What changed in this filing

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Item 1. Business

2024-03-14 compared with 2023-03-08 · 106 added, 103 removed, 240 unchanged (47% of the section changed)

Universal Electronics Inc.

("UEI") was incorporated under the laws of Delaware in 1986 and began operations in 1987.

("UEI" or the "Company") was incorporated under the laws of Delaware in 1986 and began operations in 1987.

The principal executive offices are located at 15147 N.

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Our business is comprised of one reportable segment.

We design, develop, manufacture, ship and support control and sensor technology solutions and a broad line of universal control systems, audio-video ("AV") accessories, wireless security and smart home products that are used by the world's leading brands in the video services, consumer electronics, climate control, security, safety, home automation and home appliance markets.

We design, develop, manufacture, ship and support control and sensor technology solutions and a broad line of universal control systems, audio-video ("AV") accessories, wireless security and smart home products that are used by the world's leading brands in the video services, consumer electronics, security, home automation, climate control and home appliance markets.

Our product and technology offerings include:

• easy-to-use, voice-enabled, automatically-programmed universal remote controls with two-way radio frequency ("RF") as well as infrared ("IR"), sold primarily to video service providers (cable, satellite, Internet Protocol television ("IPTV") and Over the Top ("OTT") services), original equipment manufacturers ("OEMs"), retailers, and private label customers;

• integrated circuits ("ICs"), on which our software and universal device control database is embedded, sold primarily to OEMs, video service providers, and private label customers;

• wall-mount and handheld thermostat controllers and connected accessories for smart energy management systems, primarily to OEM customers, as well as hotels and hospitality system integrators;

• easy-to-use, voice-enabled, automatically-programmed universal, two-way radio frequency ("RF") as well as infrared ("IR") remote controls, sold primarily to video service providers (cable, satellite, Internet Protocol television ("IPTV") and Over the Top ("OTT") services), original equipment manufacturers ("OEMs"), retailers and private label customers;

• wall-mount and handheld thermostat controllers and connected accessories for smart energy management systems, primarily to OEM customers, as well as hotels, hospitality and system integrators;

• proprietary and standards-based RF sensors designed for residential security, safety and home automation applications;

• AV accessories sold, directly and indirectly, to consumers including universal remote controls, television wall mounts and stands and digital television antennas;

• software, firmware and technology solutions that can enable devices such as TVs, set-top boxes, audio systems, smart speakers, game consoles and other consumer electronic and smart home devices to wirelessly connect and interact with home networks and interactive services to control and deliver home entertainment, smart home services and device or system information;

• integrated circuits ("ICs"), on which our software and universal device control database is embedded, sold primarily to OEMs, video service providers and private label customers;

• software, firmware and technology solutions that can enable devices such as Smart TVs, hybrid set-top boxes, audio systems, smart speakers, game consoles and other consumer electronic and smart home devices to wirelessly connect and interoperate within home networks to enable control and delivery of home entertainment, smart home services and device or system information;

• cloud-services that support our embedded software and hardware solutions (directly or indirectly) enabling real-time device identification and system control;

• intellectual property that we license primarily to OEMs and video service providers;

• embedded and cloud-enabled software for reliable firmware update and digital rights management validation services to major consumer electronics brands.

• embedded and cloud-enabled software for reliable firmware update provisioning and digital rights management validation services to major consumer electronics brands;

• AV accessories sold, directly and indirectly, to consumers including universal remote controls, television wall mounts and stands and digital television antennas.

Our sales channel strategy is to partner with customers who are leaders in their respective industries:

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in video services, Comcast Corporation, Liberty Global and Vodafone Group rank amongst the largest video service providers in their respective markets;

in climate control, Daikin Industries Ltd., is the market share leader in the global HVAC industry;

in Satellite services, Dish Network Corporation, Sky, Airtel and DirecTV represent the majority of global service providers;

in climate control, Daikin Industries Ltd., Trane and Carrier are customers that represent top market share leaders in the global HVAC industry;

and in security, safety and home automation, Vivint Smart Home, Somfy SA, Ring LLC and Hunter Douglas NV are channel leaders in their respective connected home markets.

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We distribute remote control devices, ICs, home security sensors, connected thermostats and AV accessories directly to video and security service providers and OEMs, both domestically and internationally.

We also distribute home security sensors and connected thermostats to pro-security installers and hospitality system integrators in the United States and Europe through a network of national and regional distributors and dealers.

Additionally, we sell our wireless control devices and AV accessories under the One For All®, Ecolink and private label brand names to retailers through our international subsidiaries and direct to retailers in key markets, such as in the United States, United Kingdom, Germany, France, Spain, and Italy.

