Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 06, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | UNIVERSAL ELECTRONICS INC | |
Entity Central Index Key | 101,984 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 13,830,823 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 59,433 | $ 62,438 |
Restricted cash | 0 | 4,901 |
Accounts receivable, net | 143,662 | 151,578 |
Contract assets | 28,253 | 0 |
Inventories, net | 147,186 | 162,589 |
Prepaid expenses and other current assets | 14,312 | 11,687 |
Assets held for sale | 0 | 12,517 |
Income tax receivable | 2,509 | 1,587 |
Total current assets | 395,355 | 407,297 |
Property, plant, and equipment, net | 107,039 | 110,962 |
Goodwill | 48,522 | 48,651 |
Intangible assets, net | 26,708 | 29,041 |
Deferred income taxes | 7,152 | 7,913 |
Other assets | 4,326 | 4,566 |
Total assets | 589,102 | 608,430 |
Current liabilities: | ||
Accounts payable | 116,590 | 119,165 |
Line of credit | 111,000 | 138,000 |
Accrued compensation | 32,964 | 34,499 |
Accrued sales discounts, rebates and royalties | 7,987 | 8,882 |
Accrued income taxes | 6,665 | 3,670 |
Other accrued liabilities | 21,050 | 28,719 |
Total current liabilities | 296,256 | 332,935 |
Long-term liabilities: | ||
Long-term contingent consideration | 9,730 | 13,400 |
Deferred income taxes | 1,530 | 4,423 |
Income tax payable | 2,520 | 2,520 |
Other long-term liabilities | 1,581 | 1,603 |
Total liabilities | 311,617 | 354,881 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 5,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.01 par value, 50,000,000 shares authorized; 23,861,547 and 23,760,434 shares issued on June 30, 2018 and December 31, 2017, respectively | 239 | 238 |
Paid-in capital | 271,500 | 265,195 |
Treasury stock, at cost, 9,927,853 and 9,702,874 shares on June 30, 2018 and December 31, 2017, respectively | (269,179) | (262,065) |
Accumulated other comprehensive income (loss) | (18,011) | (16,599) |
Retained earnings | 292,936 | 266,780 |
Total stockholders' equity | 277,485 | 253,549 |
Total liabilities and stockholders' equity | $ 589,102 | $ 608,430 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Preferred stock, $0.01 par value, 5,000,000 shares authorized; none issued or outstanding | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, $0.01 par value, 50,000,000 shares authorized; 23,861,547 and 23,760,434 shares issued on June 30, 2018 and December 31, 2017, respectively | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 23,861,547 | 23,760,434 |
Treasury stock, at cost, 9,927,853 and 9,702,874 shares on June 30, 2018 and December 31, 2017, respectively | ||
Treasury stock, shares (in shares) | 9,927,853 | 9,702,874 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 162,523 | $ 177,580 | $ 327,221 | $ 338,986 |
Cost of sales | 135,764 | 133,829 | 263,260 | 254,201 |
Gross profit | 26,759 | 43,751 | 63,961 | 84,785 |
Research and development expenses | 6,059 | 4,946 | 12,110 | 10,444 |
Factory transition restructuring charges | 0 | 449 | 0 | 5,699 |
Selling, general and administrative expenses | 30,570 | 31,053 | 60,817 | 61,704 |
Operating income (loss) | (9,870) | 7,303 | (8,966) | 6,938 |
Interest income (expense), net | (1,279) | (562) | (2,349) | (955) |
Gain on sale of Guangzhou factory | 36,978 | 0 | 36,978 | 0 |
Other income (expense), net | (1,082) | (642) | (1,669) | (59) |
Income before provision for income taxes | 24,747 | 6,099 | 23,994 | 5,924 |
Provision for income taxes | 2,088 | 1,415 | 1,922 | 1,121 |
Net income | $ 22,659 | $ 4,684 | $ 22,072 | $ 4,803 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 1.61 | $ 0.33 | $ 1.57 | $ 0.33 |
Diluted (in dollars per share) | $ 1.60 | $ 0.32 | $ 1.55 | $ 0.33 |
Shares used in computing earnings per share: | ||||
Basic (in shares) | 14,070 | 14,404 | 14,078 | 14,427 |
Diluted (in shares) | 14,158 | 14,683 | 14,195 | 14,700 |
CONSOLIDATED COMPREHENSIVE INCO
CONSOLIDATED COMPREHENSIVE INCOME (LOSS) STATEMENTS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 22,659 | $ 4,684 | $ 22,072 | $ 4,803 |
Other comprehensive income: | ||||
Change in foreign currency translation adjustment | (5,058) | 608 | (1,412) | 1,991 |
Comprehensive income | $ 17,601 | $ 5,292 | $ 20,660 | $ 6,794 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash provided by (used for) operating activities: | ||
Net income | $ 22,072 | $ 4,803 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||
Depreciation and amortization | 16,913 | 15,954 |
Provision for doubtful accounts | 2 | 81 |
Provision for inventory write-downs | 5,078 | 1,419 |
Gain on sale of Guangzhou factory | (36,978) | 0 |
Deferred income taxes | (557) | (1,035) |
Shares issued for employee benefit plan | 590 | 591 |
Employee and director stock-based compensation | 4,669 | 5,555 |
Performance-based common stock warrants | 343 | 1,263 |
Impairment of China factory equipment | 2,763 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable and contract assets | 6,164 | (20,427) |
Inventories | (16,061) | (11,249) |
Prepaid expenses and other assets | (2,765) | (121) |
Accounts payable and accrued liabilities | (7,329) | (15) |
Accrued income taxes | 1,219 | (1,691) |
Net cash provided by (used for) operating activities | (3,877) | (4,872) |
Cash provided by (used for) investing activities: | ||
Proceeds from sale of Guangzhou factory | 51,291 | 0 |
Acquisitions of property, plant, and equipment | (13,416) | (17,519) |
Refund of deposit received toward sale of Guangzhou factory | (5,053) | 0 |
Acquisitions of intangible assets | (1,248) | (765) |
Acquisition of net assets of Residential Control Systems, Inc. | 0 | (8,854) |
Net cash provided by (used for) investing activities | 31,574 | (27,138) |
Cash provided by (used for) financing activities: | ||
Borrowings under line of credit | 23,000 | 85,000 |
Repayments on line of credit | (50,000) | (42,987) |
Proceeds from stock options exercised | 704 | 842 |
Treasury stock purchased | (7,114) | (14,885) |
Contingent consideration payments in connection with business combinations | (3,858) | 0 |
Net cash provided by (used for) financing activities | (37,268) | 27,970 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 1,665 | (1,383) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (7,906) | (5,423) |
Cash, cash equivalents, and restricted cash at beginning of year | 67,339 | 59,834 |
Cash, cash equivalents, and restricted cash at end of period | 59,433 | 54,411 |
Supplemental cash flow information: | ||
Income taxes paid | 4,191 | 4,142 |
Interest paid | $ 2,525 | $ 981 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies In the opinion of management, the accompanying consolidated financial statements of Universal Electronics Inc. and its subsidiaries contain all the adjustments necessary for a fair presentation of financial position, results of operations and cash flows for the periods presented. All such adjustments are of a normal recurring nature and certain reclassifications have been made to prior year amounts in order to conform to the current year presentation. Information and footnote disclosures normally included in financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. As used herein, the terms "Company," "we," "us," and "our" refer to Universal Electronics Inc. and its subsidiaries, unless the context indicates to the contrary. Our results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures About Market Risk," and the "Financial Statements and Supplementary Data" included in Items 1A, 7, 7A, and 8, respectively, of our Annual Report on Form 10-K for the year ended December 31, 2017 . Estimates, Judgments and Assumptions The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates and assumptions, including those related to revenue recognition, allowances for sales returns and doubtful accounts, inventory valuation, our review for impairment of long-lived assets, intangible assets and goodwill, business combinations, income taxes, stock-based compensation expense and performance-based common stock warrants. Actual results may differ from these estimates and assumptions, and they may be adjusted as more information becomes available. Any adjustment may be material. Summary of Significant Accounting Policies We adopted Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers," and all related amendments as of January 1, 2018. The impact of this new guidance on our accounting policies and consolidated financial statements is also described below. There have been no other significant changes in our accounting policies during the three and six months ended June 30, 2018 compared to the significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2017 . Revenue Recognition Our performance obligations primarily arise from manufacturing and delivering universal control, sensing and automation products and AV accessories, which are sold through multiple channels, and intellectual property that is embedded in these products or licensed to others. These performance obligations are satisfied at a point in time or over time, as described below. Payment terms are typically on open credit terms consistent with industry practice and do not have significant financing components. Some contracts contain early payment discounts, which are recognized as a reduction to revenue if the customer typically meets the early payment conditions. Consideration may be variable based on indeterminate volumes. Effective January 1, 2018, revenue is recognized over time when the customer simultaneously receives and consumes the benefits provided by our performance, our performance creates or enhances an asset that the customer controls, or when our performance creates an asset with no alternative use to us (custom products) and we have an enforceable right to payment for performance completed to date, such as a firm order or other contractual commitment from the customer. An asset does not have an alternative use if we are unable to redirect the asset to another customer in the foreseeable future without significant rework. The method for measuring progress towards satisfying a performance obligation for a custom product is based on the costs incurred to date (cost-to-cost method). We believe that the costs associated with production are most closely aligned with the revenue associated with those products. We recognize revenue at a point in time if the criteria for recognizing revenue over time are not met, the title of the goods has transferred, and we have a present right to payment. We typically recognize revenue for the sale of tooling at a point in time, which is generally upon completion of the tooling and, if applicable, acceptance by the customer. A provision is recorded for estimated sales returns and allowances and is deducted from gross sales to arrive at net sales in the period the related revenue is recorded. These estimates are based on historical sales returns and allowances, analysis of credit memo data and other known factors. Actual returns and claims in any future period are inherently uncertain and thus may differ from our estimates. If actual or expected future returns and claims are significantly greater or lower than the reserves that we have established, we will record a reduction or increase to net revenue in the period in which we make such a determination. We accrue for discounts and rebates based on historical experience and our expectations regarding future sales to our customers. Accruals for discounts and rebates are recorded as a reduction to sales in the same period as the related revenue. Changes in such accruals may be required if future rebates and incentives differ from our estimates. We license our intellectual property including our patented technologies, trademarks, and database of control codes. When license fees are paid on a per-unit basis we record license revenue when our customers manufacture or ship a product incorporating our intellectual property and we have a present right to payment. When a fixed up-front license fee is received in exchange for the delivery of a particular database of infrared codes or the contract contains a minimum guarantee provision, we record revenue when delivery of the intellectual property has occurred. Tiered royalties are recorded on a straight-line basis according to the forecasted per-unit fees taking into account the pricing tiers. Contract assets represent revenue which has been recognized based on our accounting policies but for which the customer has not yet been invoiced and thus an account receivable has not yet been recorded. Under prior accounting standards, we recognized revenue on the sale of products when title of the goods had transferred, there was persuasive evidence of an arrangement (such as a purchase order from the customer), the sales price was fixed or determinable and collectability was reasonably assured. Revenue for term license fees were recognized on a straight-line basis over the effective term of the license when we could not reliably predict in which periods, within the term of the license, the licensee would benefit from the use of our patented inventions. Recently Adopted Accounting Pronouncements On January 1, 2018, we adopted ASU 2014-09 using the modified retrospective transition method. Under this method, we evaluated all contracts that were in effect at the beginning of 2018 as if those contracts had been accounted for under the new revenue standard based on the terms in effect as of the adoption date. Under the modified retrospective transition approach, periods prior to the adoption date were not adjusted and continue to be reported in accordance with historical U.S. GAAP. A cumulative catch-up adjustment was recorded to beginning retained earnings to reflect the impact of all existing arrangements under the new revenue standard. The cumulative effects of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASU 2014-09, were as follows: As reported Adjustments due to ASU 2014-09 Balance at Consolidated Balance Sheet (In thousands) 12/31/2017 1/1/2018 Contract assets $ — $ 29,759 $ 29,759 Inventories, net 162,589 (23,830 ) 138,759 Prepaid expenses and other current assets 11,687 (174 ) 11,513 Deferred income tax assets 7,913 (102 ) 7,811 Accounts payable and other current liabilities 332,935 1,528 334,463 Deferred income tax liabilities 4,423 20 4,443 Retained earnings 266,780 4,084 270,864 The following tables compare the reported consolidated balance sheet and statements of operations as of and for the three and six months ended June 30, 2018 , to pro forma amounts had the previous guidance been in effect. The guidance did not have a significant impact on the Company's unaudited condensed consolidated statement of cash flows. As of June 30, 2018 Consolidated Balance Sheet (In thousands) As reported Without Adoption of ASU 2014-09 Effect of Change Assets Contract assets $ 28,253 $ — $ 28,253 Inventories, net 147,186 169,855 (22,669 ) Prepaid expenses and other current assets 14,312 14,307 5 Deferred income taxes 7,152 7,250 (98 ) Liabilities and Equity Accounts payable and other current liabilities $ 296,256 $ 294,484 $ 1,772 Retained earnings 292,936 289,217 3,719 Three Months Ended June 30, 2018 Consolidated Statements of Operations (In thousands) As reported Without Adoption of ASU 2014-09 Effect of Change Net sales $ 162,523 $ 156,133 $ 6,390 Cost of sales 135,764 129,745 6,019 Selling, general and administrative expenses 30,570 30,427 143 Provision for income taxes 2,088 2,040 48 Net income 22,659 22,478 181 Earnings per share: Basic $ 1.61 $ 1.60 $ 0.01 Diluted $ 1.60 $ 1.59 $ 0.01 Six months ended June 30, 2018 Consolidated Statements of Operations (In thousands) As reported Without Adoption of ASU 2014-09 Effect of Change Net sales $ 327,221 $ 328,321 $ (1,100 ) Cost of sales 263,260 264,001 (741 ) Selling, general and administrative expenses 60,817 60,837 (20 ) Provision for income taxes 1,922 1,895 27 Net income 22,072 22,437 (365 ) Earnings per share: Basic $ 1.57 $ 1.59 $ (0.03 ) Diluted $ 1.55 $ 1.58 $ (0.03 ) Other Accounting Pronouncements In August 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments," which amends Accounting Standards Codification ("ASC") 230, "Statement of Cash Flows". This new guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain transactions are classified in the statement of cash flows. ASU 2016-15 is effective for fiscal periods beginning after December 15, 2017 and must be adopted retrospectively. The adoption of ASU 2016-15 did not have a material impact to the presentation of our consolidated statement of cash flows. In October 2016, the FASB issued ASU 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory," which changes the accounting for income tax consequences of