Gentex (GNTX) 26 Apr 242024 Q1 Earnings call transcript

Company Profile

Participants

Josh O'Berski	executive
Steven Downing	executive
Kevin Nash	executive
Neil Boehm	executive
Luke Junk	analyst
Ronald Jewsikow	analyst
James Picariello	analyst
David Whiston	analyst
Mark Delaney	analyst
Josh Nichols	analyst
John Murphy	analyst

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to Gentex Reports First Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please be advised today's conference is being recorded.

I would like to hand the conference over to your speaker today, Josh O'Berski. Please go ahead.

Josh O'Berski

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

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

in information the Quarter Gentex contains First of on release call XXXX Financial forward-looking conference Results website. Gentex This shown earlier as within always Gentex and the this press the morning Reports statement meaning included from the safe harbor

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to Steve over remarks. Steve? I call now hand will for prepared the Downing our

Steven Downing

way. the of out that got We Josh. Thanks,

primary the quarter million the beginning actual sales from being by expectations. forecast, to also vehicle production light resulted of in XXXX, quarter X% production vehicle that lower approximately $XXX.X original fact declined which levels our in light to the For It's declined net that than revenue X% last increased million, versus first markets. despite year our important of note $XX

Mirrors underlying was the in Despite revenue the rates of outside of by case strong our because revenue a other for growth the and production, rates outperformance which vehicle and light has several lower-than-expected record, versus launch growth only represented was mirror XX% last the growth Display been for and features quarter driven first quarters. but advanced our the quarter higher a take in company auto-dimming increased not also The content Full the strong market. business

number have The light vehicle is production. of total electronic the reducing additional including to features, revenue technologies by opportunities, executing while on we additional our in been to derisking our beginning growth increase dependence business provide investments work

basis year. made For last of result the customer the margin increase was efficiencies. reductions, points first the first levels, XXX quarter XX.X%, quarter after of the this The material an of first which of year, manufacturing-related was changes of price and the raw quarter versus was sales cost gross higher increase XXXX

compared make good recovery of XXXX, on margin the to gross the declined basis points. progress to our until very take XX plan end of to margin would XXXX estimated complete. the fourth continue that We we by When quarter

recoveries. approximately the However, fourth important cost year, during quarter last stemming customer benefit of that onetime was there of it points basis XX margin note from to is gross

for We below mix, focused year margin year line despite the raw quarter Further on of the last of we execute in margin revenue with have remain margin and came confident Additionally, continue further levels dependent in will gross year. that our rest in established remainder forecast. manufacturing. reductions to expectations plan recovery improvements this efficiencies in in gross that that cost are the gross the this material and and beginning of targeted product levels, throughout was the sales we

sales operating last $XX.X of first engineering in expenses and related to primarily teams of staffing of as Operating and expenses expenses fees professional are addition the acquisition. engineering, $XX.X the after due to in were quarter million the operating quarter during the the well as increase The first compared million eSight year.

Our operating expectations are increases pace growth expenses our expenses year, primarily additional in to the second Operating the half for trending with focused in some with the continue full this current forecasted line expected on at with R&D. year. of are

invest As technologies, we new new products continue cost for awards, and initiatives to bill in optimization of our VA/VE of business materials.

to operations higher levels for the diluted Net XX% increased to per share. and earnings of result sales a XX% million first XX% increased $XXX.X of million. gross the XXXX per income to quarter share profit, As from $XXX.X increased and income $X.XX increased

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

Kevin Nash

million, This the the of increase were net a Thanks, by net sales, was first the production $XXX.X to a to Other compared first X% in first vehicle Fire decrease which last in $X.X year. dimmable quarter driven in compared quarter 'XX. to our and million light Steve. mirror quarter markets was sales quarter for million $XX.X quarter a despite $XX.X to window sales auto-dimming Protection million first of of $X.X of aircraft the Automotive partially by million compared the declining in 'XX. the first offset primary quarter X% X% increased sales in in unit reduction by in shipments by

Share repurchases.

