UEIC

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 4:30 p.m. ET Interim Chief Executive Officer and Chief Operating Officer - Richard Carnifax Chief Financial Officer - Wade Michael Jenke General Counsel - Ryan Hochgesang Operator: Good afternoon. My name is Angelina, and I will be your conference operator today. Now I would like to welcome everyone to Universal Electronics Second Quarter 26 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a Q&A session. To ask a question during the session, you would need to press 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. I will now turn today's conference call over to our general counsel, Ryan Hochgesang. Please go ahead. Ryan Hochgesang: Thank you, operator, and thank you all for joining us for the Universal Electronics Second Quarter 26 Financial Results Conference Call. By now, you should have received a copy of the press release. If you have not, please visit the Investor Relations section of the website. This call is being broadcast live over the Internet. A webcast replay of this call, including any additional updated material, non information that might be discussed during this call, will be available on the company's website at www.uei.com. For a period of 1 year. During this call, management may make forward looking statements regarding future events and the future financial performance of the company and cautions you that these statements are just projections and actual results or events may differ materially from those projections. These statements include the company's goals, focus, strategies, and opportunities market trends, including in the connected home and the home entertainment markets, expectations with respect to customer orders and customer demand, including short term and long term demand, expectations with respect to supply chain actions and procurement, R&D, and product development activities, executive management transition action, restructuring plans and actions, including expected benefits and timing, financial projections and forecasts, including revenue, gross profit, operating profit, and net income, adjusted free cash flow, cash, cost reductions, and working capital, our ability to respond to business and regulatory changes, such as tariffs, and macroeconomic conditions. And expectations with respect to our ongoing litigation. The company undertakes no obligation to revise or update these statements to events or circumstances that may arise after today's date unless required by law or regulation and refers you to the press release mentioned at the beginning of this call and the documents the company has filed with the SEC including its 2025 annual report on Form 10 k and the periodic and current reports filed to furnish them to the In management's financial remarks, adjusted non GAAP metrics will be referenced. Management provides adjusted non GAAP metrics because it uses them for budget planning purposes. And for making operational and financial decisions. Believes that providing these non GAAP financial measures to investors as a supplement to GAAP financial measures helps investors evaluate UEI's core operating and financial performance and business trends consistent with how management evaluates such performance and trend. In addition, management believes these measures facilitate comparisons with the core operating and financial results and business trends of competitors and other companies. A full description and reconciliation of these adjusted non GAAP measures versus GAAP are included in the company's press release issued today. Joining me today are interim CEO and Chief Operating Officer, Rick Carnifax and chief financial officer, Wade Michael Jenke. Rick will provide an overview of our business, and Wade will deliver our financial results. it is my pleasure to introduce Rick Carnifax. Please go ahead, Rick. Richard Carnifax: Thank you, Ryan, and thank you all for joining us. Before I turn to the quarter, I want to acknowledge the announcement in this afternoon's release. As disclosed, I will be stepping down as interim chief executive officer effective today, August 6. The board has appointed Wade Michael Jenke as chief executive officer I look forward to supporting him through an orderly transition. The details are in the release, and the Form 8-K filed this afternoon. This does not change the operating plan, the framework we are reaffirming today, or the actions underway across the business. And I will keep my remarks on the quarter. 2 quarters ago, we outlined 3 structural moves for 2026. And last quarter, we reported the early proof points. Q2 is the quarter where those actions moved from early progress into the results themselves. Total revenue was 73.2 million down 25% year over year, including the impact of customer refund accruals associated with the tariff recovery and reflecting conditions we have described before. Component and memory cost inflation working through our customers' programs, legacy video and structural decline, European retail under pressure, a connected home inflection still delayed. Those conditions have not eased, and we have not been waiting for them to. What has changed is the company is now profitable through them, On less revenue than in Q1. The clearest way to see that is the trajectory across the 2 In Q1, we reported an adjusted non GAAP loss of approximately $0.10 per share. In Q2, on slightly lower revenue, we earned approximately $0.04 per share $0.34 including a onetime recovery of previously paid tariffs. The $5.1 million recovery is nonrecurring, and is cash recovered rather than operating performance. Excluding it, the company still moved from a loss to a profit on lower revenue. And that came from the cost structure we have been rebuilding since the start of the year. Not from any recovery in demand. Let me provide a progress report on the 3 structural moves. First, aligning our cost structure to our current revenue and margin expectations. In Q1, adjusted non GAAP operating expenses were down $5.3 million year over year. In Q2, they were down $6.2 million 24% as roles transitioned, programs wound down, and structural changes The labor reductions we described last quarter are now carried in the run rate, run rate rather than promised into it, and they came from decisions already executed. Rather than spending deferred into later periods. You can see the effect beyond the P and L as well. We ended the quarter with $11.6 million in net cash. Second, tightening portfolio focus. R&D expense stepped down again this quarter as we continue to direct resources toward initiatives with the clearest path to accretive return. This is not about stepping away from what makes UEI valuable. We are not narrowing what this company is capable of We are narrowing what we choose to fund. To work that carries a defined customer and a defined return. Third, retaining key employees preserving customer continuity, keeping suppliers engaged. This is a move that is hardest to show in a line item, and the clearest evidence in Q2 came from what customers themselves decided. With 1 of our largest video customers, we moved from primary supplier to sole source on a remote control program entering production in November. We also shipped the first mass production lot of a new