Good day, and thank you for standing by. Welcome to Gentex fourth quarter and year-end 2023 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one one on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like 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 and year-end 2023 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, 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 to 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 any unauthorized use of the contents of this conference call. This conference call contains forward-looking information within the meaning of the Gentex Safe Harbor statement, included in the Gentex report's fourth quarter and year-end 2023 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. Steve? Thank you, Josh. For the fourth quarter of 2023, the company reported net sales of $589.1 million, an increase of 19% compared to net sales of $493.6 million for the fourth quarter of last year. The fourth quarter of 2023 revenue included one-time cost recoveries of approximately $5 million. Light vehicle production increased by 6% quarter-over-quarter in the company's primary markets of North America, Europe, Japan, and Korea, which equates to a 13% revenue outperformance versus the company's underlying markets. The gross margin in the fourth quarter of 2023 was 34.5%, compared with a gross margin of 31.2% in the fourth quarter of last year. The increase in gross margin in the fourth quarter of 2023 was positively impacted by recurring price increases to customers and one-time cost recoveries, which together positively impacted the gross margins by approximately 100 basis points on a quarter-over-quarter basis. The additional improvements in gross margin came from the higher sales levels, improved leverage on overhead expenses, purchasing cost reductions, lower inbound freight expenses, and improvements in overtime-related costs. The fourth quarter of 2023 produced significant year-over-year gross margin improvements, as well as a sequential improvement in gross margin compared to the third quarter of this year. Our team has done an excellent job of working with our customers to execute both temporary and permanent price increases to help offset the inflationary cost environment that has negatively impacted Gentex over the last two years. I'm very pleased with the progress we have made in our gross margin recovery plan during 2023, and as we head into 2024, the next phase of our gross margin recovery plan will focus on bill of material reductions, throughput improvements, and overtime and scrap cost reductions. The improvements we have made in 2023, combined with our targeted improvements for 2024, provide the roadmap of how we plan to achieve our target of a 35%-36% gross margin by the end of the year. Operating expenses during the fourth quarter of 2023 were up 18% to $70.6 million, compared to operating expenses of $59.7 million in the fourth quarter of 2022. Operating expenses increased quarter-over-quarter, primarily due to staffing and engineering-related professional fees. As we ramp up our development and launch capabilities, our planned R&D expenses are trending higher, but remain in line with our expectations and continue to increase in line with our overall sales growth rates. We are focused on adding technical bandwidth across many different disciplines to help execute the significantly higher number of launches needed to accomplish our recent and forecasted growth. While launch activity has been driving an increase in R&D, we also continue to invest heavily in research activity focused on new products and technical capabilities, while also ensuring that the technical team is in place to help drive product redesigns that will optimize the cost structure of existing bills of material. We expect our R&D levels to be elevated throughout 2024 as the pace of innovation and launch of new products remains at the highest rate in company history. Income from operations for the fourth quarter of 2023 was $132.8 million, compared to income from operations of $94.1 million for the fourth quarter of last year. During the fourth quarter of 2023, the company had an effective tax rate of 13.9%, which was driven by benefits from the foreign-derived intangible income deduction, discrete benefits from stock-based compensation, as well as provision to return adjustments. In the fourth quarter of 2023, net income was $116.9 million, compared to net income of $86.2 million in the fourth quarter of last year. Earnings per diluted share in the fourth quarter of 2023 were $0.50, compared with earnings per diluted share of $0.37 in the fourth quarter of last year. For calendar year 2023, the company's net sales were $2.3 billion, an increase of 20% compared to net sales of $1.92 billion in calendar year 2022, representing the highest annual sales in company history. Light vehicle production in 2023 increased by 12% compared to last year in the company's primary markets. The company's revenue outperformance in 2023 versus the underlying market was driven by growth in FDM and exterior auto-dimming mirror unit shipments, as well as continued penetration of base interior auto-dimming mirrors. For calendar year 2023, the gross margin was 33.2% compared to a gross margin of 31.8% for calendar year 2022. Gross margin improved for the year by 140 basis points, primarily due to price increases and cost recoveries, lower freight costs, product mix, and improved overhead leverage created by the growth in revenue. For calendar year 2023, operating expenses increased 11% to $266.9 million, compared to operating expenses of $239.8 