- 2019 Guidance to Deliver Strongest Adjusted Net Sales and EPS in the Company's 30-plus Year History -

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Universal Electronics Inc. (UEI), (NASDAQ: UEIC) reported financial results for the three and nine months ended September 30, 2019.

“We are delighted to report record results and are positioned to deliver the strongest year in our history,” said Paul Arling, UEI’s chairman and CEO. “Our mission to lead sensing and control technologies for the smart home remains consistent and drives our team strategy. Our investments to enhance our competitive position, enter new markets, attract new customers, and improve account service are coming to fruition. As UEI continues to redefine what remote wireless devices can do, we are adding more customers in traditional markets such as cable, satellite, and consumer electronics as well as extending our reach into other industries like home automation and telecom. Our customers are increasingly implementing new programs, and, in recent quarters, voice-enabled, advanced products are gaining significant traction. We believe these trends will continue to fuel our long-term, profitable growth.”

Financial Results for the Three Months Ended September 30: 2019 Compared to 2018



  • GAAP net sales were $200.7 million, compared to $182.7 million; Adjusted Non-GAAP net sales were $200.9 million, compared to $182.7 million.


  • GAAP gross margins were 23.2%, compared to 22.1%; Adjusted Non-GAAP gross margins were 26.8%, compared to 24.6%.


  • GAAP operating income was $6.1 million, compared to $4.7 million; Adjusted Non-GAAP operating income was $18.7 million, compared to $13.8 million.


  • GAAP net income was $2.7 million, or $0.19 per share, compared to $1.0 million or $0.07 per share; Adjusted Non-GAAP net income was $14.3 million, or $1.01 per diluted share, compared to $11.2 million, or $0.80 per diluted share.


  • At September 30, 2019, cash and cash equivalents were $54.7 million.

Bryan Hackworth, UEI’s CFO, stated, “The world is moving toward advanced products, and we are filling the demand. The continued adoption of our advanced platforms in subscription broadcasting and consumer electronics contributed to net sales in the third quarter of 2019 growing 10% compared to third quarter 2018. As planned, our operational performance was materially better in the third quarter 2019 as we continue to gain more experience at our manufacturing facility in Mexico.”

Financial Outlook

For the fourth quarter of 2019, the company expects GAAP net sales to range between $173 million and $183 million, compared to $170.3 million in the fourth quarter of 2018. GAAP earnings per diluted share for the fourth quarter of 2019 are expected to range from $0.30 to $0.40, compared to GAAP loss per diluted share of $0.80 in the fourth quarter of 2018.

For the fourth quarter of 2019, the company expects Adjusted Non-GAAP net sales to range between $173 million and $183 million, compared to $168.3 million in the fourth quarter of 2018. Adjusted Non-GAAP earnings per diluted share are expected to range from $0.79 to $0.89, compared to Adjusted Non-GAAP earnings per diluted share of $0.84 in the fourth quarter of 2018. The fourth quarter 2019 Adjusted Non-GAAP earnings per diluted share estimate excludes $0.49 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.

Conference Call Information

UEI’s management team will hold a conference call today, Thursday, November 7, 2019 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its third quarter 2019 earnings results, review recent activity and answer questions. To access the call in the U.S. please dial 877-843-0414, and for international calls dial 315-625-3071 approximately 10 minutes prior to the start of the conference. The conference ID is 2754667. The conference call will also be broadcast live at www.uei.com where it will be available for replay for one year. In addition, a replay will be available via telephone for two business days beginning two hours after the call. To listen to the replay, in the U.S. please dial 855-859-2056, and internationally dial 404-537-3406. The access code is 2754667.

Use of Non-GAAP Financial Metrics

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, UEI provides Adjusted Non-GAAP information as additional information for its operating results. References to Adjusted Non-GAAP information are to non-GAAP financial measures. These measures are not required by, in accordance with, or an alternative for, GAAP and may be different from non-GAAP financial measures used by other companies. UEI’s management uses these measures for reviewing the financial results of UEI, for budget planning purposes, and for making operational and financial decisions and believes that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, they help investors evaluate UEI’s core operating and financial performance and business trends consistent with how management evaluates such performance and trends. Additionally, management believes these measures facilitate comparisons with the core operating and financial results and business trends of competitors and other companies.