smart thermostat platform for a major HVAC OEM. Which has since asked for additional volume in the fourth quarter. Even as the broader timing there continues to be shaped by component supply and integration work across the industry. Those are decisions about who a customer intends to rely on and they went in our favor at a time when the company was visibly restructuring. On profitability, Q2 continues to reflect the margin profile under pressure. Adjusted non GAAP gross margin was 35.4% as reported, approximately 27% excluding the tariff recovery. Against 29.9% a year ago. Input costs remain a material drag, very little of that is specific to UEI. Component and commodity pressure has been broad across our industry, and it reaches us on a lag because we build to forecast against orders already placed. Where a specific input cost has moved and is attributable, we recover it on the evidence account by account. Broader inflation, we worked through sourcing and design. The p and l is carrying this cost today, Recovery will take time, but the cost work we have done is why we can still hold the framework we set in January. On inventory, the balance moved up modestly from Q1, reflecting the higher volume we expect in the second half. Lead times on memory, capacitors and printed circuit boards now exceed our planning horizon. In that environment, the discipline is forward commitment against the longer forecast rather than buying reactively at a premium. We are buying ahead where material carries across programs. The work of the last 2 quarters is being measured across the second half, not in any single quarter's balance. Looking forward, our message is unchanged. We are reaffirming our full year framework of adjusted non GAAP diluted EPS of $0.45 to $0.65 against $0.31 in fiscal 25 on a basis that excludes the tariff recovery. What I said in April was that our outlook will be grounded in execution rather than in demand rebound. Q2 is the evidence. A profit on lower revenue than the prior quarter a lower cost base, and a stronger balance sheet. The credit belongs to a team that absorbed a great deal of change and kept doing what customers count on us for. Delivering on the programs in production today and designing the ones that follow. With that, I will turn the call over to our CFO, Wade Michael Jenke to walk through the quarter in more detail and review our outlook. Wade Michael Jenke: Thanks, Rick, and good afternoon, everyone. I will walk through our second quarter 26 financial performance with a focus on profitability, cost discipline, cash flow, and balance sheet strength, and then touch briefly on financial execution for the remainder of the year. Turning to our second quarter results. Net sales were $73.2 million compared to $97.7 million in the second quarter of 25 a decline of approximately 25%. The decline includes an accrual for tariff refunds customers, plus we continue to see top line pressure across both our end markets consistent with the difficult demand environment we have previously discussed. Connected Home net sales were 25.1 million dollars compared to $34.1 million in the prior year quarter. The decline was primarily driven by reduced demand from large climate control and home automation customers Home entertainment net sales were 48.1 million compared to 63.6 million a year ago. Primarily reflecting lower demand for subscription broadcast products. Despite the lower revenue environment, gross margin improved meaningfully. GAAP gross margin and adjusted non GAAP gross margin were both 35.4% compared to 29.9% in the prior year quarter. The year over year margin improvement was primarily driven by the sale of the tariff claims, which contributed approximately 690 basis points and the tariff refund accrual mix effect of 160 basis points. We also had improved management of inbound freight costs, which contributed approximately 90 basis points These benefits were partially offset by higher component costs, which reduced gross margin by approximately 240 basis points. And the weaker US dollar relative to the Chinese renminbi which had an adverse impact of approximately 150 basis points. Throughout the quarter, we remained highly focused on cost discipline and structural expense reduction, GAAP operating expenses decreased by $7.1 million year over year and adjusted non GAAP operating expenses declined by 6.2 million or 24%. Reflecting continued progress in aligning our cost structure with the current revenue level. R&D expenses declined to 4.3 million from $7 million in the prior year quarter primarily reflecting reductions in payroll and related personnel expenses following headcount optimization SG&A expenses declined to 16.8 million from $21.2 million in the prior year quarter. The decrease reflected lower volume driven expenses people related savings from organizational rightsizing, and reductions in discretionary spending, including travel, and professional fees. During the first half of the year, we continued to benefit from the global reduction in force and related cost actions we initiated earlier in the year. These actions have led to a leaner, more agile cost structure focused on cost reduction, cash generation, and profit improvement. GAAP operating income for the quarter was 4.8 million compared to GAAP operating income of $1 million in the prior year quarter. Adjusted non GAAP operating income was 5.8 million compared to $2.9 million in the prior year quarter. Adjusted non GAAP operating income as a percentage of net sales improved to 7.9% compared to 2.9% last year. GAAP net income was $1.6 million, or $0.12 per diluted share compared to a GAAP net loss of 2.9 million or 22¢ per diluted share. In the second quarter of 2025. Adjusted non GAAP net income was $4.6 million or $0.34 per diluted share. Compared to adjusted non GAAP net income of 2.4 million or $0.18 per diluted share in the prior year quarter. Now turning to our cash flow and balance sheet. Cash and cash equivalents at the end of the quarter were 32.4 million compared to 32.3 million at the year end 2025. For the first 6 months of 2026, operating cash flow was 5.5 million positive Cash flow benefited from working capital actions, including $8.1 million reduction in inventories during the first half of the year. Inventory ended the quarter at $70 million down from $70.8 million at year end 2025 Accounts receivable and contract assets increased versus year end, primarily reflecting the timing of sales collection activity, and the recognition of the tariff refund receivable. We also strengthened liquidity during the quarter. Available borrowing resources were 48.7 million at 06/30/2026 compared to 42.5 million 12/31/2025. At quarter end, there were no borrowings outstanding under The US credit line. Now turning to our outlook. For fiscal year 26, we remain focused on areas within our control. Cost, discipline, profitability, working capital management, and cash flow. We expect our actions to further align our cost structure with market realities, improve profitability versus last year, and strengthen our financial flexibility. For the full-year 2026, we are reaffirming our prior guidance and Continue to expect adjusted non GAAP diluted earnings per share to range from $0.45 to $0.65 compared to $0.31 per share