QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 33-0204817 | |||||||||||||
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||||||||
Securities registered pursuant to Section 12(b) of the Act: | ||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock, par value $0.01 per share | UEIC | The NASDAQ Stock Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||||||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||||||||||||||
Emerging growth company | ||||||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ | ||||||||||||||||||||||||||
Page Number | |||||
June 30, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 46,130 | $ | 60,813 | |||||||
Term deposit | 7,823 | — | |||||||||
Accounts receivable, net | 131,941 | 129,215 | |||||||||
Contract assets | 5,834 | 5,012 | |||||||||
Inventories | 147,394 | 134,469 | |||||||||
Prepaid expenses and other current assets | 6,795 | 7,289 | |||||||||
Income tax receivable | 2,608 | 348 | |||||||||
Total current assets | 348,525 | 337,146 | |||||||||
Property, plant and equipment, net | 67,867 | 74,647 | |||||||||
Goodwill | 49,044 | 48,463 | |||||||||
Intangible assets, net | 23,080 | 20,169 | |||||||||
Operating lease right-of-use assets | 19,048 | 19,847 | |||||||||
Deferred income taxes | 6,487 | 7,729 | |||||||||
Other assets | 2,093 | 2,347 | |||||||||
Total assets | $ | 516,144 | $ | 510,348 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 84,054 | $ | 92,707 | |||||||
Line of credit | 88,000 | 56,000 | |||||||||
Accrued compensation | 21,608 | 24,217 | |||||||||
Accrued sales discounts, rebates and royalties | 5,602 | 9,286 | |||||||||
Accrued income taxes | 5,075 | 3,737 | |||||||||
Other accrued liabilities | 29,099 | 30,840 | |||||||||
Total current liabilities | 233,438 | 216,787 | |||||||||
Long-term liabilities: | |||||||||||
Operating lease obligations | 13,078 | 14,266 | |||||||||
Deferred income taxes | 2,708 | 2,394 | |||||||||
Income tax payable | 939 | 939 | |||||||||
Other long-term liabilities | 867 | 13 | |||||||||
Total liabilities | 251,030 | 234,399 | |||||||||
Commitments and contingencies | 0 | 0 | |||||||||
Stockholders' equity: | |||||||||||
Preferred stock, $0.01 par value, 5,000,000 shares authorized; none issued or outstanding | — | — | |||||||||
Common stock, $0.01 par value, 50,000,000 shares authorized; 24,861,624 and 24,678,942 shares issued on June 30, 2022 and December 31, 2021, respectively | 249 | 247 | |||||||||
Paid-in capital | 319,854 | 314,094 | |||||||||
Treasury stock, at cost, 12,215,756 and 11,861,198 shares on June 30, 2022 and December 31, 2021, respectively | (366,370) | (355,159) | |||||||||
Accumulated other comprehensive income (loss) | (18,988) | (13,524) | |||||||||
Retained earnings | 330,369 | 330,291 | |||||||||
Total stockholders' equity | 265,114 | 275,949 | |||||||||
Total liabilities and stockholders' equity | $ | 516,144 | $ | 510,348 |
September 30, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 48,560 | $ | 50,611 | |||
Restricted cash | 4,799 | 4,623 | |||||
Accounts receivable, net | 153,355 | 124,592 | |||||
Inventories, net | 154,520 | 129,879 | |||||
Prepaid expenses and other current assets | 9,988 | 7,439 | |||||
Assets held for sale | 12,403 | — | |||||
Income tax receivable | 3,262 | 1,054 | |||||
Deferred income taxes | — | 5,960 | |||||
Total current assets | 386,887 | 324,158 | |||||
Property, plant, and equipment, net | 109,149 | 105,351 | |||||
Goodwill | 48,624 | 43,052 | |||||
Intangible assets, net | 30,159 | 28,549 | |||||
Deferred income taxes | 18,349 | 10,430 | |||||
Long-term restricted cash | — | 4,600 | |||||
Other assets | 4,040 | 4,896 | |||||
Total assets | $ | 597,208 | $ | 521,036 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 106,872 | $ | 97,157 | |||
Line of credit | 114,000 | 49,987 | |||||
Accrued compensation | 33,328 | 35,580 | |||||
Accrued sales discounts, rebates and royalties | 7,790 | 8,358 | |||||
Accrued income taxes | 994 | 375 | |||||
Other accrued expenses | 25,840 | 24,410 | |||||
Total current liabilities | 288,824 | 215,867 | |||||
Long-term liabilities: | |||||||
Long-term contingent consideration | 14,000 | 10,500 | |||||
Deferred income taxes | 6,376 | 7,060 | |||||
Income tax payable | 791 | 791 | |||||
Other long-term liabilities | 1,598 | 6,308 | |||||
Total liabilities | 311,589 | 240,526 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Preferred stock, $0.01 par value, 5,000,000 shares authorized; none issued or outstanding | — | — | |||||
Common stock, $0.01 par value, 50,000,000 shares authorized; 23,687,651 and 23,575,340 shares issued on September 30, 2017 and December 31, 2016, respectively | 237 | 236 | |||||
Paid-in capital | 262,776 | 250,481 | |||||
Treasury stock, at cost, 9,352,551 and 9,022,587 shares on September 30, 2017 and December 31, 2016, respectively | (243,197 | ) | (222,980 | ) | |||
Accumulated other comprehensive income (loss) | (17,831 | ) | (22,821 | ) | |||
Retained earnings | 283,634 | 275,594 | |||||
Total stockholders' equity | 285,619 | 280,510 | |||||
Total liabilities and stockholders' equity | $ | 597,208 | $ | 521,036 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net sales | $ | 175,652 | $ | 169,185 | $ | 514,638 | $ | 490,829 | |||||||
Cost of sales | 132,582 | 127,400 | 386,783 | 367,941 | |||||||||||
Gross profit | 43,070 | 41,785 | 127,855 | 122,888 | |||||||||||
Research and development expenses | 5,415 | 4,955 | 15,859 | 15,292 | |||||||||||
Factory transition restructuring charges | 446 | 81 | 6,145 | 1,598 | |||||||||||
Selling, general and administrative expenses | 32,997 | 28,628 | 94,701 | 86,867 | |||||||||||
Operating income | 4,212 | 8,121 | 11,150 | 19,131 | |||||||||||
Interest income (expense), net | (721 | ) | (228 | ) | (1,676 | ) | (753 | ) | |||||||
Other income (expense), net | 61 | 335 | 2 | 1,726 | |||||||||||
Income before provision for income taxes | 3,552 | 8,228 | 9,476 | 20,104 | |||||||||||
Provision for income taxes | 1,824 | 421 | 2,945 | 2,956 | |||||||||||
Net income | 1,728 | 7,807 | 6,531 | 17,148 | |||||||||||
Net income attributable to noncontrolling interest | — | — | — | 30 | |||||||||||
Net income attributable to Universal Electronics Inc. | $ | 1,728 | $ | 7,807 | $ | 6,531 | $ | 17,118 | |||||||
Earnings per share attributable to Universal Electronics Inc.: | |||||||||||||||
Basic | $ | 0.12 | $ | 0.54 | $ | 0.45 | $ | 1.19 | |||||||
Diluted | $ | 0.12 | $ | 0.53 | $ | 0.44 | $ | 1.16 | |||||||
Shares used in computing earnings per share: | |||||||||||||||
Basic | 14,381 | 14,510 | 14,412 | 14,441 | |||||||||||
Diluted | 14,666 | 14,848 | 14,689 | 14,740 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net sales | $ | 139,101 | $ | 150,491 | $ | 271,511 | $ | 301,033 | |||||||||||||||
Cost of sales | 99,730 | 105,829 | 195,872 | 209,972 | |||||||||||||||||||
Gross profit | 39,371 | 44,662 | 75,639 | 91,061 | |||||||||||||||||||
