Gentex Corporation (GNTX) Q1 2013 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen. Welcome to the Gentex First Quarter 2013 Financial Results Conference Call. Just a reminder, today's call is being recorded. I would now like to turn the meeting over to Ms. Connie Hamblin, Vice President of Investor Relations and Corporate Communications. Please go ahead, Ms. Hamblin.

Thank you. Good morning, everyone. Thanks for participating in our first quarter conference call. On the call with me today is Mark Newton, our Senior Vice President; and Steve Dykman, our Chief Financial Officer. I'm going to go through a few routine matters, and then I will turn the call over to Steve for some comments on the company's financial results for the first quarter. This call is being broadcast live on the Internet via an icon on our homepage at www.gentex.com. The auto playback of the conference call is also available on that website. All contents of Gentex Corporation's conference call are the property of Gentex Corporation and may not be copied, published, reproduced, rebroadcast, retransmitted or otherwise redistributed without the expressed written consent of Gentex Corporation. Gentex Corporation alone holds such rights. While we understand that there may be companies that transcribe and redistribute our conference calls notwithstanding this warning, Gentex Corporation provides no authorization to do so and expressly disclaims any responsibility for any unauthorized use of the content. We advise that you should not rely on the content of any unauthorized transcript as Gentex Corporation will not be held liable for the content of any such transcript. Gentex Corporation will hold responsible and liable any party for any damages incurred by Gentex with respect to any such unauthorized use. Your participation implies consent to our taping and to the foregoing terms. Please drop off the line if you do not agree to these terms. Before we begin, I'm just going to do a quick intro to our forward-looking statement. Gentex Corporation will make forward-looking statements in this presentation related to its financial results for the first quarter in calendar year 2013 and beyond that are based on preliminary data and are subject to risks and uncertainties. These forward-looking statements are based on management's beliefs, assumptions, current expectations, estimates and projections about the global automotive industry, the economy and the company itself. Words like anticipate, believes, confident, estimates, expects, forecasts, hopes, likely, plans, projects, optimistic and should and variations of such words and similar expressions identify forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, expense, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expressed or forecasted. The company undertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise. Please refer to the news release for the full Safe Harbor statement. Now I will turn the call over to Steve Dykman, who will make comments about the first quarter.

Good morning, and welcome to our first quarter 2013 conference call. We are pleased to report that our gross profit margin improved sequentially in the first quarter of 2013 despite difficult production environments in the regions of Japan and Korea, as well as Europe. In addition, we are pleased that we continue to show positive efficiencies within our operating expenses. A few highlights with respect to the quarter. The company reported first quarter 2013 net sales of $269.5 million, which was down 7% compared with net sales of $290.7 million in the first quarter of 2012. We reported first quarter 2013 net income of $45.4 million, which was down 2% compared with net income of $46.3 million in the first quarter of 2012. We reported first quarter 2013 earnings per diluted share of $0.32 compared with $0.32 in the first quarter of 2012. Next, we'll look at automotive net sales and auto-dimming mirror unit shipments for the first quarter ending March 31, 2013. Total auto-dimming mirror unit shipments increased by approximately 1% in the first quarter of 2013 compared with the first quarter of last year. Automotive net sales declined by approximately 8% to $263 million in the first quarter of 2013 compared with $285.7 million in the first quarter of 2012. Auto-dimming mirror unit shipments increased by approximately 8% in North America in the first quarter of 2013 compared with the same quarter last year, primarily as a result of increased mirror unit shipments to certain domestic and Asian transplant automakers. North American light vehicle production increased by approximately 1% in the first quarter of 2013 compared with the same quarter last year. Auto-dimming mirror unit shipments to offshore customers decreased by approximately 4% in the first quarter of 2013 compared with the same period in 2012, primarily due…

