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 21, 2015
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 21, 2015, Gentex Corporation issued a news release announcing financial results for the third quarter ended September 30, 2015. 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 21, 2015.
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 21, 2015
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 21, 2015
Exhibit 99.1
GENTEX REPORTS THIRD QUARTER 2015 FINANCIAL RESULTS AND ADDITIONAL SHARE REPURCHASE AUTHORIZATION
ZEELAND, MI -- (Marketwired - October 21, 2015) - 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, 2015.
3rd Quarter 2015 Highlights
• | Revenue growth of 11% quarter over quarter |
• | Gross Margin improved from 38.4% to 39.0% sequentially from the 2nd quarter 2015 |
• | Operating Income increased by 13% quarter over quarter |
• | Net Income increased by 8% quarter over quarter |
• | Earnings per Diluted Share increased by 8% quarter over quarter to $.27 per diluted share |
• | Board authorization of an additional 5 million shares for repurchase plan |
• | 2.1 million shares repurchased during the quarter |
• | $26.9 million of debt repaid during the quarter |
For the third quarter of 2015, the Company is pleased to report net sales of $389.8 million, which was an increase of 11% compared to net sales of $350.9 million in the third quarter of 2014. On a quarter over quarter basis, foreign currency fluctuations accounted for approximately 1% of revenue headwind during the third quarter of 2015.
The gross profit margin in the third quarter of 2015 was 39.0%, compared with a gross profit margin of 39.5% in the third quarter of 2014. On a quarter over quarter basis, foreign currency fluctuations accounted for the majority of the reduction in gross profit margin, while annual customer price reductions were essentially offset by purchasing cost reductions. Sequentially, from the second quarter of 2015, the gross margin improved from 38.4%, primarily due to increased purchasing cost reductions and improvements in product mix.
Operating income for the third quarter of 2015 increased 13% to $116.3 million, when compared to operating income of $103.2 million for the third quarter of 2014.
Exhibit 99.1
Other income decreased to a loss of $0.2 million in the third quarter of 2015 compared with other income of $0.8 million in the third quarter of 2014, primarily due to increased interest expense as a result of the Company's implemented interest rate swap, combined with lower realized gains on the sale of equity investments during the most recently completed quarter versus the same quarter in the prior year.
Net income for the third quarter of 2015 increased 8% to $78.3 million compared with net income of $72.3 million in the third quarter of 2014.
Earnings per diluted share in the third quarter of 2015 increased 8% to $0.27, compared with earnings per diluted share of $0.25 in the third quarter of 2014, which reflects the December 31, 2014 stock split, effected in the form of a 100% stock dividend.
Automotive net sales in the third quarter of 2015 were $379.9 million, an increase of 11% compared with automotive net sales of $341.8 million in the third quarter of 2014, primarily due to a 15% increase in auto dimming mirror unit shipments quarter over quarter.
Other net sales, which includes dimmable aircraft windows and fire protection products, were $9.9 million, an increase of 9%, in the third quarter of 2015, compared with $9.1 million in the third quarter of 2014.
Share Repurchases
During the third quarter of 2015, the Company repurchased 2.1 million shares of its common stock and through nine months ended September 30, 2015, the Company has repurchased 4.9 million shares. The Company’s Board of Directors has also recently authorized the repurchase of up to an additional 5 million shares of the Company’s outstanding common stock, under the existing terms of the most recently announced share repurchase plan. As of September 30, 2015, the Company has approximately 6.3 million shares remaining available for repurchase in the plan including the most recent share authorization. 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 2015, the Company paid down $25 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 fourth quarter and calendar year 2015 are based on the IHS Automotive October 2015 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 | Q4 2015 | Q4 2014 | % Change | Calendar Year 2015 | Calendar Year 2014 | % Change | |||||||
North America | 4.31 | 4.24 | 2 | % | 17.48 | 17.03 | 3 | % | |||||
Europe | 5.05 | 4.99 | 1 | % | 20.74 | 20.15 | 2.9 | % | |||||
Japan and Korea | 3.27 | 3.38 | (3 | )% | 13.12 | 13.68 | (4 | )% | |||||
Total Light Vehicle Production | 12.63 | 12.61 | — | % | 51.34 | 50.86 | 1 | % | |||||
Based on the above light vehicle production forecasts, the Company is providing and updating certain guidance for the fourth quarter and calendar year 2015.
2015 Calendar Year Guidance | ||
Annual Guidance | ||
Item | Updated as of 7/23/15 | Updated as of 10/21/15 |
Net Sales | $1.52 - $1.55 billion | $1.52 - $1.54 billion |
Gross Margin | 38.5% - 39.0% | no change |
Operating Expenses (E,R&D and S,G&A) | $148 - $151 million | $145-147 million |
Tax Rate | 31.5% - 32.0% | no change |
Capital Expenditures | $95 - $105 million | no change |
Depreciation & Amortization | $85 - $90 million | no change |
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
Exhibit 99.1
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; 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 10:30 a.m. EDT today, October 21, 2015. The dial-in number to participate in the call is 888-395-3227, passcode 9515045. Participants may listen to the call via audio streaming at http://www.visualwebcaster.com/event.asp?id=102887. Participants can also access that call by going to www.gentex.com and selecting the “Audio Webcast” icon on the bottom left side of the page. Other conference calls hosted by the Company will also be available at that site in the future.
