Universal Electronics(UEIC) - 2025 Q1 - Quarterly Results

Executive Summary This section highlights Universal Electronics' Q1 2025 performance, strategic initiatives, and management's focus on shareholder value Q1 2025 Performance Highlights & Management Commentary UEI's Q1 2025 performance saw Connected Home sales growth offset Home Entertainment declines, with management focused on strategic R&D and shareholder value - In Q1 2025, Connected Home channel sales growth offset declines in the Home Entertainment channel[2] - The company has authorization to repurchase approximately 778,000 shares and plans to do so opportunistically[2] - The board added John Mutch and Michael Burger, focusing on enhancing financial performance and driving shareholder value[2] Q1 2025 Financial Performance This section details Universal Electronics' consolidated financial results for Q1 2025, including net sales, profitability, and cash position Consolidated Financial Highlights (GAAP & Adjusted Non-GAAP) UEI's Q1 2025 net sales grew to $92.3 million, driven by Connected Home, as GAAP and adjusted non-GAAP net losses significantly narrowed Q1 2025 Net Sales (GAAP & Adjusted Non-GAAP) | Metric | Q1 2025 | Q1 2024 | | :----------------------- | :------------- | :------------- | | Net Sales (Total) | $92.3 Million | $91.9 Million | | Connected Home Net Sales | $31.7 Million | $24.2 Million | | Home Entertainment Net Sales | $60.6 Million | $67.7 Million | Q1 2025 Key Income Statement Metrics (GAAP & Adjusted Non-GAAP) | Metric | Q1 2025 (GAAP) | Q1 2024 (GAAP) | Q1 2025 (Adjusted Non-GAAP) | Q1 2024 (Adjusted Non-GAAP) | | :----------------------- | :-------------------- | :-------------------- | :-------------------------- | :-------------------------- | | Gross Margin | 28.3% | 28.3% | 28.3% | 28.3% | | Operating Loss | $(3.8) Million | $(6.9) Million | $(1.5) Million | $(3.4) Million | | Net Loss | $(6.3) Million | $(8.6) Million | $(1.5) Million | $(3.4) Million | | Loss Per Share | $(0.48) | $(0.67) | $(0.12) | $(0.26) | - Cash and cash equivalents totaled $27.4 million as of March 31, 2025[7] Q2 2025 Financial Outlook This section provides Universal Electronics' financial guidance for Q2 2025, including projected net sales and earnings per share Net Sales and EPS Guidance Q2 2025 net sales are projected between $91 million and $101 million, with Connected Home growth, and adjusted non-GAAP EPS expected to turn positive Q2 2025 Net Sales Outlook (GAAP & Adjusted Non-GAAP) | Metric | Q2 2025 (Low) | Q2 2025 (High) | Q2 2024 (Actual) | | :----------------------- | :------------------- | :------------------- | :--------------------- | | Net Sales (Total) | $91.0 Million | $101.0 Million | $90.5 Million | | Connected Home Net Sales | $32.0 Million | $36.0 Million | $23.3 Million | | Home Entertainment Net Sales | $59.0 Million | $65.0 Million | $67.2 Million | Q2 2025 EPS Outlook (GAAP & Adjusted Non-GAAP) | Metric | Q2 2025 (Low) | Q2 2025 (High) | Q2 2024 (Actual) | | :----------------------- | :------------------- | :------------------- | :--------------------- | | GAAP Loss Per Share | $(0.31) | $(0.21) | $(0.63) | | Adjusted Non-GAAP EPS | $0.05 | $0.15 | $(0.09) | - The Q2 2025 adjusted non-GAAP EPS estimate excludes approximately $0.36 per share in adjustments, including stock-based compensation, amortization of acquired intangibles, foreign exchange gains/losses, and related tax impacts[5] Conference Call Information This section provides details for Universal Electronics' Q1 2025 earnings conference call, including date, time, and access information Q1 2025 Earnings Call UEI will host its Q1 2025 earnings call on May 8, 2025, at 4:30 PM ET to discuss results, accessible via phone or webcast - Conference call time: Thursday, May 8, 2025, at 4:30 PM ET / 1:30 PM PT[6] - Dial-in details: US: 877-545-0523, International: 973-528-0016, Conference ID: 181440[6] - The conference call will be webcast live on the UEI investor relations website and available for replay for 90 days[6] Non-GAAP Financial Measures This section explains Universal Electronics' use of non-GAAP financial measures, their definitions, and the rationale behind their presentation Definition and Rationale UEI provides adjusted