Research and development expenses | 8,637 | 7,676 | 16,443 | 15,618 | |||||||||||||||||||
Selling, general and administrative expenses | 25,237 | 27,965 | 54,260 | 57,811 | |||||||||||||||||||
Operating income | 5,497 | 9,021 | 4,936 | 17,632 | |||||||||||||||||||
Interest income (expense), net | (183) | (127) | (479) | (235) | |||||||||||||||||||
Other income (expense), net | (694) | (17) | (334) | 6 | |||||||||||||||||||
Income before provision for income taxes | 4,620 | 8,877 | 4,123 | 17,403 | |||||||||||||||||||
Provision for income taxes | 1,632 | 3,284 | 4,045 | 4,817 | |||||||||||||||||||
Net income | $ | 2,988 | $ | 5,593 | $ | 78 | $ | 12,586 | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | 0.24 | $ | 0.41 | $ | 0.01 | $ | 0.92 | |||||||||||||||
Diluted | $ | 0.23 | $ | 0.40 | $ | 0.01 | $ | 0.89 | |||||||||||||||
Shares used in computing earnings per share: | |||||||||||||||||||||||
Basic | 12,659 | 13,672 | 12,736 | 13,737 | |||||||||||||||||||
Diluted | 12,715 | 13,926 | 12,847 | 14,062 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | 1,728 | $ | 7,807 | $ | 6,531 | $ | 17,148 | |||||||
Other comprehensive income (loss): | |||||||||||||||
Change in foreign currency translation adjustment | 2,999 | (540 | ) | 4,990 | (1,858 | ) | |||||||||
Total comprehensive income (loss) | 4,727 | 7,267 | 11,521 | 15,290 | |||||||||||
Comprehensive income (loss) attributable to noncontrolling interest | — | — | — | 30 | |||||||||||
Comprehensive income (loss) attributable to Universal Electronics Inc. | $ | 4,727 | $ | 7,267 | $ | 11,521 | $ | 15,260 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net income | $ | 2,988 | $ | 5,593 | $ | 78 | $ | 12,586 | |||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Change in foreign currency translation adjustment | (7,313) | 4,043 | (5,464) | 1,175 | |||||||||||||||||||
Comprehensive income (loss) | $ | (4,325) | $ | 9,636 | $ | (5,386) | $ | 13,761 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Cash provided by (used for) operating activities: | |||||||
Net income | $ | 6,531 | $ | 17,148 | |||
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | |||||||
Depreciation and amortization | 23,202 | 18,994 | |||||
Provision for doubtful accounts | 167 | 123 | |||||
Provision for inventory write-downs | 2,189 | 2,398 | |||||
Deferred income taxes | (953 | ) | 1,413 | ||||
Tax benefit from exercise of stock options and vested restricted stock | — | 2,230 | |||||
Excess tax benefit from stock-based compensation | — | (2,292 | ) | ||||
Shares issued for employee benefit plan | 591 | 763 | |||||
Employee and director stock-based compensation | 9,476 | 7,638 | |||||
Performance-based common stock warrants | 1,122 | 3,219 | |||||
Changes in operating assets and liabilities: | |||||||
Restricted cash | 4,623 | — | |||||
Accounts receivable | (24,440 | ) | (11,359 | ) | |||
Inventories | (21,217 | ) | (4,470 | ) | |||
Prepaid expenses and other assets | (2,422 | ) | (86 | ) | |||
Accounts payable and accrued expenses | 1,488 | 7,699 | |||||
Accrued income taxes | (1,517 | ) | (4,737 | ) | |||
Net cash provided by (used for) operating activities | (1,160 | ) | 38,681 | ||||
Cash used for investing activities: | |||||||
Acquisition of property, plant, and equipment | (29,922 | ) | (28,914 | ) | |||
Acquisition of net assets of Residential Control Systems, Inc. | (8,894 | ) | — | ||||
Acquisition of intangible assets | (1,275 | ) | (1,373 | ) | |||
Increase in restricted cash | — | (4,797 | ) | ||||
Deposit received toward sale of Guangzhou factory | — | 4,797 | |||||
Deconsolidation of Encore Controls LLC | — | 48 | |||||
Net cash used for investing activities | (40,091 | ) | (30,239 | ) | |||
Cash provided by (used for) financing activities: | |||||||
Borrowings under line of credit | 115,000 | 92,987 | |||||
Repayments on line of credit | (50,987 | ) | (107,987 | ) | |||
Proceeds from stock options exercised | 1,107 | 4,813 | |||||
Treasury stock purchased | (20,217 | ) | (2,188 | ) | |||
Excess tax benefit from stock-based compensation | — | 2,292 | |||||
Net cash provided by (used for) financing activities | 44,903 | (10,083 | ) | ||||
Effect of exchange rate changes on cash | (5,703 | ) | (3,184 | ) | |||
Net increase (decrease) in cash and cash equivalents | (2,051 | ) | (4,825 | ) | |||
Cash and cash equivalents at beginning of year | 50,611 | 52,966 | |||||
Cash and cash equivalents at end of period | $ | 48,560 | $ | 48,141 | |||
Supplemental cash flow information: | |||||||
Income taxes paid | $ | 5,770 | $ | 6,034 | |||
Interest paid | $ | 1,697 | $ | 926 |
Common Stock Issued | Common Stock in Treasury | Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Totals | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | 24,679 | $ | 247 | (11,861) | $ | (355,159) | $ | 314,094 | $ | (13,524) | $ | 330,291 | $ | 275,949 | |||||||||||||||||||||||||||||||||
Net income (loss) | (2,910) | (2,910) | |||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | 1,849 | 1,849 | |||||||||||||||||||||||||||||||||||||||||||||
Shares issued for employee benefit plan and compensation | 145 | 1 | 323 | 324 | |||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury shares | (225) | (7,354) | (7,354) | ||||||||||||||||||||||||||||||||||||||||||||
Shares issued to directors | 7 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Employee and director stock-based compensation | 2,499 | 2,499 | |||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | 24,831 | 248 | (12,086) | (362,513) | 316,916 | (11,675) | 327,381 | 270,357 | |||||||||||||||||||||||||||||||||||||||
Net income | 2,988 | 2,988 | |||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | (7,313) | (7,313) | |||||||||||||||||||||||||||||||||||||||||||||
Shares issued for employee benefit plan and compensation | 23 | 1 | 301 | 302 | |||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury shares | (130) | (3,857) | (3,857) | ||||||||||||||||||||||||||||||||||||||||||||
Shares issued to directors | 8 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Employee and director stock-based compensation | 2,637 | 2,637 | |||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | 24,862 | $ | 249 | (12,216) | $ | (366,370) | $ | 319,854 | $ | (18,988) | $ | 330,369 | $ | 265,114 | |||||||||||||||||||||||||||||||||
Common Stock Issued | Common Stock in Treasury | Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Totals | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | 24,392 | $ | 244 | (10,618) | $ | (295,495) | $ | 302,084 | $ | (18,522) | $ | 324,990 | $ | 313,301 | |||||||||||||||||||||||||||||||||
Net income | 6,993 | 6,993 | |||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | (2,868) | (2,868) | |||||||||||||||||||||||||||||||||||||||||||||
