ZEELAND, MI--(Marketwire - April 22, 2008) - Gentex Corporation ("the Company") (
NASDAQ:
GNTX), the Zeeland, Michigan-based manufacturer of automatic-dimming
rearview mirrors and commercial fire protection products, today reported
record revenues and first quarter net income for the period ended March 31,
2008.
The Company's net sales increased by 13 percent from $157.2 million in the
first quarter of 2007 to a record $178.0 million in the first quarter of
2008. The Company's operating income increased by 18 percent in the first
quarter of 2008 compared with the first quarter of 2007. Record first
quarter of 2008 net income increased by only three percent to $30.4 million
compared with $29.5 million in the first quarter of 2007, primarily due to
lower other income. Earnings per diluted share were flat at 21 cents in
the first quarter of 2008 compared with the same prior-year period.
"We are pleased to report a solid quarter in a very tough operating
environment," said Gentex Chairman of the Board and Chief Executive Officer
Fred Bauer. "The Company's geographic diversification and increased sales
of new value-added features such as the Rear Camera Display Mirror and
SmartBeam® high beam headlamp assist product continue to help the Company
offset the reduced vehicle production levels at the traditional 'Big Three'
automakers in North America due to market share challenges and now the UAW
strikes."
Gentex Senior Vice President Enoch Jen said that the Company's gross margin
increased sequentially from 34.2% in the fourth quarter of 2007 to 35.2% in
the first quarter of 2008, primarily due to purchasing cost reductions,
product mix and foreign exchange rates, partially offset by annual customer
price reductions.
Automatic-dimming mirror unit shipments for the first quarter of 2008
increased by ten percent compared with the first quarter of 2007, but
automotive revenues increased by 14 percent due to a richer mix of mirror
products shipped during the first quarter of 2008. For the first quarter
of 2008, unit shipments in North America increased by two percent compared
with the first quarter of 2007, primarily due to increased interior
automatic-dimming mirror unit shipments for certain Asian transplant
automakers. Increased penetration of interior and exterior auto-dimming
mirrors at certain of our European and Asian automotive customers was the
primary factor in achieving a 17 percent increase in the Company's offshore
unit shipments in the first quarter of 2008 compared with the same period
last year.
Following is some background and updated information on the Company's Rear
Camera Display Mirror product.
Rear Camera Display (RCD) Mirror
The Company's RCD Mirror consists of a proprietary liquid crystal display
(LCD) device that shows a panoramic video view of objects behind the
vehicle in real time. When the vehicle is put in "reverse," the display
illuminates and automatically appears through the rearview mirror's
reflective surface to give a high resolution, bright-colored image. The
image is generated by a camera or cameras placed in a protected area at the
rear of the vehicle. When the vehicle is put in "drive," the display in
the mirror automatically disappears.
This product won a 2008 Automotive News PACE (Premier Automotive Suppliers'
Contribution to Excellence) Award at a ceremony in Detroit on April 14.
The PACE Award recognizes automotive suppliers for their contribution to
innovation, technological advancement and business performance, and are
considered the industry's benchmark for innovation. Gentex is a six-time
winner of the PACE Award, and has also been a finalist three additional
times in the award's 14-year history.
The RCD Mirror is currently offered as original equipment as a stand-alone
option on four Ford and Lincoln programs, as well as on the Kia Mohave and
Hyundai Grandeur for the domestic Korean market. The RCD Mirror is also
offered on a number of port- or dealer-installed programs. The Company now
estimates that it will ship between 350,000 and 400,000 RCD Mirrors in
calendar year 2008, a 100,000-unit increase over the estimate the Company
provided in its news release for the fourth quarter 2007 results, primarily
due to increased estimated take rates on vehicle models offering the RCD
Mirrors. Additionally, based on the Company's current forecast, Gentex
estimates that RCD Mirror shipments could still more than double in
calendar year 2009 compared with the calendar year 2008 recent estimates.
The automakers currently offering Gentex's RCD mirror are doing so absent
any legislation with respect to expanding the field of view on light
vehicles so that drivers can detect objects directly behind their vehicles,
and made the decision to offer the product before any legislation was
enacted. On February 28, 2008, President Bush signed into law the "Kids
Transportation Safety Act of 2007." The Bill orders the Secretary of
Transportation at the National Highway Traffic Safety Administration
(NHTSA) to initiate rulemaking to revise the federal standard to expand the
field of view so that drivers can detect objects directly behind vehicles.
The requirements may be met by the use of additional mirrors, sensors,
cameras or other technology to increase the driver's field of view (which
is the decision that NHTSA needs to make). NHTSA has done some independent
studies already and appears to be leaning toward camera-based systems based
on those studies.
With respect to timing, Mr. Jen said that the Company's understanding is
that NHTSA has 12 months from February 28, 2008, to initiate rulemaking, 36
months to publish final standards, and then automakers will need to become
fully compliant with the final standards within 48 months thereafter.
Given this timeline, automakers will have approximately seven years to
comply with the rules that NHTSA initiates. However, Jen said that the
Company currently anticipates and hopes for early adoption by many
automakers, as Ford has already taken the lead in North America, and
Hyundai/Kia is moving forward in the domestic Korean market.
