UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) ( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004, OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _________ COMMISSION FILE NO. 0-10235 GENTEX CORPORATION (Exact name of registrant as specified in its charter) MICHIGAN 38-2030505 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 600 N. CENTENNIAL, ZEELAND, MICHIGAN 49464 (Address of principal executive offices) (Zip Code) (616) 772-1800 (Registrant's telephone number, including area code) - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ---------------- --------------- Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ---------------- ---------------- APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No ---------------- ---------------- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Shares Outstanding Class at April 21, 2004 ----- ----------------- Common Stock, $0.06 Par Value 77,248,921 Exhibit Index located at page 12 Page 1 of 16
PART I. FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS GENTEX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS March 31, 2004 December 31, 2003 -------------- ----------------- (Unaudited) (Audited) ----------- --------- CURRENT ASSETS Cash and cash equivalents $372,796,040 $322,662,971 Short-term investments 79,943,936 70,943,685 Accounts receivable, net 69,477,827 58,955,823 Inventories 22,336,846 20,938,696 Prepaid expenses and other 10,528,364 11,848,156 ----------------- -------------------- Total current assets 555,083,013 485,349,331 PLANT AND EQUIPMENT - NET 127,759,195 126,806,882 OTHER ASSETS Long-term investments 118,659,998 145,615,934 Patents and other assets, net 4,929,951 4,757,619 ----------------- -------------------- Total other assets 123,589,949 150,373,553 ----------------- -------------------- Total assets $806,432,157 $762,529,766 ================= ==================== LIABILITIES AND SHAREHOLDERS' INVESTMENT CURRENT LIABILITIES Accounts payable $20,036,857 $18,259,111 Accrued liabilities 47,697,142 32,221,369 ----------------- -------------------- Total current liabilities 67,733,999 50,480,480 DEFERRED INCOME TAXES 19,161,672 18,405,955 SHAREHOLDERS' INVESTMENT Common stock 4,634,920 4,622,449 Additional paid-in capital 159,296,022 152,874,325 Retained earnings 546,625,683 528,358,825 Other shareholders' investment 8,979,861 7,787,732 ----------------- -------------------- Total shareholders' investment 719,536,486 693,643,331 ----------------- -------------------- Total liabilities and shareholders' investment $806,432,157 $762,529,766 ================= ==================== See accompanying notes to condensed consolidated financial statements. - 2 -
GENTEX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003 2004 2003 ----------------- --------------- NET SALES $129,327,548 $115,308,564 COST OF GOODS SOLD 74,443,276 67,192,569 ----------------- --------------- Gross profit 54,884,272 48,115,995 OPERATING EXPENSES: Engineering, research and development 7,443,288 6,207,736 Selling, general & administrative 6,745,121 5,526,676 ----------------- --------------- Total operating expenses 14,188,409 11,734,412 ----------------- --------------- Operating income 40,695,863 36,381,583 OTHER INCOME: Interest and dividend income 2,152,959 2,665,211 Other, net 1,321,653 (664,256) ----------------- --------------- Total other income 3,474,612 2,000,955 ----------------- --------------- Income before provision for income taxes 44,170,475 38,382,538 PROVISION FOR INCOME TAXES 14,355,000 12,474,000 ----------------- --------------- NET INCOME $29,815,475 $25,908,538 ================= =============== EARNINGS PER SHARE: Basic $0.39 $0.34 Diluted $0.38 $0.34 Cash Dividends Declared per Share $0.15 $0.00 See accompanying notes to condensed consolidated financial statements. - 3 -
GENTEX CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended March 31, ------------------------------------ 2004 2003 ----------------- ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $29,815,475 $25,908,538 Adjustments to reconcile net income to net cash provided by operating activities- Depreciation and amortization 5,406,733 5,385,865 (Gain) loss on disposal of asset 2,976 (15,250) (Gain) loss on sale of investments (1,086,065) 1,707,499 Deferred income taxes 1,083,653 (748,674) Amortization of deferred compensation 361,501 291,649 Change in operating assets and liabilities: Accounts receivable, net (10,522,004) (7,583,647) Inventories (1,398,150) 53,509 Prepaid expenses and other 165,457 (2,223,816) Accounts payable 1,777,746 3,443,306 Accrued