Gentex Corporation (NASDAQ:GNTX) Q4 2022 Earnings Call Transcript

Kevin Nash: I think it’ll €“ we certainly did see a retrench. Our teams did a really good job of kind of selectively looking at where inventories were not needed as sales continue to grow. You should see that be at least flat. It may be a source of cash, but probably not an excessive source of cash. I mean you are talking $10 million, $15 million,$20 million. We feel comfortable with kind of the lead time environment, our supply chain. We’re not going to get too aggressive on that until we see consistent stability in the market probably for another 18 months.

Josh Nichols: Perfect. And then last question for me. I think it’s appropriate coming out of CES this month. But just thinking a little bit longer term, I mean, you look back 5, 7 years ago, the company wasn’t really generating any revenue from FDM. Everyone can see just what a growth driver that’s been and the type of performance that you put up this year despite being a capacity-constrained environment. I am just curious, your thoughts about some of the technology that you had on display at CES this year. And what are two items do you think are probably the closest to commercialization and the time line that it may be until those could start generating more material revenue?

Steve Downing: You know and I’ll have probably a different answer, but I want to hear him go first. So…

Neil Boehm: Well, I’d like to say all the products are about ready to get to the market, but a little longer than others. I think a lot of the excitement is on dimmable devices is clearly, the market that I would pick has got the most excitement from CES, and that’s large area devices as well as visors. And I think both of those have great opportunity and those are probably €“ you’re still going to be three years, three-plus years out before we see those come to market. The second one, you asked for two. The second would be in the driver and in-cabin monitoring. Positioning the mirror area as a platform for positioning cameras, emitters, processing, I think we’ll see that start gaining some more traction. There was a lot of interest over the last couple of years at CES and I think there will be more traction in there And I think that’s within the two to four year window from being market ready.

Josh Nichols: Perfect. Thanks.

Kevin Nash: Thank you.

Operator: Thank you. One moment for our next question. Our next question will come from Ryan Brinkman of JPMorgan. Your line is open.

Ryan Brinkman: Hi, thanks for taking my question. With regard to the $15 million of customer recoveries in 4Q, I am curious if these are the first materials sort of non-contractual customer recoveries that you’ve realized since costs seem to inflect around 3Q 2021? And if maybe you have a sort of rolling tally internally of the total amount of excess costs that you’ve incurred, sense costs began to inflect and that recovery is partly offset, right? And then like what percentage of those cumulative excess costs that you aim to or expect to recover over time or said differently, how many more of these recoveries for past costs do you think that investors can expect going forward?