Total cash and cash equivalents decreased to $26,287,000 as of September 30, 2024, from $42,751,000 at December 31, 2023, representing a decline of 38.5%[33]. - Available borrowing resources decreased to $37.2 million as of September 30, 2024, from $70.0 million as of December 31, 2023[147]. - The U.S. Credit Line has a maximum availability of $100.0 million, with total availability of $65.6 million as of September 30, 2024, based on the accounts receivable coverage ratio[55]. - Outstanding borrowings under the U.S. Credit Line decreased from $55.0 million on December 31, 2023, to $37.0 million on September 30, 2024, a reduction of 32.7%[60]. - The interest rate on the U.S. Credit Line was 7.83% as of September 30, 2024, down from 8.06% on December 31, 2023[58]. Assets and Liabilities - Total long-lived tangible assets decreased from $63.3 million on December 31, 2023, to $52.7 million on September 30, 2024, representing a decline of approximately 16.8%[42]. - Total intangible assets, net, decreased from $46.4 million on December 31, 2023, to $44.6 million on September 30, 2024, a decline of approximately 3.9%[45]. - The allowance for credit losses increased to $841,000 as of September 30, 2024, from $815,000 at December 31, 2023, reflecting a slight increase in credit risk[37]. - Trade receivables, net, decreased from $104.84 million on December 31, 2023, to $100.94 million on September 30, 2024, reflecting a reduction of approximately 3.7%[37]. - Total accrued compensation as of September 30, 2024, was $20.6 million, slightly up from $20.3 million at December 31, 2023[71]. Expenses - Depreciation expense for the three months ended September 30, 2024, was $3.0 million, down from $4.6 million in the same period of 2023, indicating a reduction of 34.8%[43]. - R&D expenses decreased to $7.3 million for the three months ended September 30, 2024, from $7.7 million for the same period in 2023[131]. - SG&A expenses decreased slightly to $22.9 million for the three months ended September 30, 2024, from $23.1 million for the same period in 2023[132]. - Net interest expense decreased to $2.7 million for the nine months ended September 30, 2024, from $3.3 million for the same period in 2023, attributed to a lower average loan balance[142]. - Operating lease expense for the nine months ended September 30, 2024, was $5.2 million, compared to $5.5 million for the same period in 2023, reflecting a decrease of approximately 4.2%[51]. Restructuring and Legal Matters - The company incurred $4.2 million in factory restructuring charges since September 2023, with the restructuring plan expected to be completed in the second quarter of 2024[75]. - The company incurred $1.3 million of severance and $1.3 million of other exit costs related to downsizing its factory in Mexico[77]. - The company has ongoing settlement discussions regarding the Tongshun lawsuit, which has resulted in a stay of the hearing on this matter[92]. - The company expects total estimated restructuring charges of $2.6 million for the factory restructuring in Mexico, with $41.0 thousand expected to be recognized after September 30, 2024[77]. - The company is awaiting a decision from the U.S. Supreme Court regarding Roku's appeal related to patent infringement, with a response due by November 27, 2024[81]. Taxation - The company recorded an income tax expense of $6.0 million for the nine months ended September 30, 2024, compared to $3.4 million for the same period in 2023, reflecting a significant increase[66]. - The company's gross unrecognized tax benefits amounted to $3.5 million as of September 30, 2024, which includes interest and penalties[69]. - The company has provided a full valuation allowance on its U.S. federal and state deferred tax assets due to a three-year cumulative operating loss[68]. - Income tax expense for the three months ended September 30, 2024, was $2.5 million, compared to $3.3 million for the same period in 2023, a decrease of 24.2%[66]. - The company does not anticipate a decrease in unrecognized tax benefits within the next twelve months[69]. Shareholder Activities - The company repurchased a total of 201,000 shares in the nine months ended September 30, 2024, at a total cost of $1.896 million[96]. - The company has 778,362 shares available for repurchase under the October 2023 share repurchase program[95]. - As of September 30, 2024, the company granted 116 thousand non-vested performance stock awards with a weighted-average fair value of $4.72[100]. - Stock-based compensation expense for employees and directors totaled $5.015 million for the nine months ended September 30, 2024, compared to $6.833 million for the same period in 2023[98]. - The company expects to recognize $6.0 million of total unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock awards[99].