of into plan. committed macroeconomic and We factors During the repurchases appropriate. issues, XX.X time remaining XX as repurchase capital our company of repurchase additional average in to X.X announced share common $XX.XX. deem shares quarter, shares of previously And from account remain time we strategy. available of million 'XX, repurchased first take will million will of has to approximately shares the stock the from trends But March price support other for market and at allocation vary we an

comparisons $XXX are of long-term of of the 'XX. Accounts $XXX.X 'XX up Inventories the million, Short-term fixed due were and $XXX.X was $XXX.X sales XX to up investments at were from as accounts December cost $XXX.X and $XXX.X to equivalents $XXX million million, March from Looking as Cash million $XXX.X $XXX.X of mentioned during sheet. investments. the million. the compared up and balance increased million. from company's balance income receivable The which well from and XX to million, cash investments quarter. million first $XXX.X payable method million, level higher and to million includes equity combined compared as were today sheet

at preliminary flow cash Looking items. the

cash from year. million first last of operations of XXXX was for million million first quarter first in CapEx of the and year. with for compared $XX.X first was the quarter quarter in the $XXX.X $XX was First amortization flow million $XX.X million, quarter quarter the quarter 'XX. to to depreciation the last $XX.X for $XXX.X And compared first compared million,

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

Neil Boehm

electronic and company new net of the our XX% Thank auto-dimming there of were features. and quarter since you, mirrors launches quarter exterior over advanced highest XX rate This the Kevin. launch XXXX, first interior In XXXX first net launches is the and nameplate were features. of these for

For the HomeLink the led advanced outside quarter, features Full Display in auto-dimming and way. the mirrors Mirror,

Mirror for Polestar. for Mirror, a We're Display to Full excited Display customer our Full Now announce OEM XXth update.

helps global Polestar be as major available to addition the of different Display customer its demonstrate appeal X will Full our of to in Mirror well architectures. further on vehicle OEM shipments which Our Polestar as this the for all technology of this markets vehicle, The acceptance globally.

technology In growth customer seen have the of launch, addition customers. we existing the great OEM new expansion to and our at

are Full shipping confident Mirror in the OEM of XXX our unit over announce Display customer. shipping We Also shipments. incremental we in we at to are additional Mirror XXXX XXXX FDM FDM on Full least expect to an shipping new guidance and Display X nameplates XXX,XXX globally, units above shipment currently XXXX,

production. an to products automotive project Calendar The launch teams and hard prepare as for year are year. XXXX nonautomotive program and started the off busy Gentex extremely working

and that technologies build hard team in the putting we growth at While work the to and ensure appreciate flawlessly. ship prepares the with we're execute and technologies. team dedication exciting about seeing continued is our Gentex operations excited these all to We're the

we're as are in These we currently existing for our and while execute on lot move and changes products technologies, are as launching stabilization of programs into we a well the material as especially recovery to of we to reduce VA/VE critical margin Also, opportunities continuing bill evaluate XXXX. the of have process. plan, launches

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

Steven Downing

looking XXXX compared X% XXXX. by Neil. China. to XXXX, and on forecasted Global at Light light the forecast the expected decline markets plus for for quarter vehicle mid-April to Korea, production when is S&P those vehicle primary for quarter markets same in these XXXX quarter of are Mobility The Japan year. years But for XXXX increase North and full our are our based America, of production further of the the X% regions quarter second last production the to markets, vehicle second primary versus XXXX current light and forecast Europe, second Thanks, in of

for XXXX, primary be calendar when our vehicle vehicle comparing is primary calendar markets. markets. flat to when China our year the to to flat only X% year, be prior Light forecasted For down in but light is production with markets, production plus our calendar comparing year our expected increase Vehicle XXXX year is be for when in expected plus compared but China XXXX, light by X% markets versus to production forecasted is primary primary only

changes be $XXX $X.XX expected are our Given to are billion be to Revenue provided and guidance the between XX%. expected are no and making be expenses for these production billion. expected the $X.XX Operating XX% volume to for for Gross XXXX. estimates, margins $XXX year million and million. we is previously between between year to

forecasted is and $XXX and Our and and Capital expected be between are depreciation estimated between expenditures $XXX $XX rate million amortization million million. tax be between forecasted be And to million. $XXX annual to to XX%. XX% is

