Good day. Thank you for standing by. Welcome to the Gentex fourth quarter and year-end 2021 financial results conference call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any assistance, please press star zero. I want to hand the conference over to your speaker today, Josh O'Berski, Director of Investor Relations. Please go ahead. Thank you. Good morning, and welcome to the Gentex Corporation fourth quarter 2021 earnings release conference call. I'm Josh O'Berski, Gentex, Director of Investor Relations, and I'm joined by Steve Downing, President and CEO, Neil Boehm, Vice President of Engineering and 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 and 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 redistributed. Gentex Corporation will hold responsible and liable any party for any damages incurred by Gentex Corporation with respect to the unauthorized use of 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 report's fourth quarter and year-end 2021 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. Now I'll turn the call over to Steve Downing, who will get us started today. Thanks, Josh. For the fourth quarter of 2021, the company reported net sales of $419.8 million compared to net sales of $529.9 million for the fourth quarter of 2020. The company's revenue during the quarter was impacted by a 20% quarter-over-quarter reduction in light vehicle production in the company's primary markets of North America, Europe, Japan, and Korea. The industry-wide electronics component shortages further impacted the company's revenue negatively during the fourth quarter of 2021. During the quarter, the electronics component shortages primarily impacted the company's ability to meet customer demand for Full Display Mirrors, Integrated Toll Modules, and other advanced feature unit shipments. Up until the fourth quarter of 2021, the combination of the company's conservative inventory position, along with significant efforts to redesign affected products, allowed us to avoid having any meaningful shipment issues stemming from the industry-wide electronics component shortages. In the fourth quarter, the shortages began to impact our customer shipments as well. During the fourth quarter, the company estimates that customer order changes driven by lower light vehicle production and electronic component shortages resulted in under shipments of about $85 million in revenue for the quarter. Obviously, impacting our customers by not being able to fully meet their demand is extremely disappointing. However, the team did a remarkable job of completing complicated redesigns in record time to avoid more significant customer shortages. Looking into 2022, we are forecasting growth in FDM based on pent-up demand as well as several new FDM program launches, which we expect to accelerate our growth into 2022 and 2023. The gross margin in the fourth quarter of 2021 was 34.3% compared with near record gross margins of 40.9% in the fourth quarter of 2020. The gross margin was primarily impacted by the lower quarter-over-quarter revenue, especially in the company's primary markets, as well as the lost revenue created by the electronics component shortages. Other factors impacting gross margin in the fourth quarter of 2021 were raw material cost increases, freight-related cost increases, labor cost increases driven by higher wages, and labor inefficiencies created by last-minute changes in customer demand and electronics component shortages. The fourth quarter of 2021 brought the perfect storm of lower revenue, significantly higher material costs, higher shipping costs, and higher labor costs and inefficiencies that negatively impacted gross margins more than we originally forecasted. While many of these headwinds will continue into the first half of 2022, we believe we have the ability to offset some of the impacts to gross margins as we move throughout the year. Operating expenses during the fourth quarter of 2021 were up 3% to $56 million when compared to operating expenses of $54.3 million in the fourth quarter of 2020. Income from operations for the fourth quarter of 2021 was $88 million as compared to income from operations of $162.4 million for the fourth quarter of 2020. During the fourth quarter of 2021, the company had an effective tax rate of 5.8%, which was lower than our forecasted tax rate and was driven by increased benefits from the foreign-derived intangible income deduction and discrete benefits from stock-based compensation. In the fourth quarter of 2021, net income was $84.2 million, as compared to net income of $143.3 million in the fourth quarter of 2020. Earnings per diluted share in the fourth quarter of 2021 were $0.35, as compared to earnings per diluted share of $0.58 in the fourth quarter of 2020. For calendar year 2021, the company's net sales were $1.73 billion, which was an increase of 3% compared to net sales of $1.68 billion in calendar year 2020, in a year where light vehicle production in the company's primary markets declined by 3%. For calendar year 2021, the gross margin was 35.8% compared with a gross margin of 35.9% for calendar year 2020. For calendar year 2021, operating expenses increased 2% to $209.9 million when compared to operating expenses of $205.9 million for calendar year 2020. For calendar year 2021, the company's effective tax rate was 13.3% as compared to an effective tax rate of 15.6% for calendar year 2020. Net income for calendar year 2021 was $360.8 million, up 4% compared with net income of $347.6 million in calendar year 2020. Earnings per diluted share for calendar year 2021 were $1.50, compared with earnings per diluted share of $1.41 in calendar year 2020, which represents a 6% increase on a year-over-year basis. I will now hand the call over to Kevin for fourth quarter financial details. Thanks, Steve. Automotive net sales during the fourth quarter of 2021 were $409.6 million, which compared to $521.6 million in the fourth quarter of 2020. The 20% quarter-over-quarter reduction in light vehicle production in the company's primary markets led to an 18% reduction in quarter-over-quarter mirror unit shipments. For calendar year 2021, automotive net sales were $1.69 billion, which was a 3% increase over 2020 and was driven by auto-dimming mirror unit shipment growth of 9%, despite light vehicle production