Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549


FORM 8-K


CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934


Date of Report: July 21, 2017


GENTEX CORPORATION
(Exact name of registrant as specified in its charter)

Michigan
0-10235
38-2030505
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
 
 
 
 
600 North Centennial Street
Zeeland, Michigan
 
 

49464
(Address of principal executive offices)
 
 
(Zip Code)

Registrant's telephone number, including area code: (616) 772-1800
_____________________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company    o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    o    





Section 2.
Financial Information

Item 2.02
Results of Operations and Financial Condition.

(a)
On July 21, 2017, Gentex Corporation issued a news release announcing financial results for the second quarter ended June 30, 2017. A copy of the news release is attached as Exhibit 99.1 to the Form 8-K.

The information in this Form 8-K and the attached Exhibit shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Section 9.    Financial Statements and Exhibits

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibit
    
99.1 – News Release Dated July 21, 2017.


SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: July 21, 2017            
GENTEX CORPORATION
(Registrant)                


By    /s/ Kevin C. Nash
Kevin C. Nash
Its Vice President - Accounting and Chief Accounting Officer    
    






EXHIBIT INDEX


99.1    News Release Dated July 21, 2017



Exhibit
Exhibit 99.1

http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11705250&doc=3

GENTEX REPORTS SECOND QUARTER 2017 FINANCIAL RESULTS
ZEELAND, MI -- (GLOBE NEWSWIRE - July 21, 2017) - Gentex Corporation (NASDAQ: GNTX) the Zeeland, Michigan-based manufacturer of automotive automatic-dimming rearview mirrors, automotive electronics, dimmable aircraft windows, and fire protection products, today reported financial results for the three and six months ended June 30, 2017.

2nd Quarter 2017 Summary

Net sales growth of 5% quarter over quarter compared to 1% decline in relevant light vehicle production
Net Income increased by 2% quarter over quarter
Earnings per Diluted Share increased by 3% quarter over quarter to $0.31 per diluted share
2.2 million shares repurchased during the quarter
$26.9 million of debt repaid during the quarter
For the second quarter of 2017, the Company reported net sales of $443.1 million, which was an increase of 5% compared to net sales of $423.8 million in the second quarter of 2016. The 5% quarter over quarter growth in net sales was driven by a 6% quarter over quarter increase in auto-dimming mirror unit shipments despite overall automotive light vehicle production, in the Company's primary regions, decreasing by approximately 1% for the second quarter of 2017 when compared with the same quarter in 2016.
The gross profit margin in the second quarter of 2017 was 37.7%, compared with a gross profit margin of 39.4% in the second quarter of 2016. The quarter over quarter net decrease in the gross profit margin was the result of annual customer price reductions that were not fully offset by purchasing cost reductions, as well as the Company's inability to leverage fixed overhead costs as a result of unfavorable product mix. The unfavorable product mix was driven by a higher percentage of base auto-dimming mirror shipments versus advanced feature mirrors when compared to the same period in 2016.
Income from operations for the second quarter of 2017 decreased 2% to $125.9 million when compared to income from operations of $128.7 million for the second quarter of 2016, due to the lower quarter over quarter gross profit margin percentage, which more than offset the quarter over quarter increase in net sales.



Exhibit 99.1

Other income increased to $2.1 million in the second quarter of 2017 compared to a loss of $1.1 million in the second quarter of 2016, due to an increase in investment income and realized gains on the sale of investments during the most recently completed quarter as compared to the same quarter last year.
Net income for the second quarter of 2017 increased 2% to $88.5 million compared with net income of $86.5 million in the second quarter of 2016.
Earnings per diluted share in the second quarter of 2017 increased 3% to $0.31, compared with earnings per diluted share of $0.30 in the second quarter of 2016, as a result of the increase in net income.
Automotive net sales in the second quarter of 2017 were $433.9 million, an increase of 5% compared with automotive net sales of $414.4 million in the second quarter of 2016, driven by a 6% increase in auto-dimming mirror unit shipments on a quarter over quarter basis.
Other net sales in the second quarter of 2017, which includes dimmable aircraft windows and fire protection products, were $9.2 million, a decrease of 2%, compared to other net sales of $9.4 million in the second quarter of 2016.
Share Repurchases
During the second quarter of 2017, the Company repurchased 2.2 million shares of its common stock. As of June 30, 2017, the Company has approximately 3.1 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 depending on macroeconomic issues, market trends and other factors that the Company deems appropriate.
Debt Repayment
During the second quarter of 2017, the Company paid down $25.0 million of debt on the Company's term loan, which in combination with its normally scheduled principal repayment of $1.9 million resulted in a total repayment of $26.9 million during the quarter. The Company expects to continue, at its discretion based on previously disclosed factors, to pay additional principal toward its debt in the future, in anticipation of such debt maturing on September 27, 2018.






