8K_06.30.2015


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 23, 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 July 23, 2015, Gentex Corporation issued a news release announcing financial results for the second quarter ended June 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 July 23, 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: July 23, 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 July 23, 2015



Exhibit 99.1 06.30.2015
Exhibit 99.1


GENTEX REPORTS SECOND QUARTER 2015 FINANCIAL RESULTS
ZEELAND, MI -- (Marketwired - July 23, 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 June 30, 2015.
For the second quarter of 2015, the Company is pleased to report net sales of $379.3 million, which was an increase of 12% compared to net sales of $338.4 million in the second quarter of 2014. The Company's continued growth in sales has been accomplished despite worldwide light vehicle production that declined 1% in the second quarter of 2015 in the Company's primary markets versus the second quarter of 2014, in addition to foreign currency fluctuations that accounted for approximately 1% of revenue headwind during the second quarter of 2015.
The gross profit margin in the second quarter of 2015 was 38.4%, compared with a gross profit margin of 39.7% in the second quarter of 2014. The primary drivers affecting gross profit margin on a year over year basis were annual customer price reductions, unfavorable product mix and currency rate fluctuations, which were partially offset by purchasing cost reductions.
Operating income for the second quarter of 2015 increased 8% to $108.1 million, when compared to operating income of $99.8 million for the second quarter of 2014. Adjusted Operating Income for the second quarter of 2015 increased 12% compared to the second quarter of 2014.
Other Income in the second quarter of 2015 decreased 60% to $2.3 million compared with other income of $5.8 million in the second quarter of 2014, primarily due to lower realized gains on the sale of equity investments. In the second quarter of 2014, the gains in the quarter were higher than normalized levels given the strength in equity markets and the Company's re-balancing of its investment portfolio following the HomeLink acquisition in 2013.



Exhibit 99.1

Net income for the second quarter of 2015 decreased 3% to $74.6 million compared with net income of $76.7 million in the second quarter of 2014. Adjusted Net Income increased by 12% for the second quarter of 2015 when compared to Adjusted Net Income for the second quarter of 2014.
Earnings per diluted share in the second quarter of 2015 were $0.25, compared with earnings per diluted share of $0.26 in the second quarter of 2014, which reflects the December 31, 2014 stock split, effected in the form of a 100% stock dividend. The reported earnings per diluted share for the second quarter of 2015 decreased 4% on a quarter over quarter basis, however Adjusted Earnings per Diluted Share for the second quarter of 2015 were up 11% compared to Adjusted Earnings per Diluted Share for the second quarter 2014.
Automotive net sales in the second quarter of 2015 were $370.5 million, up 12% compared with automotive net sales of $329.6 million in the second quarter of 2014, primarily due to an 11% increase in auto dimming mirror unit shipments.
Other net sales, which includes dimmable aircraft windows and fire protection products, were $8.8 million in the second quarter of 2015, compared with $8.9 million in the second quarter of 2014.

Other
During the second quarter of 2015, the Company repurchased 1.4 million shares for approximately $25.1 million, and through six months ended June 30, 2015 the Company has repurchased 2.8 million shares for $50.1 million. 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. As of June 30, 2015, the Company has approximately 3.4 million shares remaining available for repurchase under its most recently announced share repurchase plan.

Future Estimates
The Company’s forecasts for light vehicle production for the second half and calendar year 2015 are based on the IHS Automotive July 2015 forecast for light vehicle production in North America, Europe, Japan and Korea.




Exhibit 99.1

Light Vehicle Production (per IHS Automotive July light vehicle production forecast)
(in Millions)
Region
2H 2015
2H 2014
% Change
 
Calendar Year 2015
Calendar Year 2014
% Change
North America
8.75

8.41

4
%
 
17.54

17.03

3
 %
Europe
9.72

9.56

2
%
 
20.54

20.15

2
 %
Japan and Korea
6.55

6.58


 
13.19

13.68

(4
)%
Total Light Vehicle Production
25.02

24.55

2
%
 
51.27

50.86

1
 %
Based on the above light vehicle production forecasts, the Company has updated certain of its 2015 guidance for calendar year 2015.
2015 Calendar Year Guidance
 
