Gentex Reports Record Third Quarter Revenues and Earnings
13 October 1997
Gentex Reports Record Third Quarter Revenues and Earnings
ZEELAND, Mich., Oct. 13 -- Gentex Corporation ,
the Zeeland, Michigan-based manufacturer of automatic-dimming rearview mirrors
and commercial fire protection products, today reported record financial
results for the third quarter and nine months ended September 30, 1997.
The Company reported a 37 percent increase in net income to $8.7 million,
or 24 cents per share, on record revenues of $47.0 million for the third
quarter ended September 30, 1997. In the comparable 1996 quarter, the Company
reported net income of $6.3 million, or 18 cents per share, on revenues of
$36.8 million.
For the first nine months of 1997, net income increased to $24.1 million,
or 67 cents per share, on record revenues of $133.7 million. For the
comparable 1996 period, Gentex reported net income of $16.9 million, or
48 cents per share, on revenues of $111.4 million. Excluding all of the
patent litigation expenses, including a one-time charge in the first quarter
of 1996 to settle all of the outstanding patent litigation, net income for the
first nine months of 1996 would have been $20.6 million, or 59 cents per
share.
"We had a record third quarter and nine-month period and are very pleased
with the results," said Gentex Executive Vice President Kenneth La Grand. "A
number of variables shifted in the right direction and contributed to our
strong bottom line performance during the quarter, including a slight uptick
in the gross margin (both sequentially and year-over-year) and reduced
selling, general and administrative expense."
La Grand said that unit shipments to automotive customers increased by
32 percent, primarily due to new interior and exterior mirror programs for
domestic customers, as well as continued high-volume shipments of the new,
aspheric exterior mirror sub-assemblies for Mercedes-Benz.
The Company's gross margin improved to 35.6% in the third quarter of 1997
compared with 35.2% in the second quarter of 1997 and 35.5% in the third
quarter of 1996. The effects of temporary start-up costs and yield losses
associated with the aspheric and convex 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.
La Grand also indicated that yields on the Company's new convex and
wide-angle "aspheric", exterior mirrors continue to slowly improve and
believes that achieving the target yields is just a matter of time and
experience in making the products. In addition, the new "thin flat glass"
exterior auto-dimming mirror achieved its target yield during the quarter, and
now a new target has been established.
Automotive revenues increased by 33 percent in the third quarter and
23 percent for the first nine months of 1997 compared with the same respective
periods last year. Fire protection products sales decreased 4.4 percent in
the third quarter and increased 4.3% for the first nine months of 1997
compared to the same periods last year. The decline in fire protection
revenues in the third quarter of 1997 is primarily attributable to a later-
than-expected introduction of a new horn/strobe signal product.
NVS(R) Mirror unit shipments to customers in North America increased by
30 percent in the third quarter and by eight percent for the first nine months
of 1997 compared with the same 1996 periods. Unit shipments to customers
outside North America increased by 35 percent in the third quarter and
54 percent for the first nine months of 1997, compared with the same 1996
periods.
Total NVS Mirror shipments in the third quarter were 975,000, a
32 percent increase over the 740,000 units reported in the same 1996 quarter.
Exterior mirrors sub-assembly shipments increased by 90 percent in the third
quarter of 1997, accounting for 302,000 of the total mirror shipments in the
third quarter of 1997, compared with 159,000 units in the same quarter last
year.
For the first nine months of 1997, total unit shipments reached a record
2.7 million, a 20 percent increase over the first nine months of 1996. For
this same 1997 period, exterior mirror shipments were 731,000, a 55 percent
gain over the 471,000 exterior mirror units shipped during the first nine
months of 1996.
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) 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.
The Company 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, for its commitment to developing and maintaining a
highly skilled workforce, and for encouraging employee ownership of the
Company's stock.
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Net Sales $46,968,427 $36,797,757 $133,743,883 $111,378,551
Costs and Expenses
Cost of Goods
Sold 30,264,933 23,748,882 86,503,617 70,307,979
Research &
Development 2,406,153 1,941,823 6,890,365 5,576,755
Selling, General &
Administrative 2,587,579 2,655,266 8,057,107 9,025,277
Patent Settlement 0 0 0 4,000,000
Other Expense
(Income) (1,131,386) (929,383) (3,340,479) (2,530,563)
Total Costs and
Expenses 34,127,279 27,416,588 98,110,610 86,379,448
Income Before Provision
for Income Taxes 12,841,148 9,381,169 35,633,273 24,999,103
Provision for Income
Taxes 4,174,000 3,048,000 11,581,000 8,096,000
Net Income $8,667,148 $6,333,169 $24,052,273 $16,903,103
Earnings Per Share $0.24 $0.18 $0.67 $0.48
Weighted Daily Average of
Common Shares
Outstanding 36,083,936 35,772,083 35,887,713 35,425,510
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
Sept 30, Dec 31,
1997 1996
ASSETS
Cash and Short-Term Investments $27,588,546 $48,533,977
Other Current Assets 33,427,402 24,161,883
Total Current Assets 61,015,948 72,695,860
Plant and Equipment - Net 39,124,472 31,574,547
Long-Term Investments and Other Assets 75,634,209 36,108,013
Total Assets $175,774,629 $140,378,420
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities $13,788,579 $11,360,917
Long-Term Debt 0 0
Deferred Income Taxes 2,203,096 1,213,862
Shareholders' Investment 159,782,954 127,803,641
Total Liabilities & Shareholders'
Investment $175,774,629 $140,378,420
SOURCE Gentex Corporation