Exhibit 99.1

Future Estimates
The Company’s forecasts for light vehicle production for the 3rd and 4th quarter and full year 2017 are based on the IHS Automotive July 2017 forecast for light vehicle production in North America, Europe, Japan and Korea.
Light Vehicle Production (per IHS Automotive July light vehicle production forecast)
(in Millions)
Region
 
3Q 2017
3Q 2016
% Change
 
4Q 2017
4Q 2016
% Change
 
Calendar Year 2017
Calendar Year 2016
% Change
North America
 
4.21

4.42

(5
)%
 
4.33

4.36

(1
)%
 
17.54

17.83

(2
)%
Europe
 
4.94

4.75

4
 %
 
5.63

5.36

5
 %
 
22.14

21.54

3
 %
Japan and Korea
 
3.32

3.01

10
 %
 
3.36

3.48

(3
)%
 
13.42

12.91

4
 %
Total Light Vehicle Production
 
12.47

12.18

2
 %
 
13.32

13.20

1
 %
 
53.10

52.28

2
 %
Based on the July 2017 IHS light vehicle production forecast and current forecasted product mix for the 3rd and 4th quarter 2017, the Company currently expects revenues in the second half of calendar year 2017 to increase between 6% and 10% when compared with the 3rd and 4th quarters of calendar year 2016, with the 3rd quarter of 2017 expected to be at or around the lower end of the range and the 4th quarter of 2017 expected to be at or around the higher end of the range. Other guidance has been updated below to reflect actual results through the first six months of calendar year 2017.

2017 Calendar Year Guidance
 
Annual Guidance
Item
As of 4/21/17
Updated as of 7/21/17
Net Sales
$1.78 - $1.85 billion
$1.79 - $1.83 billion
Gross Margin
39.0% - 40.0%
38.5% - 39.0%
Operating Expenses (E,R&D and S,G&A)
$165 - $172 million
$165 - $170 million
Tax Rate (excluding discrete items)
31.5% - 32.5%
No change
Capital Expenditures
$115 - $130 million
No change
Depreciation & Amortization
$95 - $105 million
No change
Finally, based on 2018 light vehicle production forecasts and current forecasted product mix, the Company is making no changes to its previously announced revenue estimates for calendar year 2018, which continues to be estimated to be over and above the foregoing 2017 revenue estimates in the range of 6 - 10%.




Exhibit 99.1

Safe Harbor for Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements contained in this communication that are not purely historical are forward-looking statements. Forward-looking statements give the Company’s current expectations or forecasts of future events. These forward-looking statements generally can be identified by the use of words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “forecast”, “goal”, “hope”, “may”, “plan”, “project”, “will”, and variations of such words and similar expressions. Such statements are subject to risks and uncertainties that are often difficult to predict and beyond the Company’s control, and could cause the Company’s results to differ materially from those described. These risks and uncertainties include, without limitation: changes in general industry or regional market conditions; changes in consumer and customer preferences for our products (such as cameras replacing mirrors and/or autonomous driving); our ability to be awarded new business; continued uncertainty in pricing negotiations with customers; loss of business from increased competition; changes in strategic relationships; customer bankruptcies or divestiture of customer brands; fluctuation in vehicle production schedules; changes in product mix; raw material shortages; higher raw material, fuel, energy and other costs; unfavorable fluctuations in currencies or interest rates in the regions in which we operate; costs or difficulties related to the integration and/or ability to maximize the value of any new or acquired technologies and businesses; changes in regulatory conditions; warranty and recall claims and other litigation and customer reactions thereto; possible adverse results of pending or future litigation or infringement claims; changes in tax laws; import and export duty and tariff rates in or with the countries with which we conduct business; and negative impact of any governmental investigations and associated litigations including securities litigations relating to the conduct of our business. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law or the rules of the NASDAQ Global Select Market. Accordingly, any forward-looking statement should be read in conjunction with the additional information about risks and uncertainties identified under the heading “Risk Factors” in the Company’s latest Form 10-K and Form 10-Q filed with the SEC.



Exhibit 99.1

Second Quarter Conference Call
A conference call related to this news release will be simulcast live on the Internet beginning at 9:30 a.m. ET today, July 21, 2017. The dial-in number to participate in the call is 844-389-8658, passcode 46705734. Participants may listen to the call via audio streaming at www.gentex.com or by visiting http://edge.media-server.com/m/p/9p9i5sha. A webcast replay will be available approximately 24 hours after the conclusion of the call at http://ir.gentex.com/events-and-presentations/upcoming-past-events.
About The Company
Founded in 1974, Gentex Corporation (The NASDAQ Global Select Market: GNTX) is a supplier of automatic-dimming rearview mirrors and electronics to the automotive industry, dimmable aircraft windows for aviation markets, and fire protection products to the fire protection market. Visit the Company’s web site at www.gentex.com.
Contact Information:
Gentex Investor & Media Contact
Josh O'Berski
(616)772-1590 x5814



