Good afternoon. My name is Courtney, and I’ll be your conference Operator today. At this time, I would like to welcome everyone to the Universal Electronics Third Quarter 2010 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. (Operator Instructions) Thank you. Ms. Becky Herrick, you may begin your conference.

This call is being broadcast live over the internet. A webcast replay will be available at www.uei.com for one year. In addition, a telephone replay of this call will be made available for 48 hours, beginning approximately two hours after the conclusion of this call. To listen to the replay in the U.S., please dial 1-800-642-1687 and internationally 706-645-9291, enter access code 1861101. Also, any additional updated material non-public information that might be discussed during this call will be provided on the company’s website shortly after the call, where it will be retained for at least one year. You may also access that information by listening to the webcast replay. After reading a short Safe Harbor statement, I will turn the call over to management. During the course of this conference call, management may make projections or other forward-looking statements regarding future events and the future financial performance of the company, including the benefits the company anticipates as a result of its continued development of new and innovative products and technologies that are accepted by and meet the needs of our customers and consumers, the company’s ability to successfully anticipate the needs and demands of the consumer with respect to new and more advanced products and technologies, the continued strong relationships with the company’s existing customers, the failure of our markets or customers to continue growing and expanding in the manner we anticipated, the company’s ability to attract and obtain new customers, particularly in Asia and in Central and South America, the failure to successfully integrate the operations of the recently acquired C.G. companies into our operations, the failure of the C.G. companies to perform in accordance with our expectations, the strength of the company’s financial position and the effects the company may experience due to the current global economic environment. Management wishes to caution you that these statements are just projections and actual results or events may differ materially. For further detail on risk, management refers you to the press release mentioned at the onset of this call and the documents the company files from time to time with the SEC, including the annual report on Form 10-K for the year ended December 31, 2009 and the periodic reports the company has filed since that time. These documents contain and identify various factors that could cause actual results to differ materially from those contained in management’s projection or forward-looking statements. On the call today are Chief Executive Officer and Chairman, Paul Arling, who will deliver an overview and Chief Financial Officer, Bryan Hackworth, who will summarize the financials, and then Paul will return to provide closing remarks. It’s now my pleasure to turn the call over to Paul Arling. Please go ahead, Paul.

Thank you, Becky, and welcome everyone. The third quarter 2010 revenue of $79 million and EPS of $0.34, our third quarter came in generally as we expected it to. Despite a continuing difficult economic environment over the past two years, our year-to-date performance has been quite good with earnings growth of 28%. Our strategy of building great technologies and products for the home entertainment markets and partnering with industry leaders to deploy these technologies and products has led us to great success over the years in both good and difficult times. Our focus on building and keeping strong relationships with customers has helped us to expand our industry reach and more recently expand our global footprint into the higher growth regions of the world. Today, we are taking a major step forward to enhance our position as the leader in wireless control technology while significantly expanding both our geographic reach and market share. Today, we are very excited to announce our acquisition of Hong Kong based Enson Assets Limited and its subsidiaries including China based C.G. Development and C.G. Technology for a net purchase value of $110 million. The C.G. companies are leading remote control companies that develop, manufacture and sell remote control units to many industry leaders, including such names as Sony, Panasonic and Toshiba. The strategic benefits of the transaction are many. UEI and C.G. together account for approximately 30% of all remotes sold on planet earth annually. Market leadership in both share and technology provides many benefits including increased purchasing leverage, market diversity and a broad product portfolio that can service a customer’s complete set of needs. This scale also increases our ability to invest in industry-leading technologies. C.G. greatly enhances our position in the strategically important global TV market, particularly outside the United States. Combined with…

Thanks. Paul previously mentioned the strategic reasons for the purchase of C.G. I’d now like to take a minute to explain the financial rationale and impact to our company. First, we expect C.G. to add at least $140 million in annual revenue to our business in 2011, primarily in the OEM channel and at least $20 million in additional operating income. We do expect the acquisition to decrease our consolidated gross margin percentage by approximately 2 percentage points. However, we expect our consolidated operating margin percentage to increase by 2 percentage points. Overall, we expect at least $1 in EPS accretion in 2011. We will and provide greater detail to our 2011 forecast in February when we disclose our fourth quarter results. Regarding the terms of the acquisition, the transaction is valued at approximately $110 million. Per the terms of the agreement, we delivered 1.46 million shares of our common stock and will pay $95 million in cash. We received net assets of $68.5 million, including an estimated $15 million in cash at closing. Following the completion of this transaction, we expect to have a cash balance of approximately $35 million and a debt balance of approximately $35 million. The financing used for this transaction will carry a variable interest rate which is currently at approximately 1.8%. Now, turning to our third quarter results, net sales for the third quarter of 2010 were $79 million, compared to $83.2 million in the third quarter of 2009. Business Category revenue was $66.2 million, compared to the third quarter of 2009 revenue of $67 million. Our Consumer Category revenue was $12.8 million, compared to the third quarter of 2009 revenue of $16.2 million, reflecting lower North American retail sales. Gross profit for the third quarter was $25.7 million or 32.6% of sales, compared…