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

last the by We versus and growth to to in consumers, technologies including much XXXX customers record-setting product excited growth that content, see pace with new that are have for of driven years product for our in generate expansion of we of strategy revenue the electronic with is advanced market our The feature technologies. on we and XXXX being outgrowth and company. and the are the and our new several invested several profitability begin revenue and that over succeeding demonstrates

but see, improved I'm with Revenue progress our toward been to outperformance pleased exciting very also profitability. has

XX% our amount execute gross in accomplish cost done the reaching a a While be by to initiatives, as remain of improvement tremendous we confident year our remains to work additional XXXX. we of to plan range this end ability of margin XX%

to That comments completes today. We our now prepared for can questions. proceed

Operator

[Operator Instructions] Baird. comes from Junk Our first Luke with question

Luke Junk

year full with appreciate indicators it. for Maybe if just we any could FDM updated start volumes,

previously, then provided take detail quarter seeing on more which strong. talk in changes rates you that and just the we any customers, like at reiterating finer You're into that very but numbers envelope, the in guidance hoping first it seems can you're maybe seemed back on

mean with to year potential trying that full reconcile Just upside? any what and to it might the

Steven Downing

would I for of beginning say Yes. initial that we're forecast. volumes year, right the with on FDM the line in year

rates, take were be. at we like little end pretty ] feel year we launch be more rates take predict If take probably indication than when a to were you what at a we estimate launch, to had we kind to look take the year conservative going of tend difficult If last this rates. [ we hair mid-cycle as rates good especially anything, are for of

of FDM on we're ability with and to start we the always a little it hit this relates pretty we've how look the and such year. those rates Obviously, confident to how at -- for year, what's But has interest back been happening to numbers half really what's in strong OEMs economically. as bit to of risk in a with, our there year. the we the off which feel you long going If comfortable we've year now feel been on production many

Luke Junk

gross And margin gears margins then the to switching from just and walk here.

to rolling of especially much unpack negotiated will, margin more if opportunity? remaining this that forward. from trying working quarter going supplier I areas on somewhat understanding, things in of mechanically was lift, the Just you first based you're thinking concessions year on how already versus my guess,

the versus the margin square year to XQ full trying just well. I'm as So

Kevin Nash

Yes.

XXXX -- as -- customer you the going price a to was be know, reduction. lot in So work price about of supplier

that's the So beneficiaries probably bigger of the one in quarter.

-- compared material the last look So basis improvement last reduction versus of is about year, to raw quarter if at points first you year. XXX price

improvement. and the XXX so is manufacturing efficiencies, XXX overhead of about basis to Our like, points

basis labor, the customer. probably that was XX by then duty about scrap yield was points offset basis to pricing that points. and look to You points of of was XX at and Freight reductions XX improvement. basis XXX And

And where XX.X% margin in from a so ended to the XX.X%. that gets of you of from the kind quarter we ballpark

Steven Downing

then Luke, to is now leverage, be we a provide should really the QX, the expect by some the how get is to XX% one business is key on QX Number Yes. the one driven from PPV. overhead next couple really through And focused in areas. XX% to of to growth biggest going

of our we talk about So is getting variance what year when of PPV, base. that purchase the we from price refer beginning the to from the year supply to we're end

always First quarter thin. little is a

We have left prior from inventory over years.

So in get the full you QX. don't read-through

would base. tailwinds margin from some the supply from expect price we So reductions

throughout and looking time And then really side, expect you're efficiencies the year. the yield manufacturing at that loss on scrap over to achieve and we

Luke Junk

this rest what in income year helpful. expect And item we was just expense smaller all just just swung but very going is of should there this the quarter, what line? and That then a other nonoperating, on to that

Kevin Nash

our some investments. really investments mark-to-market of adjustments adjustments more public fair of then our combination of and Yes. of value some of tech That's a

little So or through some go that will that bit be volatile as investments mark-to-market again, new is stuff conditions. of a rounds to subject you of