Exhibit 99.1


GENTEX CORPORATION
AUTO-DIMMING MIRROR SHIPMENTS
(Thousands)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
%
 Change
 
2017
 
2016
 
%
 Change
North American Interior Mirrors
2,231

 
2,316

 
(4
)%
 
4,591

 
4,576

 
%
North American Exterior Mirrors
914

 
929

 
(2
)%
 
1,831

 
1,793

 
2
%
Total North American Mirror Units
3,146

 
3,245

 
(3
)%
 
6,422

 
6,370

 
1
%
International Interior Mirrors
4,826

 
4,392

 
10
 %
 
9,644

 
8,512

 
13
%
International Exterior Mirrors
1,816

 
1,629

 
11
 %
 
3,642

 
3,212

 
13
%
Total International Mirror Units
6,642

 
6,021

 
10
 %
 
13,286

 
11,724

 
13
%
Total Interior Mirrors
7,058

 
6,708

 
5
 %
 
14,235

 
13,089

 
9
%
Total Exterior Mirrors
2,730

 
2,559

 
7
 %
 
5,472

 
5,005

 
9
%
Total Auto-Dimming Mirror Units
9,788

 
9,267

 
6
 %
 
19,707

 
18,094

 
9
%
Note: Percent change and amounts may not total due to rounding.




Exhibit 99.1

GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 
(Unaudited)
 
(Unaudited)
 
Three Months Ended June 30,
 
Six Months ended June 30,
 
2017
 
2016
 
2017
 
2016
Net Sales
$
443,139,073

 
$
423,800,778

 
$
896,674,323

 
$
829,368,564

 
 
 
 
 
 
 
 
Cost of Goods Sold
275,931,278

 
257,028,219

 
553,665,743

 
503,905,217

Gross profit
167,207,795

 
166,772,559

 
343,008,580

 
325,463,347

 
 
 
 
 
 
 
 
Engineering, Research & Development
25,243,410

 
23,071,788

 
50,395,667

 
46,162,997

Selling, General & Administrative
16,099,871

 
14,955,050

 
32,321,279

 
29,705,639

Operating Expenses
41,343,281

 
38,026,838

 
82,716,946

 
75,868,636

 


 


 
 
 
 
Income from operations
125,864,514

 
128,745,721

 
260,291,634

 
249,594,711

 


 


 
 
 
 
Other Income (Expense)
2,079,249

 
(1,137,011
)
 
2,517,033

 
(2,416,389
)
Income before Income Taxes
127,943,763

 
127,608,710

 
262,808,667

 
247,178,322

 
 
 


 
 
 
 
Provision for Income Taxes
39,407,816

 
41,123,468

 
76,715,979

 
80,413,086

 
 
 


 
 
 
 
Net Income
$
88,535,947

 
$
86,485,242

 
$
186,092,688

 
$
166,765,236

 
 
 
 
 
 
 
 
Earnings Per Share
 
 

 
 
 
 
Basic
$
0.31

 
$
0.30

 
$
0.65

 
$
0.58

Diluted
$
0.31

 
$
0.30

 
$
0.64

 
$
0.57

Weighted Average Shares
 
 

 
 
 
 
Basic
286,722,482

 
288,803,045

 
286,956,367

 
288,943,030

Diluted
289,842,902

 
291,463,883

 
290,538,242

 
291,372,725

 
 
 

 
 
 
 
Cash Dividends Declared per Share
$
0.100

 
$
0.090

 
$
0.190

 
$
0.175





Exhibit 99.1

GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(Unaudited)
 
 
 
June 30, 2017
 
December 31, 2016
ASSETS
 
 
 
Cash and Cash Equivalents
$
580,579,352

 
$
546,477,075

Short-Term Investments
184,553,242

 
177,021,197

Accounts Receivable, net
229,250,339

 
211,591,745

Inventories
196,540,222

 
189,311,437

Other Current Assets
13,775,396

 
30,587,575

Total Current Assets
1,204,698,551

 
1,154,989,029

 
 
 
 
Plant and Equipment - Net
482,588,291

 
465,822,467

 
 
 
 
Goodwill
307,365,845

 
307,365,845

Long-Term Investments
49,260,381

 
49,894,363

Intangible Assets
298,625,000

 
308,275,000

Patents and Other Assets
21,555,728

 
23,273,129

Total Other Assets
676,806,954

 
688,808,337

 
 
 
 
Total Assets
$
2,364,093,796

 
$
2,309,619,833

 
 
 
 
LIABILITIES AND SHAREHOLDERS' INVESTMENT
 
 
 
Current Liabilities
$
271,140,517

 
$
149,857,979

Long-Term Debt
9,375,000

 
178,125,000

Deferred Income Taxes
79,641,856

 
71,212,620

Shareholders' Investment
2,003,936,423

 
1,910,424,234

Total Liabilities & Shareholders' Investment
$
2,364,093,796

 
$
2,309,619,833