We also distribute home security sensors and connected thermostats to pro-security

installers and hospitality system integrators in the United States and Europe through a network of national and regional distributors and dealers.

Additionally, we sell our wireless control devices and AV accessories under the One For All®, Ecolink TM and private label brand names to retailers in key markets, such as in the United States, United Kingdom, Germany, France, Spain, and Italy.

We utilize third-party distributors for the retail channel in countries where we do not have subsidiaries.

Our goal is to provide universal control solutions that require minimal or no user set-up and deliver consistent and intuitive one-touch control of all connected content sources and devices.

QuickSet® ("QuickSet") is a software application that may be embedded in any entertainment or smart home device, set-top box, or other host device, or delivered as a cloud-based service, through Quickset Cloud, to enable universal device setup and control.

QuickSet and QuickSet Cloud utilize data transmitted over HDMI, low power RF (such as Bluetooth or Zigbee), and Internet Protocol ("IP") networks to automatically detect various attributes of connected devices and download the appropriate control codes and functions to enable user access and control without the need for the user to enter any specific device information.

Our goal is to provide universal and interoperable control solutions that automatically set up and deliver consistent and intuitive one-touch control of all connected content sources and devices.

Over the past five years, we have focused our developments to create core technology solutions that we can offer as stand-alone licensable technologies or as embedded ingredients in our turnkey products or white-label solutions.

Our flagship solution, QuickSet® ("QuickSet") is a software application that can be embedded in any entertainment or smart home platform, or can be delivered as a cloud-based service, through QuickSet Cloud, to enable universal device setup, interoperability and control.

QuickSet and QuickSet Cloud utilize data transmitted over HDMI, low power RF (such as Bluetooth or Zigbee), and Internet Protocol ("IP") networks to automatically detect various attributes of connected devices and enables user access and control of smart, connected devices as well as legacy devices, without the need for the user to enter any specific device information.

With QuickSet and QuickSet Cloud, consumers can switch easily between activities and reliably view their chosen device or content with a single touch.

A QuickSet and QuickSet Cloud user experience can be delivered via a tactile remote, touchscreen interface, on-screen graphical user interface or voice-enabled system.

QuickSet and QuickSet Cloud are integral components of major TV and TV operator systems and are the primary solutions for easy discovery, setup and control of entertainment and smart home devices.

Today, QuickSet smart home services are the technology behind the Home Dashboard of LG TVs and provide a complete and simplified system control experience for households.

The platform has continuously expanded with new capabilities including enhanced communication protocols, such as Matter, IP, Zigbee 3.0, Zigbee RF4CE, Consumer Electronics Control ("CEC") and infrared.

QuickSet and QuickSet Cloud are integral components of our products and services and are used by our customers as the primary solution for easy discovery, control and interaction between entertainment and smart home devices.

Today, QuickSet smart home services are the technology behind LG TV's Home Dashboard, providing a complete and simplified system control experience for households worldwide.

The platform is continuously expanded with new capabilities including enhanced communication protocols, such as Matter, IP, Zigbee 3.0, Zigbee RF4CE, Consumer Electronics Control ("CEC") and infrared.

Licensees of QuickSet and/or QuickSet Cloud include service providers such as Comcast Corporation, Charter Communications, TiVo, DIRECTV and DISH Network Corporation;

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and has grown to include HVAC and emerging home automation customers.

The latest release of QuickSet has expanded functionality for entertainment and whole home audio use cases to provide deeper device and content history across an ever-increasing landscape of devices and services in the home.

This privacy-first approach in capturing user preferences across devices helps increase engagement through enhanced personalized recommendations for a better end-user experience.

QuickSet’s content history capabilities also extended to new categories of content usage in the home such as whole home audio as well as audio/video casting.

UEI’s QuickSet Widgets provide fully managed Internet of Things ("IoT") capability to non-connected electronic devices for fast time-to-market and enable digital transformation of end-user interaction.

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The smart thermostat line includes all the necessary connectivity technologies to address the evolving smart home, including seamless connection to the cloud over Wi-Fi plus local device connectivity via Bluetooth Smart, Zigbee and Infrared, including support for Matter, the industry's latest smart home connectivity standard.

With our commitment to create environmentally-sustainable solutions that do not compromise but enhance product performance, we introduced the UEI Eterna line of voice-enabled control solutions which are designed with our new generation of Extreme Low-Power System-on-Chip and energy harvesting technologies to deliver increased processing capability while using significantly less power compared to prior generations.

The energy-harvesting version of the remotes feature our "Battery-4-Life" technology that relies on collecting energy from the environment's ambient light and radio frequencies to deliver a remote-control solution that is designed to require no battery replacement over the useful life of the product.

