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 (Date of earliest event reported): January 29, 2009
GENTEX CORPORATION
(Exact
name of registrant as specified in its charter)
| Michigan (State or other jurisdiction of incorporation) 600 North Centennial Street Zeeland, Michigan (Address of principal executive offices) |
0-10235 (Commission File Number) |
38-2030505 (IRS Employer Identification No.) 49464 (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):
[ ] Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
[ ] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)).
[ ] 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 January 29, 2009, Gentex Corporation issued a news release announcing financial results for the fourth quarter and year ended December 31, 2008. A copy of the news release is attached as Exhibit 99.1 to this 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 January 29, 2009. |
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.
| Dated: January 29, 2009. | GENTEX CORPORATION (Registrant) By: /s/ Steven A. Dykman —————————————— Steven A. Dykman Vice President — Finance and Chief Financial Officer |
Exhibit 99.1
| CONTACT: Connie Hamblin (616) 772-1800 |
RELEASE: January 29, 2009 |
GENTEX REPORTS FOURTH QUARTER RESULTS
ZEELAND,
Michigan, January 29, 2009 — Gentex Corporation, the Zeeland, Michigan-based
manufacturer of automatic-dimming rearview mirrors and commercial fire protection
products, today reported results for the fourth quarter and year ended December 31, 2008.
The Company also announced that it repurchased approximately 2.1 million shares of its
stock during the fourth quarter of 2008.
For
the fourth quarter of 2008, the Company’s net sales declined by 28 percent to $122.3
million compared with $170.7 million in the fourth quarter of 2007. The gross profit
margin declined on a year-over-year basis from 34.2 percent in the fourth quarter of 2007
to 28.4 percent in the fourth quarter of 2008. Two-thirds of that decline was the result
of the Company’s inability to leverage its fixed overhead costs due to production
inefficiencies as a result of last-minute customer order reductions. The balance of the
decline was due to annual customer price reductions and foreign exchange rates, which were
partially offset by purchasing cost reductions.
Income
from operations declined by 71 percent in the fourth quarter of 2008 to $9.8 million,
compared with $33.7 million in the fourth quarter of 2007, primarily due to the decline in
the gross margin as well as a $3.8 million increase in the allowance for doubtful accounts
related to certain financially distressed Tier 1 automotive customers.
The
net loss of $10.4 million in the fourth quarter of 2008 compared with net income of $31.8
million in the fourth quarter last year was primarily due to the decrease in other income
(expense) and reduced operating margin. Other income (expense) decreased in the fourth
quarter of 2008 compared with the same prior-year period due to a non-cash charge for
other-than-temporary impairment losses of $17.9 million recognized on equity investments,
realized losses on the sale of equity investments, and lower year-end mutual fund
distributions. The net loss per diluted share was 8 cents in the fourth quarter of 2008
compared with earnings per share of 22 cents in the fourth quarter of 2007.
For
calendar year 2008, net sales declined by five percent to $623.8 million compared with
$653.9 million in calendar year 2007. Income from operations declined by 22 percent for
calendar year 2008 compared with calendar year 2007, primarily due to the decline in the
gross profit margin. Net income decreased by 49 percent in calendar year 2008 compared
with calendar year 2007, primarily due to the decrease in other income (expense) and
reduced operating margin. Other income (expense) decreased in calendar year 2008 compared
with calendar year 2007 due to a non-cash charge for other-than-temporary impairment
losses of $17.9 million recognized on equity investments, realized losses on the sale of
equity investments, and lower year-end mutual fund distributions. Net income for calendar
year 2008 was $62.1 million compared with $122.1 million for calendar year 2007. Earnings
per diluted share were 44 cents for calendar year 2008 compared with 85 cents for calendar
year 2007.
“The
fourth quarter of 2008 is by far the toughest quarter that Gentex has experienced in 25
years,” said Gentex Chairman and Chief Executive Officer Fred Bauer. “The
Company has not reported a loss in operating or net income since 1984, which was three
years prior to the introduction of the auto-dimming electrochromic mirror. The significant
reductions in automotive production in the fourth quarter caused our customers to reduce
their parts requirements, and we had to permanently lay off approximately 360 Gentex
associates during the fourth quarter to bring our employment levels in line with our
customers’ production schedules.