Future Estimates
Gentex Senior Vice President Enoch Jen provided certain guidance for the
second quarter and calendar year 2008.
"For the second quarter and all of calendar year 2008, we anticipate that
our top line growth will increase by approximately ten percent over the
respective same prior-year periods, based on the current forecast for
product mix, light vehicle production levels and take rates," said Jen.
"These are our best estimates at this time given what is known, but there
remains considerable uncertainty with not only the domestic economy but
also with the depth and duration of the strikes by the United Auto Workers
union."
He also said that based on the current forecast, the gross margin in the
second quarter and for calendar year 2008 is expected to be in the range of
the margin of 35.2 percent that was reported for the first quarter of 2008.
Gross margin will be dependent upon top line growth (which can be impacted
by vehicle production including the affect of UAW strikes among other
factors) and purchasing cost reductions.
Jen said that the Company's current 2008 forecast is based on CSM's
preliminary mid-April forecast for light vehicle production in the second
quarter of 3.9 million units for North America, 5.9 million units for
Europe and 3.6 million units for Japan and Korea. Based on that same
forecast, CSM is expecting light vehicle production of 14.3 million units
for North America, 22.4 million units for Europe and 15.0 million units for
Japan and Korea for calendar year 2008.
Unit Shipments and Revenues
Total auto-dimming mirror unit shipments in the first quarter of 2008 were
approximately 4.2 million, a ten percent increase over the same period last
year.
Auto-dimming mirror unit shipments to customers in North America increased
by two percent to approximately 1.7 million in the first quarter of 2008
compared with the same quarter last year. North American light vehicle
production decreased by eight percent in the first quarter of 2008 compared
with the same period in 2007.
Unit shipments to offshore customers increased by 17 percent to
approximately 2.5 million in the first quarter of 2008 compared with the
same period in 2007. Light vehicle production in Europe increased by
one-half percent, and production increased by six percent in Japan and
Korea, in the first quarter of 2008, respectively, compared with the same
prior-year periods.
Automotive revenues increased by 14 percent to $172.1 million in the first
quarter of 2008 compared with the same period last year. Fire Protection
revenues decreased by three percent to $5.9 million for the first quarter
of 2008 compared with the first quarter of 2007.
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, 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, 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-Nav® 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.
First 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 (
NASDAQ:
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
March 31,
2008 2007
------------- -------------
Net Sales $ 177,970,279 $ 157,205,982
Costs and Expenses
Cost of Goods Sold 115,323,288 102,627,220
Engineering, Research & Development 12,736,287 12,275,662
Selling, General & Administrative 9,923,536 8,366,571
Other Expense (Income) (5,475,469) (9,534,023)
------------- -------------
Total Costs and Expenses 132,507,642 113,735,430
------------- -------------
Income Before Provision
for Income Taxes 45,462,637 43,470,552
Provision for Income Taxes 15,014,502 13,972,843
------------- -------------
Net Income $ 30,448,135 $ 29,497,709
============= =============
Earnings Per Share
Basic $ 0.21 $ 0.21
Diluted $ 0.21 $ 0.21
Weighted Average Shares:
Basic 143,286,480 142,166,241
Diluted 143,566,009 142,723,617
Cash Dividends Declared per Share $ 0.105 $ 0.095
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
March 31, December 31,
2008 2007
------------- -------------
ASSETS
Cash and Short-Term Investments $ 400,379,949 $ 397,988,781
Other Current Assets 135,781,090 130,505,167
------------- -------------
Total Current Assets 536,161,039 528,493,948
Plant and Equipment - Net 211,058,529 205,609,671
Long-Term Investments and Other Assets 140,151,654 163,919,061
------------- -------------
Total Assets $ 887,371,222 $ 898,022,680
============= =============
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities $ 87,552,626 $ 68,362,705
Long-Term Debt 0 0
Deferred Income Taxes 17,026,174 22,847,779
Shareholders' Investment 782,792,422 806,812,196
------------- -------------
Total Liabilities & Shareholders' Investment $ 887,371,222 $ 898,022,680
------------- -------------
AUTO-DIMMING MIRROR UNIT SHIPMENTS
(Thousands)
First Quarter Ended
March 31,
--------------------- ---------
2008 2007 % Change
---------- ---------- ---------
Domestic Interior 1,217 1,175 4%
---------- ---------- ---------
Domestic Exterior 444 456 -3%
---------- ---------- ---------
Total Domestic Units 1,661 1,631 2%
---------- ---------- ---------
---------- ---------- ---------
Foreign Interior 1,765 1,505 17%
---------- ---------- ---------
Foreign Exterior 741 642 16%
---------- ---------- ---------
Total Foreign Units 2,506 2,147 17%
---------- ---------- ---------
---------- ---------- ---------
Total Interior Mirrors 2,982 2,680 11%
---------- ---------- ---------
Total Exterior Mirrors 1,185 1,098 8%
---------- ---------- ---------
Total Mirror Units 4,167 3,778 10%
---------- ---------- ---------
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.
Contact Information: CONTACT:
Connie Hamblin
(616) 772-1800