Gentex Q1 net income rises 27% despite industry production snafus

Gentex Corp.'s sales and profit margin grew in the first quarter of 2021 despite vehicle production levels taking a hit because of shortages of electronics and other parts.

The Zeeland, Mich., supplier of dimmable rearview mirrors, digital vision and other electronic components posted net income of $113.5 million for the first quarter, a 27 percent bump from the same period a year earlier.

That was driven by a quarter-over-quarter increase in sales, an improved product mix, higher gross margins and the effects of cost-saving structures put in place in the second quarter of 2020, according to Gentex.

The parts shortages caused North American light-vehicle production levels to drop by 12 percent in the quarter, Gentex said. Production levels in the European, Japanese and Korean markets were also affected. The company indicated the shortages and modifications to production that resulted from them reduced revenue by about $45 million during the quarter.

Gentex said the first quarter of 2021 nonetheless was the second-highest sales quarter in company history — behind only the fourth quarter of 2020.

"The chaos created this quarter by component shortages, freight issues, as well as customer plant shutdowns and order changes made scheduling very difficult, but the team at Gentex was able to not only keep up with our customers' orders but also improve gross margins ... versus the first quarter of last year," Gentex CEO Steve Downing said in a release .

Downing said Gentex's first-quarter gross margin — about 38 percent — was below the company's annual guidance range.

Net sales for the first quarter were $483.7 million, a 7 percent increase from the year-earlier period.

Total global mirror shipments improved 13 percent in the quarter to 11.8 million units.

Operating income in the first quarter was $133.7 million, compared with operating income of $105 million in the year-earlier period.

Gentex ranks No. 91 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $1.81 billion in 2019.