Universal Electronics (UEIC) has reported a 95.63 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $0.12 million, or $0.01 a share in the quarter, compared with $2.72 million, or $0.19 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $9.53 million, or $0.65 a share compared with $7.27 million or $0.50 a share, a year ago. Revenue during the quarter grew 7.13 percent to $161.41 million from $150.66 million in the previous year period. Gross margin for the quarter expanded 43 basis points over the previous year period to 25.42 percent. Operating margin for the quarter stood at negative 0.23 percent as compared to a positive 2.02 percent for the previous year period.
Operating loss for the quarter was $0.36 million, compared with an operating income of $3.04 million in the previous year period.
However, the adjusted operating income for the quarter stood at $11.76 million compared to $9.37 million in the prior year period. At the same time, adjusted operating margin improved 106 basis points in the quarter to 7.28 percent from 6.22 percent in the last year period.
Paul Arling, UEI's chairman and chief executive officer stated, "2017 is off to a strong start. The continued rollout of advanced remote control technologies and the proliferation of connected devices supported continued strength in our subscription broadcasting, consumer electronics OEM and wireless home security businesses. With our broad portfolio of innovative home control solutions, we have continued to deepen existing customer relationships while also adding new ones - in both existing and new markets. As we announced this morning, we acquired RCS Technology and its portfolio of energy management and control products. This transaction builds on our existing business in the smart home, enables us to provide our customers with additional connected home capabilities and expands new customer acquisition opportunities in the residential, commercial and hospitality markets."
For the second-quarter 201, Universal Electronics expects revenue to be in the range of $171 million to $179 million. The company expects adjusted revenue to be in the range of $172 million to $180 million. The company projects diluted earnings per share to be in the range of $0.31 to $0.41. On an adjusted basis, the company projects diluted earnings per share to be in the range of $0.72 to $0.82.
Operating cash flow turns negative
Universal Electronics has spent $7.93 million cash to meet operating activities during the quarter as against cash inflow of $3.14 million in the last year period. The company has spent $6.87 million cash to meet investing activities during the quarter as against cash outgo of $8.04 million in the last year period.
Cash flow from financing activities was $26.86 million for the quarter, up 202.97 percent or $18 million, when compared with the last year period.
Cash and cash equivalents stood at $62.65 million as on Mar. 31, 2017, up 11.73 percent or $6.58 million from $56.08 million on Mar. 31, 2016.
Working capital declines
Universal Electronics has witnessed a decline in the working capital over the last year. It stood at $93.90 million as at Mar. 31, 2017, down 10.13 percent or $10.59 million from $104.49 million on Mar. 31, 2016. Current ratio was at 1.39 as on Mar. 31, 2017, down from 1.52 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 50 days for the quarter from 97 days for the last year period. Days sales outstanding were almost stable at 71 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 49 days for the quarter compared with 97 days for the previous year period. At the same time, days payable outstanding was almost stable at 70 days for the quarter, when compared with the previous year period.
Debt increases substantially
Universal Electronics has witnessed an increase in total debt over the last one year. It stood at $88 million as on Mar. 31, 2017, up 51.76 percent or $30.01 million from $57.99 million on Mar. 31, 2016. Universal Electronics has witnessed an increase in short-term debt over the last one year. It stood at $88 million as on Mar. 31, 2017, up 51.76 percent or $30.01 million from $57.99 million on Mar. 31, 2016. Total debt was 16.33 percent of total assets as on Mar. 31, 2017, compared with 11.86 percent on Mar. 31, 2016. Debt to equity ratio was at 0.32 as on Mar. 31, 2017, up from 0.22 as on Mar. 31, 2016.
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