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): October 22,
2007
GENTEX
CORPORATION
(Exact
name of registrant as specified in its charter)
|
Michigan
|
0-10235
|
38-2030505
|
|
(State
or other jurisdictionof
incorporation)
|
(CommissionFile
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):
|
£
|
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.
On
October 22, 2007, Gentex Corporation issued a news release announcing financial
results for the third quarter ended September 30, 2007. 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 October 22, 2007.
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: October
22, 2007
|
GENTEX
CORPORATION
|
|
|
(Registrant)
|
||
|
By:
|
/s/
Steven A. Dykman
|
|
|
Steven
A. Dykman
|
||
|
Vice
President – Finance and Chief Financial
Officer
|
EXHIBIT
INDEX
99.1 News
Release Dated October 22, 2007.
|
CONTACT:
|
Connie
Hamblin
|
RELEASE:
October 22,
2007
|
(616)
772-1800
GENTEX
REPORTS RECORD THIRD QUARTER RESULTS
ZEELAND,
Michigan, October 22, 2007 -- Gentex Corporation (NASDAQ: GNTX), the Zeeland,
Michigan-based manufacturer of automatic-dimming rearview mirrors and commercial
fire protection products, today reported record financial results for the third
quarter and nine-month periods ended September 30, 2007.
The
Company’s net sales increased by 15 percent from $141.3 million in the third
quarter of 2006 to a third quarter record $162.5 million in the third quarter
of
2007. Net income for the third quarter of 2007 increased by 23
percent to $29.8 million compared with $24.3 million in the third quarter last
year. Earnings per diluted share increased to 21 cents in the third quarter
of
2007 compared with 17 cents in the third quarter of 2006.
For
the first nine months of 2007, net sales increased by 14 percent to $483.2
million compared with $422.7 million in the first nine months of
2006. Net income for the first nine months of 2007 increased by 16
percent to $90.3 million compared with $77.9 million in the first nine months
of
2006. Earnings per diluted share increased by 21 percent to 63 cents
for the first nine months of 2007 compared with 52 cents for the same period
in
calendar 2006.
During
the third quarter of 2007, the Company’s quarterly financial results were
negatively impacted by approximately $1.6 million (pre-tax) in expenses related
to litigation between the Company and K.W. Muth and Muth Mirror Systems
LLC. The litigation, as previously announced, relates to exterior
mirrors with turn signal indicators.
“We
are
pleased that we reported another good quarter of growth and other positive
operating improvements,” said Gentex Chairman and Chief Executive Officer Fred
Bauer. “Mirror unit shipments for the third quarter of 2007 increased by 15
percent, but automotive revenues increased by 16 percent due to a richer mix
of
mirror products shipped during the quarter. For the current quarter,
unit shipments in North America increased by 18 percent, primarily due to
increased interior mirror unit shipments for certain domestic and Asian
transplant automakers. Increased penetration at certain of our Asian
and European automotive customers was the primary factor in achieving a 13
percent increase in our offshore unit shipments.”
Gentex
Senior Vice President Enoch Jen provided certain guidance for the fourth
quarter.
“For
the
fourth quarter of 2007, we anticipate that our mirror unit shipments and
revenues will increase by approximately 10-15 percent over the same prior-year
period, based on the current forecast for product mix.”
Jen
also
said that based on the current fourth quarter forecast, the gross margin in
the
fourth quarter is expected to be similar to the gross margin in the second
quarter of 2007. On a year-over-year basis, the Company significantly
improved its gross margin from 33.9% in the third quarter of 2006 to 35.1%
in
the third quarter of 2007, primarily due to higher growth rates that allowed
the
Company to better leverage its fixed overhead costs, purchasing cost reductions
and improved manufacturing yields.
Jen
said
that the Company’s current fourth quarter 2007 forecast is based on CSM’s
preliminary mid-October forecast for light vehicle production of 3.6 million
units for North America, 5.5 million units for Europe and 3.9 million units
for
Japan and Korea. The Company's current calendar year 2007 forecast is
based on CSM’s 2007 calendar year projection of 15.0 million units for North
America, 21.5 million units for Europe and 14.7 million units for Japan and
Korea.
Total
auto-dimming mirror unit shipments in the third quarter of 2007 were
approximately 3.7 million, a 15 percent increase over the same period last
year. Auto-dimming mirror unit shipments increased by 13 percent to
11.4 million for the first nine months of 2007, compared with the same
prior-year period.