in fiscal 25 With Q2 now behind us, we have a greater visibility into the year ahead, and our guidance remains unchanged. As we execute against our 2026 business plan. Thank you all, and I will hand it back to Rick. Richard Carnifax: Thanks, Wade. Overall, the restructuring and refocusing actions we initiated are now delivering measurable results in the areas we control. Very clear about what has not yet turned and component cost and availability remain the central operational risk into the second half. We are reaffirming our full year framework based on the durable actions we have taken rather than on an assumption about conditions. On a personal note, it has been a privilege to lead this company through this period, and my thanks to our employees, our customers, and suppliers and the board. The plan we are executing was developed with the board and is directed to what matters to shareholders. Improving profitability, generating cash, and rebuilding financial flexibility. That is how we build a stronger UEI. With that, operator, please open the call for questions. Operator: Thank you. At this time, we will conduct the Q&A session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Our first question comes from the line of Steven Frankel from Rosenblatt Securities. Please go ahead. Steven Frankel: Good afternoon. Thank you. First of all, Rick, I wish you good luck, and congratulations on your new position. Wade, a couple questions for you. You talked in the release about litigation against Amazon and give us some thoughts about the timeline here. And while we are at it, an update on the Roku litigation, which has been going on for multiple years. Wade Michael Jenke: Yeah. Thank you, Frankel. I appreciate the question. So, obviously, with Amazon being very fresh, you know, that lawsuit was just filed today. The timing remains uncertain. But, I believe, filing this action was necessary to protect our IP rights, and, we are seeking appropriate remedies. So, yeah, the time was right to file, but I cannot really comment on the future timing. Terms of Roku, that case is ongoing. And some of those details are moving forward. There is a court date scheduled for 27. But beyond that, I cannot comment further. Steven Frankel: Okay. And in terms of your guidance for the year, does that incorporate any further tariff refunds? Wade Michael Jenke: Or have you gotten all the refunds that you are going to get? We have gotten all the refunds that we are going to get. The tariff monetization, was for materially the whole lot. So all of that is in the guidance. Steven Frankel: Okay. And then just remind us what the customer concentration was in the quarter? Wade Michael Jenke: Yeah. Sure. We had Daikin at 21%, and then we had Comcast at 11.4%. And then followed up third place with Sony at 8%. I will give you the top 3 there. Steven Frankel: Okay. Greg. That is helpful. And then maybe the last question. Any more details around this thermostat win? Is this from an existing customer that is now expanding the number of SKUs with you? What can you tell us? Wade Michael Jenke: Yeah. Absolutely. We are very excited. We began this journey a couple of years ago with the customer. They are a major HVAC in the market. And we have been developing the product And we just had a really big production shipment, and more to follow in the second half. So we will be able to share that in the coming quarters. All right. Thank you very much. Yeah. You are welcome. Operator: This concludes the Q&A session. I would now like to turn it back to management for closing remarks. Wade Michael Jenke: Thank you, everyone, for participating today in our earnings call for Q2 2026. A big thank you to Rick Carnifax for all his leadership and his great ability to create wonderful strategy here that has made a huge difference. We owe him a lot. We wish you the best in your new career. Thank you so much, and thank you, everyone. Richard Carnifax: Thank you, Wade, and thanks everyone for your continued support of Universal Electronics. Operator: Thank you for your participation today in today's conference. This does conclude the program. May now disconnect. Before you buy stock in Universal Electronics, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Universal Electronics wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Universal Electronics (UEIC) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management successfully transitioned the company to profitability on lower revenue compared to Q1, validating the structural cost-alignment strategy initiated earlier in the year. The return to profit was driven by a 24% year-over-year reduction in adjusted operating expenses, reflecting executed labor reductions and program wind-downs rather than deferred spending. Revenue declines of 25% were attributed to legacy video structural decay, inflationary pressures on customer programs, and a continued delay in the Connected Home market inflection. Strategic R&D narrowing is now focused exclusively on initiatives with defined customers and clear paths to accretive returns, rather than broad-based development. Customer continuity remains strong, evidenced by a major video customer moving UEI from primary to sole-source status on a new remote control program. Gross margins face ongoing pressure from component and commodity inflation, which impacts the P&L on a lag due to building against existing order forecasts. Full-year guidance for adjusted EPS of $0.45 to $0.65 is reaffirmed, grounded in internal execution and cost durability rather than an assumed demand rebound. Management is proactively buying ahead on materials like memory and capacitors as lead times now exceed the company's standard planning horizon. Inventory levels were modestly increased in Q2 to support anticipated higher production volumes scheduled for the second half of the year. The company expects to benefit from the full run-rate of organizational rightsizing and leaner cost structures throughout the remainder of fiscal 2026. A $5.1 million non-recurring recovery of previously paid tariffs significantly bolstered Q2 reported earnings and cash position. Interim CEO Rick Carnifax stepped down effective August 6, with CFO Wade Michael Jenke appointed as the permanent CEO to maintain the current operating plan. The company initiated new litigation against Amazon to protect intellectual property rights, though the timeline for resolution remains uncertain. Currency headwinds, specifically a weaker US dollar relative to the Chinese renminbi, adversely impacted gross margins by approximately 150 basis points. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed a new lawsuit was filed against Amazon on the day of the call to protect IP rights, though future timing is uncertain. The long-standing Roku litigation is ongoing with a court date currently scheduled for 2027. Management clarified that the tariff monetization covered materially the entire lot of claims, and no further tariff refunds are incorporated into the remaining 2026 guidance. Top three customers for the quarter were Daikin (21%), Comcast (11.4%), and Sony (8%). A major HVAC OEM customer has requested additional volume for a new smart thermostat platform in Q4 following a successful initial mass production shipment.

