ZEELAND, MI -- (MARKET WIRE) -- January 29, 2007 -- Gentex Corporation (
NASDAQ:
GNTX), the Zeeland,
Michigan-based manufacturer of automatic-dimming rearview mirrors and
commercial fire protection products, today reported record sales and net
income for the fourth quarter ended December 31, 2006. The Company also
announced that it repurchased approximately 1.2 million shares during the
fourth quarter of 2006 under a previously authorized and announced share
repurchase plan. In addition, the Company announced that it has developed
and is selling its own proprietary compass technology.
The Company's net sales increased by eight percent from $138.3 million in
the fourth quarter of 2005 to a record $149.6 million in the fourth quarter
of 2006. Fourth quarter net income increased by four percent to $30.8
million compared with $29.6 million in the fourth quarter last year.
Earnings per diluted share were 22 cents in the fourth quarter of 2006
compared with 19 cents in the fourth quarter of 2005.
For calendar year 2006, net sales increased by seven percent to a record
$572.3 million compared with $536.5 million in calendar year 2005. Net
income for calendar year 2006 decreased by one percent to $108.8 million
compared with $109.5 million in calendar year 2005. Earnings per diluted
share were 73 cents in calendar year 2006 compared with 70 cents for the
same prior-year period.
Excluding the impact of stock option expensing, the Company's net income
would have increased by eight percent to $31.9 million in the fourth
quarter of 2006 compared to the fourth quarter of 2005, and earnings per
diluted share for those same periods would have been 22 cents for the
fourth quarter of 2006 compared with 19 cents for the fourth quarter of
2005. Net income, excluding the impact of stock option expensing, would
have increased by three percent to $113.3 million for calendar year 2006
compared to the same period last year, and earnings per diluted share would
have been 76 cents in calendar year 2006 compared with 70 cents in calendar
year 2005. Stock option expensing did not impact the Company's income
statement for the fourth quarter and calendar year 2005, but was disclosed
in a footnote to the financial statements.
"We are pleased that we were able to post record revenues and net income
for the quarter, despite the significant light vehicle production cuts that
took place, primarily at the domestic automakers in North America," said
Gentex Chairman and Chief Executive Officer Fred Bauer. "Mirror unit
shipments for the fourth quarter of 2006 increased by five percent, but
automotive revenues increased by eight percent due to a richer mix of
mirror products shipped during the quarter. Unit shipments in North
America were down by four percent, but our European business volume
improved with some featured mirrors, helping our offshore unit shipments to
increase by 14 percent."
The Company also reported that it repurchased approximately 1,233,000
shares during the fourth quarter of 2006 at a cost of approximately $19.5
million. The Company has a share repurchase plan in place with
authorization to repurchase up to 24 million shares of the Company's stock.
As of the end of the fourth quarter of 2006, the Company has cumulatively
repurchased approximately 17.5 million shares, leaving approximately 6.5
million shares authorized to be repurchased under the plan.
Gentex Senior Vice President Enoch Jen said that the Company continues to
make good progress in its manufacturing yields, and provided certain
guidance for the first quarter and calendar year 2007.
"For the first quarter of 2007, we expect that our mirror unit shipments
will increase by approximately 5-10 percent over the same prior-year
period, and believe that, based on the current forecast for product mix,
that the Company's revenues for the first quarter of 2007 will increase
toward the top of that same range versus the same period in the prior year.
At this time, we expect to post similar numbers for unit shipments and
revenues for all of Calendar Year 2007."
Jen said that the Company's current first quarter 2007 forecast is based on
CSM's preliminary mid-January forecast for light vehicle production of 3.9
million units for North America, 5.3 million units for Europe and 3.9
million units for Japan and Korea. The Calendar Year 2007 forecast is
based upon CSM's 2007 calendar year projection of 15.3 million units for
North America, 20.8 million units for Europe and 14.5 million units for
Japan and Korea.
Automotive revenues increased by eight percent to $144.0 million in the
fourth quarter of 2006 compared with the same period last year, and
increased by seven percent to $548.4 million for calendar year 2006
compared with calendar year 2005. Fire Protection revenues increased by
four percent to $5.6 million for the fourth quarter of 2006 compared with
the fourth quarter of 2005, and were up by one percent to $23.9 million for
calendar year 2006, compared with the same period in 2005.
