Thank you. Good morning, and welcome to the Gentex Corporation First Quarter 2024 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; Neil Boehm, CTO; and Kevin Nash, Vice President of Finance and CFO. This call is live on the Internet and can be reached by going to the Gentex website at ir.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 distributed. 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 First Quarter 2024 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. Before we jump into our prepared remarks, I want to take a moment to address our upcoming Annual Shareholder Meeting and the proxy vote. Glass Lewis has recently released their proxy voting recommendations for Gentex. Their analysis lacked factual and logical accuracy on multiple fronts. I would like to briefly address a few of these items. Regarding Board oversight of Cybersecurity and Human Capital, both of these items are detailed in our proxy. Oversight for these functions are part of the Audit Committee's listed duties. They are included on Page 12 for Cybersecurity and Page 18 for Human Resources. Regarding our company reported percentages of racial and ethnic minorities on the Board, we follow NASDAQ's guidelines for disclosure. This information is included on our website in the Board of Directors section and at ir.gentex.com and also included each year in the back of our annual report. Regarding the recommendation to vote against our Nominating and Corporate Governance Committee Chair, Ms. Leslie Brown, due to a lack of female representation on the Board, we encourage shareholders to ignore Glass Lewis. Since 2016, when Ms. Leslie Brown joined our Board as our first female Board member in the company's history, Gentex has continued to identify and nominate qualified, capable, intelligent thought leaders to our Board. In this process, we have added 7 new board members to our Board, and the new Director nominee, Dr. Bill Pink, will be our eighth new Board member, if elected in this year's vote. Each of these new members and our current new director nominee have exemplary backgrounds, capabilities, and experience. Of these new members, 2 have improved the Board's gender diversity and 3, including Dr. Pink if elected, have improved the Board's racial diversity. If we assume that all of our director nominees will be elected as identified in the proxy, this means that 5 of our last 8 member additions will have improved diversity. We believe the work Ms. Brown is doing as evidenced by the sustained growth in diversity on our Board is indicative of our performance and the company's progress. Glass Lewis' recommendation to vote against a female board member, because there are not enough female board members is as illogical as it sounds. We hope that Glass Lewis updates their policies to consider the chair's gender in this process as well as the progress we've made as a company toward increasing diversity on our board. I would welcome any calls with investors, who use Glass Lewis for their proxy voting recommendations, and I'm happy to clarify Gentex's position on items contained within these reports.

Thanks, Josh. We got that out of the way. For the first quarter of 2024, net sales increased 7% versus last year to $590.2 million, despite the fact that actual light vehicle production declined by 3% in our primary markets. It's also important to note that light vehicle production declined from the beginning of quarter forecast, which resulted in revenue levels being approximately $20 million lower than our original expectations. Despite the lower-than-expected light vehicle production, revenue for the quarter was not only a company record, but also represented a 10% outperformance versus the underlying market. The revenue growth in the first quarter was driven by strong content growth because of higher launch rates and increased take rates of our Full Display Mirrors and other advanced features and strong growth in our outside auto-dimming mirror business which has been the case for the last several quarters. The work we have been executing to increase our total number of features, including investments in additional electronic technologies, is beginning to provide additional revenue growth opportunities, while de-risking the business by reducing our dependence on light vehicle production. For the first quarter of this year, the gross margin was 34.3%, which was an increase of 260 basis points versus the first quarter of last year. The increase was the result of raw material cost reductions, higher sales levels, customer price changes made after the first quarter of 2023 and manufacturing-related efficiencies. We continue to make very good progress on our margin recovery plan that we estimated would take until the end of 2024 to complete. When compared to the fourth quarter of 2023, the gross margin declined by 20 basis points. However, it is important to note that during the fourth quarter of last year, there was approximately 50 basis points of gross margin benefit stemming from one-time customer cost recoveries. Additionally, the gross margin was in line with our expectations despite revenue levels that came in below the beginning of quarter forecast. Further improvements in gross margin that we have targeted for the rest of this year are dependent on sales levels, product mix, raw material cost reductions, and further efficiencies in manufacturing. We remain focused and confident in the gross margin recovery plan that we established last year and will continue to execute throughout the remainder of this year. Operating expenses during the first quarter were $72.9 million compared to operating expenses of $61.5 million in the first quarter of last year.