intra-entity transfers of assets other than inventory. Current guidance prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. Under this new guidance, the income tax consequences of an intra-entity transfer of an asset other than inventory will be recognized when the transfer occurs. ASU 2016-16 is effective for fiscal periods beginning after December 15, 2017. The adoption of ASU 2016-16 did not have a material impact on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18,"Restricted Cash," which amends ASC 230, "Statement of Cash Flows." This new guidance addresses the classifications and presentation of changes in restricted cash in the statement of cash flows. ASU 2016-18 is effective for fiscal periods beginning after December 15, 2017 and must be adopted retrospectively. The adoption of ASU 2016-18 modified our current disclosures by reclassifying certain amounts within the consolidated statement of cash flows, but did not have a material effect on our consolidated financial statements. Recent Accounting Updates Not Yet Effective In February 2016, the FASB issued ASU 2016-02, "Leases," which changes the accounting for leases and requires expanded disclosures about leasing activities. This new guidance will require lessees to recognize a right of use asset and a lease liability at the commencement date for all leases with terms greater than twelve months. Accounting by lessors is largely unchanged. ASU 2016-02 is effective for fiscal periods beginning after December 15, 2018 and must be adopted using a modified retrospective approach. Early adoption is permitted. We are currently evaluating the impact that ASU 2016-02 will have on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment." This guidance simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to the reporting unit. ASU 2017-04 is effective for fiscal periods beginning after December 15, 2019. Early adoption is permitted. We do not expect the adoption of ASU 2017-04 will have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, "Improvements to Nonemployee Share-Based Payment Accounting." This guidance expands the scope of Topic 718, "Compensation - Stock Compensation" to include share-based payment transactions for acquiring goods and services from non-employees, but excludes awards granted in conjunction with selling goods or services to a customer as part of a contract accounted for under ASC 606, "Revenue from Contracts with Customers." We are currently evaluating the impact that ASU 2018-07 will have on our consolidated financial statements. |
Cash and Cash Equivalents and R
Cash and Cash Equivalents and Restricted Cash | 6 Months Ended |
Jun. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash Cash and Cash Equivalents Cash and cash equivalents were held in the following geographic regions: (In thousands) June 30, 2018 December 31, 2017 United States $ 6,465 $ 10,489 People's Republic of China ("PRC") 34,710 23,283 Asia (excluding the PRC) 1,348 1,405 Europe 8,139 18,071 South America 8,771 9,190 Total cash and cash equivalents $ 59,433 $ 62,438 Restricted Cash In connection with the pending sale of our Guangzhou factory in the PRC (Note 10), a prospective buyer made a cash deposit of RMB 32 million ($ 5.1 million based on April 2018 exchange rates) into an escrow account on September 29, 2016. Under the terms of the escrow account, these funds were not to be paid to us until the close of the sale. Accordingly, this deposit was presented as restricted cash within our consolidated balance sheet. In April 2018, the sale transaction with this buyer was terminated and this deposit was returned to the buyer. |
Accounts Receivable, Net and Re
Accounts Receivable, Net and Revenue Concentrations | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Accounts Receivable, Net and Revenue Concentrations | Accounts Receivable, Net and Revenue Concentrations Accounts receivable, net were as follows: (In thousands) June 30, 2018 December 31, 2017 Trade receivables, gross $ 140,483 $ 142,299 Allowance for doubtful accounts (1,008 ) (1,064 ) Allowance for sales returns (596 ) (562 ) Net trade receivables 138,879 140,673 Other 4,783 10,905 Accounts receivable, net $ 143,662 $ 151,578 Allowance for Doubtful Accounts Changes in the allowance for doubtful accounts were as follows: (In thousands) Six Months Ended June 30, 2018 2017 Balance at beginning of period $ 1,064 $ 904 Additions to costs and expenses 2 81 (Write-offs)/Foreign exchange effects (58 ) (35 ) Balance at end of period $ 1,008 $ 950 Sales Returns The allowance for sales returns at June 30, 2018 and December 31, 2017 included reserves for items returned prior to period-end that were not completely processed, and therefore had not yet been removed from the allowance for sales returns balance. If these returns had been fully processed, the allowance for sales returns balance would have been approximately $0.3 million and $0.4 million on June 30, 2018 and December 31, 2017 , respectively. The value of these returned goods was included in our inventory balance at June 30, 2018 and December 31, 2017 . Significant Customers Net sales to the following customers totaled more than 10% of our net sales: Three Months Ended June 30, 2018 2017 $ (thousands) % of Net Sales $ (thousands) % of Net Sales Comcast Corporation $ 29,542 18.2 % $ 42,951 24.2 % AT&T (1) $ — — % $ 21,740 12.2 % Six Months Ended June 30, 2018 2017 $ (thousands) % of Net Sales $ (thousands) % of Net Sales Comcast Corporation $ 67,517 20.6 % $ 85,198 25.1 % AT&T (1) $ — — % $ 40,940 12.1 % (1) Sales associated with this customer did not total more than 10% of our net sales for the indicated period. Trade receivables associated with these significant customers that totaled more than 10% of our accounts receivable, net were as follows: June 30, 2018 December 31, 2017 $ (thousands) % of Accounts Receivable, Net $ (thousands) % of Accounts Receivable, Net Comcast Corporation $ 19,570 13.6 % $ 25,142 16.6 % |
Inventories, Net and Significan
Inventories, Net and Significant Suppliers | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories, Net and Significant Suppliers | Inventories, Net and Significant Suppliers Inventories, net were as follows: (In thousands) June 30, 2018 December 31, 2017 Raw materials $ 58,263 $ 43,638 Components 11,545 16,214 Work in process 5,908 1,847 Finished goods 79,007 105,178 Reserve for excess and obsolete inventory (7,537 ) (4,288 ) Inventories, net $ 147,186 $ 162,589 Reserve for Excess and Obsolete Inventory Changes in the reserve for excess and obsolete inventory were as follows: (In thousands) Six Months Ended June 30, 2018 2017 Balance at beginning of period $ 4,288 $ 4,205 Additions charged to costs and expenses (1) 4,564 1,218 Sell through (2) (680 ) (576 ) (Write-offs)/Foreign exchange effects (635 ) (640 ) Balance at end of period $ 7,537 $ 4,207 (1) The additions charged to costs and expenses do not include inventory directly written-off that was scrapped during production totaling $0.5 million and $0.2 million for the six months ended June 30, 2018 and 2017 , respectively. These amounts are production waste and are not included in management's reserve for excess and obsolete inventory. (2) These amounts represent the reduction in reserves associated with inventory items that were sold during the period. Significant Suppliers We purchase integrated circuits, components and finished goods from multiple sources. Purchases from the following supplier totaled more than 10% of our total inventory purchases: Three Months Ended June 30, 2018 2017 $ (thousands) % of Total Inventory Purchases $ (thousands) % of Total Inventory Purchases Texas Instruments (1) $ — — % $ 11,450 11.0 % Six Months Ended June 30, 2018 2017 $ (thousands) % of Total Inventory Purchases $ (thousands) % of Total Inventory Purchases Texas Instruments (1) $ — — % $ 20,578 10.7 % (1) Purchases associated with this supplier did not total more than 10% of our total inventory purchases for the indicated period. Related Party Supplier During the three and six months ended June 30, 2018 and 2017, we purchased certain printed circuit board assemblies from a related party supplier. The supplier was considered a related party for financial reporting purposes because our Senior Vice President of Strategic Operations owned 40% of this supplier. In the second quarter of 2018, our Senior Vice President sold his interest in this supplier, and thus this supplier is no longer considered a related party. Total inventory purchases made from this supplier while it was a related party were $1.1 million during the six months ended June 30, 2018 and $1.6 million and $2.6 million during the three and six months ended June 30, 2017 , respectively. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill Changes in the carrying amount of goodwill were as follows: (In thousands) Balance at December 31, 2017 $ 48,651 Foreign exchange effects (129 ) Balance at June 30, 2018 $ 48,522 Intangible Assets, Net The components of intangible assets, net were as follows: June 30, 2018 December 31, 2017 (In thousands) Gross (1) Accumulated Amortization (1) Net Gross (1) Accumulated Amortization (1) Net Distribution rights $ 335 $ (176 ) $ 159 $ 344 $ (165 ) $ 179 Patents 13,662 (5,218 ) 8,444 13,250 (5,310 ) 7,940 Trademarks and trade names 2,786 (1,746 ) 1,040 2,786 (1,594 ) 1,192 Developed and core technology 12,560 (7,079 ) 5,481 12,560 (6,071 ) 6,489 Capitalized software development costs 198 (113 ) 85 142 (77 ) 65 Customer relationships 32,534 (21,035 ) 11,499 32,534 (19,395 ) 13,139 Order backlog — — — 150 (113 ) 37 Total intangible assets, net $ 62,075 $ (35,367 ) $ 26,708 $ 61,766 $ (32,725 ) $ 29,041 (1) This table excludes the gross value of fully amortized intangible assets totaling $6.8 million and $6.0 million at June 30, 2018 and December 31, 2017 , respectively. Amortization expense is recorded in selling, general and administrative expenses, except amortization expense related to capitalized software development costs and order backlog, which are recorded in cost of sales. Amortization expense by income statement caption was as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Cost of sales $ 18 $ 55 $ 73 $ 74 Selling, general and administrative expenses 1,758 1,736 3,505 3,317 Total amortization expense $ 1,776 $ 1,791 $ 3,578 $ 3,391 Estimated future annual amortization expense related to our intangible assets at June 30, 2018 , was as follows: (In thousands) 2018 (remaining 6 months) $ 3,506 2019 6,922 2020 5,791 2021 2,253 2022 2,143 Thereafter 6,093 Total $ 26,708 |
Line of Credit
Line of Credit | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Line of Credit | Line of Credit Our Second Amended and Restated Credit Agreement ("Second Amended Credit Agreement") with U.S. Bank National Association ("U.S. Bank") and Wells Fargo Bank, National Association provides for a $170.0 million revolving line of credit ("Credit Line") that expires on November 1, 2019. The Credit Line may be used for working capital and other general corporate purposes including acquisitions, share repurchases and capital expenditures. Amounts available for borrowing under the Credit Line are reduced by the balance of any outstanding letters of credit. There were no outstanding letters of credit at June 30, 2018 . All obligations under the Credit Line are secured by substantially all of our U.S. personal property and tangible and intangible assets as well as 65% of our ownership interest in Enson Assets Limited, our wholly-owned subsidiary which controls our manufacturing factories in the PRC. Under the Second Amended Credit Agreement, we may elect to pay interest on the Credit Line based on LIBOR plus an applicable margin (varying from 1.25% to 1.75% ) or base rate (based on the prime rate of U.S. Bank or as otherwise specified in the Second Amended Credit Agreement) plus an applicable margin (varying from 0.00% to 0.50% ). The applicable margins are calculated quarterly and vary based on our cash flow leverage ratio as set forth in the Second Amended Credit Agreement. The interest rate in effect at June 30, 2018 was 3.84% . There are no commitment fees or unused line fees under the Second Amended Credit Agreement. The Second Amended Credit Agreement includes financial covenants requiring a minimum fixed charge coverage ratio and a maximum cash flow leverage ratio. In addition, the Second Amended Credit Agreement contains other customary affirmative and negative covenants and events of default. As of June 30, 2018 , we were in compliance with the covenants and conditions of the Second Amended Credit Agreement. At June 30, 2018 , we had $111.0 million outstanding under the Credit Line. Our total interest expense on borrowings was $1.4 million and $0.6 million during the three months ended June 30, 2018 and 2017 , respectively. Our total interest expense on borrowings was $2.5 million and $1.1 million during the six months ended June 30, 2018 and 2017 , respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We utilize our estimated annual effective tax rate to determine our provision for income taxes for interim periods. The income tax provision is computed by taking the estimated annual effective rate and multiplying it by the year-to-date pre-tax book income. We recorded income tax expense of $2.1 million and $1.4 million for the three months ended June 30, 2018 and 2017, respectively, and our effective tax rate was 8.4% and 23.2% for the three months ended June 30, 2018 and 2017, respectively. During the six months ended June 30, 2018 and 2017, we recorded income tax expense of $1.9 million and $1.1 million , respectively, and our effective tax rate was 8.0% and 18.9% during the six months ended June 30, 2018 and 2017, respectively. The decrease in our effective tax rate in the current year was primarily a result of the tax rate applicable to the gain recognized on the sale of our Guangzhou factory being lower than our blended consolidated tax rate. The Tax Cuts and Jobs Act (the "Tax Act") was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate income tax rate from 35% to 21% , requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. We are applying the guidance in SAB 118 when accounting for the enactment-date effects of the Tax Act. At June 30, 2018 , we have not completed our accounting for all of the tax effects of the Tax Act. Additionally, we have made a reasonable estimate of other effects. During the three and six month period ended June 30, 2018 , we recognized no adjustments to the provisional amounts recorded at December 31, 2017 . We are awaiting further guidance from the U.S. federal and state regulatory bodies with regards to the final accounting and reporting of these items in the jurisdictions where we file tax returns. In all cases, we will continue to make and refine our calculations as additional analysis is completed. Our estimates may also be affected as we gain a more thorough understanding of tax law. These changes could be material to income tax expense. Additionally, we have provided provisional amounts for the legislative provisions that are effective as of January 1, 2018 , including, but not limited to, the creation of the base erosion anti-abuse tax ("BEAT"), a new minimum tax, a new provision designed to tax global intangible low-taxed income ("Global Minimum Tax", or "GMT"), a new limitation on deductible interest expense, and limitations on the use of net operating losses. Our accounting for these elements of the Tax Act is incomplete; however, we were able to make reasonable estimates and therefore recorded provisional adjustments. Similar to the above elements, we are in the process of collecting and preparing necessary data, and interpreting guidance as issued by the U.S. Treasury Department, Internal Revenue Service, FASB, and other federal and state standard-setting regulatory bodies. However, we continue to gather additional information to complete our accounting for these items and expect to complete the accounting within the prescribed measurement period. Given the complexity of the GMT provisions, we are still evaluating the effects of the GMT provisions and have not yet determined our accounting policy. At June 30, 2018 , we are still evaluating the GMT provisions and our analysis of future taxable income that is subject to GMT, we have included GMT related to current year operations only in our estimated annual effective tax rate and have not provided additional GMT on deferred items. At June 30, 2018 , we had gross unrecognized tax benefits of $5.7 million , including interest and penalties, of which approximately $5.4 million , if not for the state Research and Experimentation income tax credit valuation allowance, would affect the annual effective tax rate if these tax benefits are realized. Further, we are unaware of any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly change within the next twelve months. Based on federal, state and foreign statute expirations in various jurisdictions, we do not anticipate any decrease in unrecognized tax benefits within the next twelve months. We have classified uncertain tax positions as non-current income tax liabilities unless expected to be paid within one year. We have elected to classify interest and penalties as a component of tax expense. Accrued interest and penalties of $0.6 million and $0.5 million at June 30, 2018 and December 31, 2017 , respectively, are included in our unrecognized tax benefits. |
