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, 2007
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):
|
£
|
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
July
23, 2007, Gentex Corporation issued a news release announcing financial results
for the second quarter ended June 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 July 23,
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: July
23, 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 July 23, 2007.
|
|
|
CONTACT:
|
Connie
Hamblin
|
RELEASE: July
23, 2007
|
| (616) 772—1800 |
GENTEX
REPORTS RECORD SECOND QUARTER RESULTS;
COMPANY
SHIPS 100 MILLIONTH MIRROR IN THE SECOND QUARTER
ZEELAND,
Michigan, July 23, 2007 -- Gentex Corporation, the Zeeland, Michigan-based
manufacturer of automatic-dimming rearview mirrors and commercial fire
protection products, today reported record financial results for the second
quarter and six-month periods ended June 30, 2007. The Company also
announced that it reached a milestone in the second quarter of 2007 by shipping
its 100 millionth auto-dimming mirror unit. Approximately 30 million
of those units were exterior auto-dimming mirrors.
The
Company’s net sales increased by 15 percent from $142.4 million in the second
quarter of 2006 to a record $163.5 million in the second quarter of 2007.
Current second quarter net income increased by 14 percent to $31.0 million
compared with $27.2 million in the second quarter last year. Earnings per
diluted share increased by 20 percent to 22 cents in the second quarter of
2007
compared with 18 cents in the second quarter of 2006.
For
the first six months of 2007, net sales increased by 14 percent to $320.7
million compared with $281.4 million in the first six months of
2006. Net income for the first six months of 2007 increased by 13
percent to $60.5 million compared with $53.6 million in the first six months
of
2006. Earnings per diluted share increased by 21 percent to 42 cents
for the first six months of 2007 compared with 35 cents for the same period
in
calendar 2006.
During
the second quarter of 2007, the Company’s quarterly financial results were
negatively impacted by approximately $1.4 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. The trial is currently taking
place in Wisconsin.
“We
are
pleased that our growth trend continued in the second quarter,” said Gentex
Chairman and Chief Executive Officer Fred Bauer. “Mirror unit shipments for the
second quarter of 2007 increased by 14 percent, but automotive revenues
increased by 16 percent due to a richer mix of European mirror products shipped
during the quarter. For the current quarter, unit shipments in North
America increased by six percent. Increased penetration at certain of
our European and Asian automotive customers was the primary factor in achieving
a 21 percent increase in our offshore unit shipments.”
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 calendar year 2007.
“For
the
third quarter of 2007, we now expect 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. For the balance of
2007, we now also expect percentage increases similar to those expected for
the
third quarter for both unit shipments and revenues.”
Jen
also
said that given the current forecast of double-digit growth for the third
quarter and remainder of the year, the Company now should have a greater ability
to leverage its fixed overhead costs and expects to achieve gross margins that
will be similar to the second quarter of 2007 gross margin. However,
he also said that it’s important to note that the third quarter is always a
difficult quarter to forecast, due to customer plant summer shutdowns and model
year product changeover. In addition, in the third quarter of 2007,
there are additional uncertainties, including vehicle production and sales
rates
at the domestic automakers in North America as well as the upcoming United
Auto
Workers contract negotiations.
Jen
said
that the Company’s current third quarter 2007 forecast is based on CSM’s
mid-July forecast for light vehicle production of 3.6 million units for North
America, 4.7 million units for Europe and 3.5 million units for Japan and
Korea. The Company's current calendar year 2007 forecast is based on
CSM’s 2007 calendar year projection of 15.2 million units for North America,
21.3 million units for Europe and 14.6 million units for Japan and
Korea.
Total
auto-dimming mirror unit shipments in the second quarter of 2007 were
approximately 3.9 million, a 14 percent increase over the same period last
year. Auto-dimming mirror unit shipments increased by 13 percent to
7.7 million for the first six months of 2007, compared with the same prior-year
period.
Auto-dimming
mirror unit shipments to customers in North America increased by six percent
to
approximately 1.7 million in the second quarter of 2007 compared with the same
quarter last year. North American light vehicle production was down
two percent in the second quarter of 2007 compared with the same period in
2006. For the first six months of 2007, auto-dimming mirror unit
shipments to customers in North America increased by five percent to
approximately 3.3 million compared with the same period last
year. North American light vehicle production declined by three
percent for the first six months of 2007 compared with the same period in
2006.
Unit
shipments to offshore customers increased by 21 percent to approximately 2.2
million in the second quarter of 2007 compared with the same period in 2006.
Light vehicle production in Europe, and Japan and Korea, increased by three
percent in the second quarter, compared with the same prior year
periods. Automotive revenues increased by 16 percent to $157.2
million in the second quarter of 2007 compared with the same period last year,
and increased by 14 percent to $308.3 million for the first six months of
2007. Fire Protection revenues decreased by one percent to $6.3
million for the second quarter of 2007 compared with the second quarter of
2006,
and increased by two percent to $12.4 million for the first six 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.
