Gentex Corporation (Nasdaq: GNTX – news), 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, 2000.
The Company reported a 10 percent increase in net income to $15.9 million, or 21 cents per share, on record third quarter revenues of $71.9 million for the period ended September 30, 2000. In the comparable 1999 quarter, the Company reported net income of $14.4 million, or 19 cents per share, on revenues of $64.1 million.
For the first nine months of 2000, net income increased 11 percent to $52.8 million, or 70 cents per share, on record revenues of $222.6 million. For the comparable 1999 period, Gentex reported net income of $47.7 million, or 64 cents per share, on revenues of $196.7 million.
“While we did report a record third quarter, there were several factors that worked against us,” said Gentex Executive Vice President Kenneth La Grand. “Our auto-dimming mirror unit shipments were slightly lower than originally expected, as shipments waned during the second half of September. Our selling expenses increased during the quarter, primarily due to building the required infrastructure at the sales and engineering offices in France, the United Kingdom, Japan and Germany. In addition, research and development expenses continued to increase, primarily due to additional staffing required for new product development.
“Never before have we been more encouraged by the prospects for this company,” continued La Grand. “The additional selling and research and development expenses are an investment in the future, and we view them as being very necessary. We are building up our offices overseas not only in anticipation of new business, but to support the new business that we have already been awarded in the 2002 model year and beyond. The additional research and development expenses are supporting all of the new mirror (and non-mirror) product development that is taking place. We are looking forward to reaping the rewards of all of this investment in the not-too-distant future.”
Automotive revenues increased by 13 percent in the third quarter and 14 percent for the first nine months of 2000 compared with the same respective periods last year. Fire Protection revenues increased one percent in the third quarter and three percent for the first nine months of 2000 compared with the same 1999 periods. The slower growth in fire protection revenues in the third quarter of 2000 was primarily due to slower sales of smoke detectors.
Night Vision Safety(TM) (NVS®) Mirror unit shipments to customers in North America increased by seven percent in the third quarter and by four percent for the first nine months of 2000 compared with the same 1999 periods. Unit shipments to offshore customers increased by 29 percent in the third quarter and 43 percent for the first nine months of 2000, compared with the same 1999 periods. The high growth in offshore unit shipments is primarily attributable to increased volume in Europe and Japan.
Total Night Vision Safety(TM) (NVS®) Mirror shipments in the third quarter were 1.6 million, a 14 percent increase over the 1.4 million units reported in the same 1999 quarter. For the first nine months of 2000, total unit shipments reached a record 5.1 million, a 15 percent increase over the 4.4 million units shipped during the first nine months of 1999.
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®) 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
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Net Sales $71,934,236 $64,146,371 $222,566,697 $196,653,710
Costs and Expenses
Cost of Goods
Sold 43,384,580 38,351,928 129,389,887 112,529,258
Development 4,261,318 3,444,350 12,391,317 10,278,835
Selling, General &
Administrative 4,303,737 3,606,106 12,944,372 10,654,637
(Income) (3,505,362) (2,719,601) (10,340,062) (7,680,024)
Total Costs and
Expenses 48,444,273 42,682,783 144,385,514 125,782,706
Income Before Provision
for Income Taxes 23,489,963 21,463,588 78,181,183 70,871,004
Income Taxes 7,636,000 7,020,000 25,417,000 23,181,000
Net Income $15,853,963 $14,443,588 $52,764,183 $47,690,004
Earnings Per Share
Basic $0.21 $0.20 $0.71 $0.65
Diluted $0.21 $0.19 $0.70 $0.64
Weighted Average Shares:
Basic 74,059,344 73,232,990 73,837,033 72,880,739
Diluted 75,442,982 75,036,282 75,602,926 75,032,658
CONDENSED CONSOLIDATED BALANCE SHEETS
Sept 30, Dec 31,
Cash and Short-Term Investments $130,673,313 $94,733,629
Other Current Assets 54,326,826 43,481,955
Total Current Assets 185,000,139 138,215,584
Plant and Equipment - Net 81,443,748 71,338,053
Long-Term Investments and
Other Assets 144,117,423 128,119,133
Total Assets $410,561,310 $337,672,770
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities $21,208,478 $16,470,211
Long-Term Debt 0 0
Deferred Income Taxes 6,200,442 4,151,143
Shareholders' Investment 383,152,390 317,051,416
Total Liabilities &
Shareholders' Investment $410,561,310 $337,672,770