Interested in Universal Electronics Inc.? Here are five stocks we like better. Revenue fell 25% year over year to $73.2 million, with declines in both Connected Home and Home Entertainment amid weak demand, higher component costs and structural pressure in legacy video products. Profitability improved significantly as adjusted operating margin rose to 7.9% from 2.9%, supported by $6.2 million in operating-expense reductions and a $5.1 million one-time tariff recovery. GAAP net income reached $1.6 million, compared with a $2.9 million loss a year earlier. Universal Electronics reaffirmed fiscal 2026 adjusted EPS guidance of $0.45 to $0.65, excluding the one-time tariff recovery, while citing new remote-control and smart-thermostat programs as potential second-half growth drivers. CFO Wade Jenke was appointed CEO, replacing interim CEO Rick Carnifax. Universal Electronics (NASDAQ:UEIC) reported second-quarter 2026 results showing improved profitability despite a 25% year-over-year decline in revenue, as cost reductions and a one-time tariff-related recovery offset continued weakness in its Connected Home and Home Entertainment markets. The company also announced a leadership change. Interim Chief Executive Officer and Chief Operating Officer Rick Carnifax stepped down as interim CEO effective Aug. 6, with Chief Financial Officer Wade Jenke appointed as CEO. Carnifax said the transition would not alter the company’s operating plan or the financial framework it reaffirmed for 2026. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Second-quarter net sales fell to $73.2 million from $97.7 million in the prior-year period. Management said the decline included customer refund accruals related to tariff recovery and reflected continued demand pressure, higher component and memory costs, a structural decline in legacy video products, pressure in European retail, and a delayed inflection in Connected Home demand. Connected Home revenue declined to $25.1 million from $34.1 million a year earlier, primarily due to lower demand from large climate-control and home-automation customers. Home Entertainment revenue fell to $48.1 million from $63.6 million, with the company attributing the decrease largely to lower demand for subscription broadcasting products. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High During the analyst question-and-answer session, Jenke said Daikin represented 21% of quarterly revenue, Comcast accounted for 11.4%, and Sony represented 8%. Despite the lower sales base, Universal Electronics reported GAAP operating income of $4.8 million, compared with $1 million in the second quarter of 2025. Adjusted non-GAAP operating income rose to $5.8 million from $2.9 million, while adjusted operating margin increased to 7.9% of sales from 2.9% a year earlier. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling GAAP net income was $1.6 million, or $0.12 per diluted share, compared with a net loss of $2.9 million, or $0.22 per diluted share, in the prior-year quarter. Adjusted non-GAAP net income was $4.6 million, or $0.34 per diluted share, versus $2.4 million, or $0.18 per diluted share, a year earlier. Carnifax said results included a $5.1 million one-time recovery of previously paid tariffs. Excluding that nonrecurring cash recovery, he said the company still moved from an adjusted loss of approximately $0.10 per share in the first quarter to adjusted profit of about $0.04 per share in the second quarter, despite slightly lower revenue. Adjusted operating expenses declined $6.2 million, or 24%, year over year. Research and development expense decreased to $4.3 million from $7 million, primarily reflecting payroll and personnel reductions following headcount optimization actions. Selling, general and administrative expense fell to $16.8 million from $21.2 million, supported by lower volume-related expenses, organizational changes, and reduced discretionary spending. “The labor reductions we described last quarter are now carried in the run rate rather than promised into it,” Carnifax said. GAAP and adjusted gross margin were both 35.4%, up from 29.9% in the year-earlier quarter. Jenke said tariff claims contributed about 690 basis points to the improvement, while the tariff refund accrual mix effect added about 160 basis points and improved inbound freight management added about 90 basis points. Those gains were partially offset by higher component costs, which reduced gross margin by about 240 basis points, and the weaker U.S. dollar against the Chinese renminbi, which had a roughly 150-basis-point negative impact. Cash and cash equivalents totaled $32.4 million at June 30, essentially unchanged from $32.3 million at year-end 2025. Operating cash flow was $5.5 million for the first six months of 2026, aided by an $8.1 million inventory reduction during the period. Inventory ended the quarter at $70 million, down from $77.8 million at year-end. Management said inventory rose modestly from the first quarter in preparation for expected second-half volume. Lead times for memory, capacitors and printed circuit boards now exceed the company’s planning horizon, according to Carnifax, prompting the company to make forward commitments for materials that can be used across programs. Available borrowing resources increased to $48.7 million from $42.5 million at the end of 2025, and there were no borrowings outstanding under the company’s U.S. credit line at quarter-end. Universal Electronics cited customer program wins as evidence of continued commercial momentum during its restructuring. Carnifax said the company moved from primary supplier to sole-source provider for a remote-control program with one of its largest video customers, with production scheduled to begin in November. The company also shipped the first mass-production lot of a new smart thermostat platform for a major HVAC original equipment manufacturer. The customer has requested additional volume in the fourth quarter, although management said broader timing remains affected by component supply and industry integration work. Jenke said the thermostat product had been in development with the customer for several years and that additional production shipments are expected in the second half. Universal Electronics reaffirmed its fiscal 2026 adjusted non-GAAP diluted earnings guidance of $0.45 to $0.65 per share, compared with $0.31 per share in fiscal 2025. Carnifax said the framework excludes the one-time tariff recovery and is based on cost actions and execution rather than an anticipated rebound in demand. Jenke said the company has received all tariff refunds it expects to receive, and that the tariff monetization is included in the company’s guidance. On litigation, Jenke said Universal Electronics filed an action against Amazon on the day of the call to protect its intellectual property rights, though he said the timing of the case remains uncertain. He also said the company’s ongoing litigation involving Roku has a court date scheduled for 2027. Universal Electronics Inc (NASDAQ:UEIC) is a leading provider of sensing and control technologies for the smart home and consumer electronics markets. The company specializes in design, development and manufacturing of remote control devices, wireless connectivity modules and integrated sensing solutions. Its core expertise lies in infrared (IR) and radio frequency (RF) remote controls, voice-enabled control devices and universal remotes that allow consumers to manage multiple home entertainment and automation systems through a single interface. In addition to traditional remote control products, Universal Electronics has expanded its portfolio to include Internet of Things (IoT) gateways, home-automation hubs and cloud-based management platforms. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Universal Electronics Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is executing a three-pillar structural move focused on aligning cost structures to current revenue, tightening R&D focus, and retaining core operational capabilities. Revenue declines of 14.4% were attributed to HVAC industry consolidation, European retail pressure, and extended customer deployment timelines for new products. The Connected Home segment growth remains slower and less predictable than projected in 2025, leading to a shift in focus toward internal execution rather than waiting for a demand rebound. Profitability was pressured by a lower-margin product mix and commodity cost increases in resin and electronic components, alongside delayed deployments of higher-margin programs. Operational efficiency improved through a $9.8 million reduction in inventory, reflecting a broader effort to simplify the product portfolio and align stock levels with actual demand. Management reaffirmed that the Home Entertainment segment is being managed as a mature business, focusing on extracting costs and optimizing the supply chain footprint. Full-year 2026 revenue expectations remain tempered across both segments, with the company's outlook grounded in execution rather than an expected near-term market recovery. Management reaffirmed full-year adjusted non-GAAP diluted EPS guidance of $0.45 to $0.65, representing growth over 2025 driven by structural cost reductions. Structural labor expense reductions are expected to yield approximately $5 million in annualized savings as roles transition and programs wind down. The company anticipates continued volatility in the set-top box market due to ongoing memory cost issues and allocation challenges. Future growth strategy relies on higher thermostat attach rates and roadmap discussions with North American HVAC OEMs, though timing remains uncertain. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. A global reduction in force was executed in Q1, primarily targeting SG&A and select engineering roles to create a leaner cost profile. The company incurred approximately $1.3 million in one-time severance costs associated with the restructuring actions. Unfavorable product mix, primarily from lower retail sales, negatively impacted quarterly margins by 1.7 percentage points, while tariff costs also contributed to margin pressure. R&D spending was intentionally reduced by $1.8 million as the company narrowed its focus to initiatives with the clearest path to accretive returns.