Operator

next Ron Jewsikow Guggenheim Our from question Securities. comes of

Ronald Jewsikow

else? at last mirror of should be year. of? I vehicle same Looking specifically, light Is quite a Or comparison North anything versus kind it's timing period some aware X% there delta American versus down big we issue shipments production. the guess,

to kind Just shipment what of the a get declines? trying of unit drove sense

Steven Downing

the what's think issue, shipping market it about, deployed caution shortages too, happening timing supply getting trends happening other XX And at always months and levels. then everyone I when that versus inventory. back when imagine OEM was some There's timing exists. started about ago, you're There Yes. to issue is time happened. talking you're Any a and they're was stockpiling

have out they more those reason more definitely I and and market So overbought certain some what's more that had sure is impacted that probably and ahead that are of think OEMs others. OEMs, to we so obviously, And primary why know have later some there the the may -- impacted issue real you in-house. particular, in big change shakes make were in been slightly. But trying were struggling the was once going OEMs, then some they from saw they inventory on, certain realize given pull who than

it's So mix of issue. really more issue a I'd more than even say timing the so

Ronald Jewsikow

Okay. Yes, gross they quarter pretty strong that the makes I your margin to light I line with of, And guess, margins. exit commentary. based in were perfect XX% lower sense. And in think, XX% on revenue expectations on gross despite first your rate,

to end rate? to So expect helpful. on touch well exit I you the XX% that year, Do expect here basis? could from on the be a And reported us help color as would you quarterly any characterize guess, this PPV you of get by

Steven Downing

don't the I by the of get we'll XX% above think the end year.

of this still rates growth I is But on think that's more year. that a of by end range depending achievable say absolutely the midpoint of probably kind of 'XX in plan 'XX. I'd

-- the to point, it given Ron, loss where look if than we look at you we changes. $XX So had of million at if what's despite on OEM better the QX some going was started at your -- revenue anticipated in initially you given

really improved onetime sequentially, fact, if here. the And actually we're So, in about that from where in margin you we of pickups feel sitting QX QX take last good out year.

a with we feel side -- range that supplier and by -- the of lot year. little help that of end the in strongly of this the sitting really side PPV QX, from And cost we midpoint not be from very so or should

Ronald Jewsikow

it improved move as release given vehicle the production that kind auto release, called if kind these And the of sneak any was just your one on should the interpret in could model. Steve, I that? to Perfect. And we light line new of you Can of I to in ability elaborate of kind in. beyond more sight that technologies? you CPV of out guess

Steven Downing

Yes.

inside there's we're started X starting to eliminate to the Obviously, total risk major a product is of starts technologies, impact when as That auto-dimming in your if to an about formed, automotive completely. points the you with get acquisitions, total make some those might sets introduce think it hundreds lot of talking whole the some need some you're light I But that have we supplier,you're sell higher Obviously, order into factors that never range. partnerships obviously to there. to versus to certain from going associated one base Number of at production. ASPs. in away a $XX. the we've new average that when much in revenue, dollars vehicle invest have ASPs in is new mirror feature we technologies automotive an start of of

start in like even -- to really to can if industry. FDM, right, trend there's the a You just can you negative grow start

the of making consumer, investments And to also that we while several so in try had dollar adds and automotive all one lot and the production. sure areas to we And beyond eliminate to last on vehicle focuses some happen that, of focused what's over a that been on company years time the of outside as know customers other variability then of automotive. find tech really to have we happens light is going to to our the a the content need focus we've value hey, that saying,

other the outside going we're growth product early automotive There's when So launching year we about, to look opportunities later eSight place that think technologies segment. of of be excited the because a this the launching, lot year, that about some next there's we're we acquisition.

Operator

Picariello Paribas. comes from with next question BNP Our James

James Picariello

still effort? already what your redesign benefited potentially that what has are My on first this come on chip efforts. extent to question To actions is from and Gentex just

Neil Boehm

overall design there's Yes. up, From a or of versions. product from a a an -- couple if chip different redo of design, chip back we

properly So for I want to it make sure answering I'm you.

this the get We of some shortages, reduction activity, of So early initiated VA/VE start of cost pieces. into that really of that. seeing the of but late some until year, to of component wasn't back we the 'XX year, benefit initiative more we any like about redesigns the 'XX, before the you that that designs last VA/VE at won't all end see pickup

we and to costs we got are we progress that. go well. can other We've pull in continue bond as of out active, through evaluate that designs launches we'll that try of as So to it