Adjusted Non-GAAP net sales is defined as net sales excluding the revenue impact of the additional Section 301 U.S. tariffs on products manufactured in China and imported into the U.S. and the impact of stock-based compensation for performance-based warrants. Adjusted Non-GAAP gross profit is defined as gross profit excluding the impact of the additional Section 301 U.S. tariffs on products manufactured in China and imported into the U.S. and costs of implementing countermeasures to mitigate this impact, excess manufacturing overhead and factory transition costs, stock-based compensation expense, depreciation expense related to the increase in fixed assets from cost to fair market value resulting from acquisitions and amortization of intangibles acquired. Adjusted Non-GAAP operating expenses are defined as operating expenses excluding costs incurred related to implementing countermeasures to mitigate the impact of the additional Section 301 U.S. tariffs on products manufactured in China and imported into the U.S., stock-based compensation expense, amortization of intangibles acquired, changes in contingent consideration related to acquisitions and employee related restructuring and other costs. Adjusted Non-GAAP net income is defined as net income excluding the aforementioned items, foreign currency gains and losses, the net gain recognized on the sale of the company's Guangzhou factory, the related tax effects of all adjustments and adjustments to certain deferred tax assets resulting from tax incentives at one of our China factories. Adjusted Non-GAAP diluted earnings per share is calculated using Adjusted Non-GAAP net income. A reconciliation of these financial measures to the most directly comparable GAAP financial measures is included at the end of this press release.

About Universal Electronics

Universal Electronics Inc. (NASDAQ: UEIC) is the worldwide leader in universal control and sensing technologies for the smart home. For more information, please visit www.uei.com/about.

Note on Forward-looking Statements

This press release and accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including net sales, profit margin and earnings trends, estimates and assumptions; our expectations about new product introductions; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those we identify below and other risk factors that we identify in our most recent annual report on Form 10-K and the periodic reports filed thereafter. Risks that could affect forward-looking statements in this press release include our ability to enter new markets, attract new customers, and retain and grow existing customers through our ability to anticipate the needs and wants of our customers, and timely develop and deliver products and technologies that will be accepted by our customers, including with our voice-enabled advanced control products; the continuation of the ordering pattern of our customers as anticipated by management; management's ability to manage its business to achieve its growth, net sales, margins, and earnings as guided and as anticipated, including management’s ability to improve operating costs and efficiencies at acceptable levels through cost containment efforts including moving our administrative, operations, and manufacturing facilities; management’s ability to complete the transition of certain of its manufacturing operations to our Mexico facility; and effects that changes in laws, regulations and policies may have on our business including the impact of trade regulations pertaining to importation of our products and the tariffs imposed upon them. Any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release. We make these forward-looking statements as of November 7, 2019. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.


UNIVERSAL ELECTRONICS INC.



CONSOLIDATED BALANCE SHEETS



(In thousands, except share-related data)



(Unaudited)


 


 



 



September 30, 2019



 



December 31, 2018



ASSETS



 



 



 



 



Current assets:



 



 



 



 



Cash and cash equivalents



 



$



54,729



 



 



$



53,207



 



Accounts receivable, net



 



157,138



 



 



144,689



 



Contract assets



 



21,721



 



 



25,572



 



Inventories, net



 



137,522



 



 



144,350



 



Prepaid expenses and other current assets



 



6,061



 



 



11,638



 



Income tax receivable



 



3,392



 



 



997



 



Total current assets



 



380,563



 



 



380,453



 



Property, plant and equipment, net



 



91,067



 



 



95,840



 



Goodwill



 



48,404



 



 



48,485



 



Intangible assets, net



 



20,487



 



 



24,370



 



Operating lease right-of-use assets



 



19,890



 



 






 



Deferred income taxes



 



2,719



 



 



1,833



 



Other assets



 



2,357



 



 



4,615



 



Total assets



 



$



565,487



 



 



$



555,596



 



LIABILITIES AND STOCKHOLDERS’ EQUITY



 



 



 



 



Current liabilities:



 



 



 



 



Accounts payable



 



$



103,842



 



 



$



107,282



 



Line of credit



 



