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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Presentation
Operator
Operator

Hello, and welcome to Gentex Reports Second Quarter 2019 Financial Results. [Operator Instructions].

Now, it's my pleasure to turn the call to Josh O'Berski, Director of Investor Relations.

Executive
Josh O'Berski

Thank you. Good morning, and welcome to the Gentex Corporation second quarter 2019 earnings release conference call. I'm Josh O'Berski, Gentex's Director of Investor Relations, and I'm joined by Steve Downing, President and CEO; Kevin Nash, Vice President of Finance and CFO; and Neil Boehm, Vice President of Engineering and CTO. This call is live on the Internet by way of an icon on the Gentex website at www.gentex.com.

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

This conference call contains forward-looking information within the meaning of the Gentex Safe Harbor statement included in the Gentex reports second quarter 2019 financial results press release from earlier this morning, and as always, shown on the Gentex website. Your participation in this conference call implies consent to these terms.

Now, I'll turn the call over to Steve Downing, who will give the second quarter of 2019 financial summary. Steve?

Executive
Steven R. Downing

Thank you, Josh. For the second quarter of 2019, the Company reported net sales of $468.7 million, which was an increase of 3% compared to net sales of $455 million in the second quarter of 2018. This growth was in contrast of global light vehicle production that declined approximately 8% in the second quarter of 2019 versus last year. Once again, the second quarter was very difficult to predict revenue as evidenced by the fact that IHS Markit's forecast worsened by approximately 4% versus the beginning of quarter forecast.

Overall, the second quarter market conditions were very similar to those of the first quarter of this year, both of which included large reductions and global light vehicle production versus the prior year. Despite the current vehicle production environment being down about 8% from the second quarter of 2018, we were able to outperform the underlying market by approximately 11%, which resulted in a net 3% revenue growth rate for the quarter. For the first six months of 2019, global vehicle production levels have been off by approximately 7% versus prior year, but we have been able to maintain our growth targets for the year.

In fact, based on the first six months of the year and our forecast for the second half, we are actually raising the bottom end of the forecast range and narrowing our full year revenue guidance to be between $1.87 billion and $1.9 billion. Based on our first half of 2019 performance and the current IHS Markit forecast for the second half of the year, we are poised to outperform global automotive markets by approximately 7% for the year. For the second quarter of 2019, the