Gentex Corp. Q1 2008 Earnings Call Transcript

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2008-04-29 21:02:25.0

Tags: Gentex Corp.

Question-and-Answer Session

Thank you Ms. Hamblin. [Operator Instructions]. The first question is from John Murphy of Merrill Lynch. Please go ahead

John Murphy - Merrill Lynch

Good morning, everybody

Enoch Jen - Senior Vice President

Hey John

John Murphy - Merrill Lynch

It's on the striking impact, you kind of talked about $2.5 million of lost revenue as a result of the strike, and GM is talking about 100,000 units of lost GMT900 production and that would equate to $25 in content per trucking crew that's way too low for the GMT900 for you. Just wondering if there might have been a delay, any decline in shipments or... the shipment to GM for those trucks or if the impact might be slightly greater in the second quarter?

Enoch Jen - Senior Vice President

Well, I think John, one, we are not standard on the GMT900, second, I think you are correct that there is probably was some slight delay in production and plant shut down as they ran with the inventory they had on hand. From our prospective the $2.5 million represented reduce shipments or eliminate [ph] the shipments beginning on the last week in February. So, depending on the duration and depth of the UAW strike at American Axle, as well as some of the pending or threatened UAW strikes at the local GM plants, we expect that the impact on the second quarter will be greater.

John Murphy - Merrill Lynch

And if we just think about the contribution margin on that loss revenue, clearly was very low in the first quarter because there was... that demand was intact. What should we think about their contribution margin being going forward if we get a big hit from volume here?

Enoch Jen - Senior Vice President

I think what we've said previously John is that if our fully year's gross margin is approximately 35%, that our incremental or variable margin on average for our auto-dimming mirrors is approximately 10% points higher.

John Murphy - Merrill Lynch

Okay and then just one second question on ForEx, you were in a very unique position in producing almost everything, all your mirror's here and shipping overseas. I just wondering how big the benefit that was in the first quarter on much of the revenue lines on the net line and if that's something you're looking at potentially changing or even leveraging further going forward?

 

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