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SEC filingUniversal Electronics Inc. reported a net loss of $18.6 million for FY 2025, an improvement from a net loss of $24.0 million in FY 2024. Net sales decreased 6.7% to $368.3 million from $394.9 million. The company's gross profit margin remained consistent at 28.9%. Operating loss narrowed to $6.4 million from $15.3 million, driven by reduced operating expenses as a percentage of sales, which decreased to 30.6% from 32.7%. The company generated positive operating cash flow of $23.6 million, ending the year with $32.3 million in cash and cash equivalents. Key strategic moves included shutting down its Mexico manufacturing facility and executing a short-term employee furlough program as part of cost containment efforts.
Universal Electronics Inc. reported a net loss of $18.6 million for FY 2025, an improvement from a net loss of $24.0 million in FY 2024. Net sales decreased 6.7% to $368.3 million from $394.9 million. The company's operating loss narrowed to $6.4 million from $15.3 million, representing an operating margin of -1.7% compared to -3.9% in the prior year. Gross profit margin remained consistent at 28.9% in both periods. Basic and diluted earnings per share were -$1.41, improved from -$1.85 in FY 2024. The company generated positive operating cash flow of $23.6 million, contributing to a net increase in cash and cash equivalents of $5.5 million, ending the year with $32.3 million.
Revenue declined 6.7% year-over-year to $368.3 million. The company operates two primary business channels: Connected Home and Home Entertainment. Connected Home revenue increased 15.8% to $125.4 million, driven by climate control, smart home, and security product sales. Home Entertainment revenue decreased 15.3% to $242.9 million, reflecting declines in entertainment-related product sales, intellectual property licensing, and cloud-based software. Geographically, sales decreased in the United States, Latin America, and the People's Republic of China, while increasing in Asia (excluding PRC) and Europe. Daikin Industries Ltd. represented 18.3% of net sales, up from 13.3% in the prior year.
Gross profit margin remained stable at 28.9% in both FY 2025 and FY 2024, with gross profit decreasing to $106.5 million from $114.0 million due to lower sales volume. Operating expenses as a percentage of sales decreased to 30.6% from 32.7%, contributing to the improved operating loss. Research and development expenses decreased to $26.3 million from $29.7 million. Selling, general and administrative expenses decreased to $85.4 million from $91.8 million. Factory restructuring charges were $1.2 million, down from $3.6 million in the prior year. The company recorded no legal judgment or goodwill impairment charges in FY 2025.
The company generated $23.6 million in operating cash flow, primarily driven by changes in working capital, including a $41.5 million decrease in accounts receivable and contract assets. Investing activities used $6.8 million for purchases of property, plant, equipment, and intangible assets. Financing activities used $16.7 million, mainly for repayments on lines of credit and treasury stock purchases. Total assets decreased to $274.0 million from $323.4 million, with current assets at $205.1 million. Total liabilities were $127.8 million, including $119.3 million in current liabilities. Stockholders' equity was $146.2 million. The company had $24.1 million outstanding under lines of credit at year-end.
The company faces risks from adverse macroeconomic conditions, including new tariffs on goods manufactured in Vietnam, Taiwan, the PRC, and Mexico, and reduced consumer spending on durable goods. Management continues to evaluate the global manufacturing footprint as part of cost optimization and return to profitability strategy, having shut down the Mexico manufacturing facility in 2025. The company announced a short-term furlough program affecting approximately 3-4% of its workforce in late 2025 as part of cost containment efforts. Seasonality is expected to continue with increased sales in the second half of 2026. The business strategy remains focused on expanding presence in the climate control market.