Good day, and thank you for standing by. Welcome to the Universal Electronics third quarter 2023 financial results conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Kirsten Chapman with LHA Investor Relations. Please go ahead. Thank you, Sean, and thank you all for joining us for the Universal Electronics third quarter 2023 financial results conference call. By now, you should have received a copy of the press release. If you've not, please contact LHA at 415-433-3777, or visit the investor relations section of the website. This call is being broadcast live over the internet. A webcast replay of this call, including any additional updated material, non-public information that might be discussed during this call, will be available on the company's website at uei.com for one year. During this call, management may make forward-looking statements regarding future events and future financial performance of the company and cautions you that these statements are just projections, and actual results or events may differ materially from those projections. These statements include the company's ability to timely develop and deliver new technologies and technology upgrades and related products introduced this year, including meeting the demand for connectivity and operability across devices, platforms, and the hybrid systems in the home. Achieving new product development and design near and longer-term successes as anticipated by management in the connected home space, and particularly the climate control market. Its line of ultra-low power and energy harvesting control products designed to address the growing demand for more sustainable solutions in electronic devices. The continued successful collaboration with existing and new customers in developing and launching next-generation products, software solutions, and technologies into existing and new markets, which result in increased sales and share growth in the new markets for the company. Management's ability to continue to manage its business inventories and cash flows to achieve its net sales margins and earnings through financial discipline, operating efficiency, liquidity requirements and manufacturing footprint utilization, R&D spend, product line and business management, and other investment spending expectations, including our ability to execute our stock repurchase programs. The continued fluctuation of the company's market capitalization. The impact of the company's financial results that it may experience due to the supply chain constraints and inflationary pressures and microeconomic conditions it and its consumers are experiencing, and direct and indirect impact that the company may experience with respect to its business and financial results stemming from the continued economic uncertainty facing consumers' confidence in spending, natural disasters, public health crises, governmental actions or political unrest, including war, terrorist activities, or other hostilities. The company undertakes no obligation to revise or update these statements to reflect events or circumstances that may arise from today's date and refers you to the press release mentioned at the onset of this call and the documents the company has filed with the SEC, including its 2022 annual report on Form 10-K, and the periodic reports filed or furnished since then. In management's remarks, adjusted non-GAAP metrics will be referenced. Management provides adjusted non-GAAP metrics because it uses them for budgetary planning purposes and for making operational and financial decisions, and believes that providing these non-GAAP financial measures to investors as a supplement to GAAP financial measures helps investors evaluate UEI's core operating and financial performance and business trends, consistent with how management evaluates such performance and trends. In addition, management believes these measures facilitate comparisons with the core operating and financial results and business trends of competitors and other companies. A full description and reconciliation of these adjusted non-GAAP measures versus GAAP are included in the company's press release issued today. On the call today are Chairman and Chief Executive Officer Paul Arling, who will deliver an overview, and Chief Financial Officer Bryan Hackworth, who will summarize the financials. Paul will then return to provide closing remarks. It is now my pleasure to introduce Paul Arling. Please go ahead, sir. Thank you for joining us today. UEI's technology and products continue to help everyday people easily discover and interact with the devices and services in their home. We are the clear leader in this area, as is evidenced by a growing list of customers in home automation, climate control, security, and even home entertainment. During the third quarter, our efforts to control costs and optimize our manufacturing footprint, which Bryan will elaborate on in a minute, began to yield benefits. For the third quarter of 2023, we increased gross margins to a high for this year, and combined with lower expenses, we delivered bottom-line results in line with expectations. Over the last 3 plus decades, the home entertainment market has changed greatly, even more so over the last couple of years. Our prime home entertainment market customers, the video service providers, have experienced dramatic net subscriber losses, which were exacerbated by the impact we endured since the pandemic began. Even with this market decline, it is important to note that our technology leadership continued to grow. We maintain market share, and we continued to win new projects in this channel. However, our absolute dollar amount of sales, particularly in subscription broadcasting, has decreased substantially. Nevertheless, we remain committed to this market and continue to support our customers with next-generation solutions, including many hybrid systems that combine linear and streamed content and our new line