Auto-dimming
mirror unit shipments to customers in North America increased by 18 percent
to
approximately 1.6 million in the third quarter of 2007 compared with the same
quarter last year. North American light vehicle production was up
four percent in the third quarter of 2007 compared with the same period in
2006. For the first nine months of 2007, auto-dimming mirror unit
shipments to customers in North America increased by nine percent to
approximately 5.0 million compared with the same period last
year. North American light vehicle production declined by two percent
for the first nine months of 2007 compared with the same period in
2006.
Unit
shipments to offshore customers increased by 13 percent to approximately 2.1
million in the third quarter of 2007 compared with the same period in 2006.
Light vehicle production in Europe increased by six percent, and production
increased by five percent in Japan and Korea, in the third quarter of 2007,
compared with the same prior year period.
Automotive
revenues increased by 16 percent to $156.5 million in the third quarter of
2007
compared with the same period last year, and increased by 15 percent to $464.8
million for the first nine months of 2007, compared with the first nine months
of 2006. Fire Protection revenues decreased by three percent to $6.0
million for the third quarter of 2007 compared with the third quarter of 2006,
and were approximately flat at $18.4 million for the first nine months of 2007,
compared with the same period in 2006.
Non-GAAP
Financial Measure
The
financial information provided, including earnings, is in accordance with GAAP.
Still, the Company believes it is useful to provide non-GAAP earnings to exclude
the effect of Statement of Financial Accounting Standards No. 123(R),
“Share-Based Payment” [FAS 123(R)]. This non-GAAP financial measure allows
investors to evaluate current performance in relation to historic performance
without considering this non-cash charge.
The
Company’s management uses this non-GAAP information internally to help assess
performance in the current period versus historical performance (especially
prior periods where this non-cash charge was not included). Disclosure of
non-GAAP earnings to exclude the effect of FAS 123(R) has economic substance
because the excluded expenses do not represent current or future cash
expenditures.
A
reconciliation of non-GAAP earnings, to exclude the effect of FAS 123(R), to
GAAP earnings can be found in the attached financial table. The use of non-GAAP
earnings is intended to supplement, not to replace, presentation of GAAP
earnings. Like all non-GAAP financial measures, non-GAAP earnings are subject
to
inherent limitations because all of the expenses required by GAAP are not
included. The limitations are compensated by the fact that non-GAAP earnings
are
not relied on exclusively, but are used to simply supplement GAAP
earnings.
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 expenses on earnings, the
ability to leverage fixed manufacturing overhead costs, unit shipment and
revenue growth rates 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
relative market share, competitive pricing pressures, currency fluctuations,
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.
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. 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
|
(unaudited)
|
||||||||||||||||
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
September
30,
|
September
30,
|
|||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
|||||||||||||
|
Net
Sales
|
$ |
162,524,803
|
$ |