Shares issued for employee benefit plan and compensation | 160 | 2 | 408 | 410 | |||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury shares | (191) | (10,951) | (10,951) | ||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised | 22 | — | 991 | 991 | |||||||||||||||||||||||||||||||||||||||||||
Shares issued to directors | 7 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Employee and director stock-based compensation | 2,600 | 2,600 | |||||||||||||||||||||||||||||||||||||||||||||
Performance-based common stock warrants | 143 | 143 | |||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | 24,581 | 246 | (10,809) | (306,446) | 306,226 | (21,390) | 331,983 | 310,619 | |||||||||||||||||||||||||||||||||||||||
Net income | 5,593 | 5,593 | |||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | 4,043 | 4,043 | |||||||||||||||||||||||||||||||||||||||||||||
Shares issued for employee benefit plan and compensation | 15 | — | 271 | 271 | |||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury shares | (320) | (15,733) | (15,733) | ||||||||||||||||||||||||||||||||||||||||||||
Shares issued to directors | 8 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Employee and director stock-based compensation | 2,444 | 2,444 | |||||||||||||||||||||||||||||||||||||||||||||
Performance-based common stock warrants | 131 | 131 | |||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | 24,604 | $ | 246 | (11,129) | $ | (322,179) | $ | 309,072 | $ | (17,347) | $ | 337,576 | $ | 307,368 | |||||||||||||||||||||||||||||||||
Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 78 | $ | 12,586 | |||||||
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | |||||||||||
Depreciation and amortization | 12,155 | 13,128 | |||||||||
Provision for credit losses | (204) | 1 | |||||||||
Deferred income taxes | 1,227 | 1,637 | |||||||||
Shares issued for employee benefit plan | 626 | 681 | |||||||||
Employee and director stock-based compensation | 5,136 | 5,044 | |||||||||
Performance-based common stock warrants | — | 274 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable and contract assets | (5,195) | (6,241) | |||||||||
Inventories | (16,287) | (1,076) | |||||||||
Prepaid expenses and other assets | 1,329 | 625 | |||||||||
Accounts payable and accrued liabilities | (15,001) | (7,338) | |||||||||
Accrued income taxes | (948) | (2,837) | |||||||||
Net cash provided by (used for) operating activities | (17,084) | 16,484 | |||||||||
Cash flows from investing activities: | |||||||||||
Term deposit | (7,487) | — | |||||||||
Acquisition of net assets of Qterics, Inc. | (939) | — | |||||||||
Acquisitions of property, plant and equipment | (5,482) | (6,206) | |||||||||
Acquisitions of intangible assets | (3,019) | (1,907) | |||||||||
Net cash provided by (used for) investing activities | (16,927) | (8,113) | |||||||||
Cash flows from financing activities: | |||||||||||
Borrowings under line of credit | 62,000 | 41,000 | |||||||||
Repayments on line of credit | (30,000) | (15,000) | |||||||||
Proceeds from stock options exercised | — | 991 | |||||||||
Treasury stock purchased | (11,211) | (26,684) | |||||||||
Net cash provided by (used for) financing activities | 20,789 | 307 | |||||||||
Effect of foreign currency exchange rates on cash and cash equivalents | (1,461) | 1,859 | |||||||||
Net increase (decrease) in cash and cash equivalents | (14,683) | 10,537 | |||||||||
Cash and cash equivalents at beginning of period | 60,813 | 57,153 | |||||||||
Cash and cash equivalents at end of period | $ | 46,130 | $ | 67,690 | |||||||
Supplemental cash flow information: | |||||||||||
Income taxes paid | $ | 3,466 | $ | 5,663 | |||||||
Interest paid | $ | 623 | $ | 202 |
(In thousands) | September 30, 2017 | December 31, 2016 | (In thousands) | June 30, 2022 | December 31, 2021 | |||||||||||||
United States | $ | 4,795 | $ | 3,277 | ||||||||||||||
North America | North America | $ | 4,466 | $ | 6,430 | |||||||||||||
People's Republic of China ("PRC") | 22,120 | 22,142 | People's Republic of China ("PRC") | 15,328 | 16,000 | |||||||||||||
Asia (excluding the PRC) | 846 | 5,260 | Asia (excluding the PRC) | 11,786 | 11,798 | |||||||||||||
Europe | 13,317 | 19,630 | Europe | 11,756 | 17,604 | |||||||||||||
South America | 7,482 | 302 | South America | 2,794 | 8,981 | |||||||||||||
Total cash and cash equivalents | $ | 48,560 | $ | 50,611 | Total cash and cash equivalents | $ | 46,130 | $ | 60,813 |
(In thousands) | September 30, 2017 | December 31, 2016 | |||||
Trade receivables, gross | $ | 147,194 | $ | 120,965 | |||
Allowance for doubtful accounts | (1,052 | ) | (904 | ) | |||
Allowance for sales returns | (459 | ) | (539 | ) | |||
Net trade receivables | 145,683 | 119,522 | |||||
Other | 7,672 | 5,070 | |||||
Accounts receivable, net | $ | 153,355 | $ | 124,592 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Goods and services transferred at a point in time | $ | 118,355 | $ | 119,503 | $ | 227,441 | $ | 242,391 | |||||||||||||||
Goods and services transferred over time | 20,746 | 30,988 | 44,070 | 58,642 | |||||||||||||||||||
Net sales | $ | 139,101 | $ | 150,491 | $ | 271,511 | $ | 301,033 |
(In thousands) | Nine Months Ended September 30, | ||||||
2017 | 2016 | ||||||
Balance at beginning of period | $ | 904 | $ | 822 | |||
Additions (reductions) to costs and expenses | 167 | 123 | |||||
(Write-offs)/Foreign exchange effects | (19 | ) | 15 | ||||
Balance at end of period | $ | 1,052 | $ | 960 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
United States | $ | 39,637 | $ | 51,322 | $ | 83,464 | $ | 101,614 | |||||||||||||||
Asia (excluding PRC) | 34,322 | 31,608 | 67,386 | 65,824 | |||||||||||||||||||
Europe | 26,364 | 31,640 | 49,024 | 59,167 | |||||||||||||||||||
People's Republic of China | 22,616 | 23,489 | 41,908 | 47,829 | |||||||||||||||||||
Latin America | 6,906 | 5,368 | 13,394 | 11,512 | |||||||||||||||||||
Other | 9,256 | 7,064 | 16,335 | 15,087 | |||||||||||||||||||
Total net sales | $ | 139,101 | $ | 150,491 | $ | 271,511 | $ | 301,033 |
Three Months Ended June 30, | ||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||
$ (thousands) | % of Net Sales | $ (thousands) | % of Net Sales | |||||||||||||||||||||||
Comcast Corporation | $ | 18,723 | 13.5 | % | $ | 24,699 | 16.4 | % | ||||||||||||||||||
Daikin Industries Ltd. | $ | 20,875 | 15.0 | % | $ | 16,448 | 10.9 | % | ||||||||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||
$ (thousands) | % of Net Sales | $ (thousands) | % of Net Sales | |||||||||||||||||||||||
Comcast Corporation | $ | 38,607 | 14.2 | % | $ | 51,900 | 17.2 | % | ||||||||||||||||||
Daikin Industries Ltd. | $ | 38,016 | 14.0 | % | $ | 33,885 | 11.3 | % | ||||||||||||||||||
(In thousands) | June 30, 2022 | December 31, 2021 | |||||||||
Trade receivables, gross | $ | 128,148 | $ | 122,508 | |||||||
Allowance for credit losses | (1,003) | (1,285) | |||||||||
Allowance for sales returns | (567) | (592) | |||||||||
Trade receivables, net | 126,578 | 120,631 | |||||||||
Other (1) | 5,363 | 8,584 | |||||||||