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, | ||||||||||||||||
2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||||
North American Interior Mirrors | 2,242 | 2,054 | 9 | % | 6,451 | 6,148 | 5 | % | |||||||||
North American Exterior Mirrors | 871 | 627 | 39 | % | 2,462 | 1,792 | 37 | % | |||||||||
Total North American Mirror Units | 3,114 | 2,681 | 16 | % | 8,913 | 7,939 | 12 | % | |||||||||
International Interior Mirrors | 3,669 | 3,206 | 14 | % | 10,903 | 9,778 | 12 | % | |||||||||
International Exterior Mirrors | 1,541 | 1,347 | 14 | % | 4,614 | 4,022 | 15 | % | |||||||||
Total International Mirror Units | 5,210 | 4,553 | 14 | % | 15,517 | 13,800 | 12 | % | |||||||||
Total Interior Mirrors | 5,911 | 5,259 | 12 | % | 17,354 | 15,926 | 9 | % | |||||||||
Total Exterior Mirrors | 2,412 | 1,974 | 22 | % | 7,076 | 5,813 | 22 | % | |||||||||
Total Auto-Dimming Mirror Units | 8,324 | 7,233 | 15 | % | 24,430 | 21,739 | 12 | % | |||||||||
Note: Percent change and amounts may not total due to rounding.
Exhibit 99.1
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) | |||||||||||||||||
Three Months Ended September 30, | Nine Months ended September 30, | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Net Sales | $ | 389,829,139 | $ | 350,913,912 | $ | 1,138,025,071 | $ | 1,025,090,220 | |||||||||
Cost of Goods Sold | 237,932,439 | 212,288,220 | 697,492,531 | 620,873,493 | |||||||||||||
Gross profit | 151,896,700 | 138,625,692 | 440,532,540 | 404,216,727 | |||||||||||||
Engineering, Research & Development | 21,505,461 | 21,671,940 | 65,408,256 | 62,395,241 | |||||||||||||
Selling, General & Administrative | 14,128,619 | 13,747,925 | 43,020,328 | 41,602,675 | |||||||||||||
Operating Expenses | 35,634,080 | 35,419,865 | 108,428,584 | 103,997,916 | |||||||||||||
Income from operations | 116,262,620 | 103,205,827 | 332,103,956 | 300,218,811 | |||||||||||||
Other Income | (214,878 | ) | 786,780 | 2,811,849 | 11,087,889 | ||||||||||||
Income before Income Taxes | 116,047,742 | — | 103,992,607 | 334,915,805 | — | 311,306,700 | |||||||||||
Provision for Income Taxes | 37,715,317 | 31,655,724 | 104,841,502 | 93,677,000 | |||||||||||||
Net Income | $ | 78,332,425 | $ | 72,336,883 | $ | 230,074,303 | $ | 217,629,700 | |||||||||
Earnings Per Share | |||||||||||||||||
Basic | $ | 0.27 | $ | 0.25 | $ | 0.78 | $ | 0.75 | |||||||||
Diluted | $ | 0.27 | $ | 0.25 | $ | 0.77 | $ | 0.74 | |||||||||
Weighted Average Shares | |||||||||||||||||
Basic | 292,589,866 | 290,969,434 | 293,742,028 | 290,383,296 | |||||||||||||
Diluted | 295,377,478 | 292,875,952 | 296,994,572 | 292,918,052 | |||||||||||||
Cash Dividends Declared per Share | $ | 0.085 | $ | 0.08 | $ | 0.25 | $ | 0.23 | |||||||||
Exhibit 99.1
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) September 30, 2015 | December 31, 2014 | ||||||
ASSETS | |||||||
Cash and Cash Equivalents | $ | 564,528,197 | $ | 497,429,804 | |||
Accounts Receivable, net | 208,203,616 | 168,008,704 | |||||
Inventories | 164,604,063 | 141,757,884 | |||||
Other Current Assets | 41,867,345 | 49,441,302 | |||||
Total Current Assets | 979,203,221 | 856,637,694 | |||||
Plant and Equipment - Net | 388,188,954 | 373,390,992 | |||||
Goodwill | 307,365,845 | 307,365,845 | |||||
Long-Term Investments | 94,424,586 | 114,642,567 | |||||
Intangible Assets | 332,400,000 | 346,875,000 | |||||
Patents and Other Assets | 22,428,765 | 23,627,931 | |||||
Total Other Assets | 756,619,196 | 792,511,343 | |||||
Total Assets | $ | 2,124,011,371 | $ | 2,022,540,029 | |||
LIABILITIES AND SHAREHOLDERS' INVESTMENT | |||||||
Current Liabilities | $ | 181,629,886 | $ | 133,431,163 | |||
Long-Term Debt | 227,500,000 | 258,125,000 | |||||
Deferred Income Taxes | 43,785,884 | 59,571,421 | |||||
Shareholders' Investment | 1,671,095,601 | 1,571,412,445 | |||||
Total Liabilities & Shareholders' Investment | $ | 2,124,011,371 | $ | 2,022,540,029 | |||