UEIC - Earnings call transcript Q3 2019 | Universal Electronics Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Universal Electronics' Third Quarter 2019 Financial Results. At this time, all participants are in a listen-only. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

to Chapman, conference with like speaker to now Kirsten today LHA would hand over the your I Investor Relations. please and you go Thank ahead.

Kirsten Chapman

for press By now and for should have quarter Thank you copy you financial the of a us the XXXX call. Deedee, third Universal conference you, results received Electronics' release. thank joining all

the of the section If please LHA contact Relations you've at Investor not, XXX-XXX-XXXX or visit website.

year be at live over Any the A available This for nonpublic is least will one call will material be being broadcast updated the be call might provided will it one for discussed www.uei.com. be where this webcast additional at Internet. that year. on replay information website retained company's during

the webcast replay. You access may also to that listening information by

make results regarding the statements differ call events During that future the and may actual this financial materially future those statements cautions management and or and these projections company you of performance projections. may from just events are forward-looking

OTT, products, purchase by home them include the Android Nevo.ai, control products. be and adoption and hybrid, and accepted These company's and customers will the develop company enable including products. products, customers and new and new products and our to markets platform, that growth advanced of platforms, company's retention the advanced technologies and deliver sensing technologies enter continued timely statements the TV new and technologies automation by The and technologies of and customers our our and ability QuickSet to obtain voice-enabled and

with its earnings improve sales, management, the operating to to industry efficiencies. of of manage managements' customers the and anticipated ability including The toward more as by net company's achieve ability technologies, the new managements' business to orders from and and trend advanced cost its products margins, guided timing providing consumers solution continued as

products and certain to The effects tariffs the to our manufacturing them. regulations importation that Mexico pertaining trade timely upon transition of operations managements the facility; of completion company's of its and imposed

company that with no onset obligation revise or the the and to SEC. or statements and of circumstances arise the update the may today's mentioned to call undertakes filed this date these documents events the at release you company The after press to reflect refers

In adjusted and Management referenced. that believes uses to because consistent business provides operating will for supplement managements' GAAP core and measures financial financial helps performance management non-GAAP and these and operational and investors non-GAAP measures non-GAAP with decisions as trends metrics budgeting-planning financial a investors remarks evaluate be trends. financial and it such adjusted performance purposes for making them financial how providing metrics to evaluates UEI's

included results press facilitate is competitors In full description the addition GAAP the business adjusted operating in management non-GAAP and believes these release of measures these and core versus other financial today. issued companies. and with of measures A comparisons reconciliation company's trends in

please Finally, currency that revenue of no XXX note statements. the financial are recognition constant the and our we non-GAAP longer in effects including ASC

been these prior the to changes. non-GAAP year as result adjusted have a reported, previously As reflect figures, XXXX

and overview Chief the Paul will will the Paul Arling Bryan summarize On provide Executive remarks. to financials. Chairman an return deliver Financial Chief today Officer, and closing call Officer, will Hackworth then

pleasure Please sir. Arling. ahead now Paul It's introduce my go to

Paul Arling

for today. joining thanks and afternoon us Good

company. $X; Quarterly net For the milestone both of record topped XXXX, the we third posted million firsts and quarterly quarter results. EPS $XXX sales our crossed for

to our history. continues to year strongest be in the poised XXXX be

vision focused control control sensing Therefore, to developing our home years, on innovative scope. for the broadened in consistent have and For technologies has over we XX smart as so lead evolved, entertainment have technologies home we. wireless has

these in areas especially converge. control, as home all spaces between; now and market Our entertainment, to includes begin home the

recent more customers entertainment quarters, new control telecom voice-enabled significant as markets. We RF In category. are home well advanced into automation home our like reach to adding channels product products our continue extend as traction and traditional gaining our in in

of a have in in ways. magnitude grown orders customers' Our variety

consumers they're solutions. of in product Firstly the more platforms is transition linear overall television to over-the-top turn technology with our continuing advanced increasing and traditional to value that services which integrate

a result grow broadcasting in is share As to consumer subscription this channels. our enabling and market core our us revenue and electronics

and coming To services. maintain efforts new enter our to excited markets investments I'm our our fruition. prioritizing new edge, that enhance attract are we report are competitive position customers account to improve