This article first appeared on GuruFocus. Release Date: May 11, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Universal Electronics Inc (NASDAQ:UEIC) achieved a reduction in adjusted non-GAAP operating expenses by $5.3 million year-over-year. The company successfully reduced inventory by $9.8 million, improving working capital efficiency. R&D expenses were lowered from $7.2 million to $5.4 million, focusing on initiatives with clear paths to accretive returns. Despite lower revenue, adjusted non-GAAP earnings improved year-over-year, indicating effective cost management. The company reaffirmed its full-year framework, projecting adjusted non-GAAP diluted EPS of $0.45 to $0.65, up from $0.31 in 2025. Total revenue decreased by 14.4% year-over-year, reflecting ongoing challenges in both home entertainment and connected home markets. The margin profile remains under pressure due to a lower-margin product mix and delayed new product deployments. Home entertainment and connected home sales faced secular market headwinds and slower-than-expected growth. The company reported a GAAP operating loss of $3.9 million, slightly higher than the previous year's loss. Tariff costs negatively impacted quarterly margins, despite some offset from favorable purchase savings and productivity. Warning! GuruFocus has detected 3 Warning Sign with UEIC. Is UEIC fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide an overview of the strategic restructuring and refocusing actions initiated last quarter? A: Interim CEO and COO Rick Carnifax explained that the company initiated three structural moves: aligning the cost structure to current revenue and margin expectations, tightening R&D and portfolio focus on opportunities with clear paths to accretive results, and retaining key employees, customers, and suppliers. These actions are aimed at improving profitability, generating cash, and making UEI stronger and more resilient. Q: How did the company's financial performance fare in Q1 2026? A: CFO Wade Janke reported that net sales for Q1 2026 decreased by 14.4% to $79 million compared to the previous year. The decline was attributed to ongoing top-line pressure across both end markets. Despite lower revenue, adjusted non-GAAP earnings improved year-over-year due to cost actions and discipline. Q: What were the key financial metrics for the quarter? A: Adjusted non-GAAP profit for Q1 was $20.6 million or 26.1% of sales, down from 28.3% in the prior year. The margin decline was primarily driven by volume and absorption declines, unfavorable product mix, and tariff costs. However, operating expenses declined by $5.3 million year-over-year, reflecting progress in aligning the cost structure with current revenue levels. Q: What is the outlook for fiscal year 2026? A: The company expects revenue to decline year-over-year due to market headwinds in home entertainment and connected home products. However, they are focused on cost discipline, profitability, and cash flow. Adjusted non-GAAP diluted earnings per share are expected to range from $0.45 to $0.65, compared to $0.31 in 2025. Q: How is the company managing its working capital and cash flow? A: The company made meaningful progress on working capital, with inventories declining by $9.8 million and accounts receivable and contract assets declining by approximately $2.8 million sequentially. Working capital efficiency and cash generation remain top financial priorities for 2026. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Monday, May 11, 2026 at 4:30 p.m. ET Interim Chief Executive Officer and Chief Operating Officer — Richard Carnifax Chief Financial Officer — Bryan Hackworth Investor Relations — Kirsten Chapman Kirsten Chapman: Thank you, operator, and thank you all for joining us for the Universal Electronics Inc. First Quarter 2026 Financial Results Conference Call. By now, you should have received a copy of the press release. If you have not, please visit the Investor Relations section of our website. This call is being broadcast live over the Internet. A webcast replay of this call, including any additional updated material nonpublic information that might be discussed during this call, will be available on the company's website at uei.com for a period of one year. During this call, management may make forward-looking statements regarding future events and the future financial performance of the company and cautions you that these statements are just projections and actual results or events may differ materially from these projections. These statements include the company's goals, focus, strategies, and opportunities, market trends, including in the connected home and the home entertainment markets, expectations with respect to customer orders and customer demand, including short-term and long-term demand, R&D and product development activities, restructuring plans and actions, including expected benefits and timing, financial projections and forecasts, including revenue, gross profit, operating profit, and net income, adjusted free cash flow, cash, cost reductions, and working capital, our ability to respond to business and regulatory changes, such as tariffs and macroeconomic conditions, and expectations with respect to our ongoing litigation. The company undertakes no obligation to revise or update these statements to reflect events or circumstances that may arise after today's date and refers you to the press release at the beginning of this call and the documents the company has filed with the SEC, including its 2025 annual report on Form 10-K and the periodic and current reports filed or furnished since then. Management's financial remarks will reference adjusted non-GAAP metrics. Management provides adjusted non-GAAP metrics because it uses them for budget planning purposes and for making operational and financial decisions and believes that providing these non-GAAP financial measures to investors as a supplement to GAAP financial measures helps investors evaluate Universal Electronics Inc.'s core operating and financial performance and business trends consistent with how management evaluates such performance and trends. In addition, management believes these measures facilitate comparisons with the core operating and financial results and business trends of competitors and other companies. A full description and reconciliation of these adjusted non-GAAP measures versus GAAP are included in the company's press release issued today. Joining me today are interim CEO and chief operating officer, Richard Carnifax, and chief financial officer, Bryan Hackworth. Richard will provide an overview of our business, and Bryan will deliver our financial results. It is my pleasure to introduce Richard Carnifax. Please go ahead, Richard. Richard Carnifax: Thank you, and thank you all for joining us. Last quarter, we outlined three structural moves for 2026: aligning our cost structure to our current revenue and margin expectations, tightening R&D and portfolio focus on opportunities with the clearest path to accretive results, and retaining the people, customers, and suppliers that define what Universal Electronics Inc. does well. Q1 played out consistent with the environment and framework we described last quarter, reinforcing why we initiated the