liabilities, excluding dividends declared 15,483,221 15,735,621 Tax benefit of stock plan transactions 874,413 629,664 ----------------- ----------------- Net cash provided by operating activities 41,964,956 42,584,264 ----------------- ----------------- CASH FLOWS FROM INVESTING ACTIVITIES: Plant and equipment additions (6,319,287) (6,629,885) Proceeds from sale of plant and equipment 2,500 72,000 (Increase) decrease in investments 21,402,891 (77,551,764) Increase in other assets (170,521) (141,059) ----------------- ----------------- Net cash provided by (used for) investing activities 14,915,583 (84,250,708) ----------------- ----------------- CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common stock from stock plan transactions 4,808,595 2,896,952 Cash dividend paid (11,556,065) 0 Repurchases of common stock 0 (10,246,810) ----------------- ----------------- Net cash provided by (used for) financing activities (6,747,470) (7,349,858) ----------------- ----------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 50,133,069 (49,016,302) CASH AND CASH EQUIVALENTS, beginning of period 322,662,971 168,834,111 ----------------- ----------------- CASH AND CASH EQUIVALENTS, end of period $372,796,040 $119,817,809 ================= ================= See accompanying notes to condensed consolidated financial statements. - 4 -
GENTEX CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (1) The unaudited condensed consolidated financial statements included herein have been prepared by the Registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations, although the Registrant believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Registrant's 2003 annual report on Form 10-K. (2) In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only a normal and recurring nature, necessary to present fairly the financial position of the Registrant as of March 31, 2004, and the results of operations and cash flows for the interim periods presented. (3) Inventories consisted of the following at the respective balance sheet dates: March 31, 2004 December 31, 2003 -------------- ----------------- Raw materials $ 12,526,392 $ 11,041,622 Work-in-process 2,335,338 2,401,500 Finished goods 7,475,116 7,495,574 ------------- ------------- $22,336,846 $20,938,696 =========== =========== (4) The following table reconciles the numerators and denominators used in the calculation of basic and diluted earnings per share (EPS): Quarter Ended March 31, ----------------------- 2004 2003 ---- ---- Numerators: Numerator for both basic and diluted EPS, net income $29,815,475 $25,908,538 Denominators: Denominator for basic EPS, weighted-average shares outstanding 76,852,377 75,944,285 Potentially dilutive shares resulting from stock plans 1,584,690 884,742 ----------- ------------ Denominator for diluted EPS 78,437,067 76,829,027 ========== ========== Shares related to stock plans not included in diluted average common shares outstanding because their effect would be antidilutive 335,370 1,371,099 (5) At March 31, 2004, the Company had two stock option plans and an employee stock purchase plan. The Company accounts for these plans under the recognition and measurement principles of APB Opinion No. 25 (Accounting for Stock Issued to Employees) and related interpretations. No stock-based employee compensation cost is reflected in net income, as all options granted under these plans have an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation," to stock-based employee compensation. -5-
GENTEX CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONT.) Quarter Ended March 31, ----------------------- 2004 2003 ---- ---- Net income, as reported $29,815,475 $25,908,538 Deduct: Total stock-based employee compensation expense determined under fair value-based method of all awards, net of tax effects (3,021,569) (1,984,653) ----------- ------------ Pro forma net income $26,793,906 $23,923,885 =========== ============ Earnings per share: Basic -- as reported $ .39 $ .34 Basic -- pro forma .35 .32 Diluted -- as reported .38 .34 Diluted -- pro forma .34 .31 (6) Comprehensive income reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For the Company, comprehensive income represents net income adjusted for items such as unrealized gains and losses on investments and foreign currency translation adjustments. Comprehensive income was as follows: March 31, 2004 March 31, 2003 -------------- -------------- Quarter Ended $31,397,263 $24,830,185 (7) The increase in common stock during the quarter ended March 31, 2004, was attributable to the issuance of 208,105 shares of the Company's