Gentex (GNTX) 28 Jul 232023 Q2 Earnings call transcript

Company Profile

Participants

Josh O'Berski	Director, IR
Steven Downing	President, CEO & Director
Kevin Nash	VP, Finance, CFO, Treasurer & CAO
Neil Boehm	CTO & VP, Engineering
Luke Junk	Robert W. Baird & Co.
Ronald Jewsikow	Guggenheim Securities
John Murphy	Bank of America Merrill Lynch
Charles Sloan	Oak Family Advisors
James Picariello	BNP Paribas Exane
David Whiston	Morningstar

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to the Gentex's Second Quarter 2023 Financial Results Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Josh O'Berski, Director of Investor Relations. ahead. go Please

Josh O'Berski

Kevin Boehm, the Steve of on Finance Vice morning, Quarter Neil Good Gentex can and O'Berski, to Gentex joined the Director Thank Earnings be and Release This CEO; going Nash, Second is by website I'm and XXXX Investor Josh through ir.gentex.com. President CFO. the call Conference President and Corporation CTO; and live Internet and of reached you. by Relations, welcome Downing, Call. Gentex's I'm at

All call Gentex contents reproduced, of conference use the Corporation respect any otherwise hold are and transcribed of for contents call. incurred published, the party will redistributed. damages retransmitted, with this to copied, responsible by of any conference any Corporation this property and Gentex Corporation unauthorized may of not rebroadcasted, liable or be Gentex

within conference and Gentex second Gentex meaning the of forward-looking the XXXX the website. from quarter this contains financial release This safe in on reports the statement always, press shown earlier call included information harbor Gentex as results morning,

Your call to terms. implies conference participation these consent in this

the turn get Downing, who I'll started today. Now over to us call Steve will

Steven Downing

Thanks, Josh.

second quarter of million $XXX.X the a and to record the company of reported sales for $XXX.X last of second net company. million XX% net sales sales quarter the increase quarter-over-quarter XXXX, compared in of the a For year, new quarterly

Korea XXXX, and quarter second of compared of light Europe, quarter global approximately China, the increased vehicle North XX% Japan, year. the last For second in to production America, when

forecast. levels coming beginning than last be opposite the sales years has of few with our to XXXX year-to-date higher proven the far, the year So in of

our products, light and for continued the strong America, Korea. fewer chain to in of primary a supply our of resulted production, markets, which As North vehicle Europe, and quarter outperformance include compared the Japan an in X% demand result improvement this challenges

line and being the electrochromic in features value-add Full adoption core product in is technology, penetration of rates market. driven our growth Display company's growth continued Mirror other The by of our

compared to the of For XXXX, the second margin for of last quarter gross quarter a margin was year. of XX.X% XX% the gross second

XXXX improvements, improvements a quarter-over-quarter of manufacturing mix. from increased The basis cost OEMs second levels, the margin as freight-related result recoveries higher significantly costs sales and and quarter of a in product on gross

Some margin gross from of costs When by partially last these compared of improvements offset in first compared a basis in raw resulted higher the overhead increased increased XXXX, second raw XXX quarter cost margin XX.X% which first as and helped cost were of to second XX.X% year-over-year still a result the XXXX. in but recoveries second customer on the effect took half that increases the the gross levels, basis. quarter in increase material certain in to the improvements a in realized quarter year, of overtime point labor to material costs, and better leverage to offset quarter of as the incremental sales from

Late until to for we end we the our last margin that formulated of XXXX recovery take estimated year, complete. plan would

believe and end we well year. next achieving to margin of the to of I'm accomplishing are goal XX% pleased progress the gross by very our far, of our XX% on So with way a

compared increased which fees, quarter of the increased quarter-over-quarter, second year. X% the of and $XX.X professional during engineering-related by were to expenses expenses by offset outbound partially freight staffing million quarter expenses expenses. to Operating primarily second of in due XXXX $XX.X operating million last lower to Operating

business compared on to and $XXX.X VAVE the last initiatives operations and year. Income during for for as of to was increase operations new second $XX.X of the second to new from XXXX million, from materials. add Our of throughout we rest income quarter awards when bill of operating expected quarter ramp research expenses development, optimization for quarter as the build year continue focused of the will cost the started and a calendar product of million our second resources XX%

