Gentex Reports Record Revenues For Fourth Quarter 2005
ZEELAND, Mich., Jan. 26, 2006 -- Gentex Corporation, the Zeeland, Michigan-based manufacturer of automatic-dimming rearview mirrors and commercial fire protection products, today reported revenues and net income for the fourth quarter and year ended December 31, 2005.
The Company reported record revenues for the fourth quarter of 2005 of $138.3 million, a 10 percent increase over revenues of $126.2 million reported in the fourth quarter last year. Fourth quarter net income of $29.6 million increased by three percent compared with net income of $28.6 million in the comparable 2004 quarter. Earnings per diluted share were 19 cents in the fourth quarter of 2005 compared with 18 cents in the fourth quarter of 2004. All per share data reflects the two-for-one stock split effected in the form of a 100 percent common stock dividend that became effective on May 9, 2005.
For calendar year 2005, the Company posted net income of $109.5 million on revenues of $536.5 million, compared with net income of $112.7 million on revenues of $505.7 million for calendar year 2004. Earnings per diluted share were 70 cents for calendar year 2005 compared with 72 cents for calendar 2004.
"2005 will go down as a year of significant accomplishments and challenges for Gentex," said Gentex Executive Vice President Garth Deur. "Not only did we continue to grow our business despite a challenging automotive environment, but we also introduced a number of new product and manufacturing process technologies."
Mirror unit shipments in North America in the fourth quarter increased by seven percent while light vehicle production in that market increased by four percent. The increase in unit shipments in North America was primarily due to higher shipments to European and Asian transplant automakers, partially offset by lower-than-forecasted production of SUVs at certain North American automakers. Unit shipments to offshore automakers increased by 17 percent during the quarter, primarily due to increased shipments to European automakers. Light vehicle production declined by one percent in Europe and increased by six percent in the Japanese and Korean markets in the fourth quarter of 2005 compared with the same quarter last year.
The Company reported a lower-than-expected sequential gross margin in the fourth quarter, which was primarily attributable to lower than forecasted sales, a full quarter's worth of the annual customer price reductions that became effective in the third quarter, and not achieving improvements in manufacturing processes that would have offset these factors.
"The start-up challenges on certain production lines are taking longer to work through than the Company previously anticipated and these issues are making it more difficult for the Company to offset ongoing customer price reductions," said Deur. "As we indicated last quarter, our people are working relentlessly to make the required improvements, and we may have been a bit too optimistic about how quickly some of the issues could be addressed."
Total auto-dimming mirror unit shipments for the fourth quarter of 2005 increased by 12 percent to 3,247,000 units, compared with 2,900,000 units for the same quarter in 2004. Total automotive revenues in the fourth quarter of 2005 increased by ten percent to $133.0 million, compared with the same quarter last year.
Total auto-dimming mirror unit shipments for calendar year 2005 increased by eight percent to 12,570,000 units, compared with 11,640,000 units for calendar year 2004. Total automotive revenues increased by six percent for calendar year 2005 to $512.8 million, compared with the same period in 2004.
For calendar year 2005, auto-dimming mirror unit shipments in North America increased by four percent compared with calendar year 2004, while light vehicle production was flat for the year. Mirror unit shipments to offshore customers increased by 12 percent in calendar year 2005, compared with calendar year 2004. During calendar year 2005, light vehicle production was flat in Europe and increased by five percent in the Japanese and Korean markets, compared with calendar year 2004.
For the first quarter of 2006, and for calendar year 2006, the Company estimates that the growth in mirror unit shipments will be approximately ten percent higher than comparable periods in 2005. This estimate is based on CSM's light vehicle production forecast for calendar year 2006 of 15.8 million vehicle units in North America, 19.9 million units in Europe and 13.7 million units in Japan and Korea.
Revenues in the Company's Fire Protection Products Group increased by three percent in the fourth quarter of 2005 to $5.3 million, compared with the fourth quarter last year. For calendar year 2005, fire protection revenues increased by five percent to $23.7 million.
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 approximately 95 percent of the Company's revenues are derived from the sales of auto-dimming mirrors to nearly every major automaker in the world.
AUTO-DIMMING MIRROR UNIT SHIPMENTS
(Thousands)
Fourth Quarter Year Ended
Ended December 31, December 31,
2005 2004 % Change 2005 2004 % Change
Domestic Interior 1,087 986 10% 4,198 3,996 5%
Domestic Exterior 446 443 1% 1,797 1,754 3%
Total Domestic Units 1,533 1,429 7% 5,995 5,750 4%
Foreign Interior 1,199 1,106 8% 4,726 4,367 8%
Foreign Exterior 515 366 41% 1,849 1,523 21%
Total Foreign Units 1,713 1,471 17% 6,575 5,890 12%
Total Interior
Mirrors 2,286 2,091 9% 8,924 8,363 7%
Total Exterior
Mirrors 961 809 19% 3,646 3,277 11%
Total Mirror Units 3,247 2,900 12% 12,570 11,640 8%
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
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
December 31,
2005 2004
Net Sales $138,342,912 $126,235,803
Costs and Expenses
Cost of Goods Sold 88,517,406 75,531,914
Engineering, Research &
Development 9,143,355 8,085,679
Selling, General & Administrative 6,673,179 6,670,249
Other Expense (Income) (9,227,700) (5,849,457)
Total Costs and Expenses 95,106,240 84,438,385
Income Before Income Taxes 43,236,672 41,797,418
Provision for Income Taxes 13,619,000 13,166,000
Net Income $29,617,672 $28,631,418
Earnings Per Share
Basic $0.19 $0.18
Diluted $0.19 $0.18
Weighted Average Shares:
Basic 155,067,076 154,884,958
Diluted 156,681,350 156,532,280
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Year Ended
December 31,
2005 2004
Net Sales $536,483,974 $505,666,335
Costs and Expenses
Cost of Goods Sold 337,843,632 297,920,747
Engineering, Research &
Development 35,059,401 30,833,627
Selling, General & Administrative 27,286,404 26,845,748
Other Expense (Income) (23,599,974) (15,666,305)
Total Costs and Expenses 376,589,463 339,933,817
Income Before Income Taxes 159,894,511 165,732,518
Provision for Income Taxes 50,367,000 53,076,000
Net Income $109,527,511 $112,656,518
Earnings Per Share
Basic $0.70 $0.73
Diluted $0.70 $0.72
Weighted Average Shares:
Basic 155,438,834 154,321,342
Diluted 157,030,624 156,721,232
CONDENSED CONSOLIDATED BALANCE SHEETS
Dec 31, Dec 31,
2005 2004
ASSETS
Cash and Short-Term Investments $507,013,621 $494,880,260
Other Current Assets 111,973,906 97,728,834
Total Current Assets 618,987,527 592,609,094
Plant and Equipment - Net 164,030,341 135,649,119
Long-Term Investments and Other Assets 139,627,934 128,601,215
Total Assets $922,645,802 $856,859,428
LIABILITIES AND SHAREHOLDERS'
INVESTMENT
Current Liabilities $58,088,259 $50,856,258
Long-Term Debt 0 0
Deferred Income Taxes 22,962,168 22,723,198
Shareholders' Investment 841,595,375 783,279,972
Total Liabilities & Shareholders'
Investment $922,645,802 $856,859,428
Note: All earnings per share amounts and weighted daily average shares outstanding reflect the 2-for-1 stock split effected in the form of a 100% common stock dividend effective on May 9, 2005.