Gentex Corp (NASDAQ:GNTX) Q2 2019 Earnings Conference Call - Final Transcript

Jul 19, 2019 • 09:30 am ET

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Gentex Corp (NASDAQ:GNTX) Q2 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] Our first question comes from Chris Van Horn with B. Riley FBR. Your line is open.

Analyst
Chris Van Horn

Hi, good morning, guys. Thanks for taking the call and congrats on the quarter.

Executive
Steven R. Downing

Good morning, Chris.

Executive
Kevin C. Nash

Thanks, Chris.

Analyst
Chris Van Horn

So just on the gross margin guidance coming up a little bit, just a little bit more detail on what you're seeing, is it around the Full Display rollout, is it around some mixed tailwinds that you see, is it cost control? Just a little bit more detail on what's driving that.

Executive
Steven R. Downing

Thanks, Chris. It's a combination of some of the things we laid out earlier in the year. A little bit better participation from our purchasing cost reductions that initially we thought were a struggle. Our teams have done a great job of improving that. We've offset some of the tariffs earlier in the year and are able to mitigate some of that going into the back half. But yes, the mix is going very well right now. As the weakness in China is playing out, we've talked before about base level products into the China market. Actually that's been a tailwind for us on the margin side. So we're seeing a lot of that stuff continue into the back half of the year.

Analyst
Chris Van Horn

Okay, got it. And then on the new nameplates for Full Display Mirror, would you be able to give us any more information on who the customer was, are they passenger vehicles versus trucks or SUVs, anything else you could give us there?

Executive
Neil Boehm

Yes, absolutely. There's four new nameplates specifically. There was the Cadillac XT6, there's the GMC and Silverado heavy duty and there was the Jaguar Land Rover Discovery Sport.

Analyst
Chris Van Horn

Okay, got it.

Executive
Neil Boehm

Got it? All right.

Analyst
Chris Van Horn

And then was that -- was the -- is there any difference in content of those versus camera and screen or both or one or the other?

Executive
Steven R. Downing

On GM, we're Display Mirror only and then on the Range Rover we're system.

Executive
Neil Boehm

System, camera and display.

Analyst
Chris Van Horn

Okay, got it. So if you look at maybe from a regional perspective how you're thinking about the back half of the year, we've heard other suppliers kind of be really cautious on Europe and cautious on China. It seems like China's kind of building up a little bit more from a penetration standpoint versus a market risk perspective. But I guess could you just comment regionally how you're feeling for the back half of the year?

Executive
Steven R. Downing

Yes, I think when -- like when we came into the Q2 or in the Q1 call heading into Q2, we made some comments that we are a little more pessimistic than what the IHS data showed in Q2 and actually our forecast play out almost entirely the way we had expected it to. We did make some manual adjustments to the IHS data which actually served us pretty well, helped us plan a little better than we would have if we had gone purely off of