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.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(unaudited)
|
||||||||||||||||
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
|||||||||||||
|
Net
Sales
|
$ |
163,479,812
|
$ |
142,391,231
|
$ |
320,685,794
|
$ |
281,411,824
|
||||||||
|
Costs
and Expenses
|
||||||||||||||||
|
Cost
of Goods Sold
|
105,782,966
|
91,494,753
|
208,410,186
|
182,282,638
|
||||||||||||
|
Engineering,
Research & Development
|
12,446,469
|
9,962,629
|
24,722,131
|
20,121,797
|
||||||||||||
|
Selling,
General & Administrative
|
8,732,630
|
7,512,959
|
17,099,201
|
15,304,027
|
||||||||||||
|
Other
Expense (Income)
|
(8,447,283 | ) | (6,678,259 | ) | (17,981,306 | ) | (14,666,670 | ) | ||||||||
|
|
||||||||||||||||
|
Total
Costs and Expenses
|
118,514,782
|
102,292,082
|
232,250,212
|
203,041,792
|
||||||||||||
|
|
||||||||||||||||
|
Income
Before Provision for Income Taxes
|
44,965,030
|
40,099,149
|
88,435,582
|
78,370,032
|
||||||||||||
|
|
||||||||||||||||
|
Provision
for Income Taxes
|
14,008,923
|
12,863,099
|
27,981,766
|
24,762,925
|
||||||||||||
|
|
||||||||||||||||
|
Net
Income
|
$ |
30,956,107
|
$ |
27,236,050
|
$ |
60,453,816
|
$ |
53,607,107
|
||||||||
|
|
||||||||||||||||
|
|
||||||||||||||||
|
Earnings
Per Share
|
||||||||||||||||
|
Basic
|
$ |
0.22
|
$ |
0.18
|
$ |
0.42
|
$ |
0.35
|
||||||||
|
Diluted
|
$ |
0.22
|
$ |
0.18
|
$ |
0.42
|
$ |
0.35
|
||||||||
|
Weighted
Average Shares:
|
||||||||||||||||
|
Basic
|
142,543,923
|
150,592,680
|
142,356,126
|
152,402,407
|
||||||||||||
|
Diluted
|
143,477,655
|
151,044,639
|
143,047,008
|
153,176,602
|
||||||||||||
|
|
||||||||||||||||
|
Cash
Dividends Declared per Share
|
$ |
0.095
|
$ |
0.090
|
$ |
0.19
|
$ |
0.18
|
||||||||
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(unaudited)
|
||||||||
|
June
30,
|
Dec
31,
|
|||||||
|
2007
|
2006
|
|||||||
|
ASSETS
|
||||||||
|
Cash
and Short-Term Investments
|
$ |
364,684,039
|
$ |
328,227,710
|
||||
|
Other
Current Assets
|
131,040,411
|
118,650,384
|
||||||
|
Total
Current Assets
|
495,724,450
|
446,878,094
|
||||||
|
Plant
and Equipment - Net
|
191,969,821
|
184,134,373
|
||||||
|
Long-Term
Investments and Other Assets
|
164,824,106
|
154,015,933
|
||||||
|
Total
Assets
|
$ |
852,518,377
|
$ |
785,028,400
|
||||
|
LIABILITIES
AND SHAREHOLDERS' INVESTMENT
|
||||||||
|
Current
Liabilities
|
$ |
65,266,670
|
$ |
57,362,978
|
||||
|
Long-Term
Debt
|
0
|
0
|
||||||
|
Deferred
Income Taxes
|
26,079,464
|
24,971,133
|
||||||
|
Shareholders'
Investment
|
761,172,243
|
702,694,289
|
||||||
|
Total
Liabilities & Shareholders' Investment
|
$ |
852,518,377
|
$ |
785,028,400
|
||||
|
AUTO-DIMMING
MIRROR UNIT SHIPMENTS
(Thousands)
|
||||||||||||||||||||||||
|
Second
Quarter
Ended
June 30,
|
Six
Months Ended
June
30,
|
|||||||||||||||||||||||
|
2007
|
2006
|
%
Change
|
2007
|
2006
|
%
Change
|
|||||||||||||||||||
|
Domestic
Interior
|
1,249
|
1,124
|
11 | % |
2,426
|
2,229
|
9 | % | ||||||||||||||||
|
Domestic
Exterior
|
455
|
488
|
-7 | % |
918
|
966
|
-5 | % | ||||||||||||||||
|
Total
Domestic Units
|
1,704
|
1,612
|
6 | % |
3,344
|
3,195
|
5 | % | ||||||||||||||||
|
Foreign
Interior
|
1,557
|
1,293
|
20 | % |
3,060
|
2,560
|
20 | % | ||||||||||||||||
|
Foreign
Exterior
|
613
|
503
|
22 | % |
1,249
|
1,046
|
19 | % | ||||||||||||||||
|
Total
Foreign Units
|
2,170
|
1,796
|
21 | % |
4,309
|
3,605
|
20 | % | ||||||||||||||||
|
Total
Interior Mirrors
|
2,806
|
2,417
|
16 | % |
5,486
|
4,789
|
15 | % | ||||||||||||||||
|
Total
Exterior Mirrors
|
1,068
|
991
|
8 | % |
2,166
|
2,011
|