88,000



 



 



101,500



 



Accrued compensation



 



40,343



 



 



33,965



 



Accrued sales discounts, rebates and royalties



 



9,265



 



 



9,574



 



Accrued income taxes



 



3,560



 



 



3,524



 



Other accrued liabilities



 



32,659



 



 



24,011



 



Total current liabilities



 



277,669



 



 



279,856



 



Long-term liabilities:



 



 



 



 



Operating lease obligations



 



15,580



 



 






 



Contingent consideration



 



4,732



 



 



8,435



 



Deferred income taxes



 



4,195



 



 



930



 



Income tax payable



 



1,647



 



 



1,647



 



Other long-term liabilities



 



13



 



 



1,768



 



Total liabilities



 



303,836



 



 



292,636



 



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; 24,099,047 and 23,932,703 shares issued on September 30, 2019 and December 31, 2018, respectively



 



241



 



 



239



 



Paid-in capital



 



285,487



 



 



276,103



 



Treasury stock, at cost, 10,170,862 and 10,116,459 shares on September 30, 2019 and December 31, 2018, respectively



 



(277,630



)



 



(275,889



)



Accumulated other comprehensive income (loss)



 



(25,838



)



 



(20,281



)



Retained earnings



 



279,391



 



 



282,788



 



Total stockholders’ equity



 



261,651



 



 



262,960



 



Total liabilities and stockholders’ equity



 



$



565,487



 



 



$



555,596



 



UNIVERSAL ELECTRONICS INC.



CONSOLIDATED STATEMENTS OF OPERATIONS



(In thousands, except per share amounts)



(Unaudited)


 


 



 



Three Months Ended September 30,



 



Nine Months Ended September 30,



 



 



2019



 



2018



 



2019



 



2018



Net sales



 



$



200,724



 



 



$



182,717



 



 



$



578,783



 



 



$



509,938



 



Cost of sales



 



154,245



 



 



142,401



 



 



458,437



 



 



405,661



 



Gross profit



 



46,479



 



 



40,316



 



 



120,346



 



 



104,277



 



Research and development expenses



 



7,930



 



 



5,593



 



 



21,884



 



 



17,703



 



Selling, general and administrative expenses



 



32,422



 



 



29,994



 



 



94,598



 



 



90,811



 



Operating income (loss)



 



6,127



 



 



4,729



 



 



3,864



 



 



(4,237



)



Interest income (expense), net



 



(784



)



 



(1,177



)



 



(3,088



)



 



(3,526



)



Gain on sale of Guangzhou factory



 






 



 






 



 






 



 



36,978



 



Other income (expense), net



 



(148



)



 



(2,282



)



 



(426



)



 



(3,951



)



Income (loss) before provision for income taxes



 



5,195



 



 



1,270



 



 



350



 



 



25,264



 



Provision for income taxes



 



2,526



 



 



311



 



 



3,747



 



 



2,233



 



Net income (loss)



 



$



2,669



 



 



$



959



 



 



$



(3,397



)



 



$



23,031



 



 



 



 



 



 



 



 



 



 



Earnings (loss) per share:



 



 



 



 



 



 



Basic



 



$



0.19



 



 



$



0.07



 



 



$



(0.25



)



 



$



1.65



 



Diluted



 



$



0.19



 



 



$



0.07



 



 



$



(0.25



)



 



$



1.63



 



Shares used in computing earnings (loss) per share:



 



 



 



 



 



 



 



 



Basic



 



13,894



 



 



13,836



 



 



13,861



 



 



13,997



 



Diluted



 



14,170



 



 



13,959



 



 



13,861



 



 



14,116



 



UNIVERSAL ELECTRONICS INC.