Financial Performance - Third quarter 2024 GAAP net sales were $102.1 million, a decrease from $107.1 million in the same quarter of 2023[3] - GAAP gross margins improved to 30.1%, up from 19.1% year-over-year[3] - GAAP operating income was $0.4 million, compared to a loss of $14.0 million in Q3 2023[3] - GAAP net loss for Q3 2024 was $2.7 million, or $0.20 per share, significantly improved from a loss of $19.4 million, or $1.50 per share, in Q3 2023[3] - For the nine months ended September 30, 2024, GAAP net sales were $284.4 million, down from $322.9 million in the same period of 2023[4] - GAAP gross margins for the nine months increased to 29.1%, compared to 21.6% in 2023[4] - The company expects fourth quarter 2024 GAAP net sales to range from $99.0 million to $109.0 million, compared to $97.6 million in Q4 2023[5] - Adjusted Non-GAAP earnings per diluted share for Q4 2024 are expected to range from $0.10 to $0.20, compared to a loss of $0.04 in Q4 2023[6] - The company anticipates year-over-year growth in both top and bottom lines for Q4 2024 and full year 2025[2] Cash and Assets - Cash and cash equivalents as of September 30, 2024, were $26.3 million[3] - Total current assets decreased to $237,265,000 as of September 30, 2024, down from $258,851,000 as of December 31, 2023, a decline of 8.3%[17] - Total liabilities decreased to $160,069,000 as of September 30, 2024, down from $176,952,000 as of December 31, 2023, a reduction of 9.5%[17] - Cash and cash equivalents at the end of the period were $26,287,000, down from $42,751,000 at the beginning of the period, a decrease of 38.5%[20] Operating Activities - Net cash provided by operating activities for the nine months ended September 30, 2024, was $8,339,000, compared to $20,076,000 for the same period in 2023, a decrease of 58.6%[20] - Research and development expenses for the three months ended September 30, 2024, were $7,338,000, slightly down from $7,658,000 for the same period in 2023[18] - The company incurred factory restructuring charges of $104,000 in the three months ended September 30, 2024, compared to $3,690,000 in the same period in 2023[18] Loss and Earnings - The company reported a net loss of $19,500,000 for the nine months ended September 30, 2024, compared to a net loss of $91,136,000 for the same period in 2023, indicating an improvement[20] - Basic earnings per share for the nine months ended September 30, 2024, were $(1.51), compared to $(7.10) for the same period in 2023[19] - Adjusted Non-GAAP net income for Q3 2024 was $1,361,000, compared to a loss of $658,000 in Q3 2023[23] Future Expectations - The company expects Q4 2024 net sales to range between $99,000,000 and $109,000,000, compared to $97,594,000 in Q4 2023[26] - Diluted earnings per share (GAAP) for Q4 2024 are projected to be between $(0.27) and $(0.17)[26] - Adjusted Non-GAAP diluted earnings per share for Q4 2024 are expected to be between $0.10 and $0.20[26] Impairments and Adjustments - The company incurred a goodwill impairment charge of $49.1 million in 2023 due to market capitalization issues[25] - The three months ended December 31, 2024 and 2023 included adjustments for stock-based compensation expense and amortization of acquired intangibles[2] - Costs associated with certain litigation efforts and factory restructuring were also accounted for in the financial results[2] - Foreign currency gains and losses impacted the financial performance during the three months ended December 31, 2024 and 2023[2] - The three months ended December 31, 2023 included adjustments for severance costs[2]

Company Overview - Universal Electronics (UEIC) shares increased by 8.5% to $9.29 in the last trading session, following a period of 6.5% loss over the past four weeks, indicating a significant recovery in stock performance [1] - The company is experiencing growth due to expanding customer relationships and increasing design wins in the connected home and home entertainment markets [1] Earnings Expectations - The upcoming quarterly earnings report for Universal Electronics is expected to show earnings of $0.15 per share, reflecting a year-over-year increase of 87.5% [2] - Revenue is projected to be $102.57 million, which is a decrease of 4.2% compared to the same quarter last year [2] Earnings Estimate Revisions - The consensus EPS estimate for Universal Electronics has been revised down by 123.1% over the last 30 days, which typically does not correlate with price appreciation [3] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [3] Industry Comparison - Universal Electronics is part of the Zacks Electronics - Miscellaneous Products industry, where another company, Hayward Holdings, Inc. (HAYW), has a Zacks Rank of 2 (Buy) and reported an unchanged EPS estimate of $0.10, representing an 11.1% increase year-over-year [4]

Universal Electronics Inc. (NASDAQ:UEIC) Q2 2024 Earnings Conference Call August 8, 2024 4:30 PM ET Company Participants Kirsten Chapman - LHA Investor Relations Paul Arling - Chairman & Chief Executive Officer Bryan Hackworth - Chief Financial Officer Conference Call Participants Steven Frankel - Rosenblatt Securities Greg Burns - Sidoti Operator Good day, and thank you for standing by. Welcome to the Universal Electronics Second Quarter 2024 Financial Results Conference Call. At this time, all participant ...