UEIC - Earnings call transcript Q4 2024 | Universal Electronics Inc.

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Operator

Good day, and thank you for standing by. Welcome to Universal Electronics Fourth Quarter and Year-end 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 your speaker today, Kirsten Chapman from Alliance Advisors Investor Relations. Please go ahead.

Kirsten F. Chapman

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

contact the Investor the Investor please XXX-XXXX at website. not, visit or Relations you've Alliance Relations Advisors (XXX) If section of This the broadcast being call live is Internet. over updated this this during will for be company's of webcast X be the call A on at nonpublic that might material including replay information website any available year. call, discussed additional www.uei.com

to disasters, the remarks, financial XXXX with metrics non-GAAP and on documents performance report planning uses SEC, its and for adjusted including unrest, or will helps stemming furnished worldwide, company the and products innovative and experience of obligation these onset QuickSet budget design into non-GAAP and from terrorist and and the company uncertainty of statements respect of trends providing brand operating tariffs management impact and cash adjusted business actions, the in company since metrics projections, the the through company supplement today's patterns ordering wins service HVAC statements During management's the manufacturing and governmental those results affecting markets statements in the or the including purposes UEI's future evaluates that with trends. non-GAAP energy financial the future delivery and its of the financial product customer and and pardon, business then. In events differentiation the this importance the in control date customer and optimization Form these natural you due and business including control, For reports connected events the or company's to revise broadcasting in stabilization business manage unique other of call, reflect call be war, arise management the believes circumstances results making through particularly potential company's market the consumers' provides new business at measures and in and projections. with the innovative that to company of actual referenced. home capture may filed the mentioned facilities to new and in profitability opportunities incentives as of evaluate hostilities. The XX-K the its may it the company's -- by make are management; home platforms, political to them periodic Management economic from the security doing continued financial cost-saving has space, and performance long you company's and including TIDE for or certain press risk undertakes forward-looking to that such anticipated investors or the because activities and after confidence solutions, and capturing financial and continued continue QuickSet on filed annual abilities world ability automation, technologies, consistent to energy just increasing these solutions excellent include: climate company's statements a core markets share operational regarding may materially direct development company's and ability cautions no to lead investors upside events particularly to to home and performance and financial rising costs, GAAP the refers and or and harvesting spending, improvements initiatives, decisions its flows; differ entertainment parts to the release as operating reducing and traditional the the and how hospitality and sensors financial continued and subscription and U.S., may measures update this indirect the These wins; of and management's All remote One brought freight

non-GAAP combinations before the and business trends operating cost provision and to measures results measures margin, addition, This profit, fixed and press value operating income acquired or income these description non-GAAP versus or and financial the management no longer the from costs to transition impact markup included facilitate no benefit of footprint, today. Also, will market competitors on exclude manufacturing website issued believes measures adjusted assets taxes of depreciation in and with its GAAP and other specifically of comparisons loss Mexico Quarterly XXXX are in loss or resulting the adjusted and from or section. company's income adjusted QX companies. for figures. impacts excess non-GAAP fair XXXX is the reconciliation A GAAP of these company gross overhead from results. reconciliation posted income in is in Vietnam, in core release to its business and global these gross of In A Results continued manufacturing the the loss, quarterly results related net XXXX. There of full

On the ahead, return Hackworth, Financial Officer, Arling. Paul Bryan and who Paul Please will provide closing the to Chairman remarks Executive call and my pleasure to call introduce Chief Officer, Arling, an summarize will now will who are overview; Chief for go then questions. It's deliver and sir. today financials. open Paul the

Paul D. Arling

XX% projections quarter per and today. I'm team's Kirsten, fourth delivered in both QX XXXX, ago. excited exceeded thank efforts the own our EPS for compared improved consensus. our a share you of growth year sales us by We to you, to and and joining all Thank report $X.XX

