Q4 2020 Universal Electronics Inc Earnings Call
Ladies and gentlemen, thanks for standing by and welcome to the fourth quarter 2020, Universal Electronics, Inc. Earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask the question during the session you'll need the press star one on your telephone as a reminder, today's program.
It's being recorded I would now like to introduce your host for today's program Kirsten Chapman from Al H, a investor Relations. Please go ahead.
Thank you Jonathan and thank you all for joining us pretty Universal electronics fourth quarter and year end 2020 financial results Conference call.
Now you should have received the copy of the press release, if you have not please contact at.
For one five for 333777 for a visit.
At the Investor Relations section of the website. This call is being broadcast live over the Internet and webcast replay will be available for one year at www dot.
Com.
The additional updated material nonpublic information that might be discussed during this call will be provided on the companys website, where it will be retained for at least one year. You may also access that information by listening to the webcast replay.
During this call management may make forward looking statements regarding future events and the future financial performance of the company cautions you that these statements are just projections and actual results or events may differ materially from those projections.
Statements include.
The company's ability to timely develop and deliver new technologies and technology upgrades and related products that will be accepted by our existing customers and attract new customers, including the Companys Apple TV remotes Quickset widget.
Quickset cloud.
The virtual agent.
And other voice enabled products technologies and platforms.
Changes in consumer lifestyles that will translate into new purchasing habits, resulting in increased sales opportunities for the company.
The continued trend of the industry toward providing consumers with more advanced technologies by offering hybrid platforms.
For them.
Expanded smart home offerings and interactive services.
<unk> ability to continue to manage its business be it new product development product mix and deliveries increased licensing opportunities and continued operational and administrative efficiencies to achieve its net sales margins and earnings as guided.
Interruptions in the company's supply and logistics chains, causing delays in production and delivery of its products and the effects that natural disasters public health crises, including the COVID-19 pandemic have on our business and management's ability to anticipate and mitigate those effects, including the duration severity and scope of the COVID-19.
And the actions and restrictions that may be imposed on the company and its operations by the federal state local and international public health and government authorities.
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 to each of the press release mentioned at the onset of this call and documents the company files with the SEC.
In management's financial remarks, adjusted non-GAAP metrics will be referenced management provides adjusted non-GAAP metrics, because it uses them for budgeting and 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 Inc.
Valuate, you the eyes core operating and financial performance and business trends consistent with how management evaluates such performance and trends in.
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 is included in the company's press release issued today.
On the call today are chairman and Chief Executive Officer, Paul <unk>, who will deliver an overview and chief Financial Officer, Bryan Hackworth, who will summarize the financials.
Paul will then return to provide closing remarks and open the call for questions. It is now my pleasure to introduce Paul Ireland. Please go ahead Sir.
Good afternoon, and thanks for joining us today.
We are excited to be speaking with you to review the most profitable year in our history as.
As well as the showcase one of the strongest opportunity landscapes, we have ever enjoyed.
As we all know 2020 brought unprecedented challenges.
Immediately the UI.
Team took action to control what is controllable prepare strategies to manage the unpredictable and as always invest for the continuing convergence of home entertainment and control devices.
As discussed previously our 2020 sales were impacted by elements outside of our control, including quarantines limiting truck rolls of new installations for home entertainment and security customers.
However, this impact has been mitigated by careful execution of our long term strategy the <unk>.
Operating efficiently and free resources to invest in the future.
As a company we continue to focus on creating new innovation, ensuring product quality and building new customer relationships over the past several years, we have purposely implemented tactics to shift our mix towards more advanced higher margin solutions.
Our work in these areas has expanded our gross and operating margins in fact, our Q4 results beat the highs we achieved in Q3 and.
And our full year margins reached nearly 31% for gross margin and 11% for operating margin.
As a result, even with significantly lower sales, we delivered the most profitable year in our 35 plus year history.
Even more exciting is where we are today and the opportunities. It creates our goal continues to be to develop the wireless control and sensing technologies of the future.
In 2020, we saw a strong uptake of our advanced two way voice powered remote controls and our second largest market EMEA.
