Good day, and thank you for standing by. Welcome to the Gentex Corporation Third Quarter 2024 Financial Results Conference Call. [Operator Instructions] 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 Third Quarter 2024 Earnings Release Conference Call. I am Josh O'Berski, Gentex’s Director of Investor Relations, and I am joined by Steve Downing, President and CEO, Neil Boehm, CTO, and Kevin Nash, Vice President, Finance and CFO.

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 Reports third quarter 2024 financial results press release from earlier this morning and is always shown on the Gentex website. Your participation in this conference call implies consent to these terms.

I will now hand the call over to Steve Downing for our prepared remarks.

Steve?.

Thanks Josh. For the third quarter of 2024, the company reported net sales of $608.5 million compared to net sales of $575.8 million in the third quarter of last year.

For the third quarter of 2024, global light vehicle production declined by 5% versus last year, as light vehicle production weakened across all major regions, but especially in our primary markets.

When compared to the third quarter of last year, light vehicle production declined by 6% in our primary markets of North America, Europe, Japan, and Korea. This decline was significantly worse than the 3% quarter-over-quarter decline forecasted at the beginning of the quarter.

The light vehicle production declines resulted in a sale shortfall of approximately $25 million to $30 million for the quarter, but despite that weakness in our end markets, we were able to outperform our primary markets by 12% For the third quarter of 2024, the gross margin was 33.5% compared to a gross margin of 33.2% for the third quarter of last year.

The gross margin improved as a result of the higher revenue levels and purchasing cost reductions, which were partially all set by unfavorable product mix related to OEM mix, geographical mix, and IEC versus OEC mix.

Sequentially, the gross margin improved by 60 basis points as a result of the higher sales levels versus the second quarter and lower pricing reserves in the third quarter versus the first half of this year.

Overall, we are pleased with the sequential improvement in gross margin, but the third quarter was still behind our margin forecast due to lower than expected sales driven by light vehicle production shortfalls, product mix issues, and overhead inefficiencies.

We remain committed to our gross margin recovery plan that we laid out over the last 18 months, but given the shifts in the market and light vehicle production mix, we expect that the company's margin recovery target won't be fully achieved until 2025.

Operating expenses during the third quarter of 2024 increased by 13% to $78.3 million compared to operating expenses of $69 million in the third quarter of last year.

Operating expenses increased quarter over quarter, primarily due to staffing and engineering related professional fees that are in line with our budget for the year and are primarily dedicated to R&D and launches of new programs and products.

We expect that operating expenses will continue at the current pace for the rest of this year, despite the lower than forecasted light vehicle production and sales levels we have experienced over the last two quarters.

Due to the unexpected reduction in light vehicle production this year, our R&D spend has outpaced sales growth on a percentage basis, which has negatively impacted on operating margin. But as we head into 2025, our operating expense growth should moderate and move back to a normalized growth rate that is more directly correlated to sales growth.

The growth and operating expenses being driven by several new launches that are currently in development and expected to launch over the next two years and will provide growth opportunities for the company over the next several years, as well as research projects in support of new technologies that we have showcased at CES the last few years.

Income from operations for the third quarter of 2024 was $125.7 million compared to income from operations of $122.4 million for the third quarter of last year. Other income was $19.7 million during the third quarter of 2024 compared to other income of $2.1 million in the third quarter of last year.

The change was primarily driven by noncash gains of $14.5 million resulting from mark-to-market adjustments and other -market adjustments of certain holdings within the company's tech investment portfolio as well as interest income from the company's investment portfolio.

During the third quarter of 2024, the company had an effective tax rate of 15.7% which is primarily driven by the benefit of the foreign-derived and tangible income deduction. Net income for the third quarter of 2024 was $122.5 million, a 17% increase compared to net income of $104.7 million for the third quarter of last year.

The increase in net income for the third quarter was driven by the increased net sales, income from operations, and other income compared to the third quarter of last year. Earnings per diluted share for the third quarter of 2024 were $0.53 and 18% increase compared to earnings per diluted share of $0.45 for the third quarter of last year.

Earnings per diluted share for the third quarter of 2024 were positively impacted by the increased net sales and operating income, as well as the increases in other income for the quarter. Thank you, and I'll now hand the call over to Kevin for some further financial details..