CONSOLIDATED STATEMENTS OF CASH FLOWS



(In thousands)



(Unaudited)


 


 



 



Nine Months Ended September 30,



 



 



2019



 



2018



Cash provided by (used for) operating activities:



 



 



 



 



Net income (loss)



 



$



(3,397



)



 



$



23,031



 



Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:



 



 



 



 



Depreciation and amortization



 



23,734



 



 



25,264



 



Provision for doubtful accounts



 



275



 



 



2



 



Provision for inventory write-downs



 



11,222



 



 



6,450



 



Gain on sale of Guangzhou factory



 






 



 



(36,978



)



Deferred income taxes



 



2,273



 



 



(1,370



)



Shares issued for employee benefit plan



 



876



 



 



880



 



Employee and director stock-based compensation



 



6,718



 



 



6,808



 



Performance-based common stock warrants



 



1,381



 



 



747



 



Impairment of China factory equipment



 






 



 



2,886



 



Changes in operating assets and liabilities:



 



 



 



 



Accounts receivable and contract assets



 



(11,117



)



 



(1,289



)



Inventories



 



(6,819



)



 



(9,535



)



Prepaid expenses and other assets



 



5,507



 



 



(4,194



)



Accounts payable and accrued liabilities



 



11,686



 



 



(13,142



)



Accrued income taxes



 



(2,418



)



 



(4,134



)



Net cash provided by (used for) operating activities



 



39,921



 



 



(4,574



)



Cash provided by (used for) investing activities:



 



 



 



 



Proceeds from sale of Guangzhou factory



 






 



 



51,291



 



Acquisitions of property, plant and equipment



 



(15,854



)



 



(16,838



)



Refund of deposit received toward sale of Guangzhou factory



 






 



 



(5,053



)



Acquisitions of intangible assets



 



(1,505



)



 



(1,911



)



Net cash provided by (used for) investing activities



 



(17,359



)



 



27,489



 



Cash provided by (used for) financing activities:



 



 



 



 



Borrowings under line of credit



 



57,500



 



 



48,000



 



Repayments on line of credit



 



(71,000



)



 



(82,500



)



Proceeds from stock options exercised



 



411



 



 



864



 



Treasury stock purchased



 



(1,741



)



 



(12,564



)



Contingent consideration payments in connection with business combinations



 



(4,251



)



 



(3,858



)



Net cash provided by (used for) financing activities



 



(19,081



)



 



(50,058



)



Effect of exchange rate changes on cash, cash equivalents and restricted cash



 



(1,959



)



 



1,799



 



Net increase (decrease) in cash, cash equivalents and restricted cash



 



1,522



 



 



(25,344



)



Cash, cash equivalents and restricted cash at beginning of year



 



53,207



 



 



67,339



 



Cash, cash equivalents and restricted cash at end of period



 



$



54,729



 



 



$



41,995



 



 



 



 



 



 



Supplemental cash flow information:



 



 



 



 



Income taxes paid



 



$



5,608



 



 



$



5,453



 



Interest paid



 



3,479



 



 



3,722



 



UNIVERSAL ELECTRONICS INC.



RECONCILIATION OF ADJUSTED NON-GAAP FINANCIAL RESULTS



(In thousands, except per share amounts)



(Unaudited)


 


 



 



Three Months Ended September 30,



 



Nine Months Ended September 30,



 



 



2019



 



2018



 



2019



 



2018



Net sales:



 



 



 



 



 



 



 



 



Net sales - GAAP



 



$



200,724



 



 



$



182,717



 



 



$



578,783



 



 



$



509,938



 



Section 301 U.S. tariffs on goods imported from China (1)



 



(549



)



 



(399



)



 



(3,195



)



 



(399



)



Stock-based compensation for performance-based warrants



 



711



 



 



405



 



 



1,381



 



 



747



 



Adjusted Non-GAAP net sales



 



$



200,886



 



 



$



182,723



 



 



$



576,969



 



 



$



510,286



 



 



 



 



 



 



 



 



 



 



Cost of sales:



 



 



 



 



 



 



 



 



Cost of sales - GAAP



 



$



154,245



 



 



$



142,401



 



 



$



458,437



 



 



$



405,661



 



Section 301 U.S. tariffs on goods imported from China (1)



 



(3,954



)



 



(1,084



)



 



(14,461



)



 



(1,084



)



Excess manufacturing overhead and factory transition costs (2)



 



(3,014



)



 



(3,336



)



 



(16,334



)



 



(13,925



)



Adjustments to acquired tangible assets (3)



 



(121



)



 



(158



)



 



(361



)



 



(474



)



Stock-based compensation expense



 



(37



)



 



(23



)



 



(102



)