in the company's primary markets that decreased by approximately 3% during the same period. This overall growth was highlighted by the company's auto-dimming exterior mirror unit shipment growth of 21% year-over-year. Other net sales in the fourth quarter, which includes dimmable aircraft windows and fire protection products, were $10.2 million, an increase of 23% compared to $8.3 million in the fourth quarter of 2020. Fire protection sales increased by 32% for the fourth quarter of 2021 when compared to the fourth quarter of 2020. Other net sales for calendar year 2021 were $33.9 million, compared to $40 million in calendar year 2020. Fire protection sales increased by 10% year over year, while dimmable aircraft windows were down 48% in 2021 compared to calendar year 2020. The company expects that dimmable aircraft window sales will continue to be impacted until there is a more meaningful recovery of the aerospace industry and the Boeing 787 production levels improves. Share repurchases. The company repurchased 0.6 million shares of its common stock during the fourth quarter of 2021 at an average price of $34.18 per share. For the year ended December 31, the company repurchased 9.6 million shares of its common stock at an average price of $33.83 per share for a total of $324.6 million. As of December 31, 2021, the company has 24.8 million shares remaining available for repurchase pursuant to its previously announced share repurchase plan. The company intends to continue to repurchase additional shares of its common stock in the future in support of the previously disclosed capital allocation strategy, but share repurchases may vary from time to time and will take into account macroeconomic issues, including the impact of the COVID-19 pandemic and electronic shortages, market trends, and other factors the company deems appropriate. Let's take a quick look at the balance sheet. Balance sheet items mentioned today are valued as of December 31, 2021 and are compared to December 31, 2020, unless otherwise noted. Cash and cash equivalents were $263.3 million, down from $423.4 million, primarily due to share repurchases, dividend payments, and capital expenditures that more than offset cash flow from operations. Short-term and long-term investments combined were $213.1 million, up from $189.2 million. Accounts receivable was $249.8 million, down from $284.9 million due to the lower sales in the current period. Inventories were $316.3 million, which increased from $226.3 million. The majority of this change is in raw materials. Accounts payable increased to $98.3 million, up from $84.8 million, primarily due to increased raw material purchases. Quickly looking at the cash flow statement. For the fourth quarter, cash flow from operations was $69.1 million, compared with $135.4 million in the fourth quarter of 2020. Operating cash flow was impacted by the lower net income quarter-over-quarter, as well as shifts in working capital and deferred taxes. In calendar year 2021, cash flow from operations was $368.5 million, down from $464.5 million for calendar year 2020. CapEx for the fourth quarter was $30.8 million, compared with $14.7 million for the fourth quarter of 2020. In calendar year 2021, capital expenditures were $75.1 million and compared to capital expenditures of $51.7 million in 2020. Lastly, depreciation and amortization for the fourth quarter was $24 million, compared to $26.3 million for the fourth quarter of 2020. In calendar year 2021, depreciation and amortization was $99.1 million compared to D&A for 2020 of $104.7 million. I'll now hand the call over to Neil for a product update. Thank you, Kevin. Earlier this month, Gentex participated in person at the 2022 Consumer Electronics Show. It was great to be back at the show and be able to demonstrate our product-driven strategies with some of our new products and technologies. This was our largest presence at CES yet, and we displayed new products and concepts from all of our various technology areas. For the call today, I'm gonna focus on three primary areas of our booth: the driver monitoring demonstrator, the Cadillac Escalade, and the innovation lab. The first item I'll go over is the driver monitoring demonstrator. This incredible tool was developed by the Gentex team in order to demonstrate the power and capability of our driver monitoring solutions, which are based on the Guardian acquisition. In the demonstrator, we were able to show two different camera implementations. One was a driver-only focused camera that was located behind the mirror glass. The other solution was a cabin-based camera system that was mounted above the mirror in the overhead console area. In both of these camera implementations, we were able to demonstrate the operation of our AI-based algorithms used to determine the state or condition of the driver, their overall attentiveness, direction of eye gaze, head location, and the readiness to take over control of the vehicle. The systems were also able to identify if the person was holding objects like a phone, and how many people were seated. In addition to these features, we were able to show how a depth map can be created by using structured light. This depth capability allows for the expansion of features and provides more accurate information in regards to where things are physically located in the vehicle, their distance from the sensing system, and provides estimates on mass and other necessary information. The next item I'll discuss is the Cadillac Escalade. The Cadillac Escalade was one of three vehicles we had at the show and was positioned at the front of our booth. The Escalade contained multiple new features and technologies being demonstrated and showcased some of the great vehicle integration work our teams have been doing with our latest product innovations. As you approach the vehicle, you would see displays at the C pillar of the vehicle. These displays demonstrated how technology could be used to help communicate information about the vehicle status to a consumer approaching. Upon entering the vehicle, CES visitors were greeted by a new concept of our dimmable sunroof technology and a brand-new product concept that turns a traditional flip-down sun visor into a dimmable device. This was the first time we have shown in public our concept around a dimmable