0000355811false00003558112023-10-272023-10-27

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549


FORM 8-K


CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934


Date of Report: October 27, 2023


GENTEX CORPORATION
(Exact name of registrant as specified in its charter)
Michigan
0-1023538-2030505
(State or other jurisdiction
of incorporation)		(Commission
File Number)		(IRS Employer
Identification No.)
600 North Centennial Street
Zeeland
Michigan49464
(Address of principal executive offices)(Zip Code)

Registrant's telephone number, including area code: (616) 772-1800
_____________________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.06 per shareGNTXNASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐    


Section 2.     Financial Information

Item 2.02    Results of Operations and Financial Condition.

(a)On October 27, 2023 Gentex Corporation issued a news release announcing financial results for the third quarter ended September 30, 2023. A copy of the news release is attached as Exhibit 99.1 to the Form 8-K.

The information in this Form 8-K and the attached Exhibit shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Section 9.    Financial Statements and Exhibits

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibit
    
    99.1 – News Release Dated October 27, 2023.


SIGNATURE


    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: October 27, 2023
            
GENTEX CORPORATION
(Registrant)                


By    /s/ Kevin C. Nash

Kevin C. Nash
Its Vice President - Finance and Chief Financial Officer    
    



EXHIBIT INDEX


    99.1    News Release Dated October 27, 2023


Exhibit 99.1
gentex-black.jpg

GENTEX REPORTS THIRD QUARTER 2023 FINANCIAL RESULTS

    ZEELAND, MI -- (GLOBE NEWSWIRE - October 27, 2023) - 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 nine months ended September 30, 2023.
3rd Quarter 2023 Summary

•Net sales of $575.8 million, a 17% increase compared to the third quarter of 2022
•Unit shipments of 12.6 million, a 10% increase compared to the third quarter of 2022
•Gross profit margin of 33.2%, an increase of 340 basis points from the third quarter of 2022
•Income from operations of $122.4 million, a 41% increase compared to the third quarter of 2022
•Net income of $104.7 million, a 44% increase compared to the third quarter of 2022
•Earnings per diluted share of $0.45 for the quarter, a 45% increase compared to the third quarter of 2022

    For the third quarter of 2023, the Company reported net sales of $575.8 million, compared to net sales of $493.6 million in the third quarter of 2022, a 17% quarter over quarter increase. For the third quarter of 2023, global light vehicle production in North America, Europe, Japan/Korea, and China increased approximately 5%, compared to the third quarter of 2022. "While the last few years have been negatively impacted by labor and supply chain issues that limited our ability to meet customer demand, the last several quarters have improved significantly. The growth in the third quarter of 2023 is a continuation of the unit and content growth we experienced during the first half of this year, and is indicative of the success of our technology platforms, including the launch rates and increased take rates of our Full Display Mirror products,” said President and CEO, Steve Downing. "In terms of performance metrics, our unit growth in the third quarter outperformed the underlying market by 5%, while our revenue beat the market by 12%,” commented Downing.
For the third quarter of 2023, the gross margin was 33.2%, compared to a gross margin of 29.8% for the third quarter of 2022. The third quarter of 2023 gross margin increased by 340 basis points on a quarter over quarter basis as a result of the higher sales levels, improvements in freight and tariff related costs, cost recoveries and price increases from customers, and improvements in product mix. However,

Exhibit 99.1
some of these improvements were partially offset by increased raw material costs, labor costs, and scrap and yield loss increases as compared to the third quarter of 2022. When compared to the second quarter of 2023, the gross margin in the third quarter of 2023 improved from 33.1% to 33.2%. "We continue to make progress on our margin recovery plan that we estimated would take until the end of 2024 to complete. In the six months following the close of the first quarter of 2023, we have seen gross margins expand 150 basis points, as the gross margin grew from 31.7% during the first quarter of 2023 to 33.2% in the third quarter,” commented Downing. “Obviously, I am very pleased with the progress made so far in calendar year 2023, but we still have an incredible amount of work to do in the fourth quarter of this year and in 2024 in order to accomplish our goal of achieving a gross margin of 35% - 36% by the end of next year. Our focus for the next 18 months will be on achieving improvements in our material costs and supply chain expenses, but will also include targeted improvements in our operations by increasing throughput, lowering scrap and yield loss, and reducing overtime expenses.”
Operating expenses during the third quarter of 2023 increased by 14% to $69.0 million, compared to operating expenses of $60.4 million in the third 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 are trending in line with our expectations, with increases primarily focused on R&D, as we continue to add technical capabilities and bandwidth to support the increased level of launch activities, while also continuing to expand our research into new technologies. The amount of work that our team has accomplished in our advanced research areas is promising and will ultimately lay the ground work for growth in future years. R&D expenses are expected to continue at an elevated pace for the rest of this year and throughout calendar year 2024, as we invest in innovative products and technologies, new business awards, and VA/VE initiatives for cost optimization of our bill of materials,” said Downing.
    Income from operations for the third quarter of 2023 was $122.4 million, a 41% increase when compared to income from operations of $86.8 million for the third quarter of 2022.
During the third quarter of 2023, the Company had an effective tax rate of 15.9%, which was primarily driven by the benefit of the foreign derived intangible income deduction.