Thank you, Steve. In the first quarter of 2013, we are pleased to report that the company launched a number of auto-dimming mirror applications with several automakers, with various combinations of advanced technologies, including compass, microphones, telematics and wireless control systems and SmartBeam and driver assist camera products. We are also pleased to report that we have received a number of new customer performance and quality awards in the first quarter, including a Quality Excellence Award from a major European automotive customer; a Quality & Delivery Award and an Excellence in Partnership Award from a major Asian automotive customer; and High Beam System Technology Award from a major Asian automotive customer, which was awarded for a Gentex SmartBeam Dynamic Forward Lighting application, adding to a history of technology awards for SmartBeam High Beam Assist and SmartBeam Dynamic Forward Lighting products with various customers. We continue to believe that SmartBeam and driver assist unit shipments will increase in calendar year 2013 by approximately 10% to 15% compared with calendar year 2012, based on the IHS April 2013 forecast for light vehicle production, which includes a 3% decline in European light vehicle production, as well as a larger forecasted percentage decrease in the midsized luxury class vehicle model segment, which is currently one of the primary markets for these features. We're currently shipping SmartBeam and driver assist camera products for 84 vehicle models with 10 OEMs. We also continue to believe that Rear Camera Display mirror unit shipments in calendar year 2013 will decline by 25% to 35% compared with calendar year 2012, primarily due to customers the company had previously announced removing the display for rear camera to the radio instead of the rearview mirror. After 4 delays, NHTSA has indicated that it now expects to finalize its rule making related to the Kids Transportation Safety Act in fiscal 2013. We're currently shipping RCD mirrors for 58 vehicle models with 10 OEMs. All other mirror products and technologies continue to result in new awarded business. In development and launch now are interior auto-dimming mirrors with new frameless designs; lightning applications with new optoelectronics; new digital microphones; many different displays in new sizes with faster processing and increased graphics capabilities; new wireless control systems that send and receive signals from garage doors, gates, lights, locks and security systems; SmartBeam with advanced detection for tunnels, curves, fog and for use on all headlamp technologies, including halogen, Xenon and LED; driver-assist systems with new object-detection capabilities; and exterior auto-dimming mirrors with new curved glass applications. I'll now turn this back over to Connie Hamblin for further update.

I'll give you an update on our net sales estimate. For the second quarter of 2013, we currently estimate that net sales will be flat to down 5% compared with the second quarter of '12, and that's based on IHS' April 2013 forecast for light vehicle production, including declines in the Japanese and Korean and European regions, as well as our 12-week customer order reroute schedules. Forecasting in this climate is very difficult to do with any degree of accuracy. Additionally, while European production is expected to decline by 3% in the second quarter of 2013, the forecast also includes significantly higher percentage decreases in midsized luxury class vehicle models, which currently are one of the primary markets for these features. We continue to be concerned about the weak macroeconomic environment, particularly in Europe, which is our largest shipping destination. We continue to experience volatility with customer orders within the 12-week customer order release window with some of our customers, including the Tier 1 mirror suppliers, revising orders. Some IHS production forecast information, and this is based on the April 2013 forecast. For the second quarter of 2013, North American light vehicle production is expected to be 4.2 million vehicles, which is an increase of 4% compared with the second quarter of 2012 when there are 4.0 million vehicles; in Europe, 4.8 million vehicles is a decrease of 3% compared to 5.0 million vehicles last year in the second quarter; for Japan and Korea, 3.2 million vehicles, which is down 10% compared with 3.5 million vehicles last year's second quarter. For calendar year 2013, IHS expects North American light vehicle production to come in at 16.1 million vehicles, which is an increase of 4%, compared with 15.4 million vehicles last year. For Europe, they expect 18.7 million vehicle units, which is down 3% compared with 19.3 million vehicle units last year. And then, for Japan and Korea, IHS estimates 12.9 million vehicles in calendar year 2013, which is an 8% decline compared with 14.0 million units last year. As a reminder, all listeners should note that this call is being recorded by Gentex Corporation. All contents of Gentex Corporation's conference calls are the property of Gentex. No such content may be copied, published, reproduced, rebroadcast, retransmitted or otherwise redistributed without the expressed written consent of Gentex Corporation. We advise that you should not rely on the content of any unauthorized transcripts as Gentex Corporation will not be held liable for the content of any such transcripts. Gentex Corporation will hold responsible and liable any parties for any damages incurred by Gentex with respect to any such unauthorized use. Your participation implies consent to our taping and to the foregoing terms. Please drop off the line if you do not agree to these terms.

In summary, we're pleased with our first quarter financial results. And our team members have worked to stabilize and improve our gross margins, as well as our operating expenses, and we believe this quarter was a good example of the results of those efforts. And so I'll turn it back to Connie as we move to Q&A.

Okay, operator, we're going to open it up to Q&A. [Operator Instructions] Thank you. Operator, you can open it up to Q&A at this point.