Thanks Steve. Automotive net sales in the third quarter of 2024 were $596.5 million compared to $564.5 million in the third quarter of 2023. Auto dimming mirror unit shipments decreased by 3% during the third quarter of 2024 compared to the third quarter of 2023.

Other net sales in third quarter of 2024, which includes dimmable aircraft windows and fire protection products, were $12 million compared to other net sales of $11.3 million in the third quarter of 2023.

Fire protection sales increased by $1.8 million for the third quarter of 2024 compared to the third quarter of last year, and dimmable aircraft window sales decrease by $1.9 million for the third quarter of 2024 compared to the third quarter of 2023.

Additionally, in the third quarter of 2024, the company recorded its first official sales of medical devices of $0.8 million from shipments of the previously acquired eSight Go product line and business share repurchases.

During the third quarter of ‘24, the company repurchased 3.2 million shares of its common stock at an average price of $30.16 per share. As of September 30 of ‘24, the company has approximately 10.1 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 will vary from time to time and will take into account macroeconomic issues, market trends, and other factors the company deems appropriate.

Looking at the balance sheet, the balance sheet comparisons mentioned today are as of September 30th of 2024 and compared to December 31 of 2023. Cash and cash equivalents were $179.6 million compared to $226.4 million.

Short and long-term investments combined were $346.1 million, up from $299.1 million, which includes fixed income investments as well as the company's equity and cost method investments. Accounts receivable was $356.3 million, up from $321.8 million due to the timing of sales during the third quarter.

Inventories were $449.3 million, up from $402.5 million and accounts payable decreased to $182.6 million from $184.4 million.

Looking at the preliminary cash flow items for the quarter, third quarter 2024 cash flow from operations was $84.7 million compared to $125.9 million in the third quarter of last year, and year-to-date cash flow from operations was $343.8 million compared to $367.7 million for calendar year ‘23.

Capital expenditures for the third quarter were $39.3 million compared to $31.1 million for the third quarter of last year, and year-to-date capital expenditures were $103 million compared to $121.4 million for calendar year ‘23, and depreciation and amortization for the third quarter was $22.9 million compared with $22.2 million for the third quarter of ‘23, and year-to-date depreciation and amortization was $70.9 million compared with $71 million for year-to-date ‘23.

I'll now hand the call over to Neil for a product update..

Thank you, Kevin. The third quarter of 2024 was again a busy launch quarter. In the quarter, we had 25 net new nameplate launches of our interior and exterior auto-dimming mirror and electronic features. The first three quarters of 2024 have been extremely busy as we've launched more projects than ever before.

We're excited about the continued growth we're seeing with our technologies and appreciate all the hard work and dedication that the team at Gentex is putting in to ensure we execute flawlessly. The full display mirror product had another great quarter with nine additional nameplates launching in the quarter.

We are now shipping full display mirror on over 124 nameplates globally, and it continues to have great momentum on the full range of platforms from luxury to volume brands.

Even with all the changes in light vehicle production, we are still on track in 2024 to achieve our goal of an incremental 500,000 units of full display mirror over the 2023 unit shipments.

Also, while we're launching a lot of products and technologies, we are continuing to evaluate opportunities to reduce the bill of materials of existing programs as well as execute on the VAVE launches we currently have in process.

This focus and effort will increase significantly as we move through the last part of 2024 and into early 2025 as we know that these improvements in our bill of materials and increases in efficiencies across the organization are key to our ability to achieve our gross margin objectives as a company.

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 the fourth quarter of 2024 and full years 2024 and 2025 are based on the mid-October 2024 Global Mobility Forecast for Light Vehicle Production in North America, Europe, Japan, Korea, and China.

Light vehicle production in these markets is expected to decrease by approximately 4% for the fourth quarter of 2024 versus the same quarter last year. While light vehicle production in our primary markets of North America, Europe, Japan, and Korea, is expected to be down 6% in the fourth quarter of 2024 compared to last year.

For calendar year 2024, light vehicle production in North America, Europe, Japan, Korea, and China is now forecasted to decline approximately 2% compared to light vehicle production last year. Light vehicle production for calendar year 2025 is forecasted to increase by 1% compared to calendar year 2024.

