Q4 2019 Earnings Call
Ladies and gentlemen, today's conference is scheduled to begin shortly please could you just standby. Thank you for your patience.
[music].
Ladies and gentlemen, thank you for sitting by and welcome to the fourth quarter in year 2019, Universal Electronics incorporated earnings Conference call.
This time all participants are in listen only mode. After the speaker presentation. There will be a question answer session to ask a question. During this session you need a press star one on your telephone if your car any further assistance. Please press star zero. Please be advised to today's conference is being recorded.
The conference over to your Speaker today, Kirsten Chapman of L.A.J. Investor Relations. Please go ahead ma'am.
Thank you Stephanie and thank you all for joining us for the Universal Electronics fourth quarter and year end 2019 financial results Conference call by now you should have received a copy of the press release. If he has not please contact at <unk> at 415 fourth retreat 3777 or visit the Investor Relations section of the website. This call is being broadcast.
Five over the Internet webcast replay will be available for one year at.
Yeah, I dot com any additional updated material nonpublic information that might be discussed during this call will be provided on the company's website, where it will be retained for at least one year.
He also access that information by listening to the webcast replay.
This call management may make forward looking statements regarding future events and future financial performance of the company in cautions you that these statements are just projections actual results or events may differ materially from those projections. These statements include the company's ability to timely develop and deliver products and technologies that will be accepted by our costs.
Tumors and enabled the company to obtain new customers and enter new markets, including the company's Quickset technology platform voice enabled advanced control products, either way I evil Butler Smart speakers home automation Incenting technologies and products.
They continued adoption and purchase of our customers.
Hi, our customers of our technologies and products the continued to trend of industry toward providing consumers with more advanced technologies.
Management's ability to can manage its business FIA product mix adjustments and increase in operational business efficiency to achieve its net sales margins and earnings just guided.
He effects that public health issues, including the outbreak of 'cause. It 19 have on our business in management's ability to mitigate this effects and the ability of management to minimize the effects that trade regulations pertaining to importation of our products and the terrorist imposed on them.
The company undertakes.
No obligation to revise or update these statements to reflect events or circumstances that may arise. After today's date and refers you to the press release mentioned at the onset of this call and the documents the company files with the FCC.
In management's financial remarks, adjusted non-GAAP measures will be referenced management provides adjusted non-GAAP metrics because use them for.
For budget 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 you ice core operating and financial performance in business trends consistent with how management evaluate such performance and trends.
In addition management believes these measures facilitate comparisons with the core operating and financial results and this is trends of competitors in other companies.
Full description and reconciliation of adjusted non-GAAP measures versus gap is included in a copies press release issued today.
Finally, please note we are no longer including the effects of constant currency and ASCII six is fixed revenue recognition in our non-GAAP financial statements.
As a result, the prior year 2018, non-GAAP figures as previously reported I've been adjusted to reflect these changes.
On the call today, our chairman and Chief Executive Officer, Paul Arling hold your <unk> liver and overview and Chief Financial Officer, Bryan Hackworth, who will summarize the financials. Paul will then turn to provide closing remarks is now my pleasure to introduce Paul Arling. Please go ahead Sir.
Good afternoon, and thanks for joining us today.
In 2019, we executed our plan to implement specific initiatives to enrich our product mix increase our operational efficiency and free resources for strategic investments.
Our goal has been to enhance our competitive position diversify markets gain customers and ultimately achieve consistent and profitable growth that it's been a hallmark of universal electronic.
Our execution delivered the strongest year in our company's history.
More importantly, we have enhanced our profitability profile.
I'll give a quick summary of our financial success and Brian will provide more detail later.
For 2019, net sales reached 751.7 million up 11% and EPS was $3.55 up 68% compared to last year.
Throughout 2019, we've rebalanced our product line away from lower margin devices to more advanced differentiated solutions carrying higher margins. While this rebalancing has in some cases led to lower revenue levels on the near term bases, which we have currently offset this growth from new advanced solutions.
We believe it will yield improved margins and profitability over time.
Our efforts in fact are coming to fruition by the fourth quarter gross margin rose to 29.3%.
Operating margin reached its highest level in four years.
I'm proud of our team and the company we have built since our beginning in the 19 eighties, we have been industry pioneer setting standards for controlling sensing technologies in the smartphone.
First with our wireless remote controls and more recently with our Quickset enabled ward winning voice search control solutions.
