Gentex (GNTX) 28 Apr 232023 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Gentex Reports First Quarter 2023 Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to O'Berski, conference Director like speaker to now Josh today, of would hand over the your I Investor Relations.

morning earnings Nash, of I'm and CEO; Good first Vice I'm joined of President you. and Boehm, Downing, the and to Thank President Steve Gentex Investor quarter Relations XXXX CFO. O'Berski, CTO; release Finance Josh call. Neil and by conference Gentex's Director welcome Corporation and Kevin

website by live the is and the at going of to contents on Gentex Corporation property and are reached call This may copied, can this the transcribed retransmitted, not redistributed. Internet rebroadcast, or and Gentex call All ir.gentex.com. be be conference reproduced, otherwise published, of

from with hold any First use as website. damages Gentex Gentex within financial unauthorized results for of this Corporation in information meaning the of release the the this Gentex safe liable and contents responsible included call. contains will the forward-looking Quarter to call Gentex XXXX respect This shown of statement conference on any earlier Gentex party harbor Corporation conference morning Reports any the press incurred always by and

implies participation this these Your terms. in to consent call conference

the will Downing to over us started get today. Now Steve turn I'll call who

Josh. you Thank

record an the was $XXX.X XX% For net of quarter-over-quarter in the million of and net for company sales $XXX.X company. which sales the increase million, new reported quarter first XXXX, of of to quarter sales quarterly compared the XXXX, a first

XXXX. in America, China approximately to increased the quarter the compared first XXXX, and Korea For Europe, X% Japan, vehicle of light of North quarter global when production first

demand increased our have back production in the to light improved record quarter. products that combined of Many and during industry held the issues last chain vehicle the revenue led with the year for the supply

for While market. production pre-pandemic versus XX% a still outperformance light demand company's the levels, underlying is resulted the products in below vehicle

labor of first XX.X% quarter gross a first last For offset margin of of the increases partially compared raw margin XX.X%, were impacted freight-related in material margin increases, gross improvements the for was year. increases and which gross quarter costs by to customers. cost and the price by to The XXXX, was cost

to compared a the customers levels, carried the potential decline last coming forward higher mix costs more necessary costs, to of offset from favorable the of and increased recoveries labor became higher into year, from sequentially quarter one-time improvements fourth this margin These gross the year. the in and as that price than As result in the tailwinds cost fourth benefit sales XX.X% that last freight-related quarter product increases the year. margin

improving began year downward year, this margins and significant material sustained gross one-time Calendar supply of XXXX last that by increases, impacts raw pressure the margins of quarter inflation margin we price quarter that our on resulted fourth cost stabilizing was chain volatility and year the XXXX recoveries realizing cost marred profitability. of gross carried significant stresses, increases, In with securing and labor the from overall process first and cost into for year. in increases calendar

in point improved margins recoveries. benefit of low the XX.X%. the In quarter XX.X%. quarter to XX.X% that cost of third during in a quarter hit they XXXX cost we to improved fell without margins the any recoveries margins Gross But the XXXX, first secured further even to one-time when we fourth gross one-time

the Our XXXX. on end a and XXXX XXXX line achieve that quarter increased first by of million of Operating operating on the $XX.X quarter expenses plan in on to expenses of progress XXXX two during in $XX.X of quarters, is to XX% to and I a XX% accomplishing believe covers margin time of the to million by Based plan. recovery margin we designed are profile based our for way last to targeted first our X% the compared is XXXX. well this

were quarter by Operating and first during due of to which fees, professional increased staffing the lower primarily offset outbound partially XXXX, expenses freight expenses.

operating XXXX awards below to range in forecasted quarter for year. new but and expenses of for the ramp our full plan those initiatives year, for expenses XXXX, of our this growth up we product strategy, and for Our are the slightly our development and first throughout year support rate VA/VE next business expected

first to the for last year. million, operations from XXXX million, compared from for Income of of income $XXX.X quarter the was quarter $XXX.X operations first of

income benefit quarter intangible the first company of had the XX.X%, the by effective of which rate of XXXX, tax driven an the During deduction. foreign-derived primarily was

the $XX.X income income $XX.X net was net The increases for and diluted year. per compared share million Earnings quarter-over-quarter in quarter of of result were first compared profits. of of sales of $X.XX, diluted operating the the first the quarter share for to the $X.XX per of earnings quarter last first of first to XXXX year. for XXXX quarter in primarily increase Net the million for was net income last