Over have home, market. growing connected fuel design few we the growth, a sales new past years, executing in particularly is long large lead to and which initiatives been and to ongoing support the customer wins acquisition

several connected to shipping, momentum scale toward business is During new quarter. have that QX, the of tail beginning new increased and our products home with increased as end orders the

starting perseverance commitment are results. and show our that excited this to are We channel to

our financial few year full for bottom beyond. improving XXXX foundation strengthened growth Over have years, our and and projections costs and optimized line profitability. manufacturing underpin these the managed and of our our combination for have accomplishments past The we top footprint,

brands a to new Fujitsu, continue Vivint, the on of and top gain In Turning which launched products America, QX connected already quarter. home well Mitsubishi markets. and we and Asia. Europe market, North with products as build to of from Carrier, new review in new and automation, across shipments OEM Daikin, of revenues Somfy, full In hospitality, existing have our many Metis. traction include of and HVAC during we home benefited QX, introduced the These includes the relationships a quarter during as security customers

to repeat fuel Now we are starting growth. leading customers, a pipeline of new revenue to projects with that satisfied will strong additional long-term win products

the service the of growing, in on providers, across service QX positioned electronics entertainment, and evidence end our was our are is growing to packaging especially video some year. products shipments in was the slightly AV declines that pricing control America years, business, introduced shipments This with half TV strategy. of the we market. are new consumer Our of driven climate retail growth results XXXX in reflecting market all including home compared at well Western the long-term share In of to In second accessories prior and and regions. demand deliver Europe, true QX, and increased North video in video accounts lower key though primarily of earlier growth the narrowed TV subscriber our at

as We QX quantities us. the during was in result, well strong of of to increased their for received highlights. overall and International long quarter, major customers our success want We from interest groundbreaking January. and our new our some homeSense order us existing near highlighted optimism, a technologies connected our as who event a customers of the a for introduced performance. Many our many platforms. Electronics Show impacting QuickSet review new to term, and bring at As in positively new of home in I'll features major technology. were the products accounts few reasons both functionality Consumer The

and this who benefits resolving are discussions, platform systems as of AI sold the a advanced control Widget QuickSet control many development do. larger, to key customers climate while on-device This enables device the module. peek latest insights. maintenance OEMs friction retail introduces and ideal and AC UEI's solution looking through integrated introduced higher-resolution a controller now managing predictive and Pro of well unveiled their new connected enhance TIDE privacy, security thermostats runs in protecting technologies Cloud display as other a user and edge smart budget. ensure delivering points complex HVAC enhanced at platform sneak home. the control bring intelligence of QuickSet heating was to and preventive single energy of UEI our better and sources UEI enabling QuickSet other based to processor smart graphical climate user better SDK include This the support the climate user interfaces optimized stream the processing capabilities the service processing, proprietary and and other a Cloud protocol data platform system communication for optimal space opportunities the QuickSet video home OEM climate cannot protect In and providing give on and a usage and limited to tasks spanning new for expand optimize under AI consumption control TIDE and our role systems, our next-gen capabilities family learns increased actionable power management thermostats to architecture of integrity on-device operating content within personalization with in central, range on-device offered supports that software that video control smart the to providing While We consumers Pro savings. high-performance considered and ecosystem. We as new further energy home, to that thermostats home and our multiple customer user a protocols. The many engagement. broader such by decoding features of in from smart of location Elevating the of device X monetization environment layer new user audio and adapts adds and preferences. We devices homeSense framework, a an QuickSet

X toward the for moment, precisely and intelligent the brands. maximizing and target home adapts smart right entertainment Moving the the monetization to potential changes homes, the to of and delighting promise and optimal QuickSet audience home learns private in at now user

for benefit saved requirements. With over energy that, to temperature for on conditions I'll with Bryan. complying from interior outside energy harvesting Act and Green several year, and lineup with Somfy's better deliver space. CES, motorized this announced working to latest control their years in create and now outdoor with innovative been such Somfy addition remote Somfy our consumption, connected that will Consumers adjusting including Please earlier experience, convenience, power call solutions consumption enhanced the go and the low energy by to home based shade In as sensors. products We've comfort turn we favorites, collaboration reduced ahead.