Thank you, Bryan. After another solid quarter, we are encouraged by the opportunities that lie ahead. We are very excited about our acquisition of C.G. which demonstrates our focus on investing in promising market opportunities. We are extremely excited about our future. While there is much work left to do and a seemingly difficult environment in which to do it, we are up for the challenge. There are significant market opportunities available to us. Today, we are better positioned than we have ever been to capitalize on them. We will meet the demand for home entertainment solutions and technologies through innovation, providing the intelligent, simple and affordable solutions that meet our customers and consumers future needs, stay tuned.

(Operator Instructions) Your first question comes from the line of Ian Corydon with B. Riley. Ian Corydon – B. Riley: Thank you. A couple of questions on the acquisition. The guidance that you’ve given for Enson for 2011 revenues, what kind of growth rate does that assume over 2010?

Ian, we are actually breaking out the growth rate for Q4. As you know we typically go ahead and we give guidance in total, but for 2011 what we felt was this acquisition is so large that we wanted to give an outlook into 2011, so what we did was we decided to provide, I wouldn’t call a guidance, but an outlook, where we are looking at a minimum of $140 million sales and a minimum of $20 million in op income, as well as $1 in accretion. Ian Corydon – B. Riley: Okay. Yeah. I’m just wondering if you can give the Enson number for 2010, so that’s going to $140 million in 2011 from what in 2010?

Yeah. No. We are not going to break that out just yet. We’ll have to do some public filings later on that, it may come in future public filings. Ian Corydon – B. Riley: I got it. And you said most of their businesses to OEMs, what percentage is other and of that other is that, is there any direct to consumer or is that MSO business?

Yeah. There is very small, most of the business is OEM. They do do some home appliance remote controls, again done in other regions things like air-con, air conditioners are popular to be remotely controlled in other regions of the world. But by and large, their business is consumer electronics OEM. Ian Corydon – B. Riley: And it sounds like they manufacture remotes, so is this kind of in part of vertical integration opportunity that allows you to get more profit out of your full remote sales?

Well, yeah, they certainly do manufacture. They have two plants in China and again, they have been a supplier to us for the last six years. So, we know what they are capable of. We worked with them on -- alongside them on many projects. As I said earlier, we consistently rate our suppliers quarter-by-quarter. They are always at the top. So they have done a fantastic job in terms of speed, flexibility, cost, quality and delivery, and so we feel very good about what we know about them and think through the combined companies with our technology, our distribution strength and frankly, their ability to operate and their distribution strength that we’re creating a much greater company today. Ian Corydon – B. Riley: Got it. And last question is on seasonality, if you can give us a sense for how that, how seasonal that business is?

Yeah. It’s not too seasonal, I mean, they are subject to any small amount of seasonality, but I wouldn’t say it’s similar to us where you have a retail presence and in Q4, you see a definite spike in the consumer category. It’s not, I wouldn’t call, it’s not ratable throughout the year, but it’s not a significant amount of seasonality either.

Your next question comes from the line of Jason Ursaner with CJS Securities. Jason Ursaner – CJS Securities: Good afternoon Paul, Bryan.

Hi Jason. Jason Ursaner – CJS Securities: And if you are saying it doesn’t have a lot of seasonality in the comparable for the last two months of last year it was $14 million. I mean is this, there is no seasonality for when they fell to the OEMs in terms of maybe they are already prepared for the holiday season?

Yeah. There is a little bit of seasonality. So when you get into Q2 and Q3, you can see typically a bit of bump as you just mentioned, but it’s not, I wouldn’t call significant. But there is a bit of seasonality because you are going to get, they need to lead into for the Christmas season, they need to lead ahead of the retailers. Jason Ursaner – CJS Securities: But I mean if I just take that $14 million for essentially two full months and annualize it, that’s about an $85 million run rate. I mean, either the run rate currently is much higher or the growth to get to $140 million is going to be pretty phenomenal?

No. You are assuming that the, you are making an assumption that last two months of sales are equivalent to what they will be for throughout the whole year. So, I can’t give you too much detail on that other than the $140 million that we are projecting for 2011 is, we feel the minimum. Jason Ursaner – CJS Securities: Okay. And in terms of manufacturing, this obviously has been a strategic part of your business to be an outsourcer as opposed to manufacturer and it sounds as if this will grow by more through them. Do you think you really have the scale to compete in the fabrication side and how is this going to affect CapEx overtime?