visor, and the initial feedback was even better than we anticipated. People like the idea of a visor that can be controlled to clear or darken to different levels depending on the glare they're trying to block. This dimmable sunroof concept was new and unique because it was designed into four independently dimmable areas, so that passengers in each seat could personally select the level of light blocking to their preference. Our dimmable technology features best-in-class dynamic range, which is the ability to choose anywhere from fully clear to fully dark, and the Escalade provided the perfect demonstration of these advantages of our technology. The user interface for these dimming devices was seamlessly integrated into the vehicle center stack display. This helped people to envision what a true integration could look like. The final feature I'll talk about today on the Escalade was our demonstration of a sensor system that could detect the heartbeat or breathing of a baby left in a rearward-facing child seat. This technology was part of the Guardian Optical Technologies acquisition we completed in 2021, and was also included in the driver monitoring demonstrator that I discussed earlier. This technology demonstration clearly showed how our system could be implemented in a vehicle and use micro vibrations to detect children left in a car, even when a camera-based system cannot see them directly. The final area to discuss was our innovation lab. That was contained in a private area inside our booth. This innovation area was a great location for us to demonstrate products for the medical market, as well as our sensing systems that can be utilized by many different markets. The sensing system demonstrated in the innovation lab was the Vaporsens technology. Vaporsens was an acquisition Gentex completed in the spring of 2020, and we've been working hard to refine the core technology and adapt it to the multitude of use cases that exist for this technology. We still have work to do to develop the product and the core nano-sensing technology, but we're excited to see this tech evolve and come to the market in the coming years. For the medical area, we demonstrated three primary items, our RetiSpec partnership for early Alzheimer's detection, updated surgical and medical office smart lighting control system, which is based on our partnership with Mayo Clinic, and a development and evolution of the wearable vision system we are partnering with eSight to develop and manufacture. The eSight system is a unique opportunity for Gentex to work with a partner in developing the next generation of vision systems to help people with severe vision loss. Some of our core competencies like cameras, optics, and displays are all key components to help make this system successful. Now for a quick update on launches for the fourth quarter of 2021. The fourth quarter of 2021 was another strong launch quarter for the company, with HomeLink and Full Display Mirror leading the way. We're excited to announce that during the quarter of 2021, we began shipping Full Display Mirror on five new vehicle nameplates. These new nameplates are the INFINITI QX60, the Lexus LX, the Lexus NX, the Toyota Wildlander for China, and the Toyota Tundra. For 2021, Gentex announced we began shipping Full Display Mirror on 18 vehicle nameplates. At the conclusion of 2021, Gentex was shipping Full Display Mirror on 65 vehicle nameplates around the world. This growth in Full Display Mirror over the past few years demonstrates how both the OEMs and consumers value this technology. Despite all the challenges we face with shortages and shutdowns, the Gentex team has never been busier in launching products and in developing new technologies for the future. The culture of innovation is strong at Gentex, and we're excited to see all of the team's hard work come to market in the coming years. I'll now hand the call back over to Steve for guidance and closing remarks. Thanks, Neil. The company's current forecast for light vehicle production for 2022 and 2023 is based on the mid-January 2022 IHS Markit forecast for light vehicle production in North America, Europe, Japan, Korea, and China. Based on this information, light vehicle production in these markets is expected to increase approximately 8% over the 2021 calendar year volumes. For calendar year 2023, light vehicle production for these markets is forecasted to increase by another 10% over the 2022 estimated volumes. Based on these light vehicle production forecasts, we are providing guidance estimates for calendar year 2022 for each of the following areas. Revenue for 2022 is expected to be between $1.87 billion and $2.02 billion. Gross margins for the year are expected to be between 35%-36%. Operating expenses are currently forecasted to be approximately $230 million-$240 million. Our estimated annual tax rate, which assumes no change to the statutory rate, is forecasted to be between 15%-17%. Capital expenditures for 2022 are expected to be between $150 million-$175 million, and depreciation and amortization is forecasted to be between $100 million-$110 million. Additionally, based on the company's forecast for light vehicle production for calendar year 2023, the company currently expects calendar year 2023 revenue growth of approximately 15%-20% above the 2022 revenue guidance. At the end of 2020, we talked about being cautiously optimistic about 2021 due to instability in our end markets, potential supply issues, international trade concerns, and the potential long-term negative economic impacts from the pandemic. Unfortunately, many of these issues impacted the expected recovery of the global automotive industry, and especially our primary markets in 2021. We come into 2022 anticipating that at least the first half of the year will continue to see headwinds from supply and labor shortages that we believe will prevent light vehicle production from reaching the IHS estimates we discussed. We also anticipate that these headwinds will continue to cause some margin compression for 2022 due to higher material, transportation, and labor costs. Despite these challenges, we remain optimistic that 2022 will provide a more predictable operating environment, where we can begin to focus on cost containment and hope that the tailwinds created by improved light vehicle