With our commitment to create environmentally-sustainable solutions that do not compromise but enhance product performance, we offer UEI Eterna, a line of voice-enabled control solutions designed with our new generation of Extreme Low-Power System-on-Chip and energy harvesting technologies to deliver increased processing capability while using significantly less power compared to prior generations.

The energy-harvesting version features our "Battery-4-Life" technology that relies on collecting energy from the environment's ambient light and radio frequencies to deliver a control solution that is designed to require no battery replacement over the useful life of the product.

UEI Virtual Agent, an innovative self-service support solution, simplifies device onboarding by allowing customers to seamlessly hand-off the set-up process from a large screen (SmartTV) to a smaller one (mobile phone).

With QuickSet integration, UEI Virtual Agent provides automated steps for onboarding, feature discovery and troubleshooting capabilities and is available both as a web-based application and a TV app for integration into existing infrastructures.

Integrated into the latest

version of QuickSet, UEI Virtual Agent provides automated steps for onboarding, feature discovery and troubleshooting capabilities and is available both as a web-based application and a TV app for integration into existing infrastructures.

UEI Virtual Agent, when bundled with our newest set of UEI NetReady services for remote diagnostics and customer support, will further enhance the support experience for products already deployed in the home.

For the years ended December 31, 2022, 2021 and 2020, our sales to Comcast Corporation accounted for 14.5%, 16.3% and 20.1% of our net sales, respectively.

For the years ended December 31, 2023, 2022 and 2021, our sales to Daikin Industries Ltd.

accounted for 14.0%, 14.4% and 11.8% of our net sales, respectively.

For the years ended December 31, 2022 and 2021, our sales to Comcast Corporation accounted for 14.0% and 16.3% of our net sales, respectively.

Markets and Competition

We continue to place significant emphasis on expanding our sales and marketing efforts to video service providers and home entertainment OEMs in Asia, Latin America and Europe.

In the markets for video services we include cable, satellite, IPTV and OTT service providers.

In recent years, we have seen a significant change in our markets with the rise of the direct-to-consumer streaming video apps that are enabled on smart TVs and streaming devices as well as advanced set-top boxes.

This has resulted in a change in mix in our customer base, especially in the U.S., where our traditional customers in cable and satellite have been complimented with new customers in the digital media streaming domain.

Today our portfolio includes universal control products compatible with Apple's tvOS and Google's AndroidTV platforms designed for the Multichannel Video Programming Distributor ("MVPD") market allowing subscribers access to subscription-based channels through hybrid and OTT streaming platforms.

This has resulted in a change in mix in our customer base, especially in the U.S., where our traditional customers in cable and satellite have been complemented with new customers in the digital media streaming domain.

Today our portfolio includes universal control products compatible with Apple's tvOS and Google's AndroidTV platforms designed for the Multichannel Video Programming Distributor market allowing subscribers access to subscription-based channels through hybrid and OTT streaming platforms.

Additionally, some of our current customers have successfully introduced media streaming services and expanded their footprint to new end-users.

Tivo Stream, Comcast's Flex, Sky Glass and DISH Sling are examples of current customer offerings of these types of services.

Comcast-Charter's Xumo TV, Tivo Stream, Comcast's Flex, Sky Glass and DISH Sling are examples of current customer offerings of these types of services.

Additionally, these brands, along with our OEM customers in consumer electronics are expanding their customer footprints through distribution of their OS platforms that include UEI's QuickSet technologies, allowing us to grow our global technology footprint and grow our licensing revenue in those channels.

At the same time, we have seen our markets in Home Entertainment OEM, and especially our SmartTV OEMs, successfully upgrade to streaming service aggregators.

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Our primary competitors in the OEM market are the OEMs themselves and various wireless control manufacturers in Asia.

Leveraging our scale and expertise in low-power RF microcontrollers, we continue to pursue further penetration of our traditional OEM consumer electronics markets as well as newer product categories in the smart home and IoT markets including smart lighting, smart and motorized shades, as well as smart toilets and faucets, which rely on smart connectivity and control technologies to reduce water use and improve user experience.

Customers in these markets integrate our connectivity and cloud-based solutions, services and technology into their products to enhance their consumer lifestyle ecosystems.

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In this market, we compete with offshore-based, original design and built-to-print hardware manufacturers, such as Leedarson.

In the connected smart home market, we compete with the OEMs themselves as well as wireless manufacturers in North America, such as Nice, and other original design manufacturers in Asia.

In the HVAC controller and thermostat market, we compete with regional specialists and global companies such as Honeywell, Johnson Controls, Emerson, Schneider Electric, as well as Far East based OEM manufacturers such as Computime.

