ZEELAND, Mich., April 26, 2024 (GLOBE NEWSWIRE) -- Gentex Corporation (NASDAQ: GNTX), a leading supplier of digital vision, connected car, dimmable glass and fire protection technologies, today reported financial results for the three months ended March 31, 2024. 1st Quarter 2024 Summary Net sales of $590.2 million, a new quarterly sales record, and a 7% increase compared to the first quarter of 2023 Gross profit margin of 34.3%, an increase of 260 basis points from the first quarter of 2023 Income from operations of $129.3 million, a 14% increase compared to the first quarter of 2023 Net income of $108.2 million, an 11% increase compared to the first quarter of 2023 Earnings per diluted share of $0.47, a 12% increase compared to the first quarter of 2023 For the first quarter of 2024, the Company reported net sales of $590.2 million, compared to net sales of $550.8 million in the first quarter of 2023, a 7% quarter over quarter increase. For the first quarter of 2024, light vehicle production in North America, Europe and Japan/Korea declined by 3%, compared to the first quarter of 2023. "Revenue for the first quarter of 2024 of $590.2 million was the highest quarterly sales level in Company history," said President and CEO, Steve Downing. "During the first quarter of 2024, actual light vehicle production weakened in our primary markets versus the beginning of quarter forecast, which resulted in revenue levels being approximately $20 million lower than our original expectations for the quarter. Despite lower than expected production, revenue for the quarter was not only a Company record, but also represented a 10% outperformance versus the underlying market. The revenue growth in the first quarter of 2024 was driven by strong content growth, as a result of the higher launch rates and increased take rates of our Full Display Mirrors and other advanced features, and strong growth in our outside auto dimming mirror business, which has been the case over the last several quarters. The work we have been executing to increase our total number of features, including investments in additional electronic technologies, is beginning to provide additional revenue growth opportunities for the Company, while de-risking the business by reducing dependence on light vehicle production," commented Downing. For the first quarter of 2024, the gross margin was 34.3%, compared to a gross margin of 31.7% for the first quarter of 2023. The first quarter of 2024 gross margin increased by 260 basis points on a quarter over quarter basis as a result of raw material cost reductions, higher sales levels, customer price changes made after the first quarter of 2023, and manufacturing related efficiencies. "We continue to make progress on our margin recovery plan that we estimated would take until the end of 2024 to complete. While the gross margin this quarter declined slightly from the fourth quarter of last year, the performance was in line with our expectations despite revenue levels that were below beginning of quarter forecast," commented Downing. "The improvements in gross margin that we have targeted for the rest of 2024 are dependent on sales levels, product mix, raw material cost reductions, and further efficiencies in manufacturing. The entire Gentex team remains focused and confident in the gross margin recovery plan that we established last year and continue to execute." Operating expenses during the first quarter of 2024 increased by 19% to $72.9 million, compared to operating expenses of $61.5 million in the first quarter of 2023. Operating expenses increased quarter over quarter primarily due to staffing and engineering related professional fees and testing expenses. "Our operating expenses are trending in line with our expectations for the full year, with increases primarily focused on R&D. While our operating expenses grew faster than sales for the quarter, it is important to remember that the first quarter of 2023 operating expenses were below forecast and were significantly lower than sales growth as we worked to expand our engineering footprint last year. Additionally, the operating expenses for the first quarter included the addition of the newly acquired eSight team. R&D expenses are expected to continue at the current pace for the rest of this year, as we continue to invest in innovative products and technologies, new business awards, and VA/VE initiatives for cost optimization of our bill of materials," said Downing. Income from operations for the first quarter of 2024 was $129.3 million, a 14% increase when compared to income from operations of $113.3 million for the first quarter of 2023. During the first quarter of 2024, the Company had an effective tax rate of 15.2%, which was primarily driven by the benefit of the foreign derived intangible income deduction. Net income for the first quarter of 2024 was $108.2 million, compared to net income of $97.6 million for the first quarter of 2023, which represents an 11% increase. The increase in net income was primarily the result of the quarter over quarter increases in net sales and income from operations. Earnings per diluted share for the first quarter of 2024 were $0.47, a 12% increase compared to earnings per diluted share of $0.42 for the first quarter of 2023. Automotive net sales in the first quarter of 2024 were $577.6 million, a 7% increase compared to $537.4 million in the first quarter of 2023, while auto-dimming mirror unit shipments decreased by 2% during the first quarter of 2024, compared to the first quarter of 2023. Other net sales in the first quarter of 2024, which includes dimmable aircraft windows and fire protection products, were $12.6 million, compared to other net sales of $13.3 million in the first quarter of 2023. Fire protection sales decreased by $2.5 million for the first quarter of 2024, compared to the first quarter of 2023. Dimmable aircraft window sales increased by $1.8 million for the first quarter of 2024, compared to the first quarter of 2023. Share RepurchasesDuring the first quarter of 2024, the Company repurchased 1.2 million shares of its common stock at an average price of $35.84 per share. As of March 31, 2024, the Company has approximately 14.7 million shares remaining available for repurchase pursuant to its previously announced share repurchase plan. The Company intends to continue to repurchase additional shares of its common stock in the future in support of the previously disclosed capital allocation strategy, but share repurchases will vary from time to time and will take into account macroeconomic issues, market trends, and other factors that the Company deems appropriate. Future EstimatesThe Company's current forecasts for light vehicle production for the second quarter of 2024, and full years 2024 and 2025, are based on the mid-April 2024 S&P Global Mobility forecast for light vehicle production in North America, Europe, Japan/Korea, and China. Light vehicle production in these markets is expected to increase 3% for the second quarter of 2024, versus the same quarter in 2023, driven by year over year improvements in China. For calendar year 2024, light vehicle production in these markets is forecasted to be essentially flat when compared with light vehicle production in calendar year 2023. Light vehicle production for calendar year 2025 is forecasted to increase by 2% versus calendar year 2024 in these markets. Second quarter 2024 and calendar years 2024 and 2025 forecasted vehicle production volumes from S&P Global Mobility are shown below: Light Vehicle Production (per S&P Global Mobility mid-April light vehicle production forecast) (in Millions) Region Q2 2024 Q2 2023 % Change   Calendar Year 2025 Calendar Year 2024 Calendar Year 2023   2025 vs 2024% Change 2024 vs 2023% Change North America 4.15 4.09 1 %   16.42 16.01 15.68   3 % 2 % Europe 4.52 4.66 (3 )%   17.52 17.49 17.88   — % (2 )% Japan and Korea 3.03 3.13 (3 )%   11.80 12.16 12.77   (3 )% (5 )% China 7.51 6.74 11 %   30.85 29.72 29.04   4 % 2 % Total Light Vehicle Production 19.21 18.62 3 %   76.59 75.38 75.37   2 % — % Based on this light vehicle production forecast and actual results for the first quarter of 2024, the Company is making no changes to its previously provided guidance for calendar year 2024 as shown in the table below. 2024 Annual Guidance