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

of compared first by in to dimmable million, and the first $XX.X million for $XX.X quarter sales first both Other other you, includes Thank Fire the a auto-dimming to quarter window were of sales quarter XXXX. dimmable the $XXX of of quarter first And mirror for net shipments first increased quarter unit increase the compared $XXX.X sales the XXXX and first aircraft during windows were when increased protection of the sales XX% Protection net the million aircraft million, the increased first XX% XXXX, sales which XX% XXXX. Automotive XXX% to of in to XXXX, net compared by Steve. of fire in quarter products quarter quarter the XXXX. of first in XXXX. quarter compared

Share repurchases.

one shares of first of XXXX, quarter its at common an the repurchased company stock million the $XX.XX During of price per share. average

appropriate. shares XXXX, but additional from time of may company XX repurchase plan. vary pursuant share allocation stock and of of remaining other to in its deems in announced the The its will to shares common and the disclosed continue issues, market the time repurchase macroeconomic into support account XX.X future, company As previously available share factors repurchases for take previously has capital intends approximately strategy million to the March to repurchase company trends

to over million as to sheet XXXX, mentioned December method comparisons of balance as Shifting XX cash The compared and equivalents XXXX. as fixed from the are up were of million. investments. which Short-term XX long-term equity income $XXX.X combined and Cash well investments company's million, as $XXX.X to the cost today, March compared investments $XXX.X balance sheet. were includes million $XXX.X and

million, $XXX.X payable million Inventories the million $XXX.X receivable million. $XXX.X increased Accounts million, up and slightly to due higher up the were sales of down to $XXX.X from accounts $XXX.X was $XXX.X during from level first million, from quarter.

preliminary items at cash flow Looking the quarter. for

was million million, $XX.X first $XXX.X for the First first cash flow quarter compared compared quarter was XXXX first $XX.X million amortization the of $XX for million CapEx XXXX. quarter first in with from an $XXX.X the operations was quarter from million with and increase first XXXX, $XX.X for XXXX. quarter depreciation the and was quarter which million of the for of

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

net launches net feature launches being very exterior XXXX, quarter auto-dimming the net mirrors electronic of feature with you, advanced was features advanced there over previously nameplate strong features. quarter new Thank XX In The our and disclosed headwinds. of of in were the launches, of interior first and Kevin. XX%

Display of significant launches. Full and the advanced a those Mirror features HomeLink, portion For were

an Full update Now Display for the on Mirror.

Roox markets. the for During Mazda of Toyota on for market, Mirror began XXXX, Crown other shipping CX-XX, GranTurismo, the RZ, are Nissan Toyota Toyota new Full Japan These first Kluger the nameplates. and the for the Japan China we nameplates the eight quarter and Toyota and Crown Grandia the new Lexus Display vehicle Maserati additional the bZXX market, the the

Display our greater to first product to their Accessories successful over will excited FDM be the can The Mazda when be Mazda, term. its and We're Mazda so and believe of a website that shipping it drive can vehicle we to initial CX-XX be section. shipping long penetration under found is in Full building introduction we the the Mirror,

XX been our now of and consumers. across Display conclusion quarter to well XXXX, the see nameplates by of the it's extremely strong continues This regions customers have all world. first and the At we Full Mirror product the launched received growth on of

are XXXX XXXX, we and higher to at As our XXXX than we remainder volume. volume our of XXX,XXX at nameplate least unit launches expect additional that targeting XX we look be units the at least

impact. Full Display progress will seven we Mirror production been provide We'll for to be shipments only one strategic goal. years that over the in updates future in significant has and to updates our unit continue or now growth quarters nameplate had annual the a providing on and

has avoid products and execute team interruptions. constraints of some done focused continue the margin new get been seen all supply a initiatives. in to driving fully launches, of redesigns. number team quarter of and will remain I'm incredible at achieve on iterations The products development issues but on Gentex chain to and significant working OEM to to we've of team of improvement to excited new us job During these XXXX, help great constraints through have an that first our our gross the engaged back us