“Like
everyone else, we’re searching for information that will help provide some guidance
as to where ‘the bottom’ is in the global financial and automotive markets, and
at what point we should start seeing the market recover. Given the stimulus actions that
have been taken by the United States and other governments, we’re hoping that the
overall economy will gradually improve throughout 2009, and that the automotive industry
will follow soon thereafter.”
“We remain optimistic about the future of Gentex due to the continued development of new technologies and products. The Company has remained financially strong and debt free, and we believe we will come though this global economic crisis better than many companies,” concluded Bauer.
Share Repurchase Plan
During the fourth quarter, the Company repurchased 2.1 million shares at a cost of approximately $17.9 million. The Company has a share repurchase plan in place with authorization to repurchase up to 28 million shares of the Company’s stock. To date, including the prior share repurchases, the Company has repurchased approximately 26 million shares, leaving approximately two million shares authorized to be repurchased under the plan.
Unit Shipments and Revenues
Total
auto-dimming mirror unit shipments decreased by 30 percent in the fourth quarter of 2008
compared with the fourth quarter last year. Automotive revenues decreased by 29 percent
from $165.3 million in the fourth quarter of 2007 to $117.3 million in the fourth quarter
of 2008.
Auto-dimming
mirror unit shipments in North America decreased by 36% in the fourth quarter of 2008
compared with the same period in 2007, primarily as a result of significantly lower light
vehicle production. North American light vehicle production declined by 26% in the fourth
quarter of 2008 compared with the same prior-year period. The declines in light vehicle
production were highly concentrated in the light truck/SUV vehicle segment of the market.
During the fourth quarter of 2008, vehicle production was down 40 percent on a major
truck/SUV platform that offers both interior and exterior Gentex auto-dimming mirrors, and
total light truck/SUV production in North America declined by 38 percent during the
quarter, as automotive manufacturers significantly reduced or ceased production and
extended holiday shutdowns at numerous plants in response to poor sales of those vehicles.
In
the fourth quarter of 2008, auto-dimming mirror unit shipments to offshore customers
decreased by 24 percent compared with the same period last year. The decrease in unit
shipments was primarily due to lower light vehicle production in Europe and Asia. Light
vehicle production in Europe decreased by 27 percent in the fourth quarter, and decreased
by 16 percent in Japan and Korea in the fourth quarter of 2008, compared with the same
period last year.
For
calendar year 2008, total auto-dimming mirror unit shipments decreased by five percent and
automotive revenues decreased by five percent to $601.5 million, compared with calendar
year 2007, primarily due to the significant light vehicle production declines.
Auto-dimming
mirror unit shipments in North America decreased by 19 percent in calendar year 2008
compared with calendar year 2007, primarily as a result of significantly lower light
vehicle production at the Detroit Three. North American light vehicle production declined
by 16 percent in calendar year 2008 compared with calendar year 2007. Production was down
41% in calendar year 2008 on the previously referenced truck/SUV platform for which the
Company supplies both interior and exterior auto-dimming mirrors, compared with the same
period in 2007. Total light truck/SUV production was down by 25 percent in calendar 2008
compared with calendar year 2007.
Auto-dimming
mirror unit shipments to offshore customers increased by five percent in calendar year
2008 compared with calendar year 2007, primarily due to increased unit shipments to
certain European and Asian customers. Light vehicle production in Europe decreased by five
percent in calendar year 2008 compared with calendar year 2007. Light vehicle production
in Japan and Korea decreased by two percent in calendar year 2008 compared with calendar
year 2007.
Fire
Protection revenues decreased by nine percent to $5.0 million for the fourth quarter of
2008 compared with the same period last year. Fire Protection revenues decreased by seven
percent to $22.1 million for calendar year 2008 compared with calendar year 2007. The
decreased revenues during both periods were primarily due to the weak commercial
construction market.
Future Estimates
Gentex
Senior Vice President Enoch Jen provided certain guidance for the first quarter of 2009.
