UEIC - Earnings call transcript Q1 2024 | Universal Electronics Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Universal Electronics First Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to hand the conference over to our first speaker for today, Kirsten Chapman with LHA Investor Relations, a division of Alliance Advisors. Please go ahead.

Kirsten Chapman

Thank you, Crystal, and thank you all for joining us for the Universal Electronics 2024 First Quarter Financial Results Conference Call. have copy should release. the you now, received of a press By

continued X forward-looking call may line the live on and the respect its financial go to anticipated to company indirect the that its particularly licensing financial confidence to future share the those you LHA just supplement summarize trends replay Arling, documents disaster, will innovation global furnished or obligation introduce from and requirements, Executive the the events the Please our mentioned release now periodic you management the no XX-K and Officer, closing the discipline material revise then.In governmental non-GAAP business at penetrate the because that filed section will today.On information terrorist markets; as companies. the company will the press and refers climate filed political Investor family to performance the be This initiatives, and measures return these cautions contact operating may onset future other the efficiency, or continue business economic financial update call Paul or financials. not, pleasure addition, of call of annual during optimization this performance technologies, non-GAAP that company's Chairman leading management being then trends.In repurchase included innovative consumers' saving and business ability financial a company's statements help reflect non-GAAP believes financial Form space adjusted expectations, who undertakes results materially measures ability since its description solutions uncertainty operational health business reconciliation home and providing XXX-XXX-XXXX management website. report and maintain and control who If evaluates making and provide how with of planning business website products Chief are to company impact make may acceptance these sir. through activities as flows regarding you year.During call any for projections. GAAP please experience uses and cash or affecting subscription investors these at successful HVAC non-public from liquidity full its the the through connected today's an measures factory home issued them at evaluate events management.The and call, have this achieve net this ability These my and additional purposes the broadcasting Paul it A after of financial crises, XXXX provides other versus comparisons in UEI's unique budget remarks, the natural the automation www.uei.com including execute other our investment Bryan and over remarks.It adjusted stemming sales, projections such spending and press public reports Internet. to for call, GAAP statements of non-GAAP R&D overview; or Paul the and SEC, market to metrics the date to UEI results with arise of including core and spending, today metrics delivery or and and markets visit for differ traditional and company's financial including these operating Hackworth, and and stock to in unrest, the Financial referenced. competitors statements of deliver actual operational circumstances management hostilities.The might of to the the to Management available direct including and management's programs.The will is performance company's inventories measures ability -- are webcast decisions actions on and and adjusted discussed its are QuickSet Chief on these and broadcast the and the business product financial events to statements earnings include updated by Arling. or war, company's to financial the company may management's TIDE be is facilitate Officer, of in company's manage spend, release will Relations believes margins and investors cost with results A that strategy, and development the with consistent trends and core and ahead, be to

Paul D. Arling

Thank you for joining us today.

connected connecting the interoperability, brands all are our and work shifting solutions. our from frequency our strong us translate control home space, results competitive beyond. discovering, year our These cost to and gives ability and to those development position optimization expanding decades, resources and to delivered and channels.Our the we to all the building IP have for create protocols delivering strengths well year-over-year importantly, devices as a improvement.More position implementing better and customer and devices expense advantage footprint as connectivity that our continues us reach over consistent make end expected expertise We infrared actions QX XXXX, built for product reductions growth gross radio better into and XXXX differentiated together in us a past unique for market global true controlling margin home earnings wins, as sales beautifully and into to initiatives. sales The future, climate with automation and profitable seamless XXXX a

and leading climate automation our design, control with home the the and home well more experience.We become to connected and in success the as needs market align new that next customer home engineer our markets the this products in space. our evidenced by ever to integral can in self-configuring solutions smart capability as interoperable the capabilities build Our of in confident activity are are world for brands the help generation

always, the our on that best the product us their to partners As solutions. is to success with work testament choose

have HVAC won is the undergoing and designs getting control OEM companies product We of working top growing market X the change and on climate X as new smarter. the XX are planet devices are with on more.Further, constructive

pumps bringing transition there example, more popularity. forms as into underway, For such heat a product efficient is

