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Universal Electronics(UEIC) - 2025 Q1 - Earnings Call Transcript
2025-05-08 21:32
Universal Electronics (UEIC) Q1 2025 Earnings Call May 08, 2025 04:30 PM ET Company Participants Kirsten Chapman - Managing Director, Alliance Advisors IRRamzi Ammari - SVP of Corporate Planning and StrategyBryan Hackworth - CFO Conference Call Participants Steve Frankel - Director of Research & Senior Research AnalystGregory Burns - Analyst Operator Good afternoon. My name is Kelly, and I will be your conference operator today. Now I would like to welcome everyone to Universal Electronics First Quarter twe ...
Universal Electronics(UEIC) - 2025 Q1 - Earnings Call Transcript
2025-05-08 21:30
Financial Data and Key Metrics Changes - In Q1 2025, net sales were $92.3 million, slightly up from $91.9 million in Q1 2024, reflecting a growth driven by the connected home channel [14] - The adjusted net loss for Q1 2025 was $1.5 million or $0.12 per share, an improvement from a net loss of $3.4 million or $0.26 per share in Q1 2024 [17] - Gross profit for Q1 2025 was $26.1 million, representing 28.3% of sales, consistent with the prior year's rate [15] Business Line Data and Key Metrics Changes - Connected home sales grew by $7.6 million or 31% to $31.7 million in Q1 2025, driven by project wins and SKU expansion [14] - Home entertainment sales decreased by $7.1 million or 11% to $60.6 million in Q1 2025, primarily due to lower demand for subscription broadcasting products [14] Market Data and Key Metrics Changes - The connected home channel now represents 34% of total sales, indicating a shift in revenue sources [12] - In North America and EMEA, there are signs of stabilization in demand, while Latin America is experiencing lower demand for basic remotes [15] Company Strategy and Development Direction - The company is focusing on the connected home market to generate new revenue growth, with significant investments in R&D for innovative solutions [4][8] - Management plans to continue optimizing cost structures and improving cash flows while navigating tariff impacts through price adjustments [5][15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the future, highlighting the unpredictability of sales in the connected home channel compared to home entertainment [19] - The company is prepared to react to potential changes in tariff rates and economic uncertainties affecting consumer spending [5][32] Other Important Information - The company has approximately 778,000 shares remaining on its share repurchase authorization and plans to begin buying back shares in the open market [18] - Operating expenses decreased to $27.6 million in Q1 2025 from $29.4 million in Q1 2024, reflecting cost-reduction measures [16] Q&A Session Summary Question: Customer concentration and major customers - The company had two customers representing over 10% of sales: Daikin at 17.7% and Comcast at 11.2% [23] Question: HVAC space and backlog - The company has shipped to the majority of its top 10 customers, with eight accounts won and five having shipped products [24] Question: Home control business and international sales - The majority of home control sales are outside the US, with HVAC being a significant portion of international sales [26][30] Question: Tariff impact and customer willingness to share costs - Management is currently able to pass on tariff costs to customers without a material effect on financials, but remains cautious about future changes [31][32] Question: CEO succession plan - The board is actively interviewing candidates for the CEO position and has hired a search firm for the process [35][38] Question: Gross margin adjustments - The company has stopped calling out excess overhead adjustments in gross margin reporting [41] Question: Growth trajectory in connected home - Management expects strong growth in connected home sales, with ongoing product launches and project wins [44] Question: Backlog or pipeline quantification - The backlog from previously referenced projects is still being shipped over multiple years, with ongoing progress expected [48]