Accounts receivable, net | $ | 131,941 | $ | 129,215 |
Three Months Ended September 30, | |||||||||||||
2017 | 2016 | ||||||||||||
$ (thousands) | % of Net Sales | $ (thousands) | % of Net Sales | ||||||||||
Comcast Corporation | $ | 36,811 | 21.0 | % | $ | 35,554 | 21.0 | % | |||||
AT&T | 20,117 | 11.5 | 21,139 | 12.5 |
Nine Months Ended September 30, | |||||||||||||
2017 | 2016 | ||||||||||||
$ (thousands) | % of Net Sales | $ (thousands) | % of Net Sales | ||||||||||
Comcast Corporation | $ | 122,009 | 23.7 | % | $ | 111,529 | 22.7 | % | |||||
AT&T | 61,057 | 11.9 | 60,709 | 12.4 |
(In thousands) | Six Months Ended June 30, | ||||||||||
2022 | 2021 | ||||||||||
Balance at beginning of period | $ | 1,285 | $ | 1,412 | |||||||
Additions (reductions) to costs and expenses | (204) | 1 | |||||||||
Write-offs/Foreign exchange effects | (78) | (41) | |||||||||
Balance at end of period | $ | 1,003 | $ | 1,372 |
June 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||
$ (thousands) | % of Accounts Receivable, Net | $ (thousands) | % of Accounts Receivable, Net | |||||||||||||||||||||||
Comcast Corporation | $ | 16,817 | 12.7 | % | $ | — | (1) | — | % | (1) | ||||||||||||||||
Daikin Industries Ltd. | $ | 13,202 | 10.0 | % | $ | — | (1) | — | % | (1) |
September 30, 2017 | December 31, 2016 | ||||||||||||
$ (thousands) | % of Accounts Receivable, Net | $ (thousands) | % of Accounts Receivable, Net | ||||||||||
Comcast Corporation | $ | 26,553 | 17.3 | % | $ | 23,716 | 19.0 | % | |||||
AT&T (1) | — | — | 14,108 | 11.3 |
(1) Trade receivables associated with this customer did not total more than 10% of our accounts receivable, net for the indicated period. |
(In thousands) | June 30, 2022 | December 31, 2021 | |||||||||
Raw materials | $ | 63,523 | $ | 52,617 | |||||||
Components | 28,540 | 25,289 | |||||||||
Work in process | 5,312 | 7,102 | |||||||||
Finished goods | 50,019 | 49,461 | |||||||||
Inventories | $ | 147,394 | $ | 134,469 |
(In thousands) | September 30, 2017 | December 31, 2016 | |||||
Raw materials | $ | 36,803 | $ | 33,059 | |||
Components | 18,556 | 15,046 | |||||
Work in process | 6,596 | 5,860 | |||||
Finished goods | 95,690 | 80,119 | |||||
Reserve for excess and obsolete inventory | (3,125 | ) | (4,205 | ) | |||
Inventories, net | $ | 154,520 | $ | 129,879 |
(In thousands) | Nine Months Ended September 30, | ||||||
2017 | 2016 | ||||||
Balance at beginning of period | $ | 4,205 | $ | 3,045 | |||
Additions charged to costs and expenses (1) | 1,960 | 2,120 | |||||
Sell through (2) | (950 | ) | (781 | ) | |||
(Write-offs)/Foreign exchange effects | (2,090 | ) | (726 | ) | |||
Balance at end of period | $ | 3,125 | $ | 3,658 |
Three Months Ended September 30, | |||||||||||||
2017 | 2016 | ||||||||||||
$ (thousands) | % of Total Inventory Purchases | $ (thousands) | % of Total Inventory Purchases | ||||||||||
Texas Instruments | $ | 13,115 | 12.4 | % | $ | 12,353 | 13.0 | % |
Three Months Ended June 30, | ||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||
$ (thousands) | % of Total Inventory Purchases | $ (thousands) | % of Total Inventory Purchases | |||||||||||||||||||||||
Qorvo International Pte Ltd. | $ | 10,169 | 12.3 | % | $ | 9,840 | 11.9 | % |
Nine Months Ended September 30, | |||||||||||||
2017 | 2016 | ||||||||||||
$ (thousands) | % of Total Inventory Purchases | $ (thousands) | % of Total Inventory Purchases | ||||||||||
Texas Instruments | $ | 33,693 | 11.3 | % | $ | 32,294 | 11.9 | % |
Six Months Ended June 30, | ||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||
$ (thousands) | % of Total Inventory Purchases | $ (thousands) | % of Total Inventory Purchases | |||||||||||||||||||||||
Qorvo International Pte Ltd. | $ | 17,721 | 11.4 | % | $ | 19,613 | 12.3 | % |
June 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||
$ (thousands) | % of Total Accounts Payable | $ (thousands) | % of Total Accounts Payable | |||||||||||||||||||||||
Zhejiang Zhen You Electronics Co. Ltd. | $ | — | (1) | — | % | (1) | $ | 9,862 | 10.6 | % |
(In thousands) | June 30, 2022 | December 31, 2021 | |||||||||
United States | $ | 16,797 | $ | 16,804 | |||||||
People's Republic of China | 48,190 | 52,851 | |||||||||
Mexico | 18,982 | 20,509 | |||||||||
All other countries | 2,946 | 4,330 | |||||||||
Total long-lived tangible assets | $ | 86,915 | $ | 94,494 |
Three Months Ended September 30, | |||||||||||||
2017 | 2016 | ||||||||||||
$ (thousands) | % of Total Inventory Purchases | $ (thousands) | % of Total Inventory Purchases | ||||||||||
Related party supplier | $ | 1,378 | 1.3 | % | $ | 1,382 | 1.5 | % |
Nine Months Ended September 30, | |||||||||||||
2017 | 2016 | ||||||||||||
$ (thousands) | % of Total Inventory Purchases | $ (thousands) | % of Total Inventory Purchases | ||||||||||
Related party supplier | $ | 3,962 | 1.3 | % | $ | 4,971 | 1.8 | % |
September 30, 2017 | December 31, 2016 | ||||||||||||
$ (thousands) | % of Accounts Payable | $ (thousands) | % of Accounts Payable | ||||||||||
Related party supplier | $ | 1,763 | 1.6 | % | $ | 1,690 | 1.7 | % |
(In thousands) | |||
Balance at December 31, 2016 | $ | 43,052 | |
Goodwill acquired during the period (1) | 5,494 | ||
Foreign exchange effects | 78 | ||
Balance at September 30, 2017 | $ | 48,624 |
(In thousands) | |||||
Balance at December 31, 2021 | $ | 48,463 | |||
Goodwill acquired during the period (1) | 713 | ||||
Foreign exchange effects | (132) | ||||
Balance at June 30, 2022 | $ | 49,044 |
June 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
(In thousands) | Gross (1) | Accumulated Amortization (1) | Net | Gross (1) | Accumulated Amortization (1) | Net | |||||||||||||||||||||||||||||
Capitalized software development costs | $ | 1,391 | $ | (52) | $ | 1,339 | $ | 1,066 | $ | (27) | $ | 1,039 | |||||||||||||||||||||||
Customer relationships | 6,340 | (2,718) | 3,622 | 5,000 | (2,375) | 2,625 | |||||||||||||||||||||||||||||
Developed and core technology | 4,520 | (3,511) | 1,009 | 4,080 | (3,335) | 745 | |||||||||||||||||||||||||||||
Distribution rights | 300 | (261) | 39 | 325 | (269) | 56 | |||||||||||||||||||||||||||||
Patents | 26,650 | (9,773) | 16,877 | 24,518 | (9,015) | 15,503 | |||||||||||||||||||||||||||||
Trademarks and trade names | 850 | (656) | 194 | 800 | (599) | 201 | |||||||||||||||||||||||||||||
Total intangible assets, net | $ | 40,051 | $ | (16,971) | $ | 23,080 | $ | 35,789 | $ | (15,620) | $ | 20,169 |
September 30, 2017 | December 31, 2016 | ||||||||||||||||||||||
(In thousands) | Gross (1) | Accumulated Amortization (1) | Net | Gross (1) | Accumulated Amortization (1) | Net | |||||||||||||||||
Distribution rights | $ | 340 | $ | (155 | ) | $ | 185 | $ | 302 | $ | (119 | ) | $ | 183 | |||||||||
Patents | 12,593 | (4,996 | ) | 7,597 | 12,038 | (4,775 | ) | 7,263 | |||||||||||||||
Trademarks and trade names (2) | 2,786 | (1,518 | ) | 1,268 | 2,400 | (1,310 | ) | 1,090 | |||||||||||||||