Already we have shipped over 100 million of our voice remote controls to customers around the world.
Throughout our evolution, our people innovation and technology have differentiated you yeah.
And today, we continue to move our products up screen.
At CES 2020, we exhibited some great new solutions, we introduced the fifth generation of our flagship Quickset cloud platform that enables consumer electronics devices to universally and ubiquitous sleep discover and control electronic devices and services in the home.
Quickset cloud is no active in many of the new and emerging set top boxes, where I was also know deeply embedded in three of the top four TB Oems.
Well as being a key ingredient in several prominent speaker smart speaker and hybrid voice enabled set top boxes launching this year.
More recently at Samsung Unpacked event earlier this month, Samsung announced the release of their Galaxy home, many with a quickset enabled setup and control of many of the latest smart devices or no.
As well as all manner of legacy devices via the built in our airport.
Commercially speaking quickset continues to deliver outstanding performances, our footprint across connected devices, ranging from smart TV set top boxes and now smart speakers continues to grow and enhance our overall gross margins.
We see a lot of new opportunities on the horizon for our advanced technology software and ship only platforms. These technology solutions are evolving traditional customer relationships and helping us build new customer relationships in new markets and channels overall, we delivered our best year ever.
We're excited for the potential that lies ahead in 2020 and beyond.
I'll now turn the call over to our CFO Bryan Hackworth for review the financials. Please go ahead, Brian. Thank you Paul [noise] fourth quarter net sales grew 274.8 million compared to 160.3 million in the fourth quarter of 2018.
The increase reflects greater adoption of our advanced platforms and subscription broadcasting offset by our decision to opt out of certain low margin business.
Gross profit reached 51.2 million or 29.3% compared to 28.7% in the fourth quarter of 2018.
Our improved gross margin rate reflects the successful execution of enriching our product mix favoring advanced solutions, including greater royalty revenue and reducing sales of lower lower margin products.
Operating expenses were 33.9 million compared to 31.9 million in the fourth quarter 2018.
R&D expense increased to 7.2 million this year from 5.9 million in the prior year quarter, reflecting our continued investment and innovation and new product development.
Yes, you name it was 26.7 million this year compared to 26 million last year.
Well continue to invest in technology and product development to continue our long standing leadership, and bringing differentiated solutions to the market, while keeping operating expenses flat in 2020.
Operating income of seven teen point Threemillion up from 16.4 million in the fourth quarter 2018.
Operating margin increased to 9.9% compared to 9.8% in the prior year quarter.
Our effective tax rate was 20.7% compared to 22.7% in the prior year quarter.
Net income was 12.8 million or 90 cents per diluted share compared to 11.7 million or 84 cents per diluted share in the prior year quarter.
For the full year 2019, net sales grew to 751.7 million the highest in our history.
Representing an increase of 11% over 2018.
Gross profit margin increased to 26.7% from 24.8% in 2018.
Operating margin increased to 8.8% compared to 6% in the prior year.
Net income was 50.1 million or $3.55 per diluted share.
Compared to 29.7 million for $2, an 11 cents per diluted share.
Team.
Next I'll review, our cash flow and balance sheet at December 31st Joe The 19.
Cash and cash equivalents were 74.3 million compared to 53.2 million at December 30, Onest 2018.
Net cash provided by operating activities was 45.3 million for the fourth quarter and 85.3 million for the year.
Both records for you we I.
For the year strong free cash flow 63.9 million enabled us to reduce our outstanding debt by 33.5 million, while increasing our cash balance by 21.1 million.
Our cash conversion cycle approximated 111 days as of the fourth quarter 2019, compared to 109 days in the fourth quarter of 2018.
Now turning to our guidance.
Excluding any impact from the Cobot 19 virus, we expect first quarter 2020, net sales to range from 170 to 180 million.
Compared to 182.7 million in the first quarter 2019.
EPS range from 90 cents to a dollar compared to 82 cents in the first quarter 2019, illustrating our improved profitability profile.
I want to comment on how the cobot 19 virus is impacting our business.
There was a delay in restarting our China factories following the extended lunar new year. However, at this time all three of our China factories have resumed operations, albeit with reduced labor force.
Further we are happy to report that there are no known cases or the virus among our labor force.
We expect to be fully staffed within weeks.
In addition, our suppliers are also coming back online, although with the same labor and logistic issues that we're facing.