of low power, sustainable energy harvesting products. In 2023, we selectively invested in new home entertainment product developments on a handful of differentiating and innovative applications with our customers. A few examples of these include new control products for emerging streaming services, such as Sky Glass, as well as Liberty Global's Babylon Green ultra- low power remote. These products began shipping recently and will continue to scale in 2024. Most importantly, our strategy to extend our technologies and wireless expertise in adjacent markets is progressing well, and we expect our revenues from the connected home markets to grow substantially in the coming years. As we have stated over the past few years, we have been repositioning our business to focus on high growth markets in the connected home space. The climate control market, which we include in the overall connected home channel, represents a significant growth opportunity for us. I will provide a deeper dive into this market to better highlight the growth opportunities ahead. The worldwide thermostat control market today for residential and commercial installations is estimated at $1.8 billion, excluding China and India. Industry experts forecast this market to grow at a compounded annual growth rate of more than 10% over the next 5 years. UEI has been active in the climate control market for over 10 years, building LCD remote controls and wall-mounted digital controllers for Daikin, Fujitsu, Panasonic, and Toshiba, primarily targeting Asia Pacific and EMEA consumer markets, where HVAC OEM brand controllers have the dominant share of the thermostat market. In the U.S., the market for smart thermostats today is mostly served by third-party and aftermarket brands. While these aftermarket products offer convenience and connectivity, they only offer basic control of HVAC OEM equipment and limited control of more advanced and energy efficient features in existing and new equipment, such as heat pumps, variable refrigerant flow, and dual fuel systems. As a result, many of the existing consumer-branded smart thermostats miss the optimal control experience and lack the features to operate the HVAC equipment in the most energy efficient manner. With increased consumer focus on energy consumption optimization and greater emphasis on smart grid utilization, HVAC OEMs are now strategically prioritizing connectivity and interoperability in their controllers to deliver a better climate control experience for their customers. Leveraging our long history in user-centered product design, expertise in wireless device connectivity, and universal interoperability, we have been developing and commercializing a new line of advanced, smart, and connected thermostats and related sensors. The new portfolio, which targets North American and European customers, includes a comprehensive line of tactile and touch interface controllers with a smart home hub built in, supporting standard four-wire and proprietary control protocols for all the major HVAC brands. Additionally, the lineup includes a bridge product that can be wired to an existing HVAC system and wirelessly communicates to any of our tactile and touch thermostats mounted on tabletop stands that can be located anywhere in the home. A truly modular solution that can be mounted on the wall or conveniently placed anywhere in the home. The functionality of our climate control products is further enhanced with a built-in smart home hub that connects to our lineup of Zigbee sensors that include temperature, humidity, flood and freeze, occupancy sensing, door and window sensors, and CO₂ monitoring. These products, working together through software, create a truly smart home experience. Systems that sense presence can bring both greater comfort and more efficiency, creating a much smarter home environment. For example, our devices are sensing temps anywhere in the home, determining who is in the home, and verifying whether doors and windows are open. We enable a range of control experiences, including smart lighting, smart shade, and blind control from the same smart thermostat screens, as well as blending smart home and entertainment experiences like whole home audio. Bottom line, we are meeting the user where they are in the home and offering solutions they care about. The software designed into our new product line is powered by QuickSet Cloud for secure connectivity and our Nevo Virtual Agent to simplify device onboarding and provide ongoing troubleshooting and support throughout the lifetime of the product, including sensor setup and configuration. Our user-centric approach and focus on delivering a truly connected experience for our HVAC customers brings new opportunities beyond energy management, including HVAC and control system telematics, to improve system design, user experience, and predictive maintenance. Our climate control lineup has received rave reviews from our customers, as evidenced by numerous customer design awards, ranging from HVAC OEM brands such as Mitsubishi Electric Trane US, called METUS, which was announced earlier this week, Toshiba Carrier and LG, as well as smart home, utility, and energy companies. Through our investments in innovation in this market and product category, we believe that there is a window of opportunity for us in the next few years to double our revenues in climate control by focusing on penetrating and growing our footprint in North America These products take time to define, design, develop, and test, and we expect to see sales results to slowly improve in 2024 and grow substantially in the years thereafter. Now I'll turn the call over to our CFO, Bryan Hackworth, for a review of the financials. Please go ahead, Bryan. Thank you, Paul. First, I'll review the results for the third quarter of 2023 compared to the third quarter of 2022. Net sales were $107.1 million, slightly below our expected range, as a few customers ordered