[Operator Instructions] We'll hear first from David Leiker with Baird. David Leiker - Robert W. Baird & Co. Incorporated, Research Division: I wanted to try and dig a little bit deeper on the margin performance and see if there's any way you can talk a little bit about where you are in that margin recovery, when you look at the gross profit line, these cost reduction efforts were put on the sidelines for a couple of years with the supply chain issues, and where you think you are on catching up on that, the ER&D number with the contract manufacturers, where you are on that running off and on the SG&A side, the overseas, just kind of if there's some way you can talk about where you are in the process of those improvements and how much time there might be left for those to run.

Okay. So specifically, with the gross profit margin, our purchasing cost reduction program, as we mentioned, has been in place since the middle of 2006. We continue to experience strong favorable PPV with respect to that program, and we expect that going forward as well. When you look at the gross profit margin in the quarter improving on a sequential basis or versus our guidance, that really was, to some degree, a function of product mix that helped with that upward trend, as well as ongoing manufacturing cost efficiencies, as some of the cost reductions and efficiencies came in a little bit better than our beginning-of-the-quarter forecast. So we anticipate that we will continue to benefit from the manufacturing cost reductions. The product mix will certainly be dependent on customer orders, but we do also anticipate ongoing purchasing cost reduction efforts. Specifically with ER&D, as we look, and we've discussed previously, the Q1 and Q2 of last year were really at peak levels of R&D spends on a year-over-year basis, and the reduction, the primary driver there, is the result of cost savings associated with contract engineering and development services. And if you recall, we started to transition in the third quarter of last year where, in some instances, we started to convert some of the contract engineers to permanent hires that resulted in reduced overall cost to the company. There are also situations in which a particular contract engineer met certain project milestones and their particular skill sets were no longer needed. And so that started in Q3 of '12, continued through Q4 of '12, and that is pretty much now complete in the first part of Q1 of '13. So we're not anticipating any further reductions or shifts and changes in the trend with respect to contract engineers as we've kind of worked our way through them. Specifically with SG&A expenses, Q2 of last year was really the peak of the spend within SG&A. When we look on a sequential basis, SG&A expenses came down, primarily on the overseas office expense area, and it did come in a little bit lower than our initial forecast. And that really is an effort overall, with some of the efficiencies we're starting to see with the resources we devoted last year and some of our cost management initiatives within the company. As with ER&D and SG&A, we continue to have open positions of specific skill sets, and those are difficult positions to find those specific skill sets. So obviously, the timing of those adds can differ from our forecast, depending on how that process progresses and how quickly we can find those individuals. David Leiker - Robert W. Baird & Co. Incorporated, Research Division: Such that, it'd be fair to say that sequentially, there's still room over time on the gross margin side, and then on the operating expense, sequentially, you may be more stable, but there's still a couple of quarters of year-over-year performance?

Yes. So I think, as we progress through the year, you'll see the year-over-year percentage decline diminish because it's really in the second half of 2012 when you started to see some of those numbers come down a little bit.

We'll take our next question from Ryan Brinkman with JPMorgan. Ryan Brinkman - JP Morgan Chase & Co, Research Division: On the trend in operating expenses, which was just discussed, obviously, there are some very impressive declines here, 20% in RD&E. As the pace quickens, are there any assurances that you can provide investors that this will not impact your future new product development or it's not an expression of your faith in your ability to grow at historical-type levels?

Thank you. This is Mark Newton. What we're experiencing, currently, in ER&D improvement year-over-year is not a reflection of our product development, and that's part of the message we're trying to communicate here. Our new product award, new product launches and product development remain consistent with our historical trends. Our ER&D percentage as the percentage of our sales continues at a pace we're targeting, consistent with historical trends. This is not to be seen as a reflection of that, and that's what we're hoping to try and communicate here. Ryan Brinkman - JP Morgan Chase & Co, Research Division: Okay, that's great. And one thing I just didn't quite understand earlier, I mean, you talked about how the ASPs were partly a reflection of price-downs, but partly a reflection of mix. But at the same time -- and so that would be adverse mix. But at the same time, I think you discussed how your gross margin rate benefited from positive mix, and clearly, those aren't mutually exclusive things, but maybe you can just explain the differential there.