Logistically, we're taking steps to secure cargo capacity. So that we can ship predictably and at a reasonable rate as soon as production and transportation activity normalizes.
Well, China is important to us as a manufacturing center.
We sell very little into the China market at this time, therefore, any impact would be related to the speed at which we can ship product to customers were primarily in Japan and Korea.
We do not expect any delays and supplying our north American customers. This quarter, because we believe we have adequate components and safety stock at our Mexico production facility remains at full capacity.
Based on our current knowledge the coding 19 buys virus may impact labor component suppliers and shipping lanes.
As such we currently estimate.
To 10 million of net sales could be pushed to the second quarter, which equates to approximately 12 to 15 cents.
For the WPS.
We're working diligently to mitigate any negative impact however, the final outcome remains uncertain at this time.
Now, let's turn the call that fall thanks, Brian.
In 2019, we set an executed our plan to improve our customer facing organization and our bottom line staying true to our steadfast mission to deliver customers innovative controlling sensing technologies, we posted the best financial results in our history.
Regarding cobot 19, with our Geo diversity flexibility and most importantly, our cohesive team we have overcome mover numerous adverse macro conditions before most recently with terrorists.
And emerge stronger than ever before.
With our new technologies growing market opportunities are strong 2019 cash flow and strengthened balance sheet, we enter 2020 with an incredibly solid foundation.
Further our plan to elevate our product offering and enrich our margins is in motion.
Voice enabled advanced products continue to gained significant traction existing and new customers are becoming more engaged in product development as our technology helps them differentiate and raised their devices to the next level.
And our advanced technologies continue to expand their applications beyond traditional home entertainment such as smart speakers and home gateways. We are excited about all the opportunities ahead and look forward to reporting them to you in the future stay tuned.
Operator, we'd now like to open up the call for questions.
As a reminder to ask a question you will need a press star one on your telephone to withdraw your question press the pound key please standby well we've compiled acuity roster.
And our first question comes from Jeff Van Sinderen with B. Riley FBR. Please proceed with your question.
First let me say congratulations on the strong operating metrics in Q4.
Yes, just kind of a multipart question, but can you give us a little more on what you're seeing some plied chain wise in China, just kind of wondering if there's more color you can give us the or since it is sort of a it's not just limited to one.
One company and then I guess that the 10 million dollar push out what's your best guess on when you'll be back on schedule I know theres a lot of variables are tough to predict and then also and I know you said Mexico's running at full capacity or our full.
Like you said full capacity.
Is that optimize at this point or what is still left to do there to optimize that.
Okay, well there was lot in there a I'll start with a Mexico, Mexico is at full capacity.
There is probably some further improvement to be made there, but the team has done a great job of getting that over the last year year and a half.
Converted it from was what was once a like new facility, where we did a basically refurb units to a full or more full production facility.
And gotten that up and running a running relatively efficient I think there is still some room to improve but generally they've done a great job down there and.
Plenty for Q1 to produce and you know.
That hasn't really been the issue a near term in China, it's difficult to report on its day by day, all three factories are open.
Reported to us that I think it was 95% of our vendors have reported to us that they're up and running.
They probably do face some difficulties with the return of labor.
Two of our factories to what we have to factory locations, there, which are I guess I would say more rural.
Maybe we were more fortunate than others and that we have a probably a higher percentage of local workforce, we used to having facility in Shenzhen that that would have a higher level of migrant workforce people coming from other regions I would presume the returning workers there is little bit more difficult when people have to travel across.
Multiple provinces of China to return to work.
Our facility a in western China Chin, Joe as we call. It it its been up for two weeks now.
And they're getting up to speed, they're not quite at full capacity, yet that usually does take time, even in a normal year.
DTY opened later than that and are getting up to speed now on told by that by the end of next week, we should be up to speed and two of those three facilities. The other one we'll take a few more weeks.
As far as supply chain of that supplies coming in a it hasn't been a problem yet, but you know again, it's it's a difficult to know so we've tried to isolate those orders this quarter that may be impacted the those are the numbers that Brian shared with you. Our team has looked at obviously order by order.
To figure out which ones could impact us.
Ah things, we think we may not be able to get done this quarter. We're told by those customers that if we don't ship. It by the end of this quarter the they're open orders they'll take it.
In the first weeks of Ah, if we haven't done them of Q2.
So we're going to manage it we're going to obviously tried to take that number is close to zero as possible but.
