ZEELAND — Despite single-digit sales growth, Gentex Corp. reported flat earnings to end 2016.
Gentex (Nasdaq: GNTX), a Zeeland-based manufacturer of rearview mirrors, dimmable aircraft windows and fire protection products, reported it generated $419.9 million in sales in the fourth quarter that ended Dec. 31. That’s up 4 percent compared to the $405.6 million in sales the prior year, according to the latest earnings statement. The company attributed the sales growth to increased shipments of its auto-dimming interior mirrors and exterior mirrors.
The fourth quarter performance was hampered by a combination of “a raw material shortage of a specific commodity,” plant shutdowns at OEMs, and inventory adjustments at some of its Tier 1 customers, according to a statement. These challenges cost the company an estimated $15 million in revenue for the quarter.
For the quarter, selling, general and administrative costs rose 23 percent, while engineering, research and development costs were up 6.5 percent compared to the prior year.
Quarterly net income was flat, up less than a percent compared to a year ago at nearly $88.8 million, or 31 cents per diluted share.
Despite several challenges in the fourth quarter, Gentex continued to build its cash reserves, which reached nearly $723.5 million at the end of the quarter, 30-percent more than it reported a year ago. Gentex added nearly $189 million in cash to its balance sheet since the third quarter that ended Sept. 30.
For the full year, Gentex generated $1.68 billion in annual sales, a 9-percent increase from $1.54 billion in the previous year. The manufacturer boosted its spending on engineering and R&D by 6.6 percent for the year to $94.2 million.
Net income for the year rose 9.1 percent to nearly $347.6 million, or $1.19 per diluted share, which compares to $318.5 million, or $1.08 per diluted share, in 2015.
Citing estimates from IHS Automotive, Gentex expects global automotive production to increase 1 percent this year compared to 2016. As such, Gentex forecasts revenues between $1.78 billion and $1.85 billion this year with gross margins in the range of 39 percent to 40 percent.
The company also indicated it expects to spend $115 million to $130 million on capital projects throughout the year, according to guidance included in its most recent earnings statement.