During rate XX.X%, the driven benefit Net million primarily second increase. compared XXXX, foreign-derived was tax which an intangible of a income of quarter income company by second quarter quarter XXXX the the was effective which for had XX% the of year, net second last deduction. to of for $XXX.X income represents million the of the $XX.X of

net profits. of in the second XXXX. was per net share per primarily of diluted for earnings Earnings quarter-over-quarter share XX% of sales the increase income in result when quarter XXXX the operating The the increase to of compared $X.XX, diluted $X.XX a increases for and quarter were second

will hand details. financial over Kevin to call the now I for some

Kevin Nash

windows the quarter XX% you, mirror increase second the a the in aircraft quarter second dimmable products, to fire sales Other compared second $X.X 'XX by 'XX. Automotive net XX% Steve. which quarter of in net million the second quarter million, $XX.X $XXX.X of $XXX.X compared during were year. other the when million the Auto-dimming includes of quarter unit increased compared sales in of were 'XX, in quarter net to and second to of million shipments of second protection sales 'XX. Thank last

second compared for decreased of dimmable 'XX aircraft quarter by quarter of protection increased second the sales last the sales year. for Fire to million second of $X.X of quarter the 'XX million 'XX. $X.X compared the window second quarter by to And

Share repurchases.

company at share. X.X During the of quarter million per price of repurchased $XX.XX second an its stock average shares of common 'XX, the

capital and to in of repurchase account time The As from shares its into will common for approximately of future time continue will strategy, and trends of stock company appropriate. announced disclosed the company pursuant take factors previously shares support but vary to XX, repurchase available has allocation issues, company the previously share remaining macroeconomic market repurchase the the to its additional in June deems XX.X XX, to intends million repurchases other share plan.

million and million. Short-term cost as 'XX XX, as to from company's compared of includes which Cash well XX, balance at sheet. as the investments June combined December $XXX.X mentioned $XXX.X investments comparisons long-term are up million, compared the 'XX. today Looking to method and fixed were and million, were investments. equity income $XXX.X equivalents Balance sheet $XXX.X as cash

million, receivable payable the were to $XXX.X sales $XXX.X million $XXX.X accounts $XXX.X from from increase Accounts million in due and million, Inventories million, up $XXX levels. was $XXX.X up increased to down million. from

Looking items at quarter preliminary year-to-date. flow and for the cash

Second quarter quarter from $XXX.X was which an million, second in 'XX the from $XX.X cash last flow million year. operations increase of was

from increases income also and in increase due The capital. to from working million in capital. year-to-date due working was increase changes to cash in operations income shifts in an And net $XXX.X $XXX.X 'XX, million, net and increased flow was

second million with compared 'XX. for million million second year-to-date the for quarter were expenditures with expenditures $XX And the capital million $XX.X $XX.X 'XX. compared for Capital year-to-date were $XX.X of quarter

compared for amortization year-to-date year-to-date quarter and million $XX.X was with $XX.X million depreciation compared quarter 'XX. $XX amortization the million Depreciation 'XX. was And the for and $XX.X million second for of with second

I'll the call a now hand over for update. to Neil product

Neil Boehm

Kevin. you, Thank

update, bond and product X focus going second, our volumes third, focus the first, that today's areas: to full for quarter have quarter; launch on on improved. our key supply reduction constraints Full and now year; rate For we're Mirror for the Display

of XXXX, headwinds. and disclosed our to regards second net of there auto-dimming were interior new of and exterior the nameplate in feature mirrors features In launches launch quarter XX net electronic rates, previously

