Published in Manufacturing

Despite record fourth quarter, Gentex’s sales fall 9.2 percent in COVID-marred year

BY Friday, January 29, 2021 04:50pm

ZEELAND — Tier 1 automotive supplier Gentex Corp. capped off 2020 with a blistering final three months of sales. 

Fueled by a surge in auto-dimming mirror shipments, the Zeeland-based manufacturer of digital vision and connected car technology generated $529.9 million in net sales for the fourth quarter that ended Dec. 31, a 19-percent year-over-year increase and a record for the company. 

Gentex President and CEO Steve Downing COURTESY PHOTO

Gentex also reported record quarterly net income of nearly $143.3 million, or 58 cents per diluted share, which compares to the prior year’s net income of $99.5 million, or 39 cents per diluted share.

The quarterly results for Gentex (Nasdaq: GNTX) were buoyed by 14-percent quarter-over-quarter growth in shipments of the company’s auto-dimming mirrors, while its Full Display Mirror (FDM) product jumped 96 percent in the same period. For the year, the company shipped nearly more than 1 million units of the FDM, a 42-percent increase from 2019.

“The entire fourth quarter was a continuation of the furious pace that we were operating at towards the end of the third quarter of 2020,” Gentex President and CEO Steve Downing said in an earnings statement. “In fact, during most of the fourth quarter, our shipment volumes were at a level that had never been achieved by the company previously and were also well above our forecast heading into the quarter.”

“Our employees stepped up to this challenge and worked tirelessly to keep up with demand from our customers,” he added. “Achieving sales of this magnitude required unbelievable effort from the entire Gentex team and was accomplished by our operations team’s willingness to work seven days a week, along with the assistance of salaried team members who volunteered to work in operations.”

However, the strong end of the year was not enough to overcome the earlier challenges in 2020, which was marred by declining automotive sales related to the ongoing effects of the COVID-19 pandemic across the globe. Overall global vehicle production fell 16 percent for the year as a result. 

Sales for Gentex eased nearly 9.2 percent to $1.69 billion, which compared to $1.86 billion in 2019. Net income also slid nearly 18.2 percent to $347.6 million, or $1.41 per diluted share, well off the prior year’s earnings of $424.7 million, or $1.67 per share. 

The company ended the year with $423.4 million in cash on its balance sheet, an increase of $127 million from the prior year. Gentex boosted its coffers even as it paid off $25 million in debt in the fourth quarter, allowing it to end the year with zero short- or long-term debt. 

Based on worldwide light vehicle production forecasts from industry analysts IHS Market, Gentex expects to generate between $1.94 billion to $2.02 billion in revenue this year, which would be a record for the company, with further growth in the range of 4-8 percent projected for 2022. 

Gentex also said it expects to spend $85 million to $95 million on capital expenditures this year. 

“While we are very thankful to be through what we hope to be the worst of the storm, we remain cautious about 2021 due to instability in our end markets, potential supply issues, international trade concerns, and the potential for long-term negative economic impacts from the pandemic,” Downing said in the company’s earnings statement.

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