Universal Electronics(US:UEIC)2024-08-08 21:28Financial Performance - Net sales for the three months ended June 30, 2024, were $90,452,000, down 16.0% from $107,391,000 for the same period in 2023[32] - Total net sales for the six months ended June 30, 2024, were $182,352,000, down 15.5% from $215,768,000 for the same period in 2023[32] - For the three months ended June 30, 2024, the net loss was $8.19 million, compared to a net loss of $10.41 million for the same period in 2023, representing a 21% improvement[99] - The basic earnings (loss) per share for the three months ended June 30, 2024, was $(0.63), an improvement from $(0.81) in the same period of 2023[99] - The net loss for the six months ended June 30, 2024, was $16.8 million, an improvement from a net loss of $71.8 million in the same period of 2023, which included a goodwill impairment of $49.1 million[134] Cash and Liquidity - Total cash and cash equivalents decreased from $42,751,000 on December 31, 2023, to $23,128,000 on June 30, 2024, representing a decline of approximately 46.1%[31] - The company had a revolving line of credit with a maximum availability of $100 million, with total availability of $53.1 million as of June 30, 2024, based on the accounts receivable coverage ratio[56] - Net cash provided by operating activities was $2.7 million for the six months ended June 30, 2024, compared to $13.3 million for the same period in 2023, a decrease of 80%[134] - Cash used for financing activities totaled $15.8 million for the six months ended June 30, 2024, compared to $13.9 million in the same period of 2023[136] - The company had an outstanding balance of $41.0 million on its Credit Line as of June 30, 2024, with $12.1 million available for borrowing[133] Assets and Liabilities - Accounts receivable, net, decreased from $112,596,000 on December 31, 2023, to $98,800,000 on June 30, 2024, a decline of approximately 12.3%[36] - Inventories totaled $87,491,000 as of June 30, 2024, slightly down from $88,273,000 on December 31, 2023, indicating a decrease of 0.9%[39] - Total long-lived tangible assets decreased from $63.3 million at December 31, 2023, to $55.2 million at June 30, 2024, representing a decline of approximately 12.9%[42] - Total lease liabilities decreased from $17.4 million at December 31, 2023, to $14.8 million at June 30, 2024, a reduction of approximately 15%[50] - The allowance for credit losses decreased from $815,000 on December 31, 2023, to $799,000 on June 30, 2024, reflecting a reduction of 2.0%[37] Expenses and Costs - Depreciation expense for the three months ended June 30, 2024, was $3.3 million, down from $4.8 million for the same period in 2023, indicating a reduction of 31.3%[43] - Selling, general and administrative expenses decreased to $21.3 million for the three months ended June 30, 2024, compared to $25.3 million for the same period in 2023[121] - Research and development expenses decreased to $7.5 million for the three months ended June 30, 2024, down from $8.5 million for the same period in 2023[120] - The company recognized a total of $4.2 million in factory restructuring charges since September 2023, with no further expenses expected from this plan[69] - Universal Electronics incurred $0.9 million in severance and $0.6 million in other exit costs during the three months ended June 30, 2024, related to downsizing its factory in Mexico[70] Shareholder Actions - As of June 30, 2024, the company has repurchased a total of 195,000 shares, costing $1.841 million, compared to 58,000 shares repurchased in the same period in 2023[87] - The company has 778,362 shares available for repurchase under the October 2023 Program, which allows for the repurchase of up to 1,000,000 shares[86] - The company expects to recognize $6.9 million of total unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock awards over a weighted-average life of 2.0 years[90] - For the six months ended June 30, 2024, the total employee and director stock-based compensation expense was $3.364 million, a decrease from $4.698 million in the same period of 2023[89] - The company granted 322,000 non-vested restricted stock awards with a weighted-average grant date fair value of $10.38 during the six months ended June 30, 2024[90] Legal and Regulatory Matters - The company is involved in ongoing litigation against Roku, with a significant ruling from the ITC affirming that Roku infringes its patents, leading to a Limited Exclusion Order effective January 9, 2022[73] - Roku has filed multiple Inter Partes Review requests, with the PTAB granting twelve and denying fourteen requests to date, resulting in mixed outcomes regarding the validity of the company's patent claims[76] - The CIT issued a preliminary injunction in July 2021 suspending liquidation of all unliquidated entries subject to Lists 3 and 4A duties, with ongoing proceedings regarding the USTR's authority to impose these tariffs[81] - The company filed a complaint against the U.S. government regarding Section 301 Tariffs on imports from China, alleging violations of the Trade Act and the Administrative Procedures Act[79] - The company deposited RMB 35 million (approximately $4.8 million) with the court in response to a lawsuit filed by Tongshun Company, which is included in prepaid expenses[83] Market and Economic Conditions - The company expects to continue to be negatively impacted by adverse macroeconomic conditions, including reduced consumer spending and inflationary pressures[113] - The company anticipates continued challenges related to supply chain issues and economic conditions, which may impact future performance[105] - The company plans to broaden its home control and home automation product offerings to acquire new customers and expand its market share[111] - Significant customer Daikin Industries Ltd. accounted for 14.3% of net sales in the three months ended June 30, 2024, up from 12.6% in the same period of 2023[34] - Days sales outstanding increased to 91 days as of June 30, 2024, compared to 83 days in the same period of 2023[134]