Fourth quarter of 2024 and calendar years 2024 and 2025 forecasted vehicle production volumes from S&P Global Mobility are included in our press release from this morning.

Based on this light vehicle production forecast and actual results for the first nine months of 2024, we are making certain changes to our previously provided guidance for calendar year 2024 as follows. Revenue for the year is now expected to be between $2.35 billion and $2.4 billion.

Gross margins for the year are now expected to be between 33.5% and 34%. Operating expenses are still expected to be between $295 million and $305 million. Our estimated annual tax rate is now forecasted to be between 15% and 15.5%. Capital expenditures are now expected to be between $150 million and $175 million.

Depreciation and amortization are now forecasted to be between $90 million and $95 million. The company continues to be on pace for record revenue in ‘24 and ‘25 despite significant changes in the light vehicle production environment, vehicle mix, and regional mix that have impacted the production landscape.

Obviously, the actual and forecasted light vehicle production deterioration has impacted our total revenue estimates for 2024 and 2025, but our 12% outperformance versus the underlying vehicle production numbers in our primary markets during the third quarter gives us renewed confidence in our ability to continue to outperform the market.

While the teams have done a phenomenal job creating and executing our margin recovery plan, industry conditions have created a slower growth environment that we intend to address with increased cost focus, expense control, and lower capital expenditures that more closely align with our updated revenue expectations.

As we have indicated, the timeline to achieve our targeted gross margin of 35%-36% will likely push into the 2025 calendar year, but we remain confident in our ability to accomplish our stated goal despite the industry headwinds. That completes our prepared comments for today, and we can now proceed to questions..

[Operator Instructions] Our first question comes from the line of Luke Junk with Baird..

Great. Thanks for taking the questions and good morning, everyone. To start with hoping you could just walk us through the key outgrowth drivers this quarter. Just a few points of growth in underlying your shipments in terms of outgrowth. Seems like FDM was a big contributor.

Maybe if you could expand on FDM puts and takes and also just the factors supporting your unchanged full year expectation and what's obviously a pretty dynamic market and beyond FDM anything else that you'd call out that had an outside impact this quarter? Thank you..

Yes, if you look at, thanks Luke, if you look at the actual quarter like we referenced in the table, IC and OEC volumes are actually down on a year-over-year basis, but FDM helped pick up the rest of that difference.

There’re also some other advanced features that did well in a quarter, but if you actually look at the bulk of that growth came from FDM growth. Luke, I think you also might have mentioned a question about like OEM side. So I mean obviously there were some ups and downs in the quarter based on different OEMs and how they performed.

GM was quite strong, especially on the FDM side for us in the quarter. There’re a couple others that obviously struggled not only with overall production volumes, but also some featuring content that caused some headwinds in the quarter..

Understood. And then for my follow-up, Steve, just a bigger picture question in OpEx, mid-width become an increasingly challenging backdrop as you alluded to in your comments, OpEx growth this year still looks a lot like it did in ‘22 and ‘23 when production was growing high single digits and overall push in around 13% of sales this year.

Just as contemplate the lower industry growth next year as well, plus, that gross margin improvement just being pushed out a little bit.

Can you just double-click on the opportunities to rationalize spending, realize there's still a lot of balls in the air from an engineering standpoint right now as you drive towards those launches the next couple of years, but can you just help us understand the path to slowing the growth rate in OpEx next year and just, as a percentage of sales more broadly, where you think that ought to be on a more strategic standpoint as well.

Thank you..

Yes, it's a great question. If you look at our strategy as it relates to, especially the R&D spend, if you look at OpEx, the SG&A side has actually been much more muted. Most of that money has been dedicated towards R&D expenses.

And really, it's been driven by commitments that we've already made to customers, committed timelines on launches of a lot of the new features. We've got several launches right now of our DMS and CMS cabin management solution. Those are very in-depth launches, continued launches on the FDM front.

And then more on our side, we have a lot of the stuff that we've showed at CES that continues to consume resources, that we continue to make great progress in the development of those technologies and are very optimistic about their ability to get to market over the next several years.

