- Posts Record Quarterly Sales of $83.2 Million in the Third Quarter of 2009 -

CYPRESS, Calif. — (BUSINESS WIRE) — November 5, 2009 — Universal Electronics Inc. (UEI), (NASDAQ: UEIC) reported financial results for the third quarter ended September 30, 2009.

“The third quarter of 2009 marked the first time that the company has reported more than $80 million in sales during a quarter, which is positive particularly during these difficult economic times,” stated Paul Arling, UEI's Chairman and CEO. “In addition, sales over the trailing four quarters have climbed over the $310 million mark for the first time in our company’s 23-year history. This growth has been driven by our continued focus and execution on innovation leading to key customer wins as well as expanding relationships with satisfied existing customers and growth into new markets. One example of this innovation occurred in September when we began supplying Onkyo Corporation with our Quickset interface and XMP-2™ technology for its latest line of audio video receivers. Looking ahead, we are excited about 2010 and intend to demonstrate an array of new control technology advances at the Consumer Electronics Show in January.”

Financial Results for the Quarter Ended September 30: 2009 Compared to 2008

• Net sales were $83.2 million, compared to $76.5 million.
  • Business Category revenue was $67.0 million, compared to $61.3 million. The Business Category contributed 81% of total net sales, compared to 80%.
  • Consumer Category revenue was $16.2 million, compared to $15.2 million. The Consumer Category contributed 19% of total net sales, compared to 20%.
• Gross margins were 31.3 %, compared to 32.6%.
• Total operating expenses were $19.4 million, compared to $19.0 million.
• Operating income was $6.6 million, compared to $5.9 million.
• Interest income was $110,000, compared to $859,000.
• Net income was $4.2 million, or $0.30 per diluted share, compared to $4.0 million, or $0.28 per diluted share.
• At September 30, 2009, the cash and cash equivalents and term deposit balance was $79.2 million.

Bryan Hackworth, UEI’s CFO, commented “The increase in revenue for the quarter reflects our strong market position. In addition, we have leveraged our operating expenses as evidenced by the 140 basis point improvement in total operating expenses as a percent of revenue for the quarter. Operating expenses were 23.4% of revenue for the third quarter 2009, compared to 24.8% in the same period last year.”

Financial Results for the Nine-months Ended September 30: 2009 Compared to 2008

• Net sales were $232.6 million, compared to $208.4 million.
• Gross margins were 31.4%, compared to 34.0%.
• Total operating expenses were $59.1 million, compared to $57.9 million.
• Operating income was $13.9 million, compared to $13.0 million.
• Interest income was $376,000, compared to $2.6 million.
• Net income was $8.8 million, or $0.63 per diluted share, compared to $10.0 million, or $0.68 per diluted share.

Financial Outlook

For the fourth quarter of 2009, net sales are expected to range between $81 million and $84 million, compared to $78.7 million in the fourth quarter of 2008. The company anticipates gross margins for the fourth quarter of 2009 to be approximately 33.5% of sales, plus or minus one point, compared to 32.2% of sales in the fourth quarter of 2008. For the fourth quarter of 2009, operating expenses are expected to range from $19.0 million to $19.6 million, compared to fourth quarter 2008 operating expenses of $17.5 million. Earnings per diluted share for the fourth quarter of 2009 are expected to range from $0.38 to $0.42, compared to earnings per diluted share of $0.42 in the fourth quarter of 2008.

For the full 2009 year, net sales are expected to range between $313 million and $317 million, compared to $287.1 million in 2008. For 2009, operating expenses are expected to range from $78 million to $79 million, compared to 2008 operating expenses of $75.4 million. Earnings per diluted share for 2009 are expected to range from $1.02 to $1.06, compared to earnings per diluted share of $1.09 in 2008.

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