million last year. For calendar year 2023, the company's effective tax rate was 15.2%, compared to an effective tax rate of 13.8% for calendar year 2022. The increase in the tax rate in 2023 was primarily driven by a reduced benefit from the foreign-derived intangible income deduction compared to last year. Net income for calendar year 2023 was $428.4 million, up 34% compared to net income of $318.8 million last year. Earnings per diluted share for calendar year 2023 were $1.84, compared to earnings per diluted share of $1.36 last year. I'll now hand the call over to Kevin for some financial details. Thanks, Steve. Automotive net sales during the fourth quarter of 2023 were $578.7 million, compared to $482 million in the fourth quarter of 2022. For calendar year 2023, automotive net sales were $2.25 billion, which represents a 20% increase over 2022. The increase in automotive net sales was driven primarily by a 45% increase in FDM unit shipments, as well as a 21% year-over-year increase in exterior auto-dimming mirror unit shipments. Other net sales in the fourth quarter, which includes dimmable aircraft windows and fire protection products, were $10.5 million, a decrease of 2% compared to other net sales of $10.7 million in the fourth quarter of 2022. Fire protection sales decreased by 44%, and the dimmable aircraft windows increased by 362% for the fourth quarter of 2023 when compared to the fourth quarter of 2022. Other net sales for calendar year 2023 were $44.6 million, compared with other net sales of $44.2 million in calendar year 2022. Fire protection sales in 2023 were down 32% year-over-year, while dimmable aircraft windows sales increased by 211% in 2023 compared to last year. Share repurchases. The company repurchased 2.2 million shares of its common stock during the fourth quarter at an average price of $30.76 per share. For the year ended December 31, 2023, the company repurchased 4.93 million shares of its common stock at an average price of $29.61 per share, for a total of $144.7 million. As of December 31, 2023, the company has 15.9 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, market trends, and other factors the company deems appropriate. Shifting over to the balance sheet. The balance sheet comparisons mentioned today are as of December 31, 2023, as compared to December 31, 2022. Cash and cash equivalents were $226.4 million, compared to $214.8 million. Short-term and long-term investments combined were $313.4 million, up from $225.3 million, which includes fixed income investments as well as the company's equity and cost method investments. Accounts receivable was $321.8 million, up from $276.5 million due to the increase in sales levels. Inventories were $402.4 million, down from $404.4 million, and accounts payable increased to $184.4 million, up from $151.7 million. Let's take a look at preliminary cash flow items for the quarter and year. Fourth quarter 2023 cash flow from operations was $169.6 million, which was an increase from $101.8 million in the fourth quarter of 2022. The increase was due to increases in net income, shifts in working capital, and deferred taxes. Year-to-date cash flow from operations was $537.2 million, an increase from $338.2 million in 2022 due to increased net income and changes in working capital. CapEx for the fourth quarter was $62.3 million, compared with $37.9 million for the fourth quarter of last year. In calendar year 2023, capital expenditures were $183.7 million, compared with $146.4 million last year. Depreciation and amortization for the fourth quarter was $22.3 million, compared with $23.3 million for the fourth quarter of last year. Calendar year 2023, depreciation and amortization was $93.3 million, compared with $96.6 million last year. I'll now hand the call over to Neil for a product update. Thank you, Kevin. Earlier in January, Gentex participated in the 2024 Consumer Electronics Show. CES is one of the many tools we use to showcase our current and potential future product portfolio to customers and consumers. Our booth was designed to help automakers envision a path toward the autonomous age with scalable products and features ready for implementation on today's vehicles. This year, we had two different booths where we demonstrated Gentex technology. One of the booths, which was located in North Hall, showcased our newly announced acquisition of eSight, the medical wearable for people with vision loss. This booth was set up to allow partners and consumers the ability to experience this great technology, and it showed Gentex's capability and experience in displays and cameras applied in a new market segment. Our primary booth was in the West Hall and was focused on our automotive, aerospace, and consumer-facing products and technologies. This booth contained multiple vehicles and simulators, which were designed to demonstrate new features and technologies to visitors, enabling them to experience the firsthand benefits of our products right on the show floor. One of the unique demonstrators showcased a scalable, yet holistic approach to driver and in-cabin monitoring. The driver monitoring system tracked a driver's head pose, eye gaze, and other relevant movements to determine distraction, drowsiness, sudden sickness, and readiness for the return of manual control in semi-autonomous vehicles. The system is easily expandable to include 2D or 3D cabin monitoring for detecting passengers, behaviors, objects, and even presence of life. Our goal with this system is to provide solutions for today's vehicles and the transition to autonomous vehicles, which means engineering