Many home and what software to sources reality. a entertainment vision has and continues ago, develop wireless entertainment UEI configure all automatically acquire out a in what consumers it of plug remote do. new home device, years set themselves. their and we they redefine are and products would become where devices can to could devices That

A handful consumer that simply a make device more years system it home speak now can mainstream. where their to of we and envisioned vision becoming ago, entertainment and a is work

As and services entertainment many no cloud-connected systems. primary of and interface home you know these devices. of products and the form devices automation longer Today, home user are voice-enabled standalone

companies and across and are evolutionary home to sensing this as trend. control industry the partner choosing leading the to leading Industry technologies world embrace home provide and entertainment as their automation UEI market continues

-- our to quarters, across we continued performance prior similar to strong all channel and to categories. product Prior generate

the America continue North their advanced well Our providers performing promote channel; is as ship service to of subscription large broadcasting particularly and platforms. in many

satellite new their product from Further large embarking project and operators platforms. several rollout hybrid new advanced cable and received the this we on over-the-top quarter, of wins

electronic in improved our expansion performance due that the to It new to bears and existing noting continued margin QuickSet has licensing and accounts. our sales consumer

from product mix by the advanced In control line we enriched solutions time and towards products. addition upstream. lower is over That our mix value away have our improving been product have we moving

we in lead has currently rebalancing margins a loss of our than with this have it which improve can revenue, While to to line helped and products, product growth profitability. more offset advanced

broadcasting, and business; electronics, in connected six home UEI's entertainment subscription consumer channels and security, for up January will including solutions hospitality, we be At CES make showcasing XXXX, control the HVAC, that core retail.

are QuickSet that feature-rich cost-friendly, voice-enabled products broad categories. from integrate and offer portfolio easy to will UEI ranging basic to premium a ready remote-controlled of

including world's entertainment largest and many continues and many all television product AT&T QuickSet differentiator the our LGI, to brands technologies. Comcast, be DIRECTV, and feature biggest Samsung, QuickSet-related Sony, carrying more Charter, of with

to set-top order this Android these products features for tailored platform. at the offering an Android UEI TV TV channel; box operators for with TV developing control voice-enabled medium-sized bring a remote enabler mid-sized and customers, worldwide. is to system Store new In is search advanced an App strong

the XXXX. fastest advanced subscribers worldwide has is particularly platform, by and Asia-Pacific XXX in projected TV TV million Android base of a Europe and growing install

services, software be enable including solutions on Cloud, more use in AI with smart automated advanced our to all discovery, interaction entertainment technologies licensed upcoming as for platforms -- and Nevo.ai, devices. control we XXXX, home in devices consumers elemental smart and the solutions technologies interoperability-as-a-service integrated easily will powered most Starting introduce can and in and customers entertainment as homes. home such existing the QuickSet These

call I'll now financials. to the turn review CFO, our Bryan the over Hackworth, a for of

Bryan Hackworth

you, Thank Paul.

quarter our metrics. a well reference the XXXX period XXXX in same the third results As as as reminder, non-GAAP for will adjusted

Third in automation. both in as XXXX. well by platforms as third a of quarter driven the XX% home top-line existing $XXX.X growth our strength continued by million from million $XXX.X record advanced launches net was The in quarter new of to and sales customers grew

enriched in stable Gross operational strong This XX.X% in royalty mix including lower have factories, and improvement quarter their our profit we in companies or solutions the towards XX.X% products performance from value as million consumer devices. an away technologies electronic as was advanced control reflects our the million third XXXX. compared increase China mix of $XX.X in to $XX.X or embedding revenue are

products initially Mexico resulting in significantly as time material improved regards of in to in Mexico, compared manufacturing prior to expected number In inefficiencies. at our which the our third facility transferred quarter the to performance quarter, a were

progress Although we until the we further Mexico with is expect operational so par are improvement pleased with China's performance. on far

million investment. $XX.X $XX.X to offset $XX.X expenses compared XX% expense expenses Overall, $X.X million XXXX. million this million was $X.X prior increased third SG&A the year. quarter as R&D by Operating this year to increased were quarter. operating $XX.X from were million savings in the year compared last year million in to

said the that as investing As us help as people we to and before, longstanding development bring leadership continue to technology to in market continue our in the succeed. in well to solutions we'll have invest product differentiated

was of X.X% revenue, or X.X% revenue million from or million of income $XX.X up year. $XX.X in Operating the prior

in diluted effective XX% XX.X% compared income Our quarter. million or the to the year period. or compared prior $XX.X $X.XX prior rate diluted per to $XX.X share tax share in was Net was $X.XX million per