Bryan M. Hackworth

for the Thank results you, fourth XXXX of of XXXX. quarter Paul. I'll review compared the to fourth the quarter

acquired noted, As exclude previously resulting no transition periods. These our XXXX overhead prior-year of well to depreciation are business from and adjusted changes our reflected markup excess statements fixed adjustments manufacturing GAAP fair financial have on related assets combinations. These cost financials value our as financials. in as to the the factory effect corresponding longer non-GAAP footprint year-to-date from the in costs no

associated For $X.XX costs to the gross the the fourth or of $XXX,XXX, per quarter margin equivalent to items basis ending aforementioned XX amounted December XXXX, points XX, share. with

quarterly points items costs equivalent keep results. quarter in XXX were these basis gross fourth figures mind the For margin of our Please per or $X.XX $X.X share. to these for when XXXX, million, reviewing of

sales $XX.X to For million. connected million the sales the of the channel, XX% in of primarily million, were an our end XXXX, products. orders high of over home net increase of control exceeded $XXX due fourth $XXX.X range fourth specifically Sales of quarter climate increase year's for quarter last guidance a

year-end, required all fourth revenue, not Although the as to of were these recognize approximating we $X shipped under GAAP million orders in this were quarter.

connected home trend positive continue. this to expect We

the sales home of entertainment continue to headwinds, or for faces in the of ordering profit still XX.X% stabilizing. Gross fourth channel see quarter XX.X% fourth XXXX compared the was of While to XXXX. we million quarter patterns $XX.X

the million $XX.X diluted for million the or income $XXX,XXX $XX.X fourth of XXXX income million in to the quarter operating quarter. million $XX.X per a XXXX. was $XXX,XXX share the $X.XX $X.X was fourth of of Operating of reduced loss quarter. to to XXXX expenses in XXXX, were compared quarter to quarter $X.X from to Net $X.X to expenses of quarter $X.X or For for compared prior-year of the increased quarter in R&D were million XXXX. fourth in $XX.X SG&A the the expenses XXXX. prior-year million of million compared fourth million fourth per in share quarter compared $X.XX fourth the net

XX, were balance review December at cash our million million I'll and cash XX, December to Next, cash and $XX.X At XXXX. compared $XX.X equivalents XXXX, flow sheet.

For was $XX.X cash debt We million. XX net million internal which in our was months of XXXX, used approximately resulting year-end $XX activities XX, the million, XXXX, net credit for investments. of by outstanding ending line provided December operating at reduced of by position $X.X million $XX in a over

projects Now and have home in we channel past the trend won turning to guidance. the over to of connected ship, our Several XXXX. expect to continue throughout years begun this couple

to As customers not fourth climate required expect shipped our into the this range the first all recognize $XX.X were mentioned million the we for under sales as consideration, $X essentially million orders products. GAAP from compared XXXX in in quarter. increased quarter shifted XXXX, year-end, to to million quarter XXXX. although of This revenue to this XXXX. Taking earlier, $XX we revenue certain of their first orders $XX to these of And from million for control were QX approximating QX

We the a expect $X.XX of now loss turn to a XXXX. I to back ranging of first call net compared Paul. to $X.XX share the loss would $X.XX in quarter per to per from like share

Paul D. Arling

Bryan. We we reflects XXXX XXXX company a as better stronger in than that. closed much financial in our and and XXXX, Thanks, positioned performance were

as was CES unveiled home fruition. beginning deliver the off needs to end-user at wins commitment to innovative beginning connected benefits. year we is lead ultimately this to evident technologies products new to solutions the are customers as address come market design attracting our Our are customer and long and This and to also pay

Our customer processing monetization and ensure AI and engagement. customer technologies, they a through to advanced increased for and advanced opportunities wide appeal features functionality feature base user as on-device personalization privacy, offer support

are recent progress, and great full our our both and still projections to made successes, reiterating there's our Based growth ways our for strong top a and year orders on XXXX we've we While line for go. pipeline, beyond. bottom

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

Operator

Rosenblatt [Operator line from Instructions] comes question from Securities. the Our Frankel first Steven of

Steven Frankel

just triggered Could climate until QX? be more going that to we products recognition And after QX, detail in but QX? their does Maybe get help little was this a of normalize shipped that me revenue what notion that? aren't control on understand

Bryan M. Hackworth

to used years ago, revenue Steve, Yes, where to record you is a back changed. things the rules, handful ship Yes, to accounting basically the to Bryan. years about this have of these -- changed you had X the product

So essentially, a I rules, through details go all the won't the product. of customized but be it has to

have You to produce it.

we under And the commitment, But just We to in fourth to control. orders we have and firm rules, line channel, produced home as these few. connected those the related accounting the because to produce increase in -- we the bottom You products the products a orders climate of to name the year-end, have is a primarily quarter. were them, revenue. required recognize received

upon shipment. of an recognized revenue get in QX, the $X in and the for revenue QX recognized that quarter. But it fourth been additional new rules, would it under provided million with old have Now in rules, the