a comprehensive and scalable monitoring platform based on our competency in digital vision and sensor fusion techniques. A second demonstrator was set up to demonstrate the value and use cases for thermal imaging using long-wave infrared technology. Gentex previously announced our partnership with ADASKY, whose focus is on thermal imaging. At CES, we showcased a simulator that we developed together that highlighted the value that thermal imaging can bring to both forward and rearward vision systems in a vehicle. To demonstrate a forward-facing thermal imager, we showed how this information could be displayed in the center stack or any display in the dash of a vehicle to help a driver or passenger see under difficult conditions. For the rearward-facing thermal imager, we showcased how this information could be displayed in our Full Display Mirror in order to provide additional visibility benefits to the consumer in difficult driving conditions. Additionally, we demonstrated how a thermal imager can be utilized as an additional sensor input into ADAS systems for really difficult driving situations such as heavy fog, low light, very bright light, snow, and rain. Also displayed at CES were our Large Area Dimmable Devices, including sunroofs that darken on demand or with system intelligence, and sun visors that fold down like a traditional visor but include a clear, dimmable panel that can darken on demand or based on sun load sensors. With the Dimmable Visor we showed previously, the consumer would not have a vanity mirror on the visor due to the surface being all glass. So for CES this year, we had added an additional feature. With the press of a button, the see-through glass surface became a reflective surface, and the lighting above the visor turned on so the person could utilize the device like a traditional vanity mirror. This new technology and feature was really well received by everyone that sat in the vehicle. The last area of focus at CES was the launch of our new residential smoke detector product that we announced and displayed at the show. Gentex is celebrating our fiftieth anniversary this year. It's interesting to reflect on the fact that Gentex began as a smoke detecting company, and we are now using all of our background in detecting smoke for commercial applications to create an all-new product line of residential detectors called Place. Place has four different products that are designed for specific locations in the home. There's a product for the garage, the kitchen, a child's room, and a general use product. Each of these comes with some unique technology and capability to add value to the end consumer. For example, the child's room product has a nightlight feature, a white noise generator, audio and camera that will allow parents to check up on the child remotely. We're excited to launch this new product in 2024 and expect that this new product line will open many new opportunities as we expand into the consumer-facing market. Overall, CES 2024 was an excellent opportunity for us to demonstrate to our current customers, and hopefully some future ones as well, where our product strategy and development focus is heading over the next few years. In terms of launches for the fourth quarter of 2023, there were 10 net new nameplate launches of our interior and exterior auto-dimming mirrors and electronic features. For calendar year 2023, we experienced our greatest net launch rate since 2015, and we continue to see a strong pipeline of launches through 2024. Now, for an update on Full Display Mirror. The fourth quarter of 2023 was another strong quarter for Full Display Mirror shipments, and we're excited to announce that for the calendar year 2023, we were able to exceed our unit shipment goal of 500,000 units over 2022 volume, by shipping approximately 750,000 units more than 2022. This would bring our 2023 FDM unit shipments to approximately 2.44 million units. It's clear in looking at this growth, that the product is being well received by our OEM customers and the end consumers. 2023 was a really strong year for Gentex products and technologies. The FDM growth was outstanding. We had an extremely heavy launch schedule, and late in the year, we had minimal component shortage issues to worry about. In 2024, while we continue to push the Gentex technology path like we showed at CES, we will also need to focus on the execution of our heavily launched backlog and the redesign work needed to achieve the cost-optimized designs necessary to recover from the increases we've seen over the past few 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 calendar year 2024 and 2025 are based on the S&P Global Mobility mid-January 2024 forecast for light vehicle production in North America, Europe, Japan, Korea, and China. Light vehicle production in these markets is expected to decrease by 1% in 2024 compared to calendar year 2023. The forecasted vehicle production volumes for calendar years 2024 and 2025 from S&P Global Mobility are shown in our press release from today. Based on this light vehicle production forecast, the company is providing full year guidance estimates for calendar year 2024 as follows: Revenue for 2024 is expected to be between $2.45 billion-$2.55 billion. Gross margins for the year should be between 34%-35%. Operating expenses are expected to be between $295 million and $305 million. The estimated annual tax rate for the year is forecasted to be between 16% and 18%. Capital expenditures for calendar year 2024 are expected to be between $225 million and $250 million. Depreciation and amortization is expected to be