Gentex(US:GNTX)2023-02-22 19:59Financial Performance - Net sales increased by $187.8 million, or 11%, in 2022 compared to 2021, driven by a 6% increase in automatic-dimming mirror shipments from 41.8 million units to 44.2 million units [123]. - Net income decreased by $42.0 million, or 12%, in 2022, primarily due to changes in gross margin and operating profits [131]. - Cash flow from operating activities was $338.2 million in 2022, a decrease of $24.0 million compared to 2021, mainly due to lower net income and changes in working capital [142]. Cost and Expenses - Cost of goods sold as a percentage of net sales rose from 64.2% in 2021 to 68.2% in 2022, leading to a decrease in gross margin by approximately 250-300 basis points due to increased raw material and manufacturing costs [125]. - Engineering, research and development expenses increased by $15.5 million, or 13%, in 2022, primarily due to additional staffing and new product development [126]. - Selling, general and administrative expenses rose by $14.3 million, or 16%, in 2022, representing 6% of net sales compared to 5% in 2021, influenced by staffing and increased freight expenses [127]. - Operating expenses, including R&D and SG&A, are expected to be between $260 million and $270 million for calendar year 2023, driven by investments in growth and new product development [156]. Capital Expenditures and Investments - Capital expenditures increased to $146.4 million in 2022, up by $77.6 million from 2021, primarily for building and facility construction projects [144]. - Capital expenditures for 2023 are anticipated to be between $200 million and $225 million, including $70 million to $90 million for a new manufacturing facility [159]. - Short-term investments increased to $23.0 million as of December 31, 2022, up from $5.4 million in 2021, while long-term investments decreased to $153.9 million [147]. Future Projections - The Company estimates top line revenue for calendar year 2023 to be approximately $2.2 billion, based on light vehicle production forecasts and anticipated product mix [154]. - Gross margin is projected to be between 32% and 33% for calendar year 2023, with historical customer price reductions exerting pressure on margins [155]. - Revenue guidance for calendar year 2024 anticipates a 10% increase over 2023 estimates, reflecting expected growth in light vehicle production [162]. Shareholder Returns and Financial Strategy - Cash flow used for financing activities decreased by $201.1 million to $209.0 million in 2022, primarily due to a reduction in common stock repurchases [145]. - The Company plans to continue its share repurchase program in 2023, contingent on market and economic conditions [161]. - The Company is focused on maintaining a competitive advantage through investments in proprietary technology and product development [158]. Currency and Tax Considerations - Approximately 7-8% of the Company's net sales in 2023 are expected to be invoiced and paid in foreign currencies [165]. - The Company expects a tax rate between 15.0% and 17.0% for calendar year 2023 based on current statutory rates [160].