Universal Electronics(US:UEIC)2020-05-08 17:57Financial Performance - Total net sales for the three months ended March 31, 2020, were $151.778 million, a decrease of 17.5% compared to $184.163 million for the same period in 2019[34]. - Net sales in the United States were $74.381 million, down 25.0% from $98.936 million in the prior year[36]. - Net sales decreased 17.6% to $151.8 million for the three months ended March 31, 2020, compared to $184.2 million for the same period in 2019[116]. - Revenue from goods and services transferred at a point in time was $117.058 million, down from $136.338 million year-over-year, representing a decline of 14.1%[34]. - Gross profit for the three months ended March 31, 2020, was $42.9 million, with a gross profit margin of 28.3%, up from 21.7% in the same period in 2019[129]. - Operating income increased to $8.0 million for the three months ended March 31, 2020, up from $1.7 million for the same period in 2019, with an operating income percentage of 5.3% compared to 0.9%[122]. - Basic earnings per share for the three months ended March 31, 2020, was $0.42, compared to a loss of $0.07 for the same period in 2019[105]. - Diluted earnings per share for the three months ended March 31, 2020, was $0.41, compared to a loss of $0.07 for the same period in 2019[105]. - The net gain on foreign currency exchange contracts was $0.3 million for the three months ended March 31, 2020, compared to a net loss of $0.3 million for the same period in 2019[108]. Cash and Liquidity - Cash and cash equivalents totaled $58.927 million as of March 31, 2020, a decrease from $74.302 million at December 31, 2019[33]. - Net cash used by operating activities was $8.3 million during the three months ended March 31, 2020, compared to $4.5 million in the same period in 2019[136]. - Net cash provided by financing activities was $0.6 million during the three months ended March 31, 2020, compared to a net cash used of $0.5 million in the same period in 2019[138]. - As of March 31, 2020, the outstanding balance on the Credit Line was $78.0 million, with $44.3 million available for borrowing[149]. - The company had a $125 million revolving line of credit, with $78 million outstanding as of March 31, 2020, and an interest rate of 2.20%[54][57]. Assets and Liabilities - Accounts receivable, net, were $137.094 million as of March 31, 2020, compared to $139.198 million at December 31, 2019[38]. - The allowance for bad debts increased to $1.681 million at the end of the first quarter of 2020, up from $1.492 million at the end of 2019[39]. - Inventory as of March 31, 2020, was $142.243 million, slightly down from $145.135 million at December 31, 2019[42]. - Total long-lived tangible assets amounted to $103.663 million, a decrease from $110.558 million as of December 31, 2019, representing a decline of approximately 6.4%[88]. - Total lease liabilities as of March 31, 2020, amounted to $19.099 million, with total lease payments projected at $21.707 million[48]. - Operating lease liabilities totaled $19,099 thousand as of March 31, 2020, down from $20,542 thousand at December 31, 2019[47]. Expenses - Operating lease expense for the three months ended March 31, 2020, was $1.388 million, down from $1.976 million in the same period of 2019[47]. - Research and development expenses increased by 16.3% to $7.9 million for the three months ended March 31, 2020, from $6.8 million in the same period in 2019[131]. - Selling, general and administrative expenses decreased to $27.0 million for the three months ended March 31, 2020, down from $31.4 million in the same period in 2019[132]. - Stock-based compensation expense for the three months ended March 31, 2020, totaled $2.303 million, an increase of 20% compared to $1.918 million for the same period in 2019[89]. Impact of COVID-19 - The COVID-19 pandemic is expected to negatively impact sales demand for the second quarter and possibly the remainder of 2020[121]. - The impact of the COVID-19 pandemic on the company's business remains uncertain, with potential risks to revenue and operations highlighted[152]. - Local government mandates required the closure of China factories for approximately two weeks beyond the end of the Chinese Lunar New Year[119]. - The company is evaluating the impact of recent legislation related to COVID-19 on its financial position and operations[65]. Share Repurchase and Stock Options - The company repurchased 169,000 shares of common stock at a cost of $6.291 million during the three months ended March 31, 2020, compared to 43,000 shares at a cost of $1.215 million in the same period of 2019[86]. - The company has 854,000 stock options outstanding as of March 31, 2020, with a weighted-average exercise price of $42.29 and an aggregate intrinsic value of $4.070 million[90]. - The weighted average fair value of stock option grants for the three months ended March 31, 2020, was $17.70, up from $10.28 in 2019, indicating a significant increase of 72.5%[92]. - The company has suspended share repurchases under the 2020 Plan due to uncertainties surrounding the COVID-19 pandemic, with 175,127 shares remaining authorized for repurchase[85]. Legal Matters - The company has filed a complaint with the International Trade Commission against Roku, TCL, Hisense, and Funai, seeking a permanent exclusion order for infringing products[81]. - The company is involved in multiple ongoing litigations, including a significant case against Roku, which may impact future operations and financial performance[82].