between $95 million and $105 million. Additionally, based on the mid-January 2024 S&P Global Mobility light vehicle production forecast, as well as the company's estimates for aerospace, medical, and fire protection products, the company currently expects calendar year 2025 revenue to be between $2.65 billion and $2.75 billion. Calendar year 2023 turned out to be a remarkable year for the company and was the first time that Gentex has exceeded $2 billion in annual revenue. It is important to note that the growth the company has achieved over the last few years has been driven by our new technologies and innovative product roadmaps. From 2018 through 2023, the company's revenue has grown by over 26%, while light vehicle production in our primary markets of Europe, North America, Japan, and Korea has shrunk by over 11% during the same period. We believe this revenue outperformance versus the underlying market is evidence that our product strategy is effective and is creating our targeted results. Our revenue guidance for 2024 and 2025 shows that we remain confident in our ability to continue to outperform the underlying market and revenue growth while we continue to focus on gross margin improvement. Gentex is poised to execute on our forecasted revenue growth while maintaining focus on cost control and gross margin improvement, which are necessary to accomplish the goal of achieving a gross margin profile of 35%-36% by the end of 2024. These factors, we believe, will result in record revenue and profitability that should create the foundation for increased shareholder returns over the next several years. This completes our prepared comments for today. We can now proceed to questions. Thank you. As a reminder, to ask a question, please press star one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star one, one again. Please stand by while we compile our Q&A roster. Our first question is gonna come from the line of Luke Junk with Baird. Your line is open. Please go ahead. Good morning, everyone. Thanks for taking the questions. First, hoping we could start on the top line, especially, incremental FDM units. Just, wondering what's the framework that you're looking at updated this year. Is, 500,000+ units still a good number to be looking at incrementally in 2024? And then just how do you build up to that in terms of mix of new launches you're expecting this year, take rates, anything else we should be considering? Good morning, Luke. You're absolutely right. I think we're targeting right now for 2024, about a 500,000-unit increase in FDM volume shipments for this year. In terms of the mix of where that's coming from, 80% of it's gonna come from existing OEMs, and, and existing platforms, but increased take rates and kind of just expansion amongst the existing OEMs. Probably, that last 15%-20% is gonna be new targets, new launches. Several of those will be with new OEMs as well. Got it. And then, switching gears to margins. Just curious, Steve, what initial feedback you're getting from tier two suppliers as you've engaged with them going into this year in January, relative to, one, you know, just their positioning around potential cracks in semi-pricing and what you might need to do from a redesign standpoint this year. And, you know, if you are seeing opportunity, just, you know, how opportunistic can you be realistically pushing on the tier two base? Yeah, we're actually sitting really well right now. Our purchasing team has done an excellent job of preparing 2024 pricing with the supply base. The, you know, good majority of our suppliers, you know, have reached out and have collaborated with us on how to get those costs, you know, maybe not back to pre-pandemic levels, but definitely below where they were in 2023. So that should provide some of the margin tailwind we need in 2024 to help, you know, throughout the year, get us to our target, our targeted margin profile by the end of 2024. The redesigns really are gonna be more of a factor at the exit velocity of 2024 as we head into 2025. A lot of the work is gonna take, you know, 6-9 months to get it, you know, the research, the actual designs redone, and then a few months of validation. And so, what we're optimistic about, though, is if we look at those core areas of being, you know, purchasing reductions in combination with operational efficiencies, will help drive margin improvement in 2024. And then the work we're doing on the engineering side will really help keep that margin stable or if not, improve slightly in 2025 and beyond. G ot it. I'll leave it there. Thank you. Thank you. One moment as we move on to our next question. Our next question comes from the line of James Picariello with BNP Paribas. Your line is open. Please go ahead. Hey, guys, this is Jake on for James. Morning. Can you guys just give us some color on FDM margins and how long it's gonna take them to get back to that run rate, 40%-45%? I know they've been under pressure for the last, you know, few quarters to a year. Yeah, well, I think, you know, they're, they're running probably in the low 30s right now corporately, in terms of what that margin profile looks like. So below corporate average, primarily driven by the cost increases that we've encountered over the last couple of years. You know, our goal with these redesign efforts are really to get them back in line with corporate average. So I, I wouldn't predict that they're gonna go to 40% or anything, but, you know, somewhere in that 35%-36% is kind of our long-term goal, where we believe we can get that product over time. Awesome. Thanks, Steve. And then, exterior