Gentex Corporation (NASDAQ: GNTX), a leading supplier of
digital vision, connected car, dimmable glass and fire protection
technologies, today reported financial results for the three and
six months ended June 30, 2023.
2nd Quarter 2023 Summary
- Net sales of $583.5 million, a quarterly sales record,
and a 26% increase compared to the second quarter of
2022
- Unit shipments of 12.9 million, a quarterly record, and
a 21% increase compared to the second quarter of 2022
- Gross profit margin of 33.1%, an increase of 140 basis
points from the first quarter of 2023
- Income from operations of $127.3 million, a 48%
increase compared to the second quarter of 2022
- Net income of $109.2 million, an increase of 51%
compared to the second quarter of 2022
- Earnings per diluted share of $0.47 for the quarter, an
increase of 52% compared to the second quarter of
2022
For the second quarter of 2023, the Company reported net sales
of $583.5 million, compared to net sales of $463.4 million in the
second quarter of 2022, a 26% quarter over quarter increase and a
new quarterly sales record for the Company. For the second quarter
of 2023, global light vehicle production in North America, Europe,
Japan/Korea, and China increased approximately 18%, when compared
to the second quarter of 2022. “So far, 2023 has proven to be the
opposite of the last few years with year-to-date sales levels
coming in higher than our beginning of the year forecast. As a
result of the improvement in light-vehicle production, fewer supply
chain challenges, and the continued strong demand for our products,
this quarter resulted in an outperformance of 9% compared to our
primary markets which include North America, Europe, Japan and
Korea. The Company’s growth is being driven by penetration rates of
our core electrochromic technology, continued growth in our Full
Display Mirror product line, and adoption of other value-add
features in the market,” said President and CEO, Steve Downing.
For the second quarter of 2023, the gross margin was 33.1%,
compared to a gross margin of 32.0% for the second quarter of 2022.
The second quarter of 2023 gross margin increased on a quarter over
quarter basis as a result of the significantly higher sales levels,
manufacturing improvements, cost recoveries from OEM’s, and
improvements in freight related costs and product mix. Some of
these improvements were partially offset by increased raw material
and labor costs, as compared to the second quarter of 2022, but
still resulted in a 110 basis point increase in gross margin on a
year over year basis. When compared to the first quarter of
2023, the gross margin in the second quarter of 2023 increased from
31.7% to 33.1%, as a result of better overhead leverage from the
higher sales levels, customer cost recoveries realized in the
second quarter of 2023, and improvements in overtime costs, which
helped offset certain incremental raw material cost increases that
took effect in the first half of 2023. “Late last year we
formulated our plan for margin recovery that we estimated would
take until the end of 2024 to complete. So far, I am very pleased
with our progress and believe we are well on our way to
accomplishing the goal of achieving a gross margin of 35-36% by the
end of next year,” commented Downing.
Operating expenses during the second quarter of 2023 increased
by 5% to $65.8 million, compared to operating expenses of $62.6
million in the second quarter of 2022. Operating expenses increased
quarter over quarter primarily due to staffing and engineering
related professional fees, which were partially offset by lower
outbound freight expenses. “Our operating expenses started to ramp
as expected during the second quarter and will continue to build
throughout the rest of the calendar year as we add resources
focused on new product research and development, new business
awards, and VA/VE initiatives for cost optimization of our bill of
materials,” said Downing.
Income from operations for the second quarter of 2023 was $127.3
million, a 48% increase when compared to income from operations of
$85.8 million for the second quarter of 2022.
During the second quarter of 2023, the Company had an effective
tax rate of 15.1%, which was primarily driven by the benefit of the
foreign derived intangible income deduction.
Net income for the second quarter of 2023 was $109.2 million,
compared to net income of $72.4 million for the second quarter of
2022, which represents a 51% increase. The increase in net income
was primarily the result of the quarter over quarter increases in
net sales and operating profits.
Earnings per diluted share for the second quarter of 2023 were
$0.47, a 52% increase when compared to earnings per diluted share
of $0.31 for the second quarter of 2022.
Automotive net sales in the second quarter of 2023 were $574.1
million, a 27% increase when compared with $452.9 million in the
second quarter of 2022. Auto-dimming mirror unit shipments
increased 21% during the second quarter of 2023, compared to the
second quarter of 2022.