production levels over the next few years will combine with our improved product portfolio to create record sales levels for the company. That completes our prepared comments for today. Thank you for your time, and we can now proceed to questions. As a reminder, to ask a question, you will need to press star one on your telephone, and to withdraw your question, just press the pound key. Our first question comes from the line of Luke Junk from Baird. You may begin. Good morning. Thank you for taking the questions. First question I had is, Steve, wondering if you could expand on what's informing your view that IHS is too aggressive in the first half of the year. What are you hearing from customers in terms of build schedules? Or maybe more importantly, what are you seeing right now in terms of production call-offs relative to what you know, clearly there was a lot of variability in the second half of 2021. Yeah. I think you know our opinion on production is really driven by what we saw in the second half of the year. We think that instability, we know that a lot of the supply base is struggling, not only with materials, but also with labor, availability of labor. We think there's gonna be a lot of unannounced OEM issues over the next couple months that are gonna drive production to not quite hit what OEMs would like it to be. We think the first half is gonna be a lot more choppy than the back half of the year. Okay. Follow-up question on gross margins. In your prepared remarks, you noted your belief that you will be able to offset, you think, some of the impacts to gross margin as we move through the year. Thinking about this from a modeling standpoint, in the very near term, should we expect gross margin to decline sequentially? Obviously, I know first quarter is usually a little weaker seasonally. As we move through the year, I don't know if you could put a finer point on where you think we might be able to exit the year relative to the full year range that you've provided. Thank you. Yeah, I don't think it'll decline too much from Q4 into Q1. There's usually a little bit of APR, obviously, headwinds created on January one, so that definitely may impact it slightly in Q1 and Q2. Really, the reason why we think the second half will be better is as revenue should grow throughout the year, and you know, based on our estimate and understanding that we think IHS is gonna be a little overstated in the first half, we would think sales levels in general in the first half will be a little lower than the second half of the year. That incremental revenue that we're expecting to see in the second half should help stabilize the margin profile and obviously create some of the efficiencies that we need on the manufacturing side. Great. I'll leave it there. Thank you. Thanks, Luke. Our next question will come from the line of David Kelley from Jefferies. You may begin. Hey, good morning, guys. Thanks for taking my question. Maybe starting with the supply shortages and the undershipments in the quarter you noted, just hoping you could provide a bit more color on the drivers of that impact. Was it broad base? Was it isolated to a subset of your supply chain? Then as we think about the cadence throughout the quarter, did procurement visibility deteriorate, you know, by quarter end? Just trying to get a sense of what you're seeing into to 2022 here. I mean, the vast majority of the revenue shortfall came from OEM changes, in terms of, you know, their lower levels of production, especially in our primary market. If you look at our highest dollar content markets, being North America and the European market, those were very significantly impacted on a year-over-year basis by production declines. Beyond that, the stuff that impacted us directly was, say, you know, if we're looking at, you know, $90 million-$100 million revenue difference versus what we were expecting, you know, 80% of that came from the OEM side, about, you know, 20% of it came from supply issues. Inside for Gentex, we've had a lot of problems over the last year with supply issues. We're historically, over the last year at least, been able to fight through almost all of those and figure out solutions. Really, we're down to a handful of suppliers that are impacting us on the electronic side right now. The problem with that is we don't see that ending any time in the next six months or so. Neil's team's been working very, very hard on trying to make sure that there's availability of components and that we, if there are, you know, different components that we can use to redo those designs to be able to incorporate the more available components. But that's been a nonstop treadmill really for about 18 months. We continue to look at, you know, areas that we think are a concern, and then try to make sure we de-risk the business by finding alternatives. Okay, that's helpful. Maybe a quick follow-up on that last point. How are you thinking about some of the in electronics cost inflation into this year and understanding that you know your timeline of negotiations with customers and potential passthroughs are still around the corner here. You know, we've heard about semi cost inflation, pricing passthroughs kind of further down the supply chain. Just curious how you're thinking about impact on or what's maybe baked into the guidance here. If you look at our guidance, I mean, on a year-over-year basis from a material cost perspective, we're looking at about a 250-300 basis point headwind because of the cost increases we've experienced kind of starting in the fourth quarter, but then really taking in earnest in full year of 2022. On the revenue side, we kind of have baked in, you know, headwinds as well of about a 100-150 basis points. That's what kind of what really bridges you from what a normal margin would be to what we're seeing in 2022. As we've talked before, like, conversations with OEMs are just now starting to happen. We expect some of those to elongate throughout the year because it's a different conversation than we've had historically about reduction. You know, we expect that headwind is gonna last this year, and hopefully we'll have some positive results, but it's gonna be OEM by OEM. Okay, that's super helpful. Maybe last one, if I can squeeze it in, and then happy to pass it along. Any impact from labor