 



(63



)



Amortization of acquired intangible assets



 






 



 






 



 






 



 



(37



)



Adjusted Non-GAAP cost of sales



 



147,119



 



 



137,800



 



 



427,179



 



 



390,078



 



Adjusted Non-GAAP gross profit



 



$



53,767



 



 



$



44,923



 



 



$



149,790



 



 



$



120,208



 



 



 



 



 



 



 



 



 



 



Gross margin:



 



 



 



 



 



 



 



 



Gross margin - GAAP



 



23.2



%



 



22.1



%



 



20.8



%



 



20.4



%



Section 301 U.S. tariffs on goods imported from China (1)



 



1.8



%



 



0.4



%



 



2.1



%



 



0.2



%



Stock-based compensation for performance-based warrants



 



0.3



%



 



0.2



%



 



0.2



%



 



0.1



%



Excess manufacturing overhead and factory transition costs (2)



 



1.4



%



 



1.8



%



 



2.8



%



 



2.8



%



Adjustments to acquired tangible assets (3)



 



0.1



%



 



0.1



%



 



0.1



%



 



0.1



%



Stock-based compensation expense



 



0.0



%



 



0.0



%



 



0.0



%



 



0.0



%



Amortization of acquired intangible assets



 






%



 






%



 






%



 



0.0



%



Adjusted Non-GAAP gross margin



 



26.8



%



 



24.6



%



 



26.0



%



 



23.6



%



 



 



 



 



 



 



 



 



 



Operating expenses:



 



 



 



 



 



 



 



 



Operating expenses - GAAP



 



$



40,352



 



 



$



35,587



 



 



$



116,482



 



 



$



108,514



 



Section 301 U.S. tariffs on goods imported from China (1)



 



(247



)



 



(200



)



 



(1,786



)



 



(200



)



Stock-based compensation expense



 



(2,490



)



 



(2,117



)



 



(6,615



)



 



(6,746



)



Amortization of acquired intangible assets



 



(1,398



)



 



(1,400



)



 



(4,200



)



 



(4,201



)



Change in contingent consideration



 



(763



)



 



(300



)



 



(1,769



)



 



(558



)



Employee related restructuring and other costs



 



(364



)



 



(492



)



 



(1,385



)



 



(1,158



)



Adjusted Non-GAAP operating expenses



 



$



35,090



 



 



$



31,078



 



 



$



100,727



 



 



$



95,651



 



UNIVERSAL ELECTRONICS INC.



RECONCILIATION OF ADJUSTED NON-GAAP FINANCIAL RESULTS



(In thousands, except per share amounts)



(Unaudited)


 


 



 



Three Months Ended September 30,



 



Nine Months Ended September 30,



 



 



2019



 



2018



 



2019



 



2018



Operating income (loss):



 



 



 



 



 



 



 



 



Operating income (loss) - GAAP



 



$



6,127



 



 



$



4,729



 



 



$



3,864



 



 



$



(4,237



)



Section 301 U.S. tariffs on goods imported from China (1)



 



3,652



 



 



885



 



 



13,052



 



 



885



 



Stock-based compensation for performance-based warrants



 



711



 



 



405



 



 



1,381



 



 



747



 



Excess manufacturing overhead and factory transition costs (2)



 



3,014



 



 



3,336



 



 



16,334



 



 



13,925



 



Adjustments to acquired tangible assets (3)



 



121



 



 



158



 



 



361



 



 



474



 



Stock-based compensation expense



 



2,527



 



 



2,140



 



 



6,717



 



 



6,809



 



Amortization of acquired intangible assets



 



1,398



 



 



1,400



 



 



4,200



 



 



4,238



 



Change in contingent consideration



 



763



 



 



300



 



 



1,769



 



 



558



 



Employee related restructuring and other costs



 



364



 



 



492



 



 



1,385



 



 



1,158



 



Adjusted Non-GAAP operating income



 



$



18,677



 



 



$



13,845



 



 



$



49,063



 



 



$



24,557



 



 



 



 



 



 



 



 



 



 



Adjusted pro forma operating income as a percentage of net sales



 



9.3



%



 



7.6



%



 



8.5



%



 



4.8



%



 



 



 