Total auto-dimming mirror unit shipments in the fourth quarter were
approximately 3.4 million, an increase of about five percent over the same
period last year. Auto-dimming mirror unit shipments increased by seven
percent to 13.4 million for calendar year 2006 compared to calendar year
2005.
Auto-dimming mirror unit shipments to customers in North America decreased
by four percent to approximately 1.5 million in the fourth quarter of 2006
compared with the same quarter last year. North American light vehicle
production declined by eight percent in the fourth quarter of 2006 compared
with the same period in 2005. For calendar year 2006, auto-dimming mirror
unit shipments to customers in North America increased by one percent to
approximately 6.1 million compared with the same period last year. North
American light vehicle production decreased by three percent for calendar
year 2006 compared with the same period in 2005.
Unit shipments to offshore customers increased by 14 percent to
approximately 1.9 million in the fourth quarter of 2006 compared with the
same period in 2005. Light vehicle production in Europe increased by two
percent in both the fourth quarter and for calendar year 2006, and also
increased by five percent for Japan and Korea in both the fourth quarter
and calendar year 2006, compared with the same prior year periods. For
calendar 2006, unit shipments to offshore customers increased by 12 percent
to approximately 7.4 million, compared with the same period in 2005.
Electronics is the fastest growing segment in the automotive industry, and
also one of the most competitive, and Gentex continues to invest
significant research and development dollars in this area. The Company has
developed its own unique compass technology, which can be sold as a system
with the compass heading displayed in the interior auto-dimming mirror.
"We call our compass technology Z-Nav®, as it features a proprietary,
digital, tri-axis sensor (transducer) and software," said Bauer. "All
other compass technologies currently used in the automotive industry
utilize analog or digital dual-axis sensors, which are more susceptible to
variation and tolerance errors, and must be mounted in a fixed location
that is on a plane parallel to the earth's surface. The Gentex tri-axis
design is similar to compasses used in highly scientific apparatus such as
aerospace applications, and can be mounted on any fixed or pivotal location
in the vehicle, including inside the mirror housing. Calibration is
easier and faster using Z-Nav. We are pleased that we can now offer our
customers another option when they are evaluating compass technologies, and
that we can fully participate in that market segment," Bauer concluded.
Non-GAAP Financial Measure
The financial information provided, including earnings, is in accordance
with GAAP. Still, the Company believes it is useful to provide non-GAAP
earnings to exclude the effect of Statement of Financial Accounting
Standards No. 123(R), "Share-Based Payment" [FAS 123(R)]. This non-GAAP
financial measure allows investors to evaluate current performance in
relation to historic performance without considering this non-cash charge.
The Company's management uses this non-GAAP information internally to help
assess performance in the current period versus prior periods. Disclosure
of non-GAAP earnings to exclude the effect of FAS 123(R) has economic
substance because the excluded expenses do not represent current or future
cash expenditures.
A reconciliation of non-GAAP earnings, to exclude the effect of FAS 123(R),
to GAAP earnings can be found in the attached financial table. The use of
non-GAAP earnings is intended to supplement, not to replace, presentation
of GAAP earnings. Like all non-GAAP financial measures, non-GAAP earnings
are subject to inherent limitations because all of the expenses required by
GAAP are not included. The limitations are compensated by the fact that
non-GAAP earnings are not relied on exclusively, but are used to simply
supplement GAAP earnings.
Safe Harbor Statement
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21 E of
the Securities Exchange Act, as amended, that are based on management's
belief, assumptions, current expectations, estimates and projections about
the global automotive industry, the economy, the impact of stock option
expenses on earnings, the ability to leverage fixed manufacturing overhead
costs, unit shipment and revenue growth rates and the Company itself. Words
like "anticipates," "believes," "confident," "estimates," "expects,"
"forecast," "likely," "plans," "projects," and "should," and variations of
such words and similar expressions identify forward-looking statements.