Other net sales in the second quarter of 2023, which includes
dimmable aircraft windows and fire protection products, were $9.4
million, compared to other net sales of $10.5 million in the second
quarter of 2022. Fire protection sales decreased by $3.6 million
for the second quarter of 2023, compared to the second quarter of
2022. Dimmable aircraft window sales increased by $2.5 million for
the second quarter of 2023, compared to the second quarter of
2022.
Share Repurchases
During the second quarter of 2023, the Company repurchased 0.9
million shares of its common stock at an average price of $27.28
per share. As of June 30, 2023, the Company has approximately 18.8
million shares remaining available for repurchase pursuant to its
previously announced share repurchase plan. The Company intends to
continue to repurchase additional shares of its common stock in the
future in support of the previously disclosed capital allocation
strategy, but share repurchases will vary from time to time and
will take into account macroeconomic issues, market trends, and
other factors that the Company deems appropriate.
Future Estimates
The Company’s current forecasts for light vehicle production for
the third quarter of 2023, and full years 2023 and 2024, are based
on the mid-July 2023 S&P Global Mobility forecast for light
vehicle production in North America, Europe, Japan/Korea, and
China. Light vehicle production in these markets is expected to
decrease 3% for the third quarter of 2023, as compared to light
vehicle production for the third quarter of 2022. For calendar year
2023, light vehicle production in these markets is forecasted to
increase 6%, when compared to calendar year 2022. Third quarter
2023 and calendar years 2023 and 2024 forecasted vehicle production
volumes from S&P Global Mobility are shown below:
Light Vehicle Production (per S&P Global Mobility
mid-July light vehicle production forecast) |
(in Millions) |
Region |
Q3 2023 |
Q3 2022 |
% Change |
|
CalendarYear 2024 |
CalendarYear 2023 |
CalendarYear 2022 |
|
2024 vs 2023% Change |
2023 vs 2022% Change |
North America |
3.92 |
3.65 |
7 |
% |
|
15.84 |
15.47 |
14.30 |
|
2 |
% |
8 |
% |
Europe |
3.84 |
3.63 |
6 |
% |
|
17.27 |
17.44 |
15.83 |
|
(1 |
)% |
10 |
% |
Japan and
Korea |
2.99 |
2.82 |
6 |
% |
|
11.60 |
12.37 |
11.14 |
|
(6 |
)% |
11 |
% |
China |
6.27 |
7.39 |
(15 |
)% |
|
28.09 |
26.55 |
26.40 |
|
6 |
% |
1 |
% |
Total Light Vehicle Production |
17.02 |
17.49 |
(3 |
)% |
|
72.80 |
71.83 |
67.67 |
|
1 |
% |
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on this light vehicle production forecast, the Company is
updating certain previously provided guidance estimates for
calendar year 2023 as shown in the table below.
2023 Guidance |
Item |
Original Guidance |
Updated Guidance 7/28//23 |
Revenue |
Approximately $2.2 billion |
$2.2 - 2.3 billion |
Gross
Margin |
32% -
33% |
32.5% - 33% |
Operating
Expenses |
$260 -
$270 million |
No change |
Tax
Rate |
15% -
17% |
15% - 16% |
Capital
Expenditures |
$200 -
$225 million |
No change |
Depreciation & Amortization |
$100 - $110 million |
No change |
|
|
|
Additionally, based on the Company’s current forecasts for light
vehicle production for calendar year 2024, which is currently
estimated to increase by 1% as compared to 2023, the Company at
this time expects calendar year 2024 revenue of approximately $2.45
- $2.55 billion.
“The second quarter of 2023 produced revenue levels that were
both record setting and better than our initial expectations.
Additionally, the Company continued to make progress on our path
toward improved profitability and we are now executing our next
wave of cost improvement initiatives that are necessary for us to
accomplish our goal of reaching the 35-36% gross margin range by
the end of 2024. While the remainder of 2023 and 2024 have the
potential to be impacted by industry challenges and macro-economic
issues, we remain optimistic about our product portfolio, our
growth estimates, and our ability to control costs. These factors
should come together over the next 18 months to produce record
revenue and profitability for the Company,” concluded Downing.