common stock under its stock-based compensation plans. The Company has also recorded a $0.15 per share cash dividend declared on March 8, 2004, totaling approximately $11,587,000. (8) The Company currently manufactures electro-optic products, including automatic-dimming rearview mirrors for the automotive industry, and fire protection products for the commercial building industry: Quarter Ended March 31, ----------------------- 2004 2003 ---- ---- Revenue: Automotive Products $123,731,693 $110,176,859 Fire Protection Products 5,595,855 5,131,705 ------------ ------------ Total $129,327,548 $115,308,564 ============ ============ Operating Income: Automotive Products $ 39,587,492 $ 35,487,086 Fire Protection Products 1,108,371 894,497 ------------ ------------ Total $ 40,695,863 $ 36,381,583 ============ ============ -6-
GENTEX CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONT.) (9) On March 31, 2004, the Financial Accounting Standards Board (FASB) issued its Exposure Draft, "Share-Based Payment," which is a proposed amendment to FASB Statement No. 123, "Accounting for Stock-Based Compensation." The Exposure Draft would require all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. FASB expects that a final standard would be effective for public companies for fiscal years beginning after December 15, 2004. The Company does not intend to adopt a fair-value based method of accounting for stock-based employee compensation until a final standard is issued by the FASB that requires this accounting. Proforma disclosures of quarterly earnings are included in Note 5 of this quarterly statement. In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities." This standard clarifies the application of Accounting Research Bulletin No. 51, "Consolidated Financial Statements," and addresses consolidation by business enterprises of variable interest entities. Interpretation No. 46 requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risk among the parties involved. Interpretation No. 46 also enhances the disclosure requirements related to variable interest entities. This interpretation is effective for any variable interest entered into by the Company as of the end of the first quarter of 2004. The adoption of Interpretation No. 46 did not have any significant effect on the Company's consolidated financial statements. -7-
GENTEX CORPORATION AND SUBSIDIARIES ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS: FIRST QUARTER 2004 VERSUS FIRST QUARTER 2003 Net Sales. Net sales for the first quarter of 2004 increased by approximately $14,019,000, or 12%, when compared with the first quarter last year. Net sales of the Company's automotive auto-dimming mirrors increased by $13,555,000, or 12%, as auto-dimming mirror unit shipments increased by 18% from approximately 2,535,000 in the first quarter of 2003 to 2,982,000 in the current quarter. This increase reflected the increased penetration of interior and exterior auto-dimming mirrors on 2004 model year vehicles plus additional electronic feature content during the first quarter of 2004. Unit shipments to customers in North America for the current quarter increased by 11% compared with the first quarter of the prior year, primarily due to increased penetration, despite lower automotive production levels. Mirror unit shipments for the current quarter to automotive customers outside North America increased by 25% compared with the first quarter in 2003, primarily due to increased interior and exterior mirror shipments to European and Asian-Pacific automakers. Net sales of the Company's fire protection products increased 9% for the current quarter, primarily due to higher sales of certain of the Company's smoke detectors and signaling products. Cost of Goods Sold. As a percentage of net sales, cost of goods sold decreased slightly from 58.3% in the first quarter of 2003 to 57.6% in the first quarter of 2004. This slight percentage decrease primarily reflected the higher sales level leveraged over the fixed overhead costs and product mix, partially offset by annual customer price reductions. Each factor is estimated to have impacted cost of goods sold as a percentage of net sales by approximately 1-2%. Operating Expenses. Research and development expenses for the quarter increased approximately $1,236,000, and increased from 5.4% to 5.8% of net sales, when compared with the same quarter last year, primarily reflecting additional staffing, engineering and testing for new product development, including mirrors with additional electronic features. Selling, general and administrative expenses