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Gentex Reports Third Quarter 2013 Financial Results


Gentex Reports Third Quarter 2013 Financial Results

ZEELAND, MI -- (Marketwired) -- 10/22/13 -- 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, 2013.

For the third quarter of 2013, the Company's net sales were $288.6 million, an 8% increase when compared with net sales of $268.2 million in the third quarter of 2012.

The gross profit margin in the third quarter of 2013 was 36.7%, up 3.1 percentage points compared with a gross profit margin of 33.6% in the third quarter of 2012, primarily due to the impact of purchasing cost reductions and product mix, partially offset by annual customer price reductions. The gross profit margin in the third quarter of 2013 also increased sequentially from 35.8% in the second quarter of 2013, again due to purchasing cost reductions and product mix.

Net income for the third quarter of 2013 increased 33% to $55.5 million, compared with net income of $41.9 million in the third quarter of 2012, and also increased sequentially by 7% from $52.1 million in the second quarter of 2013. Earnings per diluted share were $0.38, which was an increase of $0.09 compared with earnings per diluted share of $0.29 in the third quarter of 2012, and were up sequentially from $0.36 in the second quarter of 2013.

"We're very pleased to report continued strong revenue and earnings growth despite year-to-date reduced light vehicle production in Europe and the Japan/Korea regions," said Fred Bauer, Gentex Chairman of the Board and Chief Executive Officer, "and we're excited by the momentum that the continued strong financial performance gives us as we move into a future that will include the growth that comes with our HomeLink(R) acquisition."

Unit Shipments and Net Sales

Automotive mirror unit shipments increased 13% in the third quarter of 2013 compared with the third quarter of 2012. Automotive net sales increased 7% in the third quarter of 2013 to $280.9 million, compared with automotive net sales of $261.9 million in the second quarter of 2012.

North American automotive mirror unit shipments increased 6% compare d with the third quarter of 2012, while North American light vehicle production increased by 7% in the most recently completed quarter compared with the same quarter last year.

International automotive mirror unit shipments increased 18% in the third quarter of 2013 compared with the third quarter of 2012, primarily due to increased mirror unit shipments to certain European and Asian automakers. European light vehicle production decreased by 1% in the most recently completed quarter compared with the same quarter last year, while Japan and Korea light vehicle production increased 3% compared with the same quarter last year.

Other net sales, which include fire protection products and dimmable aircraft windows, were $7.7 million in the third quarter of 2013, up 21% compared with $6.3 million in the third quarter of 2012.

Future Estimates

The Company's forecasts for light vehicle production for each of the following periods in 2013 compared with the same periods in 2012 are based on the IHS Automotive October 2013, forecast for light vehicle production in North America, Europe, Japan and Korea.


 
                                                                            
   Light Vehicle Production (per IHS Automotive's October light vehicle     
                            production forecast)                            
                               (in Millions)                                
                                                                            
                   4th       4th                                            
                 Quarter   Quarter     %      Calendar   Calendar     %     
Region             2013      2012    Change   Year 2013  Year 2012  Change  
-------------------------------------------  -----------------------------  
North America        4.05      3.82       6%       16.2       15.4       5% 
Europe               4.69      4.68      --%       19.0       19.3      (2)%
Japan and Korea      3.46      3.34       4%       13.4       14.0      (4)%

The Company estimates that net sales in the fourth quarter of 2013, including sales from the now completed acquisition of HomeLink, will increase 20-25% compared with the fourth quarter of 2012, based on the October 2013 IHS production forecast and current forecasted product mix.

The Company also estimates the gross profit margin for the fourth quarter of 2013, to be in the range of 38-38.5%, based on the October 2013 IHS production forecast and current forecasted product mix.

The Company currently estimates E,R&D expense in the fourth quarter of 2013 to increase 5-10% compared with E,R&D in the fourth quarter of 2012. Additionally, S,G&A expense in the fourth quarter of 2013 is estimated to increase 15-20% compared with S,G&A in the fourth quarter of 2012.