Steven Downing

Yes.

components of is end forward a end you really So to redesign if shipments. the and we was and going sure happened the before make focused to Everything everything activity. at that about more on general 'XX of say, as that the side, all trying just at look VA/VE done rule, get it be can going on make 'XX to

James Picariello

opportunity we Got think China that into market. as it. then to really about And tap the

follow- a CapEx, to there's then CapEx, just your toward quarter, in if in million wondering got pretty million million that of first $XXX light the there? Just high-level progress $XXX on on range the update $XX you've And my on came range.

curious for timing Just the the what look year toward there the of investments rest like that drove what range? and

Steven Downing

Yes.

order this From order, building year with say really large I underway So in a yes, the a issue we I'll in you as on more we side, the got anticipating. That's projects if you look place were you actually at lighter than equipment. the well. the receive to definitely timing CapEx, got time little reverse came But several than would Obviously, go you. it CapEx anything.

the ground the especially be definitely of for sure. think projects footprint the Plan capital up the we to half and to equipment weighted in in. get for in larger will and is investing So towards of place, try the CapEx we've that the place year, second been make some

know we those If effort. that some going looking CapEx at prototype devices, of engineering -- projects you heavy Cap effort and especially heavy technologies, draw large to they're they start area so are

are require CapEx. some those heavy to going of All

towards believe of of is investing excited because we those be will market interest lot for technologies, there a little and back the more we're the a in year. So in in this those the we half opportunity probably

done what mean Right it's at amazing years look versus now, grow. primary X base our the is what obviously, China light yes, front, in wins coming vehicle auto-dimming. lot today. China opportunity there's are total that of from our of when Obviously, market we there. I where and percentage continues the was ago, it auto-dimming know a you and outside production to focus On are

FDM the as side The electronic On a start in Whenever especially increased is form of we last do in that lot there. and side, to over couple well feature really competitive though to difficult you're projects advanced we factor, X heavy the to. mirror duties the have content, a a years our have side China. ability the limit tariffs would rate a like grow at importing the

support So built grow continually it's sure at supply the of to in got model we're looking that help trying chain that market. something inside and place to make right we've and

Operator

Our comes David with next from Whiston Morningstar. question

David Whiston

press just in beyond revenue curious have drive feature been called what release guess getting FDM. some out I advanced that I you features take was lately outperformance? rates growth the better to

Steven Downing

Yes.

have shown actually that been internally we've for about producing really held of, strength at up mean, -- that really obviously; have we If revenue; HomeLink is features the while you FDM, DVR really good well. a, combination talking some that ITM to projects; has I back a look a is

using of we've drive the going years advanced we kind the content the garner launches by of at starting through the monitoring obviously, add Beyond a those driver are quickly of interest. But the are usually believe referencing lot locations. CES a other that to being we're some about geography are lot interest a mirror that next a, look feature help product newer shown of to we're what's what current shown able at into technologies lot to cool and several that vehicle if we've combination in cabin monitoring. -- are, mirror still with features our that, as of they of CES show, existing going at platforms, a the growth, And kind pretty over and you

David Whiston

are international driving what exterior And growth? regions Okay.

Steven Downing

also Europe, at in if other one, as been total if we've into the although as market you lot success, if lot you Western on and look our quickly. a Korea. standpoint, big -- of the from So a had of Obviously, has not where obviously, you quite and outside look a at Japan China auto-dimming outside we've growing very growing penetration the volume been mirrors,

David Whiston

mentioned this some building year. you projects And large

exterior already plant. you You an guys had completed Are another building one?

Steven Downing

a We're this and year by our for Riley be occupancy and probably that on new should midyear. will North plant -- building ready be completed one one campus that

If an you announcement at that we had delayed one, support other to that look issues with. a based some made daycare regulatory we center the about help on got need

So center we have a we'll to the soon. we'll here this production XX for work we year -- that be brand-new then to getting going be completing be into been months on starting last that And XX distribution ready that -- on as have working really for will well.

David Whiston

And going can you remind me what's in North Riley?