non-GAAP financial information to supplement GAAP results, used by management for budgeting and performance evaluation, enhancing investor assessment - Non-GAAP financial measures are provided as supplemental information and are not a substitute for GAAP results[8] - Management utilizes non-GAAP metrics for budgeting, operational and financial decisions, and to assess core operating and financial performance and business trends[8] - Adjusted non-GAAP metrics exclude stock-based compensation, amortization of acquired intangibles, severance, factory restructuring, specific litigation expenses, foreign exchange gains/losses, and related tax impacts[9] Company Profile This section provides an overview of Universal Electronics Inc., detailing its business, core offerings, and market position Business Overview Universal Electronics Inc. (UEIC) is a global leader in home wireless control solutions, focusing on user-centric design, interoperability, privacy, and security - Universal Electronics Inc. (NASDAQ: UEIC) is a global leader in wireless universal control solutions for the home[10] - The company focuses on a user-centric approach to simplify interaction with complex home technology, eliminate interoperability challenges, and adopt privacy-first and secure design methods[10] - Its solutions are trusted by Fortune 500 clients including Daikin, Carrier, Comcast, Vivint Smart Home, Samsung, Sony, Hunter Douglas, and Somfy[10] - Company innovations include award-winning voice-enabled entertainment remotes and the QuickSet Cloud platform[10] Investor Relations and Risk Factors This section provides investor contact information and outlines the forward-looking statements and associated risks for Universal Electronics Contacts This section provides contact information for Universal Electronics' Chief Financial Officer and Investor Relations advisor for investor inquiries - UEI Chief Financial Officer: Bryan Hackworth, Email: investors@uei.com, Phone: 480-530-3000[11] - Investor Relations: Kirsten Chapman, Alliance Advisors, Email: ueiinvestor@allianceadvisors.com, Phone: 415-433-3777[11] Forward-Looking Statements and Risks This press release contains forward-looking statements about future performance and trends, which are not guarantees and are subject to various risks and uncertainties - Forward-looking statements are not guarantees of future performance and are subject to numerous risks and uncertainties[11] - Risk factors include: ability to timely develop and deliver innovative control solutions; attracting new customers and successfully gaining sales in new markets; optimizing manufacturing footprint and mitigating concentration risks; maintaining market share in traditional subscription broadcast markets; managing global inflationary pressures and macroeconomic conditions; successfully executing patented technologies (including litigation with Roku); strategically enhancing, expanding, and monetizing the IP portfolio; cybersecurity incidents, ethical, reputational, competitive harm, or legal liability from AI applications; impact of tariffs on profitability; and effects of economic uncertainty, natural disasters, public health crises, government actions, political instability, and war[12][13] - The company undertakes no obligation to publicly update or revise any forward-looking statements[13] Consolidated Financial Statements and Reconciliations This section presents Universal Electronics' consolidated financial statements and reconciliations between GAAP and adjusted non-GAAP results Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $310.6 million from $323.4 million, with total liabilities also decreasing and shareholders' equity slightly declining Consolidated Balance Sheet Highlights (in Thousands of Dollars) | Metric | March 31, 2025 | December 31, 2024 | | :----------------------- | :------------- | :--------------- | | Total Assets | $310,611 | $323,354 | | Total Liabilities | $160,642 | $170,249 | | Total Stockholders' Equity | $149,969 | $153,105 | | Cash and Cash Equivalents | $27,389 | $26,783 | Consolidated Statements of Operations For Q1 2025, net sales slightly increased to $92.3 million, operating loss improved, and net loss narrowed to $6.3 million, with diluted