Developed and core technology | 12,560 | (5,567 | ) | 6,993 | 12,585 | (4,068 | ) | 8,517 | |||||||||||||||
Capitalized software development costs | 142 | (59 | ) | 83 | 142 | (5 | ) | 137 | |||||||||||||||
Customer relationships (2) | 32,534 | (18,613 | ) | 13,921 | 27,703 | (16,344 | ) | 11,359 | |||||||||||||||
Order backlog (2) | 150 | (38 | ) | 112 | — | — | — | ||||||||||||||||
Total intangible assets, net | $ | 61,105 | $ | (30,946 | ) | $ | 30,159 | $ | 55,170 | $ | (26,621 | ) | $ | 28,549 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
(In thousands) | (In thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||
Cost of sales | $ | 54 | $ | 21 | $ | 128 | $ | 63 | Cost of sales | $ | 12 | $ | 4 | $ | 24 | $ | 8 | |||||||||||||||||||||
Selling, general and administrative expenses | 1,715 | 1,551 | 5,032 | 4,618 | Selling, general and administrative expenses | 989 | 712 | 1,910 | 1,546 | |||||||||||||||||||||||||||||
Total amortization expense | $ | 1,769 | $ | 1,572 | $ | 5,160 | $ | 4,681 | Total amortization expense | $ | 1,001 | $ | 716 | $ | 1,934 | $ | 1,554 |
(In thousands) | |||||
2022 (remaining 6 months) | $ | 2,295 | |||
2023 | 4,592 | ||||
2024 | 3,792 | ||||
2025 | 3,031 | ||||
2026 | 2,814 | ||||
Thereafter | 6,556 | ||||
Total | $ | 23,080 |
(In thousands) | |||
2017 (remaining 3 months) | $ | 1,776 | |
2018 | 7,046 | ||
2019 | 6,901 | ||
2020 | 5,740 | ||
2021 | 2,289 | ||
Thereafter | 6,407 | ||
Total | $ | 30,159 |
(In thousands) | June 30, 2022 | December 31, 2021 | |||||||||
Assets: | |||||||||||
Operating lease right-of-use assets | $ | 19,048 | $ | 19,847 | |||||||
Liabilities: | |||||||||||
Other accrued liabilities | $ | 5,155 | $ | 4,769 | |||||||
Long-term operating lease obligations | 13,078 | 14,266 | |||||||||
Total lease liabilities | $ | 18,233 | $ | 19,035 |
(In thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Cost of sales | $ | 762 | $ | 628 | $ | 1,397 | $ | 1,298 | |||||||||||||||
Selling, general and administrative expenses | 1,079 | 1,023 | 2,187 | 2,059 | |||||||||||||||||||
Total operating lease expense | $ | 1,841 | $ | 1,651 | $ | 3,584 | $ | 3,357 | |||||||||||||||
Operating cash outflows from operating leases | $ | 1,781 | $ | 1,585 | $ | 3,460 | $ | 3,383 | |||||||||||||||
Operating lease right-of-use assets obtained in exchange for lease obligations | $ | 255 | $ | 2,711 | $ | 3,073 | $ | 3,009 | |||||||||||||||
Non-cash release of operating lease obligations (1) | $ | — | $ | — | $ | — | $ | 654 |
June 30, 2022 | December 31, 2021 | ||||||||||
Weighted average lease liability term (in years) | 4.0 | 4.3 | |||||||||
Weighted average discount rate | 3.09 | % | 3.17 | % |
(In thousands) | June 30, 2022 | ||||
2022 (remaining 6 months) | $ | 2,866 | |||
2023 | 5,245 | ||||
2024 | 4,197 | ||||
2025 | 3,434 | ||||
2026 | 2,183 | ||||
Thereafter | 1,469 | ||||
Total lease payments | 19,394 | ||||
Less: imputed interest | (1,161) | ||||
Total lease liabilities | $ | 18,233 |
(In thousands) | June 30, 2022 | December 31, 2021 | |||||||||
Accrued bonus | $ | 2,705 | $ | 3,460 | |||||||
Accrued commission | 311 | 1,140 | |||||||||
Accrued salary/wages | 5,439 | 6,234 | |||||||||
Accrued social insurance (1) | 7,214 | 7,562 | |||||||||
Accrued vacation/holiday | 3,334 | 3,343 | |||||||||
Other accrued compensation | 2,605 | 2,478 | |||||||||
Total accrued compensation | $ | 21,608 | $ | 24,217 |
(In thousands) | June 30, 2022 | December 31, 2021 | |||||||||
Duties | $ | 4,119 | $ | 4,128 | |||||||
Expense associated with fulfilled performance obligations | 1,164 | 991 | |||||||||
Freight and handling fees | 2,685 | 3,317 | |||||||||
Operating lease obligations | 5,155 | 4,769 | |||||||||
Product warranty claims costs | 762 | 1,095 | |||||||||
Professional fees | 3,389 | 4,685 | |||||||||
Sales and value added taxes | 3,248 | 5,463 | |||||||||
Other (1) | 8,577 | 6,392 | |||||||||
Total other accrued liabilities | $ | 29,099 | $ | 30,840 |
(In thousands) | September 30, 2017 | December 31, 2016 | |||||
Accrued social insurance (1) | $ | 17,506 | $ | 19,974 | |||
Accrued salary/wages | 7,721 | 7,903 | |||||
Accrued vacation/holiday | 2,844 | 2,411 | |||||
Accrued bonus (2) | 1,985 | 2,421 | |||||
Accrued commission | 851 | 933 | |||||
Accrued medical insurance claims | 284 | 122 | |||||
Other accrued compensation | 2,137 | 1,816 | |||||
Total accrued compensation | $ | 33,328 | $ | 35,580 |
Changes in the liability for product warranty claims costs were as follows:
Litigation Roku Matters 2018 Lawsuit On September 5, 2018, we filed a lawsuit against Roku, Inc. ("Roku") in the United States District Court, Central District of California, alleging that Roku is willfully infringing 9 of our patents that are in 4 patent families related to remote control set-up and touchscreen remotes. On December 5, 2018, we amended our complaint to add additional details supporting our infringement and willfulness allegations. We have alleged that this complaint relates to multiple Roku streaming players and components therefor and certain universal control devices, including but not limited to the Roku App, Roku TV, Roku Express, Roku Streaming Stick, Roku Ultra, Roku Premiere, Roku 4, Roku 3, Roku 2, Roku Enhanced Remote and any other Roku product that provides for the remote control of an external device such as a TV, audiovisual receiver, sound bar or Roku TV Wireless Speakers. In October 2019, the Court stayed this lawsuit pending action by the Patent Trial and Appeals Board (the "PTAB") with respect to Roku's Inter Partes Review ("IPR") requests (see discussion below). This lawsuit continues to be stayed until such time as the IPR requests and all appeals with respect to them have concluded. |
(In thousands) | September 30, 2017 | December 31, 2016 | |||||
Advertising and marketing | $ | 272 | $ | 213 | |||
Deferred revenue | 79 | 1,431 | |||||
Deposit for sale of Guangzhou factory | 4,799 | — | |||||
Duties | 757 | 1,127 | |||||
Freight and handling fees | 2,176 | 1,919 | |||||
Product development | 485 | 454 | |||||
Product warranty claim costs | 218 | 134 | |||||
Professional fees | 1,691 | 1,313 | |||||
Property, plant, and equipment | 1,564 | 1,017 | |||||
Sales taxes and VAT | 2,587 | 2,715 | |||||
Short-term contingent consideration | 3,400 | — | |||||
Third-party commissions | 685 | 853 | |||||
Tooling (1) | 1,769 | 1,520 | |||||
Unrealized loss on foreign currency exchange contracts | 86 | 1,623 | |||||
URC court order and settlement agreement (Note 2) | — | 6,622 | |||||
Utilities | 392 | 331 | |||||
Other | 4,880 | 3,138 | |||||
Total other accrued expenses | $ | 25,840 | $ | 24,410 |
(In thousands) | Nine Months Ended September 30, | ||||||
2017 | 2016 | ||||||
Balance at beginning of period | $ | 134 | $ | 35 | |||
Accruals for warranties issued during the period | 169 | 100 | |||||
Settlements (in cash or in kind) during the period | (85 | ) | — | ||||
Balance at end of period | $ | 218 | $ | 135 |