Over the past few years, we have been working closely with many of the biggest video service operators in Europe.
Help them launch their new video delivery platforms that combined linear and streaming services some of.
To the market growth, we experienced in North America, our customers in Europe enjoyed strong subscriber uptake of these new platforms, our pipeline of new customer engagements continues to be strong as customers in Latin America in India.
Look to adopt either our new custom or our Android TV powered control solutions with the intent of launching these hybrid video platforms to their subscribers in 2021 and beyond.
Along those lines late in 2020, we announced the launch of a new streaming service control solution for Apple TV, specifically designed for multi channel video program distributors or N V. P DS.
This new Apple TV remote control control support all of the original functionality, including Siri.
And adds functionality that helps to simplify viewing live TV on the Apple TV with keys for channel surfing or accessing the electronic program guide. This remote is the only M. Five certified remote control other than Apple's own theory remote.
While we cannot disclose details around specific customer engagements, we can say.
We are actively planning with many current and new customers worldwide to launch this product throughout this year.
Considering the high degree of enthusiasm at our partners. We are confident on yet another success in the N V. P D channel.
Another major growth driver in our 2020 performance has been the strong momentum in TV sales and our increasing presence in that market.
<unk> Quickset continues to be the number one license connectivity software and cloud service solution on television platforms worldwide with the top three leading global OEM brands running quickset.
Quickset has demonstrated its long term value on these platforms with the addition of Iot device interoperability support on some of the newer L. G T V's.
Stay tuned as we expect to see more of these platforms become successful smart home hubs with the assistance of quickset.
Moving to 'twenty and 'twenty, one we broke our long standing tradition of exhibiting at the international consumer Electronics show held annually in Las Vegas.
Instead, we held our first virtual Universal technology summit.
Our product and marketing teams created an impressive virtual experience combining short format videos live presentations in the livestream demonstrations of our latest products and technologies.
During this online event our team hosted over 60 meetings with hundreds of participants from the world's leading companies in home Entertainment security Iot HVAC hospitality and home automation.
I'll review some of the highlights of our new product introductions.
Quickset widget, a turnkey connectivity solution that adds intelligence and quickset cloud to connected products and enabling digital transformation of the customer experience. The solution allows Oems to upgrade their product lineup to be connected managed and secured as well as deliver ongoing support.
And services and the cost effective and scalable manner.
Quickset widgets are available with built in Wi Fi and Bluetooth low energy connectivity, enabling interoperability and device management services offered through Quickset cloud Quickset widget will launch later this year initially and our new line of thermostats.
Of the UI comfort family, a first of a kind ambient aware of connected thermostat line Leverages, our 20 years of experience, providing and and advanced control solutions to the world's leading HVAC brands.
The line simplifies installation.
Daily use and ongoing support of climate control in residential commercial and hospitality applications.
With a wide range of built in sensing capabilities of the UI comfort family is aware of the environment, including temperature humidity and C O two as well as occupancy to optimize comfort and reduce energy costs. The.
The first product in the line will be available to Oems in the second half of 2021 with a version designed for the hospitality industry to follow later in the year prospective customers showed strong interest in this platform during our event.
As with all of our new product introductions, we look forward to announcing new customer wins, when we are allowed to mention them publicly.
In other exciting new service, which we showed last year and officially launch. This year is are you AI virtual agent, which introduces AI powered technology that enable self help capabilities on any screen T V phone computer and tablet.
The integrated support framework enhances the user experience by addressing common challenges around onboarding feature of discovery and troubleshooting.
Additionally, our agent reduces the cost of managing and supporting an installed base of connected devices for manufacturers and service providers that can be easily integrated into the connected device itself as well into as well as in the mobile apps and online websites.
Due to Covid, the focus of providing user support on the device itself is particularly compelling.
The service has already been developed and is actively being used on our online global product support platform available at you are see support dot com.
Our team looks forward to sharing portions of the technology summit at an upcoming analyst and Investor event, which we are currently planning for March 19th Please stay tuned for more information.
All of these new products and many more that we will introduce in the coming months have a common theme they make it easier for consumers to enjoy their products and technologies in their home.
