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, 2016


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)).





Section 2.
Financial Information

Item 2.02
Results of Operations and Financial Condition.

(a)
On October 20, 2016, Gentex Corporation issued a news release announcing financial results for the third quarter ended September 30, 2016. 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, 2016.


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, 2016            
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 October 20, 2016



Exhibit
Exhibit 99.1

https://cdn.kscope.io/b8e85e80d82df1f573f16277769870df-gntximage2015a09.jpg

GENTEX REPORTS THIRD QUARTER 2016 FINANCIAL RESULTS
ZEELAND, MI -- (Marketwired - October 20, 2016) - 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 months ended September 30, 2016.

3rd Quarter 2016 Quarter over Quarter Highlights

Revenue growth of 10% on flat light vehicle production
Gross Margin improved to 40.5% from 39.0%
Income from Operations increased by 15%
Net Income increased by 18%
Earnings per Diluted Share increased by 19% to $0.32 per diluted share
1.8 million shares repurchased during the quarter
$11.9 million of debt repaid during the quarter
For the third quarter of 2016, the Company is pleased to report net sales of $429.6 million, which was an increase of 10% compared to net sales of $389.8 million in the third quarter of 2015. The 10% sales growth was driven by a 9% quarter over quarter increase in auto-dimming mirror unit shipments, while overall automotive light vehicle production, in the Company's primary regions, declined approximately 40 basis points for the third quarter of 2016 when compared with the same quarter in 2015.
The gross profit margin in the third quarter of 2016 was 40.5%, compared with a gross profit margin of 39.0% in the third quarter of 2015. The quarter over quarter increase in the gross profit margin was driven by purchasing cost reductions and favorable product mix, which more than offset annual customer price reductions.
Income from operations for the third quarter of 2016 increased 15% to $134.2 million when compared to income from operations of $116.3 million for the third quarter of 2015 as a result of the improved gross margin and consistent financial discipline in the Company's operating expense growth.



Exhibit 99.1

Other income increased to $0.1 million in the third quarter of 2016 compared to a loss of $0.2 million in the third quarter of 2015, primarily due to an increase in realized gains on the sale of equity investments during the most recently completed quarter as compared to the same quarter last year.
Net income for the third quarter of 2016 increased 18% to $92.1 million compared with net income of $78.3 million in the third quarter of 2015.
Earnings per diluted share in the third quarter of 2016 increased 19% to $0.32, compared with earnings per diluted share of $0.27 in the third quarter of 2015. The increase was primarily driven by the increase in net income but was aided by a lower diluted share count on a quarter over quarter basis as a result of the Company continuing to execute a consistent capital allocation strategy.
Automotive net sales in the third quarter of 2016 were $419.8 million, an increase of 11% compared with automotive net sales of $379.9 million in the third quarter of 2015. As noted previously, this increase was driven by a 9% increase in auto-dimming mirror unit shipments quarter over quarter in addition to favorable shifts in product mix.
Other net sales in the third quarter of 2016, which includes dimmable aircraft windows and fire protection products, were $9.8 million, relatively consistent with other sales of $9.9 million in the third quarter of 2015.
Share Repurchases
During the third quarter of 2016, the Company repurchased 1.8 million shares of its common stock. As of September 30, 2016, the Company has approximately 9.0 million shares remaining available for repurchase, including the most recent authorization of 7.5 million shares by the Company's Board of Directors. 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 2016, the Company paid down $10 million on its revolver loan in addition to its normally scheduled principal repayment on the Company's term loan. The Company may, at its discretion, pay additional principal toward its loans in the future, depending on macroeconomic trends,



Exhibit 99.1

capital expenditure spending, cash and money market interest rates, the amount of available free cash and other factors that it deems appropriate for timing and amounts of incremental debt repayments.
Future Estimates
The Company’s forecasts for light vehicle production for the 4th quarter of calendar year 2016 are based on the IHS Automotive October 2016 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 2016
4Q 2015
% Change
 
Calendar Year 2016
Calendar Year 2015
% Change
North America
4.38

4.33

1
 %
 
17.88

17.50

2
 %
Europe
5.35

5.21

3
 %
 
21.49

20.94

3
 %
Japan and Korea
3.42

3.43

 %
 
12.95

13.27

(2
)%
Total Light Vehicle Production
13.15

12.97

1
 %
 
52.32

51.71

1
 %
Based on the October 2016 IHS light vehicle production forecast, current forecasted product mix and expense growth estimates, the Company has updated certain of its 2016 guidance. For the fourth quarter of 2016, the Company estimates that revenue will grow between 5 and 10% versus the same quarter last year.
2016 Calendar Year Guidance
 
Annual Guidance
Item
Updated as of 7/22/16
Updated as of 10/20/16
Net Sales
$1.68 - $1.72 billion
$1.68 - $1.71 billion
Gross Margin
39.0% - 39.5%
39.3% - 39.7%
Operating Expenses (E,R&D and S,G&A)
$150 - $158 million
$152 - $157 million
Tax Rate
31.5% - 32.5%
No change
Capital Expenditures
$115 - $130 million
No change
Depreciation & Amortization
$90 - $100 million
No change
Despite continued downward revisions to IHS 2017 light vehicle production estimates, the Company reaffirms its previous revenue estimates for calendar year 2017, which continues to be estimated to be over and above the foregoing 2016 revenue estimates in the range of 6 - 10%.
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



Exhibit 99.1

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; our ability to be awarded new business; continued uncertainty in pricing negotiations with customers; loss of business from increased competition; 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 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; 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.
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. EDT today, October 20, 2016. The dial-in number to participate in the call is 888-215-7013, passcode 1162056. Participants may listen to the call via audio streaming at www.gentex.com or by visiting http://edge.media-server.com/m/p/8d93i5hd. A webcast replay will be available approximately 24 hours after the conclusion of the call at http://ir.gentex.com/WebcastArchives.