So that's kind of the current commitments that are driving the rate to stay where it was and not trying to cut that because of the opportunities we see for growth from those developments, but then also the already customer-committed developments that we have in place. Some of them are also the place product that we talked about.

So if you look at the e-site launch, so our first MedTech launch, and then also our place product, so the detector product for a consumer, we continue to work on those and are approaching launches on many of those.

And that's part of the reason why we see the ability to control that spend or at least the growth rate of that spend as we head into 2025. We know that a lot of the programs that we've been in heavy development on will be launching.

And so we'll be able to redeploy some of those resources to new programs, but also, we've had to add a lot of contractors to help get us over this hurdle rate. And so as we move through those launches and as they move into production, we'll be able to readdress what does that staffing level look like.

What are the appropriate spins? And what is it more of a maintenance level of R&D that we need based off the future direction of the company?.

Our next question comes from the line of James Picariello with BNP Paribas..

Hi, everybody. My first question is on the implied growth over market for next year, right? So this year's guidance now calls for five points. And then for next year you were targeting growth over market six points. Now that looks, now that's trending towards four.

So just what's informing your update here on the growth over market?.

Really, it's, yes, I think you're probably onto it. You just didn't want to say it yourself. But really, it's, we're a little more pessimistic on what those published vehicle production volumes are. And so we would target that our outperformance is still in line with what you're seeing.

We're just manually adjusting that IHS, I mean the S&P numbers more than what they've published..

Yes, okay, that's a fair comment. My follow-up just on gross margin, so 35% to 36% achieve next year, is that framed similarly to how it was for this year where it's achieved by a certain quarter next year. And then my very quick follow-on to that is the investment income.

Within the ETS bridge here, it's been extremely choppy last quarter and this quarter. Is there stability from here on? Yes, that's it for me, thanks..

Yes, I think on that one real quick, I would say that we would expect more stability and other income as we move forward. There were two specific incidences that happened last quarter and this quarter, both of which were the exact, involved the same underlying security, and that's what drove both those changes.

So if you average those two out, it is fairly flat. And so if you take that out, we wouldn't expect that to happen again as we move forward. And then the other half of your question was? Oh, the margin profile, yes.

So as we head into ‘25, I mean despite all the industry production choppiness, we would expect the margin profile to really perform like it does in a normal year. So you'd see a little bit of a downturn in Q1 and then Q2, Q3, Q4, we continue to build, assuming that our sales levels hit what we're expecting them to.

And so usually by mid-second quarter, we're fully operational on PPV that we get from our supply base. We're through most of the pain from the customer pricing side and then we're starting to get into operational efficiencies of the new launches that are happening in the year for the year.

And so probably on a put a thumb in the air, I would say probably the ability to hit that would be towards the back half of the year. It's not out of the line of questioning that it could happen sooner than that, but I would say that's historically when we've had our best performances in the second half of the year..

Our next question comes from the line of Ryan Brinkman with JP Morgan..

Hi, great. Thanks for taking my question.

I just wanted to check in with you on, what impact might have been on your operations during the quarter from sudden or unexpected customer downtime, whether due to part shortages or their need to manage inventory levels, and how that compares to what your experience was in 2Q and what you might be expecting in 4Q.

I recall you calling out Stellantis inventory adjustments in June as having impacted 2Q. That company's made some additional announcements, and you've seen some announcements from BMW and VW and Mercedes. Just curious what your experience has been there..

The good news is, you're exactly right, there are definitely some margin headwinds and inefficiencies driven by last minute customer changes. The good news is, given our inventory levels and where we're at with the supply base, it really wasn't an incoming raw material problem.

It's really about scheduling and trying to make sure you balance operations efficiently. And really what the impact there is, is the last minute changes drive over time more than anything else.

It grows inventory more than it wouldn't necessarily need to be if we had better line of sight, and it also drives more over time and inefficiencies in the operations side. Always what comes with that then is scrap and yield loss issues as well. So you kind of hit on a couple of the key players there.

Stellantis obviously has been, it's very turbulent and they've been, have their own struggles that we've been trying to make sure we're supporting them through. But it definitely doesn't allow for the cleanest operating environment.

And so I would say probably if you look at our, between our overhead and scrap and yield increases, I would say probably 30, 50 basis points of headwind was in the quarter from volatility..

