Gentex Reports First Quarter 2016 Financial Results
/EINPresswire.com/ -- ZEELAND, MI -- (Marketwired) -- 04/22/16 -- 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 three months ended March 31, 2016.
1st Quarter 2016 Highlights
- Revenue growth of 10% quarter over quarter
- Gross Margin improved from 38.8% to 39.1% quarter over quarter
- Operating Income increased by 12% quarter over quarter
- Earnings per Diluted Share increased by 8% quarter over quarter to $0.28 per diluted share
- 3.1 million shares repurchased during the quarter
-
$16.9 million of debt repaid during the quarter
For the first quarter of 2016, the Company is pleased to report net sales of $405.6 million, which was an increase of 10% compared to net sales of $368.9 million in the first quarter of 2015 on a 1% overall increase in automotive light vehicle production on a quarter over quarter basis in the Company's primary markets.
The gross profit margin in the first quarter of 2016 was 39.1%, compared with a gross profit margin of 38.8% in the first quarter of 2015. The primary drivers affecting gross profit margin on a quarter over quarter basis resulted in a net increase in the gross profit margin. Annual customer price reductions were more than offset by purchasing cost reductions and the Company's ability to leverage fixed overhead costs.
Income from operations for the first quarter of 2016 increased 12% to $120.8 million when compared to income from operations of $107.7 million for the first quarter of 2015.
Other income decreased to a loss of $1.3 million in the first quarter of 2016 compared with other income of $0.7 million in the first quarter of 2015, primarily due to realized losses on the sale of equity investments during the most recently completed quarter.
Net income for the first quarter of 2016 increased 4% to $80.3 million compared with net income of $77.2 million in the first quarter of 2015. Net income was impacted by a reduction in Other income of approximately $2 million on a quarter over quarter basis. The reduction in Other income was a direct result of underlying performance in equity markets. In addition, the percentage increase in net income on a quarter over quarter basis was impacted by the fact that in the first quarter 2015 the Company realized incremental research and development tax credits of $3.9 million related to the completion of an audit related to calendar years 2010 through 2012. The Company continues to deliver sales growth through the operational lines of the income statement, though prior period tax benefits and poor performance in equity markets had an impact in the first quarter of 2016.
Earnings per diluted share in the first quarter of 2016 increased 8% to $0.28, compared with earnings per diluted share of $0.26 in the first quarter of 2015. As previously stated, earnings per diluted share was positively impacted by $0.01 during the first quarter of 2015 by the aforementioned prior period tax benefits.
Automotive net sales in the first quarter of 2016 were $394.0 million, an increase of 9% compared with automotive net sales of $360.6 million in the first quarter of 2015, primarily due to a 11% increase in auto dimming mirror unit shipments quarter over quarter.
Other net sales in the first quarter 2016, which includes dimmable aircraft windows and fire protection products, were $11.6 million, an increase of 39% compared with $8.3 million in the first quarter of 2015, due to a 42% increase in dimmable aircraft window sales and a 36% increase in sales from fire protection products.
Share Repurchases
During the first quarter of 2016, the Company repurchased 3.1 million shares of its common stock. As of March 31, 2016, the Company has approximately 6.4 million shares remaining available for repurchase in the previously announced share repurchase plan including the most recent authorization of 5 million shares in February 2016. The Company intends to continue to repurchase additional shares of its common stock in the future depending on macroeconomic issues, market trends and other factors that the Company deems appropriate.
Debt Repayment
During the first quarter of 2016, the Company paid down $15 million on its revolver loan in addition to its normally scheduled principal repayment on the Company's term loan. The Company may, at its discretion, pay additional principal toward its loans in the future, depending on macroeconomic trends, capital expenditure spending, interest rates, the amount of available free cash and other factors that it deems appropriate for timing and amounts of incremental debt repayments.
Future Estimates
The Company's forecasts for light vehicle production for the second quarter and calendar year 2016 are based on the IHS Automotive April 2016 forecast for light vehicle production in North America, Europe, Japan and Korea.
