GENTEX CORPORATION 1st Quarter 2022 Summary
Net sales of
Gross profit margin of 34.3%
Net income of
2.44 million shares repurchased during the quarter
FDM Launch for 12th and 13th OEM
5 New Nameplate Launches for FDM bringing total nameplates to 70
For the first quarter of 2022, the Company reported net sales of
For the first quarter of 2022, the gross margin was 34.3%, compared to a gross margin of 37.9% for the first quarter of 2021. Gross margins were impacted in the quarter by raw material cost increases, elevated freight expenses, labor cost increases in response to a tight labor market, lower than expected sales levels, and ongoing customer order volatility. 'Considering the inflationary pressures in our business right now, the gross margin was within 70 basis points of our annual guidance range for gross margin performance, despite the fact that sales for the first quarter are expected to be at the lowest level of the year. The Company is in active discussions with our customers about the inflationary aspects of our business and how to best formulate long term collaborative relationships that provide the opportunity to minimize the impact of these inflationary pressures on our business model, while preserving the ability to grow through the introduction of new, innovative products. We fully expect that these discussions will extend throughout calendar year 2022 and even into 2023,' commented Downing.
Operating expenses during the first quarter of 2022 increased by 15% to
Income from operations for the first quarter of 2022 was
During the first quarter of 2022, the Company had an effective tax rate of 15.3%, which was primarily driven by the benefit of the foreign derived intangible income deduction and discrete benefits from stock-based compensation.
Net income was
Earnings per diluted share for the first quarter of 2022 were
Automotive net sales in the first quarter of 2022 were
Other net sales in the first quarter of 2022, which includes dimmable aircraft windows and fire protection products, was
Share Repurchases
During the first quarter of 2022, the Company repurchased 2.44 million shares of its common stock at an average price of
Future Estimates
The Company's current forecasts for light vehicle production for the second quarter 2022, and full years 2022 and 2023, are based on the
Light Vehicle Production (per
(in Millions)
Region Q2 2022 Q2 2021 % Change Calendar
Year 2023 Calendar Year 2022 Calendar Year 2021 2023 vs 2022 % Change 2022 vs 2021 % Change
North America 3.59 3.19 13 % 16.49 14.75 13.05 12 % 13 %
Europe 3.98 4.14 (4 )% 18.31 16.49 13.02 11 % 27 %
Japan and Korea 2.84 2.75 3 % 11.76 11.36 10.88 4 % 4 %
China 5.50 5.79 (5 )% 26.94 24.63 24.84 9 % (1 )%
Total Light Vehicle Production 15.91 15.87 - % 73.50 67.23 61.79 9 % 9 %
Based on this light vehicle production forecast, the Company is making no changes to its previously provided guidance for calendar year 2022 as shown in the table below.
2022 Guidance
Item Amount
Revenue$1.87 -$2.02 billion
Gross Margin 35% - 36%
Operating Expenses$230 -$240 million
Tax Rate 15% - 17%
Capital Expenditures$150 -$175 million
Depreciation & Amortization$100 -$110 million
Additionally, based on the Company's forecasts for light vehicle production for calendar year 2023, the Company still expects calendar year 2023 revenue growth of approximately 15% - 20% above the 2022 revenue guidance of
'While we are optimistic given the sales level achieved during the first quarter and what we expect to be increased revenue levels throughout the remainder of the year, we have also seen increased levels of volatility in customer orders in recent weeks, stemming from the electronics supply chain shortages and OEM shut-downs. The Company has devoted significant resources to product re-engineering that has allowed us to maintain consistent supply to our customers and cleared the path for better revenue levels throughout 2022 and 2023. While the inflationary aspects of our business will continue to be a challenge over the next several quarters, we believe our recipe of out-growth versus the underlying vehicle production market will create record sales levels that will allow us to leverage our overhead to help offset some of the cost increases we have seen recently. We believe that this combination of record level sales when combined with our consistent and disciplined capital allocation philosophy will result in excellent shareholder returns over the next several years,' 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,' 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 (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; 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
First Quarter Conference Call
A conference call related to this news release will be simulcast live on the internet beginning at
About the Company
Founded in 1974,
Contact Information:
Gentex Investor & Media Contact
(616)772-1590 x5814
AUTO-DIMMING MIRROR SHIPMENTS
(Thousands)
Three Months Ended
2022 2021 % Change
North American Interior Mirrors 2,161 2,073 4 %
North American Exterior Mirrors 1,461 1,493 (2 )%
Total North American Mirror Units 3,623 3,566 2 %
International Interior Mirrors 5,087 5,779 (12 )%
International Exterior Mirrors 2,293 2,436 (6 )%
Total International Mirror Units 7,380 8,215 (10 )%
Total Interior Mirrors 7,248 7,852 (8 )%
Total Exterior Mirrors 3,755 3,929 (4 )%
Total Auto-Dimming Mirror Units 11,003 11,780 (7 )%
Note: Percent change and amounts may not total due to rounding.
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
2022 2021
Net Sales $ 468,250,776 $483,724,839
Cost of Goods Sold 307,838,816 300,424,671
Gross Profit 160,411,960 183,300,168
Engineering, Research & Development 31,974,987 27,652,081
Selling, General & Administrative 25,131,068 21,914,386
Operating Expenses 57,106,055 49,566,467
Income from Operations 103,305,905 133,733,701
Other Income (10,494 ) 1,533,035
Income before Income Taxes 103,295,411 135,266,736
Provision for Income Taxes 15,766,785 21,815,866
Net Income$ 87,528,626 $ 113,450,870
Earnings Per Share(1)
Basic$ 0.37 $ 0.47
Diluted$ 0.37 $ 0.46
Cash Dividends Declared per Share$ 0.120 $ 0.120
(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)
March 31, 2022 December 31, 2021
ASSETS
Cash and Cash Equivalents$ 279,708,413 $ 262,311,670
Short-Term Investments 6,891,621 5,423,612
Accounts Receivable, net 281,461,678 249,794,906
Inventories 362,736,521 316,267,442
Other Current Assets 24,733,040 39,178,119
Total Current Assets 955,531,273 872,975,749
Plant and Equipment - Net 468,409,064 464,121,676
Goodwill 313,928,914 313,960,209
Long-Term Investments 175,824,026 207,693,147
Intangible Assets 234,229,803 239,189,627
Patents and Other Assets 32,459,405 33,450,758
Total Other Assets 756,442,148 794,293,741
Total Assets$2,180,382,485 $ 2,131,391,166
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities$239,223,172 $ 181,656,100
Other Non-current Liabilities 12,190,413 11,746,599
Shareholders' Investment 1,928,968,900 1,937,988,467
Total Liabilities &Shareholders' Investment $2,180,382,485 $ 2,131,391,166
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