That's super helpful. Thanks. And then I just wanted to check in on the, some more questions around the other income, super impressive.

At the same time, are you able to say whether this was a mark-to-market on a public security or on private security? And if private was at, a mark that was established by an external party or did you sort of perceive the need to make a change? I'm not sure how that kind of works.

And then more broadly, what is your, well, firstly, is it related to automotive technology? And so you need to make those investments or is it just, you're invested in the Q and what's your general approach? I know you've returned a lot of capital to shareholders relative to your predecessors, but your general approach toward managing long-term investments on the balance sheet versus giving that capital to the investors to invest at their discretion..

Yes. So we talked a little bit about it last quarter.

I mean, we're in one public security and it's publicly filed out there that we made an offer for Volks back in May and subsequent to that, prior to that actually they had their stock price traded down significantly and so we actually made a, we bought more shares in a private transaction and since then the stock price has gone up and they've since also entered into a deal to market the company and so we're participating, currently participating in that process but you saw the mark-to-market adjustments from the Q2 on the downward side and then Q3 a rebound and so it is a publicly traded stock so it's a mark-to-market adjustment.

The rest of the other income, our long-term strategy really there is we do invest in fixed income investment, high yield fixed income with typically three years or less horizon so we stay safe in the medium term on the yield curve, not to create, do risk, and be able to liquidate if we need to. And we've been doing that for several years.

This one on the public stock side is strategic in nature. And just to further clarify, we are, they do have some technology we're interested on the biometric side. They do have some automotive business with some stuff that does have some technology as well as some other technologies that they have under their portfolio..

And what is their general relationship with you two? Are they a distributor of your products? Do they manage the sales to some of your customers as you would incorporate them then? Would there be some sort of margin enhancement from vertical integration, but not as much sales impact? How would that work?.

Yes. So for a long time, we have been, they have been a distributor of ours for our products into the aftermarket. So FDM, Homelink, some of our other featured mirrors, they've been -- they have a great distribution network and so we've taken advantage of that for a long time. But they also own biometric asset, formerly known as ILOC, in the aerospace.

And so you've seen us demonstrate that technology for a long time. Today, we do it with licensing and technology agreements, but we have an interest in taking that further over time. So that's a big part of it, is potential for more access to the technology assets..

Our next question comes from the line of Ron Jewsikow with Guggenheim Securities..

Yes. Good morning and thanks for taking my questions.

Yes, maybe just following up on Luke's question on FDM, the kind of upside this quarter, was that more of a function of second quarter de-stocking and just kind of returning to trend this quarter or are there some upcoming launches we should be excited about?.

You probably have that list of launches, right, it would be my guess. But, yes, like Neil mentioned, there were actually nine launches, nine new nameplates launched in the quarter. And so, yes, some of those we are pretty excited about. Like I did mention earlier in that question too, GM FDM volume was quite strong in the quarter.

It was, we did have some headwinds from some other OEs who had some issues. But all-in-all, if you look at the growth, both with existing customers, especially GM that happened in the quarter, and then also followed on with the launches that Neil referenced, it was a very strong FDM quarter..

Okay. And then just as we go into the fourth quarter, one of your supplier peers yesterday sounded quite pessimistic on kind of the European production environment. And I do think there was, there was a bit of a luxury bend to that softness.

I guess is that something you're seeing and is there conservatism embedded in your fourth quarter guide to kind of reflect this, just given you do ship obviously more outside mirrors, particularly to luxury customers..

Yes, I would say, yes, we're definitely a little more on the pessimistic side as it relates to that market right now. I don't know that I would go quite as far as the quotes that you referenced, at least that our impact to us isn't that severe. But yes, there's definitely some risk factors there.

The good news is if you look at our exposure into the European market, it's pretty well diversified. So we're not overweight really any one OEM. And so, as long as there's good geographical mix and as long as the market itself isn't down huge, we should be able to weather that storm fairly well..

Our next question comes from the line of Josh Nichols with B. Riley..

Yes, thanks for taking my question, just to touch on some of the R&D initiatives. I know driver monitoring and cabin monitoring are big focal points that you guys talked about earlier on the company's Investor Day. You were talking about having at least one commercial launch ready.