Accrued Compensation
Accrued Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Compensation | Accrued Compensation The components of accrued compensation were as follows: (In thousands) June 30, 2018 December 31, 2017 Accrued social insurance (1) $ 17,412 $ 17,727 Accrued salary/wages 9,789 7,910 Accrued vacation/holiday 2,908 2,769 Accrued bonus (2) 1,155 2,329 Accrued commission 669 1,089 Accrued medical insurance claims 321 286 Other accrued compensation 710 2,389 Total accrued compensation $ 32,964 $ 34,499 (1) PRC employers are required by law to remit the applicable social insurance payments to their local government. Social insurance is comprised of various components such as pension, medical insurance, job industry insurance, unemployment insurance, and a housing assistance fund, and is administered in a manner similar to social security in the United States. This amount represents our estimate of the amounts due to the PRC government for social insurance on June 30, 2018 and December 31, 2017 . (2) Accrued bonus includes an accrual for an extra month of salary ("13 th month salary") to be paid to employees in certain geographies where it is the customary business practice. This 13 th month salary is paid to these employees if they remain employed with us through December 31st. The total accrued for the 13 th month salary was $0.1 million and $0.7 million at June 30, 2018 and December 31, 2017 , respectively. Other Accrued Liabilities The components of other accrued liabilities were as follows: (In thousands) June 30, 2018 December 31, 2017 Advertising and marketing $ 304 $ 232 Deferred revenue 336 215 Deposit for sale of Guangzhou factory — 4,901 Duties 792 1,184 Freight and handling fees 3,043 1,983 Product development 700 974 Product warranty claim costs 1,008 339 Professional fees 1,760 1,578 Property, plant, and equipment 509 2,151 Sales taxes and VAT 799 2,955 Short-term contingent consideration 3,870 3,800 Third-party commissions 535 599 Tooling (1) 1,728 1,843 Unrealized loss on foreign currency exchange contracts 163 630 Utilities 165 103 Other 5,338 5,232 Total other accrued liabilities $ 21,050 $ 28,719 (1) The tooling accrual balance relates to unearned revenue for tooling that will be sold to customers. |
Other Accrued Liabilities
Other Accrued Liabilities | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | Accrued Compensation The components of accrued compensation were as follows: (In thousands) June 30, 2018 December 31, 2017 Accrued social insurance (1) $ 17,412 $ 17,727 Accrued salary/wages 9,789 7,910 Accrued vacation/holiday 2,908 2,769 Accrued bonus (2) 1,155 2,329 Accrued commission 669 1,089 Accrued medical insurance claims 321 286 Other accrued compensation 710 2,389 Total accrued compensation $ 32,964 $ 34,499 (1) PRC employers are required by law to remit the applicable social insurance payments to their local government. Social insurance is comprised of various components such as pension, medical insurance, job industry insurance, unemployment insurance, and a housing assistance fund, and is administered in a manner similar to social security in the United States. This amount represents our estimate of the amounts due to the PRC government for social insurance on June 30, 2018 and December 31, 2017 . (2) Accrued bonus includes an accrual for an extra month of salary ("13 th month salary") to be paid to employees in certain geographies where it is the customary business practice. This 13 th month salary is paid to these employees if they remain employed with us through December 31st. The total accrued for the 13 th month salary was $0.1 million and $0.7 million at June 30, 2018 and December 31, 2017 , respectively. Other Accrued Liabilities The components of other accrued liabilities were as follows: (In thousands) June 30, 2018 December 31, 2017 Advertising and marketing $ 304 $ 232 Deferred revenue 336 215 Deposit for sale of Guangzhou factory — 4,901 Duties 792 1,184 Freight and handling fees 3,043 1,983 Product development 700 974 Product warranty claim costs 1,008 339 Professional fees 1,760 1,578 Property, plant, and equipment 509 2,151 Sales taxes and VAT 799 2,955 Short-term contingent consideration 3,870 3,800 Third-party commissions 535 599 Tooling (1) 1,728 1,843 Unrealized loss on foreign currency exchange contracts 163 630 Utilities 165 103 Other 5,338 5,232 Total other accrued liabilities $ 21,050 $ 28,719 (1) The tooling accrual balance relates to unearned revenue for tooling that will be sold to customers. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Product Warranties Changes in the liability for product warranty claim costs were as follows: (In thousands) Six Months Ended June 30, 2018 2017 Balance at beginning of period $ 339 $ 134 Accruals for warranties issued during the period 769 167 Settlements (in cash or in kind) during the period (100 ) (3 ) Balance at end of period $ 1,008 $ 298 Restructuring Activities and Sale of Guangzhou Factory In the first quarter of 2016, we implemented a plan to transition manufacturing activities from our southern-most China factory, located in the city of Guangzhou in the Guangdong province, to our other China factories. As a result, we incurred severance costs of $0.4 million and $5.7 million during the three and six months ended June 30, 2017 , respectively, which are included within operating expenses. All operations ceased in our Guangzhou factory in the third quarter of 2017 and the transition to the other China factories was completed by the end of 2017. Since all operations at our Guangzhou manufacturing facility ceased as of the end of July 2017, the related building and land lease assets were classified as assets held for sale in our consolidated balance sheet at December 31, 2017. On September 26, 2016, we entered into an agreement to sell our Guangzhou manufacturing facility for RMB 320 million . In accordance with the terms of the agreement, the buyer deposited 10% of the purchase price into an escrow account upon the execution of the agreement, which we presented as restricted cash in our consolidated balance sheet at December 31, 2017 (also refer to Note 2). In April 2018, we and the buyer mutually agreed to terminate the sale. The mutually agreed termination took effect immediately with no incremental penalty or costs to either party. In connection with this termination, the deposit was returned to the buyer. On April 23, 2018, we entered into a new agreement to sell our Guangzhou manufacturing facility to a second buyer for RMB 339 million (approximately $51.4 million based on exchange rates in effect at the time of closing). On April 26, 2018, the second buyer paid to us a deposit of RMB 34 million (approximately $5.1 million based on exchange rates in effect at the time of closing), which under the terms of the agreement was nonrefundable. Upon receipt by the Governmental Agency of the second buyer’s application of approval of transfer, the second buyer was to pay to us RMB 237 million (approximately $35.8 million based on exchange rates in effect at the time of closing). Additionally, within two days after the second payment was made to us, the second buyer was to deposit the remaining consideration of RMB 68 million (approximately $10.3 million based on exchange rates in effect at the time of closing) into escrow, which was to be released to us upon the closing of the sale. Per the terms of the agreement, the sale was to be completed no later than June 30, 2018. On June 26, 2018, all conditions to closing were satisfied and the sale was completed, resulting in a pretax gain of $37.0 million ( $32.1 million , net of income taxes). Litigation On or about June 10, 2015, FM Marketing GmbH ("FMH") and Ruwido Austria GmbH ("Ruwido"), filed a Summons in Summary Proceedings in Belgium court against one of our subsidiaries, Universal Electronics BV ("UEBV") and one of its customers, Telenet N.V. ("Telenet"), claiming that one of the products UEBV supplied to Telenet violates two design patents and one utility patent owned by FMH and/or Ruwido. By this summons, FMH and Ruwido sought to enjoin Telenet and UEBV from continued distribution and use of the product at issue. After the September 29, 2015 hearing, the court issued its ruling in our and Telenet’s favor, rejecting FMH and Ruwido’s request entirely. On October 22, 2015, Ruwido filed its notice of appeal in this ruling. The parties have fully briefed and argued before the appellate court and we are awaiting the appellate court’s ruling. In addition, on or about February 9, 2016, Ruwido filed a writ of summons for proceeding on the merits with respect to the asserted patents. UEBV and Telenet have replied, denying all of Ruwido's allegations and in June 2017, a hearing was held before the trial court. During this hearing, Ruwido sought to have a second product which we are currently selling to Telenet included in this case. In September 2017, the Court ruled in our favor that our current product cannot be made part of this case. The Court also refused to rule on whether the original product (which we are no longer selling) infringes the Ruwido patent, instead deciding to wait until the European Patent Office has ruled on our Opposition (see below). Finally, the Court ruled that our original product (which we are no longer selling) infringes certain of Ruwido’s design rights, but stayed any decision of compensation and/or damages until all aspects of the case have been decided. We have filed an appeal as to the Court’s ruling of infringement, and submission by the parties were due to the Court during the second quarter of 2018 with a hearing expected to take place in late 2018. Subsequent to the Court's ruling that a second product could not be added to the first case on the merits, Ruwido filed a separate case on the merits with respect to this second product, claiming that it too infringes the same patent at issue in the first suit. We have denied these claims. According to the Court’s trial schedule, briefs from both parties will be due during the second half of 2018 and early 2019 with a trial date set for January 2019. In September 2015, UEBV filed an Opposition with the European Patent Office seeking to invalidate the one utility patent asserted against UEBV and Telenet by Ruwido. The hearing on this opposition was held in July 2017. During this hearing the panel requested additional information. We have assembled this additional information and the final hearing has been scheduled for January 29, 2019. On September 5, 2017, Ruwido and FMH filed a patent infringement case on the merits against UEBV and Telenet in the Netherlands alleging the same claims of infringement as in the Belgium Courts (see above). We have denied these claims and filed a counterclaim seeking to invalidate the Ruwido patent. A November 30, 2018 hearing date has been set by the Court. There are no other material pending legal proceedings to which we or any of our subsidiaries is a party or of which our respective property is the subject. However, as is typical in our industry and to the nature and kind of business in which we are engaged, from time to time, various claims, charges and litigation are asserted or commenced by third parties against us or by us against third parties arising from or related to product liability, infringement of patent or other intellectual property rights, breach of warranty, contractual relations, or employee relations. The amounts claimed may be substantial but may not bear any reasonable relationship to the merits of the claims or the extent of any real risk of court awards assessed against us or in our favor. However, no assurances can be made as to the outcome of any of these matters, nor can we estimate the range of potential losses to us. In our opinion, final judgments, if any, which might be rendered against us in potential or pending litigation would not have a material adverse effect on our consolidated financial condition, results of operations, or cash flows. Moreover, we believe that our products do not infringe any third parties' patents or other intellectual property rights. We maintain directors' and officers' liability insurance which insures our individual directors and officers against certain claims, as well as attorney's fees and related expenses incurred in connection with the defense of such claims. |
Treasury Stock
Treasury Stock | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Treasury Stock | Treasury Stock From time to time, our Board of Directors authorizes management to repurchase shares of our issued and outstanding common stock on the open market. On May 11, 2018, our Board approved a repurchase plan authorizing the repurchase of up to $10.0 million of our common stock. As of June 30, 2018 , we had $3.6 million of authorized repurchases remaining under the Board's authorizations. On July 26, 2018, our Board approved a new repurchase plan authorizing the repurchase of up to $5.0 million of our common stock bringing the total amount of authorized repurchases as of approval date to $5.4 million . We may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block transactions, accelerated share repurchases or open market solicitations for shares, some of which may be effected through Rule 10b5-1 plans. The timing and amount of future repurchases, if any, will depend upon several factors, including market and business conditions, and such repurchases may be discontinued at any time. Repurchased shares of our common stock were as follows: Six Months Ended June 30, (In thousands) 2018 2017 Shares repurchased 225 239 Cost of shares repurchased $ 7,114 $ 14,885 Repurchased shares are recorded as shares held in treasury at cost. We hold these shares for future use as management and the Board of Directors deem appropriate. |
Business Segment and Foreign Op
Business Segment and Foreign Operations | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Business Segment and Foreign Operations | Business Segment and Foreign Operations Reportable Segment An operating segment, in part, is a component of an enterprise whose operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. Operating segments may be aggregated only to a limited extent. Our chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues for purposes of making operating decisions and assessing financial performance. Accordingly, we only have a single operating and reportable segment. Foreign Operations Our net sales to external customers by geographic area were as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 United States $ 79,294 $ 85,569 $ 159,045 $ 167,497 Asia (excluding PRC) 27,467 26,916 54,867 51,566 People's Republic of China 20,627 21,835 40,744 37,578 Europe 20,330 19,740 39,460 37,164 Latin America 6,636 15,381 16,666 31,026 Other 8,169 8,139 16,439 14,155 Total net sales $ 162,523 $ 177,580 $ 327,221 $ 338,986 Specific identification of the customer billing location was the basis used for attributing revenues from external customers to geographic areas. Long-lived tangible assets by geographic area were as follows: (In thousands) June 30, 2018 December 31, 2017 United States $ 15,351 $ 14,674 People's Republic of China 92,261 96,984 All other countries 3,753 3,870 Total long-lived tangible assets $ 111,365 $ 115,528 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense for each employee and director is presented in the same statement of operations caption as their cash compensation. Stock-based compensation expense by statement of operations caption and the related income tax benefit were as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Cost of sales $ 23 $ 19 $ 40 $ 34 Research and development expenses 201 144 356 263 Selling, general and administrative expenses: Employees 1,737 1,975 3,265 3,719 Outside directors 504 794 1,008 1,539 Total employee and director stock-based compensation expense $ 2,465 $ 2,932 $ 4,669 $ 5,555 Income tax benefit $ 519 $ 889 982 1,704 Stock Options Stock option activity was as follows: Number of Options (in 000's) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in 000's) Outstanding at December 31, 2017 520 $ 42.56 Granted 119 44.95 Exercised (30 ) 23.46 $ 700 Forfeited/canceled/expired (7 ) 27.74 Outstanding at June 30, 2018 (1) 602 $ 44.17 4.57 $ 1,814 Vested and expected to vest at June 30, 2018 (1) 602 $ 44.17 4.57 $ 1,814 Exercisable at June 30, 2018 (1) 404 $ 41.03 3.83 $ 1,814 (1) The aggregate intrinsic value represents the total pre-tax value (the difference between our closing stock price on the last trading day of the second quarter of 2018 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they all exercised their options on June 30, 2018 . This amount will change based on the fair market value of our stock. The assumptions we utilized in the Black-Scholes option pricing model and the resulting weighted average fair value of stock option grants were the following: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Weighted average fair value of grants $ — $ — $ 14.26 $ 19.61 Risk-free interest rate — % — % 2.51 % 1.75 % Expected volatility — % — % 33.09 % 34.25 % Expected life in years 0.00 0.00 4.53 4.52 As of June 30, 2018 , we expect to recognize $2.8 million of total unrecognized pre-tax stock-based compensation expense related to non-vested stock options over a remaining weighted-average life of 2.0 years . Restricted Stock Non-vested restricted stock award activity was as follows: Shares (in 000's) Weighted-Average Grant Date Fair Value Non-vested at December 31, 2017 162 $ 61.19 Granted 137 44.79 Vested (58 ) 63.20 Forfeited (5 ) 59.72 Non-vested at June 30, 2018 236 $ 51.22 As of June 30, 2018 , we expect to recognize $9.8 million of total unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock awards over a weighted-average life of 2.1 years . |
