Automotive mirror supplier Gentex said Friday that supply chain challenges led to lower third-quarter profits, but also touted a sales increase compared with 2021.
The U.S. company, which primarily produces automatic-dimming rearview mirror and camera-based driver-assistance systems, said net income decreased 5 percent to $72.7 million.
Net sales climbed 24 percent to $493.6 million compared to $399.6 million in 2021. This coincides with a 22 percent increase in light-vehicle production in the company's primary markets of Europe, North America Japan and Korea.
Despite the increase in sales and production, the company missed its beginning-of-quarter forecast by $70 million to $80 million.
Operating expenses continue to increase, with a 15 percent rise to $60.4 million. Gentex cites staffing and professional fees, plus freight and travel-related expenses as causes for the increase.
Gross margin fell 5.5 percentage points to 29.8 percent. Gentex said raw material costs, labor cost increases and an unfavorable product mix are to blame.
A running theme in the company's Friday conference call was supply chain issues. Gentex said as much as 30 percent of its engineering team is focused on product redesigns to cope with the shortages. This is the same figure that was stated in the second quarter.
In a release Friday, Gentex CEO Steve Downing said, "While there appears to be some improved stability in the light vehicle production environment and the overall supply chain, the Company continues to experience significant customer order fluctuations on a week-to-week basis and difficulty in sourcing advanced electronic components for our most complex products."
Gentex ranks No. 88 on the Automotive News list of the top 100 global suppliers, with worldwide sales to automakers of $1.7 billion in 2021. Europe accounted for 39 percent of that total.