8 | % | ||||||||||||||||
|
Total
Mirror Units
|
3,874
|
3,408
|
14 | % |
7,653
|
6,800
|
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
MEASURMENT TO GAAP
|
Three
Months Ended June 30, 2007
|
Three
Months Ended June 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
|
$ |
163,479,812
|
$ |
0
|
$ |
163,479,812
|
$ |
142,391,231
|
$ |
0
|
$ |
142,391,231
|
14.8 | % | 14.8 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
Costs
and Expenses
|
||||||||||||||||||||||||||||||||
|
Cost
of Goods Sold
|
105,782,966
|
(555,221 | ) |
105,227,745
|
91,494,753
|
(575,107 | ) |
90,919,646
|
15.6 | % | 15.7 | % | ||||||||||||||||||||
|
Engineering,
Research & Development
|
12,446,469
|
(612,372 | ) |
11,834,097
|
9,962,629
|
(619,071 | ) |
9,343,558
|
24.9 | % | 26.7 | % | ||||||||||||||||||||
|
Selling,
General & Administrative
|
8,732,630
|
(590,206 | ) |
8,142,424
|
7,512,959
|
(555,617 | ) |
6,957,342
|
16.2 | % | 17.0 | % | ||||||||||||||||||||
|
Other
Expense (Income)
|
(8,447,283 | ) |
0
|
(8,447,283 | ) | (6,678,259 | ) |
0
|
(6,678,259 | ) | 26.5 | % | 26.5 | % | ||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
Total
Costs and Expenses
|
118,514,782
|
(1,757,799 | ) |
116,756,983
|
102,292,082
|
(1,749,795 | ) |
100,542,287
|
15.9 | % | 16.1 | % | ||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
Income
Before Provision for Income Taxes
|
44,965,030
|
1,757,799
|
46,722,829
|
40,099,149
|
1,749,795
|
41,848,944
|
12.1 | % | 11.6 | % | ||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
Provision
for Income Taxes
|
14,008,923
|
1,409,077
|
15,418,000
|
12,863,099
|
424,901
|
13,288,000
|
8.9 | % | 16.0 | % | ||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
Net
Income
|
$ |
30,956,107
|
$ |
348,722
|
$ |
31,304,829
|
$ |
27,236,050
|
$ |
1,324,894
|
$ |
28,560,944
|
13.7 | % | 9.6 | % | ||||||||||||||||
|
Six
Months Ended June 30, 2007
|
Six
Months Ended June 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
|
$ |
320,685,794
|
$ |
0
|
$ |
320,685,794
|
$ |
281,411,824
|
$ |
0
|
$ |
281,411,824
|
14.0 | % | 14.0 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
Costs
and Expenses
|
||||||||||||||||||||||||||||||||
|
Cost
of Goods Sold
|
208,410,186
|
(1,174,418 | ) |
207,235,768
|
182,282,638
|
(1,117,361 | ) |
181,165,277
|
14.3 | % | 14.4 | % | ||||||||||||||||||||
|
Engineering,
Research & Development
|
24,722,131
|
(1,275,561 | ) |
23,446,570
|
20,121,797
|
(1,276,781 | ) |
18,845,016
|
22.9 | % | 24.4 | % | ||||||||||||||||||||
|
Selling,
General & Administrative
|
17,099,201
|
(1,101,787 | ) |
15,997,414
|
15,304,027
|
(1,075,748 | ) |
14,228,279
|
11.7 | % | 12.4 | % | ||||||||||||||||||||
|
Other
Expense (Income)
|
(17,981,306 | ) |
0
|
(17,981,306 | ) | (14,666,670 | ) |
0
|
(14,666,670 | ) | 22.6 | % | 22.6 | % | ||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
Total
Costs and Expenses
|
232,250,212
|
(3,551,766 | ) |
228,698,446
|
203,041,792
|
(3,469,890 | ) |
199,571,902
|
14.4 | % | 14.6 | % | ||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
Income
Before Provision for Income Taxes
|
88,435,582
|
3,551,766
|
91,987,348
|
78,370,032
|
3,469,890
|
81,839,922
|
12.8 | % | 12.4 | % | ||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
Provision
for Income Taxes
|
27,981,766
|
2,386,234
|
30,368,000
|
24,762,925
|
1,222,075
|
25,985,000
|
13.0 | % | 16.9 | % | ||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
Net
Income
|
$ |
60,453,816
|
$ |
1,165,532
|
$ |
61,619,348
|
$ |
53,607,107
|
$ |
2,247,815
|
$ |
55,854,922
|
12.8 | % | 10.3 | % | ||||||||||||||||