Gentex Corporation (GNTX) Earnings Call Transcript & Summary

Welcome, everyone, to the 2021 Gentex Corporation Annual Meeting of Shareholders. I'm Jim Wallace, the Chair of the Gentex Board of Directors. As a result of the coronavirus pandemic and out of an abundance of caution, we're conducting the 2021 annual meeting virtually this year. While we had hoped to conduct the annual meeting in person when we released the proxy materials in early April, we trust you will understand the reasoning behind our decision to conduct this meeting virtually, and we thank you for and appreciate your participation in this year's annual meeting. I'm joined today in this meeting by our President and CEO, who also serves as a director on the Board, Steve Downing. I'm also joined by Joe Levan, who is our Legal Counsel from Varnum LLP. Before we begin the formal introduction of members of the Board of Directors and the management team, I want to remind everyone that voting will be closed at the conclusion of the prepared remarks concerning the purposes of the annual meeting and the introductions of the Board and management team, but before that question-and-answer time begins. So if anyone wishes to vote today, please submit your vote in the next few minutes. Let's begin by introducing the Gentex Board of Directors who are still in attendance for this virtual meeting. Our current Board members who are all standing for reelection include Leslie Brown; Steve Downing; Gary Goode; Jim Hollars; Richard Schaum; Kathy Starkoff; Brian Walker; and myself, Jim Wallace. We're also joined today by a new director candidate, Dr. Ling Zang. Today, we want to take a moment to honor a very special Board member. John Mulder joined Gentex as an employee in 1988. During this time, John served the company in various roles, including Vice President of Automotive Marketing; later as the Senior Vice President of Automotive Marketing; lastly as Vice President of Customer Relations. John has been a Board member of this company since 1992 and has contributed greatly to the success of the company during that time. His vast experience and keen insight into sales, marketing and business development has been incredibly valuable in helping the company to achieve one of the greatest growth stories in automotive industry. Mr. Mulder has decided that, after 14 years of service as an employee and 29 years of service as a Board member to Gentex, not to stand for reelection this year. You may have noticed that we have never used the words "retire," because, although Mr. Mulder will no longer be in our Board meetings, he has assured us that he will always be available to help the company continue to succeed. If we were meeting in person, I would ask for a round of applause for John, but instead, we hope it will suffice to tell John that his fellow Board members, as well as the officers, employees and shareholders of Gentex, thank him sincerely for his distinguished service and tenure. Thank you, John, for a truly remarkable career. We also have many of our Gentex officers in attendance today. We'll begin by announcing our named executive officers. In addition to Steve Downing, whom I have already introduced, Neil Boehm, Chief Technology Officer; Matt Chiodo, Vice President of Sales; Kevin Nash, Chief Financial Officer; Scott Ryan, Vice President, General Counsel and Corporate Secretary. In addition to our named executive officers, we all have several of our VP teams in attendance today. Paul Flynn, Vice President of Operations; Ken Horner, Vice President of Quality; Joe Matthews, Diversity Officer and Vice President of Purchasing; Angela Nadeau, Vice President of Commercial Management; Robert Vance, Vice President of New Markets. Under more normal circumstances, our CEO, Steve Downing, would at this time provide a presentation. But given the nature of the virtual meeting, we have decided to forgo such presentation at this year's meeting, and it will instead have an extended question-and-answer time in the meeting. During the Q&A segment of the meeting, we will be happy to address relevant questions from our shareholders who have logged in using their control number. We encourage you to include your name and e-mail address if you ask a question, that way we can address you correctly and follow-up with you if needed. Now is the time to conduct official business. The 2021 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 with the minutes of the meeting. Rosa Estrada and Eric [ Tuori ] of Gentex are appointed inspectors of election for this annual meeting. Inspectors, please report the number of shares represented in person and by proxy at today's meeting.

Mr. Chairman, 90% of the outstanding shares of Gentex Corporation are represented at today's Annual Meeting of Shareholders either in person or by proxy.

Thank you. Given that report, a quorum is present for the transaction of business at this meeting. The shareholder 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 the reading of the shareholders' meeting minutes from last year. Mr. Levan, please walk us through the voting for today's meeting.

Thank you, Mr. Chairman. As always, Gentex Corporation wants those participating to understand that this annual meeting may contain forward-looking statements within the meaning of the Gentex safe harbor for forward-looking statements, which is included on the Gentex website. This annual meeting of shareholders of Gentex 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 independent auditors for the fiscal year ended December 31, 2021; and to approve on an advisory basis the compensation of the company's named executive officers. The Gentex Corporation Board of Directors recommends that the shareholders vote for each of the director candidates, for ratification of the auditors and to approve on an advisory basis the compensation of the company's named executive officers. If you have already voted, we thank you for doing so, and there's 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. The voting for this year's annual meeting will conclude in just a few moments. Gentex has in place annual director elections, meaning each candidate is to be elected for a 1-year term in accordance with the restated Articles of Incorporation. All incumbent Board members have been nominated for reelection with the exception of Mr. Mulder, [Audio Gap] stand for reelection, as noted earlier in the meeting. In addition, Dr. Ling Zang has been nominated for his first term as a director. When you 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. Are there any questions on the proposals? [Voting]

Seeing that there are no questions on the proposals, the polls can now be closed. With that, I will request on behalf of the Chairman that the inspectors please tally the votes. Thank you, inspectors. And while the inspectors are tallying the votes, Mr. Mike Boehm of Ernst & Young, the company's independent auditors, is here to answer questions. Are there any questions for E&Y? Seeing there are no questions for E&Y, we'll now turn the meeting over to Steve Downing for shareholder questions.

Thank you, Joe. I'd be happy to take any questions you may have regarding the status of the company as well as any questions you may have regarding our product strategy and the future of the business.

Seeing none, thank you for your questions, or in this case, lack of. Now let's confirm the voting results. Inspectors, please give us those results.

Thank you, Mr. Chairman. The voting results for today's annual meetings are: each of the nominees listed in the proxy statement for election as directors received a majority of votes cast. The proposal to ratify the appointment of Ernst & Young as the company's auditors for the fiscal year ended December 31, 2021, received a majority of the votes cast. The proposal to approve on an advisory basis the compensation of the company's named executive officers received a majority of the votes cast.

From those results, the following is confirmed: all 9 director nominees have been elected as directors for a 1-year term expiring in 2022. The shareholders have ratified the appointment of Ernst & Young LLP as the company's auditors for the fiscal year ended December 31, 2021. The shareholders have approved on an advisory basis the compensation of the company's named executive officers. Recording secretary, please include the written report of the inspectors of election with 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 next year. Thank you for attending the meeting, and please stay safe and healthy.