Our expectation is that they'll probably be some effect.
The 10 million and in revenue.
Could.
I missed this quarter and shifted into Q2.
That's our best Okay.
Okay. That's all really helpful. And then I wanted to follow up with one more if I could just in terms of I guess, where you feel you are and the process of eliminating some of the lower margin products and I know you're ramping up in some of the higher margin.
I guess, how we should think about that for 2020 is that an ongoing thing or are we getting how do we still have a ways to go before your where you want to be in terms of margins and getting the higher margin products higher concentration, yes, I think we're we're.
We're operating pretty much where we want to be right now we've put a lot of disciplined in place on this we've looked at every one of our products you know on these calls we often get asked about.
You know three dozen skews that we have but it's probably a good fact for people to know that last year, we had 1800 skews within our company, so and while it's important to focus on those major ones.
You know that the there there is a lot more to the major to our business than just those major skews and we've gone through them determined level of differentiation in each product.
To determine the appropriate pricing for the value conveyed.
You know in some cases, we didn't feel like the product was properly priced and we've made some changes there.
There have been obviously when you do that there your margins will increase one way or another either because of lower than average margin product will no longer be with you or the margins on the product that you were selling will go up.
But we've done it in a very careful way and focused on small to medium sized customers are large customers, obviously get treated a little bit differently, because they by quite a bit.
So it was done with a lot of discipline SKU by SKU and the team here the marketing team and sales team have done a really good job on it.
And going forward every new products, we will look out in this way and determine the appropriate pricing again for the value conveyed. So I think it's helped also the world is moving to these more differentiated solutions. So we were getting a natural movement.
Up the differentiation curve in our business anyway.
With these two way IP enabled voice.
Driven products. So they usually have differentiated features and them, which leads to a little bit better margins. So we've had a couple of natural affects that have moved us as well as some new disciplines that we've put in place and that's led to an improvement in the profitability of our business both on a gross.
Of course net basis.
Okay. Thanks for taking my questions I'll, let someone else jump in here.
Thank you and our next question comes from Steven Frankel with Dougherty. Please proceed with your question.
Good afternoon, Paul I want to dig into this notion of opting out of so business.
And I do appreciate the improvement in gross margin.
How much of.
What we're seeing or a substitution for example of somebody buying software in the chip rather than in prior years. They might have had you make the complete remote and therefore, you had higher revenue, but lower gross margins.
Yes, most of it isn't that switch Steve most of it isn't it's the expansion of the chip only and licensing business has just been a growth with either new customers that we brought on or an expansion of the number of skews covered.
Within the current customers product line. So what happens is in some cases they take years to move this feature through their product line. The first year they'll put it on the highest ended their skews the next.
Year, they'll they'll bring it down a couple of notches within their product line.
And then in some cases they may take our features across their entire product line.
Which expands the number of units with those licenses and the the rebalancing. The product line has just been more again looking at the product line, we sell everything from mainstream product you know traditional universal remote controls you know all the way up to quickset enabled two way.
Voice products with software that rides on the set top box and in the cloud.
You know these are our most highly differentiated products and we we just feel like again, the these products, particularly when sold the medium to small sized customers.
Whose volumes Arne you.
Enormous of that you know the margins on those products should be.
The value conveyed to the customer needs to be paid for.
And in some cases, not many we had probably.
Had some cases, where.
We had products that had lived for a few years costs had gone up on either labor and materials and we had an exact at any price increases on customers and in some cases, we went and said you know these are the prices that we expect to be paid and in some cases, they paid them in which case the sales and margin on those products went up.
In other cases, they may have found an alternative.
And therefore that that revenue was lost but typically the margin on it was lower than average which will enhance your margins.
Even even with that business lost.
So it hasn't been a lot because obviously our largest customers. We do not do this with typically there's are very specific programs with very specific margins and very specific cost. It was more on the I would say the other 1400 skews within our business some of which that have.
Maybe 100000 sales per year.
So we went through that line by line detail by detail and determined our we appropriately marketing. These products are we appropriately pricing these products and in most cases, we were but in some cases, we felt we needed to make some changes and did that.
Okay and given this switch or is it and I know you don't want to forecast gross margins for Q1, but it would seem like.
This which helps minimize or eliminate the typical.
Sequential drop in gross margins that you typically see.
Yeah, Steve as Brian.