I'm just curious like the expectations in terms of timing and revenue generation, whether I presume starting with driver monitoring and then maybe moving to cabin monitoring for next year.

I would assume that could be somewhere in like the $10 million and is that really built into the model today or is that just kind of an upside optionality at this point?.

Yes, so if you look, I would say in terms of magnitude, you're right in, if for ‘25, that's about the right dollar amount to be thinking about for ‘25. Remember though at the end of ‘25 will really be our kind of second launch, end of ‘25 beginning at ‘26 and then throughout ‘26 and beyond we expect to have at least one more OEM launch.

And so we're probably talking late ‘26, early ‘27, before it's a material amount of revenue, but the work is right now..

And then, just based on your comments earlier, right, I mean, you're building a little bit of additional sounds like buffer for conservatism in regards to the forecast for next year, but that just kind of implies, well, we've had some really phenomenal FDM outperformance this year that's kind of been driving mostly light vehicle production upside out performance you guys have achieved.

Do you expect that to be effectively continue at the same type of pace that you're seeing? This year, is that really just driven by an increasing adoption rate across these higher volume production nickels that you're starting to see more than whenever this offering first came out some years ago?.

Yes, if you look at those first really three to four years of FDM production, it was really overweight luxury vehicles and full-sized SUVs. Now, as we move into more pickup trucks and also higher volume vehicles, really what's great about the FDM story is it's a little more transcendent of a product than what we've had in the past.

Really, if you look at our company's entire history, most of our products, it takes seven to 10 years to matriculate out of just luxury and into volume brands. This technology is a little different. I mean it fits so many use cases and the desire from consumers.

So it's been definitely a faster growth rate than we would have anticipated if you go back seven, eight years ago. I don't think we probably could have optimistically thought of something like this, but I don't think we probably could have capacitized around that optimism.

OEM interest is definitely there, and so we continue to just be really grateful for the success that product has had in the market..

Our next question comes from the line of Joseph Spak with UBS..

Thank you. Good morning, everyone. I just want to just to sort of go back to, you mentioned the conservatives have baked into ‘25, and it sounds like you're baking into something similar for the fourth quarter. I just want to make sure I understand that. So, it's not necessarily like the IHS or S&P numbers you sort of put in the press release here.

You've made some adjustments to the fourth quarter as well..

Yes, that's correct. If you look at, really, we kind of see Q4 looking a lot more like Q3, and so we're basically taking what happened in Q3 plus that forecast in Q4 and saying, okay, somewhere between these two sets of numbers.

And then a little bit of an adjustment, manual adjustment to those, because we do think there's a little more risk, especially in the second half of Q4 versus what the data would show..

Okay, so that sort of leads me to the second question, which is, you're just doing the math.

I mean, your guidance does sort of imply, right, fourth quarter sales flattish, or maybe down a little bit at the midpoint versus third quarter, but it seems like the gross margin is 80 basis points higher, and I'm just, I know I think you typically do have some sort of seasonal uplift, but like you mentioned in your prepared remarks, some of the mixed headwinds, that you've seen this quarter.

So is there anything else sort of really driving that margin higher quarter-over-quarter, that we should call out, like any help in understanding some of the puts and takes would be appreciated..

Well, I think we definitely had some mix issues in Q3 beyond just overall volumes. And so we think some of those mix issues will probably lighten up in Q4 versus Q3, which would help us get a little bit of a tailwind. If you're comparing to Q4 last year margin, however, I would say it's not going to get there. Last year was helped.

We had a lot of pricing and one-time recoveries and other things happening last year, calendar year, that we're not having the same benefit from this year.

And so if you look at a recurring, a maintenance margin level in essence, I would say, a little bit fairly similar to what we just posted in Q3 or slightly better would probably be like our optimistic version of what margin profile would look like in Q4..

Thank you. I'd now like to hand the conference back over to Josh O’Berski for closing remarks..

Thank you. As a reminder, we will be attending SEMA in November and CES in January and welcome investors in our booth. If you're interested in joining us at either of these events, please reach out to me. With that, this concludes our call. Thank you, everyone, and have a great weekend..

This concludes today's conference call. Thank you for your participation. You may now disconnect..