Gentex Corporation

Good day and thank you for standing by. Welcome to the Gentex Reports first quarter 2026 financial results conference call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. I would now like to hand the conference over to your speaker today. Josh Oberski, Vice President of Investor Relations.

Thank you. Good morning and thank you for joining us today for our first quarter 2026 earnings conference call. I'm Josh Oberski, Gentex Vice President of Investor Relations, and with me today are Steve Downing, President and CEO, Neil Boehm, COO and CTO, and Kevin Nash, Vice President of Finance and CFO. Please note that a replay of this conference call webcast, along with edited transcripts, will be available following the call in the investor section of our website at ir.gentex.com. Before we begin, I'd like to remind you that many of the statements made during today's call are forward-looking and reflect our current expectations. These statements involve a number of risks and uncertainties, both known and unknown, including those described in our press release issued this morning and in our annual report on Form 10-K for the year ended December 31st, 2025, as well as general economic conditions. Actual results may differ materially from those expressed or implied in these forward-looking statements if risks and uncertainties materialize or if our assumptions prove to be incorrect. I'll now hand the call over to Steve Downing for our prepared remarks. Thank you, Josh.

For the first quarter of 2026, the company reported consolidated net sales of $675.4 million, a 17% increase compared to $576.8 million in the first quarter of last year. which did not include Vox. Vox contributed $88.6 million of revenue during the quarter, while Core Gentex revenue totaled $586.8 million, which was a 2% increase despite global light vehicle production that declined more than 3% versus last year. Core Gentex revenue growth was driven by strength in advanced features across several regions, helping offset lower light vehicle production and ongoing unit volume headwinds. In North America, revenue increased approximately 6%, despite a 2% decline in light vehicle production, driven primarily by continued growth and penetration of FDM shipments. In Europe, Japan, and Korea, auto dimming mirror unit shipments declined by approximately 8% versus last year. However, revenue for these combined regions declined only 2%, reflecting favorable product mix driven by the successful launch of a cabin monitoring system in Europe and continued FDM growth. In China, first quarter revenue totaled approximately $28 million, down 29% versus last year, reflecting the ongoing impact of tariffs on our exports to China. Overall, given the continued challenges facing many of our customers, our revenue growth continues to be driven by expanding electronic content and the adoption of new technologies. As an example, Vox was a bright spot during the quarter, with revenue coming in approximately 9% above our beginning of quarter forecast, driven by stronger than anticipated sales in the premium audio segment. Consolidated gross margin for the first quarter of 2026 was 33.8% compared to 33.2% in the first quarter of last year. Core Gentex gross margin was 34%, representing an 80 basis point increase versus last year. Gross margin benefited from operational efficiencies and favorable product mix, partially offset by the impact of tariff-related costs and higher commodity prices. Year over year, the company delivered nearly 200 basis points of operational gross margin improvement, driven by strong execution and product mix, despite the headwinds created by tariffs and commodity price increases. First quarter consolidated operating expenses totaled $105 million compared to $78.7 million last year, which did not include Vox. The increase was primarily due to the Vox acquisition, which accounted for $23.2 million of the change, as well as $2.8 million of impairment charges. On a non-GAAP basis, Core Gemtech's adjusted operating expenses were $78.3 million, compared to $75 million in the first quarter of last year, when we exclude impairment charges, acquisition-related costs, and severance. As Neil mentioned in the press release, we are incredibly busy with the launch of some of the most complex and innovative technologies in the company's history. These launches include our Gen 4 FDM, new CMOS imaging sensors, in-cabin monitoring platforms, dimmable visors, and large area devices, along with multiple new VOX automotive and premium audio launches. These efforts are occurring at the same time our customers have drastically increased their requirements around cybersecurity for many of our existing and new products. Despite this activity level, the company remains focused on operating expense discipline, and continues to leverage available tools to meet customer commitments while maintaining modest expense growth. Consolidated income from operations for the first quarter of 2026 was $123.7 million compared to $113 million in the prior year period. Core Gentex income from operations totaled $117.9 million, representing a 4% year-over-year increase. On a non-GAAP basis, adjusted core Gentex income from operations was $121.4 million compared to $116.8 million in the first quarter of last year. Total other loss for the quarter was $5.6 million compared to other income of $.6 million in the prior year period, primarily reflecting lower investment income and impairment charges. The effective tax rate for the first quarter of 2026 was 16.6%, compared to 16.5% last year. Consolidated net income was $98.5 million compared to $94.9 million in the first quarter of last year, driven by higher sales and improved profitability. On a non-GAAP basis, consolidated net income was $103.7 million compared to $98 million last year. Earnings per diluted share were 46 cents for the first quarter of 2026 compared to 42 cents last year. reflecting increased sales and improved profitability, partially offset by other losses. On a non-GAAP basis, adjusted earnings per share were $0.48 compared to $0.43 for the first quarter of last year. I'll now hand the call over to Kevin for some further financial details. Thanks, Steve.