Well, we actually won’t be fabricating. We are not -- we won’t backward integrate into the silicon, on the silicon side of the business. Jason Ursaner – CJS Securities: Okay.

We will remain a buyer. Our other suppliers will do the design and fabrication of our silicon. This is more a taking it back to rubber and plastic molding and assembly of remote controls. Jason Ursaner – CJS Securities: Okay. And in terms of cross-selling opportunities, obviously this is going to increase your distribution footprint in Asia and Latin America or Asia in particular.

Right. Jason Ursaner – CJS Securities: What type of cross-selling opportunities do you think it gives you? Did you have the right customers before or does this give you kind of a foot in the door with some new customers?

Well, it’s a little of both, I mean, I would think that the one thing that C.G. probably needed the most was we have a technology development expertise that’s, in our business second to none. And I think this expands their product line upward. In some ways these guys are specialists in mainstream remote or what we can call core remote controls, the three-device, two-device and even dedicated devices that some customers use to fill out their product line. So we have a lot of customers that have a live product line all the way from a dedicated remote for a simpler or smaller television up through a universal for their midline and then for a higher end product, they will ship LCD, color screen, sometimes RF product, which is more our specialty. So I think if you combine the specialties with the two companies and the distribution pattern of both companies, you have what is not only a full line supplier, but we can add value to them to their offering and their distribution and they can offer some value to ours. Jason Ursaner – CJS Securities: Okay. And if I look at the commentary it says the consolidated gross margin by approximately 2 percentage points should get impacted. If I’m doing the math right, this means that they are somewhere in the 26% gross margin range. Is there any timetable that you can give to when they could maybe get up to the corporate average or is there some structural impediment to their products, you mentioned in doing some simple devices and air conditioners, where they really wouldn’t be a comparable gross margin?

Yeah. I mean, I can’t tell you that your calculation on that is correct, Jason. All I will say at this point again, Bryan was providing, I won’t even call it guidance. We felt that because we were making this investment, we wanted to give an outlook for next year above what we are buying. So the $140 million is a preliminary number that we will refine and give a little bit more detail on as time goes on. Our custom is typically to provide guidance for 2011 in February, but on this transaction we felt with the size of it, we wanted to provide a little bit of outlook on it. So the $140 million is not their total sales, they do sell to us. So obviously we’re telling you what is being added to our sales, so essentially that’s sales to other customers other than UEI, number one. In terms of the margins, there is also an elimination because we won’t margin things to ourselves. Jason Ursaner – CJS Securities: Right.

But the margin calculation is something that we’ll probably disclose later and obviously, provide guidance on at a later date. Jason Ursaner – CJS Securities: In terms of the debt you took on, did you have to redo the bank facility with U.S. Bank?

We did. What they did was it increased our line of credit from $15 to $20 million and then they gave the term loan as well. So we expect to be able to pay that down pretty quickly. Jason Ursaner – CJS Securities: Okay. And then just real quick, looking at the Consumer Category, you mentioned typically a Q4 spike as part of your seasonality. What was kind of the driver of this quarter, the performance being down and should we think any indication in terms of some of the new products that QuickSet remote they’ll launch?

Yeah. I will answer the first part, versus last year we had -- in Q3 of 2009 we had a new product launch that, I think we had a channel sale. So we actually expected a decrease versus the prior year. Jason Ursaner – CJS Securities: Okay. Great. I’ll jump back in the queue. Thanks, guys.

(Operator Instructions) Your next question comes from the line of Jonathan Goldberg with Deutsche Bank. Jonathan Goldberg – Deutsche Bank: Hi guys. Thanks for talking my question. I was wondering first on the acquisition. If you could just tell us a little bit about the management team, are they coming over, what’s the background of this company in general?

Well, the management team is coming over. They have key players that have been there for, in some cases more than a decade that have worked with the company. So they are deeply experienced within the company. Again, we have known it for six years and the management team is coming on board at UEI. Jonathan Goldberg – Deutsche Bank: And what’s the background of the company? Where are they based?

Well, they are based in Hong Kong but they have two plants in China. Jonathan Goldberg – Deutsche Bank: Okay. And if we could maybe, moving away from the acquisition, could you just give us an update on the core business. How is the business segment doing? What are your customers saying? It seems like some of the cable ads have been weak this quarter. What are you seeing out there? How does the industry look?

