01/26 11:40 Gentex Reports Record Fourth Quarter and Year: Fourth
Quarter Net
Income Increas
From moneynet.com
ZEELAND, Mich., Jan. 26 /PRNewswire/ -- Gentex Corporation (Nasdaq: GNTX), the
Zeeland, Michigan-based manufacturer of automatic-dimming rearview mirrors and commercial
fire protection products, today reported record revenues and net income for the fourth quarter
and year ended December 31, 1997.
The Company achieved record fourth quarter revenues of $52.6 million, a 41 percent increase
over the fourth quarter of 1996. Net income in the 1997 fourth quarter increased by 58 percent
to $11.2 million, compared with net income of $7.1 million on revenues of $37.3 million for the
same period in 1996. Diluted earnings per share increased by 55 percent from 20 cents in the
fourth quarter of 1996 to 31 cents in the fourth quarter of 1997.
For the year ended December 31, 1997, Gentex reported record net income of $35.2 million,
or 98 cents per share, on a 25 percent increase in revenues to $186.3 million. The Company
reported net income of $24.0 million, or 67 cents per share, on revenues of $148.7 million in
1996. Without the pre-tax $6 million patent settlement in April 1996 ($4.0 million, net of
accrued reserves), the Company would have reported net income of $26.6 million, or 75 cents
per share. (All per share amounts reported are diluted.)
Gentex Executive Vice President Kenneth La Grand attributed the higher sales both during the
1997 fourth quarter and year primarily to the high volume shipments of its three newest
auto-dimming exterior mirror products: flat thin glass, curved "convex" thin glass and wide-angle
"aspheric" mirror sub-assemblies.
"Our total exterior mirror shipments increased by 88 and 64 percent for the 1997 fourth quarter
and year, respectively. The new thin-glass and aspheric mirrors together accounted for 40 and
35 percent of all of our exterior mirror sub-assembly shipments in those respective periods,"
said La Grand.
La Grand also said that those three new exterior mirror products had the greatest impact on the
improvement in the Company's gross margin throughout the year. "Both aspheric and thin-glass
exterior mirror sub-assemblies are very difficult products to manufacture. Early in the year, we
had very low yields on those products, which negatively impacted the Company's gross margin.
As the year progressed, yields improved and are now at a more acceptable level. There still is
room for improvement and we have set new target yields that we would eventually like to
achieve."
Total Night Vision Safety(TM) (NVS(R)) Mirror shipments to automotive customers in 1997
increased to a record 1.1 million and 3.9 million units for the fourth quarter and year,
respectively.
"We currently expect our automotive unit growth to continue at a rate of approximately 25 to 30
percent in 1998, which would result in shipments of approximately five million units," said La
Grand. (**)
The Company's gross profit margin improved to 38.3 percent in the fourth quarter of 1997
compared with 35.6 percent in the third quarter of 1997 and 37.7% in the fourth quarter of
1996. The improved gross margin in the fourth quarter was attributable to better yields on its
new exterior mirror products, and increased capacity utilization at its newer automotive
production facility. For the fiscal year, the gross margin percentage declined from 37.1 percent
in calendar 1996 to 36.2 percent in calendar 1997. This decline is mostly attributable to the
initial lower yields on the Company's new exterior mirror products, price reductions associated
with automotive long-term contracts, and to unused capacity at the Company's newer
automotive products manufacturing facility.
Revenues in the Fire Protection Products Group increased 11 percent in the fourth quarter of
1997 compared with the same 1996 quarter, primarily due to increased sales of its signals and
AC/DC smoke detectors. For the year ended December 31, 1997, fire protection revenues
increased 6 percent from $19.1 million in 1996 to $20.2 million in 1997. La Grand attributed
the sales growth in 1997 to higher demand for the Company's AC/DC smoke detectors and
certain remote signaling devices.
Total automotive mirror unit shipments for the 1997 fourth quarter and year were 1.1 million and
3.9 million, respectively, compared with 808,000 and 3.1 million units for the same 1996
periods. Total exterior mirror units shipped for the 1997 fourth quarter and year were 348,000
and 1.1 million, respectively, compared with 185,000 and 656,000 for the same 1996 periods.
Unit shipments of NVS Mirrors to automakers outside North America increased by 39 and 50
percent for the 1997 fourth quarter and year, respectively. Shipments to offshore customers
represented 32 percent of total unit shipments in 1997. Unit shipments to automakers outside
North America were 320,000 and 1.2 million for the 1997 fourth quarter and year, respectively,
compared with 230,000 and 831,000 for the same 1996 periods.
(**) 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 (as
outlined in the Company's Form 10-K filed with the Securities and Exchange Commission and
other interim reports) in some cases may affect in the future 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 customers include Audi, Bentley,
BMW, Chrysler, Daewoo, Fiat, Ford, General Motors, Gulf States Toyota, Honda, Hyundai,
Infiniti, Kia Motors, Lexus, Mercedes-Benz, Mitsubishi, Nissan, Opel, Porsche, Rolls Royce
and Southeast Toyota Distributors.
Founded in 1974, Gentex operates out of three facilities in Zeeland, Michigan; an automotive
sales and marketing office in Livonia, Michigan; an automotive sales and engineering subsidiary
in Germany; and five 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 Year Ended
December 31, December 31,
1997 1996 1997 1996
Net Sales $52,583,995 $37,329,668 $186,327,877 $148,708,218
Costs and Expenses
Cost of Goods Sold 32,437,413 23,274,778 118,941,030 93,582,756
Research &
Development 2,189,106 1,961,178 9,079,472 7,537,933
Selling, General &
Administrative 2,768,284 2,722,683 10,825,389 11,747,961
Patent Settlement 0 0 0 4,000,000
Other Expense
(Income) (1,366,761) (1,112,263) (4,707,238) (3,642,827)
Total Costs and
Expenses 36,028,042 26,846,376 134,138,653 113,225,823
Income Before
Income Taxes 16,555,953 10,483,292 52,189,224 35,482,395
Provision for
Income Taxes 5,378,000 3,423,000 16,959,000 11,519,000
Net Income $11,177,953 $7,060,292 $35,230,224 $23,963,395
Earnings Per Share
Basic $0.32 $0.21 $1.01 $0.70
Diluted $0.31 $0.20 $0.98 $0.67
Weighted Average Shares:
Basic 35,118,981 34,386,902 34,814,912 34,093,219
Diluted 36,296,955 35,828,680 35,980,766 35,512,286
CONDENSED CONSOLIDATED BALANCE SHEETS
Dec 31, Dec 31,
1997 1996
ASSETS
Cash and Short-Term Investments $41,131,383 $48,533,977
Other Current Assets 34,788,053 24,161,883
Total Current Assets 75,919,436 72,695,860
Plant and Equipment - Net 42,238,885 31,574,547
Long-Term Investments and Other Assets 71,624,526 36,108,013
Total Assets $189,782,847 $140,378,420
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities $14,591,224 $11,360,917
Long-Term Debt 0 0
Deferred Income Taxes 1,986,446 1,213,862
Shareholders' Investment 173,205,177 127,803,641
Total Liabilities & Shareholders'
Investment $189,782,847 $140,378,420
Note: All earnings per share amounts and weighted daily average shares outstanding reflect the
2-for-1 stock split effected in the form of a 100% common stock dividend issued to
shareholders on June 24, 1996.
SOURCE Gentex Corporation
-0- 01/26/98
/CONTACT: Connie Hamblin of Gentex, 616-772-1800/
/Company News On-Call: prnewswire.com or fax, 800-758-5804, ext. 354175/
/Web site: gentex.com |