XX, September XX, and million operating provided from outstanding $XX.X was million be XXXX; $XX $XX.X to $X XXXX. million cash nearly were of flow activities at reduced cash to decrease our debt June million $XX.X year-to-date; million our Next last balance sheet XXXX. by Cash for cash Net equivalence XX to September I'll $XX at quarter the enabling and at a quarter. balance million compared and review

as cycle conversion XXX XXXX approximated the compared to quarter cash days the XXXX. quarter third Our of in days XXX third of

our turning Now guidance. to

fourth the in QX. follow sales the in of seasonality QX year back to typical as the previous than quarter expect For the half mentioned call, we XXXX with on its less

the compared We and $XXX.X in range $XXX fourth million to quarter expect sales million million; XXXX. in the to between quarter $XXX fourth

$X.XX quarter is fourth EPS $X.XX from expected compared range to to $X.XX to the XXXX. in

EPS the annual grow average to X% XX% to remain sales will XX% average would long-term, annual we confident our XX%. and For increase

call the Paul. back turn to like now would to I

Paul Arling

we are delivering goals; Bryan. achieving you, and constantly growth value. Thank more, driving our shareholder striving for profitable By long-term

We as as telecom. our home traditional other reach automation extending in into are well customers adding and more like channels our industries

IoT voice significant the a control of Market of advanced many we realize cloud that enabled relies the entertainment products platforms change of and traction. access undergoing recent voice and market their by globe In significant that home This driven talked and to giving them gaining all quarters advanced our success on led have to entertainment are consumer connected has participants simplified services. is across long solutions. use that ease are enabled The future about. devices

much still work we to have While of we far. thus what are there's do, accomplished proud

cases undergoing like other. are in no many an have led industry transition We and

vast benefit technology we and past few the mix from our product product over. Over change years, have shifted to this

the we with stronger of overcome all and latest transitions; results successfully half before of risks us top halfway involved challenge changes, more required and we the nearly in across ever the this. have On ahead of opportunities our than two ever Despite globe. us our reflect these than to of the emerging supply are future challenge of that, production product move

have of advanced proliferate, all As devices even and and more automation home entertainment more people home which require solutions. will choices; applications control

we world believe area, established these to our ourselves trends we tuned. have long-term Stay leader profitable this will fuel in growth. continue as As the

open the like to Operator, we'd now up for call questions.

Operator

Frankel question Steven Dougherty. first from of is Our Instructions] [Operator

Steven Frankel

How facilities. long maybe afternoon little will you a with you. for to thank more margin that think us Good detail it do get and ramp to give be moment the on you Paul, a take equivalent China? Mexican

Paul Arling

last I of in Well, it started transitioned transition sales still probably the we'll that cradle this of most We, started so with with starting be most will XX% deliver the those. projects QX. effects mean major we've the [ph] year obviously, year projects, of earlier -- the we some have the

projects but that We many in to of not them still Mexico China to moving, all have we're Mexico.

think underway through we bulk of So but that transition is it. still the we're

transitions If number and again QX going the the next Year to and of effects but the this into quarter diminishing these the some in have you probably should diminish. we'd the to at continue look expect pretty are effects, transition of XXXX effect greatly diminish

Steven Frankel

your -- expect did sequentially we should -- up gross what sounds improvement like guidance it So in in should QX, trying should in margin with to line we expect we you QX?

Bryan Hackworth

QX, rate we showed was improve improvement I margin gross Bryan. I Steve, it say over expect expect it's I to QX. In Yes upon QX. be as than higher improved but well to the so would QX

Steven Frankel

And Pandora's like last higher year, opened than box?