In the connected smart home market, we compete with the OEMs themselves as well as wireless manufacturers in North America, such as Nice, and other original design manufacturers in Asia, as well as technology system providers such as Tuya.

In the HVAC controller and thermostat market, we compete with regional specialists and global companies such as Honeywell and Venstar, as well as Far East based OEM manufacturers such as Computime.

We compete in our markets on the basis of product quality, enhanced features, intellectual property, local design and development expertise, local development support and end-user support.

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• Universal Electronics Italia S.R.L., established in Italy;

• Universal Electronics Trading Co., Ltd., established in the PRC;

• Universal Electronics Yangzhou Co.

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During 2023, our engineering efforts focused on the following:

• broadening our product portfolio;

• launching new embedded software solutions designed to simplify set-up and control features;

• modifying existing products and technologies to improve features, lower costs and to ensure minimal supply chain disruption;

• maintaining existing products and relocating certain manufacturing to lower cost jurisdictions;

• broadening our product and technology portfolio;

• enhancing the features and capabilities of our existing technology platforms;

• integrating our core technology platforms and modifying the applications in our existing products to improve functionality and enhance customer value;

• ensuring continuous and efficient supply chain by relocating certain manufacturing to lower cost jurisdictions;

• developing sustainable products that reduce energy use and eliminate waste;

• formulating measures to protect our proprietary technology and general know-how;

• improving our control solutions software;

• updating our library of device codes to include codes for new features and devices introduced worldwide;

• creating innovative products that address consumer challenges in home entertainment control and security sensing;

• optimizing, scaling and improving our cloud platform to deliver additional features and managed services to a large installed base of customer and end users.

• updating our interoperability device and services libraries worldwide to ensure broader smart home category support;

• identifying, testing and sourcing non-critical off-the-shelf products from vendors worldwide that complement our product portfolio for certain market verticals;

• launching new products that integrate emerging wireless technology protocols, such as Matter and Thread;

• improving our cloud platform to create value-add features that can scale across a large installed base of customers and end users.

During 2023, our advanced engineering efforts focused on further developing our existing products, services and technologies.

We released software updates to our embedded QuickSet application, and continued development initiatives around existing and emerging technologies, such as Rf4CE, Bluetooth, Bluetooth Smart WiFi and Matter, a unifying, IP-based connectivity protocol built on proven technologies designed to connect smart home devices reliably and securely across disparate IoT ecosystems.

We continue to enhance the capabilities of our service platform (UEI Virtual Agent) for easier device onboarding, identification and troubleshooting across our portfolio of control products.

As a contributor to the Matter specification, we were an active participant in several working groups and Plugfest events to help bring the full interoperability potential of the Matter standard to market in 2022.

Our knowledge of what Matter can (and cannot) deliver has culminated in our introduction of four Matter-certified and capable solutions including QuickSet, QuickSet Widget, Nevo ® Butler and UEI TIDE Dial, which were introduced in January 2023 at the International Consumer Electronics Show.

We released software updates to our embedded QuickSet application, and continued development initiatives around existing and emerging technologies, such as Zigbee 3.0, Bluetooth Smart, WiFi and Matter, a unifying, IP-based connectivity protocol built on proven technologies designed to connect smart home devices reliably and securely across disparate IoT ecosystems.

We integrated the capabilities of our service platform (UEI Virtual Agent) on our Tide and Eterna product platforms for easier device onboarding, identification and troubleshooting.

As a contributor to the Matter specification, we continue to be an active participant in several working groups and Plugfest events to help bring the full interoperability potential of the Matter standard to market.

At CES 2024, we announced several new Matter-supported products and technology platforms.

In general, our technical staff are involved in various industry organizations and bodies, which are in the process of setting standards for IR and RF communication and networking in the home.

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A key factor in creating products and software for control of entertainment and smart home devices is our proprietary device knowledge.

Each year our device control library continues to grow across AV and smart home platforms, supporting many common smart home protocols, including IR, HDMI-CEC, Bluetooth and its variants, Zigbee (Rf4CE), Z-Wave, Thread, Matter and IP networks.

We have developed a broad portfolio of patented technologies and the industry's leading database of device setup and control software.

We ship integrated circuits, on which our software and control code libraries are embedded and that connect to our cloud services, directly to manufacturers for inclusion in their products.

Each year our device discovery and control libraries continue to grow across the smart home landscape, supporting many common smart home protocols, including IR, HDMI-CEC, Bluetooth and its variants, Zigbee (Rf4CE), Z-Wave, Thread, Matter and IP networks.

