Universal Electronics Inc.

Good afternoon. My name is Kathy, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Universal Electronics Q2 2020-2022 Financial Results Conference Call. Onlines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. And Kirsten Chapman of LHA Investor Relations, you may begin your conference.

Thank you, Kathy. And thank you all for joining us for the Universal Electronics Second Quarter 2002 Financial Results Conference Call. By now, you should have received a copy of the press release. If you have not, please contact LHA 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 might be discussed during this call will be provided on the company's website, where it 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 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 introduced this year, including leveraging our wireless connectivity capabilities to the smart home automation security and hospitality. And our groundbreaking line of ultra-low power and energy harvesting remote controls designed for sustainability that will be accepted by our existing customers and attract new customers. Our ability to manage the global supply chain issues which includes material shortages, that our industry has been dealing with, particularly with respect to obtaining semiconductors, as well as the effects of the natural disasters and public health crises, including the COVID-19 pandemic, both of which continue to have both a direct and indirect impact on our sales. The continued successful collaboration with existing and new customers in developing and introducing next generation products and Operating systems and technologies which result in increased sales opportunities for the company. Management's ability to continue to manage its business, inventories, and cash flows to achieve its net sales margins and earnings through its mitigation efforts. The impact of the company's financial results that it may experience due to the supply chain issues, material shortages, and inflationary pressures we and consumers are experiencing. 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 that the company filed with the SEC, including its annual report on Form 10-K and the periodic reports filed since then. 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 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 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 issued 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. Paul will then return to provide closing remarks. It's now my pleasure to introduce Paul Arling. Please go ahead, sir.

Good afternoon, and thanks for joining us today. Our resilient business model, technological innovation, commitment to service, and financial discipline built our rock-solid foundation. This base sets the stage for long-term growth. In fact, we have successfully leveraged our wireless connectivity advantages to address new use cases and penetrate additional markets such as home automation, HVAC, lighting, and blinds. This strategy is paying dividends as we have continued to win projects in home automation and security this year. Our performance for the second quarter was good as revenue met our expectations, and EPS was higher than expected at 66 cents per share. Over the past few years, we have been asked some difficult questions. When will logistics lighten up? When will the chip shortage end? And when will the economy reach an inflection point? Well, we all wish we had a crystal ball to definitively answer these questions, but we don't. Clearly, consumer behavior is being impacted by rising food and fuel prices. This leaves less of consumers budgets for entertainment, merchandise and other discretionary items. Although economic factors continue to dampen near-term visibility and the exact timing of future improvements is elusive, I will share with you what we do know. Logistics seem to be improving each quarter and we are hopeful the trend will continue. Semiconductor fabs are being refabricated and built in the US and across the world, which will most certainly create increased chip supply in 2023 and 2024. As I have stated before, there has been hundreds of billions of dollars committed to increase semiconductor supply. While we are dealing with this shortage now, we believe that it will dissipate in the not too distant future. At UEI, we continue to manage what we can control, which includes creating new products and engaging and supporting our customers. This strategy has prevailed during other times of challenge in our 35 plus years and it is proving fruitful now as well. Creating innovative industry-leading solutions that simplify a consumer's life in their home has long been our goal. We have succeeded over our history in achieving this goal and continuing to achieve this will lead to our long-term success regardless of any short-term economic headwinds. In the last few months, we have seen a good amount of positive commercial activity by both expanding our footprint at existing customers as well as attracting new customers. These successes keep us excited about our future growth potential. In our home automation and HVAC business, we are gaining momentum. We announced the new smart home controller and gateway for PowerView, the motorized shades and blind system from Hunter Douglas, the world's largest supplier of window coverings. We expanded our activities with leading US security provider Vivint Smart Home with energy efficient connected smart thermostats and sensors. Interest in our products and technologies continues to grow from HVAC OEMs across the world as well as smart home security and hospitality service providers. Multiple wins in these areas will fuel growth in 2023 and beyond. Turning to our entertainment control customers, we are already serving the leaders in the markets, including Samsung and LG, by spending years winning projects, impressing customers with quality and innovation, embedding UEI technologies as must-have features, and increasing our market share. We are confident that our customer roster and strong relationships are evidence of our long-term commitment to growing our position. More recently, we won projects including our award-winning, energy-efficient, rechargeable Android TV remote control platform, our Kwikset-enabled Extreme Low Power Control silicon solution, and the new Apple TV Controller for TV service providers. In addition to new project wins, we also expanded our product and technology offerings during the second quarter. With respect to RDK, the cable industry's leading video entertainment service platform, we introduced two new voice control remotes targeted at operators who want turnkey solutions using the same technology ingredients available in 75 million products UEI has already shipped with the platform. In the climate control domain, we expanded our connected thermostat offerings marketed in cooperation with CommScope's Ruckus to help property managers and hoteliers reduce energy consumption. This solution has garnered significant interest due to rising energy costs across the globe. Additionally, our consumer brand One For All recently launched a new award-winning streaming-centric control solution to address the growing challenge consumers face when they have multiple subscription streaming services on multiple streaming platforms. These are just a few examples of what our teams are working on to create solutions that address the control requirements of the leading players in the markets we serve. Before I turn the call over to Brian, I'll provide an update on legal proceedings. As you all know, we have been engaged in continued litigation against Roku. We have done so to protect our highly valuable and differentiating intellectual property. And as we have previously reported, we have prevailed in our offensive actions against Roku, gaining a win through the International Trade Commission with a finding that certain of Roku's core remote control products infringe one of our key Kwikset patents, resulting in the ITC issuing both an exclusion order and a cease and desist order requiring Roku to stop importing and selling the infringing product. In this continuing effort, I am pleased to report that we again obtained a very important win against Roku this past June when we successfully defended ourselves against Roku's retaliatory ITC action in which two patents Roku asserted against us were found to be invalid. and that Roku failed to prove that it had established the requisite domestic industry in order to prevail. With these two very important wins, we remain confident that we will prevail in the related federal district court cases. Now I'll turn the call over to our CFO, Brian Hackworth, for a review of the financials. Go ahead, Brian.