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

vehicle S&P company's Korea for in for are vehicle years based America, Japan, production full The Global forecast and the forecast Europe, second mid-April for and light China. Mobility Neil. of XXXX XXXX production XXXX current on the XXXX and Thanks, light quarter North

to expected XX% for compared Light second of production vehicle second to year. markets last in is of quarter the as increase vehicle XXXX the for production these quarter light

calendar in XXXX, year markets when calendar these to compared XXXX. For to light vehicle forecasted is increase production X% year

company expected on year to billion. between changes for XX%. to expenses light margins no are Operating be for the Gross expected between its be $X.X approximately XXXX. to forecast, Revenue provided million. $XXX and vehicle for $XXX is year Based the is expected million previously are be this making the production and to XX% estimates

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

forecast light expects calendar XX%, calendar $X.X of of year the the approximately growth approximately Additionally, XXXX current based on XXXX, guidance company's the production range for for XXXX above vehicle company revenue revenue year billion.

performance quarter expectations our was products which very the of for sales the performance as in quarter. record our was with in strong, demand resulted ultimately Overall, line first XXXX for largely

build last will the XXXX. growth we avoid headcount to focus XXXX of schedules diligently team supporting Our targets much-needed perform operations challenges relief will shortages We believe into teams in labor these experienced increases supply provide are in and growth remainder recent to employment months. hectic the in and of much the be we forecasting resulted some throughout critical on has continue aggressive our our in from have year and

the needed are to recovery profile, Our so done to to larger progress our team pleased the far I'm complete accomplish to reduce to tremendous I team and has the that is of a targeted gross also critical scrap achieve margin support remains the create which and made there but capability, grit amount plans. opportunity confidence yield have to Obviously, and overtime Gentex adaptability our the initiatives. margin the work be loss, with

prepared proxy. But jump us questions, our is we walk completes before statement through today. a to into comments our That going short for Josh regarding

Steve. Thanks,

vote know, area recent season entered one Glass to its in in we to recommendation all yesterday board we believe concerning our Brown. the and Ms. proxy nomination of you to of report report. in received As and Lewis' we Ms. continued we oppose disappointed of proxy Glass into Gentex need Lewis' and Brown support strongly their summary its urges Leslie is have shareholders address to

past capable, remained Board. our on leaders focused the intelligent thought identifying qualified, nominating Gentex to has six Over years, and

board time, backgrounds variety of with onboarded we this to experience. a have capabilities new our six During members and wide

with two these racial six last improved Board's members, commitment diversity, action our conclusion we representation six believe member on gender two our and The the toward board. four diversity obvious have is additions board here that and shown more improving diversity. have board new a we've improved Of of Board's the diverse

achieve to of specifically is is time the based of on outline line improving the XX% a Glass the gender Board's it of and Chair that Corporate Nominating Governance Lewis' the a a responsibility clearly gender on Committee with focus goal the and diversity logic for diversity. recommendation diversity,

time gender of by one to therefore line, recommending this It against the supporting vote nomination support recommendation a without follows to Board members. the female This is against Lewis Chair's board. diversity Gentex's seeks Glass advising that

history. company's XXXX time board Brown In the distinction And and the was female Ms. in first she intelligence served with that since member respect. has

goals a shows qualified a means In a goal. recommendation goals toward and believe gender disagree abstaining votes the female successful summary, while their any a we diversity. Brown In candidate achieving come that other good has diversity company, words, for we for clear Lewis' from of record logic between of or Glass logical as Board stated said Ms. disconnect as for that place a against Lewis' a the vehemently Glass supporting with director progress

has served our Brown. role is and Brown to in new favor and the her lead And shareholders in Chair, on remain Board. this Brown vote XXXX. of We qualified Ms. Ms. on committee as since committee our Ms. to uniquely encourage Committee capable

Thank you can for to your time now questions. and we proceed

you. Securities. Instructions] Jewsikow first Our Ron Thank [Operator comes Guggenheim from question with

proceed. may You

Good morning, team.

you'd an highlight? How Just was anterior product a HomeLink mixed like, lower taking in from couple and China side shipments benefit big of things base increase this me. on ITM a of questions and to else mirror maybe quarter anything the

two look combination. When about things. Yes. It's at talk mix we a we

overall you also versus is then and of taken But advanced But also growth kind the benefit how or so You you overall basis mix like which factor mentioned in features of around versus -- from there's XX products points inside. base mix. rate. many the have there of outside a you're