Yes, I agree to that I think for Q1, if you were to use the gross margin rate that we achieved in Q4, I I don't expect to be significantly different.
Yes, and and again you'd say in general.
This this is kind of the new normal. This is a gross margin rate that you should be able to sustain or improve upon depending on the drivers of the business. Yeah. There was there a lot of variables that go into the the gross margins I don't want to forecast out and say, we're always going to be at extra side. I mean is it you bear with us for a long time and you've seen.
Even within a year the gross margin rate, even it even good years could be caught up and down to pay on the mix and just a lot of variables you got foreign exchange rates et cetera.
But overall if everything remained constant there were there were no other variables I I would say the way the product mixes now and the way we're producing in China.
I would say we're on a good path.
Okay, great well its Comcast in the quarter were any other 10% customers Comcast was the only 10% customer and they were at 16.3%.
Okay.
[noise] and Paul maybe some color on.
Where you think you are in terms of advanced remote that.
50, 60% of revenue today, and and what's the new design pipeline look like especially over the next couple of quarters to the extent that you can comment on things that you think are launching.
Sure Yeah, I think the next generation.
[noise] Avi control and home control is still early innings I'm, obviously, some players in the world have really led here and have been out with these solutions for some years now, but the obviously there's still are some large names.
That haven't.
Our having introduced yet and as we've said for quite some time the high ARPU markets of the world, you'll probably see this type of product become ubiquitous here in.
The U.S. of courseware, Western Europe, Japan et cetera. These these areas of the world are.
Our basically these products are going to become commonplace. They have not yet there are a lot of providers in those areas of that I've just mentioned that have not introduced.
Many of them are working on them. Some you will see this year.
Probably.
Some of them in the front half of this year, that's at least the schedule. So.
So there will be more.
And you'll probably see that over the next few years, there may even be iterations of the first generation products that come out.
New features being brought out with accessories that may go along with them provided by our technology. So we're pretty excited about the things that are out there. The market is it again still relatively early in this transition and.
We think there's a lot of room to grow with these new platforms IP enablement with voice can drive a lot of applications in these new services that we can provide.
Software and or accessories hardware accessories to help implement with our customers.
Okay, and then to go back one more time on the potential supply chain.
Disruptions just.
Let me make sure I understand what you what you said usage so the.
The low end of the revenue range.
Still assumes that you ship out everything that's in the plan the extent that there are delayed that the incremental.
10 million that you might be vulnerable to slipping into the next quarter.
Yes, that's correct.
Okay.
And then lastly of any update on a bit paying down the debt.
When is that credit line mature and are you thinking about replacing it or is your plan to try to pay that debt down in the next 12 month.
Well.
We paid down over 33 million last year. So I think we're in a comfortable position now.
There was a point I think we got up to 110 million and we wanted to give ourselves a little more breathing room. So I think over the last year year and a half we've done a good job paying it down and currently it's at 68 million each quarter, we meet with the board and we go re use of cash whether it's the best to determine what's the best use of cash.
What it whether it's paying down the debt if there's an M&A opportunity.
Your share buy backs, so its something thats a a quarterly.
Analysis has done so I don't want to say, we're going to necessarily pay it down.
The the line is ever evolving to your line and usually we get within a year of it acts of exploration, we renew it. So we just to that so we saw about two years left on the line.
And it's about a 120 million or line. So I don't I don't anticipate any change we've had this for awhile.
Okay, great. Thank you.
Thank you and as a reminder to ask a question you will need to press Star One and our next question comes from Greg Burns with Sidoti. Please proceed with your question.
The.
Sure.
Product mix.
Sure.
How much of an impact.
Does that have on.
For the fourth quarter versus.
Regarding.
For the quarter and similarly, your guidance for the first quarter.
Revenue being down year over year, how much of an impact.
Yeah.
Hi.
Yes.
Beyond that.
Yes, Greg it's difficult it's difficult to know exactly that number it's not able to be precisely calculated for this reason there. There are some skews some products that are are alive and on those when you make a price change you could probably estimate if the customer where did the.
Side to take that product somewhere else over the course of the next six months.
As usually what would happen as they would buy for a time period and then you know designed a new one and move on.
That that effect would be difficult to estimate, but we probably could the other one is when you do a new product and you make a bid on a replacement product for that specific skew because what happens sometimes as though iterates their product line and it'll just be a derivative of that first product.
