Gentex Reports Fourth Quarter Results
ZEELAND, Mich., Jan. 27, 2005 -- Gentex Corporation, the Zeeland, Michigan-based manufacturer of automatic-dimming rearview mirrors and commercial fire protection products, today reported financial results for the fourth quarter and year ended December 31, 2004.
The Company reported a two percent increase in revenues to a record of $126.2 million for the quarter ended December 31, 2004. Fourth quarter net income declined by two percent to $28.6 million compared with $29.1 million in the fourth quarter last year. Earnings per diluted share were 37 cents in both fourth quarter periods.
For the calendar year 2004, the Company reported an eight percent increase in revenues to a record $505.7 million. Net income increased by six percent to $112.7 million for calendar year 2004 compared with calendar year 2003. Earnings per diluted share were $1.44 for calendar 2004 compared with $1.37 for calendar year 2003.
"Despite another challenging quarter, there is evidence of improvement on the margin side, as we have largely resolved the start-up production issues associated with new manufacturing processes that we began in the third quarter of 2004," said Gentex Executive Vice President Garth Deur.
Light vehicle production declines in North America contributed to the continued weakness during the fourth quarter. While the Company reported a seven percent overall increase in auto-dimming mirror unit shipments, that growth came from a 17 percent unit shipment increase to offshore customers. Mirror unit shipments to customers in North America declined by two percent, as light vehicle production in that region declined by three percent.
Deur said that he believes that auto-dimming mirror unit shipments will be flat to five percent higher in the first quarter of 2005 compared with the first quarter of 2004, and that mirror unit shipments will increase approximately ten percent for calendar year 2005 compared with calendar year 2004. These estimates are based on light vehicle production forecasts in the regions to which the Company ships product, as well as the expected option rates for its mirrors on prospective vehicle models.
The Company has begun utilizing the light vehicle production forecasting services of CSM Worldwide, and CSM's current forecasts for light vehicle production for calendar 2005 are approximately 15.9 million units for North America, 20.5 million for Europe and 13.1 million for Japan and Korea. For the first quarter of 2005, CSM is forecasting light vehicle production of 4.0 million units in North America, 5.2 million units in Europe and 3.5 million units in Japan and Korea. There is no significant difference in the overall production numbers when comparing CSM's estimates to those of the Company's previous vendor for the service.
Automotive revenues increased by two percent to $121.0 million in the fourth quarter and by eight percent to $483.2 million for calendar year 2004 compared with the same periods last year. Fire Protection revenues declined nine percent to $5.2 million for the fourth quarter and by one percent to $22.5 million for calendar year 2004 compared with the same prior year periods.
Auto-dimming mirror unit shipments to customers in North America declined by two percent in the fourth quarter and increased by three percent in calendar year 2004 compared with the same 2003 periods. North American light vehicle production declined by three percent in the fourth quarter and declined by one percent for calendar year 2004 compared with the same periods in 2003.
Unit shipments to offshore customers increased by 17 percent in the fourth quarter and 26 percent for calendar year 2004, compared with the same periods last year. The higher growth in offshore unit shipments is primarily attributable to increased vehicle penetration in the European and Asia-Pacific regions. Light vehicle production in Western Europe declined five percent in the fourth quarter and by one percent for calendar year 2004 compared with the same periods in 2003.
Total auto-dimming mirror unit shipments in the fourth quarter were approximately 2.9 million, a seven percent increase over the same period last year. For calendar year 2004, total unit shipments reached a record 11.6 million, a 13 percent increase over calendar year 2003.
Founded in 1974, Gentex Corporation 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 more than 95 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 Year Ended
December 31, December 31,
2004 2003 2004 2003
Net Sales $126,235,803 $123,914,515 $505,666,335 $469,019,365
Costs and Expenses
Cost of Goods
Sold 75,531,914 70,896,590 297,920,747 272,518,466
Engineering, Research
& Development 8,085,679 7,151,010 30,833,627 26,613,770
Selling, General &
Administrative 6,670,249 6,001,114 26,845,748 23,311,853
Other Expense
(Income) -5,849,457 -3,218,392 -15,666,305 -11,588,919
Total Costs and
Expenses 84,438,385 80,830,322 339,933,817 310,855,170
Income Before Income
Taxes 41,797,418 43,084,193 165,732,518 158,164,195
Provision for Income
Taxes 13,166,000 14,003,000 53,076,000 51,403,000
Net Income $28,631,418 $29,081,193 $112,656,518 $106,761,195
Earnings Per Share
Basic $0.37 $0.38 $1.46 $1.39
Diluted $0.37 $0.37 $1.44 $1.37
Weighted Average Shares:
Basic 77,442,479 76,633,413 77,160,671 76,584,876
Diluted 78,266,140 78,154,561 78,360,616 77,684,490
CONDENSED CONSOLIDATED BALANCE SHEETS
Dec 31, Dec 31,
2004 2003
ASSETS
Cash and Short-Term Investments $494,880,260 $393,606,656
Other Current Assets 97,728,834 91,742,675
Total Current Assets 592,609,094 485,349,331
Plant and Equipment - Net 135,649,119 126,806,882
Long-Term Investments and Other Assets 128,601,215 150,373,553
Total Assets $856,859,428 $762,529,766
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities $50,856,258 $50,480,480
Long-Term Debt 0 0
Deferred Income Taxes 22,723,198 18,405,955
Shareholders' Investment 783,279,972 693,643,331
Total Liabilities & Shareholders'
Investment $856,859,428 $762,529,766
AUTO-DIMMING MIRROR UNIT SHIPMENTS
(Thousands)
Fourth Quarter Year Ended
Ended December 31, December 31,
2004 2003 % Change 2004 2003 % Change
Domestic Interior 986 1,026 -4% 3,996 3,863 3%
Domestic Exterior 443 436 2% 1,754 1,730 1%
Total Domestic
Units 1,429 1,462 -2% 5,750 5,592 3%
Foreign Interior 1,106 891 24% 4,367 3,269 34%
Foreign Exterior 366 363 1% 1,523 1,399 9%
Total Foreign Units 1,471 1,254 17% 5,890 4,668 26%
Total Interior
Mirrors 2,091 1,917 9% 8,363 7,132 17%
Total Exterior
Mirrors 809 799 1% 3,277 3,128 5%
Total Mirror Units 2,900 2,716 7% 11,640 10,260 13%
Note: Certain prior year amounts have been reclassified to conform with the current year presentation. Amounts may not total due to rounding.