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): July 22, 2008
GENTEX
CORPORATION
(Exact
name of registrant as specified in its charter)
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Michigan
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0-10235
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38-2030505
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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600
North Centennial Street
Zeeland,
Michigan
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49464
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(Address
of principal executive offices)
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(Zip
Code)
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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):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Section
2 - Financial Information
Item
2.02 Results of Operations and Financial Condition.
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(a)
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On
July 22, 2008, Gentex Corporation issued a news release announcing
financial results for the second quarter ended June 30, 2008. A
copy of the news release is attached as Exhibit 99.1 to this Form
8-K.
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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.
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(d)
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Exhibit
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99.1 - News Release Dated July 22,
2008.
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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.
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Dated: July
22, 2008
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GENTEX
CORPORATION
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(Registrant)
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By:
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/s/ Steven A. Dykman
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Steven
A. Dykman
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Vice
President – Finance and
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Chief
Financial Officer
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EXHIBIT
INDEX
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99.1
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News
Release Dated July 22, 2008.
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CONTACT:
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Connie
Hamblin
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RELEASE: July 22,
2008
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(616)
772-1800
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GENTEX
REPORTS RECORD SECOND QUARTER REVENUES
ZEELAND,
Michigan, July 22, 2008 -- Gentex Corporation, the Zeeland, Michigan-based
manufacturer of automatic-dimming rearview mirrors and commercial fire
protection products, today reported record second quarter revenues for the
quarter ended June 30, 2008. The Company also announced that it
repurchased approximately 1.2 million shares of its stock during the second
quarter of 2008.
For the
second quarter of 2008, the Company’s net sales increased by four percent to a
record $170.5 million compared with $163.5 million in the second quarter of
2007. The Company’s current second quarter operating income declined
by two percent, and net income declined by 13 percent, primarily as a result of
lower other income due to current stock market conditions. The
Company reported net income of $26.9 million compared with $31.0 million for the
second quarters of 2008 and 2007, respectively. Earnings per diluted
share were 19 cents in the second quarter of 2008 compared with 22 cents in the
second quarter of 2007.
For the
first six months of 2008, net sales increased by nine percent to $348.5 million
compared with $320.7 million in the first six months of
2007. Operating income increased by eight percent for the first six
months of 2008 compared with the same period in 2007, while net income decreased
by five percent for the first six months of 2008 compared with the same
prior-year period. Net income for the first six months of 2008 was
$57.3 million compared with $60.5 million for the first six months of 2007,
primarily as a result of lower other income due to current stock market
conditions. Earnings per diluted share were 40 cents for the first
six months of 2008 compared with 42 cents for the first six months of
2007.
During
the second quarter, the Company repurchased 1.2 million shares at a cost of
approximately $19.0 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 21.4 million shares, leaving approximately
6.6 million shares authorized to be repurchased under the plan.
“The
second quarter of 2008 is a testament to the Company’s success at global sales
diversification,” said Gentex Chairman and Chief Executive Officer Fred Bauer.
“We are operating in an industry that is experiencing the most significant
production declines, particularly at the ‘Detroit Three’, since 1991, but our
sales still increased by four percent in the second quarter. This is
due to the fact that nearly 75 percent of the Company’s mirror unit shipments
are now to automakers headquartered outside North America.
“While
our company goal is to achieve double-digit top line growth, and we look forward
to seeing improved economic conditions, we will continue to work to control the
things that we can and do our very best for the Company’s shareholders,” Bauer
continued. “We have some popular new products with significant
revenue growth potential over the next several years, such as auto-dimming
mirrors with SmartBeam® and rear camera displays, which are helping Gentex to
continue to be the industry leader in these areas. We remain excited
about our company and the prospects for the future.”
Total
auto-dimming mirror unit shipments for the second quarter of 2008 increased by
one percent over the second quarter of 2007, and automotive revenues increased
by five percent. The primary reasons for the lower growth rate were
the UAW strikes that started in the first quarter of 2008 and continued into the
second quarter, reducing the Company’s automotive revenues by approximately $5.8
million, and lower light vehicle production at the Detroit Three. For
the current quarter, unit shipments in North America decreased by 13 percent
compared with the second quarter of 2007, primarily as a result of lower light
vehicle production at the Detroit Three and the continuation of the UAW strikes.