strategic restructuring and refocusing when we did. Total revenue was $79 million, down 14.4% year over year, with both home entertainment and connected home reflecting the headwinds we highlighted last quarter: HVAC industry consolidation, European retail pressure, and extended customer deployment timelines. Home entertainment continues along its current trajectory as a mature business, and connected home growth remains slower and less predictable than we projected during 2025. Our focus remains on executing the actions within our control rather than waiting for near-term demand to rebound. That means maintaining cost discipline, prioritizing investments with clear paths to return, and improving cash generation and financial durability. Let me provide a progress report on the three structural moves. First, aligning our cost structure to our current revenue and margin expectations. In Q1, adjusted non-GAAP operating expenses were down $5.3 million year over year. Additionally, decisions made and actions started in Q1 will structurally reduce labor expense by approximately $5 million on an annualized run-rate basis. Q1 captured the early portion of the cost reductions, and savings will continue to materialize as roles transition, programs wind down, and structural changes annualize. Second, tightening R&D and portfolio focus. R&D expense was $5.4 million, down from $7.2 million a year ago, as we direct resources toward initiatives with the clearest path to accretive return and reduce activities that do not meet that threshold. This is not about stepping away from what makes Universal Electronics Inc. valuable; it is about focusing our efforts where we can better serve customers and support profitable growth. Third, retaining key employees, preserving customer continuity, and keeping suppliers engaged. Execution here is less about one quarter's numeric line item and more about operating cadence: staying close to key customers, protecting service levels, and being deliberate about the roles and capabilities we retain as we simplify the operating model. On profitability, Q1 reflects the combined effect of lower revenue and a margin profile that remains under pressure. Margin was challenged by lower-margin product mix, delayed new product deployments on certain higher-margin connected home programs, and commodity cost pressure in resin and electronic components. At the same time, adjusted non-GAAP earnings improved year over year despite lower revenue, reflecting early progress from the cost actions and discipline we have put in motion. These dynamics reinforce why the restructuring actions were necessary and why disciplined execution remains our priority. A meaningful execution outcome was working capital discipline, particularly inventory, which was reduced by $9.8 million. This work is a direct extension of the simplification effort, aligning stock levels to demand, reducing complexity where we can, and freeing up cash over time. On the commercial side, we completed direct outreach to our largest accounts to reaffirm service continuity and roadmap commitments, and the feedback has been positive. In connected home, engagement around HomeSense occupancy sensing and our TIDE Smart Thermostat portfolio is ongoing, supported by roadmap discussions with new HVAC OEM prospects in North America. OEM interest in higher thermostat attach rates supports our view that the opportunity remains meaningful, even as residential demand and new product deployments remain uneven. We are being realistic about that timing while staying closely engaged so our technology can support long-term customer roadmaps and future adoption. In home entertainment, we are managing conservatively and driving profitability, extracting costs, simplifying the product line, and optimizing the supply chain footprint. Memory cost and allocation issues continue to create forecast volatility in parts of the set-top box market, and European consumer demand remains pressured. At the same time, we are seeing selective opportunities where our product and supply chain capabilities can create value, and we will continue to pursue those with a clear path to accretive returns. Looking forward, our message is consistent with what we shared last quarter. Fiscal year 2026 revenue expectations remain tempered in both home entertainment and connected home. Against that backdrop, we are reaffirming our full-year framework, including adjusted non-GAAP diluted EPS of $0.45 to $0.65 compared to $0.31 in fiscal year 2025. Importantly, our outlook is grounded in execution—cost alignment, portfolio focus, and working capital discipline—not in the expectation of a near-term demand rebound. In summary, Q1 reinforces the rationale for the strategic restructuring and refocusing we communicated last quarter and supports the actions currently in motion. The early proof points are evident in operating expense reduction, R&D discipline, and inventory improvement. Growth still matters, but during this transition, our priority is to improve profitability, generate cash, rebuild flexibility, and make Universal Electronics Inc. a stronger, healthier, and more resilient company. With that, I will turn the call over to our CFO, Bryan Hackworth, to walk through the quarter in more detail and review our outlook. Bryan Hackworth: Thanks, Richard, and good afternoon, everyone. I will walk through our Q1 2026 financial performance with a focus on profitability, cost discipline, cash flow, and balance sheet strength, and then briefly touch on how we are thinking about the financial execution for the remainder of the year. Turning to our first quarter results, net sales for the quarter decreased 14.4% to $79 million compared to $92.3 million in 2025. The decline reflects continued top-line pressure across both our end markets, consistent with previous commentary. Connected home net sales were $28.3 million, down from $31.7 million in the prior-year quarter. Demand for connected home products continues long term, but short-term volatility will occur with adoption and volume ramp-up taking longer than we initially anticipated. Home entertainment net sales were $50.7 million compared to $60.6 million a year ago. This decline reflects ongoing secular pressure in subscription broadcasting markets as well as lower volume across consumer electronics and retail customers globally. Adjusted non-GAAP profit for the first quarter was $20.6 million, or 26.1% of sales, compared to 28.3% in the prior-year period. The year-over-year margin decline is primarily driven by volume and absorption decline. We also saw unfavorable product mix impact of 1.7 gross margin points; the majority came from lower retail sales, which is expected to be comparatively temporary. In addition, tariff costs negatively impacted quarterly margin, partially offset by favorable purchase savings and productivity, as well as FX. Throughout the quarter, we remained highly focused on cost discipline and structural expense reduction. GAAP and non-GAAP operating expenses declined by $5.3 million year over year, reflecting meaningful progress in aligning our cost structure with current revenue levels. R&D expenses declined $1.8 million, reflecting prioritization of investment toward higher-return programs and core platforms. SG&A