And margin is think reduced XXXX? freight increased quite to you that I maybe wages expedited on Has of of increased into Okay. net hiring of as gross a overtime think bit a lower last form of well. the the or something and quite year bit begun benefits or had year should this and half second that any have source later about we then, in upside a as line

Yeah.

general in still happen the operating up margin outbound and freight in expense expense. benefits the side customers a gross on because costs so overhead the of labor lot expedited sales So in shows

a basis headwind give based about margin Kevin looking does basis facing year-over-year on gross So I'm wages. OpEx, on the of lot higher of but leverage margins lower XXX some it in but at will you times labor -- increased the points we're a --

have point quickest though lower benefit the overtime freight We and your seen probably start expense. the to been to drop has

going more. And to still goods past obviously because overtime, as order build to then start side working surface ultimately, shipments, a get we extra which get versus is finished to to inventory air reduce even end so lower lower lower little then on the we'll freight overtime. shipments to the it And help able be overtime in in back will to freight we're

secure with both over related just you and more last helpful. new super your Has years, That's negatively an announcements? has business wins maybe starting could you wins supply one think by And new sneak acceleration in and in see the Neil. to FDM been to to improve and the customer ability that do for we impacted environment chain several

side. supply award Yeah. negatively have I constraints think the the don't customer impacted

and of Full of but parts I for as just constraint as that we growth we in ramp it's and I been we're supply launch executed on volume. not supply think forward also the come build we've able and just enough quantity and being seeing product Display in move the see more launches a continued to demand, out from not Mirror. execution, and we mean, yes a XX -- in announced We that

I'd wasn't was Yeah the single awards point say, in Neil's in take more biggest to it impact rates.

now. good Right the that able we sitting been now, over FDM. spot XX increase a of it for been take electronic to for a desire haven't up So especially, until comes – from to last OEMs and in just there's rates support lot to we're content advanced really months when

higher right we're volumes time now year. than this were better to we spot in So much what support last a

the color. helpful Thanks, and guys, on quarter. Super congrats

Thanks, Ron.

Ron. Thanks,

you. Thank

from BNP James comes Paribas Exane. question Picariello next with Our

everybody. morning Good

Good morning.

James. morning, Good

unit of right here kind What beyond? bar you quarter quarterly new for for to you've going shipments the volume is a Does capacity guys. drove invested, wanted reflect right? this of had forward the rest $XX.X million footprint, record established this the ask at and the kind stage your a does that set I current within of or set the You've capacity really that year kind investments. for max about stage for or first of maybe

capacity in slightly close levels year after some see and darn -- going the The probably to need see the year create XX next year and We and investment start we pretty another and extra max over we're -- CapEx overall facilities this to the that step-up in some these equipment not at elevated obviously, real a overtime. bit function next can that's you at to levels. do we're step with some more, of months that the little Yes, increases capacity. we'll that

projects some XX equipment help brick-and-mortar the increase year. next So, really the overall kind then going yes, of do years, that additional coming us months two online over to of company. have this And we to we're capacity

And your help plant topic Got you don't a that I just way? light want if footprint quarter's to any this China that also know is in drive call assembly unit your it. on it that volumes did helping is in but plant, there

We've so in China Yes. the executing final for now absolutely production. market China the we're assembly domestic --

And so produce that have that footprint but still, production additional some well. way. but plans and quicker in of from challenges, with is to also that geographical additional fairly our we're the has get third parties there helping to helping continue parts headcount raise making labor of to a look equipment here expansion the we sure the help and helped able amount our that through all facilities and at to -- products level we It's with minor a as

FDM. how staffing -- be now? -- just capacity had my it your constrained, ITM, of more is own of Got toll in-house capacity production apologies dynamic integrated you Is is availability chip course but and terms in capability your chip it. And then or and just just if your into my the plays that would last and module, referenced and this, question is on supply

biggest I'd through say, XXXX of component all availability way the calendar end the year was up the challenge.

about on we're the electronics at side. really feel we good Now where

more are be now looking for it's internally the able up Now and OEMs about with labor what with But keep to would capital right we're those. only limiting equipment factor. demand

So we're constraints not internal or either. short right shipping off based shipments now constraining FDM of

-- throughout feel one quarter with standpoint one history really keep largest So in about the positioned obviously of an FDM from up survived the quarters feel we we're the FDM good of we demand and company larger having to like how the year. largest