less than their submitted forecasts. This compares to $148.5 million for the third quarter of 2022. Cord cutting in the video service channel continues to be a headwind and an uncertain economic environment, with inflationary pressures is likely causing households to spend less on discretionary goods. Gross profit for the third quarter of 2023 was $30.4 million or 28.4% of sales, compared to 30.8% in the third quarter of 2022. We're executing on our factory footprint optimization plan, and these efforts are starting to pay dividends as this transition, coupled with a stronger U.S. dollar, contributed to sequential improvement in our gross margin rate of 300 basis points. I'd like to take a moment to provide an update on our footprint optimization plan. During the prior few calls, we've explained how, over the past several years, the enactment of certain governmental policies and changes in the global environment necessitated the expansion of our Mexico facility and influenced our decision to build operations in Vietnam. These expansions, coupled with lower demand in our video service channel and projected growth in the connected home, which requires fewer square feet of manufacturing space per sales dollar, have resulted in having excess capacity and the need to streamline our factory footprint. As stated in our last call, we commenced operations in our newly built Vietnam facility in June and mentioned the closure of our southwestern China factory was contingent on our Vietnam facility reaching certain production targets. I'm pleased to announce manufacturing operations in Vietnam have exceeded our expectations, enabling us to cease operations in our southwestern China factory in September, approximately one quarter sooner than expected. Furthermore, our Vietnam facility successfully completed the Responsible Business Alliance factory audit and received a passing score. Upon reaching one year manufacturing anniversary in June 2024, we will be eligible and expect to achieve full accreditation. The next and final phase of our optimization effort is the streamlining of our operations in Monterrey, Mexico, which will result in a smaller and more efficient factory to meet production volumes for certain North American customers. This transition is currently in progress, and we expect to complete it in the first half of 2024. Cost savings relating to these efforts, combined with cost reductions at the corporate level, which we executed in the third quarter, are expected to range from $15-$18 million on a fully annualized basis. Moreover, we expect the downsizing of our factory footprint, coupled with increased production volume associated with project wins in the connected home channel, to ultimately yield a utilization rate exceeding 90%, with the flexibility to expand as needed. For the third quarter of 2023, operating expenses were $27.5 million, compared to $30.2 million in the third quarter of 2022. SG&A expenses were reduced to $20.1 million, compared to $22.5 million in the prior quarter. R&D expenses remained consistent at $7.4 million, compared to $7.7 million in the prior year's quarter. Operating income was $2.9 million, compared to $15.5 million in the third quarter of 2022. In the third quarter of 2023, we recorded a tax reserve relating to incentives received at our Southwestern China entity, resulting in an additional $500,000 of tax expense. Earnings per diluted share were $0.08 for the third quarter of 2023, compared to $1 in the third quarter of 2022. Next, I'll review our cash flow and balance sheet. On September 13, 2023, cash and cash equivalents were $60.1 million, compared to $66.7 million on December thirty-first, 2022. For the first nine months of 2023, cash flows provided by operating activities were $20.1 million, which we used to reduce our outstanding line of credit from $88 million at year-end to $75 million on September 30, 2023, lowering our net debt position to only $15 million. Based on our modeling, supported by a strong balance sheet, existing project wins, projected growth in the connected home channel, and expected continued positive cash flow in 2024, management and the board believe UEI is significantly undervalued. Therefore, our board of directors recently authorized a stock repurchase plan of up to 1 million shares. We expect to take advantage of this opportunity now by initiating a buyback in the fourth quarter of 2023. Now, turning to our guidance. We expect sales to range from $95 million-$105 million, compared to $122.8 million in the fourth quarter of 2022. We expect EPS to range from a loss of $0.05 per share to earnings of $0.05 per share per diluted share, compared to $0.44 per diluted share in the fourth quarter of 2022. I would now like to turn the call back to Paul. Thanks, Bryan. Our expansion into the growing connected home markets continues to be successful. Our innovative products and technologies ensure we are capturing new customer wins and broadening relationships, which is helping create new revenue streams. We continue to be, by far, the leading company in home entertainment control. We are building a growing position with enormous long-term potential in the connected home space w hile we cannot share significant details of our product plans with specific customers, we have design wins with 5 of the top 8 HVAC OEM brands in North America that represent nearly 70% of the total HVAC market. These new projects, along with other connected home project wins, represent over $80 million in new annualized revenue, and we are actively qualifying and quoting opportunities that can lead to significantly more revenue potential. I want to be clear that we are not, at this time, providing detailed numbers for next year. However, this level of project activity clearly demonstrates that we have a very healthy pipeline of new business and an exciting and significant growth opportunity ahead of us. We are very confident in our ability to succeed and return UEI to growth in sales and earnings. Based on this conviction, as Bryan stated earlier, our board has authorized a stock repurchase program for up to 1 million shares. The fact remains, our technology leads in home control and our opportunities are abundant. We are all confident in our growth strategy and our long-term success. As always, stay tuned. Operator, we can now open the call for questions. Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star one, one again. Please stand by while we compile the Q&A roster. Our first question comes from Steve Frankel with Rosenblatt Securities. Your line is now open. Good afternoon. Paul, I appreciate the transparency around the new opportunities and things like HVAC. Last quarter, you also talked about that, and you talked about some of those products coming to market in the back half, yet revenue was short of the mark in Q3 and is down sequentially again in Q4. So could you help us understand whether that's incremental deterioration in your core subscription broadcast customers, or are some of these newer projects taking longer to get to market? Yeah, well, I think we said we had more than 30 projects. I think we only had a couple of them launch, and we'll probably have more. I mean, as time goes on, as each month progresses, more and more of them will layer on. We have projects going out now into 2025. And as I alluded to, we've got over 100 projects at the qualification and quote stage, and the revenue from them is much greater than that which we've won already. Now, we won't win all those projects. When they're in the qualification and quote stage, we don't win them all. We have a pretty good hit rate, though. So we think there's a lot of business out there as we described in what was probably a deeper dive than some have heard from us on HVAC. I wanted people to understand the dynamics of that market. It's changing, much like other markets have, home entertainment included. It's becoming much more energy conscious. It's becoming much smarter, and the products that our customers there are building have much more capability than the current ones on your wall. Most people on this call probably have thermostat. They may have connected thermostat that has an app on their phone, but it's just turning your system on and off to get to 72 degrees or whatever you've set it at. These systems are capable of doing much more, and we're working with companies in this market. As I said, five of the top eight are already actively working on projects with us, project wins with us, for products to be introduced. And yes, the subscription broadcasting market, as we said in the prepared statement, has been tough for the last four years. It's gotten a little tougher recently with some. Some have held in, but others have reduced further. As far as the future on that, it's difficult to precisely predict. It's probably safe to say that our future plans won't include any significant growth from that market. We do think there are a lot of players there, though, that get it and are seeing that what consumers want is they still watch linear TV for sports and other things, but then they want to go to streaming services. And what the solution that has to be provided them is a combination of those two things, what we call a hybrid system. And many of the major companies here have invested in streaming boxes and even TV OSs to power those types of products, to give the consumer the ability to have one device that they then turn on and can watch linear TV. Last night, they could have watched the Arizona Diamondbacks lose the last game of the World Series, and then when they were disgusted with that, they could go to a streaming service Prime, Netflix, Hulu, YouTube, all in one interface. This is what consumers want. Our TV customers, our CE customers understand that. They're building such things and the subscription broadcasters. So I think that's a little bit of an offset, Steve, to some of the shrinkage, but for sure, that shrinkage over the last four years has hurt us. It's less than half what it was four years ago. So that, that has certainly hurt, and we are building a different business. We've been in HVAC control for 10 years, as I said. We're building better and better products there. The good news is that, again, 5 of the top 8 in the U.S. have already signed on to do projects with us. It's reminiscent of where we were in home entertainment 20 years ago, where we were relatively low share, around 10%, respectable, but not very big. And again, we declared our God-given right to have it all, and we're going out to pursue that. We think we make great products for that market. We're presenting them to customers, and they're signing on for these design wins. We think it's a significant growth opportunity over the next couple of years. Okay, a couple questions for Bryan. What were the customer concentration numbers in the quarter? We had one 10% customer in Daikin at 14.2%. Okay. And, do your pro forma gross margins reflect, in essence, the full, a full quarter impact of not having that, Southwestern China factory? Or is there incremental improvement that's implied in your Q4 guidance? There is incremental improvement implied. The answer to the first part is yes, I do pro forma some of the overhead inefficiencies, but the way we've been trending, I believe the actual reduction will exceed what I've been pro formaing. The last thing I wanna do is pro forma more than what we ultimately are able to reduce. So I was a little bit conservative with that, and that's proven to be true, and it's one of the reasons we have some upside in the gross margin rate. And then, you know, the FX is helping us, the stronger U.S. dollar versus the Chinese renminbi is helping us as well. Great. Thank you. I'll jump back in the queue. One moment for our next question. Our next question comes from Greg Burns with Sidoti. Yeah, so, just to follow up