We have developed a broad portfolio of patented technologies and the industry's leading database of device discovery, setup and control software.

We ship integrated circuits, on which our software and control libraries are embedded and that connect to our cloud services, directly to manufacturers for inclusion in their products.

In addition, we license our software and technology to manufacturers.

Our technology also includes other remote controlled home entertainment devices and home automation control modules, as well as wired CEC and wireless IP control protocols commonly found on many of the latest HDMI and internet connected devices.

Our proprietary software automatically detects, identifies and enables the appropriate control commands for many home entertainment and automation devices in the home.

Our libraries are continuously updated with device control codes used in newly introduced AV and IoT devices.

These control codes are captured directly from original control devices or from the manufacturers' written specifications to ensure the accuracy and integrity of the library.

Smart devices are becoming a more prevalent part of the home entertainment experience, and we offer several solutions to enable entertainment device control via smart phones, tablets, smart TVs, smart speakers or digital assistants.

In our smart device control solutions, we offer the elements needed for device control ranging from IR and RF controller chips to IP-device control libraries to graphical and voice user interfaces, as well as artificial intelligence systems that deliver context aware device interactions.

We hold and apply for patents in the United States and abroad related to our remote control, home security, safety, climate control, and automation technologies.

Our patents have remaining lives ranging from one to 18 years.

We have also obtained copyright registration and claim copyright protection for certain proprietary software and libraries of our device control codes.

Our proprietary software automatically detects, identifies and enables the appropriate control infrastructure for many home entertainment and automation devices in the home.

Our libraries are continuously updated using knowledge captured directly from the original device or from the manufacturers' written specifications to ensure the accuracy and integrity of the libraries.

We hold and apply for patents in the United States and abroad related to our discovery, setup and control technologies across residential safety and security, climate control and smart home automation applications.

Our patents have remaining lives ranging from less than one to 18 years.

We have also obtained copyright registration and claim copyright protection for certain proprietary software and libraries of our device control libraries.

Additionally, the names of many of our products are registered, or are being registered, as trademarks in the United States Patent and Trademark Office and in most of the other countries in which such products are sold.

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Manufacturing and Supply

We currently operate vertically integrated manufacturing and assembly factories in the PRC, Mexico and Brazil, which allows us to produce in the regional markets and to scale our production to meet growing demand.

We currently operate vertically integrated manufacturing and assembly factories in the PRC, Vietnam, Mexico and Brazil, which allows us to produce in the regional markets and to scale our production to meet growing demand.

We also use selected third-party manufacturers and suppliers in Asia.

Our long-term factory planning strategy is to de-risk our reliance on a PRC-based supply chain by (1) reducing our manufacturing concentration in the PRC, (2) pursuing lower cost jurisdictions for manufacturing to help ensure market competitive products and (3) offering customers a flexible and globally diverse manufacturing footprint to provide a reliable and cost-efficient supply chain.

To this end, in 2022, we leased factory space in Vietnam and expect to commence manufacturing operations in 2023, pending approval of local government permits and licenses.

Construction is complete on the facility, with equipment installed.

We are beginning to hire key members of the staff to train in anticipation of commencing manufacturing operations, and while the opening of this factory may result in manufacturing inefficiencies, we are evaluating our manufacturing footprint with the expectation that once the Vietnam factory is operating efficiently, we will reduce our manufacturing capacity, most likely, by shutting down an existing facility.

We are analyzing various scenarios, each contingent on the success of the new Vietnam factory, and have yet to conclude on a specific plan.

Even though we operate three factories in the PRC, manufacturing and assembly plants in Mexico and Brazil, respectively, and plan to open a manufacturing facility in Vietnam in 2023, we continue to evaluate additional third-party manufacturers and sources of supply.

To this end, in 2023, we opened a new factory in Vietnam, which commenced manufacturing operations in June 2023 after incurring startup costs in the first half of 2023.

With our Vietnam factory now open and meeting short-term operational targets, with the expectation of continued improvement, we stopped manufacturing activities in our southwestern China factory in September 2023 and have substantially completed its shutdown.

We continue to evaluate our Mexico facility as part of our long-term factory planning strategy.

We are currently planning to downsize and streamline the Mexico operations by moving to a smaller, more efficient facility.

We expect to commence operations in this downsized facility in the second quarter of 2024.

We will continue to evaluate our global factory footprint to identify ways to operate more efficiently.

Even though we operate two factories in the PRC, one factory in Vietnam and manufacturing and assembly plants in Mexico and Brazil, respectively, we continue to evaluate additional third-party manufacturers and sources of supply.

During 2023, we utilized multiple third-party manufacturers and maintained duplicate tooling for certain of our products.