 



 



 



 



 



 



Net income (loss):



 



 



 



 



 



 



 



 



Net income (loss) - GAAP



 



$



2,669



 



 



$



959



 



 



$



(3,397



)



 



$



23,031



 



Section 301 U.S. tariffs on goods imported from China (1)



 



3,652



 



 



885



 



 



13,052



 



 



885



 



Stock-based compensation for performance-based warrants



 



711



 



 



405



 



 



1,381



 



 



747



 



Excess manufacturing overhead and factory transition costs (2)



 



3,014



 



 



3,336



 



 



16,334



 



 



13,925



 



Adjustments to acquired tangible assets (3)



 



121



 



 



158



 



 



361



 



 



474



 



Stock-based compensation expense



 



2,527



 



 



2,140



 



 



6,717



 



 



6,809



 



Amortization of acquired intangible assets



 



1,398



 



 



1,400



 



 



4,200



 



 



4,238



 



Change in contingent consideration



 



763



 



 



300



 



 



1,769



 



 



558



 



Employee related restructuring and other costs



 



364



 



 



492



 



 



1,385



 



 



1,158



 



Foreign currency (gain) loss



 



321



 



 



2,308



 



 



670



 



 



4,014



 



Gain on sale of Guangzhou factory



 






 



 






 



 






 



 



(36,978



)



Income tax provision on adjustments



 



(1,268



)



 



(1,871



)



 



(6,939



)



 



(1,630



)



Other income tax adjustments (4)



 






 



 



694



 



 



1,772



 



 



694



 



Adjusted Non-GAAP net income



 



$



14,272



 



 



$



11,206



 



 



$



37,305



 



 



$



17,925



 



 



 



 



 



 



 



 



 



 



Diluted shares used in computing earnings (loss) per share:



 



 



 



 



 



 



 



 



GAAP



 



14,170



 



 



13,959



 



 



13,861



 



 



14,116



 



Adjusted Non-GAAP



 



14,170



 



 



13,959



 



 



14,049



 



 



14,116



 



 



 



 



 



 



 



 



 



 



Diluted earnings (loss) per share:



 



 



 



 



 



 



 



 



Diluted earnings (loss) per share - GAAP



 



$



0.19



 



 



$



0.07



 



 



$



(0.25



)



 



$



1.63



 



Total adjustments



 



$



0.82



 



 



$



0.73



 



 



$



2.90



 



 



$



(0.36



)



Adjusted Non-GAAP diluted earnings per share



 



$



1.01



 



 



$



0.80



 



 



$



2.66



 



 



$



1.27



 



(1)



Includes incremental revenues and costs directly attributable to the additional Section 301 U.S. tariffs implemented in 2018 on goods manufactured in China and imported into the U.S. as well as costs incurred for the movement of factory equipment and other costs of countermeasures undertaken by the company to modify its manufacturing operations and supply chain.



(2)



The three and nine months ended September 30, 2019 include excess manufacturing overhead costs incurred as a result of expanding our manufacturing capacity in Mexico and transitioning certain of our manufacturing activities from China to Mexico. In addition, included are direct manufacturing inefficiencies incurred in Mexico as we were still in a start-up phase through the third quarter of 2019. The three and nine months ended September 30, 2018 include excess manufacturing overhead costs incurred as a result of expanding our manufacturing capacity in Mexico and transitioning certain of our manufacturing activities from China to Mexico. The nine months ended September 30, 2018 includes excess costs incurred resulting from factory underutilization associated with ceasing manufacturing activities while transitioning our Asia operations onto our new global ERP system, which went live in Asia in April 2018. Additionally, the nine months ended September 30, 2018 includes $4.8 million of asset write-downs associated with the closure and sale of our Guangzhou, China factory.



(3)



Consists of depreciation related to the mark-up from cost to fair value of fixed assets acquired in business combinations.



(4)



The nine months ended September 30, 2019 and three and nine months ended September 30, 2018 include net deferred tax asset adjustments resulting from a lower statutory tax rate due to tax incentives at one of our China factories.


 

Contacts

Paul Arling, Chairman & CEO, UEI 480.530.3000; Kirsten Chapman, LHA Investor Relations 415.433.3777