Nine Months Ended September 30, | Six Months Ended June 30, | |||||||||||||||||
(In thousands) | 2017 | 2016 | (In thousands) | 2022 | 2021 | |||||||||||||
Shares repurchased | 330 | 40 | Shares repurchased | 355 | 511 | |||||||||||||
Cost of shares repurchased | $ | 20,217 | $ | 2,188 | Cost of shares repurchased | $ | 11,211 | $ | 26,684 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(In thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||
United States | $ | 85,762 | $ | 88,243 | $ | 253,259 | $ | 263,053 | |||||||
Asia (excluding PRC) | 26,113 | 22,099 | 77,679 | 64,290 | |||||||||||
People's Republic of China | 23,437 | 19,899 | 61,015 | 59,978 | |||||||||||
Europe | 18,877 | 19,389 | 56,041 | 53,716 | |||||||||||
Latin America | 13,567 | 13,032 | 44,593 | 32,273 | |||||||||||
Other | 7,896 | 6,523 | 22,051 | 17,519 | |||||||||||
Total net sales | $ | 175,652 | $ | 169,185 | $ | 514,638 | $ | 490,829 |
(In thousands) | September 30, 2017 | December 31, 2016 | |||||
United States | $ | 14,233 | $ | 11,948 | |||
People's Republic of China | 95,165 | 94,113 | |||||
All other countries | 3,791 | 4,186 | |||||
Total long-lived tangible assets | $ | 113,189 | $ | 110,247 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Cost of sales | $ | 40 | $ | 40 | $ | 79 | $ | 77 | |||||||||||||||
Research and development expenses | 345 | 318 | 678 | 631 | |||||||||||||||||||
Selling, general and administrative expenses: | |||||||||||||||||||||||
Employees | 1,852 | 1,705 | 3,579 | 3,573 | |||||||||||||||||||
Outside directors | 400 | 381 | 800 | 763 | |||||||||||||||||||
Total employee and director stock-based compensation expense | $ | 2,637 | $ | 2,444 | $ | 5,136 | $ | 5,044 | |||||||||||||||
Income tax benefit | $ | 440 | $ | 416 | $ | 868 | $ | 882 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(In thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Cost of sales | $ | 19 | $ | 14 | $ | 53 | $ | 43 | |||||||
Research and development expenses | 149 | 136 | 412 | 409 | |||||||||||
Selling, general and administrative expenses: | |||||||||||||||
Employees | 1,843 | 1,748 | 5,562 | 5,324 | |||||||||||
Outside directors | 1,910 | 770 | 3,449 | 1,862 | |||||||||||
Total employee and director stock-based compensation expense | $ | 3,921 | $ | 2,668 | $ | 9,476 | $ | 7,638 | |||||||
Income tax benefit | $ | 603 | $ | 812 | 2,307 | 2,281 |
Number of Options (in 000's) | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in 000's) | |||||||||
Outstanding at December 31, 2016 | 652 | $ | 39.27 | |||||||||
Granted | 92 | 62.70 | ||||||||||
Exercised | (45 | ) | 24.87 | $ | 1,893 | |||||||
Forfeited/canceled/expired | (168 | ) | 46.44 | |||||||||
Outstanding at September 30, 2017 (1) | 531 | $ | 42.26 | 4.49 | $ | 11,391 | ||||||
Vested and expected to vest at September 30, 2017 (1) | 531 | $ | 42.26 | 4.49 | $ | 11,390 | ||||||
Exercisable at September 30, 2017 (1) | 378 | $ | 35.35 | 3.94 | $ | 10,731 |
Number of Options (in thousands) | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Outstanding at December 31, 2021 | 800 | $ | 45.55 | ||||||||||||||||||||
Granted | 120 | 34.56 | |||||||||||||||||||||
Exercised | — | — | $ | — | |||||||||||||||||||
Forfeited/canceled/expired | (74) | 65.54 | |||||||||||||||||||||
Outstanding at June 30, 2022 (1) | 846 | $ | 42.25 | 3.48 | $ | 505 | |||||||||||||||||
Vested and expected to vest at June 30, 2022 (1) | 846 | $ | 42.25 | 3.48 | $ | 505 | |||||||||||||||||
Exercisable at June 30, 2022 (1) | 646 | $ | 42.16 | 2.65 | $ | 505 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Weighted average fair value of grants | $ | — | $ | — | $ | 14.87 | $ | 23.97 | |||||||||||||||
Risk-free interest rate | — | % | — | % | 1.78 | % | 0.41 | % | |||||||||||||||
Expected volatility | — | % | — | % | 49.42 | % | 48.49 | % | |||||||||||||||
Expected life in years | 0.00 | 0.00 | 4.65 | 4.62 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Weighted average fair value of grants | $ | — | $ | — | $ | 19.61 | $ | 17.96 | |||||||
Risk-free interest rate | — | % | — | % | 1.75 | % | 1.36 | % | |||||||
Expected volatility | — | % | — | % | 34.25 | % | 41.38 | % | |||||||
Expected life in years | 0.00 | 0.00 | 4.52 | 4.55 |
Shares (in thousands) | Weighted-Average Grant Date Fair Value | ||||||||||
Non-vested at December 31, 2021 | $ | 310 | $ | 44.41 | |||||||
Granted | 230 | 31.80 | |||||||||
Vested | (161) | 40.55 | |||||||||
Forfeited | (3) | 47.96 | |||||||||
Non-vested at June 30, 2022 | $ | 376 | $ | 38.34 |
Shares (in 000's) | Weighted-Average Grant Date Fair Value | |||||
Non-vested at December 31, 2016 | 153 | $ | 57.43 | |||
Granted | 132 | 64.14 | ||||
Vested | (59 | ) | 61.28 | |||
Forfeited | (4 | ) | 60.71 | |||
Non-vested at September 30, 2017 | 222 | $ | 60.34 |
Incremental Warrants That Will Vest | ||||||||
Aggregate Level of Purchases by Comcast and Affiliates | January 1, 2016 - December 31, 2017 | January 1, 2018 - December 31, 2019 | January 1, 2020 - December 31, 2021 | |||||
$260 million | 100,000 | 100,000 | 75,000 | |||||
$300 million | 75,000 | 75,000 | 75,000 | |||||
$340 million | 75,000 | 75,000 | 75,000 | |||||
Maximum Potential Warrants Earned by Comcast | 250,000 | 250,000 | 225,000 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Fair value | $ | 24.17 | $ | 38.32 | $ | 24.17 | $ | 38.32 | |||||||
Price of Universal Electronics Inc. common stock | $ | 62.10 | $ | 74.99 | $ | 62.10 | $ | 74.99 | |||||||
Risk-free interest rate | 1.93 | % | 1.32 | % | 1.93 | % | 1.32 | % | |||||||
Expected volatility | 34.41 | % | 40.54 | % | 34.41 | % | 40.54 | % | |||||||
Expected life in years | 5.26 | 6.25 | 5.26 | 6.25 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Reduction to net sales | $ | — | $ | 131 | $ | — | $ | 274 | |||||||||||||||
Income tax benefit | $ | — | $ | 32 | $ | — | $ | 68 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Reduction/(increase) to net sales | $ | (141 | ) | $ | 1,160 | $ | 1,122 | $ | 3,219 | ||||||
Income tax (benefit)/expense | 53 | (426 | ) | (418 | ) | (1,182 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net gain (loss) on foreign currency exchange contracts (1) | $ | 153 | $ | 327 | $ | 1,068 | $ | 1,488 | |||||||||||||||
Net gain (loss) on foreign currency exchange transactions | (432) | (807) | (1,010) | (2,077) | |||||||||||||||||||
Other income (expense) | (415) | 463 | (392) | 595 | |||||||||||||||||||
Other income (expense), net | $ | (694) | $ | (17) | $ | (334) | $ | 6 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In thousands, except per-share amounts) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
BASIC | |||||||||||||||||||||||
Net income | $ | 2,988 | $ | 5,593 | $ | 78 | $ | 12,586 | |||||||||||||||
Weighted-average common shares outstanding | 12,659 | 13,672 | 12,736 | 13,737 | |||||||||||||||||||
Basic earnings per share | $ | 0.24 | $ | 0.41 | $ | 0.01 | $ | 0.92 | |||||||||||||||