Performance-Based Common Stock
Performance-Based Common Stock Warrants | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Performance-Based Common Stock Warrants | Performance-Based Common Stock Warrants On March 9, 2016, we issued common stock purchase warrants to Comcast to purchase up to 725,000 shares of our common stock at a price of $54.55 per share. The right to exercise the warrants is subject to vesting over three successive two -year periods (the first two -year period commenced on January 1, 2016 and ended December 31, 2017) based on the level of purchases of goods and services from us by Comcast and its affiliates, as defined in the warrants. The table below presents the purchase levels and number of warrants that will vest in each period based upon achieving these purchase levels. Incremental Warrants That Will Vest Aggregate Level of Purchases by Comcast and Affiliates January 1, 2016 - December 31, 2017 January 1, 2018 - December 31, 2019 January 1, 2020 - December 31, 2021 $260 million 100,000 100,000 75,000 $300 million 75,000 75,000 75,000 $340 million 75,000 75,000 75,000 Maximum Potential Warrants Earned by Comcast 250,000 250,000 225,000 If total aggregate purchases by Comcast and its affiliates are below $260 million in any of the two -year periods above, no warrants will vest related to that two -year period. If total aggregate purchases of goods and services by Comcast and its affiliates exceed $340 million during either the first or second two -year period, the amount of any such excess will count toward aggregate purchases in the following two -year period. At June 30, 2018 , 175,000 vested warrants were outstanding. To fully vest in the rights to purchase all of the remaining unearned 475,000 underlying shares, Comcast and its affiliates must purchase an aggregate of $680 million in goods and services from us during the remaining four -year vesting period. Any and all warrants that vest will expire on January 1, 2023. The warrants provide for certain adjustments that may be made to the exercise price and the number of shares issuable upon exercise due to customary anti-dilution provisions. Additionally, in connection with the warrants, we have also entered into a registration rights agreement with Comcast under which Comcast may from time to time request that we register the shares of common stock underlying vested warrants with the SEC. Because the warrants contain performance criteria under which Comcast must achieve specified aggregate purchase levels for the warrants to vest, as detailed above, the measurement date for the warrants is the date on which the warrants vest. Through June 30, 2018 , no warrants had vested for the two -year period beginning January 1, 2018. The assumptions we utilized in the Black Scholes option pricing model and the resulting weighted average fair value of the warrants were the following: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Fair value $6.92 $28.89 $6.92 $28.89 Price of Universal Electronics Inc. common stock $32.88 $67.21 $32.88 $67.21 Risk-free interest rate 2.71% 1.95% 2.71% 1.95% Expected volatility 40.20% 35.05% 40.20% 35.05% Expected life in years 4.50 5.50 4.50 5.50 The impact to net sales recorded in connection with the warrants and the related income tax benefit were as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2018 2017 2018 2017 Reduction/(increase) to net sales (128) 331 343 1,263 Income tax benefit/(expense) (32) 123 86 471 At June 30, 2018 , we estimated the number of warrants that will vest based on projected future purchases that will be made by Comcast and its affiliates. These estimates may increase or decrease based on actual future purchases. The aggregate unrecognized estimated fair value of unvested warrants at June 30, 2018 was $2.9 million . |
Other Income (Expense), Net
Other Income (Expense), Net | 6 Months Ended |
Jun. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense), Net | Other Income (Expense), Net Other income (expense), net consisted of the following: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Net gain (loss) on foreign currency exchange contracts (1) $ 1,865 $ (1,598 ) $ 534 $ (1,364 ) Net gain (loss) on foreign currency exchange transactions (2,965 ) 1,006 (2,240 ) 1,336 Other income 18 (50 ) 37 (31 ) Other income (expense), net $ (1,082 ) $ (642 ) $ (1,669 ) $ (59 ) (1) This represents the gains (losses) incurred on foreign currency hedging derivatives (see Note 17 for further details). |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Earnings per share was calculated as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per-share amounts) 2018 2017 2018 2017 BASIC Net income $ 22,659 $ 4,684 $ 22,072 $ 4,803 Weighted-average common shares outstanding 14,070 14,404 14,078 14,427 Basic earnings per share $ 1.61 $ 0.33 $ 1.57 $ 0.33 DILUTED Net income $ 22,659 $ 4,684 $ 22,072 $ 4,803 Weighted-average common shares outstanding for basic 14,070 14,404 14,078 14,427 Dilutive effect of stock options, restricted stock and common stock warrants 88 279 117 273 Weighted-average common shares outstanding on a diluted basis 14,158 14,683 14,195 14,700 Diluted earnings per share $ 1.60 $ 0.32 $ 1.55 $ 0.33 The following number of stock options, shares of restricted stock and common stock warrants were excluded from the computation of diluted earnings per common share as their inclusion would have been anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Stock options 382 165 357 147 Restricted stock awards 204 — 172 29 Performance-based warrants — — — — |
Derivatives
Derivatives | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives The following table sets forth the total net fair value of derivatives: June 30, 2018 December 31, 2017 Fair Value Measurement Using Total Balance Fair Value Measurement Using Total Balance (In thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Foreign currency exchange contracts $ — $ (157 ) $ — $ (157 ) $ — $ (565 ) $ — $ (565 ) We held foreign currency exchange contracts, which resulted in a net pre-tax gain of $1.9 million and a net pre-tax loss of $1.6 million for the three months ended June 30, 2018 and 2017 , respectively. For the six months ended June 30, 2018 and 2017 , we had a net pre-tax gain of $0.5 million and a net pre-tax loss of $1.4 million , respectively (see Note 15). Details of foreign currency exchange contracts held were as follows: Date Held Type Position Held Notional Value (in millions) Forward Rate Unrealized Gain/(Loss) Recorded at Balance Sheet Date (in thousands) (1) Settlement Date June 30, 2018 USD/Euro USD $ 15.0 1.1575 $ (148 ) July 27, 2018 June 30, 2018 USD/Chinese Yuan Renminbi Chinese Yuan Renminbi $ 5.0 6.6195 $ (15 ) July 27, 2018 June 30, 2018 USD/Brazilian Real USD $ 1.0 3.8626 $ 6 July 27, 2018 December 31, 2017 USD/Euro USD $ 17.0 1.1858 $ (220 ) January 5, 2018 December 31, 2017 USD/Chinese Yuan Renminbi Chinese Yuan Renminbi $ 20.0 6.6481 $ (410 ) January 5, 2018 December 31, 2017 USD/Brazilian Real USD $ 2.5 3.2350 $ 65 January 24, 2018 (1) Unrealized gains on foreign currency exchange contracts are recorded in prepaid expenses and other current assets. Unrealized losses on foreign currency exchange contracts are recorded in other accrued liabilities. |
Business Combination
Business Combination | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combination | Business Combination On April 6, 2017, we acquired substantially all of the net assets of Residential Control Systems, Inc. ("RCS"), a U.S.-based designer and manufacturer of energy management and control products for the residential, small commercial and hospitality markets. The purchase price of $12.6 million was comprised of $8.9 million in cash and $3.7 million of contingent consideration. The acquisition of these assets will allow us to expand our product offering of home sensing, monitoring and control solutions to include smart thermostat, sensing and monitoring products previously sold and marketed by RCS. Our consolidated statement of operations for the three and six months ended June 30, 2018 includes net sales of $0.8 million and $1.9 million , respectively, and net losses of $0.6 million and $0.9 million , respectively, attributable to RCS. Our consolidated statement of operations for the three and six months ended June 30, 2017 includes net sales of $1.4 million and a net loss of $0.4 million attributable to RCS for the period commencing on April 6, 2017. Contingent Consideration We are required to make additional earnout payments of up to $10.0 million upon the achievement of certain operating income levels attributable to RCS over the period commencing on the acquisition date through June 30, 2022. The amount of contingent consideration is calculated at the end of each calendar year and is based on the agreed upon percentage of operating income as defined in the Asset Purchase Agreement ("APA"). Operating income will be calculated using certain revenues, costs and expenses directly attributable to RCS as specified in the APA. At the acquisition date, the value of earnout contingent consideration was estimated using a valuation methodology based on projections of future operating income calculated in accordance with the APA. Such projections were then discounted using an average discount rate of 24.8% to reflect the risk in achieving the projected operating income levels as well as the time value of money. The fair value measurement of the earnout contingent consideration was based primarily on significant inputs not observable in an active market and thus represents a Level 3 measurement as defined under U.S. GAAP. At June 30, 2018, the fair value of earnout consideration attributed to RCS was $2.4 million which is presented within long-term contingent consideration in our consolidated balance sheet. Purchase Price Allocation Using the acquisition method of accounting, the acquisition date fair value of the consideration transferred was allocated to the net tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date. The excess of the purchase price over the estimated fair value of net assets acquired is recorded as goodwill. The goodwill is expected to be deductible for income tax purposes. Management's purchase price allocation was the following: (in thousands) Estimated Lives Fair Value Accounts receivable $ 429 Inventories 1,508 Prepaid expenses and other current assets 7 Property, plant and equipment 1-4 years 14 Current liabilities (408 ) Net tangible assets acquired 1,550 Trade name 8 years 400 Customer relationships 10 years 5,000 Order backlog 1 year 150 Goodwill 5,494 Total purchase price 12,594 Less: Contingent consideration (3,700 ) Cash paid $ 8,894 Management's determination of the fair value of intangible assets acquired was based primarily on significant inputs not observable in an active market and thus represent Level 3 fair value measurements as defined under U.S. GAAP. The fair value assigned to the RCS trade name intangible asset was determined utilizing a relief from royalty method. The fair value assigned to RCS customer relationships and order backlog intangible assets were determined utilizing a multi-period excess earnings approach. The trade name, customer relationships and order backlog intangible assets are expected to be deductible for income tax purposes. Pro Forma Results (Unaudited) The following unaudited pro forma financial information presents the combined results of our operations and the operations of RCS as if this transaction had occurred on January 1, 2016. This unaudited pro forma financial information is not intended to represent or be indicative of the consolidated results of operations that would have been achieved had the acquisition actually been completed as of January 1, 2016, and should not be taken as a projection of the future consolidated results of our operations. Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per-share amounts) 2018 2017 2018 2017 Net sales $ 162,523 $ 177,580 $ 327,221 $ 339,548 Net income 22,659 4,767 22,072 4,541 Basic earnings per share $ 1.61 $ 0.33 $ 1.57 $ 0.31 Diluted earnings per share $ 1.60 $ 0.32 $ 1.55 $ 0.31 For purposes of determining pro forma net income, adjustments were made to the three and six months ended June 30, 2017 . The pro forma net income assumes that amortization of acquired intangible assets began at January 1, 2016 rather than on April 6, 2017. The result is a net increase in amortization expense of $0.1 million for the six months ended June 30, 2017 . Additionally, acquisition costs totaling $0.1 million are excluded from pro forma net income. All adjustments have been made net of their related tax effects. |
Basis of Presentation and Sig25
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | In the opinion of management, the accompanying consolidated financial statements of Universal Electronics Inc. and its subsidiaries contain all the adjustments necessary for a fair presentation of financial position, results of operations and cash flows for the periods presented. All such adjustments are of a normal recurring nature and certain reclassifications have been made to prior year amounts in order to conform to the current year presentation. Information and footnote disclosures normally included in financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. As used herein, the terms "Company," "we," "us," and "our" refer to Universal Electronics Inc. and its subsidiaries, unless the context indicates to the contrary. Our results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures About Market Risk," and the "Financial Statements and Supplementary Data" included in Items 1A, 7, 7A, and 8, respectively, of our Annual Report on Form 10-K for the year ended December 31, 2017 . |
Estimates, Judgments and Assumptions | The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates and assumptions, including those related to revenue recognition, allowances for sales returns and doubtful accounts, inventory valuation, our review for impairment of long-lived assets, intangible assets and goodwill, business combinations, income taxes, stock-based compensation expense and performance-based common stock warrants. Actual results may differ from these estimates and assumptions, and they may be adjusted as more information becomes available. Any adjustment may be material. |