on that, the gross margin discussion. With the rationalization nearing completion, do you expect to get the gross margins above 30% again? Is that the target? Do you have a target in mind, I guess, for where you think gross margins can get? I know it'll be volume and mix dependent, but, you know, what do you think the business can sustainably operate at? Yeah, what we said is we believe we can get back to historical levels, and that's in the 28-30 plus range. As you noted, you know, there are a lot of variables that go on in the gross margin rate, so any given quarter, there are many factors. But the way we're trending, the way the factory optimization plan is coming along and the project wins that Paul illustrated, you know, I think we're gonna be at 90 plus% utilization, and that will enable us to be running efficiently, and we'll have capacity. We could expand it if needed. But with that, I expect to be back in the 20%-30% range, and we're already there. This quarter, we're, you know, we're over 28%, so it's coming to fruition. Now, you know, product mix comes into play as well. As you point out, you know, royalties play a role. Right now, TV sales are down. They won't be forever. We benefit from TV sales, as we sell our technology, when we license it, which is, you know, 100% gross margin because it's a royalty. So things of that nature also play a factor, but I do like where the gross margin rate is right now. I like the way that, you know, our operations team is operating, and Vietnam is a great testament to their performance. We're able to shut that down one quarter ahead of schedule. And these aren't We've done it a few times now, so we're getting pretty good at it, but they're not easy transitions. So overall, I think things are going well from an operational perspective. Okay, and Paul, you mentioned trying to, or thinking you could maybe double your revenue from climate control over the next couple of years. How much? What's the trailing twelve-month revenue from climate control right now? Like, what's the base off that doubling? It's under 100. We don't give the specific number, but it's under 100. Okay. Under $100 million in climate control, specifically. Okay. And that $80 million of that project pipeline of annualized revenue- I know you mentioned some of this extending out to 2024, but I guess, how much of that do you expect to get in 2024? I know the timing of each project is hard. I can't give you that specific number yet. There's a lot of variables. As I said, last quarter, the number of project wins is over 30. Each project has a date. That date is reliant on both our development of the control item, which we're usually pretty good at, but also the customer's goal of often the companion product that goes with it, which we don't have control over. And, you know, sometimes they're done on time, sometimes even early, sometimes they're a month or 2 late. So we try to shy away from giving too specific, too specific a guidance across 30, in the mid-30s projects, because there's a lot of variables in there. What, what I would say, though, is that this is the nature of our business. It was in subscription broadcasting, it was in TVs, it was in home entertainment generally, and it is in HVAC, security, home automation. We're selling B2B. We sell to a much wider breadth of customers, right? Because we go to the industry leaders, as I said, five of the top eight. Our goal will be to have eight of eight and we're working on a few extras, or I shouldn't say extras. A couple of the three that we don't have, we are in qualification or quote on. So we're looking to close everyone, just like we did in the other market. Once we do that, every project adds another layer of revenue. Sometimes those layers are $500,000-$1 million, $1.5 million a year. But each one of them, when it comes on, can often be a 5-8-year project in HVAC, where it gives regular revenue from that project. So that's the goal, build those layers. We've got 30+ projects. The estimate on the revenue from the connected home projects that we spoke about last time, but this time have given a little bit more breadth of detail on. Last time it was number of projects, this time it's the annualized revenue of, that was disclosed as $80 million. So those are one projects, and when they are all ready to ship, it'll add $80 million. Great. All right, great. Thank you. Now, some of those projects won't launch until late 2024, but again, we're just gonna keep adding them layer by layer. And as I said, I think earlier, we have, I think, another 100 projects that we're working on, not fervently yet. When we start, it's a little bit of work to define the product, and then we take it through qualification and quote stage. Define the product, quote the product, and then once you've won it, that's when the real engineering development starts. All right, great. Thank you. Yep. I am seeing no further questions at this time. I would now like to turn it back to Paul for closing remarks. Okay, thank you, everybody, for joining us today and for your continued support of UEI. We plan to present at Imperial Capital's 20th Annual Security Investor Conference in December, and Needham's 26th Annual Growth Conference in January. I think they're in New York, and it's the middle of winter, but nonetheless. We will be at the International CES in January 2024, in Las Vegas. In addition to launching our complete line of comfort climate control products, we will demonstrate use cases around our long-term commitment to the HVAC market and a view of what we hope to achieve in this new product category. We call it climate, climate control reimagined. I hope some of you are able to make it there. Please let us know. We can schedule meetings or visits and demos. Look forward to seeing you there if you can be at any of those conferences or, of course, CES. Thanks again, and have a great day. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.