Exhibit 99.1
[UNIVERSAL ELECTRONICS LOGO] N E W S
Contacts: Paul Arling (UEI) 714.820.1000
Kirsten Chapman (IR Agency) 415.433.3777
UNIVERSAL ELECTRONICS REPORTS THIRD QUARTER 2005
FINANCIAL RESULTS
- NET INCOME INCREASED 44% COMPARED TO THIRD QUARTER 2004 -
CYPRESS, CA - November 2, 2005 - Leading wireless technology developer Universal
Electronics Inc. (UEI; NASDAQ: UEIC) today announced financial results for the
quarter and nine-month period ended September 30, 2005.
THIRD QUARTER 2005 FINANCIAL HIGHLIGHTS
- - Net sales for the third quarter of 2005 were $46.2 million, an increase of
15 percent compared to $40.0 million for the same quarter last year.
- - Business Category contributed 68 percent of the total revenue and Consumer
Category contributed 32 percent, compared to the third quarter 2004 when
Business Category contributed 67 percent of total revenue and Consumer
Category contributed 33 percent.
- - Gross margins were 36.8 percent, compared to 39.4 percent in last year's
third quarter, reflecting the shift toward the company's highest volume
customers.
- - Net income for the 2005 third quarter was $2.8 million, or $0.20 per diluted
share, compared to $1.9 million, or $0.14 per diluted share, for the third
quarter of 2004.
Net sales for the nine-month period ended September 30, 2005 were $132.0
million, up 24 percent compared to $106.7 million for the first nine months of
2004. Net income for the first nine months of 2005 was $6.2 million, or $0.44
per diluted share. This compares to $5.4 million, or $0.39 per diluted share,
for the same period last year.
"Over the past several years, UEI has focused resources on simplifying the
increasingly complex home control environment," stated Paul Arling, the
company's chairman and chief executive officer. "Over the past three years UEI
recorded compound annual sales growth of 20 percent and compound annual earnings
growth of approximately 25 percent. Looking ahead, we see even greater
opportunity in the markets we serve - retail, core remote control and digital
media including automotive, cell phone and home networking control - as they are
all demonstrating substantial growth opportunities."
MARKET OPPORTUNITIES EXPANDING
UEI is targeting markets with strong growth opportunities. The Consumer
Electronics Association estimates the U.S. consumer electronic (CE) accessories
market currently exceeds $2 billion in annual sales and is expected to grow at
an estimated 10 percent annually. The company estimates the global CE
accessories market to range between $4 and $5 billion. Regarding the digital
media control, according to The Diffusion Group, there are approximately 25
million networked homes in the U.S., which is expected to rise to over 47
million by 2010, as consumers are continually searching for better solutions to
share digital media. UEI's solutions are meeting these needs, as well as those
in the automobile and cellular handheld environments.
Rob Lilleness, UEI's president and chief operating officer, added, "Over the
past three years, we have developed an industry leading patent portfolio,
technology platform, and array of wireless control solutions. As a result, UEI
has attracted subscription broadcasting leaders including Comcast, SKY, and
DirecTV who have new digital video recorder set-top box deployments, as well as
CE giants such as Pioneer, Panasonic and Denon who have new digital devices like
plasma televisions and home theater systems. In addition, with the quarter's
launch of NevoSL we have opened a whole new segment to UEI's business in home
networking device control and digital media control."
UEI'S RECENT HIGHLIGHTS:
- Pioneer Corporation and UEI entered into an agreement to extend the
current license of proprietary connectivity software for use in
several of Pioneer's Pure Vision plasma television products. Announced
in mid-July, the extension details that Pioneer will utilize UEI's
extensive database of infrared (IR) codes to ensure traditional home
devices can be controlled by consumer plasma televisions.
- In July, UEI commercially launched NevoSL to a distribution network
that has now grown to 17 countries around the world. In September, UEI
won the Residential Systems coveted RESI award for "Best Product of
the Year" at CEDIA 2005 adding to a total of 7 prestigious awards for
the product.
