ZEELAND — Quarterly sales for automotive supplier Gentex Corp. have rebounded since the early stages of the COVID-19 pandemic, though the company’s growth remains hampered by widespread supply chain disruptions.
The Zeeland-based supplier of digital vision, connected car, dimmable glass and fire protection technologies on Friday reported $428 million in sales for the quarter that ended on June 30. That’s an 86-percent increase from the same period last year in the early months of the COVID-19 pandemic.
Net quarterly income for Gentex (Nasdaq: GNTX) was $86.5 million, or 36 cents per diluted share, compared to a $2 million loss in the second quarter of 2020 that resulted in a 1-cent loss in earnings per diluted share.
However, a significant slowdown in light vehicle production in the company’s primary regions of Europe, North America, Japan, Korea and China tempered what could have been an even better quarter.
“We are still experiencing tremendous volatility and order cancellations as our customers continue to deal with the impact of the ongoing part shortages that are affecting our industry,” Gentex President and CEO Steve Downing said in a statement.
“Our initial forecast for the second quarter was for sales to be one of the largest quarters in the company’s history, but the continual changes in releases and orders resulted in the push out of approximately 2 million units,” Downing added.
Light vehicle production in Gentex’s primary regions fell short of an April IHS Markit forecast by 1.1 million units .
Gentex widened gross margins to 35.4 percent in the second quarter, which was up 16.3 percent from last year’s second quarter.
The company attributed the improved margins to higher sales levels, better overhead leverage, structural cost savings and a positive product mix. While company executives expected better margins, Gentex still faced lower than expected sales and high freight and materials costs.
Immediate relief may remain difficult for the company as IHS Markit forecasts a 4-percent decrease in light vehicle production within the company’s primary markets for the second half of 2021.
Gentex has forecasted between $970 million and $1.07 billion in sales for the second half of the year.
“In the second half of this year, we expect orders to improve but the supply constraints are causing disruptions that are leading toward higher commodity pricing, higher freight expenses, and inefficiencies in our operations,” Downing said.
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