Annual Guidance
Item
As of 4/22/15
Updated as of 7/23/15
Net Sales
$1.47 - $1.54 billion
$1.52 - $1.55 billion
Gross Margin
38.5% - 39.5%
38.5% - 39.0%
Operating Expenses (E,R&D and S,G&A)
$148 - $154 million
$148 - $151 million
Tax Rate
31.5% - 32.5%
31.5% - 32.0%
Capital Expenditures
$95 - $105 million
No change
Depreciation & Amortization
$85 - $90 million
No change

Non-GAAP Financial Measures
The financial information provided is in accordance with Generally Accepted Accounting Principles ("GAAP"). Still, the Company believes that it is useful to provide non-GAAP: operating income ("Adjusted Operating Income"), net income ("Adjusted Net Income"); and earnings per diluted share ("Adjusted Earnings per Diluted Share") with the adjustments set forth in the "Reconciliation of Non-GAAP Measures" table below. This non-GAAP financial information allows investors to evaluate current performance in the Company's core business in relation to historic performance.
Management uses such non-GAAP information internally to help assess performance in the current period versus prior periods in the Company's core business. A reconciliation of the Adjusted Operating Income, Adjusted Net Income, and Adjusted Earnings per Diluted Share is provided in the attached "Reconciliation of Non-GAAP Measures" table below. Like all non-GAAP financial measures, these non-GAAP measures are intended to supplement, not to replace, GAAP measures. All non-GAAP financial measures are subject to inherent limitations because not all of the expenses required by GAAP are included.




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; 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.






Exhibit 99.1

Second 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, July 23, 2015. To access that call, go to www.gentex.com and select 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.

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,
 
2015
 
2014
 
%
 Change
 
2015
 
2014
 
%
 Change
North American Interior Mirrors
2,184

 
2,119

 
3
%
 
4,208

 
4,094

 
3
%
North American Exterior Mirrors
851

 
629

 
35
%
 
1,591

 
1,165

 
37
%
Total North American Mirror Units
3,035

 
2,748

 
10
%
 
5,800

 
5,259

 
10
%
International Interior Mirrors
3,642

 
3,310

 
10
%
 
7,234

 
6,573

 
10
%
International Exterior Mirrors
1,497

 
1,324

 
13
%
 
3,073

 
2,675

 
15
%
Total International Mirror Units
5,139

 
4,634

 
11
%
 
10,307

 
9,247

 
11
%
Total Interior Mirrors
5,826

 
5,429

 
7
%
 
11,442

 
10,667

 
7
%
Total Exterior Mirrors
2,348

 
1,953

 
20
%
 
4,664

 
3,839

 
21
%
Total Auto-Dimming Mirror Units
8,174

 
7,382

 
11
%
 
16,107

 
14,506

 
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)
 
 
 
 
 
Three Months Ended June 30,
 
Six Months ended June 30,
 
2015
 
2014
 
2015
 
2014
Net Sales
$
379,258,477

 
$
338,436,964

 
$
748,195,932

 
$
674,176,308

 
 
 
 
 
 
 
 
Cost of Goods Sold
233,715,046

 
204,144,736

 
459,560,092

 
408,585,273

Gross profit
145,543,431

 
134,292,228

 
288,635,840

 
265,591,035

 
 
 
 
 
 
 
 
Engineering, Research & Development
22,315,244

 
20,234,074

 
43,902,795

 
40,723,301

Selling, General & Administrative
15,095,357

 
14,222,716

 
28,891,709

 
27,854,750

Operating Expenses
37,410,601

 
34,456,790

 
72,794,504

 
68,578,051

 
 
 
 
 
 
 
 
Income from operations
108,132,830

 
99,835,438

 
215,841,336

 
197,012,984

 


 


 
 
 
 
Other Income
2,317,343

 
5,786,565

 
3,026,727

 
10,301,109

Income before Income Taxes
110,450,173


105,622,003

 
218,868,063


207,314,093

 
 
 


 
 
 
 
Provision for Income Taxes
35,891,736

 
28,895,257

 
67,126,185

 
62,021,276

 
 
 
 
 
 
 
 
Net Income
$
74,558,437

 
$
76,726,746

 
$
151,741,878

 
$
145,292,817

 
 
