Universal Electronics(US:UEIC)2022-05-05 23:29Financial Performance - For the three months ended March 31, 2022, net sales were $132.4 million, a decrease of 12.0% from $150.5 million in the same period of 2021[35] - Revenue from goods and services transferred at a point in time was $109.1 million, down from $122.9 million year-over-year, while revenue from goods and services transferred over time was $23.3 million, down from $27.7 million[35] - For the three months ended March 31, 2022, the company reported a net loss of $2.91 million, resulting in a basic earnings per share of $(0.23) compared to a net income of $6.99 million and a basic earnings per share of $0.51 for the same period in 2021[97] - Gross margin percentage decreased to 27.4% for the three months ended March 31, 2022, down from 30.8% for the same period in 2021[25] - Operating loss was $0.6 million for the three months ended March 31, 2022, compared to operating income of $8.6 million for the same period in 2021[25] Cash and Liquidity - Cash and cash equivalents totaled $53.6 million as of March 31, 2022, compared to $60.8 million at the end of 2021, reflecting a decrease of 11.5%[33] - Net cash used for operating activities was $18.0 million for the three months ended March 31, 2022, compared to $6.7 million for the same period in 2021, reflecting a significant increase in cash outflows[144] - Cash used for investing activities was $11.6 million for the three months ended March 31, 2022, compared to $4.8 million for the same period in 2021, with $7.5 million allocated to term deposit investments and acquisitions[146] - Net cash provided by financing activities was $21.6 million for the three months ended March 31, 2022, an increase from $10.0 million in the same period in 2021, primarily due to net borrowings of $29.0 million[148] Accounts and Inventory - Accounts receivable, net increased to $132.6 million from $129.2 million at the end of 2021, with trade receivables gross at $126.8 million[37] - Inventories increased to $139.4 million as of March 31, 2022, compared to $134.5 million at the end of 2021, primarily due to higher raw material costs[40] - Days sales outstanding increased to 88 days as of March 31, 2022, compared to 79 days in the prior year, indicating a longer collection period for receivables[144] - Inventory increased by $4.6 million during the three months ended March 31, 2022, due to efforts to address supply chain issues, while inventory turns decreased to 2.8 from 3.5 in the prior year[144] Assets and Liabilities - Long-lived tangible assets totaled $92.7 million as of March 31, 2022, a slight decrease from $94.5 million at the end of 2021[43] - Total lease liabilities amounted to $20.446 million at March 31, 2022, compared to $19.035 million at December 31, 2021[49] - The allowance for credit losses decreased to $1.1 million from $1.3 million at the end of 2021, indicating improved credit risk management[39] - Total accrued compensation decreased to $22.255 million at March 31, 2022, from $24.217 million at December 31, 2021[66] Customer and Supplier Relations - Comcast Corporation and Daikin Industries Ltd. were significant customers, contributing 15.0% and 12.9% to net sales, respectively, in Q1 2022[36] - Significant supplier Qorvo International Pte Ltd. accounted for 10.4% of total inventory purchases in Q1 2022, down from 12.8% in Q1 2021[41] Legal and Regulatory Matters - The company filed a complaint with the International Trade Commission against Roku and others, claiming patent infringement related to various devices, with a final determination issued on November 10, 2021, affirming the infringement[74] - The company has been involved in multiple legal proceedings against Roku, with the Patent Trial and Appeals Board denying Roku's requests eleven times and granting seven times regarding the patents at issue[76] - The company’s litigation against the U.S. government regarding Section 301 Tariffs on imports from China is ongoing, with a preliminary injunction issued in July 2021 to suspend liquidation of entries subject to these tariffs[82] Strategic Initiatives - The company’s strategic business objectives for 2022 include enhancing its product offerings and expanding its market presence[117] - The company is actively seeking acquisitions or strategic partners to complement and strengthen its existing business[25] - The company acquired Qterics for approximately $0.9 million on February 17, 2022, which is expected to expand its customer base in the OEM market[101] Stock and Compensation - Stock-based compensation expense for the three months ended March 31, 2022, totaled $2,499,000, a decrease of 3.88% compared to $2,600,000 in the same period of 2021[88] - The company has a total of 846,000 stock options outstanding as of March 31, 2022, with an aggregate intrinsic value of $1,587,000[89] - As of March 31, 2022, the company expects to recognize $3.5 million of total unrecognized pre-tax stock-based compensation expense related to non-vested stock options over a remaining weighted-average life of 2.2 years[91]