Gentex Corporation, the maker of automatic-dimming rearview mirrors, has reported a 7% increase in revenues to a third-quarter record of $US120.5 million for the quarter ended September 30, 2004.
However, third quarter net income declined by 2% to $25.2 million compared with $25.7 million in the third quarter last year. Earnings per diluted share were 32 cents in the third quarter of 2004 compared with 33 cents in the same quarter last year.
For the first nine months of 2004, the company reported a 10% increase in revenues to a record $379.4 million. Net income increased 8% to $84.0 million for the first nine months of 2004 compared with the same period last year. Earnings per diluted share were $1.07 for the first nine months of 2004 compared with $1.01 for the first nine months of 2003.
“We had a very challenging third quarter,” said Gentex executive vice president Garth Deur. “While we reported an 11% increase in auto- dimming mirror unit shipments, start-up costs associated with new manufacturing initiatives, as well as normally scheduled model year price reductions made during the quarter, put downward pressure on our gross margin.
“During the third quarter, we introduced extensive new manufacturing improvements in each of our three automotive production facilities,” said Deur. “And while we have always introduced new processes at the beginning of the model year, these involved a larger number of changes and more automation than usual. Our goal is that the improvements will produce a greater long-term payoff.”
Deur said that the company has seen consistent improvement in manufacturing yields from the new processes throughout the third quarter, and expects that they will continue to improve in the fourth quarter and beyond.
The company continues to make progress in the development of Smartbeam , its intelligent high-beam headlamp control system, and is making production shipments for the 2005 model year Jeep Grand Cherokee and Cadillac STS. Deur said that Gentex has been working under a letter of intent with a major European automaker to develop Smartbeam for a number of vehicle platforms that are expected to begin shipping in calendar 2006. The company recently received a production purchase order for that business. A third North American programme that was expected to be implemented in the mid 2005 model year has been postponed until the 2006 model year due to customer implementation issues.
Deur said that he believes Gentex will show mirror unit shipment growth in the fourth quarter of approximately 5 to 10% compared with the fourth quarter of 2003. This revised estimate reflects lower actual shipments to date, as well as lower expected unit shipments for the duration of the quarter, to certain customers in Western Europe and North America.
Automotive revenues increased by 7% to $114.5 million in the third quarter and by 10% to $362.1 million for the first nine months of 2004 compared with the same periods last year.
Auto-dimming mirror unit shipments to customers in North America declined by 1% in the third quarter and increased by 5% for the first nine months of 2004 compared with the same 2003 periods. North American light vehicle production declined by 2% in the third quarter and was flat for the first nine months of calendar 2004 compared with the same periods last year.
Unit shipments to offshore customers increased by 26% in the third quarter and 29% for the first nine months of 2004, compared with the same periods last year. The higher growth in offshore unit shipments is primarily attributable to increased vehicle penetration in the European and Asia-Pacific regions. Light vehicle production in Western Europe was flat in the third quarter of 2004 compared with 2003, and increased by 1% for the first nine months of 2004 compared with the same periods last year.
Total auto-dimming mirror unit shipments in the third quarter were approximately 2.8 million, an 11% increase over the same period last year. For the first nine months of 2004, total unit shipments reached a record 8.7 million, a 16% increase over the first nine months of 2003.