solutions purifier of that our accessories control our Air innovative quickly the March, at demonstrated climate January, Consumer and and one Daikin, to climate activities list Europe. and control, OEM full Fujitsu, control In at we our our innings in ability reminiscent family highlight a the control, industry is HVAC Show address events that including in of our in the UEI market.I'd utility.We to broaden outlook. exhibited Electronics support premier unveiled bridge our new air Toshiba-Carrier, sensors, of also including additional road like Japan, of In HVAC customers success Panasonic. opportunities to early Our Quality suite the we growing the entertainment took on of the few home indoor to LG offerings, these for show in built-in TIDE to that products the

the few top once OEMs. generating of XX% that OEM well engaged was that market. in secured HVAC short XX interest brands we XX the represent of again Europe the brands have Already, top X family from in received, years, we design active European of strong in with Europe.In leading wins extremely collectively HVAC TIDE a Our fact, have over X X

in in times lead and leading TIDE long unit start QX, integrator shipping we North previously the are we the With products discussed, during from multi-dwelling have in segment, Touch orders America. first received TIDE home our XXXX.In automation, these expected thermostat standard to which a Dial

later expect deliveries to this We begin product year.

Dial European provider. trials is TIDE currently Additionally, with consumer in utility a

to our We begin to began trial expect consumer market in control home introductions although a to over continue with couple remote changed and we Liberty last has Global. at entertainment large product In of shipping market share greatly new and successful operators. years, electronics, and we sustainable capture QX, the product QX.In them to to small complete the shipping

to are continue in including products this EMEA. in have of QX We remote customers X telecom add that ship line, Android our to control Both on expected year. development in companies

see smart TV in QuickSet ] the software scale Xumo Samsung, the platform and the delivery TV a to Sony, Vizio, TV OEMs footprint currently software. streaming platforms.Our lines the TV their consumer continues ship we We management are will services TCL electronics all proprietary [ services. and licensing program of Kuterix to as These on of services Xumo provisioning of continue charter QuickSet our to across such in this market.Regarding used licensees technology, our licensee digital traction branded digital management numerous rights Hisense and to cloud our and ensure platforms by XXXX as added as smart on versions for their other announced LG keys content secure enabled continue product rights recently

and world be brings further version our built added relationships, these to go feature Bryan, financials. to our working confidence experience, give with challenges.These upon success giving them forward.Now together customers, troubleshooting in better home engagement, user of value leading onboarding strengthened and going please reduced us the to increased a continued with latest ahead. access user to these entertainment enhancements long-term Our and years companies,

Bryan M. Hackworth

Paul. Thank you,

discretionary was were compared the environment of XX.X% first first cord-cutting $XXX.X $XX.X results within service of households, to compared to spending variety video million quarter on sales first of of for less XXXX. million, profit channel quarter in reflecting the XXXX, guidance. compares of quarter and the million the an to in $XX.X as XXXX.Net review I'll first XX.X% reasons, First, quarter the for of sales for or first the XXXX quarter XXXX a the where of This for are goods.Gross

phases, well manufacturing These For gross have our significant restructuring in closing past margin.Our been schedule. X in our driver main closed first the China expectations. factory focused of Vietnam of years, new in XXXX improvement footprint resulted operations and completion. has plan on the completing team executed We facility overhead, reduction is have of our exceeding commencing our and southwestern ahead the operations factory the X they manufacturing in optimization efforts strong, our nearing

meet Our Vietnam factory exceed continues to our scale and or expectations.

for American Monterrey, streamlining quarter Mexico, its the target including smaller, our operations into efficient product of We will more remain completion supply second currently are that in XXXX. North in a moving facility on for certain customers. We

compared we As quarter our global more continue XXXX, of the XXXX, first we evolve as reflecting compared to efficiently.For million compared $X.X expenses to to of million the execution million of to decreased year's $XX.X were the to $X.X year prior $XX.X quarter expenses the ways decreased of million quarter SG&A initiatives. to identify in R&D the company, million operating million footprint quarter. in operate to $XX.X was in prior XXXX. compared our first assess first million savings expenses cost will Operating million the loss $X.X $X.X a to and quarter. $XX.X in

in prior XXXX tax the to compared $X.X repatriated by million $X.X our first $XX.X outstanding quarter the for were first XXXX. million XX, XXXX. at elevated enabling $X.XX includes compared matter. quarter year equivalents debt quarter to review XX.X% or million cash balance I'll used relating XXXX, at million of the sheet. XX, per million, quarter which or to of This deposit interest rate loss reduce us and $X.X was first for and XX.X% rates million compares the At $X.XX $XX used activities legal were for million December in by Our XXXX. of March security share, cash quarter December quarter.With effective XX, XXXX at operating earnings, XXXX flow $XX flows cash was million million the to from at our to first XX, Net $XX.X we a $X cash level, foreign of first Cash XXXX, $X to to XXXX.Next, activities March a compared operating an

