Universal Electronics(US:UEIC)2024-11-07 22:19Financial 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].