Light Vehicle Production (per IHS Automotive April light vehicle production forecast) (in Millions) % Calendar Calendar % Region Q2 2016 Q2 2015 Change Year 2016 Year 2015 Change ------- ------- ------- --------- ---------- ------- North America 4.76 4.53 5% 18.22 17.50 4% Europe 5.68 5.47 4% 21.32 20.90 2% Japan and Korea 3.31 3.24 2% 13.31 13.25 --% ------- ------- ------- --------- ---------- ------- Total Light Vehicle Production 13.75 13.24 4% 52.85 51.65 2%
Based on the April 2016 IHS production forecast, current forecasted product mix and expense growth estimates, the Company is making no changes to its previous estimates for calendar year 2016 or 2017.
Safe Harbor for Forward-Looking Statements
This news 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; and negative impact of any governmental investigations and associated litigations including securities litigations relating to the conduct of our business. 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-looking 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.
First 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, April 22, 2016. The dial-in number to participate in the call is 888-505-4375, passcode 1104846. Participants may listen to the call via audio streaming at www.gentex.com or by visiting https://www.webcaster4.com/Webcast/Page/611/14248. A webcast replay will be available approximately 24 hours after the conclusion of the call at http://ir.gentex.com/WebcastArchives.
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 March 31, % 2016 2015 Change ---------- ---------- --------- North American Interior Mirrors 2,260 2,025 12% North American Exterior Mirrors 864 740 17% ---------- ---------- --------- Total North American Mirror Units 3,124 2,765 13% International Interior Mirrors 4,121 3,592 15% International Exterior Mirrors 1,582 1,576 --% ---------- ---------- --------- Total International Mirror Units 5,703 5,168 10% Total Interior Mirrors 6,381 5,617 14% Total Exterior Mirrors 2,447 2,316 6% ---------- ---------- --------- Total Auto-Dimming Mirror Units 8,827 7,933 11% ========== ========== ========= Note: Percent change and amounts may not total due to rounding. GENTEX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, 2016 2015 ------------- -------------- Net Sales $ 405,567,786 $ 368,937,455 Cost of Goods Sold 246,876,998 225,845,046 ------------- -------------- Gross profit 158,690,788 143,092,409 Engineering, Research & Development 23,091,209 21,587,551 Selling, General & Administrative 14,750,589 13,796,352 ------------- -------------- Operating Expenses 37,841,798 35,383,903 ------------- -------------- Income from operations 120,848,990 107,708,506 Other Income (Expense) (1,279,378) 709,384 ------------- -------------- Income before Income Taxes 119,569,612 108,417,890 Provision for Income Taxes 39,289,618 31,234,449 ------------- -------------- Net Income $ 80,279,994 $ 77,183,441 ============= ============== Earnings Per Share Basic $ 0.28 $ 0.26 Diluted $ 0.28 $ 0.26 Weighted Average Shares Basic 289,210,621 295,031,431 Diluted 291,316,353 298,594,143 Cash Dividends Declared per Share $ 0.085 $ 0.08 GENTEX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) December 31, March 31, 2016 2015 -------------- -------------- ASSETS Cash and Cash Equivalents $ 626,470,720 $ 551,557,527 Accounts Receivable, net 223,989,470 195,969,400 Inventories 188,624,776 174,695,411 Other Current Assets 21,060,564 61,786,454 -------------- -------------- Total Current Assets 1,060,145,530 984,008,792 Plant and Equipment - Net 414,695,494 412,720,270 Goodwill 307,365,845 307,365,845 Long-Term Investments 71,063,732 95,156,539 Intangible Assets 322,750,000 327,575,000 Patents and Other Assets 21,291,520 21,846,482 -------------- -------------- Total Other Assets 722,471,097 751,943,866 -------------- -------------- Total Assets $2,197,312,121 $2,148,672,928 ============== ============== LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities $ 195,323,204 $ 131,006,546 Long-Term Debt 208,750,000 225,625,000 Deferred Income Taxes 44,283,828 69,524,621 Shareholders' Investment 1,748,955,089 1,722,516,761 -------------- -------------- Total Liabilities & Shareholders' Investment $2,197,312,121 $2,148,672,928 ============== ==============
Contact Information:
Gentex Investor & Media Contact
Josh O'Berski
(616)772-1590 x5814