Quarter Brightens Gentexs Picture

October 21, 2002
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ZEELAND — Growing demand for auto-dimming mirrors and the ability to penetrate new markets and vehicle models enabled Gentex Corp. to set new quarterly revenue and earnings records and score major gains from year-ago levels.

The third quarter saw the Zeeland-based Gentex surpass $100 million in quarterly revenues for the first time ever, as sales of the popular Night Vision Safety mirrors continued to soar and automakers began buying more units with electronic features. About half of the mirrors shipped during the quarter were equipped with some form of "value-added" feature, such as a tire pressure indicator, vehicle communications systems, map lamps and exterior turn signals, Executive Vice President Garth Deur said.

Gentex specifically cited increased sales of mirrors for high-volume, mid-size vehicle models with helping to set new sales and earnings milestones, a trend executives have worked toward for some time.

"You're seeing the evidence of what we've been saying for a long time," Deur said during an Oct. 15 conference call with brokerage analysts.

Based on projected vehicle production levels for North America, Europe and Asia, Gentex is on pace to grow mirror shipments by 20 percent to 25 percent for 2002, Deur said.

Gentex last week reported third quarter revenues of $101.5 million, a 37 percent increase over the $74.1 million during the same period a year earlier.

Quarterly net income totaled $21.4 million, or 28 cents per share, up 44 percent from the $14.9 million, or 20 cents per share, in the third quarter of 2001. The results narrowly beat analysts' expectations for earnings of 27 cents per share.

The third quarter set "another benchmark which we believe we'll be measuring future quarters against," said Ken La Grand, Gentex's long-time executive vice president who's retiring early next year.

"We've never been more pleased with both our results and the outlook for our business," La Grand said.

Mirror shipments through the third quarter were up 23 percent over year-ago levels, from 5.3 million to 6.5 million units.

LaGrand expects that Gentex in 2003 can again achieve a long-held goal of growing unit shipments and revenues by 20 percent annually.

"We still see that as a very realistic goal," he said.

Through the first nine months of the year, sales were $287.9 million, up 25 percent from the $230.6 million during the same period of 2001.

Year-to-date net income was $61.6 million, or 81 cents per diluted share, up 28 percent from the $48.4 million, or 64 cents per share, through the first nine months of last year.

Gentex, meanwhile, is looking at future capacity expansions.

Zeeland Township trustees next month will consider a request from the company for a tax abatement for a new plant at 88th Street and Riley Avenue, adjacent to its corporate campus and existing production plants in Zeeland.

The company continues to add production lines in its current facilities and has enough capacity for the next two vehicle model years, Deur said. A new facility, he said, is "still in the planning mode."

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