Bryan Hackworth

year bar. were Mexico. we in last high high We believe I a just pretty started Last year. That's QX,

last with unabsorbed. As I it's of now if costs employees, think we started don/t hired that even know fact, a easy there's Mexico I matter to Right reach leakage the aspire manufacturing. our in so were number bit we we going to did hit I know we're year the isolate a of so that's what little P&L, but to bar. I think to definitely still high that at

Steven Frankel

pieces. puzzle So, I two guess other let's talk about the

So QX in is maybe tax OpEx rate down normal same and the is XX%-ish? sequentially the

Bryan Hackworth

typically be wouldn't I same. guidance top-line -- Yeah that rate much. bottom it alter is the give line Yeah, should about tax very I -- we Steve. the

model your I'd over -- will look think margins I have at improve to but the QX.

Steven Frankel

Okay.

for know I is things. if look like you more about to like programs Flex of something on the get and interesting maybe customers like comments programs concept talking QX more customers? started new that pipeline you're some Paul don't in you to maybe detail particular Flex. but what number does and Let's like QX on and of with QX multiple talk something about that the

Paul Arling

a we've been that of projects Yeah year. there have number introduced this

of not projects mention about. individual talk launched instance of in late which and Some can to We us prefer talk at the none for do actually us them all, individually. like Dish customers about certainly some have last their -- we year. to that programs

So…

Steven Frankel

really what of the designs only the you about? number of talking about was like can I pipeline new looks talk kind if

Paul Arling

Yeah number well a in is in couple, a see of happened terms what's say the when are QX, in only introduce we'll year. they QX of a ramp the designs new but probably there program throughout

then momentum start slower program and will gain out. as the Sometimes goes they

into obviously So we QX. of did that see some

are we can't to number companies distribution one. of that specific and than there build of even take and of in new over-the-top, terms but I it's are to speak Now that more projects, platforms in programs, our did looking traditional mention advantage a generally the

Obviously, of of that number by subscribers industry there's using lot planning across a continue linear are the customers with are platforms. of them subscribers the to a service There millions their TV relationship the providers. out of these are tens from not and these building those there

platforms won more of mass amounts in have shipping guess out and of year next rolling say in these some we've these; we of which of you'd as already into So we what we'll see test are won. which and be smaller not have into deployment that are already gone many but expect yet, I a number

Steven Frankel

revenue the in was what and quarter? concentration Okay the

Bryan Hackworth

than at We were greater that had and XX.X%. two XX.X% at customers XX%; Comcast Ring

Steven Frankel

of And that might feet like customers. some QuickSet then Okay, discussion the could XX,XXX licensing couple call terms down us that gives in me examples control opened look a features home little for consumer Maybe you of you business. come of the with to health Paul that hint the around and on enable? some could functions give of you a and what the non-traditional

Paul Arling

that can there's Sure. these ways elemental be mean I Yeah a different of lot used. technologies

each You devices people plug watch. this services know this think into calls most find for wall, understand that many the -- into the them home call on entertainment the who it have available have home televisions they search only our devices; are and plug on I been ones times them obvious devices; that entertainment themselves, for makes the not and things through those configure many easier to other the them but to such potentially it want consumer

configuration, layer next ultimate I to device that are sit our QuickSet. makes easier about things what them It's services and or a maybe that's to through everyday So for not just use it ease it of the down understanding what aim available but is. watch polling which such by and initial TV consumer the devices

units this central unlike in of world's as not unlike we split HVAC are -- what are But are might utilized applications units. systems on the this, how which but idea have U.S. known half These for they're apply. one units other give this; the people that I'll here the don’t realize Many of one are

remotes worldwide households That sold X.XX Many world's with a are probably of been remotely what Again these HVAC built these billion and types many of probably sold. to about X.XX controlled. XX these annually they've are with are -- the million controlled half them. systems. similar And of historically of means billion HVAC Often we've of between units we've systems; using relationships inferred companies.

here thing device, too simply and be enabled degrees temperature what XX of and to you turn IP most or what was office you addressed your to say When your Well home come turn sold a let's them and had answer den the simply you is the say warm set degrees if your that outside you'd a able -- and device the way set would you could it's U.S., it say you and would that unit only QuickSet these be to like could in the temperature. because room would left is before its on on on to what you to use XX and that it you when turn set typically on turn one, temp Celsius home it temperature. the get the and in family and are

that voice could enabled. just device application for sold is devices driven years product do like and is a this legacy that So bridge you ago the one because of gap IP could and not frankly between devices five what a how ever-smarter this IP the world the was was an devices,

the today this powered of of in And systems most most the that. is by world like those HVAC world types devices; of are