XX% strong with advanced in extremely HomeLink the was quarter contained features. launch an quarter, net very and advanced way. Display Mirror leading quarter was second of the and heavy the Full In The launches features

and consumers Now our for an update with customers Mirror increased take through Full volumes. on maintain that momentum Display launches to Mirror. increased helped with Display Full drive continues and to rates have

the XXXX of that stated XXXX we of XXXX our now forecast XXXX, than remainder on unit believe be at units for of current of Full units higher least we our XXX,XXX half Based the our quarter Mirror than first we our and XXX,XXX are to unit the volume. the approximately the be volume In expecting growth year higher first volume. Display results our will XXXX,

been vehicle to second we've globally. We're significant Throughout us to excited so redesigns. see of of a to constraints across have that to in quarter forcing continue product different platforms improvements many execute the see XXXX, supply continued this number grow

evaluate With the cost strategies perspective. a challenges us, our begin and of these we to can designs from majority component behind

we've our costs. the components of due mode but be the Over in, now effort to we to of the reactionary years, an focus incurred increases on material turning the down the drive suppliers significant and bill cost X in designs, we're needed last to components the our

have strategy Our supplier us find very our growth. partners key profitable win-win is sustainable, that straightforward, to situations to both work allow with

launching history. do been to want This working continues team all I you through has challenges, and the to highest an new incredible Gentex rate team. say truly impressive. products at It Finally, company the issues to job while in thank

Steve to and over hand I'll remarks. call back now the guidance closing for

Steven Downing

of mid-July XXXX for XXXX the The the Global Neil. vehicle XXXX production forecast in North on Europe, Japan, these for quarter quarter and Thanks, years last third full XXXX the the XXXX and of as light light company's production vehicle decrease Light expected production is current markets for are to and third quarter vehicle Forecast compared vehicle based production Mobility S&P third Korea America, year. for in China. X% for to of light

this issues vehicle that impact light potential not year. X% year. any second when It estimated year these to approximately important half in do to calendar to the increase estimates in is from For of compared note production markets these is labor last XXXX, include forecasted stemming

this vehicle forecast, certain production light estimates for XXXX. guidance on Based year updating is calendar company the

which the billion. $X.X revenue increasing to estimates for are expected year, now $X.X billion We is our and between be

range We of to we are and now expecting year. year for also end the be bottom as gross for the XX% raising margins XX.X% between for the gross are the margins

expected $XXX still between and million $XXX are expenses Operating be million. to

the expenditures and estimated and be million. end amortization million expected the $XXX and to between unchanged be XX%. between now $XXX still forecast between be remains annual are $XXX rate And is are our We for of is million for XX% XXXX. which $XXX and and depreciation lowering Capital high tax to forecasted expected million our year, to

for for the $X.XX between billion light XXXX, company's vehicle company to calendar year billion. year expects production and the Additionally, forecast calendar revenue based XXXX be $X.XX on current

quarter levels that expectations. XXXX of our record-setting initial than second were and revenue both produced The better

accomplish XX% range to path of cost executing Additionally, improvement profitability, that the wave necessary of to to XXXX. goal we now our us end for of continued gross the our reaching make company by next progress are towards margin and XX% the on are our initiatives improved

by While we challenges revenue our XX produce control the and over to be to months portfolio, continue issues, our should These and of had for record and XXXX growth company. our product about optimistic factors potential to next the XXXX remain the the costs. industry remainder to ability macroeconomic and impacted come together estimates profitability

now today, comments prepared for our questions. we completes and That can proceed to

Operator

Instructions]. [Operator

the first question from Junk with line Baird. comes Luke Our of

Luke Junk

on leverage both and initiatives faster of gross guidance elements you result that Based of may margin. the Steve, wave And respect maybe have some to laid you've upside Can or hoping all gross equal now, initially the this coming than sustainability you're it's gross gross about to and to you're it you some margin appears to then of that of with expected. sooner start margin with are the factors? out next those the moving progressing right sooner margin where just higher, talk that quarter plan improvement moving than seeing are these thought?