Revenue Recognition | We adopted Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers," and all related amendments as of January 1, 2018. The impact of this new guidance on our accounting policies and consolidated financial statements is also described below. There have been no other significant changes in our accounting policies during the three and six months ended June 30, 2018 compared to the significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2017 . Revenue Recognition Our performance obligations primarily arise from manufacturing and delivering universal control, sensing and automation products and AV accessories, which are sold through multiple channels, and intellectual property that is embedded in these products or licensed to others. These performance obligations are satisfied at a point in time or over time, as described below. Payment terms are typically on open credit terms consistent with industry practice and do not have significant financing components. Some contracts contain early payment discounts, which are recognized as a reduction to revenue if the customer typically meets the early payment conditions. Consideration may be variable based on indeterminate volumes. Effective January 1, 2018, revenue is recognized over time when the customer simultaneously receives and consumes the benefits provided by our performance, our performance creates or enhances an asset that the customer controls, or when our performance creates an asset with no alternative use to us (custom products) and we have an enforceable right to payment for performance completed to date, such as a firm order or other contractual commitment from the customer. An asset does not have an alternative use if we are unable to redirect the asset to another customer in the foreseeable future without significant rework. The method for measuring progress towards satisfying a performance obligation for a custom product is based on the costs incurred to date (cost-to-cost method). We believe that the costs associated with production are most closely aligned with the revenue associated with those products. We recognize revenue at a point in time if the criteria for recognizing revenue over time are not met, the title of the goods has transferred, and we have a present right to payment. We typically recognize revenue for the sale of tooling at a point in time, which is generally upon completion of the tooling and, if applicable, acceptance by the customer. A provision is recorded for estimated sales returns and allowances and is deducted from gross sales to arrive at net sales in the period the related revenue is recorded. These estimates are based on historical sales returns and allowances, analysis of credit memo data and other known factors. Actual returns and claims in any future period are inherently uncertain and thus may differ from our estimates. If actual or expected future returns and claims are significantly greater or lower than the reserves that we have established, we will record a reduction or increase to net revenue in the period in which we make such a determination. We accrue for discounts and rebates based on historical experience and our expectations regarding future sales to our customers. Accruals for discounts and rebates are recorded as a reduction to sales in the same period as the related revenue. Changes in such accruals may be required if future rebates and incentives differ from our estimates. We license our intellectual property including our patented technologies, trademarks, and database of control codes. When license fees are paid on a per-unit basis we record license revenue when our customers manufacture or ship a product incorporating our intellectual property and we have a present right to payment. When a fixed up-front license fee is received in exchange for the delivery of a particular database of infrared codes or the contract contains a minimum guarantee provision, we record revenue when delivery of the intellectual property has occurred. Tiered royalties are recorded on a straight-line basis according to the forecasted per-unit fees taking into account the pricing tiers. Contract assets represent revenue which has been recognized based on our accounting policies but for which the customer has not yet been invoiced and thus an account receivable has not yet been recorded. Under prior accounting standards, we recognized revenue on the sale of products when title of the goods had transferred, there was persuasive evidence of an arrangement (such as a purchase order from the customer), the sales price was fixed or determinable and collectability was reasonably assured. Revenue for term license fees were recognized on a straight-line basis over the effective term of the license when we could not reliably predict in which periods, within the term of the license, the licensee would benefit from the use of our patented inventions. |
Recent Accounting Pronouncements | In August 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments," which amends Accounting Standards Codification ("ASC") 230, "Statement of Cash Flows". This new guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain transactions are classified in the statement of cash flows. ASU 2016-15 is effective for fiscal periods beginning after December 15, 2017 and must be adopted retrospectively. The adoption of ASU 2016-15 did not have a material impact to the presentation of our consolidated statement of cash flows. In October 2016, the FASB issued ASU 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory," which changes the accounting for income tax consequences of intra-entity transfers of assets other than inventory. Current guidance prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. Under this new guidance, the income tax consequences of an intra-entity transfer of an asset other than inventory will be recognized when the transfer occurs. ASU 2016-16 is effective for fiscal periods beginning after December 15, 2017. The adoption of ASU 2016-16 did not have a material impact on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18,"Restricted Cash," which amends ASC 230, "Statement of Cash Flows." This new guidance addresses the classifications and presentation of changes in restricted cash in the statement of cash flows. ASU 2016-18 is effective for fiscal periods beginning after December 15, 2017 and must be adopted retrospectively. The adoption of ASU 2016-18 modified our current disclosures by reclassifying certain amounts within the consolidated statement of cash flows, but did not have a material effect on our consolidated financial statements. Recent Accounting Updates Not Yet Effective In February 2016, the FASB issued ASU 2016-02, "Leases," which changes the accounting for leases and requires expanded disclosures about leasing activities. This new guidance will require lessees to recognize a right of use asset and a lease liability at the commencement date for all leases with terms greater than twelve months. Accounting by lessors is largely unchanged. ASU 2016-02 is effective for fiscal periods beginning after December 15, 2018 and must be adopted using a modified retrospective approach. Early adoption is permitted. We are currently evaluating the impact that ASU 2016-02 will have on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment." This guidance simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to the reporting unit. ASU 2017-04 is effective for fiscal periods beginning after December 15, 2019. Early adoption is permitted. We do not expect the adoption of ASU 2017-04 will have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, "Improvements to Nonemployee Share-Based Payment Accounting." This guidance expands the scope of Topic 718, "Compensation - Stock Compensation" to include share-based payment transactions for acquiring goods and services from non-employees, but excludes awards granted in conjunction with selling goods or services to a customer as part of a contract accounted for under ASC 606, "Revenue from Contracts with Customers." We are currently evaluating the impact that ASU 2018-07 will have on our consolidated financial statements. On January 1, 2018, we adopted ASU 2014-09 using the modified retrospective transition method. Under this method, we evaluated all contracts that were in effect at the beginning of 2018 as if those contracts had been accounted for under the new revenue standard based on the terms in effect as of the adoption date. Under the modified retrospective transition approach, periods prior to the adoption date were not adjusted and continue to be reported in accordance with historical U.S. GAAP. A cumulative catch-up adjustment was recorded to beginning retained earnings to reflect the impact of all existing arrangements under the new revenue standard. |
Sales Returns | Sales Returns The allowance for sales returns at June 30, 2018 and December 31, 2017 included reserves for items returned prior to period-end that were not completely processed, and therefore had not yet been removed from the allowance for sales returns balance. |
Basis of Presentation and Sig26
Basis of Presentation and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Adjustments Made to the Consolidated Balance Sheets and Impacts of New Revenue Guidance on Financial Statements | The cumulative effects of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASU 2014-09, were as follows: As reported Adjustments due to ASU 2014-09 Balance at Consolidated Balance Sheet (In thousands) 12/31/2017 1/1/2018 Contract assets $ — $ 29,759 $ 29,759 Inventories, net 162,589 (23,830 ) 138,759 Prepaid expenses and other current assets 11,687 (174 ) 11,513 Deferred income tax assets 7,913 (102 ) 7,811 Accounts payable and other current liabilities 332,935 1,528 334,463 Deferred income tax liabilities 4,423 20 4,443 Retained earnings 266,780 4,084 270,864 The following tables compare the reported consolidated balance sheet and statements of operations as of and for the three and six months ended June 30, 2018 , to pro forma amounts had the previous guidance been in effect. The guidance did not have a significant impact on the Company's unaudited condensed consolidated statement of cash flows. As of June 30, 2018 Consolidated Balance Sheet (In thousands) As reported Without Adoption of ASU 2014-09 Effect of Change Assets Contract assets $ 28,253 $ — $ 28,253 Inventories, net 147,186 169,855 (22,669 ) Prepaid expenses and other current assets 14,312 14,307 5 Deferred income taxes 7,152 7,250 (98 ) Liabilities and Equity Accounts payable and other current liabilities $ 296,256 $ 294,484 $ 1,772 Retained earnings 292,936 289,217 3,719 Three Months Ended June 30, 2018 Consolidated Statements of Operations (In thousands) As reported Without Adoption of ASU 2014-09 Effect of Change Net sales $ 162,523 $ 156,133 $ 6,390 Cost of sales 135,764 129,745 6,019 Selling, general and administrative expenses 30,570 30,427 143 Provision for income taxes 2,088 2,040 48 Net income 22,659 22,478 181 Earnings per share: Basic $ 1.61 $ 1.60 $ 0.01 Diluted $ 1.60 $ 1.59 $ 0.01 Six months ended June 30, 2018 Consolidated Statements of Operations (In thousands) As reported Without Adoption of ASU 2014-09 Effect of Change Net sales $ 327,221 $ 328,321 $ (1,100 ) Cost of sales 263,260 264,001 (741 ) Selling, general and administrative expenses 60,817 60,837 (20 ) Provision for income taxes 1,922 1,895 27 Net income 22,072 22,437 (365 ) Earnings per share: Basic $ 1.57 $ 1.59 $ (0.03 ) Diluted $ 1.55 $ 1.58 $ (0.03 ) |
Cash and Cash Equivalents and27
Cash and Cash Equivalents and Restricted Cash (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents by Geographic Region | Cash and cash equivalents were held in the following geographic regions: (In thousands) June 30, 2018 December 31, 2017 United States $ 6,465 $ 10,489 People's Republic of China ("PRC") 34,710 23,283 Asia (excluding the PRC) 1,348 1,405 Europe 8,139 18,071 South America 8,771 9,190 Total cash and cash equivalents $ 59,433 $ 62,438 |
Accounts Receivable, Net and 28
Accounts Receivable, Net and Revenue Concentrations (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Accounts Receivable, Net and Allowance for Doubtful Accounts | Accounts receivable, net were as follows: (In thousands) June 30, 2018 December 31, 2017 Trade receivables, gross $ 140,483 $ 142,299 Allowance for doubtful accounts (1,008 ) (1,064 ) Allowance for sales returns (596 ) (562 ) Net trade receivables 138,879 140,673 Other 4,783 10,905 Accounts receivable, net $ 143,662 $ 151,578 Changes in the allowance for doubtful accounts were as follows: (In thousands) Six Months Ended June 30, 2018 2017 Balance at beginning of period $ 1,064 $ 904 Additions to costs and expenses 2 81 (Write-offs)/Foreign exchange effects (58 ) (35 ) Balance at end of period $ 1,008 $ 950 |
Net Sales to Significant Customers | Net sales to the following customers totaled more than 10% of our net sales: Three Months Ended June 30, 2018 2017 $ (thousands) % of Net Sales $ (thousands) % of Net Sales Comcast Corporation $ 29,542 18.2 % $ 42,951 24.2 % AT&T (1) $ — — % $ 21,740 12.2 % Six Months Ended June 30, 2018 2017 $ (thousands) % of Net Sales $ (thousands) % of Net Sales Comcast Corporation $ 67,517 20.6 % $ 85,198 25.1 % AT&T (1) $ — — % $ 40,940 12.1 % (1) Sales associated with this customer did not total more than 10% of our net sales for the indicated period. |
Trade Receivables Associated with Significant Customers | Trade receivables associated with these significant customers that totaled more than 10% of our accounts receivable, net were as follows: June 30, 2018 December 31, 2017 $ (thousands) % of Accounts Receivable, Net $ (thousands) % of Accounts Receivable, Net Comcast Corporation $ 19,570 13.6 % $ 25,142 16.6 % |
Inventories, Net and Signific29
Inventories, Net and Significant Suppliers (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Inventories, net were as follows: (In thousands) June 30, 2018 December 31, 2017 Raw materials $ 58,263 $ 43,638 Components 11,545 16,214 Work in process 5,908 1,847 Finished goods 79,007 105,178 Reserve for excess and obsolete inventory (7,537 ) (4,288 ) Inventories, net $ 147,186 $ 162,589 |
Changes in Reserve for Excess and Obsolete Inventory | Changes in the reserve for excess and obsolete inventory were as follows: (In thousands) Six Months Ended June 30, 2018 2017 Balance at beginning of period $ 4,288 $ 4,205 Additions charged to costs and expenses (1) 4,564 1,218 Sell through (2) (680 ) (576 ) (Write-offs)/Foreign exchange effects (635 ) (640 ) Balance at end of period $ 7,537 $ 4,207 (1) The additions charged to costs and expenses do not include inventory directly written-off that was scrapped during production totaling $0.5 million and $0.2 million for the six months ended June 30, 2018 and 2017 , respectively. These amounts are production waste and are not included in management's reserve for excess and obsolete inventory. (2) These amounts represent the reduction in reserves associated with inventory items that were sold during the period. |
Purchases from Significant Suppliers | Purchases from the following supplier totaled more than 10% of our total inventory purchases: Three Months Ended June 30, 2018 2017 $ (thousands) % of Total Inventory Purchases $ (thousands) % of Total Inventory Purchases Texas Instruments (1) $ — — % $ 11,450 11.0 % Six Months Ended June 30, 2018 2017 $ (thousands) % of Total Inventory Purchases $ (thousands) % of Total Inventory Purchases Texas Instruments (1) $ — — % $ 20,578 10.7 % (1) Purchases associated with this supplier did not total more than 10% of our total inventory purchases for the indicated period. |
Goodwill and Intangible Asset30
Goodwill and Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the Carrying Amount of Goodwill | Changes in the carrying amount of goodwill were as follows: (In thousands) Balance at December 31, 2017 $ 48,651 Foreign exchange effects (129 ) Balance at June 30, 2018 $ 48,522 |
Components of Intangible Assets, Net | The components of intangible assets, net were as follows: June 30, 2018 December 31, 2017 (In thousands) Gross (1) Accumulated Amortization (1) Net Gross (1) Accumulated Amortization (1) Net Distribution rights $ 335 $ (176 ) $ 159 $ 344 $ (165 ) $ 179 Patents 13,662 (5,218 ) 8,444 13,250 (5,310 ) 7,940 Trademarks and trade names 2,786 (1,746 ) 1,040 2,786 (1,594 ) 1,192 Developed and core technology 12,560 (7,079 ) 5,481 12,560 (6,071 ) 6,489 Capitalized software development costs 198 (113 ) 85 142 (77 ) 65 Customer relationships 32,534 (21,035 ) 11,499 32,534 (19,395 ) 13,139 Order backlog — — — 150 (113 ) 37 Total intangible assets, net $ 62,075 $ (35,367 ) $ 26,708 $ 61,766 $ (32,725 ) $ 29,041 (1) This table excludes the gross value of fully amortized intangible assets totaling $6.8 million and $6.0 million at June 30, 2018 and December 31, 2017 , respectively. |
Amortization Expense by Income Statement Caption | Amortization expense by income statement caption was as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Cost of sales $ 18 $ 55 $ 73 $ 74 Selling, general and administrative expenses 1,758 1,736 3,505 3,317 Total amortization expense $ 1,776 $ 1,791 $ 3,578 $ 3,391 |