mirror shipments in the quarter came in, very strong. Can you talk about some of the drivers there, and how should we think about that in 2024? Thank you. Thanks for pointing that out. Obviously, we're very pleased with the success in outside mirror growth over the last couple of years. Fourth quarter was no exception. Been very, very strong growth. A lot of that's coming just from expansion and take rate improvements. Obviously, the mix, the vehicle mix has been good in terms of the types of vehicles OEMs were building during some of the constraints, has definitely been a tailwind for us. Obviously, this type of volume creates some operational challenges in terms of getting capacity in place that quickly. Our team has done a remarkable job of keeping yields up, given the strong demand that's been put on those, that part of the organization. But as we look forward, you know, a lot of our, a lot of our customers, including Tesla and others, have driven very high take rates. E- vehicles and BEV, in particular, have very much latched on to some of the higher-end technologies and features, and so those have been, from a competitive set, have been driving take rates at other OEMs higher as well. Very helpful. Thank you. Thank you. One moment as we move on to our next question. Our next question is going to come from the line of Josh Nichols with B. Riley. Your line is open. Please go ahead. Yeah, thanks for taking my question, and great to see the record results for 2023. Now I was just curious, I know historically, 1Q, there's been, like, a 200 to 300 basis points typically of, like, margin compression for some cost concessions. Just looking at the guide, is that, like, something that the company expects will happen this year, and then you kind of rebound from there and get back to that 35%-36% level in the back half of this year? Yeah, we usually see a dip in Q1. I would say, you know, Q1 of this year probably won't be quite as significant from a compression standpoint. Just if you look at our existing agreements with OEMs, it's definitely come down from where it was, given all the cost pressures that the industry has seen over the last couple of years. That 2%-3% isn't really what we're targeting this year for, or expecting, in terms of givebacks to OEMs. We think that'll be less than that. But, as normal, we would expect Q1 to be probably the lightest margin quarter of the year. And then to your point, by Q4, we expect to be in that 35%-36% range. And really, that's driven by a couple factors as well. You have, A, the price downs in Q1 that happened to OEMs. We're also in Q1, you're still burning through inventory that was purchased based on 2023 economics, and so the concessions from the supply base really won't start hitting until late Q1 or Q2. Great. And then it was really encouraging and good to see all the company's cutting-edge technology at CES this year, whether it was the thermal imaging, dimmable glass or in-cabin monitoring and the new direct-to-consumer offering. There's a number of things the company is working on here in terms of advanced technologies. But I guess if we're thinking about what could be the next or nearest term positive catalyst in terms of monetization and revenue growth, like, what, h ow would you handicap some of the newer offerings in terms of which one is going to drive more revenue over the next, like, 12-36 months? Yeah, I'd say in the shorter term, it's going to be driver monitoring. We're working on a couple launches right now with some OEMs where we have business awards, so those will be probably creating material revenue in the... Of that feature set that you saw at CES, that'll be the one driving material revenue the soonest. Following after that, obviously, we still think in the next three to five years, it's going to be large area devices, and from an overall dollar standpoint, still has one of the largest opportunities that we've seen as a company. Probably in that same horizon, obviously, will be the visor project. We've only been showing that really for about 1 year now, so we've got a lot of work to do. But the interest at CES in that product in particular was very tangible. I mean, it's, there's hardly anyone that you show that product to that doesn't understand the use case and why there could be some consumer value created. Yep. Just as a follow-up, I know that Europe is moving towards mandating this type of stuff for in-cabin monitoring. Like, any way to quantify the impacts or just some color on what you're seeing there in terms of the demand uptick? Y eah, I mean, our first, and that's kind of what's happening. So the real regs that are driving it are in the European Union, where some type of an assist and alert notification is required, especially as we start to move into semi-autonomous vehicles. And so that's where the majority of the business development side has been taking place. But there's a lot of interest, even from existing domestic customers that are interested in this type of technology, interested in how we can integrate it, conceal the technology to make it not obvious, and help just with the integration being, you know, center and high mounted in a vehicle. There's some geography advantages to our location and the tech that we bring to the table. So, we continue to see the kind of that trend, both a trend in regulation, but then also a trend just in OEMs wanting and needing this type of a feature set. Great. Thank you. Thank you. Thank you. Thanks, Josh. Thank you. One moment as we move on to our next question. Our next question is going to come from the line of John Murphy