More and more people are watching more types of videos in more rooms with more devices for longer periods of time than ever before.
With more happening one constant remains home control is converging.
So you we I continues to provide operators OEM brands and integrators with a wide variety of solutions focused on the convergence of home entertainment and home automation.
I'll now turn the call over to our CFO Bryan Hackworth for a review of the financials. Please go ahead Ron.
Thank you Paul first of all review the results for the fourth quarter of 2020 compared for the fourth quarter of 2019.
Net sales met our expectations at $156 4 million, which compares to $174 8 million for the fourth quarter of 2019.
As anticipated sales continues to reflect the impact of COVID-19 on our sufficient broadcast and security customers, specifically those without self install capability.
Partially offsetting this headwind was growth in high margin chip sales and royalties.
Our technologies continue to gain traction in a few of the largest TV Oems in the world.
These technologies can be embedded in multiple devices.
The old in various form factors and distributed through multiple channels.
Our gross profit was $52 6 million or 33, 6% of sales compared to $51 2 million or 29, 3% in the fourth quarter of 2019.
This improvement is the direct result of our strategic investments and product innovation.
Which has generated a favorable sales mix with an increase in both chip sales and royalty revenue.
Further in the fourth quarter, we received of labor subsidy from the Chinese government.
These types of subsidies are common but have typically been received evenly throughout the year versus concentrated in any given quarter.
Operating expenses were $33 5 million compared to $33 9 million in the fourth quarter of 2019.
SG&A decreased to $25 3 million from $26 7 million in the prior year quarter.
<unk> overall cost control and lower variable expenses.
R&D expense increased to $8 2 million of this year compared to $7 2 million of the prior year quarter, an increase of 13% as we continue to utilize a portion of Opex savings to fund the continued development of advanced technologies.
Operating income of $19 1 million or $12 two per cent of sales compared to $17 3 million for nine 9% of sales in the fourth quarter of 2019.
Our effective tax rate was $15 five per cent compared to 27% in the prior year quarter.
For the fourth quarter of 'twenty 'twenty, we reported our highest quarterly bottom line in the company's history net.
Net income was $16 million or $1 14 per diluted share compared to $12 8 million or <unk> 90 per diluted share for the same period last year.
One of our goals beginning in the late 2018 was the restructure of corporate overhead. So we could reallocate capital to promising new growth areas, such as security and home automation.
Fast forward a couple of years and our successful efforts have yielded additional investments in future products technologies and markets.
And higher gross margins and a much improved financial profile.
For the full year 2020, even with pandemic related headwinds contributing to a reduction of sales of 136 million for the prior year.
We delivered earnings of $3.76 per diluted share.
The highest in our company's history compared to $3 55 in 2019 technology.
Technology, driven product sales resulted in a gross margin rate exceeding 30 points.
38 per cent to be specific.
Per to $26 seven per cent and the prior year.
Operating expenses were reduced to $123 8 million for $134 7 million kind of operating margin exceeded 10%.
Increasing from eight 8% in 2019.
To 10, 7% in 2020.
Next I'll review of our cash flow of balance sheet at December 31, 2020, cash and cash equivalents were $57 2 million.
Per the $67 1 million at September 30 of 2020.
Cash flow from operations yielded nearly $30 million for the current quarter.
We paid down our debt from $15 million to $20 million.
While repurchasing over 180000 shares for $7 9 million of an average price of approximately $43 per share.
For the full year, our improved financial model resulted in cash flow from operations of over $73 million.
Enabling us to reduce our debt by $48 million, while repurchasing over 440000 shares for $17 7 million.
The average price of approximately $40 per share.
We believe the future of you AI is very bright we launched innovative products in the latter half of 2020 and have additional products scheduled to be launched in the first half of 2021.
With sales growth expected to return this year.
And the fact that <unk> has become a more profitable company with strong free cash flow.
We believe <unk> is currently undervalued. Therefore, our board of directors has approved an additional plan to purchase up to 300000 shares contingent on share price over the next few months.
Now turning to our guidance in the first quarter of.