Steven Frankel

there in something expenses margin guidance, margin rate in And drop revenue, a to we're imply decrease gross your Okay. Is pressure? is just both having else an and that because in you're that it Or gross decrease run on? you seems some your missing gross and $X margin. going million so in then increase

Bryan M. Hackworth

said margin point. think the a expect I the or outlook. with the be thing X points year be to last Well, XX I expect minus in gross I I percentage still don't think for full I important in the quarter, plus I change have it year, to full

in have not so lower have volume production, is So QX you you're the that you typically first quarter, lower light. When efficiently hasn't as normally as absorbing you overhead the changed. do.

margin So pressure little -- gross bit pressure takes a of puts that the on rate.

it points I X. there or to of bit still the QX. is little But difference. the see plus expect I pressure rate XX for minus year, a So don't in full be a margin on

Steven Frankel

have of basis? what general, OpEx should on or in growth kind And a shrink year-over-year --

Bryan M. Hackworth

be don't expect whatever I I be -- to expect to OpEx similar. I think it

nature, wage whatever inflation, things of think going to offset. I that we're

Steven Frankel

And Okay. what were numbers QX? concentration in your customer then

Bryan M. Hackworth

customers, XX% and at XX.X%. Daikin X at had XX.X% Comcast We

Steven Frankel

then Nice to the legal footnotes. the on mentioned some maybe see judgment that in one that back. detail And was

Paul D. Arling

Yes.

Roku's Court decision reported, then for win of Roku U.S. previously Roku. the final. the against In Federal Court we the filed Circuit U.S. As request, the request Appeals review our for Supreme a of Court affirmed a decision. denied that U.S. Supreme making mid-January,

we And expect we this to is will seek on significant progress important the get cases XXXX. update started in result, X As course, made unstayed a everyone or district of to matter. as court

Steven Frankel

a footnote one in and Roku? settlement of that Is your was there that do is Or something And to legal with China. related to different? having factories also

Bryan M. Hackworth

to no, labor years. related that was and issue agency No, a that prior

Operator

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

Gregory Burns

How do tariffs factor for XXXX? outlook into your

Paul D. Arling

so a still complex the to as that's lot, Well, occur -- topic far we there. complete, a think, and I there's aren't tariffs

we've already produced We far U.S. -- small As that. of is have China amount some destined China. ago, concerned, a in we did remediate as years but product don't

So that we had and to years did. deal with X ago

of is unless So us irrelevant done China with anything somewhat change. the that's nature things to

once threatened to that tariffs working a already As work that. mitigate some we're the frankly, use something going on but will right far -- were ways was. Mexico the as here think production smaller the is production once changes as X remediate as much ameliorate customers begin be effect, but situation. and as it than go, of to to we the there was much It's China, the we're happen, out because with gone potentially If obviously could than to in get them the it smaller tariffs make price. far our hub, to to Americas, as have the significantly. But this to tariffs, fluid, from ago I -- years now there down has those obviously, We is it's

we've we shown to years and ourselves had be have ago think I front since. on as pretty to do this nimble many

to anything fluid it ameliorate but it's now. be, that have situation could it's remediate relatively as So that watch. again, is and really we'll having we'll the do again, stands not But Mexico small, situation us to or a customers. China to with relevant with

the difficult Beyond it's will next be. know to what tariff that, move

Gregory Burns

shifted the the $X of see move about a think we pipeline on Okay. normalize And year? basis how for based growth seeing accelerating you're trends between Do when should remainder year that the or recently, been currently playing on that we as how we improving Like you quarters, you sequential do that then order and million that the you've the throughout year? on out based seeing? see activity order the

