Gentex Corporation (GNTX) Earnings Call Transcript & Summary

Welcome to the 2020 Annual Meeting for Gentex Corporation. Our host for today's call is Jim Wallace, Chair of the Board of Directors. [Operator Instructions] I will now turn the call over to your host, Mr. Wallace. You may begin, sir.

Thank you, and welcome, everyone, to the 2020 Gentex Corporation Annual Meeting of Shareholders. As the gentleman said, I'm Jim Wallace, Gentex's Chair of the Board of Directors. As a result of the coronavirus pandemic, we're conducting the 2020 annual meeting virtually, for the first time in the history of Gentex Corporation. While we had hoped to conduct the annual meeting in person when we presented proxy materials in early April, we trust that you will understand the necessity of our decision to conduct this annual meeting virtually. And we thank you for and appreciate your participation in this new format. I'm joined today in this meeting by our President and CEO, Mr. Steve Downing. I'm also joined by Mr. Joe Levan, who is our long-time legal counsel from Varnum LLP. May I begin by introducing the Gentex's Board of Directors who are all in attendance for this virtual meeting. Our current Board members who are standing for reelection: Leslie Brown, Gary Goode, Jim Hollars, John Mulder, Richard Schaum, Kathy Starkoff, Brian Walker and myself, Jim Wallace. I may digress for a moment to honor a very special Board member, Mr. Fred Sotok. Fred Sotok has been a Board member of the company since 2000, has contributed greatly to the success of the company during that time. His experience and keen insight into operational excellence has been incredibly valuable to helping the company not only achieve record growth rates, but has also helped the company maintain world-class margins. This is a result of continuing to focus on cost control, efficiency improvements and world-class quality performance. Mr. Sotok has decided that after 20 years of service to Gentex, he will not stand for reelection. Although Mr. Sotok will no longer be in our Board meetings, he has assured us of his continuing commitment through everything he can to help the company continue to succeed. If we were meeting in person, I would ask for a round of applause for Fred. But instead, we hope it would suffice to tell Fred that his fellow Board members as well as the officers, employees, and shareholders of Gentex thank him sincerely for his distinguished service and tenure. We also have many of the Gentex officers in attendance today, and will begin by announcing our named executive officers. In addition to Steve Downing, there are Neil Boehm, Chief Technology Officer; Kevin Nash, Chief Financial Officer; Matt Chiodo, Vice President of Sales; Scott Ryan, Vice President, General Counsel and Corporate Secretary. In addition to our named executive officers, we also have several of our VP team in attendance today. Present are Paul Flynn, Vice President of Operations; Ken Horner, Vice President of Quality; Joe Matthews, Vice President of Purchasing and the recently added new role as the company's first Diversity Officer; Angela Nadeau, Vice President of Commercial Management, Robert Vance, Vice President of New Markets. Under more normal circumstances, our CEO, Steve Downing, this time would present a corporate -- would provide a corporate presentation, however, given the nature of the virtual meeting, we will forgo the said presentation and will instead have an extended Q&A time later in this meeting. During the Q&A segment of the meeting, we'll be happy to address relevant questions from our shareholders who logged in using their control number. We encourage you to include your name and e-mail address if you ask a question. This will allow us to address you correctly and follow-up with you, if needed. But first, it's time to conduct the official business of Gentex. Therefore, the 2020 Annual Meeting of Shareholders of Gentex Corporation is called to order. Joe Levan is appointed recording secretary for this meeting. Mr. Levan, please include the affidavit of distribution of the minutes of the meeting. Rosa Estrada and Tricia Bosma of Gentex are appointed inspectors of election for this meeting. Inspectors, please report the number of shares represented in person and by proxy at today's meeting.

Mr. Chairman, 88% of the outstanding shares of Gentex Corporation are represented at today's Annual Meeting of Shareholders.

Given that report, a quorum is present for the transaction of business at this meeting. The shareholders list is available at the footer of the page during the meeting for inspection by shareholders for proper purposes related to the meeting. As Chair, I hereby waive reading the shareholders -- minutes of the shareholders' meeting from last year. Mr. Levan, please walk us through the voting for today's meeting.

Thank you, Mr. Chairman. This annual meeting of the shareholders of Gentex Corporation is being held for the following purposes set forth in the proxy statement: To elect 9 directors; to ratify the appointment of Ernst & Young as the company's auditors for the fiscal year ended December 31, 2020; and to approve, on an advisory basis, the compensation of the company's named executive officers. The Gentex Corporation Board of Directors recommends that shareholders vote for each of the director candidates, for the ratification of the auditors, and to approve on an advisory basis compensation of the company's named executive officers. If you have already voted, we thank you for doing so, and there is no need for you to take any further action. If you choose to vote at today's meeting and are a registered shareholder, you may use the Vote Here button on the bottom right side of your screen. Voting will be closed at the conclusion of the prepared remarks concerning the purposes of the annual meeting and before the question-and-answer time begins. So if anyone does wish to vote in person today, please submit your vote in the next few minutes. [Voting]

Gentex Corporation has in place annual director elections, meaning each candidate is to be elected for a 1-year term in accordance with its restated Articles of Incorporation. All the incumbent Board members have been renominated for election this year, with the exception of Fred Sotok who has decided not to stand for reelection, as noted earlier in the meeting. In addition, Mr. Steve Downing has been nominated for his first term as a director. When you're connected to the virtual annual meeting today, you were provided the opportunity to vote your shares electronically. Based on this, all ballots have been made available to each shareholder. Since I don't see any questions on the proposals, the polls can be closed. With that, I will ask, on behalf of our Chair, that the inspectors please tally the votes. Thank you, inspectors. While the inspectors are tallying the votes, Mr. [ Mike Bane ] of E&Y, the company's independent auditor, is in attendance to answer any questions shareholders may have for the company's auditors. Seeing that there are no questions for E&Y, I will now turn the meeting over to Steve Downing for shareholder questions. Mr. Downing?

Thank you, Joe. I'd be happy to take any questions you may have regarding the status of the company, the current situation regarding COVID as well as any other questions you may have regarding our product strategy and the future of the business. Based on the online questions submitted, it appears that everyone's going to go easy on me today, easier than normal at least. So with that, I think we could turn this back over to Mr. Wallace.

Thank you, Steve. We will now confirm the voting results. Inspectors, please give us the results.

Each of the nominees listed in the proxy statement for election as directors received a majority of votes cast at today's annual meeting. The proposal to ratify the appointment of Ernst & Young as the company's auditors for the fiscal year ended December 31, 2020, received a majority of votes cast at today's annual meeting. The proposal to approve, on an advisory basis, the compensation of the company's named executive officers also received a majority of votes cast at today's annual meeting.

Thank you. From those results, the following is confirmed: Number one, Leslie Brown, Steve Downing, Gary Goode, Jim Hollars, John Mulder, Rich Schaum, Kathy Starkoff, Brian Walker and myself, Jim Wallace, have been elected as directors for a 1-year term expiring in 2021. Number two, the shareholders have ratified the appointment of E&Y LLP as the company's auditors for the fiscal year ended December 31, 2020. Number three, the shareholders have approved, on an annual basis, compensation of the company's named executive officers. Mr. Levan, please include the written report of the inspectors of election in the minutes of the annual meeting. With that, this meeting is adjourned. Unfortunately, given the current situation, we cannot enjoy our usual reception. However, we do hope to be able to host our in-person shareholders meeting next year. Thank you for attending the meeting. Please stay safe, and please stay healthy.

This now concludes the meeting. Thank you for joining, and have a pleasant day.