Estimated Future Amortization Expense Related to Intangible Assets | Estimated future annual amortization expense related to our intangible assets at June 30, 2018 , was as follows: (In thousands) 2018 (remaining 6 months) $ 3,506 2019 6,922 2020 5,791 2021 2,253 2022 2,143 Thereafter 6,093 Total $ 26,708 |
Accrued Compensation (Tables)
Accrued Compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Components of Accrued Compensation | The components of accrued compensation were as follows: (In thousands) June 30, 2018 December 31, 2017 Accrued social insurance (1) $ 17,412 $ 17,727 Accrued salary/wages 9,789 7,910 Accrued vacation/holiday 2,908 2,769 Accrued bonus (2) 1,155 2,329 Accrued commission 669 1,089 Accrued medical insurance claims 321 286 Other accrued compensation 710 2,389 Total accrued compensation $ 32,964 $ 34,499 (1) PRC employers are required by law to remit the applicable social insurance payments to their local government. Social insurance is comprised of various components such as pension, medical insurance, job industry insurance, unemployment insurance, and a housing assistance fund, and is administered in a manner similar to social security in the United States. This amount represents our estimate of the amounts due to the PRC government for social insurance on June 30, 2018 and December 31, 2017 . (2) Accrued bonus includes an accrual for an extra month of salary ("13 th month salary") to be paid to employees in certain geographies where it is the customary business practice. This 13 th month salary is paid to these employees if they remain employed with us through December 31st. The total accrued for the 13 th month salary was $0.1 million and $0.7 million at June 30, 2018 and December 31, 2017 , respectively. The components of other accrued liabilities were as follows: (In thousands) June 30, 2018 December 31, 2017 Advertising and marketing $ 304 $ 232 Deferred revenue 336 215 Deposit for sale of Guangzhou factory — 4,901 Duties 792 1,184 Freight and handling fees 3,043 1,983 Product development 700 974 Product warranty claim costs 1,008 339 Professional fees 1,760 1,578 Property, plant, and equipment 509 2,151 Sales taxes and VAT 799 2,955 Short-term contingent consideration 3,870 3,800 Third-party commissions 535 599 Tooling (1) 1,728 1,843 Unrealized loss on foreign currency exchange contracts 163 630 Utilities 165 103 Other 5,338 5,232 Total other accrued liabilities $ 21,050 $ 28,719 (1) The tooling accrual balance relates to unearned revenue for tooling that will be sold to customers. |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Components of Other Accrued Liabilities | The components of accrued compensation were as follows: (In thousands) June 30, 2018 December 31, 2017 Accrued social insurance (1) $ 17,412 $ 17,727 Accrued salary/wages 9,789 7,910 Accrued vacation/holiday 2,908 2,769 Accrued bonus (2) 1,155 2,329 Accrued commission 669 1,089 Accrued medical insurance claims 321 286 Other accrued compensation 710 2,389 Total accrued compensation $ 32,964 $ 34,499 (1) PRC employers are required by law to remit the applicable social insurance payments to their local government. Social insurance is comprised of various components such as pension, medical insurance, job industry insurance, unemployment insurance, and a housing assistance fund, and is administered in a manner similar to social security in the United States. This amount represents our estimate of the amounts due to the PRC government for social insurance on June 30, 2018 and December 31, 2017 . (2) Accrued bonus includes an accrual for an extra month of salary ("13 th month salary") to be paid to employees in certain geographies where it is the customary business practice. This 13 th month salary is paid to these employees if they remain employed with us through December 31st. The total accrued for the 13 th month salary was $0.1 million and $0.7 million at June 30, 2018 and December 31, 2017 , respectively. The components of other accrued liabilities were as follows: (In thousands) June 30, 2018 December 31, 2017 Advertising and marketing $ 304 $ 232 Deferred revenue 336 215 Deposit for sale of Guangzhou factory — 4,901 Duties 792 1,184 Freight and handling fees 3,043 1,983 Product development 700 974 Product warranty claim costs 1,008 339 Professional fees 1,760 1,578 Property, plant, and equipment 509 2,151 Sales taxes and VAT 799 2,955 Short-term contingent consideration 3,870 3,800 Third-party commissions 535 599 Tooling (1) 1,728 1,843 Unrealized loss on foreign currency exchange contracts 163 630 Utilities 165 103 Other 5,338 5,232 Total other accrued liabilities $ 21,050 $ 28,719 (1) The tooling accrual balance relates to unearned revenue for tooling that will be sold to customers. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Changes in the Liability for Product Warranty Claim Costs | Changes in the liability for product warranty claim costs were as follows: (In thousands) Six Months Ended June 30, 2018 2017 Balance at beginning of period $ 339 $ 134 Accruals for warranties issued during the period 769 167 Settlements (in cash or in kind) during the period (100 ) (3 ) Balance at end of period $ 1,008 $ 298 |
Treasury Stock (Tables)
Treasury Stock (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Repurchased Shares of Common Stock | Repurchased shares of our common stock were as follows: Six Months Ended June 30, (In thousands) 2018 2017 Shares repurchased 225 239 Cost of shares repurchased $ 7,114 $ 14,885 |
Business Segment and Foreign 35
Business Segment and Foreign Operations (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Net Sales to External Customers by Geographic Area | Our net sales to external customers by geographic area were as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 United States $ 79,294 $ 85,569 $ 159,045 $ 167,497 Asia (excluding PRC) 27,467 26,916 54,867 51,566 People's Republic of China 20,627 21,835 40,744 37,578 Europe 20,330 19,740 39,460 37,164 Latin America 6,636 15,381 16,666 31,026 Other 8,169 8,139 16,439 14,155 Total net sales $ 162,523 $ 177,580 $ 327,221 $ 338,986 |
Long-Lived Tangible Assets by Geographic Area | Long-lived tangible assets by geographic area were as follows: (In thousands) June 30, 2018 December 31, 2017 United States $ 15,351 $ 14,674 People's Republic of China 92,261 96,984 All other countries 3,753 3,870 Total long-lived tangible assets $ 111,365 $ 115,528 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation Expense and Related Income Tax Benefit | Stock-based compensation expense by statement of operations caption and the related income tax benefit were as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Cost of sales $ 23 $ 19 $ 40 $ 34 Research and development expenses 201 144 356 263 Selling, general and administrative expenses: Employees 1,737 1,975 3,265 3,719 Outside directors 504 794 1,008 1,539 Total employee and director stock-based compensation expense $ 2,465 $ 2,932 $ 4,669 $ 5,555 Income tax benefit $ 519 $ 889 982 1,704 |
Stock Option Activity | Stock option activity was as follows: Number of Options (in 000's) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in 000's) Outstanding at December 31, 2017 520 $ 42.56 Granted 119 44.95 Exercised (30 ) 23.46 $ 700 Forfeited/canceled/expired (7 ) 27.74 Outstanding at June 30, 2018 (1) 602 $ 44.17 4.57 $ 1,814 Vested and expected to vest at June 30, 2018 (1) 602 $ 44.17 4.57 $ 1,814 Exercisable at June 30, 2018 (1) 404 $ 41.03 3.83 $ 1,814 (1) The aggregate intrinsic value represents the total pre-tax value (the difference between our closing stock price on the last trading day of the second quarter of 2018 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they all exercised their options on June 30, 2018 . This amount will change based on the fair market value of our stock. |
Assumptions Used in Valuation and Weighted Average Fair Value of Stock Option Grants | The assumptions we utilized in the Black-Scholes option pricing model and the resulting weighted average fair value of stock option grants were the following: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Weighted average fair value of grants $ — $ — $ 14.26 $ 19.61 Risk-free interest rate — % — % 2.51 % 1.75 % Expected volatility — % — % 33.09 % 34.25 % Expected life in years 0.00 0.00 4.53 4.52 |
Non-Vested Restricted Stock Award Activity | Non-vested restricted stock award activity was as follows: Shares (in 000's) Weighted-Average Grant Date Fair Value Non-vested at December 31, 2017 162 $ 61.19 Granted 137 44.79 Vested (58 ) 63.20 Forfeited (5 ) 59.72 Non-vested at June 30, 2018 236 $ 51.22 |
Performance-Based Common Stoc37
Performance-Based Common Stock Warrants (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Purchase Level and Number of Warrants That Will Vest | The table below presents the purchase levels and number of warrants that will vest in each period based upon achieving these purchase levels. Incremental Warrants That Will Vest Aggregate Level of Purchases by Comcast and Affiliates January 1, 2016 - December 31, 2017 January 1, 2018 - December 31, 2019 January 1, 2020 - December 31, 2021 $260 million 100,000 100,000 75,000 $300 million 75,000 75,000 75,000 $340 million 75,000 75,000 75,000 Maximum Potential Warrants Earned by Comcast 250,000 250,000 225,000 |
Assumptions Used in Valuation and Weighted Average Fair Value of Warrants | The assumptions we utilized in the Black Scholes option pricing model and the resulting weighted average fair value of the warrants were the following: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Fair value $6.92 $28.89 $6.92 $28.89 Price of Universal Electronics Inc. common stock $32.88 $67.21 $32.88 $67.21 Risk-free interest rate 2.71% 1.95% 2.71% 1.95% Expected volatility 40.20% 35.05% 40.20% 35.05% Expected life in years 4.50 5.50 4.50 5.50 |
Impact to Net Sales in Connection with Warrants and Related Income Tax Benefit | The impact to net sales recorded in connection with the warrants and the related income tax benefit were as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2018 2017 2018 2017 Reduction/(increase) to net sales (128) 331 343 1,263 Income tax benefit/(expense) (32) 123 86 471 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense), Net | Other income (expense), net consisted of the following: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Net gain (loss) on foreign currency exchange contracts (1) $ 1,865 $ (1,598 ) $ 534 $ (1,364 ) Net gain (loss) on foreign currency exchange transactions (2,965 ) 1,006 (2,240 ) 1,336 Other income 18 (50 ) 37 (31 ) Other income (expense), net $ (1,082 ) $ (642 ) $ (1,669 ) $ (59 ) (1) This represents the gains (losses) incurred on foreign currency hedging derivatives (see Note 17 for further details). |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Calculation of Earnings Per Share | Earnings per share was calculated as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per-share amounts) 2018 2017 2018 2017 BASIC Net income $ 22,659 $ 4,684 $ 22,072 $ 4,803 Weighted-average common shares outstanding 14,070 14,404 14,078 14,427 Basic earnings per share $ 1.61 $ 0.33 $ 1.57 $ 0.33 DILUTED Net income $ 22,659 $ 4,684 $ 22,072 $ 4,803 Weighted-average common shares outstanding for basic 14,070 14,404 14,078 14,427 Dilutive effect of stock options, restricted stock and common stock warrants 88 279 117 273 Weighted-average common shares outstanding on a diluted basis 14,158 14,683 14,195 14,700 Diluted earnings per share $ 1.60 $ 0.32 $ 1.55 $ 0.33 |
Securities Excluded from the Computation of Diluted Earnings (Loss) Per Common Share | The following number of stock options, shares of restricted stock and common stock warrants were excluded from the computation of diluted earnings per common share as their inclusion would have been anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Stock options 382 165 357 147 Restricted stock awards 204 — 172 29 Performance-based warrants — — — — |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Total Net Fair Value of Derivatives | The following table sets forth the total net fair value of derivatives: June 30, 2018 December 31, 2017 Fair Value Measurement Using Total Balance Fair Value Measurement Using Total Balance (In thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Foreign currency exchange contracts $ — $ (157 ) $ — $ (157 ) $ — $ (565 ) $ — $ (565 ) |
Foreign Currency Exchange Contracts | Details of foreign currency exchange contracts held were as follows: Date Held Type Position Held Notional Value (in millions) Forward Rate Unrealized Gain/(Loss) Recorded at Balance Sheet Date (in thousands) (1) Settlement Date June 30, 2018 USD/Euro USD $ 15.0 1.1575 $ (148 ) July 27, 2018 June 30, 2018 USD/Chinese Yuan Renminbi Chinese Yuan Renminbi $ 5.0 6.6195 $ (15 ) July 27, 2018 June 30, 2018 USD/Brazilian Real USD $ 1.0 3.8626 $ 6 July 27, 2018 December 31, 2017 USD/Euro USD $ 17.0 1.1858 $ (220 ) January 5, 2018 December 31, 2017 USD/Chinese Yuan Renminbi Chinese Yuan Renminbi $ 20.0 6.6481 $ (410 ) January 5, 2018 December 31, 2017 USD/Brazilian Real USD $ 2.5 3.2350 $ 65 January 24, 2018 (1) Unrealized gains on foreign currency exchange contracts are recorded in prepaid expenses and other current assets. Unrealized losses on foreign currency exchange contracts are recorded in other accrued liabilities. |
Business Combination (Tables)
Business Combination (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Purchase Price Allocation | Management's purchase price allocation was the following: (in thousands) Estimated Lives Fair Value Accounts receivable $ 429 Inventories 1,508 Prepaid expenses and other current assets 7 Property, plant and equipment 1-4 years 14 Current liabilities (408 ) Net tangible assets acquired 1,550 Trade name 8 years 400 Customer relationships 10 years 5,000 Order backlog 1 year 150 Goodwill 5,494 Total purchase price 12,594 Less: Contingent consideration (3,700 ) Cash paid $ 8,894 |
Pro Forma Financial Information | The following unaudited pro forma financial information presents the combined results of our operations and the operations of RCS as if this transaction had occurred on January 1, 2016. This unaudited pro forma financial information is not intended to represent or be indicative of the consolidated results of operations that would have been achieved had the acquisition actually been completed as of January 1, 2016, and should not be taken as a projection of the future consolidated results of our operations. Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per-share amounts) 2018 2017 2018 2017 Net sales $ 162,523 $ 177,580 $ 327,221 $ 339,548 Net income 22,659 4,767 22,072 4,541 Basic earnings per share $ 1.61 $ 0.33 $ 1.57 $ 0.31 Diluted earnings per share $ 1.60 $ 0.32 $ 1.55 $ 0.31 |
Basis of Presentation and Sig42
Basis of Presentation and Significant Accounting Policies - Adjustments Made to the Consolidated Balance Sheet Following Adoption (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Contract assets | $ 28,253 | $ 29,759 | $ 0 |
Inventories, net | 147,186 | 138,759 | 162,589 |
Prepaid expenses and other current assets | 14,312 | 11,513 | 11,687 |
Deferred income tax assets | 7,152 | 7,811 | 7,913 |
Liabilities and Stockholders' Equity | |||
Accounts payable and other current liabilities | 296,256 | 334,463 | 332,935 |
Deferred income tax liabilities | 1,530 | 4,443 | 4,423 |
Retained earnings | 292,936 | 270,864 | 266,780 |
As reported | |||
Assets | |||
Contract assets | 0 | 0 | |
Inventories, net | 169,855 | 162,589 | |
Prepaid expenses and other current assets | 14,307 | 11,687 | |
Deferred income tax assets | 7,250 | 7,913 | |
Liabilities and Stockholders' Equity | |||
Accounts payable and other current liabilities | 294,484 | 332,935 | |
Deferred income tax liabilities | 4,423 | ||
Retained earnings | 289,217 | $ 266,780 | |
ASU 2014-09 | Adjustments due to Adoption of ASU 2014-09 | |||
Assets | |||
Contract assets | 28,253 | 29,759 | |
Inventories, net | (22,669) | (23,830) | |
Prepaid expenses and other current assets | 5 | (174) | |
Deferred income tax assets | (98) | (102) | |
Liabilities and Stockholders' Equity | |||
Accounts payable and other current liabilities | 1,772 | 1,528 | |
Deferred income tax liabilities | 20 | ||
Retained earnings | $ 3,719 | $ 4,084 |
Basis of Presentation and Sig43
Basis of Presentation and Significant Accounting Policies - Condensed Balance Sheet, Pro Forma Amounts Under Previous Guidance (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Contract assets | $ 28,253 | $ 29,759 | $ 0 |
Inventories, net | 147,186 | 138,759 | 162,589 |
Prepaid expenses and other current assets | 14,312 | 11,513 | 11,687 |
Deferred income taxes | 7,152 | 7,811 | 7,913 |
Liabilities and Stockholders' Equity | |||
Accounts payable and other current liabilities | 296,256 | 334,463 | 332,935 |
