Gentex Q4 net income jumps 44% on mirror shipments, product mix

Growth in auto-dimming mirror unit shipments and a strong mix of products with advanced features helped supplier Gentex Corp. post a 44 percent jump in fourth-quarter net income.

The company, which released its financial results Friday, also said it benefited from cost reductions implemented over the year.

The Zeeland, Mich., supplier of digital vision, connected car, dimmable glass and fire protection products posted net income of $143.3 million for the fourth quarter, a company quarterly record, compared with $99.5 million in the year-earlier period.

Net sales for the quarter also broke a company quarterly record with $529.9 million, a 19 percent increase from a year earlier. During the quarter, Gentex paid down the remaining $25 million balance of its short-term debt.

As one of the earlier suppliers to report quarterly results, Gentex is often viewed as a bellwether for global suppliers.

"When you combine this level of financial performance, with our common-sense approach to capital allocation, we believe we are forging a pathway to a significant increase in overall shareholder returns," CEO Steve Downing said in a statement.

Shares of Gentex were down 1.3 percent to $33.12 in midday trading Friday amid a broad market decline.

For all of 2020, the company's net income fell 18 percent to $347.6 million. Full-year net sales slipped 9 percent to $1.69 billion.

Gentex shipped 38.2 million auto-dimming mirror units in 2020, down 11 percent from 42.8 million in 2019, as the COVID-19 pandemic forced the closure of automotive plants worldwide in the spring.

"In 2020, the company experienced a severe, unexpected reduction in production volumes and revenue, especially in the second quarter, that was unlike anything in our history," Downing said. "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."

Gentex expects 2021 revenue of $1.94 billion to $2.02 billion, with global light-vehicle production increasing to 72.4 million units.

In a call with investors and the media Friday, CFO Kevin Nash said the company kept its focus on maintaining a high level of liquidity throughout the year.

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.