Paul D. Arling

even Yes. difficult further but out. gotten QX. pretty QX and of answer. have far from and it's course, to Again, customers, QX, an are outlook QX even We, Greg, out, QX

we could So out. guidance this the It's those whole of economic one number provide one of one be long-term or why on situation the factors. reasons improve is reduced don't a the quarter and because of significantly we depending reasons guidance provide significantly

do have year a back few the quite -- half positively had a in few we impact we things. the However, that new We've help few a projects. had of

fourth gaining second I to winning prepared in reminiscent and some and It's have see be as that long-term bidding want in year, we number more. are bullish and bit the how for third, fifth And for home bullish projects to and HVAC. provide affect the we're could share, we're the other said remarks, because markets. televisions, entertainment there's cases, happened variables And business. in, seeing again, prove execution ago. entertainment more we what and on guidance. If many economy of then just years have projects, why, for don't a ourselves for earn any and a we We about to with focus in quite provide demand we that but these not similar We great that's -- us, in of home this just to But great products, go year progresses, sure. more we're about are we'll devices, pattern

economic trailing even bullish better. So lack this breeze, we're on we of it economic to sort or be at long-term real -- very forecast give get reluctant headwind of point. even could But can a If the any any about that. total we're

Gregory Burns

stabilize the -- saw business can business level reached Do the subscription this a relative kind that -- patterns in Or guess, view Okay. of do this you how of in the market And what stable you you is quarter saw terms that? broadcast strength sustainability then sustainable? the the order feel and part you has maybe there? quarter, of I that like the of

Paul D. Arling

It did.

had certainly, gone a to lessened X X But X rate out. Now decline the years. of probably bit and X down of But or has or forecast these always over with lessening the few decline show of a has the quarters X that or -- the and again, performance gotten difficult will, that last quite over it's given forecast again, it would many difficult customers. last quarters we've the we've

fact, In them. from some have did we increases

the shine connected it's has then through. Because business the the maybe shine very from home the business our reached entertainment can our area can home flattened of growth the doing even damage or point home a total out declining through, part that, connected the growth sparingly were on right? to might and if So be where side, reduced we that of

Operator

from of [Operator the Riley Securities. line Van Instructions] comes question Jeff Our from next Sinderen B.

Jeff Van Sinderen

else I'm produce And but just shift anything products. not wonder producing in you from or to say I if could predominantly China guess to, the perhaps? is an growth. -- production in needed could for HVAC considerations. you if Let is that's circle needed you Vietnam wondering Mexico just issue, there if a connected Mexico more production if you I And congratulations recall, to facility I me we back to that geographic home or on return have

Paul D. Arling

We home already. entertainment both Vietnam, home and make connected do in Yes. products

product for Vietnam, shifts further a of in facility could there any products our So to either made or of classification if necessary. be

Jeff Van Sinderen

CES. your and contribution in bit the Okay. business a some showcased Good that that more potential to opportunities Can at on the know. little monetization that could to And enhanced of have? you elaborate mentioned then you products you

Paul D. Arling

give is present and CES, OEMs things. much at to Well, could want Yes. in couple product, of the new, I Sure. different don't to The advanced -- some away their monetization because future but technologies be of inclusion brand we these too for device had not even, the we're consumers, security you in doing lot provides device the entertainment in -- know, necessarily the itself, cloud device, but battle to the a a more there in of OS. in the the on as bring this and we a which home typically obviously business, is potentially

monetization interface, their eyeballs more obviously that is we to consumer in increases again, we're way So within hours companies what to long a bring of an sometimes viewing are a are and to the to help consumers products to of the their do which lot way more things device, building bring other I them able do doing guess now, things can want going software-driven it OS to -- the more connecting players. those to the OS, the really or want say some do -- the a consumer it that Over thing we're obviously, about only do. which doesn't right we're it doing are battle term, more attracted the which for what I because they through device the work, right? platform. attracted people to brings to OS isn't the a in would -- creates is across that's users right? And of And doing

come your ways So wish more OS to to people view things to they we the to watch. attractive it for to make are various developing

sort too concerned, technology here, and are the Now what is as homeSense our are home different entertainment, And private hardware applications the they of because where there we're far course, get a it home done is might chips as present. this essentially, I doing home within ways development be to to it variety it's HVAC, essentially customers, who it why but be. device. AI determine And determine does that of is partners of into on advanced allow other -- platforms, home this of with can won't do is can can deep smart that platforms, them and because of of who's some

on whole things do parts climate I importantly Well, on say, control. is of you Why world. house a applications the in call system their probably are people actually XX% be could this comfort optimized? like entertainment if there, their have better people it might Now often. of homes where isn't the with where there's where even are Wouldn't large home system your why there bunch know and of they very occupied cost that? that. for nobody But for simple or to this ever you optimize need is better Wouldn't nobody cooling locate right? Some balance

we one there's these QuickSet HVAC, I very connected And be question, good lot into to homeSense across were SDK QuickSet, along our one, products hope I have future for products our applications technology with this other directly. and in build applies other interested customers products X their and of there. that into your So them in pretty for this future built the we alongside or think applications And the Jeff. answered this a a platforms, working OEMs. board, home, security, entertainment. And that

