Universal Electronics (NASDAQ: UEIC) reported Q4 EPS of $0.90, $0.07 better than the analyst estimate of $0.83. Revenue for the quarter came in at $174.8 million versus the consensus estimate of $179.04 million.

Financial Results for the Three Months Ended December 31: 2019 Compared to 2018

• GAAP net sales were $174.7 million, compared to $170.3 million; Adjusted Non-GAAP net sales were $174.8 million, compared to $168.3 million.
• GAAP gross margins were 28.5%, compared to 22.0%; Adjusted Non-GAAP gross margins were 29.3%, compared to 28.7%.
• GAAP operating income was $11.5 million, compared to $2.6 million; Adjusted Non-GAAP operating income was $17.3 million, compared to $16.4 million.
• GAAP net income was $7.0 million, or $0.49 per diluted share, compared to a GAAP net loss of $11.1 million or $0.80 per diluted share; Adjusted Non-GAAP net income was $12.8 million, or $0.90 per diluted share, compared to $11.7 million, or $0.84 per diluted share.
• Net cash provided by operating activities was $45.3 million for the fourth quarter and $85.3 million for the year, both records for UEI.

“In 2019, we posted the highest annual Adjusted Non-GAAP net sales and EPS in our 34-year history of $751.7 million and $3.55, respectively,” said Paul Arling, UEI’s chairman and CEO. “Over the past year, we invested in innovation to increase our competitive edge and drive long-term growth; we enriched our product mix to favor higher margin advanced solutions; and we implemented initiatives to improve productivity globally. Our efforts to increase profitability are coming to fruition, as we achieved our highest gross and operating margins in four years. Combined with strategic product development, we have better positioned UEI to flourish in the ever evolving and expanding arena of sensing and control technologies for the smart home in 2020 and beyond.”

GUIDANCE:

Universal Electronics sees Q1 2020 EPS of $0.90-$1.00, versus the consensus of $0.80. Universal Electronics sees Q1 2020 revenue of $170-180 million, versus the consensus of $188.29 million.

• For the first quarter of 2020, excluding any potential impact related to the COVID-19 virus, the company expects GAAP net sales to range between $170 million and $180 million, compared to $184.2 million in the first quarter of 2019. GAAP earnings per diluted share for the first quarter of 2020 are expected to range from $0.36 to $0.46, compared to GAAP loss per diluted share of $0.07 in the first quarter of 2019.
• For the first quarter of 2020, excluding any potential impact related to the COVID-19 virus, the company expects Adjusted Non-GAAP net sales to range between $170 million and $180 million, compared to $182.7 million in the first quarter of 2019. Adjusted Non-GAAP earnings per diluted share are expected to range from $0.90 to $1.00 compared to Adjusted Non-GAAP earnings per diluted share of $0.82 in the first quarter of 2019.
• The COVID-19 virus may impact first quarter 2020 by shifting up to $10 million of net sales to second quarter 2020. As a result, EPS for the first quarter of 2020 may be lower by $0.12 to $0.15 cents. Management is working diligently to mitigate any negative impact; however, the final outcome remains uncertain at this time.
• The first quarter 2020 Adjusted Non-GAAP earnings per diluted share estimate excludes $0.54 per share related to, among other things, additional Section 301 U.S. tariffs on goods manufactured in China, excess manufacturing overhead and factory transition costs, stock-based compensation, amortization of acquired intangibles, changes in contingent consideration relating to acquisitions, foreign currency gains and losses, restructuring costs and the related tax impact of these adjustments. For a more detailed explanation of Non-GAAP measures, please see the Use of Non-GAAP Financial Metrics discussion and the Reconciliation of Adjusted Non-GAAP Financial Results, each located elsewhere in this press release.

For earnings history and earnings-related data on Universal Electronics (UEIC) click here.