- At the IFA trade show in Berlin in August and September, the largest
consumer electronics trade show in the world, UEI launched universal
remotes for new segments of the market, digital-antennas for Europe's
expanding free-to-air high-definition broadcasting, and new packaging
for the Kameleon(TM) line of remotes; in addition to previewing new
digital media and home automation products.
- In October, Denon selected UEI's Kameleon "digital ink"- like
technology to supply advanced remote controls for certain models of
its high-end amplifiers and tuners to be distributed in the United
States, Europe and Asia. The relationship marks a further integration
of UEI's technology with high-end consumer electronics partners based
in Asia.
- Received media coverage in multiple publications including the front
covers of Business Week and Residential Systems, as well as mentions
in O: The Oprah Magazine, Electronic House, PC Magazine, American
Express' Departures, T3, and many more publications with a total
circulation reaching over 6 million
readers. T3, the pre-eminent British gadget and electronics magazine
said, "NevoSL may be the best thing for the home since television."
UEI will participate in the Electronic House (EH) Expo November 9-11 in the
Anaheim Convention Center and the International Consumer Electronics Show (CES)
in January 2006 in the Las Vegas Convention Center.
CONFERENCE CALL INFORMATION
UEI's management team will hold a conference call today at 1:30 p.m. Pacific
Time to review financial results and hold a question and answer session for
callers. To access the call in the U.S. please dial 800-622-9917 and for
international calls dial 706-645-0366, approximately 10 minutes prior to the
start of the conference. The conference call will also be broadcast live over
the Internet and available for replay for a year at www.uei.com. In addition, a
replay of the call will be available via telephone for 2 business days,
beginning two hours after the call. To listen to the replay, in the U.S., please
dial 800-642-1687 and international the number is 706-645-9291. Enter access
code 1441176.
ABOUT UNIVERSAL ELECTRONICS
Universal Electronics Inc., based in Southern California, develops firmware and
turnkey solutions as well as software designed to enable consumers to wirelessly
connect, control and interact with an increasingly complex home environment. The
company's primary markets include original equipment manufacturers (OEMs) in
consumer electronics and personal computing, as well as multiple system
operators in the cable and satellite subscription broadcasting markets. For
nearly 20 years, the company has developed a broad portfolio of patented
technologies and the industry's leading database of home connectivity software
that it licenses to its customers, including many leading Fortune 500 companies.
In addition, UEI sells its universal wireless control products and other
audio/visual accessories through its European headquarters in The Netherlands,
and to distributors and retailers in Europe, Asia, Latin America, South Africa
and Australia/New Zealand under the One For All(R) brand name. More information
about UEI can be obtained at http://www.uei.com.
SAFE HARBOR STATEMENT
Except for the historical information contained herein, the matters discussed in
this press release are forward-looking statements that involve a number of risks
and uncertainties. Among the factors that could cause actual results to differ
materially from those expressed herein are the following: the failure of the
company's business lines to grow and expand in the manner anticipated by the
company's management, including the consumer electronics, digital media and
CEDIA markets; the growth of, acceptance of and the demand for the company's
products and technologies, including new products such as NevoSL and the
company's home connectivity line of products, in various markets and
geographical regions, including the subscription broadcasting cable, satellite,
consumer electronics, retail, home automation, automotive, and cellular
industries, not materializing as believed by the company's management; the
failure of the seasonal increase in retail sales to occur as expected by the
company; the effect the Euro and other foreign currencies has on the company's
results; compared to the U.S. Dollar; the possible dilutive effect the company's
stock option programs may have on the company's EPS and stock price; the
inability of the company to deliver the NevoSL and the company's home
connectivity line of products at the time and in the quantities anticipated by
the company's management; and
other factors listed from time to time in the company's press releases and SEC
filings. The company undertakes no obligation to revise or update any
forward-looking statements in order to reflect events or circumstances that may
arise after the date of this release.
