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
Executive
Kevin C. Nash

in working capital. Capital expenditures for the second quarter of 2019 were $28.7 million compared with $25.6 million in the second quarter of 2018. The year-to-date 2019 capital expenditures were $45.5 million compared with $51.9 million in 2018.

And depreciation and amortization for the second quarter of 2019 was $25.2 million compared with $27.9 million in the second quarter of 2018. And year-to-date depreciation and amortization was $53.3 million compared with $55.9 million in 2018.

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

Executive
Neil Boehm

Thank you, Kevin. In the second quarter of 2019, there were 33 total launches of our interior and exterior auto-dimming mirrors and electronic features. Of the total launches, approximately 40% had advanced features. While the percentage of new launches with an advanced feature was slightly lower than previous quarters, the reason for it, it offers some interesting insights.

During the second quarter, we've launched base interior auto-dimming mirrors on four new nameplates for domestic China OEMs and one new nameplate was launched for domestic India OEM. These nameplate launches represent further penetration of our core auto-dimming technology for emerging market applications.

In regards to our Full Display Mirror product, the company launched four additional nameplates during the second quarter of 2019, which means we are currently shipping on 30 vehicle nameplates for this exciting new product. For the second half of 2019, we are forecasting approximately eight new vehicle nameplate launches of Full Display Mirror.

Our last update for today is in regards to our Integrated Toll Module product. Late in the first quarter of this year, we began our first volume shipments to Audi for the E-Tron vehicle. During the second quarter of 2019, the first consumers began registering their ITM systems online to activate the device and began using the system for normal tolling use. We are watching and waiting for feedback from the consumers, dealers and the OEM to help other customers understand the use case and consumer acceptance of this product.

While the volumes are relatively low on this vehicle, we are excited to have successfully launched a new innovative connected car product that includes transactional capability. Over the next 18 months, we continue to expect further nameplate launches with our launch customer Audi as well as the initial launch of ITM at two additional OEMs.

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

Executive
Steven R. Downing

Thanks, Neil. Based on the mid-July 2019 IHS Markit light vehicle production forecast for our primary regions of North America, Europe, Japan, Korea and China, current forecasted product mix and expense growth estimates and year-to-date actual performance, the Company is updating guidance for the remainder of calendar year 2019 in each of the following areas.

Revenue of $1.87 to $1.9 billion for the year, gross margins in the range of 36.5% to 37.5% for the year, which represents a 50 basis point improvement in the gross margin forecast for the year and includes estimates for the additional tariffs