Understood. Thanks. Thanks guys.

you. Thank

Thank you.

question Junk comes Luke next with from Baird. Our

proceed. may You

like To Steve, might but you of on that touch just hoping that up part also other morning. that's on your some and taking really? price recovery Thanks question. you this obvious you discussed, within things the my yield already you're of less just could if and start, not part the control for address. gross of at muscling part maybe journey is could the recovery And margin scrap loss as to Good initiatives words the overtime company, such what be the aspects that the

Yes.

to the seeing less effective in and of than despite were growth. to mean the dollars be opportunity year. gives But way. ongoing that's overtime we've rest leverage be overhead So are price with levels of a of the time revenue, like going an internal to you mentioned piece the I of higher the what prior been going us the year through able recovery in this to over a start obviously, we've most more that matter -- what there's do been it that portion that's it target the to parts We

So created that's there. there's obviously some leverage

that's the and loss. scrap have -- conditions in And team not struggles was some had ideal then -- we that growing, have so And and with yield operating with QX. we

months, scrap improvement. opportunity equipped to for comfortable, nine that can and However, employees XX these become the further us believe it the next profile as newer yield category drive create over and more we capable loss we does to improve margin

in get takes months so effective. the thing to comfortable capable team that three totally and it's the another six newer get And different the it's before one And probably to thing very to trained. onboard, members environment it's a process team feel and them highly

bit we've put team's of good able So as team dedication with time to our we those in the make areas we'll together about know feel and that and a we well. operations improvements little be

One is margin pricing, his section helps more mentioned or costs reengineering through -- portion, the call better with bill just costs. those to VA/VE lower component tooling So less material only nuance more the it that right? product reduce not redesign material tooling helps that intended the of way of but efforts versus in with Neil

end Yes. margin XXXX us line and of as focus VA/VE And that further to about our taking through to profile. we activities. into that's XXXX time XXXX will be And talk total really on the targeted why XXXX improvement like and get back that more

be do at And Thank then or about making the for you. seems if into leaning just market? follow-up happening at mirrors we of Bigger Thank richly think my the out China breakneck this pace Chinese categories to you you maybe more now Show market Shanghai FDM coming Neil what at contenting picture sense. How that. base in for for Auto month. look a in China innovation the even in was really emerging the to terms product that

Yes.

that's Chinese we mirrors years For on that of that Again of really into that's in had we start one and what executing and penetration. talk and the base market mirrors into is With adding changes for that really, that the executing and of what focused bit we fast. China is And about get some little we've to you introduction said, and base mirrors continuing the features base been quarter our the couple market a grow last -- base -- see mirrors products another this content. any have that launching handful market. specific then

that that into into the with we time and side be. of does But domestic JV financial evolving focused just of adapt it that into footprint to making and the to OEMs be get that of grow more how quick. really, resources business to products been moving and And in the the side. wanted the our really working on it is team then we've market The China is outside

we're doing the lot there's coming time kind And in the space lot a next looking of So and happening a it's right. time to at make shortage that phase. we're a start our it component taking sure to evolving out of

Thank you. there. I leave it

Luke. Thanks,

Thanks, Luke.

you. Thank

with America. next Murphy question of comes Bank Our from John

You may proceed.

John? Hey,

if mute, on Murphy, John is please your unmute. line

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

proceed. may You

and to for see for Thanks the great sales the question record my quarter. taking Yes.

looking Just to here that Is guess the the action gross end you're have the need much normalized margin for try to year? you And you I low you're could kind further near as for move targets here a this guidance you year doing the and quarter. of almost year things really that profile towards take margin to end it? that enhance the there in first further gross of of get the then other next more that for

a right. to the margins. on through further lot the throughout work end absolutely end be you're of the that's improve of No Yes. the going QX year There's going of to

the about So by that's going XX the talking the to off over happen months. months really to course this why XX wanted start we progress next to is of

