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: October 20, 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 October 20, 2017, Gentex Corporation issued a news release announcing financial results for the third quarter ended September 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 October 20, 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: October 20, 2017            
GENTEX CORPORATION
(Registrant)                


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






EXHIBIT INDEX


99.1News Release Dated October 20, 2017



Exhibit
Exhibit 99.1

http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11846483&doc=3

GENTEX REPORTS THIRD QUARTER 2017 FINANCIAL RESULTS
ZEELAND, MI -- (GLOBE NEWSWIRE - October 20, 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 nine months ended September 30, 2017.

3rd Quarter 2017 Summary

Net sales growth of 2% quarter over quarter while North American light vehicle production declined 8% on a quarter over quarter basis.
Gross Margin improvement of 130 basis points versus 2Q 2017
Earnings per Diluted Share of $0.31
3.2 million shares repurchased during the quarter
$10.0 million of debt repaid during the quarter
For the third quarter of 2017, the Company reported net sales of $438.6 million, which was an increase of 2% compared to net sales of $429.6 million in the third quarter of 2016. The 2% quarter over quarter growth in net sales was driven by an increase of 12% in international auto-dimming mirror unit shipments. The underlying light vehicle production in Europe, Japan, and Korea was up 7% overall in these markets which comprise the majority of the Company's international shipments. The growth in international auto-dimming mirror unit shipments was partially offset by a quarter over quarter decrease of 7% in North American auto-dimming mirror unit shipments which in large part resulted from an 8% quarter over quarter decline in North American light vehicle production. During the third quarter of 2017, North American light vehicle production schedules decreased by approximately 3% as compared to the Company's original estimates for production, primarily due to intermittent plant shutdowns, which negatively impacted the Company's net sales growth on a quarter over quarter basis by approximately the same percentage.
When compared with the third quarter of 2016, the gross margin declined from 40.5% to 39.0% in the third quarter of 2017, primarily as a 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 due to the lower growth in sales on a quarter over quarter basis. However, the gross profit margin improved



Exhibit 99.1

sequentially from 37.7% in second quarter of 2017 to 39.0% in the third quarter of 2017, primarily as a result of improvements in product mix and manufacturing efficiencies.
Income from operations for the third quarter of 2017 decreased 4% to $129.1 million when compared to income from operations of $134.2 million for the third 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.
Other income increased to $1.8 million in the third quarter of 2017 compared to $0.1 million in the third quarter of 2016, due to an increase in investment income during the most recently completed quarter as compared to the same quarter last year.
Net income for the third quarter of 2017 decreased 2% to $90.2 million compared with net income of $92.1 million in the third quarter of 2016.
Earnings per diluted share in the third quarter of 2017 decreased 3% to $0.31, compared with earnings per diluted share of $0.32 in the third quarter of 2016, as a result of the decrease in net income.
Automotive net sales in the third quarter of 2017 were $428.2 million, an increase of 2% compared with automotive net sales of $419.8 million in the third quarter of 2016, driven by a 5% increase in auto-dimming mirror unit shipments on a quarter over quarter basis.
Other net sales in the third quarter of 2017, which includes dimmable aircraft windows and fire protection products, were $10.5 million, an increase of 6%, compared to other net sales of $9.8 million in the third quarter of 2016.
Share Repurchases
During the third quarter of 2017, the Company repurchased 3.2 million shares of its common stock at an average price of $17.51 per share. As of September 30, 2017, the Company has approximately 14.9 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 third quarter of 2017, the Company paid down $8.1 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 $10.0 million during the quarter. The Company expects to continue, at its discretion



Exhibit 99.1

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.
Future Estimates
The Company’s forecasts for light vehicle production for the fourth quarter and full year 2017 are based on the IHS Automotive October 2017 forecast for light vehicle production in North America, Europe, Japan and Korea.
Light Vehicle Production (per IHS Automotive October light vehicle production forecast)
(in Millions)
Region
 
4Q 2017
4Q 2016
% Change
 
Calendar Year 2017
Calendar Year 2016
% Change
North America
 
4.23

4.36

(3
)%
 
17.28

17.83

(3
)%
Europe
 
5.69

5.37

6
 %
 
22.27

21.54

3
 %
Japan and Korea
 
3.50

3.48

1
 %
 
13.51

12.91

5
 %
Total Light Vehicle Production
 
13.42

13.21

2
 %
 
53.06

52.28

1
 %
Based on the October 2017 IHS light vehicle production forecast, current forecasted product mix and expense growth estimates, the Company has updated certain of its 2017 guidance. For the fourth quarter of 2017, the Company estimates that revenue will increase between 5% and 10% versus the same quarter last year. Other guidance has been updated below to reflect actual results through the first nine months of calendar year 2017.
2017 Calendar Year Guidance
 
Annual Guidance
Item
Updated as of 7/21/17
Updated as of 10/20/17
Net Sales
$1.79 - $1.83 billion
$1.78 - $1.80 billion
Gross Margin
38.5% - 39.0%
no change
Operating Expenses (E,R&D and S,G&A)
$165 - $170 million
no change
Tax Rate (excluding discrete items)
31.5% - 32.5%
31.0% - 32.0%
Capital Expenditures
$115 - $130 million
$110 - $120 million
Depreciation & Amortization
$95 - $105 million
$95 - $100 million
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