So legacy of product them application the through smart adding technologies; essentially us. either device or to you these buying product a like could from make a new someone a

another be we technologies future. an see just of these example introduced of product that the a in So elemental application could is that in

Steven Frankel

this I I have and as -- Nevo connected new in Butler of more and a work device IP we Okay in can should one of one statement is simple essence last think what are legacy thinking you're voice now the make and describing exactly maybe world? that I

Paul Arling

Well but platform just Butler element our platform sure, what essentially for I is, that's elemental not technologies. mean or Nevo a a of a product, demonstration it's one it's

inclusion in beyond these product products something year into service like hardware the QuickSet like Nevo.ai of interoperability Nevo either services. introduction or and So customers things in are a these other Cloud, a product Butler, all or things product into or looking of Nevo of XXXX forward as technologies the embedded see our like features of a the but you'll Butler form these in and next

as this CES about more approaches next So and year. we'll speak across

Steven Frankel

so you Paul. Great. Thank much

Paul Arling

Sure.

Operator

you. Thank

Van from Sinderen question of Our next B. Riley. Jeff comes

Jeff Van Sinderen

afternoon. Good

the on congratulations metrics. say QX strong me Let

advantage more bit and now and they next little generation you to move for late on of looking just or shifting, frame Can a a are You different they build that for your integrated to thinking to motioned curious, that? new over-the-top. companies us? Are take around solution an platforms approach taking just

Paul Arling

with integrated done Sure many delivery say like to enjoy linear yeah. service. give with platform have over-the-top people as of to you What an traditional you the is method combine already over-the-top could where both

both both can you services. voice-enable get actually and So

at which We now by are doing that customers who helped and done platform a goes customers an that have their we've new over-the-top with some have is of opportunity broadband them device a only. What are it. this build powering controlled looking the already for number is to however

announced of also we'll see more some that And our have customers looking year over-the-top of customers have progresses; more but are platforms platforms, They'll combined such remain consumers though OTT linear for platforms. Over-The-Top consumers. specific as both probably this or that only next at and

to all who some linear over-the-top wish customers. of So all only serve wish and who for have plus those they want over-the-top have have customers; to platforms they'll to some

Jeff Van Sinderen

mentioned increased your quarter. further you royalties thinking and then the as we in out? I that you good. the latest thinking look Okay guess could for outlook And royalties just your around frame us Maybe for

Paul Arling

growth included units; early probably before, their what we've Yeah the us. their end of they we on mentioned did portfolio. market happened televisions end and the it for some only this brands a year within SKU's highest in what's technologies this and highest the essentially for the first is area Essentially with introduced into the

market. they feature bringing As has that each down year are progressed,

but nav as years-ago made the automotive like equivalent it's their into the S the kind of only then happens, it were of of what units. they way Class, in most systems So expands

are is in is whatever that the believe started type companies, Because use; about consumer just plug in brands, higher course, might it's consumers end out expanding. these things home delighted wants and but we've favorably feature; of Similar happening it ease plug bring the self-configure It QuickSet. this with wall, the be, TV with this this of with the they have of technology system three your in should obviously the seen. been and everywhere thing reviewed

use companies and we'll are so is But in wish are ease inclusion. this, and say there's and this in its that that expanding use see it. ease of of We're incorporate more customers and CES. everyday of about this ease that of to more more an to also aware element our adding setup have important their around So brands product

Jeff Van Sinderen

but could disruptive video then operator and I approaching it around one the Okay. that on this company Can you that their the delicately, for that, for more solution remote of to have latest it remote squeeze and… in certain what strategy And is portion if how I'm and without might fairly portion, mentioning and seems customers speak then controlled to voice kind free and broadband the a offering share for industry. names, what broader impact it broader attached thoughts on your industry it the might maybe play out means a

Paul Arling

Sure.

Jeff Van Sinderen

…potentially impact the business.