Steven Downing

Yes. No, question. thanks that for

-- portion to revenue. of than had well. the was growth a us mentioned on with underlying allows higher new business we've The over had months. higher the before, leverage sales right last anticipated what's lot then overhead You're and we really, faster And strong What the this hires even margins in manufacturing of happens the as of level quite X driving really principle. this we really with

starting helped some but offset show folks themselves costs. see in trained which And of higher getting has up throughput, to the the labor. team been labor gone increased able labor those so the significantly, Obviously, has onboarded, costs improvements have to to

some of and, Beyond estimates OEMs have cost with happening from quicker than in freight what improvements that, initial honestly, significant little were. than some slowdown in the the the been come recoveries a there's costs. in Obviously, our in what's industry, quite actually anticipated more meaningful

we've -- And us raw expedited both that's had our components on incoming the lower but customers. materials, on getting bill so also the material to as costs on cost then for of side freight the helped with side SG&A

down right next improvement trying those to you the get look focused the initiatives, slow pricing so of the when on base. really continuing adjust, increases wave from we're And cost supply what now is obviously, cost to at

components of we into Neil material increases availability then the prices, a of we're focus, We not to there the just base were but to of year based the us of at bill we the bill on the And move cost opportunity as lot had lot BOM material second of through the half this be next and to on also believe designs. year, to mentioned, make focused, to going available. as go higher be focus ones optimized from for have changing years, over that that we on a on next suppliers, of will couple components to supply were sure

Luke Junk

to gave. going implies just a to view way. quite It targeted look outgrowth meaningful in I that at the ranges company updated that wanted historically follow-up, XXXX is you my a be For year for the driving above you've second consecutive the

the is wondering, Should in that? something on the we I we outgrowth? appreciate in Are that XXXX well? that's about executions into Or Just else reflected that? seeing think that expected reflected what's driving FDM gave. Neil higher there update XXXX as

Steven Downing

Yes, there things. are several

definitely in product and continued the FDM rates. OEMs them expansion and One vehicles portfolio of growth new more take is with

one higher outside run couple believe continue will volumes. we've volume been We growth. is to mirror in of significantly other obviously strength that of The a on actually terms show of OEC some year

to we launching that the those. as advanced meaningful features to there's end growth we'll need show And start some start to new year business. that seeing of now volumes we're expecting DVR, like come finally some some will of towards can have year produce features next back, online, things ITM the that other the to the we well starting components coming we for other believe be next that then end by of But

Operator

Our question the Guggenheim line from of Jewsikow Ron Securities. with comes next

Ronald Jewsikow

interior, was quarter Just on this how normalizing this out versus, I stick think, helped of upside. growth -- didn't out just seeing mirror growth ASPs, really pricing I a supply chain breakout given a of to that, probably upside. they the quite Maybe it's think the to pick X% just than big as FDM being bit the upside ASP still exterior much it well. almost quarter But quarter-over-quarter stronger

Steven Downing

Yes.

think almost most of advanced all attributable features of that to I inside. -- is it on really

strength being FDM the really there. So

Some mix was HomeLink well. of did Features the other really like also good.

America us, So out look the inside in pan you And ASP the if the mix really product on North and being hair for overweight well product at especially a feature. advanced Europe side. mix for and us does

Ronald Jewsikow

in pricing clean I retroactive pricing, this Okay. And for pricing, called quarter, you just the ongoing was the like fourth side? nothing know sticks quarter. of there out on terms some out pretty in retro but

Kevin Nash

That top nature basis on was XXX probably points to XX points pricing. basis of the onetime line from the

Steven Downing

and Well, recurring.

Kevin Nash

And then recurring.