with Bank of America. Your line is open. Please go ahead. Good morning, guys. Morning. A couple of questions. I mean, you exited last year at 34.5% on gross. You called out 100 basis points benefit for pricing actions, and then something that you know seems a small impact, one-time cost recoveries. I'm just curious, I mean, you're exiting close to that 35%-36%, your gross margin target you're talking about by the end of this year. What are kind of the big headwinds that would kind of dampen that out? Because, I mean, you're getting pretty damn close to it already. Yeah, I'd say the single biggest one obviously will be, you know, there are some pricing concessions to OEMs that are happening at the beginning of the year, so that would be number one. Number two, one of the things that would, that would hurt is obviously no one knows for sure what's going to happen with LVP. You know, right now, in our primary markets, it's targeted to be down 1%. We think that our current book business will more than offset that reduction. But if sales didn't come in as high as we're expecting, obviously, that would create the other biggest headwind. You know, on the rest, on the rest of the business, you know, we feel like we've got most of the contracts in place on the supply side, so we don't view that as a huge risk factor as we head into this year. Honestly, product mix would be the next one. And so as interest rates, if they stay elevated, do, you know, what is the value of the vehicle that a consumer is going to purchase? And will it or will it not contain our technology? And if so, how much of it, right? So, you know, what our ASPs are largely driven by, you know, the type and, and the trim level of vehicles that are purchased by consumers. Well, you see, maybe just a follow-up to that. You know, if I were to tell you that, you know, I think you should be modeling the business as +2% bare minimum for that global number, and +5% bare minimum for the North American production number, and IHS is way too conservative, you know, how big an impact would that have on sort of what you're communicating to us, but maybe even more importantly, you know, how you're setting up the business? I mean, could you handle something the way you're capacitated and your OpEx, you know, and staffing is set up? Because, I mean, IHS is way too low. The reality is we're going to be up, but you know, how significantly, I think, is more the question mark. I mean, you know, the idea that we're going to be down in this year is just, is just, a little bit preposterous. So if, if we were to think about, and I'm not calling you out, I mean, I know you got to run the business, but if you were to have that toggle of, of global production up at least 2%, North American up at least +5%, are you set up to handle it? And how big of an impact would that have the way you're communicating in this outlook? John, I love your energy. Man, I honestly- Well, I mean, I've been doing this for a long time. It's been so many years since I've been- They're off. They're off this year. Yeah. I've had so many years of being hit with a board that I think I've lost optimism or something. No, I mean, if it were to happen, and realistically, I think, you know, that's where OEMs are trying to get to as well, to the numbers you just discussed, we would see at least point for point improvement in our guidance. In other words, if, you know, if North America was up 200 basis points instead of down 100 basis points, you know, we would expect to see, you know, 200-300 basis points, 200-300 basis points at least improvement, in our own business there, because we do have, obviously, we do have a lot of exposure to the North American OEMs with good content. Okay, and then just lastly, have you, do you see any inventory buffer in the channel? I mean, obviously, Mobileye scared people quite a bit. I mean, are you seeing anything that you've built up in your inventories or, or maybe even forward looking into your tier one customers, tier one supplier partners and then in the automakers? Or is that something you're just not seeing or- No. Well, quite the opposite. Given the growth we've experienced over the last two years and the lengthening of how long it's taken to get capital, you notice our CapEx, we keep guiding higher than we're actually able to spend. And the last two years haven't been because we're cutting that back, it's just because the supply base on capital has pushed out so far that it's hard to get it in place. So the last two years, we've been actually under-capacitated for what the volumes have been. And so our actually finished goods inventory is lower than we would like it to be. Yeah. And so, you know, we're working 6/7 days at times just to keep up with demand. And so, you know, we would welcome, like, obviously not a slowdown, but a chance for stable orders so that we could get caught up and get inventories back to where they were. So fortunately, we haven't, you know, from a financial side, fortunately, we haven't pre-built or pre-shipped anything. So we don't see any glut in inventory, either at our customers or definitely not internally. That's great to hear. Thank you very much, guys. Appreciate it. Thanks, John. Thank you. Thank you. One moment as we move on to our next question. Our next question is going to come from the line of Mark Delaney with Goldman Sachs. Your line is open. Please go ahead. Yeah, good morning. Thank you very much for taking the questions. Just starting, you know, hoping to follow up on the topic John was just bringing up around LVP for this year. You started to cover a little