Gentex Expects Banner Year

February 3, 2003
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ZEELAND — Gentex Corp., coming off a record sales and earnings year in 2002, sees plenty more growth ahead this year, as new product programs outpace anticipated decreases in automotive production volumes in North America and Europe.

New business stemming from penetrating a growing number of vehicle platforms should push shipments of Gentex’s popular automatic-dimming automotive mirrors up another 15 percent to 20 percent globally in 2003.

Gentex in recent years has enjoyed similar annual growth rates in unit shipments through the launch of several new products, winning new customers and building stronger ties with existing customers in the European and Asia-Pacific markets.

“We don’t have any reason to believe that there won’t continue to be good growth opportunities in all the markets,” Gentex Executive Vice President Garth Deur told brokerage analysts during a conference call to discuss the corporation’s fourth quarter and 2002 results.

“The 2002 and 2003 model years have just been outstanding and provide a great base from which we need to continue to grow from,” Deur said.

A strong automotive production year in North America, combined with new product programs, helped to push shipments of Gentex’s Night Vision Safety mirrors up 23 percent in 2002 to a record 8.8 million units.

“It turned out to be a great year,” said Deur, who expects the corporation to continue strong growth rates through 2003 on the strength of new contracts and product programs worldwide.

“We expect it’s going to be just more of the same,” he said. “Super growth in Asia-Pacific, good growth in Europe and some more growth here in North America — that’s all going to wrap up to what we think is going to be a really outstanding year in 2003.”

Gentex last week reported fourth-quarter revenues of $107.3 million, up nearly 35 percent from the $79.7 million during the same period a year earlier. Quarterly earnings totaled $24 million, or 32 cents per share, up 42.8 percent from the $16.8 million, or 22 cents per share, recorded in the fourth quarter of 2001.

The fourth quarter generated a pleasant surprise for Gentex via a sizable gain in the average cost of its mirrors shipped.

Automakers opting for higher electronic content in mirrors — such as digital compasses, temperature displays, tire pressure gauges and LED turn signals and map lights — pushed the average price of a Gentex mirror to $43.36, which compares to an annual average price of $42.50.

Deur attributed the rise to a highly favorable order mix during the fourth quarter. He expects the average price to drop slightly in the periods ahead.

“The mix of vehicles they built was a richer mix than we anticipated,” Deur said.

Gentex’s annual revenues grew 27.3 percent for the year, from $310.3 million to $395.2 million. Net income for 2002 was $85.7 million, up 31.5 percent from the $65.2 million in the prior year.

Gentex does not traditionally offer revenue or earnings guidance, although brokerage analysts who follow the company are anticipating growth in earnings per share over 2002.

In the year ahead, Gentex plans to begin work on a new factory in Zeeland that will rival the size of the 700,000-square-foot Riley Street plant that opened a little more than two years ago. The new facility will cost $15 million to $20 million to design and build, plus another $20 million for equipment, Vice President of Finance Enoch Jen said.    

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