shortages in the quarter, or do you expect that to be more of a 2022 event? Just any color on labor or wage inflation would be helpful as well. Yeah, no, there's for sure wage inflation that's definitely impacting gross margin profile and operating margins as well. One of the things we're struggling with right now is overall availability of labor. What that creates is obviously the inefficiencies we talked about in the conference call comments. Really, what happens is it's driven by labor. When I say labor shortages, that's really driven by two factors. One is fewer people participating in the workforce right now, and then number two is the amount of people out due to contact tracing or COVID positive testing. Right now, you know, the stability inside and ability to plan is very difficult because of the, you know, quarantine periods associated with people who are contact traced or test positive. That's been the real difficulty right now is, you know, you're averaging, you know, upwards of 10% more of the general workforce that aren't available on a daily basis than what we're normally used to. That's been the most difficult part of it. In our size, you know, you're talking hundreds of people that aren't available every day, the way you would like them to be or that you would plan around. Okay. Got it. Thanks, Steve, and thanks, Kevin. Appreciate it. Mm-hmm. Thank you. Our next question will come from the line of Josh Nichols from B. Riley. You may begin. Yeah, thanks for taking my question. Just curious your thoughts. I mean, you have exposure to all the different auto OEMs, obviously. Do you think that we've kind of passed through the trough here when you look at the second half of 2021? Just thinking about the revenue cadence, is that expected to kind of build as we move throughout the year, or is it gonna be a little bit more disproportionately second half weighted whenever things start to ease up, as you kind of mentioned in your commentary? No, I think your statement that it will probably build throughout the year is kind of what we're expecting right now. You know, if we look at customer call-offs, Q1 looks like it's a step up over Q4 in terms of revenue. We're just a little more pessimistic about the industry's ability to handle that type of increase in overall volumes in a short period of time. The underlying issues that exist for the supply base and for OEMs, quite frankly, doesn't change on January one. We think it's gonna take a little longer for the industry to get back to those higher levels of production. Yes, the second part of that too, Josh, and I'm- That's about. Okay. Did I answer that question for you, Josh? I thought you had a second part of that question in. No, I think you got it then. Okay. Just because you mentioned it earlier, I mean, some supply constraints for the first time hitting FDM, but I mean, the company's obviously had a ton of success when you look at all the nameplates that you've been adding. Could you highlight a little bit about what's the pipeline look like for 2022 and 2023 in terms of being able to add significant new nameplates for that offering? If you could provide a little bit of color on the expectations as far as, like, unit growth that you're expecting for 2022 in that area, given the high margin contribution that it has. Yeah. Well, Neil will touch on 2022. I'll kind of hit 2021 retrospectively. You know, if you look at those final volumes for FDM this year, they were significantly lower than what we were expecting, and that was really driven by, you know, both the industry and the OEM side, but also our inability to get the components we needed to meet demand. I would, you know, I would guess that we are 150,000-200,000 units short of FDM this year of what we believed demand was coming into the year. We don't see that overall demand changing as we go forward into 2022 and 2023. We think we're gonna go back to that growth rate. You know, assuming we can get the components we need, we know the OEM interest and consumer interest is there. We think we're gonna get back to that faster growth rate on FDM even though 2021 was definitely impacted by component shortages. Neil, do you wanna- Yeah. Yeah, and for 2022, you know, there's a lot of variables, like Steve said, one volume, but also in getting components and then customers if they continue to stay with their build dates of vehicles. When looking at the year, we would see between, probably between 10 and 15 new nameplates launch in 2022. And I think we announced it at the last quarter, we have additional OEMs, I think we're up to 14 now that we've talked about that have awarded this business. We said that the numbers of 12, 13, and 14 would be in the next two and a half years. I anticipate one of those will for sure launch this year, potentially two of those. A lot of that's gonna be dependent on timing in the last half of the year, but we expect a couple new customers to be publicly announced and then somewhere between 10 and 15 new nameplates. Thanks for clarifying that. Last question for me, then I'll pass the baton. You've been right to kind of fade the IHS numbers, right, and be a little bit more conservative. I'm curious about what you're seeing that gives you some more confidence that the second half is really gonna be kind of a key inflection point. Is there specific supply that is coming online from some of the chip manufacturers? Or what are you hearing whenever you talk to OEMs that gives you that confidence that we're gonna see this inflection in the second half of this year? Yeah, you definitely have some additional capacity from, especially on the electronic side, that we believe will start to positively impact the supply side in the second half. It's why, you know, early last year we were talking about the fact that we thought this was a full 2021 and probably early 2022 problem. We still kind of hold to that timing. It's not gonna fix all the issues. I think the thing that gives us a little more confidence, especially on our side, is that there are different components that are available that aren't as constrained. It's really about us moving into those new components, getting those full redesigns done, and then broadening our supply base to make sure we can meet the customer demand side. We, you know, we know we've definitely left some