Universal Electronics(UEIC) - 2025 Q2 - Quarterly Results

Executive Summary & Business Highlights Second Quarter 2025 Performance Overview UEI achieved strong Q2 2025 results, with 46% Connected Home revenue growth boosting gross margin and operating cash flow, and reaching a net cash position for the first time since December 2021 - Connected Home business revenue grew 46%, driving strong gross margin and operating cash flow[2] - The company achieved a net cash position for the first time since December 2021, reflecting an improved balance sheet[2] Strategic Initiatives and Operational Changes The company is strategically investing in profitable growth areas like Connected Home, expanding into new European and North American markets, and optimizing production by closing its Mexico factory due to declining Home Entertainment volumes and increased efficiency at its Vietnam facility - Investments are being allocated to profitable growth areas like Connected Home, with new customer expansion in European and North American markets[2] - The Mexico factory will close to optimize production, addressing declining Home Entertainment volumes and improved efficiency at the Vietnam facility[2] Financial Results for Three Months Ended June 30, 2025 vs 2024 GAAP Financials (Q2 2025 vs Q2 2024) In Q2 2025, GAAP net sales increased year-over-year, primarily due to strong Connected Home growth, as the company reversed an operating loss to an operating income and significantly reduced net loss and loss per share | Metric | Q2 2025 (GAAP) | Q2 2024 (GAAP) | Year-over-Year Change | | :-------------------------------- | :------------- | :------------- | :-------------------- | | Net Sales | $97.7 million USD | $90.5 million USD | +$7.2 million USD | | Gross Margin | 29.9% | 28.7% | +1.2 percentage points | | Operating Income (Loss) | $1.0 million USD | $(4.5) million USD | +$5.5 million USD | | Net Loss | $(2.9) million USD | $(8.2) million USD | +$5.3 million USD | | Loss Per Share | $(0.22) | $(0.63) | +$0.41 | Adjusted Non-GAAP Financials (Q2 2025 vs Q2 2024) After adjusting for non-GAAP items, Q2 2025 saw the company achieve operating income and net income, a stark contrast to losses in the prior year, reflecting significant improvements in core business operational efficiency | Metric | Q2 2025 (Adjusted Non-GAAP) | Q2 2024 (Adjusted Non-GAAP) | Year-over-Year Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Gross Margin | 29.9% | 28.7% | +1.2 percentage points | | Operating Income (Loss) | $2.9 million USD | $(1.1) million USD | +$4.0 million USD | | Net Income (Loss) | $2.4 million USD | $(1.2) million USD | +$3.6 million USD | | Diluted Earnings (Loss) Per Share | $0.18 | $(0.09) | +$0.27 | Net Sales by Channel (Q2 2025 vs Q2 2024) In Q2 2025, Connected Home channel sales significantly increased by 46.4%, while Home Entertainment channel sales experienced a slight decrease of 5.4% | Channel | Q2 2025 Sales | Q2 2024 Sales | Year-over-Year Change | | :---------------- | :------------ | :------------ | :-------------------- | | Connected Home | $34.1 million USD | $23.3 million USD | +46.4% | | Home Entertainment | $63.6 million USD | $67.2 million USD | -5.4% | Financial Results for Six Months Ended June 30, 2025 vs 2024 GAAP Financials (H1 2025 vs H1 2024) In H1 2025, GAAP net sales increased, and both operating loss and net loss significantly narrowed, indicating an overall improvement in financial performance | Metric | H1 2025 (GAAP) | H1 2024 (GAAP) | Year-over-Year Change | | :-------------------------------- | :------------- | :------------- | :-------------------- | | Net Sales | $190.0 million USD | $182.4 million USD | +$7.6 million USD | | Gross Margin | 29.1% | 28.5% | +0.6 percentage points | | Operating Loss | $(2.7) million USD | $(11.4) million USD | +$8.7 million USD | | Net Loss | $(9.2) million USD | $(16.8) million USD | +$7.6 million USD | | Loss Per Share | $(0.70) | $(1.30) | +$0.60 | Adjusted Non-GAAP Financials (H1 2025 vs H1 2024) Adjusted non-GAAP data for H1 2025 shows a shift from operating loss to operating income and a substantial reduction in net loss, reflecting enhanced core business profitability | Metric | H1 2025 (Adjusted Non-GAAP) | H1 2024 (Adjusted Non-GAAP) | Year-over-Year Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Gross Margin | 29.1% | 28.5% | +0.6 percentage points | | Operating Income (Loss) | $1.4 million USD | $(4.6) million USD | +$6.0 million USD | | Net Income (Loss) | $0.8 million USD | $(4.6) million USD | +$5.4 million USD | | Diluted Earnings (Loss) Per Share | $0.06 | $(0.36) | +$0.42 | Net Sales by Channel (H1 2025 vs H1 2024) In H1 2025, Connected Home channel sales increased by 38.5%, while Home Entertainment channel sales decreased by 7.9% | Channel | H1 2025 Sales | H1 2024 Sales | Year-over-Year Change | | :---------------- | :------------ | :------------ | :-------------------- | | Connected Home | $65.8 million USD | $47.5 million USD | +38.5% | | Home Entertainment | $124.2 million USD | $134.9 million USD | -7.9% | Balance Sheet Key Balance Sheet Items (June 30, 2025 vs Dec 31, 2024) As of June 30, 2025, the company's cash and cash equivalents increased, and total liabilities decreased, optimizing the balance sheet structure | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------ | :----------- | :-------------------- | | Cash and Cash Equivalents | $34.3 million USD | $26.8 million USD | +$7.5 million USD | | Total Current Assets | $227.1 million USD | $242.5 million USD | -$15.4 million USD | | Total Assets | $304.1 million USD | $323.4 million USD | -$19.3 million USD | | Total Current Liabilities | $140.1 million USD | $158.3 million USD | -$18.2 million USD | | Total Liabilities | $151.4 million USD | $170.2 million USD | -$18.8 million USD | | Total Stockholders' Equity | $152.8 million USD | $153.1 million USD | -$0.3 million USD | Cash Flows Cash Flow Activities (Six Months Ended June 30, 2025 vs 2024) In H1 2025, net cash from operating activities significantly increased, while net cash used in investing and financing activities decreased, leading to a substantial rise in cash and cash equivalents at the end of the period | Activity | H1 2025 | H1 2024 | Change | | :-------------------------------------- | :---------- | :---------- | :-------------------- | | Net Cash Provided by Operating Activities | $17.7 million USD | $2.7 million USD | +$15.0 million USD | | Net Cash Used in Investing Activities | $(4.0) million USD | $(5.0) million USD | +$1.0 million USD | | Net Cash Used