These statements do not guarantee future performance and involve certain
risks, uncertainties, and assumptions that are difficult to predict with
regard to timing, expense, likelihood and degree of occurrence. These risks
include, without limitation, employment and general economic conditions,
the pace of economic recovery in the U.S. and in international markets, the
pace of automotive production worldwide, the types of products purchased by
customers, competitive pricing pressures, currency fluctuations, the
financial strength of the Company's customers, the mix of products
purchased by customers, the ability to continue to make product
innovations, the success of newly introduced products (e.g. SmartBeam®,
Z-Nav), and other risks identified in the Company's filings with the
Securities and Exchange Commission. Therefore actual results and outcomes
may materially differ from what is expressed or forecasted. Furthermore,
the Company undertakes no obligation to update, amend, or clarify
forward-looking statements, whether as a result of new information, future
events, or otherwise.
Fourth Quarter Conference Call
A conference call related to this news release will be simulcast live on
the Internet beginning at 10:30 a.m. Eastern Standard Time today. To access
that call, go to
www.gentex.com and select the "Audio Webcast" icon in the
lower right-hand corner 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 an international
company that provides high-quality products to the worldwide automotive
industry and North American fire protection market. Based in Zeeland,
Michigan, the Company develops, manufactures and markets interior and
exterior automatic-dimming automotive rearview mirrors that utilize
proprietary electrochromic technology to dim in proportion to the amount of
headlight glare from trailing vehicle headlamps. Many of the mirrors are
sold with advanced electronic features, and approximately 96 percent of the
Company's revenues are derived from the sales of auto-dimming mirrors to
nearly every major automaker in the world.
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Year Ended
December 31, December 31,
2006 2005 2006 2005
------------- ------------- ------------- -------------
Net Sales $ 149,589,602 $ 138,342,912 $ 572,267,073 $ 536,483,974
Costs and Expenses
Cost of Goods
Sold 97,493,721 88,517,406 373,163,484 337,843,632
Engineering,
Research &
Development 11,115,661 9,143,355 41,773,792 35,059,401
Selling,
General &
Administrative 7,841,410 6,673,179 30,882,821 27,286,404
Other Expense
(Income) (11,756,683) (9,227,700) (32,526,622) (23,599,974)
------------- ------------- ------------- -------------
Total Costs and
Expenses 104,694,109 95,106,240 413,293,475 376,589,463
------------- ------------- ------------- -------------
Income Before
Income Taxes 44,895,493 43,236,672 158,973,598 159,894,511
Provision for
Income Taxes 14,079,519 13,619,000 50,212,596 50,367,000
------------- ------------- ------------- -------------
Net Income $ 30,815,974 $ 29,617,672 $ 108,761,002 $ 109,527,511
============= ============= ============= =============
Earnings Per Share
Basic $ 0.22 $ 0.19 $ 0.74 $ 0.70
Diluted $ 0.22 $ 0.19 $ 0.73 $ 0.70
Weighted Average
Shares:
Basic 142,219,264 155,067,076 147,950,666 155,438,834
Diluted 142,695,329 156,681,350 148,494,363 157,030,624
Cash Dividends
Declared per
Share $ 0.095 $ 0.09 $ 0.37 $ 0.35
CONDENSED CONSOLIDATED BALANCE SHEETS
Dec 31, Dec 31,
2006 2005
------------- -------------
ASSETS
Cash and Short-Term
Investments $ 328,227,710 $ 507,013,621
Other Current Assets 118,650,384 111,973,906
------------- -------------
Total Current Assets 446,878,094 618,987,527
Plant and Equipment - Net 184,134,373 164,030,341
Long-Term Investments and
Other Assets 154,015,933 139,627,934
------------- -------------
Total Assets $ 785,028,400 $ 922,645,802
============= =============
LIABILITIES AND
SHAREHOLDERS' INVESTMENT
Current Liabilities $ 57,362,978 $ 58,088,259
Long-Term Debt 0 0
Deferred Income Taxes 24,971,133 22,962,168
Shareholders' Investment 702,694,289 841,595,375
------------- -------------
Total Liabilities &
Shareholders' Investment $ 785,028,400 $ 922,645,802
============= =============
GENTEX CORPORATION AND SUBSIDIARIES
STATEMENTS OF INCOME RECONCILIATION
NON-GAAP MEASURMENT TO GAAP
Three Months Ended December 31, 2006
------------------------------------ Non-
(Non-GAAP GAAP GAAP
Excluding 2006 2006
Stock Stock Quarter vs. vs.