revenue on the table because we couldn't meet the demand of the customers, and obviously the industry had its bigger challenges. We definitely have seen the ability at the end of Q4 for the industry to pick up the pace was pretty noticeable. I just don't think it's quite as aggressive as what IHS thinks for the first half. Thanks, guys. That's it for me. Thank you. Thank you. Our next question will come from the line of David Whiston from Morningstar. You may begin. Thanks. Good morning, guys. Morning, David. Morning. First question's on the recently signed infrastructure bill in the U.S. I've heard that that requires headlights that are very similar to your ADB tech to be approved in two years. I was just curious what kind of potential windfall for Gentex could ADB be in the U.S. because of this legislation? Yeah, I think in regards to where our product's been going over the last few years with the standalone SmartBeam product, it's gradually been getting replaced, as we've talked about, I think for a couple of years now. It is exciting that that technology is finally coming to the market since it's been available in Europe for multiple years. To see it actually come here is great, but I don't see that it's gonna have a great impact on us at this point. Yeah, unfortunately it's about 10 years too late. Mm-hmm. No, that's too bad. On the new cabin monitoring tech you showed at CES, I was just curious across your customer base, someone, for example, like GM, would they perhaps not be very interested in this tech because they already have some monitoring technology as part of their Super Cruise package? Yeah, so I think what's interesting about the tech and what we were showing is, you know, what they have in Super Cruise is similar on the base system that Neil described in his tech conversation. But what we showed on the advanced side is very different than what anyone's doing right now. Even though there is always some resistance when you have an embedded product currently, the upside is all OEMs are looking for what the future in this area can look like. We believe we showed something very compelling, both from a geography standpoint, which is different than what GM is executing in Super Cruise, but also on the advanced features that we can offer by doing a full cabin monitoring, not just driver monitoring. On chips, I mean, we actually see in the press some articles from time to time about how there's actually going to be a big supply glut in a few years because everyone's adding capacity. I guess my question to you is that really a bad thing for autos? Doesn't sound bad to me, but I was curious on your reaction. No. In fact, I mean, honestly, the reason why the material cost increases that everyone's seeing is because of the shortage. There's a new watermark being created by the supply side on what the values of electronic components are. Once you're overcapacitated or once there's available capacity, that's when the balance of power starts to shift into the buyers of those components versus what we're seeing right now. I agree with you completely. I mean, it gives you more design flexibility and certainly the ability to plan better. More importantly, it does start to change the overall economics of the value of a component. Okay. Thanks, guys. Thank you. Thanks. Thank you, David. Our next question will come from the line of John Murphy from Bank of America. You may begin. Good morning, guys. How are you? Good. Good morning. Just a first question on the CapEx outlook. You know, it's more than double year-over-year versus 2021. I'm just curious what's going on there. Yeah. Well, first, 2021 ended about $25 million less than what our plan was. And really, it's kind of crazy, but it was also about availability of even equipment. We just, you know, we had placed orders, honestly couldn't take delivery of some of the CapEx that we had planned for this year just due to shortages. Part of that is just $25 million or so moving from 2021 into 2022. The other thing I think it's important to look at is the last three years, given the issues, we've really been very careful on our CapEx spend. Historically, if you go back over, let's say, a 10-year period, you would say we averaged around $100 million a year in CapEx on a much smaller business back then. We've been very focused on being disciplined over the last few years. Now with the growth rates into 2022 and into 2023, we have some capacity issues that we wanna address through some buildings, but then also there's levels of automation that will help with the efficiency and obviously some of the labor challenges, and then more importantly, just building that capacity. Obviously with some of the new products and the new product portfolio, those require CapEx to get those ready for operations as well. How should we think about sort of run rate CapEx after sort of this catch up in 2022? I mean, we're talking probably in the $125-$150? I'd say no, we're probably more like after 2022, if you look at 2023 and beyond, we'll probably be more in the 120-130 range. Got it. Okay. Super helpful. The next just on the IHS schedules that you know is just sort of a you know beating a dead horse here, but I mean, when we look at the light vehicle production schedules, the 17% increase in North America and 18% in Europe that are expected, is that where you see the most risk? Just trying to understand- Yeah. Exactly right. Those are big increases. Yeah. Exactly right. That's why, when we look at those, especially towards those large markets, you know, they haven't supported those levels of production in a long time. We think there's gonna be a lot of challenges trying to get back to that level in a short period. Okay. Would you govern those really as something sort of going closer to 10% increases? I mean, where are you haircutting those to? It seems like that, like supporting a 10% plus increase in the chip industry right now is not in the cards. I mean, what are you kind of haircutting that to in your thought process? Yeah. If you look at like the overall, I'll kind of talk about our primary markets and the overall IHS data being around 8%-9% growth rate for 2022. We think that's more like 5%-6%. With the bulk coming out of North America and Europe? Most of it coming out of North America and Europe. Got it. A little bit