bit around how you guys see the other regions. You mentioned, I believe, that you think North America might be tracking a little bit stronger than what IHS is currently projecting based on what you're seeing from OEM schedules. You know, could you talk a little bit more on all the regions and globally and anything you may be seeing in OEM schedules that is either similar or different to what IHS is projecting? Yeah, I think just to clarify quickly, we're really using just John's presupposition that it was going to be better. I wouldn't say that the company necessarily feels that it's understated. It is certainly, at this point, you know, prognosticating light vehicle production by region is something that I obviously we don't get paid for that forecast. So unless you want to buy it from me, I'd be happy to provide you one, if you'd like me to sell you my own personal forecast. But, you know, I look at it and say it's probably a fairly flattish production environment globally. Now, the mix in between the regions, obviously, if you look at Japan, Korea, it's had a tough few years. Obviously, Europe has kind of oscillated back and forth really over the last five. You know, North America definitely would say there's definitely some demand there. You know, the question is OEM mix and which OEMs are going to win in the marketplace. And quite frankly, you know, you do have some other OEMs who are expanding into North America for sales here, where they're manufacturing, and that's European OEMs included. And so I kind of look at the globe and say, listen, I would fully expect that the China market will probably cool some. And if that happens, and the rest of it's picked up out of our primary markets, being Europe, North America, and Japan, Korea, that bodes really well for us. Our revenue is better in those areas. The profitability tends to be a little better as well. Got it. No, thanks for that, Steve. And then the second question was on OpEx, and understandably, the company is taking OpEx up this year to support all of the different growth initiatives that you have, as well as the revenue growth that you're seeing in the business. Maybe help us think a little bit, you know, beyond 2024. You know, with the investments you're putting into place this year, you know, is that a pretty good base of investment level and OpEx beyond 2024 may grow more slowly? Or would you anticipate, you know, continued increases in OpEx that may be, you know, a little bit higher than the typical underlying economic inflation to support some of the longer-term efforts? Thanks. Yeah, no, I think if you look at this guidance we put in place for this year, I think somewhere in that range for the next couple of years will probably be where we're at. Like, I wouldn't expect it to go above this 225-250 range in 2025. If you look at that level... And really, the factor comes, if 2024 and 2025 pan out the way we're talking about, we're going to be looking at being at capacity, at capacity... I'm sorry, Kevin, what did you say? I think he was asking on OpEx. Oh, OpEx, sorry. Sorry, talking about CapEx still. Well, we'll hit. I'll finish CapEx, and we'll get to OpEx. But if you look at the CapEx plan, at these levels of revenue, we are going to be needing additional facilities, not just equipment. And then on the OpEx side, really, this OpEx should. Once we get through this year, if we hit these numbers, and there's a lot of ifs in that statement, because it's requiring us to find a lot of talent, and the talent is difficult to locate and acquire. If we do get to these levels by the end of the year, I think the OpEx growth rate should roughly track in line with sales growth rates. It's what we try to target to, and there's a little bit of a leading indicator, obviously, of OpEx, sometimes expands ahead of a sales growth splurge. But, one of the things that we always try to focus on over a long period of time is trying to make sure that that OpEx growth rate is roughly in line with sales growth rate, if not slightly below it, so you get a little bit of leverage through the bottom half of the income statement. Understood. Thank you. Thank you. Thank you. One moment as we move on to our next question. Our next question is going to come from the line of Ryan Brinkman with JPM. Your line is open. Please go ahead. Hi. Great, thanks for taking my question. Can you help us a little bit more with the addressable market of the consumer retail fire safety protection? And, you know, talk about your strengths in the commercial fire protection market and how that might translate over into retail. What sort of the early discussions have been around, like, go-to-market strategy for retail and any partners that you might have brought on board or expect to bring on board? And, you know, how big this business ultimately could be over what timeframe? Sure. So, hey, thanks for asking that question. As it was a very exciting part of the CES show, was showing the new Place product. We have our first customer already on board and is ready for the product, once we have the engineering work completed, hopefully, mid this year. And so that'll be kind of our SOP timing for that first customer. Beyond that, our next go-to-market philosophy is really focused on how do we get engaged with direct to builder. One of the things we know is the DIY market is interesting. However, we believe that the maximum upside of this product will be focused on trying to get it installed at construction or remodel. We believe it's a lot easier of an install at that point in time, and it's easier to convince a homeowner of the significant