2021, we expect net sales for range from $150 million to $160 million.
Per to 152 million in the same quarter of 2020.
We believe our investments in R&D will continue to yield gross margin of exceeding 30 points in the first quarter.
The lower than the rate achieved in the in the fourth quarter.
We also expect EPS to range from <unk> 83 to 93 five.
Compared to 81 cents in the first quarter of 2020.
We continue to believe in our long term growth targets of sales of between five and 10% and EPS between 10 and 20 per cent.
I would now turn the call back to Paul.
Thanks Bryan.
Looking at 2020.
Like many of our partners and customers in our industry had to deal with the difficult and unprecedented environment.
I'm proud to say that our team once again managed to perform brilliantly there.
Performance demonstrated their winning attitude creativity and ongoing focus on great business operations as a result, while continuing to invest in the future we were still able to deliver our most profitable year ever.
I'm able to repeat one of my favorite phrases during tough times strong companies get stronger.
Without a doubt we have accomplished that.
Looking at our market, we have positioned the company incredibly well.
Consumers have more choices than ever before they can get content from over the top video streaming apps live TV streaming on demand libraries and linear TV broadcast.
And the video provider pool continues to grow including cable satellite telecom and new streaming service players content and technology brands are spending billions of dollars to create hybrid platforms, making it more competitive than ever to capture of eyeballs.
The abundance of choice continues to escalate and consumers want the quickest easiest possible way to find their needle in the haystack UE.
<unk> provides that magic.
As always stay tuned.
Operator, we can now open the call for questions.
Certainly ladies and gentlemen for you have a question at this time. Please press Star then one on your Touchtone telephone. If your question has been answered and you'd like to remove yourself from the queue. Please press the pound key our first question comes in a line of Greg Burns from Sidoti and company. Your question. Please.
Good afternoon.
I just wanted to dig in a little bit on the the guidance for the first quarter.
Roughly I guess.
Net revenue sequentially, but profitability down down a little bit of can you just walk us through.
Whats driving the little bit of of pull back in the the margins into the first quarter of the fourth quarter, Yeah sure Greg in.
In Q4, what happened was we had a of labor subsidy that we received and the fourth quarter and this is common but usually what what the Chinese government will do is they will they'll submit these.
Subsidies throughout the year, so I, usually get them over a three or four quarter period, where we got the majority of it in the fourth quarter of 2020. So.
It drove up the the margin in the fourth quarter.
Okay. So aside from that we also had in the fourth quarter. We also had a.
We had success with the royalty revenue and license our technology. The TV. The TV channel has done extremely well. So we licensed the three of the largest Oems in the in the World and we expect that to continue but in Q4 was a little bit of an aberration was the fact that we did receive the majority of an annual subsidy in in one quarter.
Okay. So it's mainly.
Coming from the little step back in the gross margins of any.
Big changes on the.
In terms of operating expenses or kind of roughly.
Good day wherever the market.
Yes, it's mainly driven by the <unk>.
What I just mentioned of the margin rate.
Okay, Great and then when we look at the year over year.
In terms of the revenue.
Relative to the first quarter guidance.
You talked about you're out of them.
A bunch of of announcements of new Cott.
Alex.
You set to launch a couple of new European operators Rolling out.
Vance platforms the Apple.
The Apple remote so you know a lot going on a lot of assuming moving out of the pipeline, but not much growth.
Year over year in the first quarter do.
Do you expect.
Go to accelerate with some of these new things, we're rolling out throughout the year as we as we.
Look beyond the first quarter.
Yes, yeah, we.
Expect where were rolled out you know.
Some of the platform as of the back half of 2020.
We've got more slated for the the front half of 2021, so we expect it to accelerate throughout the year I mean right now.
In Q1, that's not a reflection of what we think will happen for the full 2021 versus 2020, we expect sales growth and it will it will occur, but it's going to it's going out of ramping up as opposed to being.
I wouldn't use Q1 of the as a harbinger of it will ramp up.
Okay great.
And then I.
Just had a couple of questions on some of the the new products.