Yes, part of it is the mix of exterior mirrors versus interior mirrors. And as we previously discussed, for interior mirrors, those -- for a base auto-dimming mirror, they sell for around $20 and range significantly all the way up to $200-plus. Exterior mirrors really range from $20 to $50. So when the mix shifts a little bit between interior and exterior mirrors, that can impact your overall ASPs. Previously, we also stated that our gross profit margins don't differ significantly by products, but we did say that the exterior mirror margin is slightly higher because the electronics are housed in the interior mirror, and they use the same electronics.

We'll hear next from Rich Kwas with Wells Fargo.

This is David on for Rich. Most of our questions have been answered, but can you give us an idea of take rates and wins for the new SmartBeam DFL? And the other question is, the SmartBeam DFL is that allowable here in the U.S.?

Our SmartBeam Dynamic Forward Lighting product that we began to announce applications for in early 2012, continues to succeed in applications as part of our SmartBeam family, as headlamp technology continues to advance. And so this is a part of our overall forecasted growth that we indicated for the year. Our guidance for SmartBeam, this is a part of that. And we're very pleased that it continues to be part of that product family and that we continue to be recognized with technology awards for it.

Got you. But on the second part of my question, I just wanted to understand. Is that -- dynamic forward lighting, is that something that's allowable through -- under U.S. regulations here in the U.S.?

Currently, today, not at this point. But our SmartBeam applications, fortunately, have significant content in regions like in Europe, where this is allowed, and other areas where it's being reviewed.

We'll take our next question from Steve Dyer with Craig-Hallum.

Just as it relates kind of to the ER&D, as you look at the falloff there in cost and in spend. As you look at sort of the product portfolio or pipeline, is there a feature or an application in there that you feel like has the same potential as RCD did, for example, a couple of years ago. I think, at least from my standpoint, as you've built over the last couple of years here towards something, I was, I guess, anticipating a killer app, so to speak, that really would fill the hole of RCD rolling off. Is there 1 or 2 of those sort of more notable things in the pipeline?

That's what we were intending to overview when we talk about all other mirror products and technologies continue to result in new business and new development and launch, as we spoke earlier about ER&D variance quarter versus quarter, with the high number of contract engineers that a year ago were in place. This was to support the development of our other applications and technologies, which have succeeded. And we're hoping that it demonstrates that even though we are down in Rear Camera Display, with a forecasted decline of 25% to 35%, we're trying to demonstrate that we have other technologies that are being sold and applied in our other areas: SmartBeam, microphones, wireless control systems and new interior and exterior mirrors with new glass applications. So it's basically across all of our technologies, is the message we're trying to communicate, that these continue in strong development and launch with new technologies.

So it sounds like more you're thinking of it in terms of a platform or a suite of maybe kind of singles and doubles that can be added on as opposed to a home run that's going to change things?

Well, as we've also spoken recently, to try to honor our customer request, we haven't been doing new press releases for the past few quarters at customer request so that we don't expose new technologies before they applied them on their vehicles. These vehicle technologies are developed some years in advance. And so we, as required by our customers, can't really talk about a new killer app or things like that, but across all of the things that we're currently doing today, we generally do want to communicate that we have technology developments and that we're in strong development launch with them.

Okay. And then, just one last question. NHTSA fiscal '13, is that -- to be clear, is that your fiscal year, the calendar year or is it the government sort of September fiscal year?

Government fiscal year or calendar year, we aren't really certain.

It was their wording.

We -- how to say that in this call, we'll just state what has been publicly stated at this point. We would be happy if some decisions was finally made.

We'll take our next question from John Murphy from Bank of America Merrill Lynch.

I just had a follow-up on pricing and margin based on mix that you guys highlighted in the quarter as being negative. I was just curious. As we look at the pricing down 8.6% -- or between 8% and 9% depending on how you're measuring it, just curious, is there about, like, a 3% to 4% of that, that is because of the negative mix and the average selling price would have been down similar to what we saw in the second half of last year, down 5%, if we had a constant mix. And I'm also trying to understand that as well for gross margins. Obviously, if you're selling base mirrors, you're getting better margins. The more content you put on, the more there's a little pass-through and the lower margins are. I'm just trying to understand, did we get 3% to 5% hit on these -- on your selling price because of that? But then, do we get a 200- to 300-basis-point pickup on margins because of that as well?

Okay. Well, I think specifically on -- part of your question was the impact of annual customer price reductions. And as we previously stated, the annual customer price reductions have been running at an impact on margins of 1.5% to 2%. So if you do the math, that's right around 3% overall average. Specifically with the product mix impact, it will vary depending on the mix and the makeup of that. But when you look at overall, the lower average selling price of exterior mirrors had the most impact on the overall ASP in the quarter.