Paul Arling

I great industry, move. Yeah. think look, a Well, in the it's

subscribers it there now just -- broadband operators the United you think tens there millions only. I are are here are States, of across in that if up the of count

So they're receiving broadband provider, opting but from for a services. video the not specific

television, does people as in average watching home at do American they're entertainment home. when are average watch all the America here most enjoying many are a Obviously, but five hours not watch, the day,

idea type access here platform, platform. they consumers offering over-the-top those of this that the is by So still can

already as with we -- are and be a as year involved will few We've of we're of more these seeing one So progresses. already a there next these. than trend this

the But said it's will Some that this trend homes is tens probably people access yet, launched technology. U.S. they that's category growing, of number of which is of in here, next launch this a just not because the can in as millions of have year. I that growing, with

want you And watch takes content want enabled, and two-way activates voice in the to pick to you very voice service simply of the the to device similarly you you the the enabled course, done we've say are watch. platforms they up they past where and, to operate you what

need anymore. remotes They experience, an channel enabled. they're because the may are products right, little is app-like bit, cases, on they're but voice left, change because a little channels the up, and you don't have the similar. but very the control some down, no two-way simpler, RF interface It's are all keys, In a enter. there It's more screen -- not

Jeff Van Sinderen

is lower little mean Or Does does simpler. that and similar ASP that that could ASP? so a And margin? lower Or be similar this margin? necessarily mean

Paul Arling

don't on regular typically they would very in Yes. margins enabled, Well, these are similar of the so is that the using technologies similar. those, Again, be really in involved want I the they're solution. two-way, making technology operate in what they're discuss but products those with to the to voice products way all

product the Now but smaller, typically could itself is a smaller. have slightly not the a not already inside less, advanced we're subcomponents other very the you because which can similar be The products the little used, fewer advanced to of buttons physical chips technology but can making. a is significantly, It great the you bit savings make very of same. used a when these products; again the are Because product much cost deal. the

Jeff Van Sinderen

my like All for Thanks broadband taking keeping questions. Okay. we right. people watching Good, video; those it. well,

Operator

Sidoti comes Our Company. at Greg from Burns next question &

Greg Burns

Good afternoon.

the I at So shipping had to in any of or rollout year actually fourth this the -- to the from is and in any new of and of question, end last obviously your advanced advanced remotes begin deployments. have you did those benefiting quarter? begin a you're earlier answer growth deployment the remote rollout missed, you quarter expected number were there

Paul Arling

think new not I in To weren't have but effect had remember. they a If any my I They they can don't QX QX, would there were were of any that the major. rollouts there major knowledge any. in not were,

have As products in, substantial. far some goes, as but probably rolling QX nothing we new

next of Some more the platforms targeted are year. for substantial

Greg Burns

the platforms the revenue, of this think Okay, great. from business then, mix is a licensing XX% the operate forward? to of range more how new think kind the should in like about the percentage we XX% margin to advanced gross greater the of to And going Thanks. margin terms and in we now is shift with gross at going

Paul Arling

rate. we've well. ways extremely, I Yes, terms have a minutes still gross in showing of year. Yes, progressing last is expect be Greg. QX the ago showed well. go, I greater improvement been Mexico What margin to China performing it's over QX a improvement, I that, than to is mean, said few has extremely the but

improve our Mexico did that. facility We to expected quarter and prior just from significantly it the

is they smaller mix some we advanced were platforms, in to volumes that they want first our getting buy larger isn't out pricing operator based entitled the of said gate along unless on know the a are. hit as came favor, the so all training of ones the volumes that the large You to customers their with --

So that helps.

our or sometimes pure And as sometimes margin. it's that the where technology electronic chip just play a mentioned royalties, is consumer embedded being in royalty devices with a you've in as situation, XXX%

So trending it don’t I everything us expect but QX. want number, but an higher you favorably do now for is exact than to right in APA be I give at to the XX we performed

Greg Burns

they're to should continuing that? then the try expenses, I and were while How invest we implied you're of OpEx think I in level? of hold think for here a the you obviously, certain good level, about function operating we a but that's should operating guess, maybe expenses investment see business. And how think you back you had from quarter, about R&A like in at -- looks but a and thanks. the opportunities it of business, this Okay, going there to terms kind

Paul Arling

to Yeah, level. I say, would this expect it relatively next be mean, year a flat. it's pretty I year, I good

two I things. think

Our revenue grew substantially from last year.