You announced in terms of the the quickset widget I know you've embedded in your own smart thermostat product, but what's the what's the pipeline look like there for.
For other Oems to begin embedding this into their products.
Do you have of pipeline like set the rollout or is there something that you have to now go to market with them.
It kind of educate.
Customers on of the benefits of those products like the.
What's the view here as we look into <unk>.
2021 on the adoption of <unk>.
Quickset widget.
I think the the answer to that is you know quick said has become extremely popular as I said earlier three the three top brands in the world three top of our market share brands of the world are current.
The license or is there end use quickset in their product and in fact are increasing the number of products that they're putting the technology in so we see these as further enhancements.
Two of the connected home experience for quick set so quick that has ramped nicely over the last five years with these very important players, particularly on the TV side and we're continuing to advance the line by bringing new enhancements to it of things like the virtual agents and <unk>.
At widget, which would allow them to expand it even further.
So we have a pipeline of customers there was a lot of interest of knees.
Some of them a virtual agent we have talked to people about before so it's probably nearer term.
Quickset widget is relatively new.
But again these are things that we bring out at.
What used to be C E S.
And now have become the technology summit.
And which will show later to investors and then you are the the analysts.
In March.
And we think these are further enhancements to this quickset family of products.
Okay, and then lastly, the the comfort family the smart connected thermostats rolling out now.
How does that differ from the won't be seen in the market.
Maybe like a nest or some other of these connected.
Smart thermostats and how is the.
Well I was asking I guess delivered market or you could be selling.
Directly to the consumer or is it going to go through your more traditional channel thing yeah. The the biggest difference is that that most of those products that people would be most familiar with are things that they would see online or in a retail store that they buy is an aftermarket product and either install it themselves or hire somebody to come.
Mountain install we view the future of of of these types of products, particularly HVAC control as being commercially installed or sold as a part of the original.
The compressor or unit so.
So our distribution strategy on this would be non.
Not necessarily to sell it as a consumer product, but the sell it commercially.
And I can just give you a couple of small examples.
Thermostat can be placed into of let's say of lodging.
Establishment and let's say this is probably a bad example, today because people aren't traveling but if we are ever to get back to traveling again.
If you stay in the hotel multiple times and it notices that when you stay in the particular chain of hotels, you constantly put your thermostat to 73, while I put minus the 68.
These are sensing and aware of products that could modify themselves for a variety of people.
So most of the features in the consumer products, you've talked about are programmed for a family.
But the hotel room would have potentially 365 different customers every year.
Each of whom May have stayed in hotels before and it could have the ability to be able to customize itself for each individual consumer.
All of these products are a little bit different in that again, there they're sold with original units more of an OEM sales or their installed commercially.
They can also sense of whether the consumer if the consumer because some people do this they turn the thermostat down to 66 and then they leave for the day.
Well this is not good for the hotel and not good for the energy grid. So what it could do as noticed that the room is empty and then two.
Tune itself to a more reasonable temperature.
Things like that so the the it's built around features for a more.
Hospitality slash commercial.
And for consumers, but not in the direct way in other words will sell directly to the HVAC company.
Okay, great. Thank you Kurt.
Thank you. Our next question comes from the line of of Stephens, Inc. From Colliers for your question. Please.
Alright. Thank you Paul can we start with this opportunity for the industry to move from custom software in their set top box to the industry standard platforms like Apple TV for Kay in and focus on the App development, which should be a quicker path for.
Yeah kind of.
Size the pipeline for us there and with the pipeline that you have include some of those traditional customers.
It has been one of the headwinds you faced over the last couple of years, because they never seem to get the market with their custom develop set top box because of the world is changing so quickly.
I'll address that the.
The market for these platforms is obviously.
All of the subscribers on this planet essentially because as.
As time goes on the home entertainment experience everywhere.
He is going to be such that people want to watch live content sports the Bachelor of the Bachelorette whatever your favorite reality show is and those again those reality shows are like sports day. There are things that the the results of which you don't want to you're not going to watch it three years later.
Live TV is here to stay through a content like that as I like call of perishable content.