Safe Harbor for Forward-Looking Statements

This new release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements contained in this communication that are not purely historical are forward-looking statements. Forward-looking statements give the Company's current expectations or forecasts of future events. These forward-looking statements generally can be identified by the use of words such as "anticipate", "believe", "could", "estimate", "expect", "forecast", "goal", "hope", "may", "plan", "project", "will", and variations of such words and similar expressions. Such statements are subject to risks and uncertainties that are often difficult to predict and beyond the Company's control, and could cause the Company's results to differ materially from those described. These risks and uncertainties include, without limitation, changes in general industry or regional market conditions; changes in consumer and customer preferences for our products; our ability to be awarded new business; continued uncertainty in pricing negotiations with customers; loss of business from increased competition; customer bankruptcies or divestiture of customer brands; fluctuation in vehicle production schedules; changes in product mix; raw material shortages; higher raw material, fuel, energy and other costs; unfavorable fluctuations in currencies or interest rates in the regions in which we operate; costs or difficulties related to the integration of any new or acquired technologies and businesses; changes in regulatory conditions; warranty and recall claims and other litigation and customer reactions thereto; possible adverse results of pending or future litigation or infringement claims; negative impact of any governmental investigations and associated litigations including securities litigations relating to the conduct of our business; integration of the newly acquired HomeLink business operations; retention of the newly acquired customers of the HomeLink business; and expansion of product offerings including those incorporating HomeLink technology. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-lo oking statement, whether as a result of new information, future events or otherwise, except as required by law or the rules of the Nasdaq Global Select Market. Accordingly, any forward-looking statement should be read in conjunction with the additional information about risks and uncertainties identified under the heading "Risk Factors" in the Company's latest Form 10-K and Form 10-Q filed with the SEC.

Third Quarter Conference Call

A conference call related to this news release will be simulcast live on the Internet beginning at 10:30 a.m. EDT today, October 22, 2013. To access that call, go to http://www.gentex.com and select the "Audio Webcast" icon on the right side of the page. Other conference calls hosted by the Company will also be available at that site in the future.

About The Company

Founded in 1974, Gentex Corporation (NASDAQ: GNTX) is a supplier of automatic-dimming rearview mirrors and electronics to the automotive industry, dimmable aircraft windows for aviation markets, and fire protection products to the fire protection market. Visit the Company's web site at www.gentex.com.


 
                                                                            
                             GENTEX CORPORATION                             
                       AUTO-DIMMING MIRROR SHIPMENTS                        
                                (Thousands)                                 
                                                                            
                              Three Months Ended        Nine Months ended   
                                 September 30,            September 30,     
                                              %                        %    
                             2013   2012    Change    2013   2012    Change 
                            ------ ------ --------   ------ ------ -------- 
North American Interior                                                     
 Mirrors                     1,867  1,879       (1)%  5,897  5,820        1%
North American Exterior                                                     
 Mirrors                       563    423       33%   1,631  1,281       27%
                            ------ ------ --------   ------ ------ -------- 
  Total North American                                                      
   Mirror Units              2,430  2,302        6%   7,528  7,101        6%
International Interior                                                      
 Mirrors                     2,972  2,537       17%   8,507  7,935        7%
International Exterior                                                      
 Mirrors                     1,202    995       21%   3,493  3,105       12%
                            ------ ------ --------   ------ ------ -------- 
  Total International                                                       
   Mirror Units              4,174  3,532       18%  12,000 11,040        9%
Total Interior Mirrors       4,839  4,416       10%  14,404 13,755        5%
Total Exterior Mirrors       1,765  1,418       24%   5,124  4,386       17%
                            ------ ------ --------   ------ ------ -------- 
  Total Auto-Dimming Mirror                                                 
   Units                     6,604  5,834       13%  19,528 18,141        8%
                            ====== ====== ========   ====== ====== ======== 
                                                                            