Increased unit shipments to Asian and European transplants partially offset
those two negative factors. Increased penetration of interior and
exterior auto-dimming mirrors at certain of the Company’s European and Asian
automotive customers was the primary factor in achieving a 12 percent increase
in offshore auto-dimming mirror unit shipments.
Future
Estimates
Gentex
Senior Vice President Enoch Jen said that the Company continues to make good
progress in its manufacturing yields, and provided certain guidance for the
third quarter and balance of calendar year 2008.
“For the
third quarter and balance of calendar year 2008, we currently expect that our
top line will grow by approximately ten percent,” said Jen.
“However,
while the third quarter is always a difficult quarter for us to forecast due to
customer plant summer shutdowns and model year product changeover, this year has
far more uncertainties associated with it due to the global economic conditions
and light vehicle production environment,” Jen concluded.
Unit Shipments and
Revenues
Jen said
that the Company’s current third quarter 2008 forecast is based on CSM’s
mid-July forecast for light vehicle production of 3.1 million units for North
America, 4.9 million units for Europe and 3.6 million units for Japan and
Korea. The Company's current calendar year 2008 forecast is based on
CSM’s 2008 calendar year projection of 13.4 million units for North America,
22.0 million units for Europe and 15.0 million units for Japan and
Korea.
Total
auto-dimming mirror unit shipments in the second quarter of 2008 were
approximately 3.9 million, a one percent increase over the same period last
year. Auto-dimming mirror unit shipments increased by six percent to
8.1 million for the first six months of 2008, compared with the same prior-year
period.
Auto-dimming
mirror unit shipments to customers in North America decreased by 13 percent to
approximately 1.5 million in the second quarter of 2008 compared with the same
quarter last year. North American light vehicle production was down
14 percent in the second quarter of 2008 compared with the same period in
2007. For the first six months of 2008, auto-dimming mirror unit
shipments to customers in North America decreased by six percent to
approximately 3.1 million compared with the same period last
year. North American light vehicle production declined by 11 percent
for the first six months of 2008 compared with the same period in
2007.
Unit
shipments to offshore customers increased by 12 percent to approximately 2.4
million in the second quarter of 2008 compared with the same period in 2007.
Light vehicle production in Europe increased by four percent, and production in
Japan and Korea increased by two percent in the second quarter of 2008 compared
with the same prior-year periods. For the first six months of 2008,
auto-dimming mirror unit shipments to offshore customers increased by 14 percent
to approximately 4.9 million compared with the same period last
year. Production in Europe increased by three percent and by four
percent in Japan and Korea for the first six months of 2008 compared with the
same period in 2007.
Automotive
revenues increased by five percent to $164.8 million in the second quarter of
2008 compared with the same period last year, and increased by nine percent to
$336.9 million for the first six months of 2008. Fire Protection
revenues decreased by ten percent to $5.6 million for the second quarter of 2008
compared with the second quarter of 2007, and decreased by seven percent to
$11.6 million for the first six months of 2008, compared with the same period in
2007, primarily as a result of the weak commercial construction
market.
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
leverage fixed manufacturing overhead costs, unit shipment and revenue growth
rates, the ability to control ER&D and SG&A expenses, gross margins, and
the Company itself. Words like "anticipates," "believes,"
"confident," "estimates," "expects," "forecast," "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, the pace of automotive production worldwide, the
maintenance of the Company’s market share, competitive pricing pressures, the
ability to achieve purchasing cost reductions, currency fluctuations, interest
rates, equity prices, the financial strength of the Company's customers, supply
chain disruptions, potential sale of OEM business segments or suppliers, the mix
of products purchased by customers, the ability to continue to make product
innovations, the success of certain newer products (e.g. SmartBeam®, Z-NavÒ and Rear Camera Display
Mirror), and other risks identified in the Company's 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.
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. Eastern Daylight Saving Time 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.