141,265,647
|
$ |
483,210,597
|
$ |
422,677,471
|
||||||||
|
Costs
and Expenses
|
||||||||||||||||
|
Cost
of Goods Sold
|
105,522,931
|
93,387,125
|
313,933,117
|
275,669,763
|
||||||||||||
|
Engineering,
Research & Development
|
13,251,945
|
10,536,334
|
37,974,076
|
30,658,131
|
||||||||||||
|
Selling,
General & Administrative
|
9,112,808
|
7,737,384
|
26,212,009
|
23,041,411
|
||||||||||||
|
Other
Expense (Income)
|
(9,215,954 | ) | (6,103,269 | ) | (27,197,260 | ) | (20,769,939 | ) | ||||||||
|
Total
Costs and Expenses
|
118,671,730
|
105,557,574
|
350,921,942
|
308,599,366
|
||||||||||||
|
Income
Before Provision for Income Taxes
|
43,853,073
|
35,708,073
|
132,288,655
|
114,078,105
|
||||||||||||
|
Provision
for Income Taxes
|
14,026,590
|
11,370,152
|
42,008,356
|
36,133,077
|
||||||||||||
|
Net
Income
|
$ |
29,826,483
|
$ |
24,337,921
|
$ |
90,280,299
|
$ |
77,945,028
|
||||||||
|
Earnings
Per Share
|
||||||||||||||||
|
Basic
|
$ |
0.21
|
$ |
0.17
|
$ |
0.63
|
$ |
0.52
|
||||||||
|
Diluted
|
$ |
0.21
|
$ |
0.17
|
$ |
0.63
|
$ |
0.52
|
||||||||
|
Weighted
Average Shares:
|
||||||||||||||||
|
Basic
|
143,496,082
|
144,879,673
|
142,740,287
|
149,871,596
|
||||||||||||
|
Diluted
|
144,842,628
|
145,092,084
|
143,699,262
|
150,441,525
|
||||||||||||
|
Cash
Dividends Declared per Share
|
$ |
0.105
|
$ |
0.095
|
$ |
0.295
|
$ |
0.275
|
||||||||
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||||||||||
|
(unaudited)
|
||||||||||||||||
|
Sept
30,
|
Dec
31,
|
|||||||||||||||
|
2007
|
2006
|
|||||||||||||||
|
ASSETS
|
||||||||||||||||
|
Cash
and Short-Term Investments
|
$ |
380,944,140
|
$ |
328,227,710
|
||||||||||||
|
Other
Current Assets
|
138,806,947
|
118,650,384
|
||||||||||||||
|
Total
Current Assets
|
519,751,087
|
446,878,094
|
||||||||||||||
|
Plant
and Equipment - Net
|
198,135,164
|
184,134,373
|
||||||||||||||
|
Long-Term
Investments and Other Assets
|
170,304,031
|
154,015,933
|
||||||||||||||
|
Total
Assets
|
$ |
888,190,282
|
$ |
785,028,400
|
||||||||||||
|
LIABILITIES
AND SHAREHOLDERS' INVESTMENT
|
||||||||||||||||
|
Current
Liabilities
|
$ |
70,314,815
|
$ |
57,362,978
|
||||||||||||
|
Long-Term
Debt
|
0
|
0
|
||||||||||||||
|
Deferred
Income Taxes
|
26,629,722
|
24,971,133
|
||||||||||||||
|
Shareholders'
Investment
|
791,245,745
|
702,694,289
|
||||||||||||||
|
Total
Liabilities & Shareholders' Investment
|
$ |
888,190,282
|
$ |
785,028,400
|
||||||||||||
|
AUTO-DIMMING
MIRROR UNIT SHIPMENTS
(Thousands)
|
||||||||||||||||||||||||
|
Third
Quarter
Ended
September 30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||||||||||
|
2007
|
2006
|
%
Change
|
2007
|
2006
|
%
Change
|
|||||||||||||||||||
|
Domestic
Interior
|
1,235
|
978
|
26 | % |
3,661
|
3,207
|
14 | % | ||||||||||||||||
|
Domestic
Exterior
|
412
|
414
|
-0.5 | % |
1,322
|
1,370
|
-4 | % | ||||||||||||||||
|
Total
Domestic Units
|
1,647
|
1,392
|
18 | % |
4,983
|
4,578
|
9 | % | ||||||||||||||||
|
Foreign
Interior
|
1,443
|
1,248
|
16 | % |
4,503
|
3,808
|
18 | % | ||||||||||||||||
|
Foreign
Exterior
|
615
|
569
|
8 | % |
1,872
|
1,625
|
15 | % | ||||||||||||||||
|
Total
Foreign Units
|
2,059
|
1,818
|
13 | % |
6,375
|
5,433
|
17 | % | ||||||||||||||||
|
Total
Interior Mirrors
|
2,678
|
2,226
|
20 | % |
8,164
|
7,015
|
16 | % | ||||||||||||||||
|
Total
Exterior Mirrors
|
1,028
|
984
|
4 | % |
3,193
|
2,995
|
7 | % | ||||||||||||||||
|
Total
Mirror Units
|
3,706
|
3,210
|
15 | % |
11,358
|
10,010
|
13 | % | ||||||||||||||||
Note:
Certain prior year amounts have been reclassified to conform with the current
year presentation. Amounts may not total due to
rounding.
