Gentex Corporation Business Report FY ended Dec. 2018
Financial Overview |
(in million USD) |
| FY ended Dec. 31, 2018 | FY ended Dec. 31, 2017 | Rate of change (%) |
Factors | |
| Sales | 1,834.1 | 1,794.9 | 2.2 | 1) |
| Operating Income | 508.1 | 523.4 | (2.9) | - |
Factors
1) Net Sales
-The Company’s net sales for the fiscal year ended December 31, 2018 increased by 2.2% over the previous year to USD 1,834.1 million. The primary factor for the Company’s increased sales was a 6% increase in automatic-dimming mirror shipments, from 39.3 million to 41.6 million, highlighting increased market penetration of automatic-dimming mirrors, especially to international markets. Specifically, international automotive mirror unit shipments increased by 7% compared to the previous year, with increased market penetration to European and Japanese automakers. Sales of fire protection products increased by 18% over the previous year, while sales of dimmable aircraft windows increased by 16% compared to the previous year.
Business Partnership
-The Company and Fingerprint announced an exclusive partnership agreement to bring iris-scanning technology to the automotive industry. The first such systems are likely to be discretely located inside automatic-dimming rearview mirror or related windscreen mount developed by the Company. Locating the iris authentication system in or around the mirror would allow auto manufacturers to offer the solution in varying vehicle trim packages, without requiring a substantial redesign of the interior. For automakers that use key fobs, or car sharing providers that leverage phone apps to identify drivers, iris recognition systems could act as a second layer of security, confirming the driver's identity, with a false acceptance rate as low as one in 10 million. (From a press release on January 11, 2018)
Contracts
-At CES 2018, the Company announced that Jaguar Land Rover would be the first automaker to offer its car-to-home automation feature as well as its next-generation digital rear vision system. Jaguar and Land Rover vehicle models equipped with InControl Apps can download the HomeLink Connect application. The HomeLink Connect app can then be configured to control various devices and be used to adjust thermostat settings, turn home lighting on or off, unlock a door, or play music. Jaguar Land Rover will also be the first automaker with models that feature the Company’s next-generation Full Display Mirror intelligent rear-vision system. (From a press release on January 9, 2018)
Awards
-The Company received a Global Purchasing Supplier Excellence Bronze Award in the Product Engineering category from Jaguar Land Rover, recognizing its contribution to the automaker’s business. (From a press release on June 14, 2018)
-The Company was named the Body Supplier of the Year from FCA for its interior and exterior automatic-dimming mirrors. (From a press release on May 8, 2018)
Outlook
-The Company expects that its sales in the fiscal year ending December 31, 2019 will be between USD 1.83 billion and USD 1.93 billion.
R&D Expenditure |
(in million USD) |
| FY ended Dec. 31, 2018 | FY ended Dec. 31, 2017 | FY ended Dec. 31, 2016 | |
| Total | 107.1 | 99.7 | 94.2 |
| % of sales | 5.8 | 5.6 | 5.6 |
-The Company’s investment in research and development for the fiscal year ended December 31, 2018 increased by 7.4% over the previous year primarily due to an increase in staffing levels to support growth, new business and the development of new products.
Product Development
Company technologies on Rinspeed microSNAP concept vehicle
-The Company recently integrated several of its technologies for microSNAP, the latest concept vehicle from automotive think tank Rinspeed. At CES 2019, Rinspeed is demonstrating a downsized Snap offshoot dubbed microSNAP, a last-mile vehicle designed for commuting and localized, just-in-time delivery. The Company provided its biometric iris-scanning system for occupant recognition, an interior cabin monitoring system, and dimmable glass window elements. The iris-scanning system would serve to authenticate microSNAP passengers, authorize vehicle usage, track and assign ride payment, and deliver customized security. For passenger privacy, the Company provided microSNAP with dimmable glass panels that darken on demand or in conjunction with sensor function. The glass panels can also assist the climate control system in maintaining a consistent temperature by darkening according to temperature and sun load sensors. (From a press release on December 21, 2018)
Patents
-As of 2018, the Company owns 635 U.S. patents and 787 foreign patents. Of these totals, 514 U.S. patents and 768 foreign patents are related to electrochromic technology, automotive rearview mirrors, microphones, displays, cameras, sensors, or HomeLink products.
-The Company has 294 U.S. patent and 418 foreign patent applications currently pending.
Capital Expenditure |
(in million USD) |
| FY ended Dec. 31, 2018 | FY ended Dec. 31, 2017 | FY ended Dec. 31, 2016 | |
| Overall | 86.0 | 104.0 | 121.0 |
| -Automotive Products | 84.3 | 82.7 | 99.8 |
-The decrease in capital expenditures for the fiscal year ended December 31, 2018 was primarily due to decreases in production equipment purchases and building related costs.
-The Company expects to invest between USD 90 million and USD 100 million in capital expenditures during the fiscal year ending December 31, 2019. The capital expenditures will primarily be used for purchasing production equipment.
Investment in U.S.
-In 2018, the Company completed construction of a new 265,000-square-foot distribution facility in Zeeland, Michigan, U.S. The Company invested approximately USD 22 million to complete construction of the facility. The facility enables the Company to consolidate all of its distribution activities to a single location, thus increasing available manufacturing space at its other facilities. Operations at the distribution facility began in the fourth quarter of 2018.