Universal Electronics Inc.

Good day and thank you for standing by. Welcome to the Universal Electronics Q3 2021 Financial Results Conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require... For any further assistance, please press star zero. I would now like to hand the conference over to Kirsten Chapman of LHA Investor Relations. Please go ahead.

Thank you, Mary, and thank you all for joining us today for the Universal Electronics Third Quarter 2021 Financial Results Conference Call. By now, you should have received a copy of the press release, and if you have not, please contact LHA Investor Relations at 415-433-3777 or visit the Investor Relations section of the website. This call is being broadcast live over the Internet, and a webcast replay will be available for one year at www.uei.com. Any additional updated material, non-public information that may be discussed during this call will be provided on the company's website and will be retained for at least one year. You may also access that information by listening to the webcast replay. During this call, management may make forward-looking statements regarding future events and future financial performance of the company and caution to you that these statements are just projections and actual results or events may differ materially from those projections. These statements include the company's ability to timely develop and deliver new technologies and technology upgrades and related products that will be accepted by our existing customers and attract new customers, including the company's Kwikset family of products and technologies, the Apple TV Remote, Nevo Butler Entertainment and Smart Home Hub, Smart Home Automation, and our voice-enabled, AI-powered, and other advanced technology control products and platforms. The positive traction that management is seeing in the various markets and industries in which it serves coming to fruition as expected by management, including with respect to our HAVC customers. The continued successful collaboration with existing and new customers in developing and introducing new next generation products, operating systems, and technologies, which result in increased sales opportunities for the company. The continued trend of industry moving towards providing consumers with more advanced technologies by offering hybrid platforms, expanded smart home offerings, and interactive services. Management's ability to continue to manage its business via new product development, product mix, and deliveries, increased licensing opportunities, and continued operational and administrative efficiencies to achieve its net sales margins and earnings as guided. Interruptions in the company's supply and logistics chains, including the impact that global shortage of integrated circuits and shipping interruptions and delays could have in causing delays in production and delivery of its products. The impact of the company's financial results that it may experience stemming from issues surrounding its Chinese workforce, And the continued effects that natural disasters and public health crises, including the COVID-19 pandemic, have on our business and management's ability to anticipate and mitigate those effects, including the duration, severity, and scope of the COVID-19 pandemic and its actions and restrictions that may be imposed on the company and its operations by federal, state, local, and international public health and government authorities. 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 mentioned at the onset of this call and the documents the company files with the SEC, including this quarter's report on Form 10Q. 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 and believes that providing these non-GAAP financial measures to investors as supplement to the GAAP financial measures help investors evaluate UEI's core operations 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 the adjusted non-GAAP measures versus GAAP is included in the company's press release today. On the call today are Chairman and Chief Executive Officer Paul Arling, who will deliver an overview, and Chief Financial Officer Brian Hackworth, who will summarize the financials. Then Paul will return to provide closing remarks. It is now my pleasure to introduce Paul Arling. Please go ahead, sir.

Good afternoon and thanks for joining us. Today, as always, we're delighted to speak with investors. The third quarter 2021 sales improved over those in 2020. However, they were impacted more than anticipated by shipping delays as well as ongoing component shortages. Nonetheless, this quarter we maintained a strong product mix and delivered 30.4% gross margins. which combined with our continued cost controls yielded EPS of $1.03, a third quarter record for UEI. Our mission to create smarter living continues to guide our course of action, focusing on creating products and technologies that help everyday people easily discover and interact with the devices and services in their home. We continue to lead the industry with innovative breakthroughs. Overall, we are pleased with the market acceptance of our product our new product initiatives that we have been working on over the past few years. We are making great progress with our Apple TV 4K Siri voice-enabled search and control device. We designed specifically for multi-channel video program distributors, otherwise referred to as MVPDs. In Europe, already seven operators have launched the product, including major MVPDs such as Deutsche Telekom and Free Telekom, while other operators are set to launch their services with our controller over the course of the next few quarters. Voice-enabled remote controls continue to proliferate as a standard feature within operator platforms. As we have said before, many of these relationships restrict our ability to mention them by name, so we cannot. However, one global operator that we can mention is Astro, Malaysia's leading content and consumer company serving 5.7 million households across TV, radio, digital, and e-commerce platforms. Other customers who are scaling their advanced platform services are Claro in Latin America and Megacable in Mexico, leveraging their newly introduced Android TV deployments. UEI's rich product portfolio in this segment is well positioned, having secured three new Android TV projects in the third quarter with new and existing customers across our global footprint. In the US market, we continue to grow our overall market in voice-enabled remotes by expanding distribution on some of our MVPD customer streaming service platforms. In the TV market, we continue to improve the breadth and depth of our Kwikset deployments across the top three major TV brands globally. The design cycles in this channel are long. As our engineers are currently releasing new software to support 2022 TV models, while designing and developing next generation software features to support 2023 TV models for all our major customers. The new features we are deploying expand our software functionality beyond entertainment control, offering new features and services to also enable discovery management and control of popular smart home devices. As communicated previously, we also began shipping Nevo Butler to our first international telecommunication operator in Europe, where the official product launch is expected to occur around the end of November 2021. The product will serve as a far-field voice controller for their premium video entertainment service. We are extremely excited to see this product come to market and anticipate a very positive consumer reaction. We hope this product introduction will represent an important reference design for other partners to follow. Regarding smart home automation, we see strong evidence that our RF design and development expertise and knowledge of wireless connectivity and control are leverageable assets in this domain. We're excited about our progress to date as we are gaining traction across new and existing customers. In the third quarter, we secured multiple design wins with new HVAC customers as well as new brands in the home appliance segment. Our design wins include smart thermostats, wall controllers, smart home gateways, switches, sensors, and even shade controllers. Typically, these complex and interoperable development projects require longer design and development lead times with related revenues expected in late 2022 and into 2023. The good news is that once introduced these home automation products have extremely long product life cycles that can last up to eight or 10 years. Finally, with the new year just around the corner we're truly excited about CES 2022 at which we will be exhibiting in person in January in Las Vegas consistent with prior years at next year's event. we will introduce a suite of new products and technologies across our home entertainment and connected home categories. In our entertainment space, we will be highlighting our new connectivity products and technologies designed for the next generation of sustainable smart home devices, including a Bluetooth smart chipset that is close to 10 times more energy efficient than currently available platforms. When combined with our energy harvesting solutions, we can deliver an advanced remote control that doesn't need battery replacement. While striving to create more sustainable products that our customers are asking for, we can also enrich the user experience with a range of advanced, power-hungry features such as hands-free voice, network-connected, and ambient-aware backlighting that can run as efficiently as many of today's standard remote controls. We are also extending the capabilities of our standard product platforms to support our latest generation of Kwikset Cloud, allowing for seamless control of both entertainment and smart home devices. Powered by a virtual agent for automated self-help when onboarding or troubleshooting, any of our advanced remote controls, thermostats, and soon, our security sensor lines. In our connected home category, we'll be demonstrating an expanded line of UEI comfort smart thermostats, an extended range of wireless sensors, and the Nevo Butler interacting with smart home devices using Matter, a connectivity standard announced earlier this year and supported by the largest smart home ecosystem providers in the industry. I'll now turn the call over to our CFO, Brian Hackworth, for a review of the financials. Please go ahead, Brian.