Retained earnings | 292,936 | 270,864 | 266,780 |
Without Adoption of ASU 2014-09 | |||
Assets | |||
Contract assets | 0 | 0 | |
Inventories, net | 169,855 | 162,589 | |
Prepaid expenses and other current assets | 14,307 | 11,687 | |
Deferred income taxes | 7,250 | 7,913 | |
Liabilities and Stockholders' Equity | |||
Accounts payable and other current liabilities | 294,484 | 332,935 | |
Retained earnings | 289,217 | $ 266,780 | |
Effect of Change | ASU 2014-09 | |||
Assets | |||
Contract assets | 28,253 | 29,759 | |
Inventories, net | (22,669) | (23,830) | |
Prepaid expenses and other current assets | 5 | (174) | |
Deferred income taxes | (98) | (102) | |
Liabilities and Stockholders' Equity | |||
Accounts payable and other current liabilities | 1,772 | 1,528 | |
Retained earnings | $ 3,719 | $ 4,084 |
Basis of Presentation and Sig44
Basis of Presentation and Significant Accounting Policies - Condensed Statements of Operations, Pro Forma Amounts Under Previous Guidance (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net sales | $ 162,523 | $ 177,580 | $ 327,221 | $ 338,986 |
Cost of sales | 135,764 | 133,829 | 263,260 | 254,201 |
Selling, general and administrative expenses | 30,570 | 31,053 | 60,817 | 61,704 |
Provision for income taxes | 2,088 | 1,415 | 1,922 | 1,121 |
Net income | $ 22,659 | $ 4,684 | $ 22,072 | $ 4,803 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 1.61 | $ 0.33 | $ 1.57 | $ 0.33 |
Diluted (in dollars per share) | $ 1.60 | $ 0.32 | $ 1.55 | $ 0.33 |
Without Adoption of ASU 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net sales | $ 156,133 | $ 328,321 | ||
Cost of sales | 129,745 | 264,001 | ||
Selling, general and administrative expenses | 30,427 | 60,837 | ||
Provision for income taxes | 2,040 | 1,895 | ||
Net income | $ 22,478 | $ 22,437 | ||
Earnings per share: | ||||
Basic (in dollars per share) | $ 1.60 | $ 1.59 | ||
Diluted (in dollars per share) | $ 1.59 | $ 1.58 | ||
Effect of Change | ASU 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net sales | $ 6,390 | $ (1,100) | ||
Cost of sales | 6,019 | (741) | ||
Selling, general and administrative expenses | 143 | (20) | ||
Provision for income taxes | 48 | 27 | ||
Net income | $ 181 | $ (365) | ||
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.01 | $ (0.03) | ||
Diluted (in dollars per share) | $ 0.01 | $ (0.03) |
Cash and Cash Equivalents and45
Cash and Cash Equivalents and Restricted Cash - Cash and Cash Equivalents by Geographic Region (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 59,433 | $ 62,438 |
United States | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 6,465 | 10,489 |
People's Republic of China (PRC) | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 34,710 | 23,283 |
Asia (excluding the PRC) | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 1,348 | 1,405 |
Europe | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 8,139 | 18,071 |
South America | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 8,771 | $ 9,190 |
Cash and Cash Equivalents and46
Cash and Cash Equivalents and Restricted Cash - Restricted Cash (Details) - Sep. 29, 2016 ¥ in Millions, $ in Millions | USD ($) | CNY (¥) |
Guangzhou Factory | Disposed of by Sale | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Cash deposit | $ 5.1 | ¥ 32 |
Accounts Receivable, Net and 47
Accounts Receivable, Net and Revenue Concentrations - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Accounts Receivable, Net, Current [Abstract] | ||||
Trade receivables, gross | $ 140,483 | $ 142,299 | ||
Allowance for doubtful accounts | (1,008) | (1,064) | $ (950) | $ (904) |
Allowance for sales returns | (596) | (562) | ||
Net trade receivables | 138,879 | 140,673 | ||
Other | 4,783 | 10,905 | ||
Accounts receivable, net | $ 143,662 | $ 151,578 |
Accounts Receivable, Net and 48
Accounts Receivable, Net and Revenue Concentrations - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Schedule of Allowance for Doubtful Accounts | ||
Balance at beginning of period | $ 1,064 | $ 904 |
Additions to costs and expenses | 2 | 81 |
(Write-offs)/Foreign exchange effects | (58) | (35) |
Balance at end of period | $ 1,008 | $ 950 |
Accounts Receivable, Net and 49
Accounts Receivable, Net and Revenue Concentrations - Sales Returns (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Allowance for sales returns | $ 0.3 | $ 0.4 |
Accounts Receivable, Net and 50
Accounts Receivable, Net and Revenue Concentrations - Net Sales to Significant Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Major Customer [Line Items] | ||||
Net sales | $ 162,523 | $ 177,580 | $ 327,221 | $ 338,986 |
Net Sales | Comcast Corporation | ||||
Revenue, Major Customer [Line Items] | ||||
Net sales | $ 29,542 | $ 42,951 | $ 67,517 | $ 85,198 |
Percent of net sales | 18.20% | 24.20% | 20.60% | 25.10% |
Net Sales | AT&T | ||||
Revenue, Major Customer [Line Items] | ||||
Net sales | $ 0 | $ 21,740 | $ 0 | $ 40,940 |
Percent of net sales | 0.00% | 12.20% | 0.00% | 12.10% |
Accounts Receivable, Net and 51
Accounts Receivable, Net and Revenue Concentrations - Trade Receivables Associated with Significant Customers (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Revenue, Major Customer [Line Items] | ||
Accounts receivable, net | $ 143,662 | $ 151,578 |
Accounts Receivable, Net | Comcast Corporation | ||
Revenue, Major Customer [Line Items] | ||
Accounts receivable, net | $ 19,570 | $ 25,142 |
Percent of accounts receivable, net | 13.60% | 16.60% |
Inventories, Net and Signific52
Inventories, Net and Significant Suppliers - Inventories, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | |||||
Raw materials | $ 58,263 | $ 43,638 | |||
Components | 11,545 | 16,214 | |||
Work in process | 5,908 | 1,847 | |||
Finished goods | 79,007 | 105,178 | |||
Reserve for excess and obsolete inventory | (7,537) | (4,288) | $ (4,207) | $ (4,205) | |
Inventories, net | $ 147,186 | $ 138,759 | $ 162,589 |
Inventories, Net and Signific53
Inventories, Net and Significant Suppliers - Changes in Reserve for Excess and Obsolete Inventory (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Schedule of Reserve for Excess and Obsolete Inventory [Rollforward] | ||
Balance at beginning of period | $ 4,288 | $ 4,205 |
Additions charged to costs and expenses | 4,564 | 1,218 |
Sell through | (680) | (576) |
(Write-offs)/Foreign exchange effects | (635) | (640) |
Balance at end of period | 7,537 | 4,207 |
Inventory written-off and scrapped during production | $ 500 | $ 200 |
Inventories, Net and Signific54
Inventories, Net and Significant Suppliers - Purchases from Significant Suppliers (Details) - Texas Instruments - Supplier Concentration Risk - Inventory Purchases - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Concentration Risk [Line Items] | ||||
Purchases from significant supplier | $ 0 | $ 11,450 | $ 0 | $ 20,578 |
Percent of total inventory purchases | 0.00% | 11.00% | 0.00% | 10.70% |
Inventories, Net and Signific55
Inventories, Net and Significant Suppliers - Related Party Supplier (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Executive Vice President | |||
Related Party Transaction [Line Items] | |||
Ownership percentage in third party by executive | 40.00% | ||
Related Party Supplier | Supplier Concentration Risk | Inventory Purchases | |||
Related Party Transaction [Line Items] | |||
Inventory purchases | $ 1.6 | $ 1.1 | $ 2.6 |
Goodwill and Intangible Asset56
Goodwill and Intangible Assets, Net - Changes in the Carrying Amount of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Balance | $ 48,651 |
Foreign exchange effects | (129) |
Balance | $ 48,522 |
Goodwill and Intangible Asset57
Goodwill and Intangible Assets, Net - Components of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross | $ 62,075 | $ 61,766 |
Accumulated Amortization | (35,367) | (32,725) |
Net | 26,708 | 29,041 |
Gross value of fully amortized intangible assets | 6,800 | 6,000 |
Distribution rights | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross | 335 | 344 |
Accumulated Amortization | (176) | (165) |
Net | 159 | 179 |
Patents | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross | 13,662 | 13,250 |
Accumulated Amortization | (5,218) | (5,310) |
Net | 8,444 | 7,940 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross | 2,786 | 2,786 |
Accumulated Amortization | (1,746) | (1,594) |
Net | 1,040 | 1,192 |
Developed and core technology | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross | 12,560 | 12,560 |
Accumulated Amortization | (7,079) | (6,071) |
Net | 5,481 | 6,489 |
Capitalized software development costs | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross | 198 | 142 |
Accumulated Amortization | (113) | (77) |
Net | 85 | 65 |
Customer relationships | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross | 32,534 | 32,534 |
Accumulated Amortization | (21,035) | (19,395) |
Net | 11,499 | 13,139 |
Order backlog | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross | 0 | 150 |
Accumulated Amortization | 0 | (113) |
Net | $ 0 | $ 37 |
Goodwill and Intangible Asset58
Goodwill and Intangible Assets, Net - Amortization Expense by Income Statement Caption (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 1,776 | $ 1,791 | $ 3,578 | $ 3,391 |
Cost of sales | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | 18 | 55 | 73 | 74 |
Selling, general and administrative expenses | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 1,758 | $ 1,736 | $ 3,505 | $ 3,317 |
Goodwill and Intangible Asset59
Goodwill and Intangible Assets, Net - Estimated Future Annual Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Schedule of Estimated Future Amortization expense | ||
2018 (remaining 6 months) | $ 3,506 | |
2,019 | 6,922 | |
2,020 | 5,791 | |
2,021 | 2,253 | |
2,022 | 2,143 | |
Thereafter | 6,093 | |
Net | $ 26,708 | $ 29,041 |
Line of Credit (Details)
Line of Credit (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Line of Credit Facility [Line Items] | |||||
Amount outstanding under line of credit | $ 111,000,000 | $ 111,000,000 | $ 138,000,000 | ||
Interest expense on borrowings | $ 1,400,000 | $ 600,000 | $ 2,500,000 | $ 1,100,000 | |
Line of Credit | US Bank | |||||
Line of Credit Facility [Line Items] | |||||
Effective interest rate | 3.84% | 3.84% | |||
Line of Credit | US Bank | LIBOR | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 1.25% | ||||
Line of Credit | US Bank | LIBOR | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 1.75% | ||||
Line of Credit | US Bank | Base Rate | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 0.00% | ||||
Line of Credit | US Bank | Base Rate | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Line of Credit | US Bank | Enson | |||||
Line of Credit Facility [Line Items] | |||||
Ownership interest used to secure obligations | 65.00% | 65.00% | |||
Line of Credit | Second Amended Credit Agreement | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | $ 170,000,000 | $ 170,000,000 | |||
Commitment fees | 0 | ||||
Letter of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Letter of credit outstanding amount | $ 0 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 2,088 | $ 1,415 | $ 1,922 | $ 1,121 | |
Effective tax rate | 8.40% | 23.20% | 8.00% | 18.90% | |
Unrecognized tax benefits | $ 5,700 | $ 5,700 | |||
Unrecognized tax benefits that would impact effective rate | 5,400 | 5,400 | |||
Accrued interest and penalties | $ 600 | $ 600 | $ 500 |
Accrued Compensation (Details)
Accrued Compensation (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Components of Accrued Compensation | ||
Accrued social insurance | $ 17,412 | $ 17,727 |
Accrued salary/wages | 9,789 | 7,910 |
Accrued vacation/holiday | 2,908 | 2,769 |
Accrued bonus | 1,155 | 2,329 |
Accrued commission | 669 | 1,089 |
Accrued medical insurance claims | 321 | 286 |
Other accrued compensation | 710 | 2,389 |
Total accrued compensation | 32,964 | 34,499 |
Salaries accrued for thirteenth month | $ 100 | $ 700 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Advertising and marketing | $ 304 | $ 232 |
Deferred revenue | 336 | 215 |
Deposit for sale of Guangzhou factory | 0 | 4,901 |
Duties | 792 | 1,184 |
Freight and handling fees | 3,043 | 1,983 |
Product development | 700 | 974 |
Product warranty claim costs | 1,008 | 339 |
Professional fees | 1,760 | 1,578 |
Property, plant, and equipment | 509 | 2,151 |
Sales taxes and VAT | 799 | 2,955 |
Short-term contingent consideration | 3,870 | 3,800 |
Third-party commissions | 535 | 599 |
Tooling | 1,728 | 1,843 |
Unrealized loss on foreign currency exchange contracts | 163 | 630 |
Utilities | 165 | 103 |
Other | 5,338 | 5,232 |
Total other accrued liabilities | $ 21,050 | $ 28,719 |
Commitments and Contingencies -
Commitments and Contingencies - Changes in the Liability for Product Warranty Claim Costs (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Schedule of Changes in Reserve for Product Warranty Claim Costs | ||
Balance at beginning of period | $ 339 | $ 134 |
Accruals for warranties issued during the period | 769 | 167 |
Settlements (in cash or in kind) during the period | (100) | (3) |
Balance at end of period | $ 1,008 | $ 298 |
Commitments and Contingencies65
Commitments and Contingencies - Restructuring Activities and Sale of Guangzhou Factory (Details) $ in Thousands, ¥ in Millions | Jun. 26, 2018USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Apr. 26, 2018USD ($) | Apr. 26, 2018CNY (¥) | Apr. 23, 2018USD ($) | Apr. 23, 2018CNY (¥) | Sep. 26, 2016CNY (¥) |
Restructuring Cost and Reserve [Line Items] | ||||||||||
Factory transition restructuring charges | $ 0 | $ 449 | $ 0 | $ 5,699 | ||||||
Nonrefundable deposit | $ 5,100 | ¥ 34 | ||||||||
Consideration receivable upon government approvals | 35,800 | 237 | ||||||||
Escrow deposit | $ 10,300 | ¥ 68 | ||||||||
Gain on sale of Guangzhou factory | $ 37,000 | $ 36,978 | 0 | $ 36,978 | 0 | |||||
Net gain on disposal | $ 32,100 | |||||||||
Guangzhou Factory | Disposed of by Sale | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Consideration received in sale | $ 51,400 | ¥ 339 | ¥ 320 | |||||||
Escrow deposit as percentage of purchase price | 10.00% | |||||||||
Employee Severance | Manufacturing Activities Transition | Selling, General and Administrative Expenses | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Factory transition restructuring charges | $ 400 | $ 5,700 |
Commitments and Contingencies66
Commitments and Contingencies - Litigation (Details) - UEBV Lawsuit - Pending Litigation | Jun. 10, 2015productsubsidiarypatentcustomer | Sep. 30, 2015patent |
Contingencies [Line Items] | ||
Number of subsidiaries named in lawsuit | subsidiary | 1 | |
Number of customers named in lawsuit | customer | 1 | |
Design Patents | ||
Contingencies [Line Items] | ||
Number of products named in lawsuit | product | 1 | |
Number of patents allegedly infringed upon | 2 | |
Utility Patents | ||
Contingencies [Line Items] | ||
Number of patents allegedly infringed upon | 1 | 1 |
Treasury Stock - Narrative (Det
Treasury Stock - Narrative (Details) - USD ($) | Jul. 26, 2018 | Jun. 30, 2018 | May 11, 2018 |
Equity, Class of Treasury Stock [Line Items] | |||
Share value available for repurchase | $ 3,600,000 | ||
Subsequent Event | |||
Equity, Class of Treasury Stock [Line Items] | |||
Open market share value authorized for repurchase | $ 5,400,000 | ||
Share Repurchase Plan - Authorized May 16, 2018 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Open market share value authorized for repurchase | $ 10,000,000 | ||
Share Repurchase Plan - Authorized July 26, 2018 | Subsequent Event | |||
Equity, Class of Treasury Stock [Line Items] | |||
Open market share value authorized for repurchase | $ 5,000,000 |
Treasury Stock - Repurchased Sh
Treasury Stock - Repurchased Shares of Common Stock (Details) - USD ($) shares in Thousands, $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Equity [Abstract] | ||
Shares repurchased (in shares) | 225 | 239 |
Cost of shares repurchased | $ 7,114 | $ 14,885 |
Business Segment and Foreign 69
Business Segment and Foreign Operations - Net Sales to External Customers by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Schedule of Revenues from Geographical Segments [Line Items] | ||||
Net sales | $ 162,523 | $ 177,580 | $ 327,221 | $ 338,986 |
United States | ||||
Schedule of Revenues from Geographical Segments [Line Items] | ||||
Net sales | 79,294 | 85,569 | 159,045 | 167,497 |
Asia (excluding the PRC) | ||||
Schedule of Revenues from Geographical Segments [Line Items] | ||||
Net sales | 27,467 | 26,916 | 54,867 | 51,566 |
People's Republic of China (PRC) | ||||
Schedule of Revenues from Geographical Segments [Line Items] | ||||
Net sales | 20,627 | 21,835 | 40,744 | 37,578 |