Third 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, October 20, 2017. The dial-in number to participate in the call is 844-389-8658, passcode 91223697. Participants may listen to the call via audio streaming at www.gentex.com or by visiting https://edge.media-server.com/m6/p/u4xbsb2s. 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 September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
%
 Change
 
2017
 
2016
 
%
 Change
North American Interior Mirrors
2,102

 
2,259

 
(7
)%
 
6,693

 
6,835

 
(2
)%
North American Exterior Mirrors
842

 
921

 
(9
)%
 
2,673

 
2,714

 
(2
)%
Total North American Mirror Units
2,944

 
3,179

 
(7
)%
 
9,366

 
9,549

 
(2
)%
International Interior Mirrors
4,794

 
4,258

 
13
 %
 
14,438

 
12,771

 
13
 %
International Exterior Mirrors
1,875

 
1,675

 
12
 %
 
5,517

 
4,887

 
13
 %
Total International Mirror Units
6,668

 
5,933

 
12
 %
 
19,954

 
17,658

 
13
 %
Total Interior Mirrors
6,896

 
6,517

 
6
 %
 
21,130

 
19,606

 
8
 %
Total Exterior Mirrors
2,717

 
2,596

 
5
 %
 
8,189

 
7,601

 
8
 %
Total Auto-Dimming Mirror Units
9,613

 
9,113

 
5
 %
 
29,320

 
27,207

 
8
 %
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 September 30,
 
Nine Months ended September 30,
 
2017
 
2016
 
2017
 
2016
Net Sales
$
438,627,786

 
$
429,643,276

 
$
1,335,302,109

 
$
1,259,011,840

 
 
 
 
 
 
 
 
Cost of Goods Sold
267,398,126

 
255,821,376

 
821,063,869

 
759,726,593

Gross profit
171,229,660

 
173,821,900

 
514,238,240

 
499,285,247

 
 
 
 
 
 
 
 
Engineering, Research & Development
24,770,279

 
23,585,115

 
75,165,946

 
69,748,112

Selling, General & Administrative
17,386,729

 
16,024,504

 
49,708,008

 
45,730,143

Operating Expenses
42,157,008

 
39,609,619

 
124,873,954

 
115,478,255

 


 


 
 
 
 
Income from operations
129,072,652

 
134,212,281

 
389,364,286

 
383,806,992

 


 


 
 
 
 
Other Income (Expense)
1,759,391

 
115,701

 
4,276,424

 
(2,300,688
)
Income before Income Taxes
130,832,043

 
134,327,982

 
393,640,710

 
381,506,304

 
 
 


 
 
 
 
Provision for Income Taxes
40,601,708

 
42,263,336

 
117,317,687

 
122,676,422

 
 
 


 
 
 
 
Net Income
$
90,230,335

 
$
92,064,646

 
$
276,323,023

 
$
258,829,882

 

 
 
 
 
 
 
Earnings Per Share

 

 
 
 
 
Basic
$
0.32

 
$
0.32

 
$
0.97

 
$
0.90

Diluted
$
0.31

 
$
0.32

 
$
0.96

 
$
0.89

Weighted Average Shares
 
 

 
 
 
 
Basic
284,661,920

 
287,736,638

 
285,915,565

 
288,466,905

Diluted
287,020,950

 
290,453,825

 
289,061,501

 
291,024,663

 
 
 

 
 
 
 
Cash Dividends Declared per Share
$
0.100

 
$
0.090

 
$
0.290

 
$
0.265





Exhibit 99.1

GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(Unaudited)
 
 
 
September 30, 2017
 
December 31, 2016
ASSETS
 
 
 
Cash and Cash Equivalents
$
561,999,767

 
$
546,477,075

Short-Term Investments
178,650,929

 
177,021,197

Accounts Receivable, net
240,505,816

 
211,591,745

Inventories
206,657,817

 
189,311,437

Other Current Assets
16,047,166

 
30,587,575

Total Current Assets
1,203,861,495

 
1,154,989,029

 
 
 
 
Plant and Equipment - Net
493,663,599

 
465,822,467

 
 
 
 
Goodwill
307,365,845

 
307,365,845

Long-Term Investments
51,663,435

 
49,894,363

Intangible Assets
293,800,000

 
308,275,000

Patents and Other Assets
21,276,820

 
23,273,129

Total Other Assets
674,106,100

 
688,808,337

 
 
 
 
Total Assets
$
2,371,631,194

 
$
2,309,619,833

 
 
 
 
LIABILITIES AND SHAREHOLDERS' INVESTMENT
 
 
 
Current Liabilities
$
264,922,840

 
$
149,857,979

Long-Term Debt

 
178,125,000

Deferred Income Taxes
80,443,155

 
71,212,620

Shareholders' Investment
2,026,265,199

 
1,910,424,234

Total Liabilities & Shareholders' Investment
$
2,371,631,194

 
$
2,309,619,833