expenses declined $3.5 million, driven by organizational restructuring and lower discretionary spending. During the quarter, we executed a global reduction in force, primarily impacting selling and general administrative roles as well as select engineering and R&D positions. These actions and decisions are expected to result in approximately $5 million of annualized cost savings, with associated one-time severance costs of approximately $1.3 million. Importantly, these actions are structural in nature and will create a leaner cost profile. We remain focused on improving the profitability and financial strength of the business as we align our operating model to be more agile. GAAP operating loss for the quarter was $3.9 million compared to a loss of $3.8 million in the prior year, despite a significant decline in revenue. Adjusted non-GAAP operating loss was $1.6 million compared to $1.5 million in the prior-year quarter. Adjusted non-GAAP net loss was $1.3 million, or $0.10 per diluted share, compared to a net loss of $1.5 million, or $0.12 per share, last year, reflecting improved profitability from decisive cost reductions. Now turning to cash flow and balance sheet. Cash and cash equivalents at the end of the quarter were $29.8 million. Operating cash flow for the quarter had a modest decline of $0.8 million, primarily due to timing and reductions of accrued liabilities and restructuring costs of $1.3 million. Importantly, we made meaningful progress on working capital. Inventories declined by $9.8 million, and accounts receivable and contract assets declined by approximately $0.8 million sequentially. Working capital efficiency and cash generation remain top financial priorities for us in 2026. Now turning to our outlook. For fiscal year 2026, our revenue expectations are tempered as home entertainment continues to face secular market headwinds and connected home products have yet to fully scale to offset. As a result, we expect revenue to decline year over year, as previously communicated. Given this environment, we are fanatically focused on cost discipline, profitability, and cash flow. We expect our actions to further align our cost structure to market realities, improve profitability versus last year, and structurally reduce working capital to free up cash. For the full year, we expect adjusted non-GAAP diluted earnings per share to range from $0.45 to $0.65 compared to $0.31 in 2025. With Q1 completed, our visibility into the full year gains higher resolution and our confidence increases. Our previous guidance is holding and remains consistent as we continue to execute our business plan for 2026. Thank you, and I will hand it back to Richard. Richard Carnifax: Thanks, Bryan. Overall, the strategic restructuring and refocusing actions we initiated last quarter are underway, and we are seeing progress in the areas we control. We remain focused on disciplined execution: aligning the cost structure to our current revenue and margin expectations, focusing R&D and portfolio resources where we see the clearest path to return, and protecting the people, customers, and suppliers that define Universal Electronics Inc.'s capabilities. We are reaffirming our full-year framework, and we remain focused on improving profitability, generating cash, and rebuilding the flexibility needed to make Universal Electronics Inc. stronger and more resilient over time. We will now open the call for questions. Operator, please open the line. Operator: Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press 11 on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, please press 11 again. I am not showing any further questions at this time. I would like to turn the call back to Richard for any further remarks. Richard Carnifax: Thank you, everybody, for joining, and thank you for your continued support of Universal Electronics Inc. Have a good day. Operator: Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day. Before you buy stock in Universal Electronics, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Universal Electronics wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. UEIC Q1 2026 Earnings Transcript was originally published by The Motley Fool

SCOTTSDALE, Ariz., May 11, 2026--(BUSINESS WIRE)--Universal Electronics Inc. (UEI) (Nasdaq: UEIC) reported financial results for the three months ended March 31, 2026. "Q1 results were broadly consistent with the operating environment we anticipated, reinforcing the decisive actions we took last quarter to strategically restructure and refocus the business," said Richard Carnifax, Interim CEO and COO. "We are already seeing tangible progress in the areas within our control, including a $5.3 million year-over-year reduction in operating expenses and approximately $9.8 million of inventory reduction. Our full-year framework is grounded in disciplined execution — aligning our cost structure, sharpening our portfolio focus and maintaining rigorous working capital management — rather than relying on a near-term recovery in demand. We remain focused on enhancing profitability, generating sustainable cash flow and strengthening the operational and financial flexibility necessary to position UEI for greater long-term resilience and success." Financial Results for the Three Months Ended March 31, 2026 compared to the same period in 2025 In Q1 2026, we significantly reduced our operational costs improving our ability to generate profits going forward. GAAP operating expenses decreased by $5.3 million, and Adjusted non-GAAP operating expenses were down $5.3 million. GAAP net sales were $79.0 million, compared to $92.3 million. GAAP net sales in connected home were $28.3 million, compared to $31.7 million. GAAP net sales in home entertainment were $50.7 million, compared to $60.6 million. GAAP gross margins were 26.1%, compared to 28.3%; Adjusted non-GAAP gross margins were 26.1%, compared to 28.3%. GAAP operating loss was $3.9 million, compared to GAAP operating loss of $3.8 million; Adjusted non-GAAP operating loss was $1.7 million, compared to Adjusted non-GAAP operating loss of $1.5 million. GAAP net loss was $7.3 million, or $0.58 per share, compared to $6.3 million, or $0.48 per share; Adjusted non-GAAP net loss was $1.3 million, or $0.10 per diluted share, compared to Adjusted non-GAAP net loss of $1.5 million, or $0.12 per diluted share. At March 31, 2026, cash and cash equivalents were $29.8 million. For a more detailed explanation of non-GAAP financial measures, please refer to the "Use of Non-GAAP Financial Metrics" and "Reconciliation of Adjusted Non-GAAP Financial Results" located elsewhere in this press release. Financial Outlook Now that Q1 is behind us, we have greater visibility into the year ahead, and we are pleased to reaffirm that our full‑year 2026 guidance remains unchanged from our prior outlook. For the full year 2026, we are guiding to a revenue decline year over year. We expect adjusted non‑GAAP diluted earnings per share to be in the range of $0.45 to $0.65, compared to $0.31 per share in fiscal 2025. Conference Call Information UEI’s management team will hold a conference call today, Monday, May 11, 2026 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its first quarter 2026 earnings results, review recent activity