Japan, Korea. Okay. Got it. Driver monitoring systems, cabin monitoring systems, there's a lot of players out there. You sit in a unique position in where you are in the vehicle, which is a good vantage point. Just curious, you know, how many competitors are there and, you know, I mean, sort of what's the unique position that you think you have? I mean, you know, in the mirror you're, you know, in a very unique position with real proprietary technology that's protected. I mean, when you get into this new pool, I mean, is it just a much wider pool of, you know, competition? How do you think about that for that part of the business going forward? No, that's a great question. I mean, one of the things when we decided to make the Guardian acquisition and then look at what our competitive advantage would be in the space, we looked at the availability. The base version of a system that's just a camera anywhere in the car looking at only the driver, there are gonna be a lot of players in that space. That's not really where we were wanting to compete. Where we wanna compete is in the higher end system, both from a geography standpoint, to your point of concealing the camera and the emitters, IR emitters in a mirror location or in an overhead, also looking at the advanced feature side. What Neil was walking through on that, on the advancements, the ability to see, you know, look at a rearward-facing car seat and pick up micro vibrations is really the secret sauce of the system of what Guardian was working on. It's literally doing structured light to look at it. It's picking up very, very small micro vibrations in and around the cabin of the vehicle. With that comes the ability to do a lot of feature sets that just a vision system alone would not be able to do. You know, we're gonna compete not only from our geography and location and ability to conceal cameras and emitters, but also with a higher-end feature set. Got it. Then just lastly on the raw mat discussions, I mean, you know, obviously these are, you know, it's a little bit opaque on hedging, you know, pass-throughs, all this kind of stuff that, you know, impact you're sharing with the automaker on the raw mat, you know, hikes and hopefully at some point normalization coming back down. I mean, has anything changed in these discussions? I mean, my understanding is that, you know, prior, I mean, I haven't done this for a long time, you know, prior to 2008 and 2009, the bulk of the raw mats were sort of at risk more on the supplier side, on your side. 2008 and 2009, the automaker switched to taking over a bit more. Now it seems like it's, you know, switching. You know, they're pushing back a little bit because they're so. You know what I mean? There's so much going on with AVs and EVs. They need help on both the CapEx or the capital and the cost side. It just seems like they're gonna push back a little bit more on this raw mat increase. I'm just curious if that's changing or if it's just more of the same in these discussions. No, it's definitely. I would say it's definitely changing. I mean, we've engaged just since the last call, we started to engage with OEMs on this very discussion. Honestly, in 20 years at Gentex, I've rarely had this type of a conversation. It's definitely new waters in a lot of ways for us as a company. OEMs are beginning to stake their positions on what are they gonna do with the supply base. Obviously, in terms of tier one suppliers, there's a lot of companies that are gonna struggle to eat these type of raw material increases and labor and cost increases without support from an OEM. It's gonna be very interesting to see which OEMs are supportive to try to help the supply base and which push back harder. In a constrained environment, it's going to become interesting. You know, those OEMs who work with the suppliers better are probably gonna be in a position to get more access to inventory and to components. I think every OEM's gonna make a decision on what their position is, and we're beginning to have those discussions about, you know, the fact that we can't eat all these cost increases alone without help from an OEM. Just one follow-up on that. I mean, have you ever envisioned a contract that would be set up for what ultimately gets passed through to the end consumer? I mean, the automakers are at that point where theoretically they can raise prices to potentially offset this, but you're kind of stuck in the sandwich where you don't have that flexibility. I mean, is there any kind of discussion on indexing to ultimate sell-through pricing to the consumer? I mean, that's where I mean that would be sort of the holy grail of trying to get up the food chain where it gets passed on to the consumer. That's complicated. Any discussions around that? I wouldn't say discussions yet. There's been, you know, a ton of speculation and ideas thrown out, and obviously, as a supplier, there's a lot of discussions that we have with OEMs about, hey, we're willing to get creative with you to try to solve this problem. So I mean, there's been I wouldn't call it any, you know, tangible conversation around an idea like that. Right now everyone's kind of in the idea generation phase, where you're trying to find a way that it doesn't become combative, but you're trying to find a way that it can work for both, you know, us and an OEM to make sure that, you know, we're getting there. It is interesting. OEMs, I feel like through this last 18 months, have gotten better with consumers, saying, "Hey, there's a little bit more pricing power there than probably OEMs even believed in the past." Especially with the fact that you can't build as many vehicles right now, so you gotta try to maximize profitability on a per vehicle basis. OEMs have seemingly done a really good job of changing their mindset as it relates to what is the price of a vehicle and how do they maximize that value from a consumer. Yeah. Let's just hope that sticks with them. Exactly. Well, thank you so much, guy. Thank you so much, guys. Take care. Thank you. Thank you. Our next question will come from the line of Mark Delaney from Goldman Sachs. You may begin. Yes, good morning, and thanks very much for taking the questions. You know, first, I wanted to ask on the sunroof. You spoke about it as part of your comments about the CES trade show. Could you go