DILUTED | |||||||||||||||||||||||
Net income | $ | 2,988 | $ | 5,593 | $ | 78 | $ | 12,586 | |||||||||||||||
Weighted-average common shares outstanding for basic | 12,659 | 13,672 | 12,736 | 13,737 | |||||||||||||||||||
Dilutive effect of stock options, restricted stock and common stock warrants | 55 | 254 | 111 | 325 | |||||||||||||||||||
Weighted-average common shares outstanding on a diluted basis | 12,715 | 13,926 | 12,847 | 14,062 | |||||||||||||||||||
Diluted earnings per share | $ | 0.23 | $ | 0.40 | $ | 0.01 | $ | 0.89 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(In thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Net gain (loss) on foreign currency exchange contracts (1) | $ | (1,488 | ) | $ | (218 | ) | $ | (2,852 | ) | $ | (894 | ) | |||
Net gain (loss) on foreign currency exchange transactions | 1,176 | 439 | 2,512 | 2,455 | |||||||||||
Other income (expense) | 373 | 114 | 342 | 165 | |||||||||||
Other income (expense), net | $ | 61 | $ | 335 | $ | 2 | $ | 1,726 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Stock options | 616 | 375 | 590 | 302 | |||||||||||||||||||
Restricted stock awards | 145 | 88 | 174 | 69 | |||||||||||||||||||
Common stock warrants | 275 | 275 | 275 | 138 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(In thousands, except per-share amounts) | 2017 | 2016 | 2017 | 2016 | |||||||||||
BASIC | |||||||||||||||
Net income attributable to Universal Electronics Inc. | $ | 1,728 | $ | 7,807 | $ | 6,531 | $ | 17,118 | |||||||
Weighted-average common shares outstanding | 14,381 | 14,510 | 14,412 | 14,441 | |||||||||||
Basic earnings per share attributable to Universal Electronics Inc. | $ | 0.12 | $ | 0.54 | $ | 0.45 | $ | 1.19 | |||||||
DILUTED | |||||||||||||||
Net income attributable to Universal Electronics Inc. | $ | 1,728 | $ | 7,807 | $ | 6,531 | $ | 17,118 | |||||||
Weighted-average common shares outstanding for basic | 14,381 | 14,510 | 14,412 | 14,441 | |||||||||||
Dilutive effect of stock options, restricted stock and common stock warrants | 285 | 338 | 277 | 299 | |||||||||||
Weighted-average common shares outstanding on a diluted basis | 14,666 | 14,848 | 14,689 | 14,740 | |||||||||||
Diluted earnings per share attributable to Universal Electronics Inc. | $ | 0.12 | $ | 0.53 | $ | 0.44 | $ | 1.16 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
(In thousands) | 2017 | 2016 | 2017 | 2016 | |||||||
Stock options | 165 | — | 153 | 111 | |||||||
Restricted stock awards | 30 | 5 | 30 | 8 |
June 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement Using | Total Balance | Fair Value Measurement Using | Total Balance | |||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||||||||||||||
Foreign currency exchange contracts | $ | — | $ | 81 | $ | — | $ | 81 | $ | — | $ | (92) | $ | — | $ | (92) |
September 30, 2017 | December 31, 2016 | |||||||||||||||||||||||||||||||
Fair Value Measurement Using | Total Balance | Fair Value Measurement Using | Total Balance | |||||||||||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
Foreign currency exchange contracts | $ | — | $ | (385 | ) | $ | — | $ | (385 | ) | $ | — | $ | (1,584 | ) | $ | — | $ | (1,584 | ) |
Date Held | Type | Position Held | Notional Value (in millions) | Forward Rate | Unrealized Gain/(Loss) Recorded at Balance Sheet Date (in thousands)(1) | Settlement Date | |||||||||||
September 30, 2017 | USD/Euro | USD | $ | 17.0 | 1.2039 | $ | 299 | October 27, 2017 | |||||||||
September 30, 2017 | USD/Chinese Yuan Renminbi | USD | $ | 22.0 | 6.6174 | $ | 111 | October 20, 2017 | |||||||||
September 30, 2017 | USD/Brazilian Real | USD | $ | 4.5 | 3.2330 | $ | (86 | ) | October 20, 2017 | ||||||||
September 30, 2017 | USD/Brazilian Real | BRL | $ | 1.0 | 3.3660 | $ | 61 | October 20, 2017 | |||||||||
December 31, 2016 | USD/Euro | USD | $ | 18.0 | 1.0513 | $ | (61 | ) | January 27, 2017 | ||||||||
December 31, 2016 | USD/Chinese Yuan Renminbi | Chinese Yuan Renminbi | $ | 25.0 | 6.7230 | $ | (974 | ) | January 13, 2017 | ||||||||
December 31, 2016 | USD/Chinese Yuan Renminbi | Chinese Yuan Renminbi | $ | 10.0 | 6.6757 | $ | (457 | ) | January 13, 2017 | ||||||||
December 31, 2016 | USD/Brazilian Real | USD | $ | 2.0 | 3.4775 | $ | (131 | ) | January 13, 2017 | ||||||||
December 31, 2016 | USD/Brazilian Real | USD | $ | 4.0 | 3.2316 | $ | 39 | January 13, 2017 |
Date Held | Currency | Position Held | Notional Value (in millions) | Forward Rate | Unrealized Gain/(Loss) Recorded at Balance Sheet Date (in thousands)(1) | Settlement Date | ||||||||||||||||||||||||||||||||
June 30, 2022 | USD/Euro | USD | $ | 23.0 | 1.0550 | $ | 116 | July 29, 2022 | ||||||||||||||||||||||||||||||
June 30, 2022 | USD/Chinese Yuan Renminbi | CNY | $ | 33.0 | 6.6889 | $ | (35) | July 29, 2022 | ||||||||||||||||||||||||||||||
December 31, 2021 | USD/Chinese Yuan Renminbi | CNY | $ | 19.0 | 6.3777 | $ | 38 | January 7, 2022 | ||||||||||||||||||||||||||||||
December 31, 2021 | USD/Euro | USD | $ | 31.0 | 1.1336 | $ | (130) | January 7, 2022 | ||||||||||||||||||||||||||||||
(1)Unrealized gains on foreign currency exchange contracts are recorded in prepaid expenses and other current assets. Unrealized losses on foreign currency exchange contracts are recorded in other accrued liabilities. |
(in thousands) | Estimated Lives | Preliminary Fair Value | |||
Accounts receivable | $ | 429 | |||
Inventories | 1,508 | ||||
Prepaid expenses and other current assets | 7 | ||||
Property, plant and equipment | 1-4 years | 14 | |||
Current liabilities | (408 | ) | |||
Net tangible assets acquired | 1,550 | ||||
Trade name | 8 years | 400 | |||
Customer relationships | 10 years | 5,000 | |||
Order backlog | 1 year | 150 | |||
Goodwill | 5,494 | ||||
Total purchase price | 12,594 | ||||
Less: Contingent consideration | (3,700 | ) | |||
Cash paid | $ | 8,894 |
(In thousands) | Estimated Lives | Preliminary Fair Value | |||||||||
Accounts receivable | $ | 787 | |||||||||
Property, plant and equipment | 5 years | 3 | |||||||||
Customer relationships | 6 years | 1,340 | |||||||||
Developed technology | 6 years | 440 | |||||||||
Trade names | 6 years | 50 | |||||||||
Goodwill | 713 | ||||||||||
Operating lease ROU assets | 3 years | 149 | |||||||||
Other assets | 2 | ||||||||||
Other accrued liabilities | (6) | ||||||||||
Short-term operating lease obligation | (48) | ||||||||||
Deferred revenue | (1,539) | ||||||||||
Long-term operating lease obligation | (101) | ||||||||||
Long-term deferred revenue | (851) | ||||||||||
Cash paid | $ | 939 |
Three Months Ended September 30, 2017 | Nine Months Ended September 30, 2017 | ||||||||||||||
(In thousands, except per-share amounts) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Net sales | $ | 175,652 | $ | 170,658 | $ | 515,200 | $ | 497,172 | |||||||
Net income | 1,751 | 7,525 | 6,292 | 16,892 | |||||||||||
Net income attributable to Universal Electronics Inc. | 1,751 | 7,525 | 6,292 | 16,892 | |||||||||||
