Gentex Q1 2020 Earnings Report
Key Takeaways
Gentex Corporation reported a decrease in net sales and earnings for the first quarter of 2020, primarily due to the negative impact of the COVID-19 pandemic on the automotive industry. Net sales decreased by 3% compared to the first quarter of 2019, and net income decreased by 14%.
Net sales declined by 3% quarter over quarter, while global light vehicle production volumes decreased by 24%.
The COVID-19 pandemic negatively impacted first quarter net sales by approximately 9%, resulting in an estimated $40 million loss.
Gross margin was 34.5% for the first quarter, impacted by lost sales due to the pandemic and annual customer price reductions.
The company repurchased 7.0 million shares during the quarter.
Gentex
Gentex
Gentex Revenue by Segment
Forward Guidance
The Company's current estimate is that net sales for 2020 will be down between 10 and 15 percent, when compared with 2019.
Positive Outlook
- Company remains confident in its ability to continue to outperform the underlying market.
- Company focus is directed at protecting employees, while still supporting the global customer base.
- Company will continue to work to ensure that our cost structure accurately reflects industry production changes and new business realities.
- Overall commitment to new product research and development will remain one of our top priorities for investment.
- Company remains optimistic that we can continue to provide above market returns for our shareholders by leveraging our current product strategy and through the execution of our lean organizational structure.
Challenges Ahead
- COVID-19 has created unprecedented circumstances for our industries, which include massive changes to production levels at our customers.
- Industries have been significantly influenced by federal, state and local governments in each of the countries where our customers operate.
- Many of these changes have come with little or no advanced warning, which makes it very difficult to forecast sales or build a sustainable operating model.
- Light vehicle production for calendar year 2020 in the Company's primary regions is expected to decline 20% compared to 2019.
- Based on the difficulty and uncertainty of global light vehicle production data for 2021, the Company is withdrawing its revenue guidance for 2021 until better data becomes available.
Revenue & Expenses
Visualization of income flow from segment revenue to net income