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In addition, our manufacturing facilities in Yangzhou, PRC have also achieved ISO 45001 International Standard for safety and health management systems.

Our facilities located in Yangzhou, PRC and Monterrey, Mexico have successfully completed the Validated Audit Process ("VAP") with the Responsible Business Alliance ("RBA"), the world's largest industry coalition dedicated to responsible business conduct in global supply chains, with both factories achieving Silver Status from the RBA.

We are focused on reducing the environmental impact of our operations.

We are evaluating the use of renewable energy and our teams continue to examine practices and processes throughout our facilities to identify opportunities for greater efficiency.

We are evaluating the use of renewable energy and our teams continue to examine practices and processes throughout our facilities to identify opportunities for greater energy efficiency.

Each of our manufacturing facilities has standing policies and targets for the monitoring and management of waste generation and energy consumption and is focused on reducing electricity consumption, water usage and greenhouse gas emissions.

We are in our second year of membership with the RBA.

We joined as an "affiliate" member in 2021 and were elevated to "regular" membership in 2022.

We embrace and support the vision, mission, and goals of the RBA.

This is outlined further in our website:

https://www.uei.com/corporate-responsibilities.

Through the RBA program, we have access to a range of RBA training and assessment tools to support continual improvement in our social, environmental and ethical responsibilities of our supply chains.

We follow the RBA guidelines for supplier risk assessments process by requiring our suppliers of raw materials and components to complete the full RBA self-assessment questionnaire ("SAQ") and to conduct an on-site VAP audit for 50% of any identified high-risk major suppliers.

In addition to observance of quality standards from our suppliers, we maintain and request our suppliers to adhere to our Global Supplier Code of Conduct and Fair Competition Policy ("Supplier Code of Conduct"), which is available on our website and is an essential part of our supply chain management.

Further, our Supplier Code of Conduct sets forth our global expectations that we have in the areas of fair dealing, legal compliance, business integrity, labor practices, health and safety, and environmental management.

In particular, we require our suppliers to respect basic human rights and to not engage in any involuntary or forced labor and to fully comply with all laws and regulations pertaining to the appropriate and dignified treatment of all workers.

In addition, we adhere to, and require suppliers to adhere to the RBA Code of Conduct, which among other things prohibits the use of forced labor in any manner.

To better enforce a zero-tolerance of forced labor, we provide training to our employees to identify signs of forced labor and other unlawful labor practices and how to report it directly to management or use our global ethics "whistleblower" line.

We are a member of the Responsible Business Alliance ("RBA"), an industry coalition dedicated to driving sustainable value for workers in global supply chains, among other things.

As a member of the RBA, we have adopted the RBA Code of Conduct, which establishes standards to ensure that working conditions are safe, that employees are treated with respect and dignity and that business operations are environmentally responsible and conducted ethically.

The RBA Code of Conduct has been reflected in our employee policies and procedures.

In addition, UEI is committed to complying with applicable laws and regulations of the countries in which we operate and supporting ethical labor practices that do not infringe on human rights.

We follow RBA guidelines for the supplier risk assessment process, requiring relevant suppliers of raw materials and components to complete the RBA self-assessment questionnaire ("SAQ").

Upon completion of the RBA SAQ, we have the ability to request an on-site RBA Validated Audit Process audit using the RBA online system for any suppliers that are identified as high-risk.

In addition to observance of quality standards by our suppliers, we require suppliers to adhere to our Global Supplier Code of Conduct and Fair Competition Policy ("Supplier Code of Conduct"), which is available on our website.

Our Supplier Code of Conduct sets forth our global expectations in the areas of fair dealing, legal compliance, business integrity, labor practices, health and safety and environmental management.

Among other things, we require our suppliers to respect human rights and to not engage in any form of involuntary or forced labor and to fully comply with all laws and regulations pertaining to the appropriate and dignified treatment of all workers.

Our Global Human Rights Policy is aligned with internationally recognized human rights principles defined by the Universal Declaration of Human Rights and the United Nations Guiding Principles on Business and Human Rights.

We also provide training to relevant employees to help identify and report any signs of forced labor or other unlawful labor practices.

We have a third-party confidential ethics hotline ("the UEI Ethics Line") to enable our employees or other stakeholders to anonymously report any suspected violations of applicable laws, policies or human rights violations.

We are committed to investigating all communications received on the UEI Ethics Line.

Government Regulation and Environmental Matters

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We also face increasing complexity in our product design and procurement operations as we adjust to new and future requirements relating to the material composition of our products.

We may also face significant costs and liabilities in connection with product take-back legislation.