Ronald Jewsikow

it's this Okay. recurring, okay, Unfortunately, still through that's but but it quarter. -- came

customer like the stronger prior vehicle and maybe And Okay. demand bit. But demand. or like a you has prepared a quick rates FDM XXX,XXX one expected. take XXX,XXX just rates bit did lines just than remarks, OEM versus that it much sound quite the Neil's maybe more upside versus how the is And of one, reading light things between chain production take supply been

Neil Boehm

question. great Yes,

the with a last take we we a about looking that year -- direction Hyundai, when than support a availability. customers a could information, was So there talked started late much actually last and this to we it rate launching year what due at component of want lot having like higher of

catch up So able and parts seen to this great availabilities to wanted actually are as what improve, they we've to we've in the been that a produce actually able component it. increase

X.X asked have that roughly parts portion our from the increase as million to the to supply that goes is due year, that greater ability a consumers actually our wanted for. XXX,XXX than the this of and big to customers have So for the

Steven Downing

supply year, that volumes for capacity come is not has demand by were interesting they demand question that able the seem we base. to will mentioned, being what's hit like we there is is, online higher product Neil when think finally requesting, last still didn't to very to the the able from the And weren't good I once deliver be last hampered news year. that have been

But see execution excited them pretty at take anticipated. several there's those, with Ron noticed some been probably you're you been and online rates come launches. that better probably and to anybody product, we we than mentioned, been of Neil know some do. brands -- -- there's that So have have better volume the before than some and there's tracking

Operator

of Murphy Our from next Bank comes America. question the John with line of

John Murphy

how I'm grosses. you mean, a kind question I you're the the through of expected? us kind implies other of sort end volume can Or end potentially, coming factors leverage in the on if there better thinking a there? XX% Just of is And give to it really about just first big to if XX.X% on roughly half range. back range? and the are is due then gross low wide just is operating of number something high than curious the which

Steven Downing

Yes.

of We half order for the in the overhead an for the I is that bottom implied range -- in a to something -- disputes. like focused revenue right. from would of more some that from looked due if us -- year then you're think the loss you on range drastic we on perspective. from And kept what end this at labor second standpoint. mean, if I really what that of mean happens math, that XXXX, know the look

always estimate drastic would anything there and to that total means that what an and book but of are product worried that impacted which have OEMs wouldn't your business. a about of happens portfolio you're mix I that product little impact, and

to going coming manufacturing to and that's throughput if better is due it is sales have these And levels. to would and lower recoveries end, now over higher levels at the overhead side. high get we're from overhead really margin because really but of we right do better helps to what continue revenue, where see need operate cost the to On some the time, leverage there to is on expansion

John Murphy

as and of And to we the like conservative if mean, assuming of operating -- half XX% exit what maybe expected. just year on XX% target a industry potentially leverage. 'XX. growing then I with expected on to this they XX% just numbers on better you're the end like for second mean XX% XX% the follow-up is seem of upside, I end seem implying -- the by even high than Those the

on incremental cost what expansion? them XX%, counting those actions, going the exit about to think think you you're -- about we from XXX other to So kind rate point raw margin If XXX actions, drive gross exit basis the leverage actions? the you're from of drive maybe I of and mean, assuming may what that sort cost cost is could inflation operating costs. labor and separately to

Steven Downing

Yes.

you talked just growth this year expansion far gross the the exactly revenue when the going half mean in we higher that the same of exit next year, the this I to part is And for velocity so second about of driven So overhead. helps business. into the sales look heading this year right. factors at of and margin manufacturing level the year, you're be by

control got to cost we things Internally, some better. we've have

get can the yield time, rate with been on costs, So we newer employees throughput. over running, and scrap the we've focus and

we've part have those the And targeted are this goals of all into for year in half next year. heading place opportunities back so of our as that and