Jeff Van Sinderen

the I for you Yes, that HVAC maybe that connected have might kind wanted about a into But largest that. that, know that's you those maybe rebound year? with you perhaps know, baked that a the that it? I to a be think Or products growth I growth are this see you that, appreciate other helpful. it growth just Are you're subscription in are are drivers be in, up? us of little seeing largely Or guess, control, drivers could Is that broadcasting? in year. driving programs products of seeing your home. it help HVAC-derived bit this guidance don't there products? in just I bit. Is there new I

Paul D. Arling

great one little of it's entertainment. there just as products sales us in opportunity present that not opportunities Yes. the No, are deploy. the the we where as a had thing. opportunity large for on each. home the our be good in potential biggest would saw how they HVAC I it's meaning side say, could as home predominantly And big how question. an as they bit entertainment, and to many That's we largest a It's is are customers customers them

and we some We've -- to who X the be Daikin names in in largest providers Carrier, So happen are, mentioned working HVAC this of X world. course, largest and of the on the call, on world. the

others, with We are growing it's we working it's mentioned. market changing. is But this other large, and names

change well these products as their -- opportunity just change comfort brings drives device, that platforms to it's because with cost to the the the and help them. balance new make cost in with again, new efficient, energy not about So that that more an products consumers these them of trying sell is them, they're to to make because of

looking before. can that, some in they're controller can more them for the do methods things do have never do that It functional. ways much that. can help also that to We and we So done that it's make device

a in is remote the here's control capable and remotes -- So said and in The many years of happened what The case. connected this thermostat the has remotes. sometimes doing. Well, in changing other what once it's is homes is phones. were happened not markets. even many even in we remote that's years another we happened It's -- ago, product. ago in It's control happened

if tell balance it bill? they're you Now meaning an What beginning could that you down it the it become could it now, degrees what be me device. price you down IP they're to if at can do much more? connected, could electric to by turn to when it let I degrees, if XX What your controlled if But XX hour goes only per kilowatt XX X:XX. want right if be

who integral itself. There proven we've already top markets, attractive become another other do not do. market, because is complete very this and are way this with these reprograms thing then entertainment, more want as it, we in And in automatically then names the that others device we have done this including the market other customers. and or thing, a that home to interests sort to home. We've smart leading yes, but hit probably to the in they interoperability of as You that of on interconnectivity

and one winning of proving and probably reasons that's and second, the here, more offer then why ourselves to many projects. winning lot fourth third, a have we're we projects So there.

in of So just lot continuing offer things some And we've that growing the with. area, here, is differentiation. and beginning done think what of leading we of company large at players the lot I here. projects that's, we large -- mentioned. a were and to we're similar other again, have to we in of before. a how market, This have by I but a innovate lot a it, We're starting lot became to win this stage the opportunity far control of And market, a there's

year, far. 'XX now. so 'XX, I 'XX, starting This we've will doing bullish the 'XX, customers right done are And but the things with that's fuel right? win we very do us. see and year. late that to the And that key of pretty we're And about we're similar, so for projects more happy right think will what it's And just not And we'll right? to this now. expect we fuel happen that

Jeff Van Sinderen

would that and accelerate, Or you there think, in the you the about into second your belief business. are that, Okay. I how HASH out about I HVAC XXXX? of but know growth sort the thinking break of this it the, And growth just Is that business thinking guess, out, curve loud -- thinking will I'm kind here year business? half of do you don't of

Paul D. Arling

there market. the that the the some there, now, market will some will of last market same customers the time years has from but today, time year, number business of on anywhere connected business it don't dynamics grow just the market, guess size home difficult the are X based home to I growth been connected the the X, from probably and the itself. -- years now is next as win growth Yes. yet But I not the years the And sit today, I doesn't be as that few X, majority X prospects at that because are of predict difficult the pace growth the and we be entertainment it's probably always home do that X, of of the mean, this we for out. have to think beginning in we our

home. fuel mean certain might from will shrinkage at wins home X comes entertainment key help next the connected we're this isn't the the So does anywhere. over probably There's far, still, by as our going years. that of very the So not do It a it entertaining and to where of may of from to still future. business. themselves is opportunity we that I growth X People home business. do have is right? offset markets, are there important further those leader there, We have much an see But It plenty any there. part

