Gentex‘s net sales for the first quarter of 2013 decreased by 7% to US$269.5m compared with $290.7m in the first quarter of 2012.
The gross profit margin improved to 34.7% in the first quarter of 2013 compared with 34.2% in the fourth quarter of 2012, primarily due to purchasing cost reductions and product mix, partially offset by annual customer price reductions. The gross profit margin was flat on a quarter over quarter basis at 34.7% in the first quarter of 2013 compared with the first quarter of 2012, with the impact of annual customer price reductions being offset by purchasing cost reductions and product mix.
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Net income of $45.4m for the first quarter of 2013 decreased by approximately 2% compared with net income of $46.3m in the first quarter of 2012. Earnings per diluted share were flat at 32 cents in the first quarter of 2013 compared with the first quarter of 2012.
“We are happy 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, and Europe, which account for the majority of the company’s unit shipments,” said Gentex chairman and chief executive officer Fred Bauer. “We also are pleased that we are continuing to demonstrate positive efficiencies within our operating expenses.”
The company said SmartBeam and driver assist unit shipments will increase in calendar year 2013 by approximately 10-15% compared with calendar year 2012, based on the IHS April 2013 forecast for annual light vehicle production, which includes 3% decline in European light vehicle production, as well as larger forecasted percentage decreases in the mid-size luxury class vehicle model segment, which currently is one of the company’s primary markets for these features.
The challenging European economic and market conditions continue to have a negative impact on product mix and option take rates.
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By GlobalDataFor the second quarter of 2013, Gentex estimates that net sales will be flat to down approximately 5% compared with the second quarter of 2012, based on IHS’s April 2013 forecast for second quarter light vehicle production, which includes declines in the regions of Japan and Korea, and Europe, as well as the company’s 12-week customer order release schedule. Unstable macroeconomic factors continue to be a concern, particularly in Europe, as it remains the company’s largest shipping destination. Volatility in customer orders within the 12-week customer order release schedule, with some customers, including tier one mirror suppliers, revising orders, continues. Accurate forecasting in this environment remains very difficult.
Light vehicle production in North America in the second quarter of 2013 compared with the second quarter of 2012 is currently expected to increase by 4%, while production in the regions of Japan and Korea, and Europe are expected to decline by 10% and 3%, respectively. The IHS forecast for second quarter 2013 production in the regions of Japan and Korea, and Europe again includes higher percentage decreases in mid-size luxury class vehicle models, which constitutes a primary market for the company’s products.
Based on the company’s expected net sales for the second quarter of 2013, the company currently expects that its gross profit margin for the second quarter of 2013 will be in the same range as the gross profit margin of 34.7% reported in the first quarter of 2012 and 2013.