The European Union's Waste Electrical and Electronic Equipment ("WEEE") Directive makes producers of electrical goods financially responsible for specified collection, recycling, treatment, and disposal of past and future covered products.

We may also face significant costs and liabilities in connection with product take-back and "right to repair" legislation.

For example, the European Union's Waste Electrical and Electronic Equipment ("WEEE") Directive makes producers of electrical goods financially responsible for specified collection, recycling, treatment, and disposal of past and future covered products.

Our European subsidiaries are WEEE compliant.

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However, due to the heightened awareness of corporate environmental, social and governance ("ESG") matters and evolving laws and regulations or enforcement policies, increases in compliance costs may have a material adverse effect upon our capital expenditures, earnings or financial condition.

Our operations, supply chain and products are expected to become increasingly subject to federal, state, local and foreign laws, regulations and international treaties relating to climate change, such as climate disclosure, carbon pricing or product energy efficiency requirements.

We strive to continually improve the energy and carbon efficiency of our operations, supply chain and product portfolio and deliver more cost-effective and lower carbon technology solutions to our customers.

We believe that technology will be fundamental to finding solutions to achieve compliance with and manage those requirements.

We are committed to reducing and eliminating substances of concern from our products and manufacturing process.

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In other regions, we also need to comply with our customers' specific requirements relating to the non-use of certain hazardous substances in the products, which are typically equally or more stringent than the RoHS directive.

We have a dedicated "Green Team," based in the PRC and comprised of engineers and environmental regulation experts, that analyze our products, processes, and raw materials to help ensure that we comply with environmental and government regulations worldwide, as well as the applicable "Green" requirements imposed by our customers.

We have a dedicated "Green Team" comprised of engineers and environmental regulation experts, that analyze our products, processes, and raw materials to help ensure that we comply with environmental and government regulations worldwide, as well as the applicable "Green" requirements imposed by our customers.

Additionally, we have in-house testing capability to help ensure product compliance.

In response to and to comply with certain National Standards published by the Chinese government, our Green Team has been working proactively for the identification and reduction of volatile organic compounds ("VOCs") within our supply chain.

We place great importance on the compliance with local health and safety laws and regulations.

At our manufacturing facilities, we are also committed to protecting our workers from exposure to hazardous substances under an established health and safety management system.

As an example, we have replaced VOC emitting inks and paints with reduced-VOC paints at our PRC facilities.

As an example, we have replaced volatile organic compounds ("VOC") emitting inks and paints with reduced-VOC paints at some of our manufacturing facilities.

We strive to extend the useful life of our products and reduce our products' impact on the environment.

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These limits, regulations, and tariffs, especially those pertaining to or affecting relations between the United States and the PRC, might significantly disrupt our business, affecting our capacity to manufacture, source components and sell goods.

Climate Change

Our operations, supply chain and products are expected to become increasingly subject to federal, state, local and foreign laws, regulations, and international treaties relating to climate change, such as climate disclosure, carbon pricing or product energy efficiency requirements.

We believe that technology will be fundamental to finding solutions to achieve compliance with and manage those requirements.

Our Board of Directors (the "Board"), specifically the Corporate Governance, Sustainability and Nominating Committee, is responsible for risk oversight, which includes relevant environmental-related risks such as climate change.

Government regulations are subject to change;

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As of December 31, 2023, we employed 4,177 members of staff across our worldwide facilities.

Of this staff, 3,383 are associated with our manufacturing and supply chain organizations in the PRC, Mexico and Brazil.

Of this staff, 3,127 are associated with our manufacturing and supply chain organizations in the PRC, Mexico, Vietnam and Brazil.

Beyond the manufacturing and supply chain organizations, 649 of staff work in engineering and R&D, 117 in sales, marketing, consumer service and support and 284 in executive and administrative functions.

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Since the fourth quarter of 2021, these third-party agencies have been required to adhere to our Supplier Code of Conduct, which among other things, prohibits the use of forced labor and sets forth requirements on fair dealing, legal compliance, business integrity, labor practices, health and safety and environmental management.

Employee Recruitment, Retention, and Development

We provide and maintain a work environment that is designed to attract, develop and retain top talent through offering our employees an engaging work experience that contributes to their career development.

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• sensor engineering and R&D teams are located in Carlsbad, California;

• connected thermostat engineering and R&D teams are located in Poway, California;

• connected thermostat engineering and R&D teams are located in Santa Ana and Poway, California;

• hardware engineering teams are located in Panyu and Suzhou in the PRC;

1 unchanged sentence

• a software services team focused on support software solutions is located in Plymouth, Minnesota.