Basic earnings per share attributable to Universal Electronics Inc. | $ | 0.12 | $ | 0.52 | $ | 0.44 | $ | 1.17 | |||||||
Diluted earnings per share attributable to Universal Electronics Inc. | $ | 0.12 | $ | 0.51 | $ | 0.43 | $ | 1.14 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Cost of sales | 71.7 | 70.3 | 72.1 | 69.8 | |||||||||||||||||||
Gross profit | 28.3 | 29.7 | 27.9 | 30.2 | |||||||||||||||||||
Research and development expenses | 6.2 | 5.1 | 6.1 | 5.1 | |||||||||||||||||||
Selling, general and administrative expenses | 18.1 | 18.6 | 20.0 | 19.2 | |||||||||||||||||||
Operating income | 4.0 | 6.0 | 1.8 | 5.9 | |||||||||||||||||||
Interest income (expense), net | (0.2) | (0.1) | (0.2) | (0.1) | |||||||||||||||||||
Other income (expense), net | (0.5) | 0.0 | (0.1) | 0.0 | |||||||||||||||||||
Income before provision for income taxes | 3.3 | 5.9 | 1.5 | 5.8 | |||||||||||||||||||
Provision for income taxes | 1.2 | 2.2 | 1.5 | 1.6 | |||||||||||||||||||
Net income | 2.1 | % | 3.7 | % | — | % | 4.2 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||
Cost of sales | 75.5 | 75.3 | 75.2 | 75.0 | |||||||
Gross profit | 24.5 | 24.7 | 24.8 | 25.0 | |||||||
Research and development expenses | 3.1 | 2.9 | 3.1 | 3.1 | |||||||
Factory transition restructuring charges | 0.2 | 0.1 | 1.2 | 0.3 | |||||||
Selling, general and administrative expenses | 18.8 | 16.9 | 18.4 | 17.7 | |||||||
Operating income | 2.4 | 4.8 | 2.1 | 3.9 | |||||||
Interest income (expense), net | (0.4 | ) | (0.1 | ) | (0.3 | ) | (0.2 | ) | |||
Other income (expense), net | 0.0 | 0.2 | 0.0 | 0.4 | |||||||
Income before provision for income taxes | 2.0 | 4.9 | 1.8 | 4.1 | |||||||
Provision for income taxes | 1.0 | 0.3 | 0.6 | 0.6 | |||||||
Net income | 1.0 | 4.6 | 1.2 | 3.5 | |||||||
Net income attributable to noncontrolling interest | — | — | — | 0.0 | |||||||
Net income attributable to Universal Electronics Inc. | 1.0 | % | 4.6 | % | 1.2 | % | 3.5 | % |
Three Months Ended September 30, | |||||||||||||
2017 | 2016 | ||||||||||||
$ (millions) | % of total | $ (millions) | % of total | ||||||||||
Business | $ | 163.1 | 92.8 | % | $ | 157.2 | 92.9 | % | |||||
Consumer | 12.6 | 7.2 | 12.0 | 7.1 | |||||||||
Total net sales | $ | 175.7 | 100.0 | % | $ | 169.2 | 100.0 | % |
Nine Months Ended September 30, | |||||||||||||
2017 | 2016 | ||||||||||||
$ (millions) | % of total | $ (millions) | % of total | ||||||||||
Business | $ | 477.9 | 92.9 | % | $ | 456.3 | 93.0 | % | |||||
Consumer | 36.7 | 7.1 | 34.5 | 7.0 | % | ||||||||
Total net sales | $ | 514.6 | 100.0 | % | $ | 490.8 | 100.0 | % |
(In thousands) | Nine Months Ended September 30, 2017 | Increase (Decrease) | Nine Months Ended September 30, 2016 | ||||||||
Cash provided by (used for) operating activities | $ | (1,160 | ) | $ | (39,841 | ) | $ | 38,681 | |||
Cash used for investing activities | (40,091 | ) | (9,852 | ) | (30,239 | ) | |||||
Cash provided by (used for) financing activities | 44,903 | 54,986 | (10,083 | ) | |||||||
Effect of exchange rate changes on cash | (5,703 | ) | (2,519 | ) | (3,184 | ) | |||||
Net increase (decrease) in cash and cash equivalents | $ | (2,051 | ) | $ | 2,774 | $ | (4,825 | ) |
September 30, 2017 | Increase (Decrease) | December 31, 2016 | |||||||||
Cash and cash equivalents | $ | 48,560 | $ | (2,051 | ) | $ | 50,611 | ||||
Working capital | 98,063 | (10,228 | ) | 108,291 |
Payments Due by Period | |||||||||||||||||||
(In thousands) | Total | Less than 1 year | 1 - 3 years | 4 - 5 years | After 5 years | ||||||||||||||
Operating lease obligations | $ | 13,732 | $ | 4,570 | $ | 5,192 | $ | 3,321 | $ | 649 | |||||||||
Purchase obligations(1) | 7,037 | 7,037 | — | — | — | ||||||||||||||
Contingent consideration (2) | 17,400 | 3,400 | 13,000 | 1,000 | — | ||||||||||||||
Total contractual obligations | $ | 38,169 | $ | 15,007 | $ | 18,192 | $ | 4,321 | $ | 649 |
(In thousands) | June 30, 2022 | December 31, 2021 | |||||||||
Cash and cash equivalents | $ | 46,130 | $ | 60,813 | |||||||
Available borrowing resources | 34,300 | 66,300 |
(In thousands) | September 30, 2017 | December 31, 2016 | |||||
Cash and cash equivalents | $ | 48,560 | $ | 50,611 | |||
Available borrowing resources | 11,000 | 35,000 |
(In thousands) | Six Months Ended June 30, 2022 | Increase (Decrease) | Six Months Ended June 30, 2021 | ||||||||||||||
Cash provided by (used for) operating activities | $ | (17,084) | $ | (33,568) | $ | 16,484 | |||||||||||
Cash provided by (used for) investing activities | (16,927) | (8,814) | (8,113) | ||||||||||||||
Cash provided by (used for) financing activities | 20,789 | 20,482 | 307 | ||||||||||||||
Effect of foreign currency exchange rates on cash and cash equivalents | (1,461) | (3,320) | 1,859 | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | $ | (14,683) | $ | (25,220) | $ | 10,537 |
June 30, 2022 | Increase (Decrease) | December 31, 2021 | |||||||||||||||
Cash and cash equivalents | $ | 46,130 | $ | (14,683) | $ | 60,813 | |||||||||||
Working capital | 115,087 | (5,272) | 120,359 |
Payments Due by Period | |||||||||||||||||||||||||||||
(In thousands) | Total | Less than 1 year | 1 - 3 years | 4 - 5 years | After 5 years | ||||||||||||||||||||||||
Operating lease obligations | $ | 27,213 | $ | 7,076 | $ | 10,773 | $ | 5,442 | $ | 3,922 | |||||||||||||||||||
Property, plant, and equipment purchases | 1,776 | 1,776 | — | — | — | ||||||||||||||||||||||||
Inventory purchases | 23,163 | 23,163 | — | — | — | ||||||||||||||||||||||||
Software license | 3,467 | 52 | 420 | 841 | 2,154 | ||||||||||||||||||||||||
Total material cash commitments | $ | 55,619 | $ | 32,067 | $ | 11,193 | $ | 6,283 | $ | 6,076 |
Period | Total Number of Shares Purchased (1) | Weighted Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2) | ||||||||||||||||||||||
April 1, 2022 - April 30, 2022 | 118,665 | $ | 29.75 | 116,796 | 8,204 | |||||||||||||||||||||
May 1, 2022 - May 31, 2022 | 11,255 | 29.01 | 8,204 | — | ||||||||||||||||||||||
June 1, 2022 - June 30, 2022 | — | — | — | — | ||||||||||||||||||||||
Total | 129,920 | $ | 29.69 | 125,000 | — |
Period | Total Number of Shares Purchased (1) | Weighted Average Price Paid per Share (2) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (3) | |||||||||
July 1, 2017 - July 31, 2017 | 1,354 | $ | 67.21 | — | 200,000 | ||||||||
August 1, 2017 - August 31, 2017 | 38,462 | 57.33 | 35,729 | 164,271 | |||||||||
September 1, 2017 - September 30, 2017 | 50,678 | 59.91 | 50,000 | 114,271 | |||||||||
Total | 90,494 | $ | 58.92 | 85,729 | 114,271 |
101.INS | Inline XBRL Instance Document | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Dated: | August 4, 2022 | ||||||||||||||||||
UNIVERSAL ELECTRONICS INC. | |||||||||||||||||||
By: | /s/ Bryan M. Hackworth | ||||||||||||||||||
Bryan M. Hackworth | |||||||||||||||||||
Chief Financial Officer (principal financial officer | |||||||||||||||||||