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,”
“future,” “goal,” “guidance,” “hope,” “intend,” “may,” “opinion,”
“optimistic,” “plan,” “poised,” “predict,” “project,” “should,”
“strategy,” “target,” “will,” “work to,” 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, including the impact of
inflation; changes in consumer and customer preferences for our
products (such as cameras replacing mirrors and/or autonomous
driving); our ability to be awarded new business; continued
uncertainty in pricing negotiations with customers and suppliers;
loss of business from increased competition; changes in strategic
relationships; customer bankruptcies or divestiture of customer
brands; fluctuation in vehicle production schedules (including the
impact of customer employee strikes); changes in product mix; raw
material and other supply shortages; labor shortages, supply chain
constraints and disruptions; our dependence on information systems;
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
and/or ability to maximize the value 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; changes in tax laws; import and
export duty and tariff rates in or with the countries with which we
conduct business; negative impact of any governmental
investigations and associated litigation including securities
litigation relating to the conduct of our business; and the length
and severity of the COVID-19 (coronavirus) pandemic, including its
impact across our business on demand, operations, and the global
supply chain. 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, which risks and uncertainties
include the impacts of COVID-19 (coronavirus) pandemic and supply
chain constraints that have affected, are affecting, and will
continue to affect, general economic and industry conditions,
customers, suppliers, and the regulatory environment in which the
Company operates. Includes content supplied by S&P Global
Mobility Light Vehicle Production Forecast of July 14, 2023
(http://www.gentex.com/forecast-disclaimer).
Second Quarter Conference Call
The Company will host a conference call related to this news
release and it will simulcast beginning at 9:30 a.m. ET, July 28,
2023. Participants who wish to ask questions may register for the
call at
https://register.vevent.com/register/BIba3a85f94da3458b983c83b803f9ad35
to receive the dial-in numbers and unique PIN to access the call.
It is recommended that participants join 10 minutes prior to the
event start, although they may register ahead of the call and dial
in at any time during the call. Participants may listen to the call
via audio streaming https://edge.media-server.com/mmc/p/fwvmzen9. A
webcast replay will be available approximately 24 hours after the
conclusion of the call
at http://ir.gentex.com/events-and-presentations/upcoming-past-events.
About the Company
Founded in 1974, Gentex Corporation (The NASDAQ Global Select
Market: GNTX) is a leading supplier of digital vision, connected
car, dimmable glass and fire protection technologies. Visit the
Company’s web site at www.gentex.com.
Contact Information:Gentex Investor &
Media ContactJosh O’Berski(616)772-1590 x5814
|
GENTEX CORPORATION |
AUTO-DIMMING MIRROR SHIPMENTS |
(Thousands) |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
% Change |
|
2023 |
|
2022 |
|
% Change |
North American Interior Mirrors |
2,399 |
|
2,127 |
|
13 |
% |
|
4,825 |
|
4,288 |
|
13 |
% |
North American Exterior
Mirrors |
1,800 |
|
1,468 |
|
23 |
% |
|
3,419 |
|
2,929 |
|
17 |
% |
Total North American Mirror Units |
4,199 |
|
3,595 |
|
17 |
% |
|
8,244 |
|
7,217 |
|
14 |
% |
International Interior
Mirrors |
5,620 |
|
4,909 |
|
14 |
% |
|
11,391 |
|
9,996 |