Next to these specialized centers of excellence, we employ engineering, sales and marketing and support staff in many of our regional offices in the United States, The Netherlands, Hong Kong, PRC, Brazil, India, Japan, Korea and Mexico.

We are committed to an inclusive culture that values equality, opportunity, and respect.

We have an employee Code of Conduct and a Supplier Code of Conduct that our employees and suppliers, respectively, must adhere to, both of which cover diversity, inclusion, anti-discrimination and corporate social responsibility.

The respect for human rights is a core tenet both within our organization and when working with our suppliers, and our employees are encouraged to notify the Company if they notice or suspect any violation of our employee Code of Conduct, Supplier Code of Conduct or the law.

We have a confidential ethics hotline to enable our employees to report any suspected violations of applicable laws or policies.

We are an Equal Opportunity Employer and are committed to providing a workplace free of discrimination, harassment and retaliation for all employees and we value equality, opportunity and respect.

Our Code of Conduct covers topics related to inclusion and anti-discrimination.

We encourage any employee who believes they are the subject of discrimination, harassment or retaliation to express concerns without fear of retribution or retaliation to their immediate supervisors, any senior-level managers, or through the UEI Ethics Line.

Labor unions represent approximately 20.0% of our 4,177 employees as of December 31, 2023.

1 unchanged sentence

Unionized workers, employed in Manaus, Brazil, are represented under contract with the Sindicato dos Trabalhadores nas Industrias Metalugicas, Mecanicas e de Materiais Eletricos de Manaus.

Additionally, workers at our Vietnam facility are covered by a collective bargaining agreement.

These workers represent approximately 10.0% of our 4,177 employees as of December 31, 2023.

Our business units are subject to various laws and regulations relating to their relationships with their employees.

1 unchanged sentence

We believe that our relationships with employees and their representative organizations are good.

Safety, Health, and Wellness

The health and safety of our employees, contractors, visitors and the communities in which we operate is paramount.

We are committed to reducing or eliminating health and safety risks through our health and safety programs, including effective control measures, emergency response plans and training programs.

This commitment is outlined in our Global Health and Safety Policy.

As a member of RBA, we also adhere to the standards of the RBA Code of Conduct to ensure working conditions are safe throughout our supply chain.

Historically, our business has been influenced by the retail sales cycle, with increased sales in the second half of the year.

6 unchanged sentences

Ammari 58 Senior Vice President, Corporate Planning and Strategy

David Chong 61 Executive Vice President, Asia

David Chong 62 Executive Vice President, Global Sales

Firehammer, Jr.

65 Senior Vice President, General Counsel, Head of Global Compliance, and Secretary

Koopmans 47 Senior Vice President, Global Sales

66 Senior Vice President, General Counsel, Head of Global Compliance, and Corporate Secretary

Carnifax 37 Senior Vice President, Global Operations

24 unchanged sentences

He received his Bachelor of Science, Engineering degree in 1989 and, subsequently, a Master of Business Administration from University of California, Irvine in 1993.

David Chong is our Executive Vice President, Asia.

He is responsible for managing sales in our Asian markets.

He was previously responsible for the general management of our Asia region.

David Chong is our Executive Vice President, Global Sales.

He was previously responsible for the general management and sales of our Asia region and was promoted to his current position in October 2023.

Chong joined us in January 2009 as Senior Vice President of Global OEM Sales.

7 unchanged sentences

Firehammer, Jr., Esq.

is our Senior Vice President, General Counsel, Head of Global Compliance, and Secretary.

is our Senior Vice President, General Counsel, Head of Global Compliance, and Corporate Secretary.

He joined us in October 1993 as General Counsel.

He became our Secretary in February 1994.

He became our Corporate Secretary in February 1994.

He was our Vice President from May 1997 until August 1998, and served as counsel to us from September 1998 until February 1999, at which time he was promoted to Senior Vice President.

4 unchanged sentences

Firehammer is also a certified public accountant (inactive).

Koopmans is our Senior Vice President, Global Sales.

He served as Managing Director, EMEA from 2018 to August 2019 when he was promoted to his current position.

From 2014 to the end of 2017, he was our Senior Vice President for subscription broadcasting business in Europe and India where he led the customer transition into smart remote controls.

From 2005 until 2013, he was the head of our worldwide consumer business and our One For All ® brand.

Prior to joining us, Mr.

Koopmans worked at Mars, Sony Europe and Royal Philips Electronics in different product, marketing and sales management roles in both fast-moving consumer goods and durable consumer goods categories.

Koopmans received his Master in Science of Business Administration from Erasmus University in Rotterdam, The Netherlands.

Carnifax is our Senior Vice President, Global Operations.

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business