Universal Electronics (NASDAQ: UEIC) reported Q4 EPS of $1.14, $0.19 better than the analyst estimate of $0.95. Revenue for the quarter came in at $156.3 million versus the consensus estimate of $153.72 million.

Financial Results for the Three Months Ended December 31: 2020 Compared to 2019

• GAAP net sales were $156.3 million, compared to $174.7 million; Adjusted Non-GAAP net sales were $156.4 million, compared to $174.8 million.
• GAAP gross margins were 32.7%, compared to 28.5%; Adjusted Non-GAAP gross margins were 33.6%, compared to 29.3%.
• GAAP operating income was $12.5 million, compared to $11.5 million; Adjusted Non-GAAP operating income was $19.1 million, compared to $17.3 million.
• GAAP net income was $12.2 million, or $0.86 per diluted share, compared to $7.0 million or $0.49 per diluted share; Adjusted Non-GAAP net income was $16.0 million, or $1.14 per diluted share, compared to $12.8 million, or $0.90 per diluted share.
• At December 31, 2020, cash and cash equivalents were $57.2 million.

Paul Arling, UEI’s chairman and CEO, said, “UEI’s ongoing investment in innovation for the future, strategies to enrich margins, and tactics to improve operating efficiencies, delivered strong performance and position the company well for 2021. Focusing on shifting our mix toward more advanced, higher margin solutions, we generated our highest margins in over a decade. As a result, even with lower sales, we reported the most profitable year in our 35+ year history.

“Additionally, we enter 2021 with our broadest, most sophisticated technology offering. Recent publicly disclosed examples once again include industry firsts: our Apple TV remote control designed for cable, satellite, IPTV and other multichannel video program distributors truly enhances the Apple TV 4K live and streaming TV experiences; our QuickSet® Widget provides a turnkey connectivity solution that adds intelligence and QuickSet Cloud to products; our UEI Virtual Agent introduces AI-powered technology that enables self-help capabilities to any screen - TV, phone, computer or tablet; and our ambient-aware connected thermostat family, UEI Comfort, simplifies installation, daily use and ongoing support of climate control in residential, commercial and hospitality applications. Our product development marries our pursuit of continued improvement, our unparalleled patented technology, and our vast experience providing end-to-end advanced control solutions. We help to assist our customers in differentiating themselves as they navigate the convergence of traditional TV, on-demand content and streaming apps. 2021 promises to be another exciting year.”

Bryan Hackworth, UEI’s CFO, stated, “Our improved financial model resulted in cash flow from operations in 2020 of over $73 million, enabling us to reduce our debt by $48 million while also purchasing over 440,000 shares for $17.7 million for an average price of approximately $40 per share. Given our strong balance sheet and much improved cash flow, we are well positioned for the future.”

GUIDANCE:

Universal Electronics sees Q1 2021 EPS of $0.83-$0.93, versus the consensus of $0.93. Universal Electronics sees Q1 2021 revenue of $150-160 million, versus the consensus of $163.33 million.

For the first quarter of 2021, the company expects GAAP net sales to range between $150 million and $160 million, compared to $151.8 million in the first quarter of 2020. GAAP earnings per diluted share for the first quarter of 2021 are expected to range from $0.40 to $0.50, compared to GAAP earnings of $0.41 in the first quarter of 2020.

For the first quarter of 2021, the company expects Adjusted Non-GAAP net sales to range between $150 million and $160 million, compared to $152.0 million in the first quarter of 2020. Adjusted Non-GAAP earnings per diluted share are expected to range from $0.83 to $0.93 compared to Adjusted Non-GAAP earnings per diluted share of $0.81 in the first quarter of 2020. The first quarter 2021 Adjusted Non-GAAP earnings per diluted share estimate excludes $0.43 per share related to, among other things, excess manufacturing overhead costs, stock-based compensation, amortization of acquired intangibles, changes in contingent consideration relating to acquisitions, litigation costs, foreign currency gains and losses and the related tax impact of these adjustments.

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