|
GENTEX
CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||||||||||||||||
|
STATEMENTS
OF INCOME RECONCILIATION
|
||||||||||||||||||||||||||||||||
|
NON-GAAP
MEASUREMENT TO GAAP
|
||||||||||||||||||||||||||||||||
|
Three
Months Ended September 30, 2007
|
Three
Months Ended September 30, 2006
|
|||||||||||||||||||||||||||||||
|
GAAP
|
Stock
Option Expense
|
(Non-GAAP
Excluding Stock Option Expense)
|
GAAP
|
Stock
Option Expense
|
(Non-GAAP
Excluding Stock Option Expense)
|
GAAP
2007 vs. 2006 % Change
|
Non-GAAP
2007 vs. 2006 % Change
|
|||||||||||||||||||||||||
|
Net
Sales
|
$ |
162,524,803
|
$ |
0
|
$ |
162,524,803
|
$ |
141,265,647
|
$ |
0
|
$ |
141,265,647
|
15.0 | % | 15.0 | % | ||||||||||||||||
|
Costs
and Expenses
|
||||||||||||||||||||||||||||||||
|
Cost
of Goods Sold
|
105,522,931
|
(602,146 | ) |
104,920,785
|
93,387,125
|
(565,696 | ) |
92,821,429
|
13.0 | % | 13.0 | % | ||||||||||||||||||||
|
Engineering,
Research & Development
|
13,251,945
|
(634,777 | ) |
12,617,168
|
10,536,334
|
(604,667 | ) |
9,931,667
|
25.8 | % | 27.0 | % | ||||||||||||||||||||
|
Selling,
General & Administrative
|
9,112,808
|
(693,911 | ) |
8,418,897
|
7,737,384
|
(636,647 | ) |
7,100,737
|
17.8 | % | 18.6 | % | ||||||||||||||||||||
|
Other
Expense (Income)
|
(9,215,954 | ) |
0
|
(9,215,954 | ) | (6,103,269 | ) |
0
|
(6,103,269 | ) | 51.0 | % | 51.0 | % | ||||||||||||||||||
|
Total
Costs and Expenses
|
118,671,730
|
(1,930,834 | ) |
116,740,896
|
105,557,574
|
(1,807,010 | ) |
103,750,564
|
12.4 | % | 12.5 | % | ||||||||||||||||||||
|
Income
Before Provision for Income Taxes
|
43,853,073
|
1,930,834
|
45,783,907
|
35,708,073
|
1,807,010
|
37,515,083
|
22.8 | % | 22.0 | % | ||||||||||||||||||||||
|
Provision
for Income Taxes
|
14,026,590
|
1,083,410
|
15,110,000
|
11,370,152
|
540,848
|
11,911,000
|
23.4 | % | 26.9 | % | ||||||||||||||||||||||
|
Net
Income
|
29,826,483
|
847,424
|
30,673,907
|
$ |
24,337,921
|
$ |
1,266,162
|
$ |
25,604,083
|
22.6 | % | 19.8 | % | |||||||||||||||||||
|
Nine
Months Ended September 30, 2007
|
Nine
Months Ended September 30, 2006
|
|||||||||||||||||||||||||||||||
|
GAAP
|
Stock
Option Expense
|
(Non-GAAP
Excluding Stock Option Expense)
|
GAAP
|
Stock
Option Expense
|
(Non-GAAP
Exlcuding Stock Option Expense)
|
GAAP
2007 vs. 2006 % Change
|
Non-GAAP
2007 vs. 2006 % Change
|
|||||||||||||||||||||||||
|
Net
Sales
|
$ |
483,210,597
|
$ |
0
|
$ |
483,210,597
|
$ |
422,677,471
|
$ |
0
|
$ |
422,677,471
|
14.3 | % | 14.3 | % | ||||||||||||||||
|
Costs
and Expenses
|
||||||||||||||||||||||||||||||||
|
Cost
of Goods Sold
|
313,933,117
|
(1,776,564 | ) |
312,156,553
|
275,669,763
|
(1,683,057 | ) |
273,986,706
|
13.9 | % | 13.9 | % | ||||||||||||||||||||
|
Engineering,
Research & Development
|
37,974,076
|
(1,910,338 | ) |
36,063,738
|
30,658,131
|
(1,881,448 | ) |
28,776,683
|
23.9 | % | 25.3 | % | ||||||||||||||||||||
|
Selling,
General & Administrative
|
26,212,009
|
(1,795,698 | ) |
24,416,311
|
23,041,411
|
(1,712,395 | ) |
21,329,016
|
13.8 | % | 14.5 | % | ||||||||||||||||||||
|
Other
Expense (Income)
|
(27,197,260 | ) |
0
|
(27,197,260 | ) | (20,769,939 | ) |
0
|
(20,769,939 | ) | 30.9 | % | 30.9 | % | ||||||||||||||||||
|
Total
Costs and Expenses
|
350,921,942
|
(5,482,600 | ) |
345,439,342
|
308,599,366
|
(5,276,900 | ) |
303,322,466
|
13.7 | % | 13.9 | % | ||||||||||||||||||||
|
Income
Before Provision for Income Taxes
|
132,288,655
|
5,482,600
|
137,771,255
|
114,078,105
|
5,276,900
|
119,355,005
|
16.0 | % | 15.4 | % | ||||||||||||||||||||||
|
Provision
for Income Taxes
|
42,008,356
|
3,469,644
|
45,478,000
|
36,133,077
|
1,762,923
|
37,896,000
|
16.3 | % | 20.0 | % | ||||||||||||||||||||||
|
Net
Income
|
90,280,299
|
2,012,956
|
92,293,255
|
$ |
77,945,028
|
$ |
3,513,977
|
$ |
81,459,005
|
15.8 | % | 13.3 | % | |||||||||||||||||||
End
of Filing