Gentex Reports Record Q3 Revenues and Earnings
14 October 1998
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, 1998.
The Company reported a 14 percent increase in net income to $9.9 million,
or 13 cents per share, on record revenues of $49.6 million for the third
quarter ended September 30, 1998. In the comparable 1997 quarter, the Company
reported net income of $8.7 million, or 12 cents per share, on revenues of
$47.0 million. The impact of the United Auto Workers (UAW) strikes against
General Motors that were ongoing during the early third quarter of 1998
resulted in an approximate three cent reduction in per share earnings for the
third quarter.
For the first nine months of 1998, net income increased 38 percent to
$33.2 million, or 45 cents per share, on record revenues of $157.9 million.
For the comparable 1997 period, Gentex reported net income of $24.1 million,
or 34 cents per share, on revenues of $133.7 million. The impact of the UAW
strikes against General Motors that took place late in the second quarter and
early in the third quarter of 1998 resulted in an approximately five cent
reduction in per share earnings for the first nine months of 1998.
"Despite the impact of the strikes against General Motors, we had record
third quarter and nine-month periods and are very pleased with the results,"
said Gentex Executive Vice President Kenneth La Grand. "In addition, our
gross profit margin was relatively stable for the third quarter of 1998,
despite contractual annual price reductions on August 1 that affected a
significant portion of our automotive mirror business. The stable gross
margin is primarily attributable to higher yields on some of our mirror
products, primarily due to our new in-house coater and processes."
Automotive revenues increased by five percent in the third quarter and 20
percent for the first nine months of 1998 compared with the same respective
periods last year. Fire Protection revenues increased 10 percent in the third
quarter and one percent for the first nine months of 1998 compared with the
same 1997 periods. The increase in fire protection revenues in the third
quarter of 1998 was primarily due to higher sales of certain smoke detectors
and generally improved industry sales.
Night Vision Safety(TM) (NVS(R)) Mirror unit shipments to customers in
North America increased by seven percent in the third quarter and by 32
percent for the first nine months of 1998 compared with the same 1997 periods.
NVS Mirror unit shipments for the third quarter and nine month periods of 1998
were negatively impacted by the UAW strikes against General Motors. North
American light vehicle production decreased by approximately five percent in
the third quarter of 1998 compared with the same 1997 quarter, and was nearly
flat for the nine months ended September 30, 1998, compared with the same 1997
period.
Unit shipments to offshore customers increased by 16 percent in the third
quarter and 15 percent for the first nine months of 1998, compared with the
same 1997 periods.
Total Night Vision Safety(TM) (NVS(R)) Mirror shipments in the third
quarter were 1.1 million, a 10 percent increase over the 974,000 units
reported in the same 1997 quarter. Exterior mirrors sub-assembly shipments
increased by 16 percent in the third quarter of 1998, accounting for 351,000
of the total mirror shipments in the third quarter of 1998, compared with
302,000 units in the same quarter last year.
For the first nine months of 1998, total unit shipments reached a record
3.5 million, a 26 percent increase over the first nine months of 1997. For
this same 1998 period, exterior mirror shipments were 1.1 million, a 49
percent gain over the 731,000 exterior mirror units shipped during the first
nine months of 1997.
Certain matters discussed in this news release are "forward-looking
statements" which involve certain risks and uncertainties, and are subject to
change based on various market, industry and other important factors. The
Company cautions investors that numerous factors (as outlined in the Company's
Form 10-K filed with the Securities and Exchange Commission and other interim
reports) in some cases may affect in the future the Company's actual results,
and may cause those results to differ materially from those expressed in this
news release.
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. Revenues from the sale of automatic-dimming mirrors represent
about 90 percent of total Company revenues.
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, Southeast Toyota Distributors and Toyota.
Founded in 1974, Gentex operates out of three facilities in Zeeland,
Michigan; an automotive sales office in Livonia, Michigan; automotive sales
and engineering subsidiaries in Germany and Japan; 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,
1998 1997 1998 1997
Net Sales $49,596,221 $46,968,427 $157,947,372 $133,743,883
Costs and Expenses
Cost of Goods Sold 30,412,536 30,264,933 96,322,113 86,503,617
Research &
Development 2,861,513 2,406,153 8,152,256 6,890,365
Selling, General &
Administrative 3,044,766 2,587,579 9,135,974 8,057,107
Other Expense
(Income) (1,407,566) (1,131,386) (4,930,743) (3,340,479)
Total Costs and
Expenses 34,911,249 34,127,279 108,679,600 98,110,610
Income Before Provision
for Income Taxes 14,684,972 12,841,148 49,267,772 35,633,273
Provision for
Income Taxes 4,784,000 4,174,000 16,101,000 11,581,000
Net Income $9,900,972 $8,667,148 $33,166,772 $24,052,273
Earnings Per Share
Basic $0.14 $0.12 $0.46 $0.34
Diluted $0.13 $0.12 $0.45 $0.34
Weighted Average Shares:
Basic 71,823,718 70,263,914 71,487,969 70,060,082
Diluted 73,422,512 72,167,872 73,512,644 71,775,426
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
Sept. 30, Dec. 31,
1998 1997
ASSETS
Cash and Short-Term Investments $61,183,422 $41,131,383
Other Current Assets 40,017,500 34,788,053
Total Current Assets 101,200,922 75,919,436
Plant and Equipment - Net 57,497,995 42,238,885
Long-Term Investments and
Other Assets 74,463,786 71,624,526
Total Assets $233,162,703 $189,782,847
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities $16,732,950 $14,591,224
Long-Term Debt 0 0
Deferred Income Taxes 1,922,410 1,986,446
Shareholders' Investment 214,507,343 173,205,177
Total Liabilities &
Shareholders' Investment $233,162,703 $189,782,847
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 issued to shareholders on June 22, 1998.