 
 
 
 
 
 
Earnings Per Share
 
 
 
 
 
 
 
Basic
$
0.25

 
$
0.26

 
$
0.52

 
$
0.50

Diluted
$
0.25

 
$
0.26

 
$
0.51

 
$
0.50

Weighted Average Shares
 
 
 
 
 
 
 
Basic
293,958,258

 
290,430,260

 
294,461,499

 
290,119,368

Diluted
297,462,102

 
292,998,986

 
297,990,032

 
293,237,178

 
 
 
 
 
 
 
 
Cash Dividends Declared per Share
$
0.085

 
$
0.08

 
$
0.17

 
$
0.15





Exhibit 99.1

GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(Unaudited)
June 30, 2015
 
December 31, 2014

ASSETS
 
 
 
Cash and Cash Equivalents
$
569,896,553

 
$
497,429,804

Accounts Receivable, net
196,059,680

 
168,008,704

Inventories
150,772,495

 
141,757,884

Other Current Assets
38,483,395

 
49,441,302

Total Current Assets
955,212,123

 
856,637,694

 
 
 
 
Plant and Equipment - Net
375,320,843

 
373,390,992

 
 
 
 
Goodwill
307,365,845

 
307,365,845

Long-Term Investments
114,740,646

 
114,642,567

Intangible Assets
337,225,000

 
346,875,000

Patents and Other Assets
22,676,573

 
23,627,931

Total Other Assets
782,008,064

 
792,511,343

 
 
 
 
Total Assets
$
2,112,541,030

 
$
2,022,540,029

 
 
 
 
LIABILITIES AND SHAREHOLDERS' INVESTMENT
 
 
 
Current Liabilities
$
155,308,717

 
$
133,431,163

Long-Term Debt
254,375,000

 
258,125,000

Deferred Income Taxes
55,852,607

 
59,571,421

Shareholders' Investment
1,647,004,706

 
1,571,412,445

Total Liabilities & Shareholders' Investment
$
2,112,541,030

 
$
2,022,540,029





Exhibit 99.1

GENTEX CORPORATION
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)

In this press release the Company has provided information regarding certain non-GAAP financial measures, which are reconciled to their closest GAAP financial measure in the following schedules.

Adjusted Operating Income: Adjusted Operating Income is presented as a supplemental measure of the Company's performance and is defined as Operating Income excluding certain severance related costs and foreign currency fluctuations set forth in the table below:
 
(Unaudited)
 
Three Months Ended June 30,
 
2015
 
2014
 
(in 000's except per share amounts)
Operating Income
$
108,133

 
$
99,835

Severance related costs
1,977

 

Foreign currency fluctuations
1,985

 

Adjusted Operating Income
$
112,095

 
$
99,835



Adjusted Net Income and Adjusted Earnings per Diluted Share : Adjusted Net Income and Adjusted Earnings per Diluted Share are presented as supplemental measures of the Company's performance. Adjusted Net Income is defined as Net Income adjusted for: certain severance related costs during the second quarter of 2015; foreign currency fluctuations during the second quarter of 2015; incremental research and development tax credits resulting from tax return filings from prior years recorded during the second quarter of 2014; normalizing realized gains on investments included in Other Income on a quarter over quarter basis each as set forth in the table below, plus the tax impact of adjusting items. Adjusted Earnings per Diluted Share is defined as Adjusted Net Income divided by weighted average diluted shares outstanding.
 
(Unaudited)
 
Three Months Ended June 30,
 
2015
 
2014
 
(in 000's except per share amounts)
Net Income
$
74,558

 
$
76,727

Severance related costs
1,977

 

Foreign currency fluctuations
1,985

 

Other Income adjustments

 
(3,453
)
Incremental Research & Development tax credits

 
(5,474
)
Tax impact of adjusting items (at effective tax rate of 32.5% in each period)
(1,288
)
 
1,122

Adjusted Net income
$
77,232

 
$
68,922

 


 


Adjusted Earnings Per Share:
 
 
 
Basic
$
0.263

 
$
0.237

Diluted
$
0.260

 
$
0.235

 


 


Weighted Average Shares (000's)

 

Basic
293,958

 
290,430

Diluted
297,462

 
292,999