Exhibit 99.1



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,
 
2016
 
2015
 
%
 Change
 
2016
 
2015
 
%
 Change
North American Interior Mirrors
2,259

 
2,242

 
1
%
 
6,835

 
6,451

 
6
%
North American Exterior Mirrors
921

 
871

 
6
%
 
2,714

 
2,462

 
10
%
Total North American Mirror Units
3,179

 
3,114

 
2
%
 
9,549

 
8,913

 
7
%
International Interior Mirrors
4,258

 
3,669

 
16
%
 
12,771

 
10,903

 
17
%
International Exterior Mirrors
1,675

 
1,541

 
9
%
 
4,887

 
4,614

 
6
%
Total International Mirror Units
5,933

 
5,210

 
14
%
 
17,658

 
15,517

 
14
%
Total Interior Mirrors
6,517

 
5,911

 
10
%
 
19,606

 
17,354

 
13
%
Total Exterior Mirrors
2,596

 
2,412

 
8
%
 
7,601

 
7,076

 
7
%
Total Auto-Dimming Mirror Units
9,113

 
8,324

 
9
%
 
27,207

 
24,430

 
11
%
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,
 
2016
 
2015
 
2016
 
2015
Net Sales
$
429,643,276

 
$
389,829,139

 
$
1,259,011,840

 
$
1,138,025,071

 
 
 
 
 
 
 
 
Cost of Goods Sold
255,821,376

 
237,932,439

 
759,726,593

 
697,492,531

Gross profit
173,821,900

 
151,896,700

 
499,285,247

 
440,532,540

 
 
 
 
 
 
 
 
Engineering, Research & Development
23,585,115

 
21,505,461

 
69,748,112

 
65,408,256

Selling, General & Administrative
16,024,504

 
14,128,619

 
45,730,143

 
43,020,328

Operating Expenses
39,609,619

 
35,634,080

 
115,478,255

 
108,428,584

 


 


 
 
 
 
Income from operations
134,212,281

 
116,262,620

 
383,806,992

 
332,103,956

 


 


 
 
 
 
Other Income (Expense)
115,701

 
(214,878
)
 
(2,300,688
)
 
2,811,849

Income before Income Taxes
134,327,982

 
116,047,742

 
381,506,304

 
334,915,805

 
 
 


 
 
 
 
Provision for Income Taxes
42,263,336

 
37,715,317

 
122,676,422

 
104,841,502

 
 
 


 
 
 
 
Net Income
$
92,064,646

 
$
78,332,425

 
$
258,829,882

 
$
230,074,303

 
 
 
 
 
 
 
 
Earnings Per Share
 
 

 
 
 
 
Basic
$
0.32

 
$
0.27

 
$
0.90

 
$
0.78

Diluted
$
0.32

 
$
0.27

 
$
0.89

 
$
0.77

Weighted Average Shares
 
 
 
 
 
 
 
Basic
287,736,638

 
292,589,866

 
288,466,905

 
293,742,028

Diluted
290,453,825

 
295,377,478

 
291,024,663

 
296,994,572

 
 
 

 
 
 
 
Cash Dividends Declared per Share
$
0.090

 
$
0.085

 
$
0.265

 
$
0.250





Exhibit 99.1

GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(Unaudited) September 30, 2016
 
December 31, 2015

ASSETS
 
 
 
Cash and Cash Equivalents
$
534,518,281

 
$
551,557,527

Short-Term Investments
152,235,753

 
4,547,355

Accounts Receivable, net
229,236,789

 
195,969,400

Inventories
179,353,603

 
174,695,411

Other Current Assets
13,471,694

 
57,239,099

Total Current Assets
1,108,816,120

 
984,008,792

 
 
 
 
Plant and Equipment - Net
450,781,365

 
412,720,270

 
 
 
 
Goodwill
307,365,845

 
307,365,845

Long-Term Investments
57,458,514

 
95,156,539

Intangible Assets
313,100,000

 
327,575,000

Patents and Other Assets
20,751,828

 
21,846,482

Total Other Assets
698,676,187

 
751,943,866

 
 
 
 
Total Assets
$
2,258,273,672

 
$
2,148,672,928

 
 
 
 
LIABILITIES AND SHAREHOLDERS' INVESTMENT
 
 
 
Current Liabilities
$
156,479,263

 
$
131,006,546

Long-Term Debt
195,000,000

 
225,625,000

Deferred Income Taxes
50,529,019

 
69,524,621

Shareholders' Investment
1,856,265,390

 
1,722,516,761

Total Liabilities & Shareholders' Investment
$
2,258,273,672

 
$
2,148,672,928