Universal Electronics CEO Discusses Q3 2010 Results - Earnings Call Transcript

Universal Electronics Inc. (UEIC)

Q3 2010 Earnings Call

November 4, 2010 4:30 PM ET


Becky Herrick – Lippert/Heilshorn & Associates, IR

Paul Arling – Chairman and Chief Executive Officer

Bryan Hackworth – Chief Financial Officer


Ian Corydon – B. Riley

Jason Ursaner – CJS Securities

Jonathan Goldberg – Deutsche Bank

Corey Barrett – Pacific Crest Securities



Good afternoon. My name is Courtney, and I’ll be your conference Operator today. At this time, I would like to welcome everyone to the Universal Electronics Third Quarter 2010 Results 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. Becky Herrick, you may begin your conference.

Becky Herrick

Thank you, Operator, and good afternoon, everyone. Thank you for joining us for the Universal Electronics 2010 third 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 immediately.

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 1-800-642-1687 and internationally 706-645-9291, enter access code 1861101.

Also, any additional updated material non-public information that might be discussed during this call will be provided on the company’s website 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 future events and the future financial performance of the company, including the benefits the company anticipates as a result of its continued development of new and innovative products and technologies that are accepted by and meet the needs of our customers and consumers, 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 failure of our markets or customers to continue growing and expanding in the manner we anticipated, the company’s ability to attract and obtain new customers, particularly in Asia and in Central and South America, the failure to successfully integrate the operations of the recently acquired C.G. companies into our operations, the failure of the C.G. companies to perform in accordance with our expectations, the strength of the company’s financial position and the effects the company may experience due to the current global economic environment.

Management wishes to caution you that these statements are just projections and actual results or events 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 projection or forward-looking statements.

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

It’s now my pleasure to turn the call over to Paul Arling. Please go ahead, Paul.

Paul Arling

Thank you, Becky, and welcome everyone. The third quarter 2010 revenue of $79 million and EPS of $0.34, our third quarter came in generally as we expected it to. Despite a continuing difficult economic environment over the past two years, our year-to-date performance has been quite good with earnings growth of 28%.

Our strategy of building great technologies and products for the home entertainment markets and partnering with industry leaders to deploy these technologies and products has led us to great success over the years in both good and difficult times.

Our focus on building and keeping strong relationships with customers has helped us to expand our industry reach and more recently expand our global footprint into the higher growth regions of the world.

Today, we are taking a major step forward to enhance our position as the leader in wireless control technology while significantly expanding both our geographic reach and market share.

Today, we are very excited to announce our acquisition of Hong Kong based Enson Assets Limited and its subsidiaries including China based C.G. Development and C.G. Technology for a net purchase value of $110 million.

The C.G. companies are leading remote control companies that develop, manufacture and sell remote control units to many industry leaders, including such names as Sony, Panasonic and Toshiba. The strategic benefits of the transaction are many.

UEI and C.G. together account for approximately 30% of all remotes sold on planet earth annually. Market leadership in both share and technology provides many benefits including increased purchasing leverage, market diversity and a broad product portfolio that can service a customer’s complete set of needs. This scale also increases our ability to invest in industry-leading technologies.

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