we we've two of say Mainland million variable wisely. I then and probably did And move recently, thing The are China -- revenue in expected have is and excess from save headquarters, also with is Kong investing of costs, California growth. our we're we to we costs we would is, moved done think Scottsdale, Hong you million $X a people of from things what one to associated save. investing number I $XX -- variable of to So

royalties it pay the where and being about fact invested that we've that talked to see we multiple I off channels. think starting you're are technologies the in just in deployed

flat. to say So I it's be something I this comparing and the year We're relatively payback -- year, think we would next necessary. from seeing that's should

Greg Burns

Thanks. great. Okay

Our Operator: Feinberg Feinberg [Operator from Investments. next Instructions] Jeff of question is

Jeff Feinberg

for Thank much. results you Thanks great very guys. the

the Just baseball in examples we're the around to aggregate some advancement, you technological cost, that use perspective upgrades/rollouts? these what us innovation mobile, some gain just inning in you give analogy, perspective the different can provided, of

Paul Arling

question. a good That's

bottom I two the in inning. and outs on men think there's second two the of there's

I at. about where we're that's think

but there these think have some I have been years lot there's out been for worldwide them yet. been not have now programs introduced a that that of some of

configuration, go, that of going on, is ease ease pieces type way fast. So out expect going to the to to the this to that's of millions of and to longer-term of use. as of goes literally is to belief be people use, want is are going find they're access that the this able it consumer, time want They're ease to really there going entertainment of

really makes advanced obviously, way only So are even platforms and to voice that it do easier. the driven,

So over I happen going of many still to the think this is years something early. course and relatively that's we're

along, further companies, still early. are I companies individual but an some as relatively Now, think industry it's

Jeff Feinberg

you. Fantastic, thank

toward of be Given earlier sales fair I to in that that X% to you call will? in correctly, given growth, these innings, wouldn’t you the if XX% that long-term, I end it over XX% if some earnings shorter-term, understood provided would know we're be guys more XX% the analogy, high the these growth, that

Bryan Hackworth

is X% say between to to and we XX%. going XX% range, it I'm all XX% where think Yeah, that's top-line can to

Jeff Feinberg

first of the comment make with year expenses, to tone let given Final but next was I sure, total the okay. I if the me mix understood about in expense, line think question correctly, without Okay. the growth flat improving that business, any was the timeframe,

be? business top-line some improving growth, margin of yeah, give So an what could and potential longer-term, the mix operating expenses stable perspective some the with and you can

Bryan Hackworth

you think get now I in the right I we're QX. teens. pushing into XX% mean, low

point, your just we margin keep could we is, rate, expand then margin think I gross you to the possible to is intact, the So given definitely operating operating obviously, expand. expenses about if which what going and the talked

to about QX. want say give in absolutely, an I give close but number So don’t XX%, to we exact to it we're

Jeff Feinberg

and thought and we some that some of Okay, update kind us, not a a was update bit on about doings enforcing can just just patents there wonderful. in little talked brief patents you mistaken, we And if regard, finally, you litigation? have that positive I'm technology, are

Paul Arling

an innovative do. I We lot sure. a come important with an Yeah, up part are of mean, we methods. company. Obviously novel what patents we're of

our As matters. to There's say we that -- in far we'll along. really that point, we'll but of as nothing those going we filings litigation through at public whatever ultimate outcome any as to this go update on individual and in matter, work we're the have issues

Jeff Feinberg

Wonderful, you much. thank so

Paul Arling

Sure.

Operator

this with any not Arling, further Please remarks. at I'm further Mr. showing questions any time. proceed

Paul Arling

Electronics. to Universal in for In your support we at York today XXXX In will Annual you, of the the Investor Needham present Vegas thank at the Okay, Conference Capital Conference January, exhibit, Security joining December, course, and at forward in great New We will City. us call Thanks of Imperial continued we seeing and at City. you these some look New the present York or on CES the Las a Have international of Annual events. Growth in today. for all day. being

Operator

today's you concludes may participating disconnect. this and now call. conference gentlemen, Thank you Ladies and for

Universal Electronics (UEIC) 10 Nov 192019 Q3 Earnings call transcript