loss per share at $0.48 Consolidated Statements of Operations Highlights (in Thousands of Dollars, except per share amounts) | Metric | Q1 2025 | Q1 2024 | | :----------------------- | :------------- | :------------- | | Net Sales | $92,326 | $91,900 | | Gross Profit | $26,083 | $25,988 | | Operating Income (Loss) | $(3,754) | $(6,908) | | Net Income (Loss) | $(6,274) | $(8,649) | | Diluted Earnings (Loss) Per Share | $(0.48) | $(0.67) | Consolidated Statements of Cash Flows For Q1 2025, net cash from operating activities significantly improved to $9.0 million, increasing cash and equivalents to $27.4 million at period-end Consolidated Statements of Cash Flows Highlights (in Thousands of Dollars) | Metric | Q1 2025 | Q1 2024 | | :----------------------------------- | :------------- | :------------- | | Net Cash Provided by (Used in) Operating Activities | $8,984 | $(2,775) | | Net Cash Provided by (Used in) Investing Activities | $(1,907) | $(2,366) | | Net Cash Provided by (Used in) Financing Activities | $(6,383) | $(10,230) | | Net Increase (Decrease) in Cash and Cash Equivalents | $606 | $(15,837) | | Cash and Cash Equivalents at End of Period | $27,389 | $26,914 | Net Sales by Channel In Q1 2025, Connected Home net sales grew 31.27% to $31.7 million, offsetting a 10.53% decline in Home Entertainment, resulting in a slight overall net sales increase Net Sales by Channel (in Thousands of Dollars) | Channel | Q1 2025 | Q1 2024 | Year-over-Year Change | | :--------------- | :------------- | :------------- | :------- | | Connected Home | $31,729 | $24,171 | +31.27% | | Home Entertainment | $60,597 | $67,729 | -10.53% | | Net Sales (Total) | $92,326 | $91,900 | +0.46% | - The Connected Home channel includes sales of climate control, smart home, and security products[23] - The Home Entertainment channel includes sales of entertainment-related products, intellectual property licensing, and cloud software solutions[23] Reconciliation of Adjusted Non-GAAP Financial Results This section reconciles GAAP and adjusted non-GAAP financial results for Q1 2025 and Q1 2024, detailing adjustments that improved non-GAAP operating and net loss figures GAAP and Adjusted Non-GAAP Reconciliation Highlights (in Thousands of Dollars, except per share amounts) | Metric | GAAP Q1 2025 | Adjusted Non-GAAP Q1 2025 | GAAP Q1 2024 | Adjusted Non-GAAP Q1 2024 | | :----------------------- | :-------------------- | :-------------------------- | :-------------------- | :-------------------------- | | Gross Profit | $26,083 | $26,099 | $25,988 | $26,015 | | Operating Income (Loss) | $(3,754) | $(1,476) | $(6,908) | $(3,407) | | Net Income (Loss) | $(6,274) | $(1,549) | $(8,649) | $(3,418) | | Diluted Earnings (Loss) Per Share | $(0.48) | $(0.12) | $(0.67) | $(0.26) | - Total adjustments to diluted earnings per share were $0.36 in Q1 2025 and $0.41 in Q1 2024[27] - Adjustments include stock-based compensation, amortization of acquired intangibles, severance (Q1 2025), factory restructuring (Q1 2024), litigation expenses (Q1 2024), and foreign exchange (gain)/loss[25][27] Reconciliation of Adjusted Non-GAAP Financial Outlook This section reconciles the Q2 2025 financial outlook from GAAP to adjusted non-GAAP, showing adjustments' impact on diluted EPS, with adjusted non-GAAP EPS projected positive Q2 2025 Outlook GAAP and Adjusted Non-GAAP EPS Reconciliation (in Thousands of Dollars, except per share amounts) | Metric | Q2 2025 (Low) GAAP | Q2 2025 (High) GAAP | Q2 2025 (Low) Adjusted Non-GAAP | Q2 2025 (High) Adjusted Non-GAAP | Q2 2024 (Actual) GAAP | Q2 2024 (Actual) Adjusted Non-GAAP | | :----------------------- | :----------------------- | :----------------------- | :----------------------------- | :----------------------------- | :----------------------- | :----------------------------- | | Diluted Earnings (Loss) Per Share | $(0.31) | $(0.21) | $0.05 | $0.15 | $(0.63) | $(0.09) | - Total adjustments to the Q2 2025 EPS outlook are $0.36, while actual adjustments for Q2 2024 were $0.54[30] - Adjustments include stock-based compensation, amortization of acquired intangibles, foreign exchange gains/losses, and related tax impacts; Q2 2024 also included specific litigation and factory restructuring expenses[30]