Option Option Ended 2005 % 2005 %
GAAP Expense Expense) 12/31/05 Change Change
------------ ---------- ------------ ------------ ----- -----
Net Sales $149,589,602 $ 0 $149,589,602 $138,342,912 8.1% 8.1%
Costs and
Expenses
Cost of
Goods Sold 97,493,721 (582,524) 96,911,197 88,517,406 10.1% 9.5%
Engineering,
Research &
Development 11,115,661 (621,129) 10,494,532 9,143,355 21.6% 14.8%
Selling,
General &
Administra-
tive 7,841,410 (577,582) 7,263,828 6,673,179 17.5% 8.9%
Other Expense
(Income) (11,756,683) 0 (11,756,683) (9,227,700) 27.4% 27.4%
------------ ---------- ------------ ------------
Total Costs
and Expenses 104,694,109 (1,781,235) 102,912,874 95,106,240 10.1% 8.2%
------------ ---------- ------------ ------------
Income Before
Provision for
Income Taxes 44,895,493 1,781,235 46,676,728 43,236,672 3.8% 8.0%
Provision for
Income Taxes 14,079,519 740,481 14,820,000 13,619,000 3.4% 8.8%
------------ ---------- ------------ ------------
Net Income $ 30,815,974 $1,040,754 $ 31,856,728 $ 29,617,672 4.0% 7.6%
============ ========== ============ ============
Year Ended December 31, 2006
------------------------------------ Non-
(Non-GAAP GAAP GAAP
Excluding 2006 2006
Stock Stock Year vs. vs.
Option Option Ended 2005 % 2005 %
GAAP Expense Expense) 2005 Change Change
------------ ---------- ------------ ------------ ----- -----
Net Sales $572,267,073 $ 0 $572,267,073 $536,483,974 6.7% 6.7%
Costs and
Expenses
Cost of
Goods Sold 373,163,484 (2,265,581) 370,897,903 337,843,632 10.5% 9.8%
Engineering,
Research &
Development 41,773,792 (2,502,577) 39,271,215 35,059,401 19.2% 12.0%
Selling,
General &
Administra-
tive 30,882,821 (2,289,977) 28,592,844 27,286,404 13.2% 4.8%
Other Expense
(Income) (32,526,622) 0 (32,526,622) (23,599,974) 37.8% 37.8%
------------ ---------- ------------ ------------
Total Costs
and Expenses 413,293,475 (7,058,135) 406,235,340 376,589,463 9.7% 7.9%
------------ ---------- ------------ ------------
Income Before
Provision for
Income Taxes 158,973,598 7,058,135 166,031,733 159,894,511 (0.6%) 3.8%
Provision for
Income Taxes 50,212,596 2,503,404 52,716,000 50,367,000 (0.3%) 4.7%
------------ ---------- ------------ ------------
Net Income $108,761,002 $4,554,731 $113,315,733 $109,527,511 (0.7%) 3.5%
============ ========== ============ ============
AUTO-DIMMING MIRROR UNIT SHIPMENTS
(Thousands)
Fourth Quarter Year Ended
Ended December 31, December 31,
----------------- -------- ----------------- --------
2006 2005 % Change 2006 2005 % Change
-------- -------- -------- -------- -------- --------
Domestic Interior 1,050 1,087 -3% 4,258 4,198 1%
-------- -------- -------- -------- -------- --------
Domestic Exterior 418 446 -6% 1,805 1,797 0.4%
-------- -------- -------- -------- -------- --------
Total Domestic
Units 1,469 1,533 -4% 6,063 5,995 1%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Foreign Interior 1,360 1,199 13% 5,168 4,726 9%
-------- -------- -------- -------- -------- --------
Foreign Exterior 588 514 14% 2,196 1,849 19%
-------- -------- -------- -------- -------- --------
Total Foreign
Units 1,948 1,713 14% 7,364 6,575 12%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Total Interior
Mirrors 2,411 2,286 5% 9,426 8,924 6%
-------- -------- -------- -------- -------- --------
Total Exterior
Mirrors 1,006 961 5% 4,001 3,646 10%
-------- -------- -------- -------- -------- --------
Total Mirror Units 3,417 3,247 5% 13,427 12,570 7%
-------- -------- -------- -------- -------- --------
Note: Certain prior year amounts have been reclassified to conform with the
current year presentation. Amounts may not total due to rounding.
Contact Information: CONTACT:
Connie Hamblin
(616) 772--1800