Note: Certain prior year amounts have been reclassified to conform with the 
 current year presentation. Percent change and amounts may not total due to 
 rounding.                                                                  
                                                                            
                                                                            
                                                                            
                     GENTEX CORPORATION AND SUBSIDIARIES                    
                    CONDENSED CONSOLIDATED BALANCE SHEETS                   
                                                                            
                                               (Unaudited)                  
                                              September 30,    December 31, 
                                                   2013            2012     
                                             --------------- ---------------
ASSETS                                                                      
Cash and Short-Term Investments              $   226,676,955 $   450,481,520
Other Current Assets                             297,174,694     294,181,520
                                             --------------- ---------------
Total Current Assets                             523,851,649     744,663,040
                                                                            
Plant and Equipment - Net                        351,066,630     349,938,172
                                                                            
Goodwill                                         337,670,463               -
Long-Term Investments                            114,270,623     141,834,034
Patents and Other Assets                         370,268,798      29,256,089
                                             --------------- ---------------
Total Other Assets                               822,209,884     171,090,123
                                                                            
                                             --------------- ---------------
Total Assets                                 $ 1,697,128,163 $ 1,265,691,335
                                             =============== ===============
                                                                            
LIABILITIES AND SHAREHOLDERS' INVESTMENT                                    
Current Liabilities                          $   120,590,431 $    87,957,442
Long-Term Debt                                   267,500,000               -
Deferred Income Taxes                             53,730,295      56,773,337
Shareholders' Investment                       1,255,307,437   1,120,960,556
                                             --------------- ---------------
Total Liabilities & Shareholders' Investment $ 1,697,128,163 $ 1,265,691,335
                                             =============== ===============
                                                                            
                                                                            
                                                                            
                     GENTEX CORPORATION AND SUBSIDIARIES                    
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME                
                                                                            
                                (Unaudited)               (Unaudited)       
                             Three Months Ended        Nine Months ended    
                               September 30,             September 30,      
                             2013         2012         2013         2012    
                         ------------ ------------ ------------ ------------
Net Sales                $288,621,626 $268,248,089 $845,094,493 $839,210,399
  Cost of Goods Sold      182,659,141  178,132,021  543,055,886  555,510,532
                         ------------ ------------ ------------ ------------
    Gross profit          105,962,485   90,116,068  302,038,607  283,699,867
                                                                            
  Engineering, Research                                                     
   & Development           19,106,682   20,434,012   56,654,440   66,441,649
  Selling, General &                                                        
   Administrative          13,199,557   12,058,701   36,278,011   36,621,668
                         ------------ ------------ ------------ ------------
  Income from operations   73,656,246   57,623,355  209,106,156  180,636,550
  Other Income              7,387,008    4,062,706   14,819,949   10,516,549
                         ------------ ------------ ------------ ------------
Income before Income                                               
         
 Taxes                     81,043,254   61,686,061  223,926,105  191,153,099
Provision for Income                                                        
 Taxes                     25,522,293   19,808,978   70,877,180   62,164,893
                         ------------ ------------ ------------ ------------
Net Income               $ 55,520,961 $ 41,877,083 $153,048,925 $128,988,206
                         ============ ============ ============ ============
                                                                            
Earnings Per Share                                                          
  Basic                  $       0.39 $       0.29 $       1.07 $       0.90
  Diluted                $       0.38 $       0.29 $       1.06 $       0.89
Weighted Average Shares                                                     
  Basic                   143,697,760  143,027,693  143,160,402  143,415,077
  Diluted                 144,518,900  143,584,375  143,816,041  144,417,219
                                                                            
Cash Dividends Declared                                                     
 per Share               $       0.14 $       0.13 $       0.42 $       0.39

CONTACT: Investor/Media Relations (616) 772-1590, ext. 4207

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