Gentex Reports Revenues and Net Income for Q2, 1997
14 July 1997
Gentex Reports Record Revenues and Net Income for the Second Quarter of 1997
For the 1998 Model Year, Gentex was Awarded the Electrochromic Mirror Business
On Over 90% of the New Auto-Dimming Mirror Volume
ZEELAND, Mich., July 14 -- 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 months ended June 30, 1997.
The Company reported record net income of $8.0 million, or 22 cents per
share, on record revenues of $44.9 million for the second quarter ended June
30, 1997. Excluding the effect of the strikes at Chrysler and General Motors,
net income for the second quarter would have been approximately $8.5 million,
or 24 cents per share. In the comparable 1996 quarter, the Company reported
net income of $7.2 million, or 20 cents per share, on revenues of $38.7
million.
For the first six months of 1997, net income increased to $15.4 million or
43 cents per share on record revenues of $86.8 million. Excluding the effects
of the GM and Chrysler strikes in the second quarter, net income would have
been approximately $15.9 million, or 44 cents per share. For the comparable
1996 period, Gentex reported net income of $10.6 million, or 30 cents per
share, on revenues of $74.6 million.
"We had a very good second quarter, despite the strikes, and we are
pleased with the results," said Gentex Executive Vice President Kenneth La
Grand. "Unit shipments to offshore customers increased by 82 percent,
primarily due to new interior mirror programs and the new, aspheric exterior
mirror sub-assemblies for Mercedes-Benz."
He said that revenues in both the Automotive and Fire Protection Groups
were again strong during the second quarter. The Company's gross margin
stayed consistent with the 35.2% reported in the first quarter of 1997.
Without the effects of the Chrysler and GM strikes, the gross margin would
have experienced a slight improvement. However, the effects of temporary
start-up costs and yield losses associated with the aspheric and "thin glass"
exterior mirror programs, temporary under-utilization of the Company's new
automotive mirror manufacturing facility, and price reductions not fully
offset by productivity improvements continue to affect gross margins.
"We did see some yield improvement on the aspheric mirror lines during the
second quarter," said La Grand, "but we still have not achieved our target
yield on those products. We hope to be significantly closer to the target
yield by the end of the third quarter.
"The recent start-up of the 'thin-glass' exterior mirror program has been
somewhat better than expected, and we are optimistic that we can achieve the
target yield on the thin-glass products by the end of the third quarter."
La Grand said that the Company continues to achieve one of its long-term
goals: maintaining a consistently high share of the electrochromic mirror
market.
"For the 1998 model year, Gentex was awarded the electrochromic mirror
business on over 90 percent of the new auto-dimming mirror volume," said La
Grand. "To date, we also have been awarded a similar percentage of the volume
for the 1999 model year."
Total Night Vision Safety(TM) (NVS(R)) mirror shipments in the second
quarter were 897,000, an 11 percent increase over the 811,000 units reported
in the same 1996 quarter. Exterior mirrors accounted for 222,000 of the total
mirror shipments in the second quarter of 1997, compared with 176,000 units in
the same quarter last year.
For the first six months of 1997, total unit shipments reached a record
1.8 million, a 15 percent increase over the first six months of 1996. For
that same six-month period in 1997, exterior mirror shipments were 429,000, a
38 percent gain over the 312,000 exterior mirror units shipped during the
first six months of 1996.
The Company's Fire Protection Products Group reported an increase in
revenues of about 7 percent and 9 percent for the second quarter and first six
months of 1997, respectively. La Grand cited increased sales of its AC/DC
smoke detector and remote signaling devices as the leading contributors to
that revenue increase.
Gentex Corporation is an international company that
provides high-quality products to the worldwide automotive industry and North
American fire protection market. The Company develops, manufactures and
markets proprietary electro-optic products, including interior and exterior
electrochromic, automatic-dimming Night Vision Safety(TM) (NVS(R)) automotive
rearview mirrors that dim in proportion to the amount of headlight glare from
trailing vehicle headlamps, and an extensive line of fire protection products
for commercial applications. The Company's Automotive Products Group is ISO
9001 registered and is in compliance with QS-9000, quality designations that
soon will be required to supply production or service parts to automakers.
Gentex was the first company in the world to successfully develop and
produce a commercial electrochromic mirror for the motor vehicle industry, and
is the leading supplier of these mirrors to the worldwide automotive industry.
Gentex customers include Audi, Bentley, BMW, Chrysler, Daewoo, Fiat, Ford,
General Motors, Gulf States Toyota, Honda, Hyundai, Infiniti, Kia Motors,
Lexus, Mercedes-Benz, Mitsubishi, Nissan, Opel, Porsche, Rolls Royce and
Southeast Toyota Distributors.
Founded in 1974, Gentex operates out of three facilities in Zeeland,
Michigan; an automotive sales and marketing office in Livonia, Michigan; an
automotive sales and engineering subsidiary in Germany; and five regional U.S.
sales offices for the Fire Protection Products Group. The Company is
recognized for its quality products, its application of world class
manufacturing principles and for its commitment to developing and maintaining
a highly skilled workforce.
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Net Sales $44,873,334 $38,672,711 $86,775,456 $74,580,794
Costs and Expenses
Cost of Goods Sold 29,068,728 24,181,145 56,238,684 46,559,097
Research & Development2,406,945 1,907,698 4,484,212 3,634,932
Selling, General
& Administrative 2,779,137 2,728,007 5,469,528 6,370,011
Patent Settlement -- -- -- 4,000,000
Other Expense
(income) (1,234,322) (768,423) (2,209,093) (1,601,179)
Total Costs
and Expenses 33,020,488 28,048,427 63,983,331 58,962,861
Income Before Provision
for Income Taxes 11,852,846 10,624,284 22,792,125 15,617,933
Provision for
Income Taxes 3,852,000 3,400,000 7,407,000 5,048,000
Net income $8,000,846 $7,224,284 $15,385,125 $10,569,933
Earnings Per Share $0.22 $0.20 $0.43 $0.30
Weighted Daily Average of
Common Shares
Outstanding 35,812,342 35,606,575 35,785,633 35,214,307
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
June 30, Dec 31,
1997 1996
ASSETS
Cash and Short-Term
Investments $27,132,018 $48,533,977
Other Current Assets 32,253,667 24,161,883
Total Current Assets 59,385,685 72,695,860
Plant and Equipment - Net 37,220,133 31,574,574
Long-Term Investments
and Other Assets 69,100,718 36,108,013
Total Assets $165,706,536 $140,378,420
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities $16,667,335 $11,360,917
Long-Term Debt -- --
Deferred Income Taxes 1,695,540 1,213,862
Shareholders' Investment 147,343,661 127,803,641
Total Liabilities &
Shareholders' Investment$165,706,536 $140,378,420
SOURCE Gentex Corporation