Universal Electronics Inc. (UEIC)

Q1 2010 Earnings Call Transcript

May 6, 2010 4:30 pm ET

Executives

Kirsten Chapman – IR, Lippert/Heilshorn & Associates

Paul Arling – Chairman and CEO

Bryan Hackworth – SVP and CFO

Analysts

Scot Ciccarelli – RBC Capital Markets

Steve Frankel – Brigantine Advisors

John Bright – Avondale Partners

Ian Corydon – B. Riley & Co.

Jonathan Goldberg – Deutsche Bank

Presentation

Operator

Good afternoon. My name is Natasha and I will be your conference operator today. At this time, I would like to welcome everyone to the UEI first quarter 2010 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions)

Thank you. Ms. Chapman, you may begin your conference.

Kirsten Chapman

Thank you, Tasha. Good afternoon, everyone and thank you for joining us for the Universal Electronics 2010 first quarter conference call. By now, you should have received a copy of the press release. If you have not, please contact Lippert/Heilshorn & Associates at 415-433-3777 and we will forward a copy to you.

This call is being broadcast live over the Internet. A webcast replay will be available at www.uei.com for one year. In addition, a telephone replay of this call will be made available for 48 hours beginning approximately two hours after the conclusion of this call. To listen to the replay in the U.S., please dial 800-642-1687 and internationally, please dial 706-645-9291. Enter access code 70364425.

Also, any additional updated material nonpublic information that might be disclosed during this call will be provided on the company's website at www.uei.com shortly after the call, where it will be retained for at least one year. You may also access that information by listening to the webcast replay. After reading a short Safe Harbor Statement, I will turn the call over to management.

During the course of this conference call, management may make projections or other forward-looking statements regarding the future events and future financial performance of the company, including the benefits the company expects as a result of its development and of new and innovative products and technologies, including the company's recently introduced QuickSet, XMP-2 and One-For-All smart control technologies.

The expected continued global growth in HDTVs and DVRs; the company's ability to successfully anticipate the needs and demands of the consumer with respect to new and more advanced products and technologies; the continued strong relationships with the company's existing customers; the company's ability to attract and obtain new customers, particularly in Asia; the strength of the company's financial position and the effects the company may experience due to the continued softness in the world markets due to the global economic environment.

Management wishes to caution you that these statements are just projections and actual events or results may differ materially. For further detail on risk, management refers you to the press release mentioned at the onset of this call and the documents the company files from time to time with the SEC, including the annual report on Form 10-K for the year ended December 31, 2009 and the periodic reports the company has filed since that time. These documents contain and identify various factors that could cause actual results to differ materially from those contained in management's projections or forward-looking statements.

On the call today are Paul Arling, Chief Executive Officer and Chairman, who will deliver an overview. Bryan Hackworth, Chief Financial Officer, will summarize the financials. Then Paul will return to provide vision for 2010.

Now it is my pleasure to turn the call over to Paul Arling, CEO. Please go ahead, Paul.

Paul Arling

Thank you, Kirsten and welcome, everyone. In the first quarter of 2010, we reported solid revenue of $71.4 million and improved earnings per share of $0.13. Our results are based on sound execution and innovations. Throughout our 20 year history, UEI has successfully cut through the complexity of the ever changing home entertainment experience to provide the kinds of technologies that make people's lives simpler.

A key to executing this strategy is mastering three important consumer needs to connect, to control and to interact. Our expertise in all things wireless, infrared and radio frequency, including protocols such as Bluetooth, R4CE and WiFi, enable us to provide consumers with customized technology solutions that connect virtually every device in their home.

Our global database of control codes provides consumers with the ability to control every device in their home. UEI has over 180 control patents and over 200 customers across the globe, including OEMs, subscription broadcasters and retailers.

In 2009, while the economy suffered, UEI continued executing on our strategy by introducing successful new products and technologies. An example of this kind of innovation is our XMP-2 technology, which is a two way protocol designed for interactive applications and services.

XMP-2 enables our QuickSet automated remote control setup solution, which is in use by both Onkyo and DIRECTV. QuickSet uses interactive onscreen menus to make setting up a universal remote control almost effortless. It also saves pre-programmed settings, enabling consumers to transfer configurations to a replacement remote, which translates into fewer service calls and lower operating costs for our customers.

Another example of our innovation is a recently introduced retail product, our One-For-All SmartControl. In addition to controlling all of the consumer's digital and high-definition equipment, SmartControl includes three pre-defined keys that enable one-button access to common user activities, watch TV, watch a movie and listen to music. The ultimate result is an intuitive, modeless home-theater-system control experience at an affordable price. But potentially the most important new feature in this product is UEI's SimpleSet, a simple three-step universal device setup that does not require a manual or a computer and can literally be set up in less than a minute.

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