into more depth in when you could see that being used in the market for production vehicles? Sure. Absolutely. Yeah, the evolution of the product has happened over the last three years through, well, three or four years now through CES, as we've demonstrated different levels of dimming devices and we've grown that into sunroofs from the aerospace window side. From a market and activity, there's still a lot of work to do from a vehicle side integration, working with customers. I would say that within the next three to four years is when you would anticipate seeing that from us in the marketplace. It's a great evolution. I think the thing that's really coming along well with the technology is the consumer side, seeing the need and the want for it. The ability to choose individual control over the different seating locations for the consumer to have it be clear or dark or different levels in between the two states is extremely advantageous and really positive results. Yeah, it's helpful. Thanks. In terms of cash flow for this year, could you talk about use of cash and how you think about maybe balancing that? I mean, you spoke already on your CapEx plans, but in terms of using free cash flow, you know, how do you think about things like buybacks versus M&A? Are there more tuck-ins that you are or even larger acquisitions you may be considering, you know, like Guardian, you know, you augmenting the product portfolios. Interested in you know what the outlook for your potential acquisitions may be. Thanks. Yeah. If you look at the playbook we've been executing the last couple of years, to your point, we've been enhancing our R&D portfolio with the small acquisitions that we put in place. We've got teams working on product development for commercialization. Again, that doesn't detract a lot from a free cash flow perspective. We plan to stick right to the plan as we did this year. We're spending $325 million on CapEx. As sales come up, the operating cash flow doesn't change, the margin matrix doesn't change. CapEx is up a little bit, as Steve already alluded to, but that leaves a significant amount for kind of executing share repurchases on a systematic basis throughout the year. Then if there is an opportunity that presents itself from either a bolt-on, or a small technology acquisition, we continue to look, and our teams are very focused on that and developed over the last few years. The same offensive plays as we ran in 2021 will apply to 2022. Just to clarify quickly, when Kevin said the $300-$325, he was talking about repurchases. Yes. not CapEx. Yeah. Not CapEx. Sorry. Understood. Thank you. Once again, that's star one for any questions, star one. Our next question will come from the line of Ryan Brinkman from J.P. Morgan. Your line is open. Hi. Thanks for taking my question. In the release, it mentions full display and Integrated Toll Module as being more impacted by the chip shortage than your lower feature, I guess, lower ASP products. I'm curious the degree to which this mix impact maybe the, you know, the less high feature products may be factoring into your margin guide for 2022. I get that the overall level of customer production due to the chip shortage will result in less fixed cost leverage. So arguably, you know, the chip shortage is impacting your margin in more ways than one. But just specifically with regard to the mix of your own products, is that a significant factor in the margin guide? And when do you think you may no longer be supply limited on some of these higher feature products? Well, as Steve alluded to, right, the first half of the year with FDM and ITM constraints kind of rolled off Q4 that we see in the first half of the year, hopefully freeing up in the back half. What we're seeing is great growth in other products like we did in Q4 with outside mirror growth throughout 2021 into 2022. When you put all that into the mix calculation, we're seeing about a 50-100 basis point headwind from the mix side if you look at the overall product mix and shipping base mirrors versus the advanced feature stuff. Okay, that's very helpful. Thank you. You mentioned, I think in response to one of the previous questions that the conversations with customers had already begun with regard to the recovery of these non-commodity supply chain costs that were talked about on the third quarter. Based upon those early discussions, would you have any thoughts on, you know, what percentage of that cost increase that you might potentially be able to recover in those discussions? Yes. It's tough to put it in that regard already. Obviously, with some of these, as you can imagine, you're having these conversations early with some of the more difficult relationships. Unfortunately, it's probably not a good indicator of how all of them will go 'cause you're starting obviously with the ones that are most challenging. It's tough to put it into a percentage of what percent of increase are you seeing because, like we mentioned before, we're gonna take a long-term approach with this, and so we're not gonna come in saying, "This has to be done, and it has to be done this year, and this is what it has to be." It's more about, hey, what does the book of business look like? What is the new opportunities for growth look like? You know, what are our previous commitments, and how do we find something that can work for an OEM and handle this over, you know, a multiyear period? It's difficult to put into a percentage right now. What I would say is that, you know, probably, you know, half of our conversations aren't overly combative. OEMs are interested in collecting the data and understanding what we're seeing and having a pretty honest. It's really an education process at the beginning of us explaining and helping them understand what we're seeing. Then I think the next two to three months are gonna be key in trying to reach some agreement with them on how do we go about this together. Very helpful. Thank you. Thanks, Ryan. Thank you. I'm not showing any further questions in the queue. I'll turn it back over to Josh for any closing remarks. Great. Thank you everyone for your time and the questions today. We look forward to meeting with you in 2022, and hope you have a great weekend. This concludes our call. This concludes today's conference call. Thank you for participating.