Gentex Corp Investor Day 2026

All right. Thank you everyone for being here. My name is Josh O'Berski. I am Gentex's Vice President of Investor Relations. Appreciate you all making the trek, and thanks for everyone online watching this as well. Just a quick couple points of housekeeping. We are using the Q&A feature for the webcast. If you have questions and you are online and you want to submit those that way, please do not use the chat, use the Q&A function. That will keep everything streamlined, and it will be seen and read more easily. The other thing, and this is an apology from me, we had some AV issues this morning, and so we are actually running this presentation off of my computer. If you see any messages pop up from my wife, you did not see them.

If you see anything pop up from my Google Chat, you are now accomplices in what you have seen. I apologize in advance for that, and may God have mercy on all of our souls. With that said Thank you.

It is Google Chat. There is not anything you can do.

With that said, thank you again for being here. We are going to have Steve kick off the presentation. There will be some tours later. If you do not have an itinerary, I have got them printed out here. If you need anything, just shoot me an email or a text. Thanks again. Steve? Thanks, Josh.

If you need to peel off at any point, you need some privacy, let us know. Obviously, there's probably more important things than listening to us all day that you may need to deal with. So feel free to let us know. There's plenty of ways we can get you your privacy if you need it. Once again, it is odd, like Josh said, having to do this on his computer. If you don't know much about Josh drinks whiskey and plays a lot of games with his cat, Buddy. One of the many things that I'll never truly understand about Josh and what he does for fun. Also, no one turned in scorecards from those of you who golfed yesterday, so I had to officially declare that James, and half of the round that Josh played and I were the worst.

Since there's no verifiable proof otherwise. Also, James is the biggest sandbagger in the history of golf. James can verify this, too. I figure out he's like, "I'm a 12, I'm a 12, I'm a 12." After seven, he was two under. So I think there's no other conclusion other than he lies more than Josh or I.

That's right. So you know I make a joke about a quiz afterwards.

That's not entirely true, but I decided not to make Josh read this to you either. Most of our presentations today is going to be a little different than what we normally do. Everyone in this room and online, you know most of this data. So I'm going to hit a couple highlights and just a couple themes real quick, because it's really going to drive to the underlying theme for the conference, and that is when we look at the fundamental financial performance that we've put up over the last couple years especially, we truly believe that the market. We get it. It's a difficult market to convince investors that any play in automotive is a strong one.

But if you look at the fundamentals that we've put up, we believe we can paint a very compelling picture that we are significantly undervalued. Instead of talking through all the data that you already know, we're really going to focus on the presentation of that data and take a different cut and look at it, both in my presentation. Obviously, Neil will talk a lot about on the product side, but Kevin's got a few interesting slides as well that are really meant to drive home why we believe we've separated from the current constraints that we've all known and understand about automotive and how it drives potential revenue growth and obviously financial performance for us. Just going through a quick of these highlights real quick. If you look at net sales, first half of this year, up about $100 million versus last year.

Gross margin up 170 basis points versus last year. Income from operations, you can see up to $265 million versus $231 million last year. Net income up $213 million versus $190 million last year. EPS up from $1.06 versus $0.92 last year. We repurchased 5.9 million shares, about $137 million in the first half of the year. With that performance, we can all see what the stock did. I'm not going to rub it in on our faces collectively, so I'm not going to show that chart, but I think we know the story of what's happened with most autos, quite frankly, during that same time period. Just a quick refresher. Where are we at? What was our original guidance for this year? Where are we sitting today? Revenue is still projected to be $2.65 billion-$2.75 billion for the year. We say it's unchanged. That was from our July update when we posted earnings.

We actually increased that about $50 million, both low end and high end in the April earnings call. So it is up versus beginning of the year. We lowered our operating expenses guidance. I will just point out, this is clear of severance and impairments, but we still anticipate there may be additional severance expense throughout this year. I will talk, and I think we're going to discuss a little bit about the VOXX integration, how we've done with that. The next wave of severance will likely come with our ERP upgrades. We're not going to have the efficiencies that you need until you get to that point where systems can help offset some of the manual workload that's existed inside of that organization for a long time.

We lowered our annual tax rate guidance for the year, lowered CapEx for the year. One of the things we want to point out, this is not about us not investing. In fact, today, part of the reason for the tours is to see where a lot of that investment over the last few years has gone. Primary reason why we're able to lower CapEx is maintenance CapEx. With the reduction in some of the volumes that we've seen, we have plenty of capacity for our core auto-dimming products. Most of the CapEx that you'll see and experience is really targeted over the next five years in the facilities, infrastructure, and manufacturing lines it'll take to help us grow revenue over the next five to 10 years. CapEx obviously down, and then depreciation and amortization unchanged.

We're still targeting this $2.8 billion to $2.9 billion next year, and that is in light of the second half of runoffs that we started talking about already in Q3, experiencing Q2, heading into Q3. Some of those will still contribute to some headwinds starting in the beginning of 2027, but we can more than offset those with growth in other areas of the market. This isn't to belabor the point, but this is what's happening in global light vehicle production. Obviously we've all lived through this. We've seen it. If you back up, I always like to joke, 20-some years ago when we got in this industry, China was less than 5% of global light vehicle production. You look at it now, they are the dominant player. Unfortunately for us, that's taken most of that skin, has come off the backs of our primary customers.

European, North America, Japan, and Korean customers are really the people who have contributed the volume declines that allowed China to pick up some of that extra volume. The reason why I bring this up is we've seen this coming for several years. The last five to seven years have been very obvious what the future holds as it relates to global light vehicle production. We knew the solution had to be technology. It wasn't going to be a volume game. There's not going to be a volume game to be had, and you're not going to get to where we believe we are capable of getting strictly off of selling more base inside mirrors.