Operator

from have from we follow-up Rosenblatt Instructions] Steven [Operator Securities. Frankel a question

Steven Frankel

these a decide install products, Paul, are rather in that making smart standard discussion about new when you new think part with up in a are they than of for consumer the these to where thermostats they sale to optional as something vendors HVAC do system? you a has pay additional

Paul D. Arling

can't about economics plans. And obviously, customers' speak the end. specific their on I talk Well, Yes. we to never

probably do, So good you're they if free, it through in their considered they mean to to the to consumer to part discussions say market them that appropriate. will on realize integral what asking, it that. I very product. for but them what comment this, or better That brand if they them of give day attach is But many sell have consumer to the But and than be now system, as to to it's become wouldn't more will an home, is their any the can't other is just they us product because in will or that their their one and/or will deem smart their would available like in being vendors. the the as up will to that better product have market, want They products. market, I right? they'll want to their which attractive that desire We just they integral make way

in to consumer fixed. the the had be only but contact say, I we is your in huge right, things X We this. Almost system." and of look want everyone And here. there again, come the maybe to and able can is or your features, a to features, mean not if predict is for have useful trail are that's this they when that this that mentioned have Because be aren't opportunity it system, working middle that is us make So even but other days I towards HVAC so them features be to IP do contacted product smarter, may summer mean that everyone at -- are your -- well, market anybody towards an I smarter. HVAC this they're to that the device. And faithfully And the make their do product. additional of that other consumer to their the on say "Hey, just those the don't in what better. product to they're you that things wait people the a by for is will to should connected very they're out control interested better, don't where, that consumer that. And little and make that a your device cognizant you fail that few that failing making do I has not I system products installer can things as these doing easier of sometimes life in may think all they're

that. Phoenix, I can you want don't in particularly You that tell

have just are is are in So systems TV, Remember, separate that it the the that coming unit data smarter, might like the itself. controller proprietary from device from is itself. was the that systems

as help So again, those to increase happenings the the in and/or and communicate value you're well. predict increase OEM way for value have devices going and that between will to them a potentially the installer the

devices better, to useful product. everyone more win these ways with have make are there So a

Steven Frankel

review then many XX for And have you you in with? the world, others us won? having And the top are of many vendors you how could how HVAC discussions Great. material

Paul D. Arling

think of material the of to when say that. all know We're definition I you talking probably discussions, Well, I don't them.

to account give particularly they're their you going want into because these all large, is all are. quite don't your size, to won of home these entertainment, relationships, pitch, it's we any new want In true in or vendor it think at probably and companies, in are the sure are it break usually able business you majority fact, and an a When of And the least in most I to I'm market, of is in HVAC, them go way if project. a we've any today and was market. Because it I probably in not of that's business.

with how you that they project project through. We've how allowed So new their prove go test. projects. right? integrate see been to you have go It's you're engineers, yourself, through where typically see they their you through other once Then this a markets. work, a people, a in you It's you

of do often we together second projects. will, And then how they'll work You a and because those. multiple the projects, they We've then award been we done. after introduced, they That's decide so few they're may you've have will them they'll can on what we're first choice. where After get to at work as the the did major reviews a we at how has as stage home point together, -- better do in do that they're done of entertainment, with or once projects make and and product award them much review on project, the the did you vendor, happy course, these want can as players. with we additional to execute been you like and awarded we them with we possible much of of

Operator

would Arling for to turn I now closing over Paul time, like conference the to back this remarks. At

Paul D. Arling

the Universal of call on joining Okay. and your us today. Thank you for support Electronics continued

great Sidoti the Virtual to XX. We We seeing some will a day. look March Thank you. XX present forward and of at Have Conference there. or Small-Cap on you all

Operator

today's conference concludes for you This participating. call. Thank

disconnect. may You now

Universal Electronics (UEIC) 20 Feb 252024 Q4 Earnings call transcript