and answer questions. To attend the call please register at: https://edge.media-server.com/mmc/p/m9tj5ahs/ to receive a computer-generated dial-in number and a unique pin number. The conference call will also be broadcast live on the investor section of the UEI website where it will be available for replay for 90 days. Use of Non-GAAP Financial Metrics In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, UEI provides Adjusted non-GAAP information as additional information for its operating results. References to Adjusted non-GAAP information are to non-GAAP financial measures. These measures are not required by, in accordance with, or an alternative for, GAAP and may be different from non-GAAP financial measures used by other companies. UEI’s management uses these measures for reviewing the financial results of UEI for budget planning purposes and for making operational and financial decisions. Management believes that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, help investors evaluate UEI’s core operating and financial performance and business trends consistent with how management evaluates such performance and trends. Additionally, management believes these measures facilitate comparisons with the core operating and financial results and business trends of competitors and other companies. Adjusted non-GAAP gross profit is defined as gross profit excluding stock-based compensation expense. Adjusted non-GAAP operating expenses are defined as operating expenses excluding stock-based compensation expense, amortization of intangibles acquired, and severance. Adjusted non-GAAP net income (loss) is defined as net loss excluding the aforementioned items, foreign currency gains and losses, and the related tax effects of all adjustments, as well as valuation allowances on certain deferred tax assets and certain net deferred tax adjustments. Adjusted non-GAAP earnings (loss) per diluted share is calculated using Adjusted non-GAAP net income (loss). A reconciliation of these financial measures to the most directly comparable GAAP financial measures is included at the end of this press release. We do not provide a reconciliation for forward-looking non-GAAP financial metrics because reconciliation information is not available without unreasonable effort, such as attempting to make assumptions that cannot reasonably be made on a forward-looking basis to determine the corresponding GAAP metric. About Universal Electronics Universal Electronics Inc. (Nasdaq: UEIC) is the global leader in wireless universal control solutions for the home. The company brings to life millions of innovative control products each year that focus on a user-centric approach to building control products and applications that simplify user interaction with highly complex technologies in the home, removing interoperability challenges as a roadblock for user adoption, with privacy first and a secure by design approach to today's smart devices. Our products are offered by the world's leading brands in home entertainment and the connected home markets, including Fortune 500 customers Daikin, Carrier, Comcast, Vivint Smart Home, Samsung, Sony, Hunter Douglas and Somfy. The company's pioneering breakthrough innovations include its award-winning voice control entertainment remote controls and QuickSet Cloud, the world's leading platform for automated device and service discovery, set-up and control, and user experience personalization for the home. For more information, visit www.uei.com. Forward-looking Statements This press release contains "forward-looking statements" within the meaning of federal securities laws, including statements about our future financial results, anticipated trends in our business and market conditions; our expectations about new product introductions; our expectation that strategic actions can structurally reduce working capital and free up more cash from operations; our plans to align our cost structure to market realities to materially generate improved profits over last year; our focus, strategy and business plans; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those we identify below and other risk factors that we identify in our annual report on Form 10-K for the year ended December 31, 2025 and the periodic reports filed and furnished since then. Risks that could affect forward-looking statements in this press release include: our continued ability to timely develop and deliver innovative control solutions and technologies that are accepted by our customers, both near- and long-term; our ability to attract new customers and to successfully capture sales in all markets we serve, including in the climate control and connected home markets as anticipated by management; our ability to continue optimizing our manufacturing footprint and realize the lower concentration risks as expected by management; our ability to maintain our market share in the traditional subscription broadcast market; our ability to manage through the worldwide inflationary pressures and macroeconomic conditions; our ability to successfully execute our strategic actions and plans; our ability to continue to manage our business, inventories and cash flows to achieve our net sales, margins and earnings through financial discipline, operational efficiency, product line management, liquidity requirements, capital expenditures and other investment spending expectations; our continued ability to successfully enforce our patented technology, including with respect to our litigation against Roku; our continued ability to strategically enhance, expand, and monetize our IP portfolios; the continued fluctuation in our market capitalization; the use of artificial intelligence applications which could result in cybersecurity incidents that implicate the personal data of end users or other unintended ethical, reputational, competitive harm or legal liability; the direct and indirect impact we may experience with respect to our business and financial results and management’s ability to anticipate and mitigate the impact stemming from the continued economic uncertainty affecting consumers’ confidence and spending, natural disasters or other events beyond our control, public health crises (including an outbreak of infectious disease), governmental actions, including the changes in or enhanced use of laws, regulations and policies may have on our business including the impact of decreased governmental incentive programs worldwide or of enhanced or expanded trade regulations, including the expanded use of tariffs, pertaining to importation of our products, the effects of political unrest, war, terrorist activities, or other hostilities; the effects and uncertainties and other factors more fully described in our reports filed with the SEC. Since it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results, the above list should not be considered a complete list. Further, any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release. We make these forward-looking statements as of the date hereof, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law or regulation.   View source version on businesswire.com: https://www.businesswire.com/news/home/20260511927280/en/ Contacts UEI: Wade Jenke, CFO, UEI, [email protected] 480-530-3000