Gentex Corporation (NASDAQ:GNTX) Q3 2022 Earnings Conference Call October 28, 2022 9:30 AM ET

Company Participants

Josh O'Berski - Director of Investor Relations

Steve Downing - President & Chief Executive Officer

Kevin Nash - Vice President of Finance & Chief Financial Officer

Neil Boehm - Vice President of Engineering and Chief Technology Officer

Conference Call Participants

Luke Junk - Baird

John Murphy - Bank of America

Gavin Kennedy - Jefferies

Ryan Brinkman - JPMorgan

Josh Nichols - B. Riley

David Whiston - Morningstar

James Picariello - BNP

Operator

Good day and thank you for standing by. Welcome to the Gentex reports Third Quarter 2022 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Josh O'Berski. Please go ahead.

Josh O'Berski

Thank you. Good morning and welcome to the Gentex Corporation third quarter 2022 earnings release conference call. I'm Josh O'Berski, Gentex's Director of Investor Relations and I'm joined by Steve Downing, President and CEO; Neil Boehm, Vice President of Engineering and CTO; and Kevin Nash, Vice President of Finance and CFO.

This call is live on the Internet and can be reached by going to the Gentex website in at ir.gentex.com. All contents of this conference call are the property of Gentex Corporation and may not be copied, published, reproduced, rebroadcast, retransmitted, transcribed or otherwise redistributed. Gentex Corporation will hold responsible and liable any party for any damages incurred by Gentex Corporation with respect to any unauthorized use of the contents of this conference call. This conference call contains forward-looking information within the meaning of the Gentex Safe Harbor statement included in the Gentex Reports Third Quarter 2022 financial results press release from earlier this morning and as always, shown on the Gentex website. Your participation in this conference call implies consent to these terms.

Now, I'll turn the call over to Steve Downing, who will get us started today.

Steve Downing

Thank you, Josh. For the third quarter of 2022, the company reported net sales of $493.6 million compared to net sales of $399.6 million in the third quarter of last year which was a 24% increase quarter-over-quarter.

For the third quarter, global light vehicle production in North America, Europe, Japan, Korea and China, increased approximately 26% when compared to the third quarter of last year. Light vehicle production in the company's primary markets of North America, Europe and Japan, Korea was up 22% on a quarter-over-quarter basis. Some of the supply chain issues that plagued the industry in the third quarter of last year have improved and overall light vehicle production growth contributed to the company's quarter-over-quarter revenue growth. However, product mix for the third quarter and overall sales levels were still impacted by customer order adjustments, supply chain challenges and labor availability issues. Together, these headwinds resulted in unit shipments being approximately 750,000 units lower than our original forecast at the beginning of the quarter which resulted in a revenue shortfall of about $35 million to $40 million. 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.