Steven Downing

that features. some area inside devices. R&D large our expansion be There's auto-dimming well. as area building for So that also There going of inside of be be a combination will to of will

Operator

Our next Goldman Sachs. question comes from Mark with Delaney

Mark Delaney

the Hoping a cadence revenue year. you more dig little the for could on bit

compared little I'm a LVP was you launch bit the headwinds region lower is than timing? by how previously customer some talk perhaps in more that a think opinions is you perhaps a be maybe about if to spoke to due program you any there sign different you for LVP little out is that and better S&P see and if You hoping expected? quarter, the shipping where understand broadly have And bit purely on forecasting? to first Or year to

Steven Downing

by of a OEMs wasn't was expected. there really pullback say that would little I bit Yes, definitely

more question more couple think this year? like more year, little that it we've of kind trend -- I obviously, Or question, million bearish So is the always S&P's just served just on of I and is of a our that's projections. a years, a the trended that our throughout onetime the We've kind well dollar of forecast. going little been continue us to the occurrence? And favor. really conservative, been really in terms in that's bit a think last

is China the you of at rest think of look I market. kind most the you regions, throughout the look if at year, the growth the If overperforming of

at look Europe, months. kind then and really those you especially the see moving if we relatively Korea, North of America, So next XX flat, Japan, Western through

model. based over-the-top And our type a forecast of any on not stretch so They're regions. of that is really in those volumes one by

overperforming therefore, feel don't back we settle So to and like needs it's down.

those you are we pretty of think good production terms of it, stasis vehicle light in at If points those look in each regions.

When you ability start kind content. to at look our what's outperform about of our you -- talking driving that, feature

deployment talking some vehicle at our help look light content at customers each dollar trying we they're fact the really offset try never about it when so vehicles, to for our their of well. was. higher-end back work really of of come That us we as to well. OEM, is total those look on I products drives our OEM making technology and to production on fit to the including it customers focusing each that OEMs, And mean consumer fact what the the with profitability where how sure may hard revenue suits and

Mark Delaney

you grow to talk in some America others. international of OEMs domestic expansion domestic region. regions, mean you opportunity some your think the within China efforts? China. or about better was China Maybe international South question Polestar can other I OEMs spoke in when you I understand announced and today, think of the about selling when other support Europe in and trying But you their their of China opportunities the win the those of of ambitions My some businesses to some the about about to

Steven Downing

Yes.

a model. interesting I very think it's

of right a going of to the take import now to a and where where you which in North produced given of fact market, be good trying and global we moved here. lot is to they're out over expansion to that are going be time, the cars in politics focus terms the who's American If have footprint where vehicles

If you in American closer help think the capitalize support about we're really well America, to to production like North structured feel market those. on of we North

completely challenges obviously and something biggest The are we then is if exported. in produced China have

of that geopolitical there's in side We obviously a bit us have now tariff of the little -- puts the disadvantage. a right structure

to domestic high-end and more China electronic creative want as capitalize Especially we to content, opportunities have get duties the on competitiveness. that's really relates because start so affect And when in to if market. our we'll it tariffs to those the

Operator

B. next comes Our Josh from question with Nichols Riley.

Josh Nichols

to the Investor Day In the the production vehicle at vein talked model, better come Great expected than margins quarter. recently. moving beyond about of in the light see your for you

OEM X offering of you at the type that? provide on driver could could monitoring think like? just year. you this dynamics touch later competitive and I look maybe something that if the of also update kind may be of in-cabin of progress kind updates with And I like least later Any of some releasing any what think, on on, If opportunities? earlier you

Steven Downing

Yes.

how and the Day, So and like right. manufacture Investor we and It's At looks it to you're given our very difficult space. having a talk did Analyst absolutely build awards and achieve about to we're product several trying what that in really content it.