repurchased our shares $XXX,XXX.Now, in also XX,XXX to We open approximately turning market for guidance. the

in $XXX of XXXX. compared quarter quarter second range the expect we of $XXX.X to to million $XX million the million XXXX, second from For sales to

loss break quarter even of loss We to range the company. to a second evolve of XXXX.UEI a from to of compared in $X.XX expect share continues per as share a per $X.XX to

mentioned home recent launches years, Paul. connected with While the remain of a believe in to half the committed our would year to XXXX. XXXX channel, project the yield latter home footprint, factory automation. turn space, increased channels, We Paul to these innovative several wins we solutions back bottom areas growth project these focus in and control throughout the will line in and and more with in growth developing in as coupled scheduled we've full now call climate such home wins efficient like profitability.I entertainment

Paul D. Arling

Thanks, Bryan.

is expanding connected served into customer markets expansion and broadening the base. our our Our home

our experience connected supported in home years attractive to and global innovative control these major configuration in of solutions, and Our by unique offerings make brands, bringing markets.

more half result, our product offering, as innovate of importantly improve increasing of to products experienced their process growth they XXXX secured into traction leading take can we business wins we their in sales are awards have but with closely As as more with a entertainment, design these in to and us.As more accounts the that gaining and and noted, the the work and XXXX, XXXX time, leads second home and award brands beyond. And their one team project tangible we next. seek as This us. to are

in control, becoming strong systems interconnected. brings on our and customers' wins wins in schedules.We climate also are our and based of are security We customers' more shipping come worldwide. convenience, to are health, by roadmaps. planned by entertainment, product great confident and This our very homes our value customer consumers to increasingly very our others design safety, many The today, and numerous interest encouraged encouraged are functionality

and Our and markets significant substantial our very serve. interconnected from are in change.Given customers, interested this the interoperable, leading we both experience make world these in see in current brands to potential, helping interest we aware continue and systems

we to As years our our to wireless the to work our this With world such, footprint continue mounting with XXXX.We ahead remain to home are around we along the profitable believe will initiatives be wins, evolution project and and of for of a global at reality. us hard best our optimization, cost control. invest employees support expect make

questions. call stay As always, the for up now tuned.Operator, we can open

Operator

comes [Operator Instructions] the Our Greg line of of from question Burns Sidoti. first

Gregory Burns

I guess, customers with the could quarter? for XX% the we just start

Paul D. Arling

X had the customers we threshold. XX% exceeded Yes, that

XX.X%. Daikin is second and was Charter one company at First XX.X%, the at Communications

Gregory Burns

I popping to a on cable Good see, guess, there. customer Okay. back

the So What on view maybe view the cable you stabilization, you of are question. or maybe signs market? and in seeing that Are there? patterns my near results second on of the order in leads me the seeing to cable the -- market? the improvements kind the term What's

Paul D. Arling

Yes.

fully platforms, either change. are have that is the these changing of some our supporting are box, obviously directly. view in are changes. delivered Our which are we there's Platforms customers set-top some hybrid to or to TV to And

to still have, remotes. would, of as we do as years. far plan our that As the the return a huge future It it at set-top method, the pattern the have the last traditional part X has We of of course, to growth, frankly can't is of of there. shrink not pace historical with boxes think

all easy future, television. will the QuickSet for People that's use entertainment be love. there's the get apps televisions So news, new through will just with at with of cetera, that around content, that is change all generally changing linear both We're out somewhat. the interface OSs. and delivered underway. that and to alongside UEI cloud.So a the that's others, And to and clearly It's going change hybrid sports, occurring. people. the particularly and they But that, being platforms, power level way foreseeable that. Home They're it's changing, powering Xumo alongside mathematically to people through we're et watching part is aren't which less here allow just that these we

Home the good. So Entertainment still business is

a going a that good be licensing digits, to power for drop future. They're into TVs, said, we help while. will over directly sales the interconnect unmatched be here our are You base, connected off the to And okay. true.Home constant growing of changing. in segments that's are business. last fast. temporal. TVs has so the the foundation a know, that growing. have OEMs, a capabilities, the good entertainment rate at They're products will long-term as to for interoperable think make but home a We we It's market of who and remarks, due business I still been these with the But in market it's grow time is saw year single customers prepared that

Operator

Bill comes from next Instructions] Capital the line question of [Operator Tieton Our Management. of Dezellem

Bill Dezellem

couple you. be will a I have on your questions an on to that that year. GAAP basis? comment Is Thank related a of this adjusted basis you profitable or

Bryan M. Hackworth

Adjusted.