But then you have U S V O D E V O D and the various other sources of content the the world's moving to these high hybrid platforms now large companies in the industry.
Having the wherewithal of the scale to build their own platform.
So they can manage their own platform build it build of voice engine behind it.
Is it can be a very substantial.
Substantial development for them.
But there is a vast array of of.
Of companies that probably have a few hundred million subscribers.
That will probably either adopt a platform built by a larger entity syndicated right from a larger entity or they will choose a platform built by the.
The technology company like an apple or others.
That will bring all of those entertainment options together.
That market probably in time is larger.
Right because the the the number of subscribers that are in the largest companies.
Art why they're of course huge some of the companies have 20 million subscribers, but there's hundreds of millions of subscribers worldwide.
So we think the market for these platforms either Android base.
The Apple TV product et cetera have a real good runway over the course of the next few years, because again, they bring to a lot of smaller operators and frankly, even to some of the larger ones. As you may have mentioned that have either.
Chosen not to or.
Have not successfully built.
These hybrid platforms and by hybrid I mean, again, where you can get all the things you wish to watch all the sports all of the reality show is watched live and then when they are over he gets the switchover to netflix or prime or Hulu or the rugby channel.
Whatever channel do you like to stream.
I think it's pretty well understood by everyone that those platforms are.
Part of the future the because that's what people want to watch right that combination and they wanted to get it out get out of it quickly.
What we're doing is partnering with the people who are building those platforms to build the best control technology for them and I think we've accomplished that with many of the partners we have.
And you know that market is still developing but we think its got runway for the next next number of years.
Okay, where do you think you are today in terms of mix of advanced remotes are what percentage of the remote controls you sell today.
I don't have a precise calculation for that Steve, but I would guess at this point, it's got to be half or more of our business.
Probably about 20 to 25 per cent of our business is non the AAV.
At this point.
And well over half of the <unk> business would be in these advanced platforms.
Now remember that the part that isn't.
The advanced platforms.
Maybe more units and what happens when when people make the transition to advanced platforms. The ASP goes up so there's a growth opportunity there because the the older product that was the simple IR controller is not as sophisticated or as expensive as the two way.
Way, Bluetooth low energy or RF for CE device that has the voice K.
Capability built in those.
Those are much more sophisticated products and have a higher price point, so as the world transitions to these platforms, there's a certain.
The upward momentum on growth for us.
As the world slowly turns to those those are those applications.
Okay.
We made tremendous progress.
Our cash flow generation and patron that down significantly.
How do you think about capital allocation.
Over the next couple of years in terms of.
Using that cash to buy more stock.
For the ended dividend.
Make acquisitions kind of what's out of the menu to the extent you're willing to share that.
Well our approach we can certainly share in that would be that obviously any cash we hold.
Is the shareholders they expect a certain return on it.
When we invested in our own business, we get a good return on it I think we've proven that as far as are the returns we can gain on the capital.
If we have those investments to make internally and they produce the types of equity.
The returns that our shareholders would expect we would of course make them.
Our own stock.
As its price does move up or down I can provide an opportunity.
We look at it like that we don't buy shares just to be buying them. We look at our own valuation of them as if we were going to buy the buy the company right. We look at our forecast and.
And value our company based on that each quarter and then discuss this as a capital allocation procedure, both internally and with our board the determine the level at which we would buy the stock based on its value at this at this moment.
Right. So when we see of large spread there.
We're a little bit more aggressive in buying it and when we see that spread shrink we buy less.
And then the third would be to look externally, but we look in the same way again every dollar we have a we know the shareholder wishes to get a certain level of return from it.
And you know if we can find investments that provide that type of value when combined with us we can really drive that business to a good valuation and again a good return on the value. We paid for it then we will look at that as well.
And we look at it every quarter and we look at because each of those can change each quarter right. The internal investments the external investments and the buying of our own stock and if we find one of them to have a really good return.
And any specific moment, then we will allocate more capital towards it.
If we can't find any of those that can get you get equity rates of return then we would consider giving it to the money for the money back to people, who can right because if we can't generate that equity level of return on it then we would consider returning it.