It's completely get a quarter. -- but hopefully the be it goal to linear improvement continue better to every may is not

action -- we in place. there's And that so yes lot a of have steps

to pricing lower being yields comes the still help need little stuff smooth to on settle one should as going don't with Obviously, and Some We of on tailwinds margin a have through we focused those team and and base happen some more take lower time. negotiations. well. We with is primarily expect of think those questions year couple talked throughout further. I improvement the as operational on about time it the training them all scrap side be the customer a to profile work just costs overtime the ago we and board helping we to as probably the customer at be evenly to those

recessionary year into to then some we at beyond end some think start point And next, think this we economics as of we'll pricing. beginning relates to of that it XXXX heading see

into de-escalating cost of of we're a that hopeful instead environment increase we So environment more a back materials. can get for normalized to kind

clarifying. are half that for you visibility right do above, me. just well. going question percentage beat revisiting looking versus in confident first just or the material surpass that this XX% in I for, or the looking waiting later that? becoming you're I like that XQ bit year? for the light Thanks guess as the bodes second for to year, well and Yes. And so vehicle then you to last production Growth year guess, quarter for XX% a the you're first thinking in a come be expected to slowdown right how then about increasingly XX% before or potentially better are growth this this able expect that half, I'm you target you're little

Yeah.

half rates, upside what are little going vehicle there. obviously they And impact The a think the year? we to the how high-priced of higher I a with? is the this dealing factor is big R second Is going or interest this risk are R that's market. to happen in

we're time really improved. and It's that been the the it's been consistent of so we one orders. chaotic the probably optimistic It had that little things for quarters of so two customer order the the is to years very in a first honestly very while one And about was base at so and long hard all. from over volatility a where plan first

so get schedule, little we where than the a too normal. could a bit operate like chaos. was legs under pre-pandemic it wasn't And it its without Obviously, team really much able more to week-long

to So back but that getting the we're there, starting in area. improvements we're make not way to all

upside there's there. definitely some I mean yeah, So

side. of vehicle happened production a overstated environment in The QX -- chaos because is the last QX auto that production year little light the on on the automotive

to our there don't of that top weeks I I But ahead don't sales which and our going words, XX been to first know cars as side back In us, it that other starting are our for customer long capacity able built. just own time know it's of there we're in is keep So start good also that on the been starting strength supply components ability is the to exactly. where to stacked are leading was a is base. you're hasn't well be get and entirely some to be for correlate up. OEMs And it of that's outperformance sign struggle going when because to It's time, our see to the to because capacity OEM the see to pre-pandemic. a increase in and

So exciting. it's pretty

half We're on that. In we portion is back opportunity post for would second I by the was. have macroeconomic of what this the what there slightly a to the -- a than of say impact words, do better And just forecast does QX, there doesn't have time hoping our Obviously, huge year look the half. like? is other we'll going that the to an better sense

three the be worse a as massive us taught have As to last opportunity than years expected well. there's it for always though,

it call good a sales punched the out great we're see I quarter. from well on getting think hanging worn brings. the ropes, we're had as but We're just little a being pretty -- about we'll half second optimistic happy we QX So that what and

to opportunity chain improving and to Thank enough. you. above stuff or the see normal supply Thank like FDM fair to you. normal for back environment Well, the Great get trends.

Thank you.

Thank you.

comes with question Frederico from next America. of Our Bank Morandi

proceed. may You

Murphy. John It's hear Can guys. me? Hey, you

you. Yes. We got

days a it's One statement, down, more. the you need do more a which world actually before. of and and of to think these lot less the you kind have sorry you thing of a interesting Yes, enlightened for difficulties cost need of them and team -- what very in very opposite people is people the technical made larger take

history, running much kind bad has put what Could an go interesting. the is very dollar and bad can't their costs versus been on if been and overtime scrap you loss you're yield the scrap it's overtime So has relative how how relative are, maybe to terms idea yield might been you has to of that history us away, how Just that? give like of history? outline

Yeah.

you So kind over I'm Kevin But we probably months, at in overtime start sure I'll XX the with if some running that a been last the two of and at jump will amount expected. about generic of have look times answer normally time really over would we've details. with

who employees of been are CapEx of you like your amount of time XX it's that that. last take over in there the So footprint. certain overtime. a that of Obviously, helps and over there's beyond a there's amount way certain it healthy Unfortunately, advantage months, amount

look XX we next over one overtime drivers savings why the as that's so of And the at months. of key

Yeah.