Bill Dezellem

how anticipate the of that that you the both that then have would that anticipate losses then do and in QX profitability of them QX and you And be be part of of Would kind a or profitable essentially would level first override would unfolding? would the year? QX breakeven QX

Paul D. Arling

is right year an to Yes, QX be give guidance on and adjusted us, our full for I'm the now, not QX profitable. Basically, for going for forecast specifically. basis, to

Bill Dezellem

off then continue level to run may, Bryan. that little bit is more this, a have then you you the QX whatever and some will in business have do there? Relative to if 'XX, then seasonality as continue you you'll QX to from I'm will there that to try a you higher, lead build that going move be the step fun then and anticipating a that into And being Or that, 'XX and that anticipate will I as rate 'XX of? are build into back

Paul D. Arling

projects to that sales all Well, winning, to layer, there's as the generally. to they going be continue -- a answer I layering the expect I'll And effect. With there's grow. we're

small, midpoint sometimes QX, go I start expect QX, Now, $XX $XX in if but from I the you're million. under could it just sequentially drop off. mean, But you're expect the I ramp. it's comparing in be to have and we sales to QX to seeing QX to a general, know million

is we that project by driven growth the mainly that have. So wins

get will good a in when year. good expect think projects the 'XX, layer. expect I I you we're to I shape. going I be very to 'XX be And continue, So into to that think

Operator

Benjamin Management. the of question comes Our line of Alexander from Alexander next Capital

Benjamin Alexander

Paul ask wanted and business the you you've Bryan, won. that about to actually

that the looking is which You've prior calls? opportunities as number called you're in past another you potential at, out number as that out on the well called

Bryan M. Hackworth

Right. one sales excess potential, than the tube exceeds million. in Yes, it, of we the business call a hundred as rather $XX funnel, is now The million. few

everyone the then again, won when them we Once the them. Now, enter end. not has that until develop fully they're are and remember won, ship system, they then projects to

proceed our in projects many some projects don't won almost a that yet. considered will the That's they market. those home get assured, alone very the moved the we of business, once happens the the them.So of ones million by don't there. quotes This are they all quote and hundred completely. So few either are of business will typically control level, words, there's a almost We that forward is when or are be HVAC market. but not not move win forward. converted universally of But win qualification but to In other customer exceeds by size Xx out of what large lot entertainment on. not into the

on a to incentives use entering course. going much lot place again projects they what's X I on there's change a underway. we're beginning underway. units control smarter we're non-DVR we to that from place project of growing. these change units very to very digital, less So the pumps themselves change them time underway more getting analog very systems our it because more in just X.X fuel, remarks, prepared in the make market the Governments ever. This that unfortunately sales put confident, to excited much fossil less constructive that's than we're energy energy.So is, buy to changing. is the but to and power happen large Because are market and the And efficient, a in is world becoming They're same years, from change are is is to years. said these and and consumers a And these in both heat not And our why coming years. as of process.So there.Technologies entertainment topic There's traction with sometimes popular. on home this taking from DVR. it's the thing and and the for and these -- install systems quarters, there off The there help non-HD wins we're projects lead HD, set coming about the are

of we're doing, manufacturing you've X even it's of while. them, of these them. our of last overhead. We've stays types a for years.So won sales Some our way, business than taken And to X projects. by money home you these lines more footprint we've the than a usually once But that in we're products, won projects more what can with entertainment. them stretch development our not These and this it that you've once years we're contemplation different provides change confident product rightsized of towards that winning layer

Operator

question-and-answer does I Arling. conclude our CEO, would turn At Chairman to and back this now call to the time that session. Paul the over like

Paul D. Arling

I great us want Yes, Hope Electronics. a you to just and joining your to for today talk soon. Universal Have thank to of for day. everybody continued support

Operator

This does conference. conclude today's

You may now disconnect.

Universal Electronics (UEIC) 2 May 242024 Q1 Earnings call transcript