And if you make a bid on that and decide what your margin should be on it and then did do not receive the business it's difficult to know exactly what would have happened.
[laughter] the the loss of that revenue would be difficult to determine.
But rest assured that in most of these cases, what's happening is.
Some of these skews, our lower margin meaning.
We're where we're looking at these products and saying the margins better gain from making these.
At the current level.
Our are not.
Hi enough for devalue conveyed.
So.
When we priced them, we price them to what we think should be appropriate often lower than our average margins.
And then determine the customer will determine whether they want to do that or not.
So how much businesses that my guess is its millions.
But probably not tens.
That would be our estimate.
Okay.
The guide for the first quarter supplying.
Okay.
Year over year.
How should we think about.
No.
Why is that did you have a bunch of.
Employments benefiting last year. So it was a tough comp or is there something else going on and then.
Through the balance of the.
The rest of 2020, you expect revenue growth to pick up.
Based on what you're seeing in the pipeline.
Yeah.
Yeah.
In Q and Q1, one of the benefits we had last year.
Was.
Towards the end of 2018, we had a few.
At a minimum at least a few product launches of advanced platforms. So we got into Q1. They were in full swing and I think we benefit from that a little bit.
Right now so more mature so I think I think there's a little bit of a have a drop in sales because of that I think also it's Paul was talking about this and see Frankel asked this question about substitution, it's not it's not a a direct substitution within a customer, but if we raise prices on on a certain product and the customer.
Doesn't agree to it and say that those units go away, but then you replace it with another customer that is buying our advanced technology and they're paying it paint a pure royalty or they're buying a chip with our technology embedded on the chip the sales dollar ring isn't going to be.
As high as selling a full remote.
However are the profit similar I think you're seeing that in the the bottom line exceeded our guidance me sales you're right sales are down in Q1 or the guidance versus the prior year first quarter, but our profits are are up significantly.
Let's take the midpoint I think it's 15% so.
I mean, it's it's just a it's a little bit of its a mix change I don't think it's bad at all I think you may have lower sales and Q1, but the profit per sales dollar is higher.
Okay that makes sense and then just for the balance of the or someone asked earlier about the pipeline. It sounds like you do have visibility on some things rolling out so.
Mix shift maybe.
Revenue visibility on.
New deployments of higher.
Products coming out.
Year that might suggest revenue.
Yeah.
We do we have projects in the pipeline that we would expect to launches this year progresses.
Okay, and then lastly.
Well, what you're doing with the boy I mean, maybe as part of this mix shift more software.
Licensing type revenue, but.
Originally I thought it. This is you bring your own product with the Butler and selling that into the.
The.
Broadcast market, but it seems like now.
Shifting the strategy, there a little bit maybe licensing out.
What does the strategy behind that and where might we see that get deployed.
Sure Yeah, Yeah, we're already seeing elements of Nivo Butler as I think I said on the last conference call Nivo Butler was a product that could be implemented by customers, but it was a collection of you <unk> elemental technologies Quickset cloud Nivo AI interoperability as a service.
We have the a number of things within Nivo Butler that nivo, but there was not only a product but it was also a demonstration vehicle for customers many of whom.
Looked at Nivo Butler and said, we really like with this product does but we're building a product and we'd like to build these elements into our product. So instead of it being a hardware solution for them. They are made even more efficiently said can't we just build these elemental technologies into our product.
To which we said we'll of course you can I mean, if you don't necessarily have to buy the hardware in order to get these great services are these great technologies.
So we're already designing these elemental technologies into products.
Tvs set top boxes and again you if you're seeing this already in products there in the market, but also so we'll see it as time goes on so we think this is an important element to build these technologies into a product like bottler.
But there could still can be sold as a product, but more importantly, it's it's a demonstration platform to for the variety of technologies, we can bring to other people's products.
Okay do you foresee.
The.
Well, we see <unk>.
Thanks.
Yeah.
Yes.
No no you'll see elements of Knievel Butler in products this year.
Great. Thanks.
Thank you and I'm not showing any further questions at this time I'll now turn the call to Paul Arling for any further remarks, okay. Thank you for joining us today and your continued support of Universal electronics. It's important to note that in March we will present at this Dodi Spring 2020 Investor Conference.
In New York, We look forward to seeing you soon have a wonderful day.
Ladies and gentlemen. This concludes today's conference. Thank you for participating you may now disconnect.
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