But it's okay and then I think of is it a sound financial approach that says we're shepherds of that capital we can use it to get good returns.
We can't then we would consider giving it back to someone who can.
Okay, and just one last quick question customer concentration during the quarter Comcast the other customers.
Customers.
No. It was a Comcast was the only customer exceeding 10% and they were at $18 30 per cent.
I'm, sorry, 18.3 $18 three.
Thanks, Bryan and thank you Paul.
Thank you. Our next question comes from the line of Jeff Van syndrome from B Riley Your question. Please.
Good afternoon, everyone first let me say congratulations on Q4 profitability well done there.
Regarding the legacy non self installed platforms, what are you seeing and hearing from the Msos regarding truck rolls for new installations, just wondering if you're getting any feedback there are they seeing anything open up with COVID-19 starting to ease a little bit in some areas and I guess any thoughts around pent up demand.
Those kind of rules.
Yeah.
We're not seeing the huge difference.
I think the order patterns would show that the the.
The the customers that have not adopted a self install platform.
While they may improve a little we haven't seen the huge improvement so I think the effects of the pandemic either.
Either because of Covid and teens of shutdowns or just consumer attitude of having strange people in their house, if you get the customer the.
The customer doesn't have the self install platform.
You'd have to invite somebody into your home to two.
Our service person into your house to install.
So yes, there there still is still but look I think each of those operators completely understands this.
And as I said earlier I think the market for.
The forgetting even about the pandemic for a minute.
I think most industry participants here understand what I explained earlier that consumers are watching a variety of things that they want to watch the there over the top services they want their live content the <unk>.
Five hour a day person here in the U S is watching all of it there.
They're watching the live stuff you're watching.
Of the over the top of stuff there, they're watching five hours a day, so the consumer needs to get what they want and you can charge them well for that which you gave them.
So the world is moving in this direction. These platforms are coming it may take longer than what most people would have thought it would but it's kind of them and so even those that have.
An architecture that is not self install are beginning to move in that direction.
Okay. Good and then you spoke to this a bit around some specific new products, but just wondering.
What you expect to be kind of the primary growth drivers for the ramp you anticipate revenues. This year is it more of a legacy type platforms that require of truck rolls is it more of a self install new products like Apple TV, maybe some more international I know you spoke to that in India and some other areas.
Yeah, I think it's a few of those again internationally we're seeing.
We've seen a good amount of growth with new platforms, and we're continuing to see that so many of the operators of companies. We've worked with some of them are new.
Which is obviously a good growth driver some of them are existing customers, but that are moving toward more advanced platform.
Seen real good traction on that.
In other countries. So we see that continuing this year and I think it's just an overall trend moving to these platforms.
I don't.
Expect that the non.
Self install.
The professionally installed platforms.
We're not counting on.
Some huge magic wanted to be.
Waived in the.
This will explode and growth again.
That isn't in our expectation.
Okay. Okay. Good.
And then just to follow up on the wedge of product that appears to be of system on a chip if I'm not mistaken and I guess I'm just wondering if your thinking around that is that it could be a transformational product too.
The drive broader adoption of your IP.
Yeah, I mean look I think any enhancements to the quickset family of products.
It makes it more compelling, but but also can drive value for our customer of course, and thus for us. So we continue to work on enhancements to the platform that can bring compelling value to the customer.
And then you know.
Potentially bring us.
More value or even maybe the different business model in time, we're not prepared to talk a lot about that yet, but we see that as part of this.
The strategy within quickset.
Okay. Thanks for taking my questions and continued success sure. Thank you.
Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to Paul Arlene.
The executive officer.
Thank you for joining us today and your continued support of Universal Electronics as I said earlier on March 19th please.
Please mark your calendar and please join us for our virtual analyst and Investor Day.
Is the first time, we've done this we will take you through portions of the virtual room provide demos and host Q&A for you to discuss products and strategies with our team. So that you too can get a deeper look in the U S latest technologies.
Later in March in addition, we will present at the Sidoti Investor Conference.
Again, thank you for participating today and have a wonderful day.
Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.
Yeah.
Yeah.
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