Okay. So greater than half of the decline would be a fair statement?

Well, for mix, overall, yes, which should be a combination of exterior and interior auto-dimming mirror mix. Exterior would be less than half.

Okay. And you're expecting that mix to improve a little bit going into the second quarter versus the first quarter, is that correct?

Well, I think as you look at exterior mirrors, we're a Tier 2, so it's a little more difficult to predict over time. So the mix for exterior mirrors has been positive for the last 2 quarters, and whether that continues to be very strong will remain to be seen.

We'll hear next from Greg Halter with Great Lakes Review.

Hopefully, the flooding that we're hearing about, the rains have not had any impact on your facilities or the facilities to be built, I guess.

Yes, there has not been any impact here with our facilities. But certainly, surrounding areas have had its challenges over the past weeks.

And on the other income, the loss on disposal of assets, can you say how much that was, what was sold and if there's anything left in that bucket?

Okay. So pretty much the majority of the decline year-over-year was the result of the disposal of assets. So there is not any anticipated additional losses on disposal of assets, the disposal related to software applications for non-core administrative area within the company.

We'll take our next question from David Whiston with Morningstar.

I wanted to follow up on the DFL question from earlier. I know Audi has been public recently saying they want to get the law changed so they can sell their Matrix product here, and this is, I believe, starting to work with SAE to at least study the issue. Are you at all lobbying in Washington on the Gentex end to speed that along?

We're aware of the general efforts to try and gain approval as new advanced headlamp technologies are being applied by our customers. Obviously, we're developing technologies as we spoke generally about dynamic forward lighting for this. And so yes, we're supporting our customers' efforts by providing product and capability. They have typically the strongest leverage and the considerations with government agencies, automakers do. And we, obviously, are very interested in a successful consideration of these technologies to be expanded.

And having our customers involved is a good thing because if ever NHTSA is going to make a move, they're going to need some powerful lobbying to get them to do that. And they're look -- I mean, these are based on a lot of rules are very, very old that are on the books and don't necessarily allow for new technologies like this, and there's -- change is necessary.

We're hoping for better results and what has been achieved to date with Kids Transportation Safety Act.

Yes, I think we're all tired of waiting on that one. Just one other one on RCD. Volumes are still robust today, but in a few years, if this trend continues with more move to the center stack, I mean, is there a certain volume level -- annual volume level for RCD that you guys would just terminate production?

Nothing that we can forecast at this time. As we've stated previously, and we can reinforce now, customers do continue to apply Rear Camera Display Mirrors in applications, and we continue to have new developments and launches in it beyond the 4 customers that we had previously indicated. As far as an increase in moving to the center stack, outside of the 4 customers that we've publicly communicated to date, we're not seeing a massive trend, as you're asking, I think, right now.

Okay. And roughly how many years out do you try to forecast your RCD?

Well, I think when we look at our overall forecasting, we work off a 12-week rolling release schedule, of which the initial week is firm. So beyond that, we utilize IHS. And the challenge we have, once you get out beyond a calendar year or 12-month window, is that we know the program awards that we're -- in the vehicle models, that we're going to be on, but we necessarily don't always know how it's going to be packaged until several months before start of production, when the automakers put together their marketing brochures. So we make certain assumptions. But from specific unit volume estimates, they certainly are subject to change as a result.

[Operator Instructions] We'll take our next question from Adam Brooks with Sidoti & Company. Adam Brooks - Sidoti & Company, LLC: Just wanted to touch on Driver Assist real quickly, maybe, once again, reviewing your value proposition to customers and any obstacles you're seeing from your end as far as placement of sensors and whatnot.

All right. As we've spoken previously about our application of forward cameras in the vehicle, just like we do with our SmartBeam product, our driver assist product is done in a specific way, consistent with how Gentex has done it historically, with camera integrated with the rearview mirror, the inside rearview mirror, and electronics for decision logic inside the mirror. We continue to compete with these technologies today as we do with our SmartBeam products. And as far as barriers or limitations, no. Our primary challenge isn't necessarily the same as with all of our technologies, in our ability to apply packaging, as well as our ability to meet cost goals that our customers have. Adam Brooks - Sidoti & Company, LLC: And then real quickly as far as option take rates, did you see any material change from 4Q to 1Q, and maybe looking to 2Q? Or is it pretty much all things pretty much flat, meaning pretty bad, over in Europe in particular?