Thanks, Steve. Automotive net sales in the first quarter increased by 7% to $577.6 million despite a reduction in auto-dimming mirror unit shipments of 2% for the quarter and light vehicle production in our primary markets declining by 3% compared to the first quarter of '23. Other net sales in the first quarter were $12.6 million compared to $13.3 million in the first quarter of '23. This was driven by a $2.5 million decrease in Fire Protection sales, which was partially offset by a $1.8 million increase in dimmable aircraft window sales compared to the first quarter of last year. Share repurchases. During the first quarter, we repurchased 1.2 million shares of common stock at an average price of $35.84. And as of March 31 of '24, the company has approximately 14.7 million shares remaining available for repurchase from the previously announced plan. We remain committed to repurchase additional shares in support of our capital allocation strategy. But share repurchases will vary from time to time and will take into account macroeconomic issues, market trends, and other factors we deem appropriate. Looking at the balance sheet. The balance sheet comparisons mentioned today are as of March 31 of '24 and compared to December 31 of '23. Cash and cash equivalents were $249 million compared to $226.4 million. Short-term and long-term investments combined were $311 million, up from $299.1 million, which includes fixed income investments as well as the company's equity and cost method investments. Accounts receivable was $341.6 million, up from $321.8 million due to the higher level of sales during the first quarter. Inventories were $436.6 million, up from $402.5 million and accounts payable increased to $191.8 million from $184.4 million. Looking at the preliminary cash flow items. First quarter 2024 cash flow from operations was $129.9 million, compared to $120.9 million in the first quarter of last year.

Thank you, Kevin. In the first quarter of 2024, there were 31 net new nameplate launches of our interior and exterior auto-dimming mirrors and electronic features. This is the highest first quarter launch rate for the company since 2015 and over 60% of these net launches were advanced features. For the advanced features in the quarter, Full Display Mirror, HomeLink, and outside auto-dimming mirrors led the way. Now for a Full Display Mirror update. We're excited to announce our 16th OEM customer for Full Display Mirror, Polestar. Our Full Display Mirror shipments to Polestar for the Polestar 4 vehicle, which will be available in all of our major markets globally. The addition of this OEM customer helps to further demonstrate the global appeal of this technology as well as its acceptance on different vehicle architectures. In addition to the new OEM customer launch, we have seen great growth and expansion of the technology at our existing customers. We are currently shipping Full Display Mirror on over 110 nameplates globally, and we are confident in our 2024 FDM shipment guidance of shipping an incremental 500,000 FDM units above the 2023 unit shipments. Also in 2024, we expect to announce shipping Full Display Mirror to at least 1 additional new OEM customer. Calendar year 2024 started off as an extremely busy launch year. The Gentex project and program teams are working hard to prepare the automotive and nonautomotive products for production. While the operations team prepares to build and ship these exciting technologies. We're excited about the continued growth we're seeing with our technologies and appreciate all the hard work and dedication that the team at Gentex is putting in to ensure we execute flawlessly. Also, while we're launching a lot of products and technologies, we are continuing to evaluate opportunities to reduce the bill of material of existing programs as well as execute on the VA/VE launches we currently have in process. These changes are critical for our margin recovery and stabilization plan, especially as we move into 2025.

Thanks, Neil. The current forecast for light vehicle production for the second quarter of 2024 and full years 2024 and 2025 are based on the mid-April 2024 S&P Global Mobility forecast for light vehicle production in our primary markets of North America, Europe, Japan and Korea, plus China. Light vehicle production in these markets is expected to increase 3% for the second quarter of 2024, versus the same quarter last year. But when looking further at our primary markets, those regions are forecasted to decline by 2% compared to the second quarter of 2023. For calendar year 2024, light vehicle production in our primary markets plus China is forecasted to be flat when compared with light vehicle production for the prior year, but is expected to be down 1% when comparing only our primary markets. Light Vehicle production for calendar year 2025 in our primary markets, plus China is forecasted to increase by 2% versus calendar year 2024, but is expected to be flat when comparing only our primary markets. Given these production volume estimates, we are making no changes to our previously provided guidance for 2024. Revenue for the year is expected to be between $2.45 billion and $2.55 billion. Gross margins for the year are expected to be between 34% and 35%. Operating expenses are expected to be between $295 million and $305 million. Our estimated annual tax rate is forecasted to be between 16% and 18%. Capital expenditures are expected to be between $225 million and $250 million. And depreciation and amortization is forecasted to be between $95 million and $105 million. Additionally, based on the company's current forecast for light vehicle production for calendar year 2025, the company still expects calendar year 2025 revenue of approximately $2.65 billion to $2.75 billion. We are on pace for record-setting revenue in 2024 and 2025 and with much of that growth being driven by expansion of our product content, including advanced feature growth and new electronic technologies. The outgrowth versus the market demonstrates that our product strategy is succeeding with our customers and consumers, and we are excited to see several of the new technologies that we have invested in over the last several years begin to generate revenue and profitability for the company. Revenue outperformance has been exciting to see, but I'm also very pleased with our progress toward improved profitability. While a tremendous amount of work remains to be done this year as we execute additional cost improvement initiatives, we remain confident in our ability to accomplish our plan of reaching a 35% to 36% gross margin range by the end of 2024.

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

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.