Gentex has posted net income for the third quarter of 2014 up 30% to US$72m, compared with net income of US$56m in the third quarter of 2013.

The company unveiled net sales of US$351m, up 22% compared to net sales of US$289m during the same period.

Gross profit margin increased on a quarter-over-quarter basis to 39.5% in the third quarter of 2014 compared with a gross profit margin of 36.7% in the third quarter of 2013. 

The better gross profit margin is due to the impact of the HomeLink acquisition, improvements in product mix and purchasing cost reductions, which were partially offset by annual customer price reductions.

"We continue to demonstrate double digit unit and revenue growth thanks to the performance of our SmartBeam and driver assist camera systems, the addition of the HomeLink acquisition, and the continued penetration of our inside and outside electrochromic mirrors," said Gentex chairman and CEO, Fred Bauer.

"In this relatively flat, worldwide, light-vehicle production environment, [this] represents solid performance and the goal of our many growth initiatives."

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Gentex Corporation (NASDAQ: GNTX), the Zeeland, Michigan-based manufacturer of automotive automatic-dimming rearview mirrors, automotive electronics, dimmable aircraft windows, and fire protection products, today reported financial results for the third quarter ended September 30, 2014.

For the third quarter of 2014, the Company reported net sales of $350.9 million, which were up 22% compared to net sales of $288.6 million for the third quarter of 2013.

The gross profit margin increased on a quarter-over-quarter basis to 39.5% in the third quarter of 2014 compared with a gross profit margin of 36.7% in the third quarter of 2013. The improvement in the gross profit margin is due to the impact of the HomeLink® acquisition, improvements in product mix, and purchasing cost reductions, which were partially offset by annual customer price reductions.

Net income for the third quarter of 2014 increased 30% to $72.3 million, compared with net income of $55.5 million in the third quarter of 2013.

Earnings per diluted share in the third quarter of 2014 increased 29% or $0.11 to $0.49, compared with earnings per diluted share of $0.38 in the third quarter of 2013. During the third quarter of 2014, the Company benefited from incremental research and development tax credits for calendar year 2013 in the amount of $1.8 million. As a result, the effective tax rate in the third quarter of 2014 decreased to 30.4% (from 31.5% in the third quarter of 2013) and the incremental impact to earnings per diluted share for the quarter was approximately $0.01.

Automotive electrochromic mirror unit shipments in the third quarter of 2014 increased 10% compared with the third quarter of 2013, primarily due to increased unit shipments of both the Company's interior and exterior auto-dimming rearview mirrors in all of the Company's primary markets. As a result, automotive net sales in the third quarter of 2014 were $341.8 million, up 22% compared with automotive net sales of $280.9 million in the third quarter of 2013.

Other net sales, which include dimmable aircraft windows and fire protection products, were $9.1 million in the third quarter of 2014, up 19% compared with $7.7 million in the third quarter of 2013.

"We continue to demonstrate double digit unit and revenue growth thanks to the performance of our SmartBeam and driver assist camera systems, the addition of the HomeLink acquisition, and the continued penetration of our inside and outside electrochromic mirrors," said Gentex Chairman of the Board and Chief Executive Officer, Fred Bauer, "which, in this relatively flat, worldwide, light-vehicle production environment, represents solid performance and the goal of our many growth initiatives."

Other Items
In May 2014 the Company increased its quarterly dividend based on the significant improvements in the Company's operating results. The goal of the Company is to return value to the shareholders and historically the dividend has been a significant part of this value and has moved in line with the Company's increase in earnings. The major focus of shareholder value is based on growth in our core business including last year's acquisition of HomeLink and funding R&D in new technologies that will help drive growth over the next several years. Additionally, the Company repurchased 351,565 shares of its common stock during the third quarter of 2014, totaling approximately $10,000,000 at an average price of $28.44 per share. The Company may, in the future, repurchase additional shares of its common stock, depending on macroeconomic issues, market trends and other factors that the Company deems appropriate.

Future Estimates
The Company's forecasts for light vehicle production for each of the following periods in 2014 compared with the same periods in 2013 are based on the IHS Automotive October, 2014, forecast for light vehicle production in North America, Europe, Japan and Korea.

   
Light Vehicle Production (per IHS Automotive October light vehicle production forecast)  
(in Millions)  
   
Region   4th Quarter 
2014
  4th Quarter 
2013
  %
Change
    Calendar
Year
2014
  Calendar
Year
2013
  %
Change
 
North America   4.19   4.02   4 %   17.0   16.2   5 %
Europe   4.91   4.96   (1 )%   20.0   19.5   3 %
Japan and Korea   3.32   3.62   (8 )%   13.6   13.5   1 %
Total Light Vehicle Production   12.42   12.60   (1 )%   50.6   49.2   3 %
                             

Despite the October 2014 IHS production forecast, which is estimating a 1% decline in quarter-over quarter light vehicle production, the Company estimates that net sales in the fourth quarter of 2014 will increase approximately 10 - 15% compared to the fourth quarter of 2013, and estimates the gross profit margin in the fourth quarter of 2014 will be approximately 39.5 - 40%.

The Company also estimates that E, R&D and S, G&A expense for the fourth quarter of 2014 will increase 5 - 10% compared with the fourth quarter of 2013. 

Original source: http://ir.gentex.com/press-releases/gentex-reports-third-quarter-2014-financial-result-nasdaq-gntx-1153121