- Tables Follow -
UNIVERSAL ELECTRONICS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
SEPTEMBER 30, DECEMBER 31,
2005 2004
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 42,340 $ 42,472
Accounts receivable, net 36,856 38,433
Inventories, net 23,370 23,862
Prepaid expenses and other current assets 3,973 2,237
Income tax receivable 423 1,158
Deferred income taxes 3,467 3,216
--------- ---------
Total current assets 110,429 111,378
Equipment, furniture and fixtures, net 4,348 3,732
Goodwill 10,502 10,655
Intangible assets, net 6,166 6,550
Other assets 371 2,935
Deferred income taxes 4,876 5,035
--------- ---------
Total assets 136,692 $ 140,285
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,677 $ 17,559
Accrued income taxes 5,680 4,267
Accrued compensation 2,566 5,914
Other accrued expenses 8,184 8,557
--------- ---------
Total current liabilities 37,107 36,297
Deferred income taxes 101 107
Deferred Revenue 415
--------- ---------
Total liabilities 37,623 36,404
Stockholders' equity:
Common stock 168 166
Paid-in capital 81,644 78,872
Accumulated other comprehensive income (4,232) 3,571
Retained earnings 51,471 45,293
Deferred stock-based compensation (244) (168)
Common stock held in treasury (29,738) (23,853)
--------- ---------
Total stockholders' equity 99,069 103,881
--------- ---------
Total liabilities and stockholders' equity 136,692 $ 140,285
========= =========
UNIVERSAL ELECTRONICS INC.
CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share amounts)
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------- ---------------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Net sales $ 46,206 $ 40,047 $ 132,030 $ 106,669
Cost of sales 29,212 24,254 83,601 65,333
--------- --------- --------- ---------
Gross profit 16,994 15,793 48,429 41,336
Research and development 1,782 1,841 4,952 4,092
Selling, general and
administrative expenses 11,541 10,656 37,147 29,451
--------- --------- --------- ---------
Operating expenses 13,323 12,497 42,099 33,543
--------- --------- --------- ---------
Operating income 3,671 3,296 6,330 7,793
Interest income, net (287) (261) (639) (525)
Other expense (income), net 118 551 (2,131) 57
--------- --------- --------- ---------
Income before income taxes 3,840 3,006 9,100 8,261
Provision for income taxes (1,063) (1,078) (2,922) (2,867)
--------- --------- --------- ---------
Net income $ 2,777 $ 1,928 $ 6,178 $ 5,394
========= ========= ========= =========
Earnings per share:
Basic $ 0.21 $ 0.14 $ 0.46 $ 0.40
========= ========= ========= =========
Diluted $ 0.20 $ 0.14 $ 0.44 $ 0.39
========= ========= ========= =========
Shares used in computing
earnings per share:
Basic 13,391 13,496 13,459 13,566
--------- --------- --------- ---------
Diluted 13,918 14,029 13,995 14,002
========= ========= ========= =========
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UNIVERSAL ELECTRONICS INC.
RECONCILIATION OF THIRD QUARTER 2005 YTD PRO FORMA, GAAP RESULTS
(In thousands, except per share amounts)
(Unaudited)
The following table reconciles UEI's pro forma financial results for the third
quarter of 2005 YTD, which excludes the write down of a certain receivable as
well as the related tax effect, to its actual financial results in accordance
with generally accepted accounting principles.
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ -------------------------
2005 2004 2005 2004
-------- -------- -------- --------
Net income, as reported
according to GAAP $ 2,777 $ 1,928 $ 6,178 $ 5,394
Plus:
Balance write down 0 0 1,592 0
Less:
Tax effect of excluding the
write down 0 0 (201) 0
-------- -------- -------- --------
Pro forma net income $ 2,777 $ 1,928 $ 7,569 $ 5,394
======== ======== ======== ========
GAAP earnings per share
Diluted $ 0.20 $ 0.14 $ 0.44 $ 0.39
======== ======== ======== ========
Pro forma earnings per share:
Diluted $ 0.20 $ 0.14 $ 0.54 $ 0.39
======== ======== ======== ========
Shares used in computing
earnings per share:
Diluted 13,918 14,029 13,995 14,002
======== ======== ======== ========
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