in really on think that. just to I tailor So

at If -- time incremental have to year. last you we're we to were $XXX paying -- on running short, we've a which teammates -- $XXX we're about the XXX side over to If premium. million range headcount added at XXX last look were probably is close were that trying this that this the Xx hourly quarter. X.Xx to year in overtime to build we million at incentives that sales really We production

a And unit more so getting lot perspective. cost a from then you're

just of -- the at once you the work this we you straight opportunity exists. because have XX-hour the normal so headcount, higher really time time, improve what happening productivity, that's And where over weeks primarily down that's get

inefficiencies? result are, that of Got it. or And how as other yield the mean, loss, I a yields bad

it's that this to about in this percentage not the potential few you're size talking loss dollars of of last or They're yield there. not million Yeah. start talk yield couple but in a savings On a million revenue out of you case. of are dollars couple about points horrible a like or when

back at things state to really get these of are that margin the so types improvements need on ideal kind that to make profile to And the we of get and side. in good

this we you it tell overtime. just on point at for portion and like Okay. lastly And sound was then the because a huge international that's just maybe China or shipments, is first it idea year us the have does many how what in an opportunity so what quarter you can last in

company. of right shipments total it XX% because around revenue to higher total continue to be is Shipments for base. the still mix X% higher It's a of

So closer the revenue X.X%. that's probably is probably to to closer XX%

But really it's kind the is volumes in growth still But EV with lot mirror Tesla mirror growth market. it's then growing the the of outside X% in mirrors. at base revenue it's outside and a primarily of driven driven that of by of because other some manufacturers

guys. Thank helpful. very That’s you,

John. you, Thank

John. Thanks

you. Thank

Our Morningstar. comes Whiston with next David question from

You proceed. may

morning. Good Thanks. Hello.

For and then hinting an SG&A? were freight clarify Steve, regular I expedited difference. is to think I COGS is freight wanted in just you in and accounting

it's sales is -- in in bill in expense. customer shipment when so COGS. it's material -- the the to No you're incoming your shipping But selling

Yeah.

Okay.

freight we're incoming when improvements will costs So the not expense talking when which talking gross will you're materials. talking in on up selling the freight side about we're about improve operating margins freight improvements show but in bill

Okay.

You had in said? both you improvement

Yes. We did have improvements in both, yes.

Okay.

is more On corporate you spending the versus then, side, in in ROE out fees. are or of it professional on? and staffing balanced? what fees on increase an also And the press release Is type increasing called you professional increase staffing the

you're Yeah. increases both statement operating There is the relation there to in were expense. in reading that but

So that's professional the side. on really

the working about some and as and engineers new with of So on. products outside launch rate help we're to it's more well development keep up consulting the teams

Okay. guess, just And one question. more then, I

In know some terms some ongoing the as are kind mixed of are and it's good of things -- uncertainties you signal things the bad. a macro

still cautious a really seen they of before present like the very to more vehicles on fears? bit haven't type products in next dimmable and stage customers surfaces? your are on due now But that being larger Are more macro just focused we focusing much

-- actually a recessionary in it's fears. their new in slowdown we due technology Well haven't to interest seen

was hardest back I the OEMs new say interest an have ability in things to say pickup fact, a execution. the to would about as R&D during from engagement -- and the the In standpoint of I'd the increased it's seen talk gone actually office one and development pandemic. R&D that product we've

the it like. prototype a look could It were when vehicle a of a of working of tough from home, show people brand-new future was or what even theory was product the really -- discuss to

I see customer product lot. selling would lot and a our new coming to to concepts. back improved visit that that to getting we've a visits So of difficult say and facilities part of Zealand was We're some had a environment. OEMs and has R&D our

R&D efforts. So seen headwinds haven't in of negative terms fears due to product any or recessionary new yet we

Okay. or Airbus starting more Is production growth, good. that primarily it And airplane was on really the just window lastly any growth Boeing? from

a Boeing in putting was cautious of were last it much always pretty that We lot year. There this was percentage zero, time about there. because

we're improve production aerospace actually but consistent which area. now running did is it right pretty sign lot a good our So in a

majority a to coming vast producing. Airbus back area has little and related. obviously started still that good getting to Boeing it's bit of to -- but Airbus are still see the So sales I those pick up back mean, it's

Okay. Thanks.

you. Thank

David. Thanks

This I'd Josh any like it concludes Thank over remarks. back turn the to you. closing O'Berski, for session. Q&A now to

And great a for call. questions. everyone time you your have weekend. our concludes This Thank and

call. participating. conference you for This you. today's Thank concludes Thank

may disconnect. You now