“A number of companies have recently discussed and reported that they are experiencing increased costs due to the stresses on the supply chain caused by the increased demand for certain electronic components,” said Jen. “Those costs were the primary reason for the sequential decline in our gross profit margin when comparing the third quarter of 2010 with the second quarter of 2010, and we expect that these increased costs will continue for the next several quarters.
“However, we continue to see increasing orders for both our SmartBeam and RCD Mirror products, and we’re excited about the prospects for the new, camera-based, driver-assist features that we have in our product development pipeline,” said Jen.
The Rear Camera Display Mirrors display high-resolution, color images of the area directly behind the vehicle via an automaker-specified camera. SmartBeam is the Company’s proprietary high beam headlamp assist system. Driver-assist features include several levels of the SmartBeam variable forward lighting product, as well as items like lane-departure warning and traffic sign recognition.
Gentex currently is working to fill nearly 100 technical positions, primarily in the electrical and software development and engineering areas. Additional information is available at http://www.gentex.com/corp_jobs.html.
Unit Shipments and Net Sales
Total auto-dimming mirror unit shipments increased by 28 percent in the third quarter of 2010 compared with the third quarter last year. Automotive net sales increased by 33 percent from $151.1 million in the third quarter of 2009 to $201.5 million in the third quarter of 2010.
Total auto-dimming mirror unit shipments increased by 56 percent in the first nine months of 2010 compared with the first nine months last year. Automotive net sales increased by 64 percent from $352.2 million in the first nine months of 2009 to $579.4 million in the first nine months of 2010.
Automatic-dimming mirror unit shipments increased by 36 percent in North America in the third quarter of 2010, primarily as a result of increased mirror unit shipments to the domestic automakers as well as the Asian transplant automakers. North American light vehicle production increased by 26 percent in the third quarter of 2010 compared with the same prior-year quarter.
Automatic-dimming mirror unit shipments increased by 70 percent in North America in the first nine months of 2010, primarily as a result of increased mirror unit shipments to the domestic automakers as well as the Asian transplant automakers. North American light vehicle production increased by 54 percent in the first nine months of 2010 compared with the same prior-year period.
Automatic-dimming mirror unit shipments to offshore customers increased by 24 percent in the third quarter of 2010 compared with the same quarter last year. The increase in unit shipments was primarily due to increased mirror unit shipments to certain European and Asian automakers. Light vehicle production in Europe decreased by one percent in the third quarter of 2010, and increased by 12 percent in Japan and Korea in the third quarter of 2010, compared in each case with the same quarter last year.
Automatic-dimming mirror unit shipments to offshore customers increased by 48 percent in the first nine months of 2010 compared with the same period last year. The increase in unit shipments was primarily due to increased mirror unit shipments to certain European and Asian automakers. Light vehicle production in Europe increased by 17 percent in the first nine months of 2010, and increased by 30 percent in Japan and Korea in the first nine months of 2010, compared in each case with the same period last year.
Other net sales increased by 15 percent to $5.4 million for the third quarter of 2010 compared with the same quarter last year, as increased dimmable aircraft window net sales more than offset the 11 percent decrease in fire protection net sales on a quarter-over-quarter basis. Other net sales were flat at $14.7 million for the first nine months of 2010 compared with the same prior-year period, as increased dimmable aircraft windows net sales offset the 19 percent decrease in fire protection net sales. The decline in fire protection net sales during the three- and nine-month periods ending September 30, 2010, was primarily due to the continued weak commercial construction market.
Future Estimates
Gentex Senior Vice President Enoch Jen provided certain guidance for the fourth quarter of 2010.
“Based on CSM Worldwide’s end-of-September light vehicle production forecast for the fourth quarter of 2010, we currently expect our net sales in the fourth quarter of 2010 to increase by approximately 20 percent compared with the fourth quarter of 2009,” said Jen.
“Additionally, we now estimate that shipments of our SmartBeam high beam headlamp assist product will increase by approximately 40-45 percent in calendar year 2010 compared with shipments of approximately 437,000 SmartBeam units in calendar year 2009,” said Jen. “We also now believe that unit shipments of Rear Camera Display mirrors will approximately double in calendar year 2010 compared with shipments of approximately 573,000 units in calendar year 2009.”
Jen said that sequential light vehicle production volumes in the fourth quarter of 2010 compared with the third quarter of 2010 are expected to decrease by about four percent in North America and Japan and Korea, and to increase by approximately six percent in Europe. “We’re still taking it one quarter at a time, given the continued uncertainties in the global automotive industry and world economy,” said Jen.