increased approximately $1,218,000, for the quarter, and increased from 4.8% to 5.2% of net sales, when compared with the first quarter of 2003. This increased expense primarily reflected the continued expansion of the Company's overseas sales and engineering offices, as well as the stronger euro exchange rate. Total Other Income. Total other income for the quarter increased by approximately $1,474,000 when compared with the first quarter of 2003, primarily due to realized gains on the sale of equity investments in the current quarter compared to realized losses on the sale of equity investments in the prior year quarter, partially offset by reduced interest income due to lower interest rates. FINANCIAL CONDITION: Cash flow from operating activities for the three months ended March 31, 2004, decreased $619,000 to $41,965,000, compared to $42,584,000 for the same period last year, primarily due to increased net income offset by changes in working capital. Capital expenditures for the three months ended March 31, 2004, were $6,319,000, compared to $6,630,000 for the same period last year. Cash and cash equivalents as of March 31, 2004, increased approximately $50,133,000 compared to December 31, 2003. The increase was primarily due to cash flow from operations. Accounts receivable as of March 31, 2004, increased approximately $10,522,000 compared to December 31, 2003, primarily due to increased sales. Accrued liabilities as of March 31, 2004, increased approximately $15,476,000 compared to December 31, 2003, primarily due to increased accrued taxes and compensation, reflecting the timing of certain tax and compensation payments. -8-
Management considers the Company's working capital and long-term investments totaling approximately $606,009,000 at March 31, 2004, together with internally generated cash flow and an unsecured $5,000,000 line of credit from a bank, to be sufficient to cover anticipated cash needs for the next year and for the foreseeable future. On October 8, 2002, the Company announced a share repurchase plan, under which the Company may purchase up to 4,000,000 shares based on a number of factors, including market conditions, the market price of the Company's common stock, anti-dilutive effect on earnings, available cash and other factors as the Company deems appropriate. During the quarter ended March 31, 2003, the Company repurchased 415,000 shares at a cost of approximately $10,247,000. No shares have been repurchased subsequently by the Company. TRENDS AND DEVELOPMENTS: The Company is subject to market risk exposures of varying correlations and volatilities, including foreign exchange rate risk, interest rate risk and equity price risk. During the quarter ended March 31, 2004, there were no significant changes in the market risks reported in the Company's 2003 Form 10-K report. The Company has some assets, liabilities and operations outside the United States, which currently are not significant. Because the Company sells its automotive mirrors throughout the world, it could be significantly affected by weak economic conditions in worldwide markets that could reduce demand for its products. The Company continues to experience pricing pressures from its automotive customers, which have affected, and which will continue to affect, its margins to the extent that the Company is unable to offset the price reductions with productivity improvements, engineering and purchasing cost reductions, and increases in unit sales volume. In addition, profit pressures at certain automakers are resulting in increased cost reduction efforts by them, including requests for additional price reductions, decontenting certain features from vehicles, and warranty cost-sharing programs, which could adversely impact the Company's sales growth and margins. The Company also continues to experience from time to time some pressure for select raw material cost increases. Automakers have been experiencing increased volatility and uncertainty in executing planned new programs which have, in some cases, resulted in cancellations or delays of new vehicle platforms, package reconfigurations and inaccurate volume forecasts. This increased volatility and uncertainty has made it more difficult for the Company to forecast future sales and effectively utilize capital, engineering, research and development, and human resource investments. The Company does not have any significant off-balance sheet arrangements or commitments that have not been recorded in its consolidated financial statements. On October 1, 2002, Magna International acquired Donnelly Corporation, the Company's major competitor for sales of automatic-dimming rearview mirrors to domestic and foreign vehicle manufacturers and their mirror suppliers. The Company sells certain automatic-dimming rearview mirror sub-assemblies to Magna Donnelly. To date, the Company is not aware of any significant impact of Magna's acquisition of Donnelly upon the Company; however, any ultimate significant impact has not yet been determined. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information called for by this item is provided under the caption "Trends and Developments" under Item 2 -- Management's Discussion and Analysis of Results of Operations and Financial Condition. ITEM 4. CONTROLS AND PROCEDURES As of March 31, 2004, an evaluation was performed under the supervision and with the participation of the Company's management, including the CEO and CFO, of the effectiveness of the design and operation of the Company's disclosure controls and procedures [(as defined in Exchange Act Rules 13a - 15(e) and 15d - 15(e)]. -9-
ITEM 4. CONTROLS AND PROCEDURES (CONT.) Based on that evaluation, the Company's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were adequate and effective as of March 31, 2004, to ensure that material information relating to the Company would be made known to them by others within the Company, particularly during the period in which this Form 10-Q was being prepared. During the period covered by this quarterly report, there have been no changes in the Company's internal controls over financial reporting that have materially affected or are likely to materially affect the Company's internal controls over financial reporting. There have been no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subsequent to March 31, 2004. Statements in this Quarterly Report on Form 10-Q which express "belief", "anticipation" or "expectation" as well as other statements which are not historical fact, are forward-looking statements and involve risks and uncertainties described under the headings "Management's Discussion and Analysis of Results of Operations and Financial Condition" and "Trends and Developments" that could cause actual results to differ materially from those projected. All forward-looking statements in this Report are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) See Exhibit Index on Page 12. (b) During the three months ended March 31, 2004, one report on Form 8-K was filed on January 27, 2004, to disclose the Company's financial results for the fourth quarter and year ended December 31, 2003. -10-
SIGNATURES 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. GENTEX CORPORATION Date: May 5, 2004 /s/ Fred T. Bauer -------------------- ----------------------------------- Fred T. Bauer Chairman and Chief Executive Officer Date: May 5, 2004 /s/ Enoch C. Jen --------------------- ----------------------------------- Enoch C. Jen Vice President - Finance, Principal Financial and Accounting Officer -11-
EXHIBIT INDEX EXHIBIT NO. DESCRIPTION PAGE 3(a)(1) Registrant's Articles of Incorporation were filed in 1981 as Exhibit 2(a) to a Registration Statement on Form S-18 (Registration No. 2-74226C), an Amendment to those Articles was filed as Exhibit 3 to Registrant's Report on Form 10-Q in August of 1985, an additional Amendment to those Articles was filed as Exhibit 3(a)(1) to Registrant's Report on Form 10-Q in August of 1987, an additional Amendment to those Articles was filed as Exhibit 3(a)(2) to Registrant's Report on Form 10-K dated March 10, 1992, an Amendment to Articles of Incorporation, adopted on May 9, 1996, was filed as Exhibit 3(a)(2) to Registrant's Report on Form 10-Q dated July 31, 1996, and an Amendment to Articles of Incorporation, adopted on May 21, 1998, was filed as Exhibit 3(a)(2) to Registrant's Report on Form 10-Q dated July 30, 1998, all of which are hereby incorporated herein be reference. 3(b)(1) Registrant's Bylaws as amended and restated February 27, 2003, were filed as Exhibit 3(b)(1) to Registrant's Report on Form 10-Q dated May 5, 2003, and the same are hereby incorporated herein by reference. 4(a) A specimen form of certificate for the Registrant's common stock, par value $.06 per share, was filed as part of a Registration Statement on Form S-18 (Registration No. 2-74226C) as Exhibit 3(a), as amended by Amendment No. 3 to such Registration Statement, and the same is hereby incorporated herein by reference. 