“Based on CSM Worldwide’s mid-January light vehicle production forecast, we
currently expect our revenues in the first quarter of
2009 to decline by approximately 40 percent compared with the first quarter of 2008,”
said Jen. “Light vehicle production in the first quarter of 2009 currently is
expected to decline by 42 percent in North America (including a 46 percent decline in
total light truck/SUV production), by 34 percent in Europe and by 29 percent in Japan and
Korea.
“It’s
very difficult to grow your business when your customers are experiencing production
declines like these,” said Jen. “The production schedules have been very
unstable and continue to change on a weekly basis. For that reason, we do not plan to
provide full year 2009 guidance at this time. However, CSM is currently forecasting that
vehicle production levels will stabilize and then gradually improve during the balance of
2009.”
The
Company’s current first quarter 2009 forecast is based on CSM’s mid-January
forecast for light vehicle production of 2.0 million units for North America, 3.8 million
units for Europe and 2.8 million units for Japan and Korea. CSM’s current calendar
year 2009 forecast for production is a 21 percent decline to 10.0 million light vehicle
units for North America; a 16 percent decline to 17.4 million units for Europe, and a 17
percent decline to 12.0 million units for Japan and Korea.
Safe Harbor Statement
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended, that are based on management’s belief, assumptions, current expectations, estimates and projections about the global automotive industry, the economy, the impact of stock option expense, the ability to control and leverage fixed manufacturing overhead costs, unit shipment and revenue growth rates, the ability to control E,R&D and S,G&A expenses, gross margins, and the Company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecast,” “hopes,” “likely,” “plans,” “projects,” and “should,” and variations of such words and similar expressions identify forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict with regard to timing, expense, likelihood and degree of occurrence. These risks include, without limitation, employment and general economic conditions, worldwide automotive production, the maintenance of the Company’s market share, the ability to achieve purchasing cost reductions, competitive pricing pressures, currency fluctuations, interest rates, equity prices, the financial strength/stability of the Company’s customers (including their Tier 1 suppliers), supply chain disruptions, potential sale of OEM business segments or suppliers, potential customer (including their Tier 1 suppliers) bankruptcies, the mix of products purchased by customers, the ability to continue to make product innovations, the success of certain newer products (e.g. SmartBeam® and Rear Camera Display Mirror), and other risks identified in the Company’s other filings with the Securities and Exchange Commission. Therefore, actual results and outcomes may materially differ from what is expressed or forecasted. Furthermore, the Company undertakes no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.
Fourth Quarter Conference Call
A conference call related to this news release will be simulcast live on the Internet beginning at 10:30 a.m. EST today. To access that call, go to www.gentex.com and select the “Audio Webcast” icon in the lower right-hand corner of the page. Other conference calls hosted by the Company will also be available at that site in the future.
Annual Meeting of Shareholders
The Company’s 2009 Annual Meeting of Shareholders will be held on Thursday, May 14, 2009, at 4:30 p.m. EDST at the Pinnacle Center in Hudsonville, Michigan.
About the Company
Founded in 1974, Gentex Corporation (The Nasdaq Global Select Market: GNTX) is an international company that provides high-quality products to the worldwide automotive industry and North American fire protection market. Based in Zeeland, Michigan, the Company develops, manufactures and markets interior and exterior automatic-dimming automotive rearview mirrors that utilize proprietary electrochromic technology to dim in proportion to the amount of headlight glare from trailing vehicle headlamps. Many of the mirrors are sold with advanced electronic features, and approximately 96 percent of the Company’s revenues are derived from the sales of auto-dimming mirrors to nearly every major automaker in the world.