Yeah. I mean, look, I think that the cable, satellite and subscription broadcasting side of things has gone pretty much as we expected. There was no surprise there. The growth rate is lower right now. I think the bigger issue is on the consumer electronics side. As I mentioned, some of the data on the call from outside sources are saying that the TV market is still up globally, but the variance in growth rate is much greater than it used to be, I mean, in the more developed countries like the U.S., North America and Western Europe have fallen to be more laggard markets. The U.S. growth is projected to be flat by some market experts, up 1% by others, but certainly nobody is looking at robust growth here in North America and Western Europe is only slightly higher. Whereas what you see is the India, China, Latin America, the growth rates there are, in some cases staggering. So it’s important to be positioned well to access that growth. Now that doesn’t mean that TV growth in the U.S. won’t occur again. I think we are in the midst of a difficult time over the last two years and I would never declare that TVs won’t grow again here but I think right now, the consumer electronics market here is weak and UEI has historically been very well positioned in North America and Europe and less well positioned in some of these other parts of the world. We are building on that. We have made some internal investments. We formed a company in Latin America to access that growth. We have done an acquisition now with the one we announced today with C.G. that obviously has a fantastic position outside the U.S. and we think we can access the growth on a wider basis with a broader product portfolio and more market diversity than we had yesterday. So, I think the market generally is varied to answer your question. Here it’s tough elsewhere it’s actually going pretty well. Jonathan Goldberg – Deutsche Bank: Okay. Thank you.

Your next question comes from the line of Corey Barrett with Pacific Crest Securities. Corey Barrett – Pacific Crest Securities: Corey Barrett in for Andy Hargreaves. I just had a couple of questions. First is, what’s the competitive advantage you were discussing plastic and rubber level, I was hoping you could provide some more granularity there?

Yeah. Well, we typically, UEI we provide designs and we have not provided any assembly service. So, if you look at our industry from raw materials forward, the things that we don’t do at this point are, as I mentioned earlier, we don’t fab. We don’t do chip design. We have partners of ours do that. And at this point, we go back to raw material with our acquisition of C.G. So we participate at every level of the industry. Corey Barrett – Pacific Crest Securities: Great. And then can you comment on what you are seeing in terms of these options of two-way remotes and then just comment on your strategy in addressing convergence and internet connectivity?

Yeah. Those are really two separate things. I mean, I think the two-way is just about providing a better user experience because I think in many cases, the ease of set up is important to our customers and it’s also important to the consumer. So, they share that need for an easier to set up remote and that’s the first application we have done on two-way, which is to make the set up done through a wizard which is much easier than pushing in codes. Now, we are looking at next generation versions of that which, as I said earlier, we’ll be showing these types of things at future tradeshows but we want to make it even more simple, the ultimate goal here for our engineering group here in Cypress is to create and across the globe, is to make remotes that configure themselves. Now, we are not quite there yet, but we are working on some things that can take a lot of steps out of it using some of the technologies that are embedded in devices today. And again, at future tradeshows we will be showing some of that stuff. We think that it is the future of how these remotes will operate and also applications on other devices. Some of the touch screen devices that have been put out either phones or tablets or other type devices. So these are the types of developments we are doing here in Cypress. We’ve already had some implementations of these by major customers and we expect to iterate those products going forward to make them even more compelling. Corey Barrett – Pacific Crest Securities: Are you seeing interest accelerate for those kinds of products?

Yeah. I think there is a great deal of interest in making a better user experience across pretty much all of our customers. Corey Barrett – Pacific Crest Securities: Okay. Great. And can you speak to sort of how you’re addressing connectivity strategically?

Well, yeah, I mean, again, we’ve done a lot of technology development of products that provide navigation control, QWERTY input and two-way in a variety of forms. We used two-way infrared, which has the benefit of being very inexpensive, but we have also done quite a few products that are two-way RFs using technologies like Wi-Fi, or Z-Wave or ZigBee or what’s now known as RF or CE. So we’ve done a lot of product platforms. We have even shipped products with many of these technologies embedded. We think that’s coming. It’s probably little slower than everybody might expect but it is happening and customers are continued to be interested in this type of technology. Corey Barrett – Pacific Crest Securities: Okay. Thank you very much.

Yeah.

(Operator Instructions) There are no further audio questions at this time. I would now like to turn the call back over to Mr. Paul Arling.

Okay. Thanks for joining us today, everybody. We are very excited about the things we have done. We will let you know we are going to be at the -- we are going to have a very strong presence of the CES Show or the International Consumer Electronics Show held January 6th through the 9th in Las Vegas. If you are going to be in attendance, let us know that you are coming. Stop by our booth and see some of the exciting new technologies that we are working on. Thanks for being on the call and goodbye.

This concludes today’s conference call. You may now disconnect.