growth a really of anything. is get basis Neil's get redesigns part gross year. we bill savings to be product beyond the working are then of materials is on to margin full point, the for a on things VAVE just redesigns cost to expansion are looking and and before in lower to per into of lot on lot Neil the materials able going And the bill at product side that the A next focused of we're and ship that beyond that last to to initiatives get instead done push of trying XXXX XXXX going benefit be

upside it all we those of the be more So hit the numbers if to end trajectory. may talking There things we're about really XXXX perfectly. some than even

to focused think haven't on be that probably for. accounted a headwinds we little the I more we're some that thing is there'll

a might estimates those And so conservative. little be

business and features not business some of we're at above a the and going that gross inside looking But book be everything also to larger margins. new book are of of average

there's what be some in that So the products and we a and those those products growth with to profitability the business, expansion natural of the going of look headwind to know like.

John Murphy

one. mirrors now a right quarterly one you or How maybe into China And are basis? many Okay. last -- just on annual shipping

Kevin Nash

a revenue it's our X% on basis, Well, book of revenue. total about of

unit mean, base perspective still the So for it's more under of revenue our mirrors, because but company. I a little remains from it XX% a it's total higher

Operator

of Whiston with Our Morningstar. from line comes next question David the

David Whiston

you Can me? hear

Steven Downing

Yes.

David Whiston

upward at Just benefited rest to that's of be nonrecurring nice volume been curious with a it great. and that kind things come for as quarter has, a also any finally was more for recovery all in probably you've that time, really strong long I which know of But this back waiting year? just won't there there like and the

Steven Downing

other the But that, of on in margin over price points be onetime There onetime mean you sales, I retroactive some should else help nonrecurring costs had the any last the XX No. abnormal recurring. XX we offset nature, XX of basis everything or on any the recoveries, that sales in wasn't to instance, to for side, months. activity. so incurred pickups quarter than

David Whiston

And the recovering Japan geographies back this wondering really any upward there are particular, the upper in And faster direction others? or if bounced hard than slower quarter? in Okay. I'm

Steven Downing

very in QX. why is Yes. be And Korea, to from we're half you about actually is going most down production that that reason heading being year of our X%. market overall optimistic still mean, the the Europe, the on impact those production, coming But negative is China markets the Well, of side I back strong. the light all primary look global into were if at Japan, North QX, America, vehicle

markets, see only year. we Japan, the rest the but of continue in We in through bit a the recovery really, QX not quite Korea to think, of

Operator

[Operator Instructions].

Family Our next from question Advisors. comes Sloan Oak the Charlie of with line

Charles Sloan

durably all changed OEMs wasn't that be first, issues, a it if has more adjustment I with supply question And have the big to the a is more before partnership not? which relationship with the or Steve of chain after for

Steven Downing

that's great handle as certain the And differently. supplier a I That's situations are about more One with a Every a would working actually platforms OEMs OEMs, we're trying is talk absolutely candidly our we've where collaborative. was OEMs mistakes this very future gotten more together do question. to new industry micro who case all say in it from an as partners challenge maybe with technology. standpoint, on and processing preferred that our made we're we've thing and

gone picked proof product historically, suppliers to engineer we're sharing of We're their But be build make most have off, a proactive own much trying platforms, kind design, until really and of had concepts, OEMs ready. that a sure that information we're without prefer around they started to of or more from. platforms sure not micro make are that sharing OEM certain -- if especially part to not they there an that's designing that strategy, to of an stay OEM with with platform away to move

in area. our supplier maturing a to try differently. every that think as that were relationships handling of Certain more I to proactive So be OEM's

So end in the up we don't again. situation

Charles Sloan

Okay. should or we kind And in then still the reductions of first future of reductions the in expect quarter price first cost so years? quarter

Steven Downing

what -- there's last less very it's be Yes, have -- been. to the much going years it's to going be few than

of on material push last hey, the cost OEMs our some that bill has we eaten with over by One of big ourselves the help increases X we've years. need been,

conversations isn't we ago. to for about than who of happen The get back productivity there assisted that others. Some ones of a where to have tougher to going been out-year long better haven't having material normalized a some those time -- with have because bill about our were years was few OEMs

much past. labor what are eating higher in they the were that we're than costs And