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
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(unaudited)
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||||||||||||||||
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Three
Months Ended
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Six
Months Ended
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|||||||||||||||
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June
30,
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June
30,
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|||||||||||||||
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2008
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2007
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2008
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2007
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|||||||||||||
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Net
Sales
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$ | 170,491,552 | $ | 163,479,812 | $ | 348,461,831 | $ | 320,685,794 | ||||||||
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Costs
and Expenses
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||||||||||||||||
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Cost
of Goods Sold
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111,411,298 | $ | 105,782,966 | 226,734,586 | 208,410,186 | |||||||||||
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Engineering,
Research & Development
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13,398,456 | $ | 12,446,469 | 26,134,743 | 24,722,131 | |||||||||||
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Selling,
General & Administrative
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9,892,080 | $ | 8,732,630 | 19,815,616 | 17,099,201 | |||||||||||
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Other
Expense (Income)
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(4,230,322 | ) | $ | (8,447,283 | ) | (9,705,791 | ) | (17,981,306 | ) | |||||||
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Total
Costs and Expenses
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130,471,512 | 118,514,782 | 262,979,154 | 232,250,212 | ||||||||||||
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Income
Before Provision for Income Taxes
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40,020,040 | 44,965,030 | 85,482,677 | 88,435,582 | ||||||||||||
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Provision
for Income Taxes
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13,161,679 | 14,008,923 | 28,176,181 | 27,981,766 | ||||||||||||
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Net
Income
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$ | 26,858,361 | $ | 30,956,107 | $ | 57,306,496 | $ | 60,453,816 | ||||||||
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Earnings
Per Share
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||||||||||||||||
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Basic
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$ | 0.19 | $ | 0.22 | $ | 0.40 | $ | 0.42 | ||||||||
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Diluted
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$ | 0.19 | $ | 0.22 | $ | 0.40 | $ | 0.42 | ||||||||
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Weighted
Average Shares:
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||||||||||||||||
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Basic
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142,239,378 | 142,543,923 | 142,762,929 | 142,356,126 | ||||||||||||
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Diluted
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142,575,626 | 143,477,655 | 142,904,951 | 143,047,008 | ||||||||||||
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Cash
Dividends Declared per Share
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$ | 0.105 | $ | 0.095 | $ | 0.210 | $ | 0.19 | ||||||||
CONDENSED
CONSOLIDATED BALANCE SHEETS
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(unaudited)
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||||||||
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June
30,
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December
31,
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|||||||
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2008
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2007
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|||||||
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ASSETS
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||||||||
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Cash
and Short-Term Investments
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$ | 376,919,395 | $ | 397,988,781 | ||||
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Other
Current Assets
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141,237,880 | 130,505,167 | ||||||
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Total
Current Assets
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518,157,275 | 528,493,948 | ||||||
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Plant
and Equipment - Net
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216,322,783 | 205,609,671 | ||||||
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Long-Term
Investments and Other Assets
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135,991,063 | 163,919,061 | ||||||
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Total
Assets
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$ | 870,471,121 | $ | 898,022,680 | ||||
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LIABILITIES
AND SHAREHOLDERS' INVESTMENT
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||||||||
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Current
Liabilities
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$ | 69,815,977 | $ | 68,362,705 | ||||
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Long-Term
Debt
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0 | 0 | ||||||
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Deferred
Income Taxes
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18,715,357 | 22,847,779 | ||||||
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Shareholders'
Investment
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781,939,787 | 806,812,196 | ||||||
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Total
Liabilities & Shareholders' Investment
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$ | 870,471,121 | $ | 898,022,680 | ||||
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AUTO-DIMMING
MIRROR UNIT SHIPMENTS
(Thousands)
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||||||
|
Second
Quarter
Ended
June 30,
|
Six
Months Ended
June
30,
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|||||
|
2008
|
2007
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%
Change
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2008
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2007
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%
Change
|
|
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Domestic
Interior
|
1,130
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1,248
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-9%
|
2,347
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2,423
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-3%
|
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Domestic
Exterior
|
344
|
450
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-24%
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788
|
906
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-13%
|
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Total
Domestic Units
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1,474
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1,698
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-13%
|
3,135
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3,329
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-6%
|
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Foreign
Interior
|
1,727
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1,558
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11%
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3,492
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3,063
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14%
|
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Foreign
Exterior
|
712
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618
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15%
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1,453
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1,260
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15%
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Total
Foreign Units
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2,439
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2,176
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12%
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4,945
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4,323
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14%
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Total
Interior Mirrors
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2,857
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2,806
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2%
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5,839
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5,486
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6%
|
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Total
Exterior Mirrors
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1,056
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1,068
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-1%
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2,241
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2,166
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4%
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Total
Mirror Units
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3,913
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3,874
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1%
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8,080
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7,652
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6%
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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.