We are not seeing any significant shifts when we look at things sequentially Q4 to Q1 and as we look to our Q2 forecast with respect to option take rates, no.

We'll hear next from David Leiker with Baird. David Leiker - Robert W. Baird & Co. Incorporated, Research Division: I wanted to just follow up on a couple of things. Mark, I think you said that you continue to receive new contract awards for Rear Camera Display. Did I hear that correctly?

That is correct. David Leiker - Robert W. Baird & Co. Incorporated, Research Division: And are those for standard, where it would be the default location? Or are those where it would be an up-sell option on those vehicles? Do you do know enough yet in terms of how that falls?

What we have right now, these would be consistent with what Rear Camera Display has historically been, since there are automakers who have worked to apply a more standard application, like the 4 customers we previously announced. There are still automakers that do provide it as an option application, and so what we've been receiving awards on for Rear Camera Display is consistent with the option application that it historically was up to this point, since we began selling it in 2007. David Leiker - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then the other thing -- I'm just trying to look here. The other item here is if we look at this rear camera legislation, there's some talk that been floating around that the adoption of backup cameras is happening at a fast-enough pace that there is a chance, I don't know if it's a small chance or a reasonable chance, that NHTSA may just say that the law isn't needed, that market demand is going to achieve the law without the regulatory framework. What are your -- are you hearing anything on that and what would be your thoughts if that's the way that it ended up going?

We hear commentary on that in the public, just as you do. Obviously, our preference at Gentex would be that we were allowed to compete in the market as it was before Kids Transportation Safety Act was implied. And again, in those types of situations, we were able to succeed very, very well with the product because it offered a value to automakers, and it had a good response from car buyers as a preference, if given the option. When it's mandated, as we've talked before, and it has to be on every car, the indicated potential that it would be, it effectively becomes the same thing as tires and seats, and automakers, obviously, will look for the most cost-effective applications that they have to, to apply it. And the one thing that is in every vehicle is a radio, and we're not, obviously, with our products, in at that level and don't have the ability to compete on those. So from my perspective, I think it would not surprise us if this would delay forever, and we would wish that we were back where we were originally and could've skipped the step. David Leiker - Robert W. Baird & Co. Incorporated, Research Division: Okay, got it. I think a lot of us feel that way. Just staying on the display, one last item here. Have you been awarded any contracts where you put the display in the mirror where that display is used for something other than a backup camera image?

Yes, we have many different applications for the display has multiple uses, information within the vehicle. Our mirrors are on the vehicle electrical bus system, connected to the car mini-applications, as we've spoken before, and the display has been used for things like compass and other information in the car, integrated with wireless control systems for information. Yes, it's had -- we've worked to make it a very useful product across the history of it, and it's is one of the reasons we've succeeded. We have graphics processing capability with this, which allows us to provide other information in addition to the backup function. David Leiker - Robert W. Baird & Co. Incorporated, Research Division: Again, are those displays, as you talk about your business, included in that RCD number? Or is this completely separate from that?

No, it's in the RCD number. David Leiker - Robert W. Baird & Co. Incorporated, Research Division: So when you talk about RCD, it's more than just backup display, it's a display in the mirror for potentially other functions?

That's correct. Within RCD is the use of the Rear Camera Display itself for other functions as long as it's in the car. That was one of the value propositions with the product and one of the things we've succeeded with. It's not just an option for backup safety. As long as it's there and if the mirror is connected to the vehicle bus system, you can use it for things that you might normally display, information displays in the instrument panel, for example. You do have this other display available to you. David Leiker - Robert W. Baird & Co. Incorporated, Research Division: And then one last item on that. What portion of your RCD mirrors today, do you think, are displaying other information, as opposed to being used solely for backup camera image?

I'm trying to calculate quickly. It's more than 25%, 25% to 30% at least. It's something we'd have to double check. But it's -- we have varying uses for the product, and those places where it has been used, we'd have to confirm exactly. But we've worked to make it a useful display and have done so for some time.

At this time, there are no further questions. I'd like to turn the call back to Ms. Hamblin for closing remarks.

Thank you. For everybody that's on the call, we appreciate your time. And if you have additional questions, we'll be here. Feel free to call.

This does conclude today's conference. We thank you for your participation. You may now disconnect.