X% of January less -- that going to to of times saw It's 'XX. starting is So some be it kind be far looking OEM that significant a but be lot the we X. the in we're with There what years top will at as than past. We're start QX, relationship. a what won't will in of is different each nearly in X% on as

Charles Sloan

So just operations. a Kevin, fund your on I question have mutual

Can is $XXX in the much On and equity that marketable you securities, that? million cash method. how disclose of

Kevin Nash

probably couple of about -- a of so specific $XX It's we a couple -- investments. about method we million have investments, have equity

Charles Sloan

fine. That's

So that bonds? of million, of How the $XXX versus stocks $XXX million is $XXX I'm much numbers, million. using

Kevin Nash

small. Very

in that We $X just stock. about have income -- fixed $XXX less than of million is million of it's million cash. The around or well That's it. rest out $XXX

Charles Sloan

what the cash? on And yield that is

Kevin Nash

market is -- about XXX that cash income to And a side, some the from the that with we have as move currently. floaters longer well. have with have actually, rates. are lower maturities, -- moving basis securities stuff invested north. the on got we points -- of with The yield that we that of some X-year have we've because continues longer actually to then fixed And yields X- were in lower bunch

But upside move moved quickly. the the out working up So we're so we went market fixed down rates if strategically other opportunities. to income of them just find our way through trying those and when

Charles Sloan

Right.

you the $X.XX, $X.XX This your even probably I you you at say, cash when know, is and think a think so about the investments. cash and adding, your share? look about don't there ROEs And and nonequity core operations, the --

Kevin Nash

probably. Yes,

Charles Sloan

Okay.

hurting is for And that right, your long has a and so ROEs, obviously time.

and what And so not we what back I'm make to even actually can investments the investments more? overall, saying buy shares, ROEs -- improve can make but we

Kevin Nash

Well, that's again strategic... I mean, that --

Charles Sloan

we're Because shareholders.

Kevin Nash

company, shares is of our increase allocation just ROIC always preference and as our But we product it mean, we as our sufficiently combination flow to our and like we've -- funding really a think cash. development. remain overall No, that's Midwestern holding versus because R&D that realize ROE preference. new as or as about relates the strategy are nimble that as capital I our ongoing do we preference, to Yes, talked a far acquisitions future absolutely. that's buying the of cash back I

in successful you if for will, quickly the been able or is financing. being acquisition an we've past how help dry, and of powder cash of move part But the having banks to without

really approach liquidity a have relates it strategy, to So and as we continue and our to balanced been that's availability.

Charles Sloan

the on acquisitions that that would horizon are would you there that so some cash help? use that any of could see And

Steven Downing

looking mean, I always for focused Yes. opportunities. we're on

the us. of things haven't with sense that the we've to is one lot the a think I of made acquisition struggled targets of just valuations

so hurdle versus And the repurchases rates profile at is return saying, the of of one hey, we is look acquisitions? share what

look those period to of have you time. at long over a And

tech we've declined smaller over so we have been really technology We're look Unfortunately, done new an far, much hoped. most we've plays, income last statement as not it, we as opposed haven't of the And had valuations had a to of to acquisitions years, and acquisition. lot. continue existing startups, few instead the

the to which were optimistic repurchases, share something and profile has, the things that interest not We to valuations the rate I investing some to which were given degree, was to but higher are go -- pretty were to and drop. better extent happening I going was than and some we And the to that in hoped to acquisitions it not that that acquisitions. R&D ready extent of small and had acquire technology a return market

Charles Sloan

Right.

Okay.

