Michigan | 0-10235 | 38-2030505 | |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |
600 North Centennial Street Zeeland, Michigan | 49464 | ||
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, par value $0.06 per share | GNTX | NASDAQ Global Select Market |
Section 2. | Financial Information |
Item 2.02 | Results of Operations and Financial Condition. |
(a) | On July 19, 2019, Gentex Corporation issued a news release announcing financial results for the second quarter ended June 30, 2019. A copy of the news release is attached as Exhibit 99.1 to the Form 8-K. |
• | Net Sales growth of 3% quarter over quarter versus an 8% quarter over quarter reduction in global light vehicle production volumes |
• | Gross margin of 37.7% including negative tariff impact of 60 basis points |
• | Sequential gross margin improvement of 150 basis points compared to the first quarter of 2019 |
• | Quarter over quarter earnings per diluted share growth of 5% to $0.42 |
• | 3.1 million shares repurchased during the quarter at an average of $22.72 per share |
• | Revised 2019 calendar year guidance for improvements in gross margin, depreciation and amortization, and effective tax rate ranges |
Light Vehicle Production (per IHS Markit mid-July light vehicle production forecast) | |||||||||||||
(in Millions) | |||||||||||||
Region | 3Q 2019 | 3Q 2018 | % Change | Calendar Year 2019 | Calendar Year 2018 | % Change | |||||||
North America | 4.12 | 4.03 | 2 | % | 16.65 | 16.96 | (2 | )% | |||||
Europe | 4.75 | 4.64 | 2 | % | 21.44 | 21.99 | (3 | )% | |||||
Japan and Korea | 3.33 | 3.06 | 9 | % | 13.28 | 13.20 | 1 | % | |||||
China | 5.99 | 6.23 | (4 | )% | 25.04 | 26.85 | (7 | )% | |||||
Total Light Vehicle Production | 18.19 | 17.96 | 1 | % | 76.41 | 79.00 | (3 | )% |
2019 Calendar Year Guidance | ||
Annual Guidance | ||
Item | As of 4/19/19 | Updated as of 7/19/19 |
Net Sales | $1.83 - $1.93 billion | $1.87 - $1.90 billion |
Gross Margin | 36.0% - 37.0% | 36.5% - 37.5% |
Operating Expenses (E,R&D and S,G&A) | $195 - $200 million | No change |
Tax Rate | 16.0% - 18.0% | 16.0% - 17.0% |
Capital Expenditures | $90 - $100 million | No change |
Depreciation & Amortization | $105 - $115 million | $100 - $110 million |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||||
North American Interior Mirrors | 2,206 | 2,202 | — | % | 4,433 | 4,528 | (2 | )% | |||||||||
North American Exterior Mirrors | 1,320 | 950 | 39 | % | 2,549 | 1,768 | 44 | % | |||||||||
Total North American Mirror Units | 3,526 | 3,152 | 12 | % | 6,981 | 6,296 | 11 | % | |||||||||
International Interior Mirrors | 5,339 | 5,299 | 1 | % | 10,596 | 10,647 | — | % | |||||||||
International Exterior Mirrors | 1,953 | 2,115 | (8 | )% | 3,924 | 4,227 | (7 | )% | |||||||||
Total International Mirror Units | 7,293 | 7,415 | (2 | )% | 14,520 | 14,874 | (2 | )% | |||||||||
Total Interior Mirrors | 7,545 | 7,501 | 1 | % | 15,028 | 15,175 | (1 | )% | |||||||||
Total Exterior Mirrors | 3,273 | 3,066 | 7 | % | 6,473 | 5,995 | 8 | % | |||||||||
Total Auto-Dimming Mirror Units | 10,819 | 10,567 | 2 | % | 21,501 | 21,170 | 2 | % |
(Unaudited) | (Unaudited) | ||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net Sales | $ | 468,711,354 | $ | 454,981,440 | $ | 937,300,351 | $ | 920,401,545 | |||||||
Cost of Goods Sold | 292,173,750 | 282,176,968 | 591,118,243 | 574,968,672 | |||||||||||
Gross Profit | 176,537,604 | 172,804,472 | 346,182,108 | 345,432,873 | |||||||||||
Engineering, Research & Development | 28,359,343 | 27,200,465 | 56,448,524 | 53,249,723 | |||||||||||
Selling, General & Administrative | 20,273,295 | 18,921,003 | 40,232,286 | 36,984,813 | |||||||||||
Operating Expenses | 48,632,638 | 46,121,468 | 96,680,810 | 90,234,536 | |||||||||||
Income from Operations | 127,904,966 | 126,683,004 | 249,501,298 | 255,198,337 | |||||||||||
Other Income | 2,377,578 | 2,289,774 | 5,689,789 | 5,534,372 | |||||||||||
Income before Income Taxes | 130,282,544 | 128,972,778 | 255,191,087 | 260,732,709 | |||||||||||
Provision for Income Taxes | 21,323,919 | 19,948,796 | 41,952,050 | 40,459,984 | |||||||||||
Net Income | $ | 108,958,625 | $ | 109,023,982 | $ | 213,239,037 | $ | 220,272,725 | |||||||
Earnings Per Share(1) | |||||||||||||||
Basic | $ | 0.42 | $ | 0.40 | $ | 0.82 | $ | 0.81 | |||||||
Diluted | $ | 0.42 | $ | 0.40 | $ | 0.82 | $ | 0.80 | |||||||
Weighted Average Shares | |||||||||||||||
Basic | 255,219,868 | 271,747,049 | 256,350,600 | 273,085,191 | |||||||||||
Diluted | 256,579,621 | 274,122,498 | 257,694,885 | 275,660,418 | |||||||||||
Cash Dividends Declared per Share | $ | 0.115 | $ | 0.110 | $ | 0.230 | $ | 0.220 | |||||||
(1) Earnings Per Share has been adjusted to exclude the portion of net income allocated to participating securities as a result of share-based payment awards. |
(Unaudited) | |||||||
June 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Cash and Cash Equivalents | $ | 260,332,892 | $ | 217,025,278 | |||
Short-Term Investments | 190,565,065 | 169,412,999 | |||||
Accounts Receivable, net | 226,426,332 | 213,537,799 | |||||
Inventories | 225,094,463 | 225,281,599 | |||||
Other Current Assets | 27,984,155 | 25,672,579 | |||||
Total Current Assets | 930,402,907 | 850,930,254 | |||||
Plant and Equipment - Net | 501,398,382 | 498,473,766 | |||||
Goodwill | 307,365,845 | 307,365,845 | |||||
Long-Term Investments | 121,061,221 | 137,979,082 | |||||
Intangible Assets | 260,025,000 | 269,675,000 | |||||
Patents and Other Assets | 22,549,518 | 21,010,121 | |||||
Total Other Assets | 711,001,584 | 736,030,048 | |||||
Total Assets | $ | 2,142,802,873 | $ | 2,085,434,068 | |||
LIABILITIES AND SHAREHOLDERS' INVESTMENT | |||||||
Current Liabilities | $ | 177,560,797 | $ | 169,160,919 | |||
Other Non-current Liabilities | 6,190,219 | — | |||||
Deferred Income Taxes | 54,717,622 | 54,521,489 | |||||
Shareholders' Investment | 1,904,334,235 | 1,861,751,660 | |||||
Total Liabilities & Shareholders' Investment | $ | 2,142,802,873 | $ | 2,085,434,068 |
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