GENTEX CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2008 | 2007 | 2008 | 2007 | |||||||||||
| Net Sales | $ | 122,281,421 | $ | 170,722,639 | $ | 623,799,822 | $ | 653,933,236 | ||||||
| Cost of Goods Sold | 87,578,410 | 112,303,124 | 420,672,934 | 426,236,241 | ||||||||||
| Gross Profit | 34,703,011 | 58,419,515 | 203,126,888 | 227,696,995 | ||||||||||
| Engineering, Research & Development | 12,652,748 | 12,740,981 | 51,888,922 | 50,715,057 | ||||||||||
| Selling, General & Administrative | 12,285,244 | 9,068,837 | 42,425,050 | 35,280,846 | ||||||||||
| Lawsuit Judgment | 0 | 2,885,329 | 0 | 2,885,329 | ||||||||||
| Income from Operations | 9,765,019 | 33,724,368 | 108,812,916 | 138,815,763 | ||||||||||
| Other Expense (Income) | 25,757,662 | (13,725,745 | ) | 16,618,055 | (40,923,005 | ) | ||||||||
| Income (Loss) Before Income Taxes | (15,992,643 | ) | 47,450,113 | 92,194,861 | 179,738,768 | |||||||||
| Provision for Income Taxes | (5,627,538 | ) | 15,600,391 | 30,106,914 | 57,608,747 | |||||||||
| Net Income (Loss) | ($ 10,365,105 | ) | $ | 31,849,722 | $ | 62,087,947 | $ | 122,130,021 | ||||||
| Earnings (Loss) Per Share | ||||||||||||||
| Basic | ($ 0.08 | ) | $ | 0.22 | $ | 0.44 | $ | 0.85 | ||||||
| Diluted | ($ 0.08 | ) | $ | 0.22 | $ | 0.44 | $ | 0.85 | ||||||
| Weighted Average Shares: | ||||||||||||||
| Basic | 137,890,462 | 143,995,387 | 140,902,304 | 143,056,704 | ||||||||||
| Diluted | 137,890,462 | 145,188,679 | 141,004,936 | 144,070,297 | ||||||||||
| Cash Dividends Declared per Share | $ | 0.110 | $ | 0.105 | $ | 0.43 | $ | 0.40 | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
| Dec 31, 2008 | Dec 31, 3007 | |||||||
|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||
| Cash and Short-Term Investments | $ | 323,483,785 | $ | 397,988,781 | ||||
| Other Current Assets | 133,668,174 | 130,505,167 | ||||||
| Total Current Assets | 457,151,959 | 528,493,948 | ||||||
| Plant and Equipment - Net | 214,951,719 | 205,609,671 | ||||||
| Long-Term Investments and Other Assets | 90,999,702 | 163,919,061 | ||||||
| Total Assets | $ | 763,103,380 | $ | 898,022,680 | ||||
| LIABILITIES AND SHAREHOLDERS' INVESTMENT | ||||||||
| Current Liabilities | $ | 49,472,438 | $ | 68,362,705 | ||||
| Long-Term Debt | 0 | 0 | ||||||
| Deferred Income Taxes | 15,034,620 | 22,847,779 | ||||||
| Shareholders' Investment | 698,596,322 | 806,812,196 | ||||||
| Total Liabilities & Shareholders' Investment | $ | 763,103,380 | $ | 898,022,680 | ||||
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AUTO-DIMMING MIRROR
UNIT SHIPMENTS
(Thousands)
| Fourth Quarters Ended December 31, | Years Ended December 31, | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2008 | 2007 | % Change | 2008 | 2007 | % Change | |||||||||||||||
| Domestic Interior | 842 | 1,247 | -32% | 4,095 | 4,907 | -17% | ||||||||||||||
| Domestic Exterior | 238 | 452 | -47% | 1,285 | 1,768 | -27% | ||||||||||||||
| Total Domestic Units | 1,080 | 1,699 | -36% | 5,380 | 6,676 | -19% | ||||||||||||||
| Foreign Interior | 1,141 | 1,589 | -28% | 6,410 | 6,093 | 5% | ||||||||||||||
| Foreign Exterior | 497 | 574 | -13% | 2,598 | 2,452 | 6% | ||||||||||||||
| Total Foreign Units | 1,638 | 2,163 | -24% | 9,009 | 8,545 | 5% | ||||||||||||||
| Total Interior Mirrors | 1,983 | 2,836 | -30% | 10,505 | 11,000 | -5% | ||||||||||||||
| Total Exterior Mirrors | 735 | 1,026 | -28% | 3,884 | 4,220 | -8% | ||||||||||||||
| Total Mirror Units | 2,718 | 3,863 | -30% | 14,389 | 15,221 | -5% | ||||||||||||||
Note: Certain prior year amounts have been reclassified to conform with the current year presentation. Percent change and amounts may not total due to rounding.