So generally But separate question. you cash much how need. maybe is a just the that's question

Kevin Nash

$X more. Just

Charles Sloan

And good how more the strong to year, of X last so some out bad side. forward Yes, the of other and hopefully, instead getting change work cities, to we it's from for on future. are of things And year the seeing on wonderful operational exactly. side. will just that a in you Well, look luck it's right, a hear -- tale kind to this of

we'll companies Reserve need that to raise. the forward and don't to look Federal anyway, great Gentex seeing of more capital minutes quarter, So in

Operator

with from BNP Exane. comes line the question next James Paribas Our Picariello of

James Picariello

Can hear you me?

Steven Downing

James. Yes,

James Picariello

you a from half be seeing as the think separate on would the your right? progress perspective, front. supply This So basis, where pricing year-over-year cost in about recoveries the trends net we from a on are chain sourcing second deflationary

you're where seeing the costs back come in down curious Just actually half?

Steven Downing

Yes.

at to year, metals -- half pressures last see starting deflationary You're of better months. plastics starting you're really the the in in over some They're precious anticipating really What and is XX second see versus to really last metals. some the we're high is and cost running for really sure. levels some freight what

we're stabilize, continue to So at better. those expecting not get to if least

inflationary some through side, to the engineering pressures. able and going that We're that hoping be really glass to side On supplier co-development seeing the and through those. still electronic some on changes some we're offset we're and

that's to work. take But going

know do business growing suppliers. the just of we book can we some so through And of of these the

In of to changes going we cases, cost have some order to this our other make potentially suppliers, to get Some we're supplier get to can in by consolidating savings. targets.

James Picariello

discussed. Got helpful. are neutral that that's baked-in XXX super guidance on for in toward point? is closer the at guidance? is was once that we No, it I pricing in the it. what then the recoveries this positive And the points to or front, net just Where basis mean, trending that assumption

Kevin Nash

between that XXX I -- temporary That's I we're end year. realized we towards the price points. far planning of basis what's what mean or working Yes. what That's mean increases. recoveries what to permanent the in the we're towards for tracking -- close kind we're by of been and so the the and

James Picariello

plus quarter, XX% points be were XX it. is you growth to just lastly XXXX market, changes growth of LVP, points X markets the calling way about then target. over on year, now plus right next the for Last a And right X. thinking LVP Got of revenue that global as instead XX flex our the growth -- the next we Is for points with of year, the the for marker? it -- XX as global for

Steven Downing

of a that looking half stance into as you range. are through right starting the customer in XX% X% next and at we're now aggressive somewhere is say lot would and bit year. the probably What to to little why saw us reason the up more second orders a I firm take

massive for instance, currently. wouldn't we lower so are what they FDM, in than changes rates, on take And expect

we're especially us in year, say, confidence and to the FDM volumes the expecting on rates and this half first really, retrench so in gave of strength okay, features. the not technologies And those take any

business look incremental looking is what the what So and that's estimating like. going at we're to really

revenue And standpoint of about the on into next product year that's we heading based feel good -- second portfolio. year an overall pretty where half we're this the from and

Operator

We have a Guggenheim the line from Ron Securities. of Jewsikow question follow-up with

Ronald Jewsikow

Yes.

guide. XXXX quick on real Just the

bit like next just update either driving the be launching second on of the talk might be product about year? was a But the the new dimmable I there -- back could next side surfaces understand in Sounded that driver anything any year. half half product that. new in early something it to or in monitoring of launch

Steven Downing

Yes.

right working side, we're what we're think underlying area the on sure tech. really making on device large on I sure is focused now the making

and traction So next it's the that the features really couple we're not marketplace have of at half next years, over to other year. back about LAD showing of been of CES launch in the a the last couple expecting hit some those been year, but we've getting late of

Operator

the concludes today's to back closing to session. question-and-answer O'Berski for like That remarks. Josh turn call I'd

Josh O'Berski

today. call. Thank you, time our your weekend. and for questions Have everyone, concludes a This good conference

Operator

call. Thank participating. This today's you conference concludes for

now disconnect. may You

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