that complexity. launching in product a that through do we're good at. expect a their of end right engineering those of type 'XX, into that -- when there's we We and you to of launches you're of with we're where So move launch of But the whenever several about have 'XX very now Obviously, teams. we product. of feel lot learning

a how of And portions that set and competitive of quite so geographies the a different it's product. on of CMS, few the DMS or in could side, version in it who exciting If it's do vehicle. on like DMS players, especially terms what -- there's looks baseline the

what ago, years so several or the center industry, most of of at all you the locations of the focused steering been And over stack for of if focused on look cameras. we've was behind couple on wheel years, a kind last right kind

get to pushing on trend And feature position higher starting in that's vehicle see feature we're and in the sets what now OEMs in you to as increased hard can vehicle going could an are could are starting obviously you where automotive so come set. up with to a the grips you We other cameras get. really

revenue dealing be generation. So margin but great DMS, more though, with competitors whenever you're going base there's profile to lower

the expansion. we're execute we add these first and terms see as And for opportunities aspects product. where on we making additional of Longer functionality few features, term, margin focused so the launches, in sure technical flawlessly that's we of what

there's ourselves, only and feature really acquisition beyond a for Israel that not drive can the full believe And why that's profitability monitoring in we OEM we monitoring, cabin set focus the made but well. so because revenue for driver customers to on of just there reasons our as one help

Operator

BofA. next question Our Instructions] [Operator Murphy John with comes from

John Murphy

have flip this mean, margins Just there and filled on doesn't up gross this campus that done you I could of like not that's XX% ramped up, exit potential year? that margins gets more end margin. But about one we total on That's question side, upside build the to the on to expand. facility, there's seem really curious, and is of guys this of when just rate recently. at of sort facility margin, been North what's 'XX and in 'XX it's of this the in historically, part when way year. talked see Riley to be your starts a you happening some gross I'm kind XX% a but the is pressure gross

Steven Downing

Yes.

getting it at 'XX and I we that drive for for further expansion fill but end and depending with, the to obviously, the not what to opportunity, major reason impact start year, used this the what kind of it's think large have. what of comes total that the it negative of one the and that online -- products law Number the beyond we're starts on is a of the probably is. then really company. it There plant throughout revenue as of numbers. adding doesn't just have there's business plant why mix -- sourced is X Part reasons

on of we're percentage overall grown a easier. that adding we've of incremental basis absorb less plan as the impact an able business, is so the to So

we how bring all actually Instead is product out do how period. much to event cliff over scale on that able adding this better a at you're try we're of spend having controlled we better to and fill. by where able two fashion. We moving it's help massive of time people revenue actually once. we're a Number -- B, to a plants likely to A hundreds and event to it more where of buildings existing in

once usually, which soften the through online, of beachhead ramping of plant that a us have so that on helps flowing comes we portion revenue already of new And facility. kind a

John Murphy

X% And second helpful. but little that a was on volume, a expecting. then was maybe down in the bit just up incredibly That's good, quarter. lighter one Quarter unit were than we

or As something what guidance, unit that. the us us you'd we unit FY Is And 'XX don't kind giving your now? you volume us be haven't recall for in that of growth comfortable in about definitely you giving I are at volume least, forecast think given thoughts 'XX?

Steven Downing

of some unit do to but that those is obviously, a to able the And even kind if of look customers. top we of moved away on we've then the rest estimates the we've OEM with focus China volume a do content, reason you standpoint, to tend of mix predict the there's -- volume and markets. just as from at, takes very offset then Honestly, why are We in lot even the that we harder in is geographically our though between growth and from because actually with also market, they than line. grown cyclical. puts issues. What we're And understand

predict. this and getting where, a but didn't So, But payoff side. headwinds a than on the the offset to example because unit it, we quarter on frankly, some a is the we quite harder there's prime more to able were love, FDM yes, volume it's content that dollar little were we

be from Number and number changes, working units on. we're to And to so of in we're susceptible get to order certain then on change less to little that what hard time. to total really dependent may is time OEMs geopolitical revenue issues, one growth. focused to geographical mix -- a And two, struggling less also kind issues be

John Murphy

and you Yes. positive. of like on seems cost the unit being mix both be just both It may

that's So I of kind asking. was what

Operator

not Josh. at showing time. to over this questions I'm like to And I'd call turn any back the further

Josh O'Berski

This everyone, a today. We your weekend. concludes for hope you great time our conference and participation appreciate call. Thank have you, your

Operator

does conclude Ladies and gentlemen, this today's presentation.

have now and wonderful disconnect, may day. You a

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