Gentex Reports Record Revenues for the Second Quarter of 2000
18 July 2000
Gentex Reports Record Revenues for the Second Quarter of 2000
ZEELAND, Mich. - 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, 2000.
The Company reported record second quarter net income of $18.4 million, or
24 cents per share, on all-time record revenues of $76.8 million for the
second quarter ended June 30, 2000. In the comparable 1999 quarter, the
Company reported net income of $16.5 million, or 22 cents per share, on
revenues of $66.9 million.
For the first six months of 2000, net income increased to $36.9 million,
or 49 cents per share, on record revenues of $150.6 million. For the
comparable 1999 period, Gentex reported net income of $33.2 million, or 44
cents per share, on revenues of $132.5 million.
"We had another record quarter, fueled by strong shipments to our European
and Japanese customers," said Gentex Executive Vice President Kenneth La
Grand. "Unit shipments to offshore customers increased by 58 percent in the
quarter compared with the second quarter of 1999."
La Grand said that the Company's net income continues to be impacted by
increased investment in research and development and selling, general and
administrative (S,G&A) expenses.
"The increased S,G&A expenses are primarily due to building the necessary
infrastructure at our sales and engineering offices in Europe and Japan,
including our recently opened office in France. We have significant new
business opportunities in those overseas markets and are making the
investments to ensure that we can support the higher level of new business."
La Grand said that the increased investment in research and development is
expected to continue at least over the next 12-18 months.
"This is an investment in our future, and we are very excited about the
many opportunities we see over the next two to five years. We believe that
Gentex is really starting to be recognized in the industry as an agile leader
in the development of important new technologies. We have significant
opportunities in the telematics markets and are developing numerous products
for both the OnStar(R) system and other mirror-based telematics-type products.
Based on our expertise in electronics and proven performance in developing
these types of products on a fast track, Gentex has received an important,
high-volume commitment for a telematics mirror product that will be introduced
in the 2002 model year on a mid-sized family sedan."
He said that the telematics-type mirrors so far have brought the Company
incremental revenue due to the additional content in each mirror, but the
business has largely been replacing existing auto-dimming mirror business. La
Grand believes that telematics-type products will become so popular that in
the future there is significant opportunity for auto-dimming mirrors to be
offered, in conjunction with telematics, on vehicles that otherwise might not
have offered the auto-dimming feature alone.
La Grand said the Company also has another potentially high-volume
commitment for an advanced-feature auto-dimming mirror on another mid-sized
family sedan in the 2002 model year. "We're seeing years of effort come to
fruition," said La Grand. "Penetrating the mid-size vehicle market has been a
long-term goal, and it's finally beginning to happen."
The Company's research and development investment goes beyond simply
mirrors. La Grand said that the Company also has developed a new automotive
safety technology that it hopes to announce in the next few months.
"We've shown it to customers and have received a great reception. We've
developed something that is safety-related that isn't currently available on
any vehicle in the world today. Development programs are underway, and it's
possible that this new technology could be used on select vehicle programs in
the 2004 model year," concluded La Grand.
During the second quarter, the Company opened its third automotive
products manufacturing facility. The new facility, also located in Zeeland,
Michigan, will increase the Company's capacity for manufacturing auto-dimming
mirrors to approximately 14 million units when it is fully equipped. LaGrand
said that the additional overhead expenses associated with the new facility,
and the current under-utilization of that facility, negatively impacted the
Company's gross margin during the second quarter by about one percentage
point. He said he expects that impact to lessen over time as the facility
becomes more fully utilized.
Total Night Vision Safety(TM) (NVS(R)) Mirror shipments in the second
quarter of 2000 were 1.7 million, a 14 percent increase over the 1.5 million
units reported in the same 1999 quarter. Exterior mirrors accounted for
544,000 of the total mirror shipments in the second quarter of 2000, compared
with 500,000 units in the same quarter last year.
For the first six months of 2000, total unit shipments reached a record
3.4 million, a 15 percent increase over the first six months of 1999. For
that same six-month period in 2000, exterior mirror shipments were 1.1
million, a 6 percent gain over the 1.0 million exterior mirror units shipped
during the first six months of 1999.
The Company's Fire Protection Products Group reported an increase in
revenues of about 7 percent for the second quarter and five percent for the
first six months of 2000, compared with the same periods last year. La Grand
cited increased sales of certain smoke detectors and signaling products for
the increase.
The Company plans to provide an update on its new LED technology via a
news release during the afternoon of July 20, 2000. There have been many
positive developments regarding the validation process for its new LED
devices, but it is taking somewhat longer than originally expected to complete
the tooling and provide samples to customers. More details will be provided
in the release on July 20.
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 (some of which are outlined
in the Company's Form 10-K filed with the Securities and Exchange Commission
and other interim reports) and future events may affect 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.
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 OEM customers include Audi, Bentley, BMW, Daewoo,
DaimlerChrysler, Fiat, Ford, General Motors, Hyundai, Infiniti, Kia Motors,
Lexus, Mitsubishi, Nissan, Opel, Porsche, Rover, Rolls Royce and Toyota.
Gentex aftermarket/distributor customers include Gulf States Toyota
Distributors, Mito Corporation, Southeast Toyota Distributors, Subaru
Distributors NE and Toyota Motor Sales USA.
Founded in 1974, Gentex operates out of four facilities in Zeeland,
Michigan; an automotive sales office in Livonia, Michigan; automotive sales
and engineering subsidiaries in Germany, Japan, the United Kingdom and France;
and four 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 Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Net Sales $76,755,923 $66,889,149 $150,632,461 $132,507,339
Costs and Expenses
Cost of Goods
Sold 44,635,685 37,552,621 86,005,307 74,177,330
Research &
Development 4,256,066 3,543,158 8,129,999 6,834,485
Selling, General &
Administrative 4,501,495 3,634,323 8,640,635 7,048,531
Other Expense
(Income) (3,879,509) (2,491,684) (6,834,700) (4,960,423)
Total Costs
and Expenses 49,513,737 42,238,418 95,941,241 83,099,923
Income Before
Provision for
Income Taxes 27,242,186 24,650,731 54,691,220 49,407,416
Provision for
Income Taxes 8,882,000 8,114,000 17,781,000 16,161,000
Net Income $18,360,186 $16,536,731 $36,910,220 $33,246,416
Earnings Per Share
Basic $0.25 $0.23 $0.50 $0.46
Diluted $0.24 $0.22 $0.49 $0.44
Weighted Average Shares:
Basic 73,897,916 72,993,935 73,715,860 72,694,625
Diluted 75,688,794 75,301,775 75,653,305 75,018,638
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
June 30, Dec. 31,
2000 1999
ASSETS
Cash and Short-Term Investments $114,963,429 $94,733,629
Other Current Assets 52,475,425 43,481,955
Total Current Assets 167,438,854 138,215,584
Plant and Equipment - Net 79,177,128 71,338,053
Long-Term Investments and
Other Assets 144,027,921 128,119,133
Total Assets $390,643,903 $337,672,770
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities $22,761,805 $16,470,211
Long-Term Debt 0 0
Deferred Income Taxes 4,843,689 4,151,143
Shareholders' Investment 363,038,409 317,051,416
Total Liabilities &
Shareholders' Investment $390,643,903 $337,672,770