Europe | ||||
Schedule of Revenues from Geographical Segments [Line Items] | ||||
Net sales | 20,330 | 19,740 | 39,460 | 37,164 |
Latin America | ||||
Schedule of Revenues from Geographical Segments [Line Items] | ||||
Net sales | 6,636 | 15,381 | 16,666 | 31,026 |
Other | ||||
Schedule of Revenues from Geographical Segments [Line Items] | ||||
Net sales | $ 8,169 | $ 8,139 | $ 16,439 | $ 14,155 |
Business Segment and Foreign 70
Business Segment and Foreign Operations - Long-Lived Tangible Assets by Geographic Area (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Long-lived Assets from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived tangible assets | $ 111,365 | $ 115,528 |
United States | ||
Long-lived Assets from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived tangible assets | 15,351 | 14,674 |
People's Republic of China (PRC) | ||
Long-lived Assets from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived tangible assets | 92,261 | 96,984 |
All other countries | ||
Long-lived Assets from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived tangible assets | $ 3,753 | $ 3,870 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-based Compensation Expense and Related Income Tax Benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Employee and director stock-based compensation expense | $ 2,465 | $ 2,932 | $ 4,669 | $ 5,555 |
Income tax benefit | 519 | 889 | 982 | 1,704 |
Cost of sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Employee and director stock-based compensation expense | 23 | 19 | 40 | 34 |
Research and development expenses | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Employee and director stock-based compensation expense | 201 | 144 | 356 | 263 |
Selling, general and administrative expenses | Employees | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Employee and director stock-based compensation expense | 1,737 | 1,975 | 3,265 | 3,719 |
Selling, general and administrative expenses | Outside directors | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Employee and director stock-based compensation expense | $ 504 | $ 794 | $ 1,008 | $ 1,539 |
Stock-Based Compensation - St72
Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Number of Options | |
Outstanding at beginning of period (in shares) | shares | 520 |
Granted (in shares) | shares | 119 |
Exercised (in shares) | shares | (30) |
Forfeited/canceled/expired (in shares) | shares | (7) |
Outstanding at end of period (in shares) | shares | 602 |
Vested and expected to vest at end of period (in shares) | shares | 602 |
Exercisable at end of period (in shares) | shares | 404 |
Weighted-Average Exercise Price | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 42.56 |
Granted (in dollars per share) | $ / shares | 44.95 |
Exercised (in dollars per share) | $ / shares | 23.46 |
Forfeited/canceled/expired (in dollars per share) | $ / shares | 27.74 |
Outstanding at end of period (in dollars per share) | $ / shares | 44.17 |
Vested and expected to vest at end of period (in dollars per share) | $ / shares | 44.17 |
Exercisable at end of period (in dollars per share) | $ / shares | $ 41.03 |
Weighted-Average Remaining Contractual Term (in years) | |
Outstanding at end of period | 4 years 6 months 26 days |
Vested and expected to vest at end of period | 4 years 6 months 26 days |
Exercisable at end of period | 3 years 9 months 29 days |
Aggregate Intrinsic Value | |
Exercised | $ | $ 700 |
Outstanding at end of period | $ | 1,814 |
Vested and expected to vest at end of period | $ | 1,814 |
Exercisable at end of period | $ | $ 1,814 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used in Valuation and Weighted Average Fair Value of Stock Option Grants (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Weighted average fair value of grants (in dollars per share) | $ 0 | $ 0 | $ 14.26 | $ 19.61 |
Risk-free interest rate | 0.00% | 0.00% | 2.51% | 1.75% |
Expected volatility | 0.00% | 0.00% | 33.09% | 34.25% |
Expected life | 0 years | 0 years | 4 years 6 months 11 days | 4 years 6 months 7 days |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized pre-tax stock-based compensation expense | $ 2.8 |
Unrecognized pre-tax stock-based compensation expense, remaining weighted-average life | 2 years |
Restricted Stock Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized pre-tax stock-based compensation expense | $ 9.8 |
Unrecognized pre-tax stock-based compensation expense, remaining weighted-average life | 2 years 1 month 6 days |
Stock-Based Compensation - Non-
Stock-Based Compensation - Non-Vested Restricted Stock Award Activity (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Shares | |
Non-vested at beginning of period (in shares) | shares | 162 |
Granted (in shares) | shares | 137 |
Vested (in shares) | shares | (58) |
Forfeited (in shares) | shares | (5) |
Non-vested at end of period (in shares) | shares | 236 |
Weighted-Average Grant Date Fair Value | |
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 61.19 |
Granted (in dollars per share) | $ / shares | 44.79 |
Vested (in dollars per share) | $ / shares | 63.20 |
Forfeited (in dollars per share) | $ / shares | 59.72 |
Non-vested at end of period (in dollars per share) | $ / shares | $ 51.22 |
Performance-Based Common Stoc76
Performance-Based Common Stock Warrants - Narrative (Details) - Common Stock Purchase Warrants | Mar. 09, 2016USD ($)vesting_period$ / sharesshares | Jun. 30, 2018USD ($)shares |
Class of Warrant or Right [Line Items] | ||
Number of shares called by warrants (in shares) | shares | 725,000 | 475,000 |
Exercise price of warrants (in dollars per share) | $ / shares | $ 54.55 | |
Number of vesting periods | vesting_period | 3 | |
Term of successive vesting periods | 2 years | 2 years |
Vesting period one | 2 years | |
Vested warrants outstanding (in shares) | shares | 175,000 | |
Total vesting period | 4 years | |
Number of warrants vested (in shares) | shares | 0 | |
Unrecognized estimated fair value of unvested warrants | $ 2,900,000 | |
Supply Threshold | ||
Class of Warrant or Right [Line Items] | ||
Aggregate level of purchases, $260 million threshold | $ 260,000,000 | |
Aggregate level of purchases, $340 million threshold | $ 340,000,000 | |
Supply threshold amount | $ 680,000,000 |
Performance-Based Common Stoc77
Performance-Based Common Stock Warrants - Purchase Level and Number of Warrants to Vest (Details) - Common Stock Purchase Warrants - Supply Threshold | Mar. 09, 2016USD ($)shares |
Class of Warrant or Right [Line Items] | |
Aggregate level of purchases, threshold one | $ | $ 260,000,000 |
Aggregate level of purchases, threshold two | $ | 300,000,000 |
Aggregate level of purchases, threshold three | $ | $ 340,000,000 |
Incremental Warrants That Will Vest January 1, 2016 - December 31, 2017 | |
$260 million threshold (in shares) | 100,000 |
$300 million threshold (in shares) | 75,000 |
$340 million threshold (in shares) | 75,000 |
Maximum Potential Warrants Earned by Comcast (in shares) | 250,000 |
Incremental Warrants That Will Vest January 1, 2018 - December 31, 2019 | |
$260 million threshold (in shares) | 100,000 |
$300 million threshold (in shares) | 75,000 |
$340 million threshold (in shares) | 75,000 |
Maximum Potential Warrants Earned by Comcast (in shares) | 250,000 |
Incremental Warrants That Will Vest January 1, 2020 - December 31, 2021 | |
$260 million threshold (in shares) | 75,000 |
$300 million threshold (in shares) | 75,000 |
$340 million threshold (in shares) | 75,000 |
Maximum Potential Warrants Earned by Comcast (in shares) | 225,000 |
Performance-Based Common Stoc78
Performance-Based Common Stock Warrants - Assumptions Used in Valuation and Weighted Average Fair Value of Warrants (Details) - Common Stock Purchase Warrants | Jun. 30, 2018$ / shares | Jun. 30, 2017$ / shares |
Class of Warrant or Right [Line Items] | ||
Fair value (in dollars per share) | $ 6.92 | $ 28.89 |
Price of Universal Electronics Inc. common stock (in dollars per share) | $ 32.875 | $ 67.210 |
Measurement Input, Risk Free Interest Rate [Member] | ||
Class of Warrant or Right [Line Items] | ||
Risk-free interest rate | 0.0271 | 0.0195 |
Measurement Input, Price Volatility [Member] | ||
Class of Warrant or Right [Line Items] | ||
Risk-free interest rate | 0.4020 | 0.3505 |
Measurement Input, Expected Term [Member] | ||
Class of Warrant or Right [Line Items] | ||
Expected life | 4 years 6 months | 5 years 6 months |
Performance-Based Common Stoc79
Performance-Based Common Stock Warrants - Impact to Net Sales in Connection with Warrants and Related Income Tax Benefit (Details) - Common Stock Purchase Warrants - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Class of Warrant or Right [Line Items] | ||||
Reduction/(increase) to net sales | $ (128) | $ 331 | $ 343 | $ 1,263 |
Income tax benefit/(expense) | $ (32) | $ 123 | $ 86 | $ 471 |
Other Income (Expense), Net (De
Other Income (Expense), Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Other Income and Expenses [Abstract] | ||||
Net gain (loss) on foreign currency exchange contracts | $ 1,865 | $ (1,598) | $ 534 | $ (1,364) |
Net gain (loss) on foreign currency exchange transactions | (2,965) | 1,006 | (2,240) | 1,336 |
Other income | 18 | (50) | 37 | (31) |
Other income (expense), net | $ (1,082) | $ (642) | $ (1,669) | $ (59) |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
BASIC | ||||
Net income | $ 22,659 | $ 4,684 | $ 22,072 | $ 4,803 |
Weighted-average common shares outstanding (in shares) | 14,070 | 14,404 | 14,078 | 14,427 |
Basic earnings per share (in dollars per share) | $ 1.61 | $ 0.33 | $ 1.57 | $ 0.33 |
DILUTED | ||||
Net income | $ 22,659 | $ 4,684 | $ 22,072 | $ 4,803 |
Weighted-average common shares outstanding (in shares) | 14,070 | 14,404 | 14,078 | 14,427 |
Dilutive effect of stock options, restricted stock and common stock warrants (in shares) | 88 | 279 | 117 | 273 |
Weighted-average common shares outstanding on a diluted basis (in shares) | 14,158 | 14,683 | 14,195 | 14,700 |
Diluted earnings per share (in dollars per share) | $ 1.60 | $ 0.32 | $ 1.55 | $ 0.33 |
Earnings Per Share - Securities
Earnings Per Share - Securities Excluded from the Computation of Diluted Earnings (Loss) Per Common Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded in computation of diluted earning per share (in shares) | 382 | 165 | 357 | 147 |
Restricted stock awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded in computation of diluted earning per share (in shares) | 204 | 0 | 172 | 29 |
Performance-based warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded in computation of diluted earning per share (in shares) | 0 | 0 | 0 | 0 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative Instruments,Gain (Loss) [Line Items] | ||||
Net gain (loss) on foreign currency exchange contracts | $ 1,865 | $ (1,598) | $ 534 | $ (1,364) |
Not Designated as Hedging Instrument | Foreign Currency Exchange Contracts | Other Income (Expense), Net | ||||
Derivative Instruments,Gain (Loss) [Line Items] | ||||
Net gain (loss) on foreign currency exchange contracts | $ 1,900 | $ (1,600) | $ 500 | $ (1,400) |
Derivatives - Total Net Fair Va
Derivatives - Total Net Fair Value of Derivatives (Details) - Fair Value Measurements on a Recurring Basis - Foreign Currency Exchange Contracts - Not Designated as Hedging Instrument - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Total Balance | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts | $ (157) | $ (565) |
Level 1 | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts | 0 | 0 |
Level 2 | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts | (157) | (565) |
Level 3 | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency exchange contracts | $ 0 | $ 0 |
Derivatives - Foreign Currency
Derivatives - Foreign Currency Exchange Contracts (Details) - Not Designated as Hedging Instrument | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018USD ($)¥ / $$ / R$$ / € | Dec. 31, 2017USD ($)¥ / $$ / R$$ / € | |
USD/Euro Foreign Exchange Forward, July 27, 2018 | USD | ||
Derivative [Line Items] | ||
Notional value | $ 15,000,000 | |
Forward rate | $ / € | 1.1575 | |
Unrealized gain/(loss) recorded at balance sheet date | $ (148,000) | |
USD/Chinese Yuan Renminbi Foreign Exchange Forward, July 27, 2018 | Chinese Yuan Renminbi | ||
Derivative [Line Items] | ||
Notional value | $ 5,000,000 | |
Forward rate | ¥ / $ | 6.6195 | |
Unrealized gain/(loss) recorded at balance sheet date | $ (15,000) | |
USD/Brazilian Real Foreign Exchange Forward, July 24, 2018 | USD | ||
Derivative [Line Items] | ||
Notional value | $ 1,000,000 | |
Forward rate | $ / R$ | 3.8626 | |
Unrealized gain/(loss) recorded at balance sheet date | $ 6,000 | |
USD/Euro Foreign Exchange Forward, January 5, 2018 | USD | ||
Derivative [Line Items] | ||
Notional value | $ 17,000,000 | |
Forward rate | $ / € | 1.1858 | |
Unrealized gain/(loss) recorded at balance sheet date | $ (220,000) | |
USD/Chinese Yuan Renminbi Foreign Exchange Forward, January 5, 2018 | Chinese Yuan Renminbi | ||
Derivative [Line Items] | ||
Notional value | $ 20,000,000 | |
Forward rate | ¥ / $ | 6.6481 | |
Unrealized gain/(loss) recorded at balance sheet date | $ (410,000) | |
USD/Brazilian Real Foreign Exchange Forward, January 24, 2018 | USD | ||
Derivative [Line Items] | ||
Notional value | $ 2,500,000 | |
Forward rate | $ / R$ | 3.2350 | |
Unrealized gain/(loss) recorded at balance sheet date | $ 65,000 |
Business Combination - Narrativ
Business Combination - Narrative (Details) | Apr. 06, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) |
Business Combination | |||||||
Cash consideration | $ 0 | $ 8,854,000 | |||||
Fair value of earnout consideration | $ 9,730,000 | 9,730,000 | $ 13,400,000 | ||||
Residential Control Systems, Inc | |||||||
Business Combination | |||||||
Initial purchase price | $ 12,600,000 | ||||||
Cash consideration | 8,894,000 | ||||||
Contingent consideration | 3,700,000 | ||||||
Net sales | 800,000 | $ 1,400,000 | 1,900,000 | 1,400,000 | |||
Net loss | 600,000 | $ 400,000 | 900,000 | ||||
Additional earnout payments | $ 10,000,000 | ||||||
Net increase in amortization expense | 100,000 | ||||||
Acquisition costs excluded from pro forma net income | $ 100,000 | ||||||
Residential Control Systems, Inc | Long-term Contingent Consideration | |||||||
Business Combination | |||||||
Fair value of earnout consideration | $ 2,400,000 | $ 2,400,000 | |||||
Measurement Input, Discount Rate [Member] | Residential Control Systems, Inc | Valuation Methodology Based on Future Operating Income Projections | |||||||
Business Combination | |||||||
Discount rate | 0.248 |
Business Combination - Purchase
Business Combination - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Apr. 06, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Business Combination | ||||
Goodwill | $ 48,522 | $ 48,651 | ||
Cash paid | $ 0 | $ 8,854 | ||
Residential Control Systems, Inc | ||||
Business Combination | ||||
Accounts receivable | $ 429 | |||
Inventories | 1,508 | |||
Prepaid expenses and other current assets | 7 | |||
Property, plant and equipment | 14 | |||
Current liabilities | (408) | |||
Net tangible assets acquired | 1,550 | |||
Goodwill | 5,494 | |||
Total purchase price | 12,594 | |||
Less: Contingent consideration | (3,700) | |||
Cash paid | 8,894 | |||
Residential Control Systems, Inc | Minimum | ||||
Business Combination | ||||
Estimated lives of property, plant and equipment | 1 year | |||
Residential Control Systems, Inc | Maximum | ||||
Business Combination | ||||
Estimated lives of property, plant and equipment | 4 years | |||
Residential Control Systems, Inc | Trade name | ||||
Business Combination | ||||
Finite-lived intangible assets | 400 | |||
Estimated useful life of intangible assets | 8 years | |||
Residential Control Systems, Inc | Customer relationships | ||||
Business Combination | ||||
Finite-lived intangible assets | 5,000 | |||
Estimated useful life of intangible assets | 10 years | |||
Residential Control Systems, Inc | Order backlog | ||||
Business Combination | ||||
Finite-lived intangible assets | $ 150 | |||
Estimated useful life of intangible assets | 1 year |
Business Combination - Pro Form
Business Combination - Pro Forma Financial Information (Details) - Residential Control Systems, Inc - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Business Combination | ||||
Net sales | $ 162,523 | $ 177,580 | $ 327,221 | $ 339,548 |
Net income | $ 22,659 | $ 4,767 | $ 22,072 | $ 4,541 |
Basic earnings per share attributable to Universal Electronics Inc. (in dollars per share) | $ 1.61 | $ 0.33 | $ 1.57 | $ 0.31 |
Diluted earnings per share attributable to Universal Electronics Inc. (in dollars per share) | $ 1.60 | $ 0.32 | $ 1.55 | $ 0.31 |