4(b) Amended and Restated Shareholder Protection Rights Agreement, dated as of March 29, 2001, including as Exhibit A the form of Certificate of Adoption of Resolution Establishing Series of Shares of Junior Participating Preferred Stock of the Company, and as Exhibit B the form of Rights Certificate and of Election to Exercise, was filed as Exhibit 4(b) to Registrant's Report on Form 10-Q dated April 27, 2001, and the same is hereby incorporated herein by reference. 10(a)(1) A Lease dated August 15, 1981, was filed as part of a Registration Statement on Form S-18 (Registration Number 2-74226C) as Exhibit 9(a)(1), and the same is hereby incorporated herein by reference. 10(a)(2) A First Amendment to Lease dated June 28, 1985, was filed as Exhibit 10(m) to Registrant's Report on Form 10-K dated March 18, 1986, and the same is hereby incorporated herein by reference. *10(b)(1) Gentex Corporation Qualified Stock Option Plan (as amended and restated, effective August 25, 1997) was filed as Exhibit 10(b)(1) to Registrant's Report on Form 10-Q, and the same is hereby incorporated herein by reference. *10(b)(2) Gentex Corporation Second Restricted Stock Plan was filed as Exhibit 10(b)(2) to Registrant's Report on Form 10-Q dated April 27, 2001, and the same is hereby incorporated herein by reference. -12-
EXHIBIT NO. DESCRIPTION PAGE *10(b)(3) Gentex Corporation 2002 Non-Employee Director Stock Option Plan (adopted March 6, 2002), was filed as Exhibit 10(b)(4) to Registrant's Report on Form 10-Q dated April 30, 2002, and the same is incorporated herein by reference. 10(e) The form of Indemnity Agreement between Registrant and each of the Registrant's directors and certain officers was filed as Exhibit 10 (e) to Registrant's Report on Form 10-Q dated October 31, 2002, and the same is incorporated herein by reference. 31.1 Certificate of the Chief Executive Officer of Gentex Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). 14 31.2 Certificate of the Chief Financial Officer of Gentex Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). 15 32 Certificate of the Chief Executive Officer and Chief Financial Officer of Gentex Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) 16 *Indicates a compensatory plan or arrangement. -13-
EXHIBIT 31.1 CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER OF GENTEX CORPORATION I, Fred T. Bauer, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Gentex Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods, presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures [as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)] for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the period covered by this quarterly report based on such evaluation; and c) disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting; Date: May 5, 2004 /s/ Fred T. Bauer -------------------------- Fred T. Bauer Chief Executive Officer -14-
EXHIBIT 31.2 CERTIFICATION OF THE CHIEF FINANCIAL OFFICER OF GENTEX CORPORATION I, Enoch C. Jen, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Gentex Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods, presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures [as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)] for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the period covered by this quarterly report based on such evaluation; and c) disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting; Date: May 5, 2004 /s/ Enoch C. Jen -------------------------- Enoch C. Jen Vice President, Finance -15-
EXHIBIT 32 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18-U.S.C. SECTION 1350) Each, Fred T. Bauer, Chief Executive Officer of Gentex Corporation, and Enoch C. Jen, Chief Financial Officer of Gentex Corporation, certify, to the best of their knowledge and belief, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18-U.S.C. Section 1350), that: (1) The quarterly report on Form 10-Q for the quarterly period ended March 31, 2004, which this statement accompanies, fully complies with the requirements of Section 13 (a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in this quarterly report on Form 10-Q of the quarterly period ended March 31, 2004, fairly presents, in all material respects, the financial condition and results of operations of Gentex Corporation. Dated: May 5, 2004 GENTEX CORPORATION ----------- By /s/ Fred T. Bauer ----------------------------------- Fred T. Bauer Its Chief Executive Officer By /s/ Enoch C. Jen ----------------------------------- Enoch C. Jen Its Vice President-Finance/Chief Financial Officer A signed original of this written statement has been provided to Gentex Corporation and will be retained by Gentex Corporation and furnished to the Securities and Exchange Commission or its staff upon request -16-