|
14 |
% |
International Exterior
Mirrors |
3,102 |
|
2,188 |
|
42 |
% |
|
6,003 |
|
4,482 |
|
34 |
% |
Total International Mirror Units |
8,722 |
|
7,097 |
|
23 |
% |
|
17,394 |
|
14,477 |
|
20 |
% |
Total Interior Mirrors |
8,019 |
|
7,036 |
|
14 |
% |
|
16,216 |
|
14,284 |
|
14 |
% |
Total Exterior Mirrors |
4,902 |
|
3,656 |
|
34 |
% |
|
9,422 |
|
7,411 |
|
27 |
% |
Total Auto-Dimming Mirror Units |
12,921 |
|
10,692 |
|
21 |
% |
|
25,638 |
|
21,695 |
|
18 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Note: Percent change and amounts may not total due to
rounding. |
|
GENTEX CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
|
|
(Unaudited) |
|
(Unaudited) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net Sales |
$ |
583,472,846 |
|
$ |
463,423,002 |
|
|
$ |
1,134,234,157 |
|
$ |
931,673,777 |
|
|
|
|
|
|
|
|
|
Cost of Goods Sold |
|
390,389,807 |
|
|
315,055,988 |
|
|
|
766,413,887 |
|
|
622,894,804 |
|
Gross Profit |
|
193,083,039 |
|
|
148,367,014 |
|
|
|
367,820,270 |
|
|
308,778,973 |
|
|
|
|
|
|
|
|
|
Engineering, Research & Development |
|
37,973,790 |
|
|
32,857,419 |
|
|
|
72,627,537 |
|
|
64,832,406 |
|
Selling, General & Administrative |
|
27,819,861 |
|
|
29,718,626 |
|
|
|
54,652,698 |
|
|
54,849,694 |
|
Operating Expenses |
|
65,793,651 |
|
|
62,576,045 |
|
|
|
127,280,235 |
|
|
119,682,100 |
|
|
|
|
|
|
|
|
|
Income from Operations |
|
127,289,388 |
|
|
85,790,969 |
|
|
|
240,540,035 |
|
|
189,096,873 |
|
|
|
|
|
|
|
|
|
Other Income |
|
1,314,396 |
|
|
(982,985 |
) |
|
|
4,058,851 |
|
|
(993,479 |
) |
Income before Income
Taxes |
|
128,603,784 |
|
|
84,807,984 |
|
|
|
244,598,886 |
|
|
188,103,394 |
|
|
|
|
|
|
|
|
|
Provision for Income
Taxes |
|
19,448,381 |
|
|
12,403,581 |
|
|
|
37,865,222 |
|
|
28,170,366 |
|
|
|
|
|
|
|
|
|
Net Income |
$ |
109,155,403 |
|
$ |
72,404,403 |
|
|
$ |
206,733,664 |
|
$ |
159,933,028 |
|
|
|
|
|
|
|
|
|
Earnings Per Share(1) |
|
|
|
|
|
|
|
Basic |
$ |
0.47 |
|
$ |
0.31 |
|
|
$ |
0.88 |
|
$ |
0.68 |
|
Diluted |
$ |
0.47 |
|
$ |
0.31 |
|
|
$ |
0.88 |
|
$ |
0.68 |
|
|
|
|
|
|
|
|
|
Cash Dividends Declared per
Share |
$ |
0.120 |
|
$ |
0.120 |
|
|
$ |
0.240 |
|
$ |
0.240 |
|
|
|
|
|
|
|
|
|
(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. |
|
GENTEX CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
(Unaudited) |
|
|
|
June 30, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Cash and Cash Equivalents |
$ |
237,665,601 |
|
$ |
214,754,638 |
Restricted Cash |
|
— |
|
|
4,000,000 |
Short-Term Investments |
|
20,172,297 |
|
|
23,007,385 |
Accounts Receivable, net |
|
350,409,472 |
|
|
276,493,752 |
Inventories |
|
390,026,268 |
|
|
404,360,270 |
Other Current Assets |
|
27,032,788 |
|
|
26,036,331 |
Total Current Assets |
|
1,025,306,426 |
|
|
948,652,376 |
|
|
|
|
Plant and Equipment - Net |
|
596,694,337 |
|
|
550,033,036 |
|
|
|
|
Goodwill |
|
313,647,268 |
|
|
313,807,494 |
Long-Term Investments |
|
239,621,466 |
|
|
202,331,983 |
Intangible Assets, net |
|
209,710,910 |
|
|
219,360,910 |
Patents and Other Assets, net |
|
102,126,685 |
|
|
93,044,125 |
Total Other Assets |
|
865,106,329 |
|
|
828,544,512 |
|
|
|
|
Total Assets |
$ |
2,487,107,092 |
|
$ |
2,327,229,924 |
|
|
|
|
LIABILITIES AND SHAREHOLDERS’
INVESTMENT |
|
|
|
Current Liabilities |
$ |
276,062,016 |
|
$ |
250,552,752 |
Other Non-current Liabilities |
|
15,095,750 |
|
|
10,884,351 |
Shareholders’ Investment |
|
2,195,949,326 |
|
|
2,065,792,821 |
Total Liabilities &
Shareholders’ Investment |
$ |
2,487,107,092 |
|
$ |
2,327,229,924 |
Gentex (NASDAQ:GNTX)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Gentex (NASDAQ:GNTX)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024