benefits without having to rewire or redo electrical work. And our [place] product is designed to be able to upscale. So once you have a base unit, it's easy to upgrade that unit into one of the more advanced featured rooms that Neil referenced in his prepared comments. So that's kind of the current plan for go-to-market. In terms of overall size estimates, it's a little early to kinda indicate that. Our target, then when we started developing this product, is we got about a $20 million-$25 million book of business in the commercial side of fire protection currently. You know, we believe that that plus the new Place product, you know, our goal is in the next seven to 10-year period, to have, you know, a $100 million or so book of business, focused on residential fire protection. Great. Thank you very much. Good. Thanks, Ryan. Thank you. One moment as we move on to our next question. Our next question is gonna come from the line of David Whiston with Morningstar. Your line is open. Please go ahead. Thanks. Good morning. You called out in the press release three main drivers to get to the gross margin target by the year-end of reducing bill of materials, throughput, and overtime scrap cost reductions. I'm just curious, what's the rough breakout among those three buckets for the contribution? Probably 70% of it is bill of material reductions, with the equal split with the other two items probably would be a fair assumption. Okay. And on both the chip shortage and just general supply chain issues unrelated to chips, just how bad or good is everything right now? Is the chip shortage mostly behind you? Yeah, I think in general, the component shortages, you know, you still have a component shortage pop up once in a while, but in general, the big constraints that we've seen and experienced are behind. I think as we've, you know, kind of mentioned before, we're in a stage of redesign, kicking off redesigns to start pulling costs out of the build materials. Okay. Thank you very much. Okay. David. Thank you. And again, ladies and gentlemen, if you would like to ask a question at this time, please press star then one one on your telephone. And our next question comes from the line of Ron Jewsikow with Guggenheim Securities. Your line is open. Please go ahead. Yeah, good morning. Thanks for taking my question. Hello. How's it going? Yeah, can you hear me? Yes, we can hear you. Okay, good. Just to follow up on some of the next generation product discussions. In 2024, 2025, how much of kind of the revenue growth is assumed to be coming from new products? I assume that's heavily weighted towards driver monitoring. Yeah, I would say, I mean, if you consider new products, it depends on, do you mean— do you consider FDM growth to be a new product or a legacy product? Yeah, I probably shouldn't call it legacy at this point, but this is more focused, I would say, on, on DMS and other stuff. Yeah. If you're looking at that, I'd say probably about half of the incremental growth rate will be driven by new technology. That includes FDM then, though, right? What? Yes, includes FDM. Okay. Yep. If, if we exclude FDM, is it, is it closer to, like, 1%? Or just trying to- No, I'd say about a quarter of it would be then from things outside of FDM that are new products. Okay, that's helpful. And then on the 2025 guide, specifically, if we think about kind of the 8% year-over-year number that you guys are guiding towards at the midpoint, how should we think about FDM contribution, traditional electrochromics, and other products? And then, I guess, more importantly, what would be needed to drive revenue growth closer to the 10% year-over-year implied at the high end of the guide? Yeah, I think what would be needed to get to the higher end would be some help on LVP. And then obviously, you know, stabilization and take rates, especially of FDM. Those would be the two big takeaways for 2024, right? Those would be the things that would actually help us get to the high end of that range. Okay. And then most of the LVP is growing in China in that 2025 range, not North America or- Right ... Japan, Korea. Okay. No, that's helpful color. And then just sneak one more in. A bit of a follow-up on kind of the cadence for this year, but I know in a normal year, you start getting better pricing from your supply base closer to midyear. Is that still a good way to think about this year? I know we're kind of not in a normal environment right now, or are you already seeing better pricing from your Tier 2s? Yeah, I think we've—the pricing is fairly locked in. It's just a matter of burning through that inventory, which is on average, about two to three months for us. So that's when Steve referred to it earlier. It's... Contracts are pretty much locked in, or I, I wouldn't say 100%, but we feel pretty good about it. Starting in the end of the first quarter into the second is when you start to see the benefit of that roll through the financials. Okay, that's super helpful. Appreciate the time. Thanks, guys. Thanks, Ron. Thanks, Ron. Thank you. I would now like to turn the conference back over to Josh O'Berski for closing remarks. Thank you, everyone, for your time and questions today. As a reminder, Gentex will be hosting an Analyst and Investor Day on the morning of March 19th, 2024, in New York at the Nasdaq building in Times Square. If you're interested in attending, please reach out to me directly, and we can follow up from there. Thanks again for the questions today. Hope everyone has a great weekend. This concludes today's conference call. Thank you for participating. You may now disconnect.