Exhibit 99.1
Net income for the third quarter of 2023 was $104.7 million, compared to net income of $72.7 million for the third quarter of 2022, which represents a 44% 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 third quarter of 2023 were $0.45, a 45% increase compared to earnings per diluted share of $0.31 for the third quarter of 2022.
    Automotive net sales in the third quarter of 2023 were $564.5 million, a 17% increase compared with $480.9 million in the third quarter of 2022. Auto-dimming mirror unit shipments increased 10% during the third quarter of 2023, compared to the third quarter of 2022.
    Other net sales in the third quarter of 2023, which includes dimmable aircraft windows and fire protection products, were $11.3 million, compared to other net sales of $12.7 million in the third quarter of 2022. Fire protection sales decreased by $5.3 million for the third quarter of 2023, compared to the third quarter of 2022. Dimmable aircraft window sales increased by $4.0 million for the third quarter of 2023, compared to the third quarter of 2022.
Share Repurchases
During the third quarter of 2023, the Company repurchased 0.8 million shares of its common stock at an average price of $32.41 per share. As of September 30, 2023, the Company has approximately 18.0 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 fourth quarter of 2023, and full years 2023 and 2024, are based on the mid-October 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 increase 4% for the fourth quarter of 2023, as compared to light vehicle production for the fourth quarter of 2022. For calendar year 2023, light vehicle production in these markets is forecasted to increase 9%, compared to calendar year 2022. Fourth quarter 2023 and calendar years 2023 and 2024

Exhibit 99.1
forecasted vehicle production volumes from S&P Global Mobility are shown below:
Light Vehicle Production (per S&P Global Mobility mid-October light vehicle production forecast)
(in Millions)
RegionQ4 2023Q4 2022% ChangeCalendar Year 2024Calendar Year 2023Calendar Year 20222024 vs 2023
% Change		2023 vs 2022
% Change
North America3.24 3.55 (9)%16.29 15.20 14.30 7 %6 %
Europe4.58 4.32 6 %17.44 17.71 15.83 (2)%12 %
Japan and Korea3.32 3.12 6 %12.14 12.69 11.14 (4)%14 %
China7.85 7.27 8 %28.05 27.89 26.40 1 %6 %
Total Light Vehicle Production18.99 18.26 4 %73.92 73.49 67.67 1 %9 %

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 Annual Guidance
ItemGuidance as of 7/28//23Updated Guidance 10/27//23
Revenue$2.2 - $2.3 billionNo change
Gross Margin32.5% - 33%No change
Operating Expenses$260 -$270 millionNo change
Tax Rate15% - 16%15% - 15.5%
Capital Expenditures$200 - $225 million$200 - $215 million
Depreciation & Amortization$100 - $110 million$95 -$100 million

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 expects calendar year 2024 revenue of approximately $2.45 - $2.55 billion.
"The Company is on pace for record setting revenue this year which has been aided by tailwinds from the relief of the supply chain constraints, along with strong demand for outside mirrors and advanced electronic features. Our outgrowth versus the market demonstrates that our product strategy is succeeding with our customers and consumers. At the same time, progress on the path toward improved profitability continues, as we execute the additional cost improvement initiatives that will enable us to accomplish our plan of reaching a 35-36% gross margin range by the end of 2024. While gross margin improvements have continued throughout 2023, the sequential gross margin improvement from the second quarter to the third quarter of this year was subdued by certain product mix issues that will

Exhibit 99.1
hopefully subside as we move into the fourth quarter and next year. The fourth quarter will likely be impacted by the UAW strikes from both a revenue and margin perspective, but we remain confident in our ability to continue to grow revenue, while improving our margin profile throughout the end of this year and into 2024,” 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,” "likely," “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

Exhibit 99.1
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 the UAW strikes and 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 October 16, 2023 (http://www.gentex.com/forecast-disclaimer).
Third 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, October 27, 2023. Participants who wish to ask questions may register for the call at https://register.vevent.com/register/BIb1d8aa6b9c82405daa317d1647f7862e 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/ig4zn4os. 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.




Exhibit 99.1
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 Contact
Josh O'Berski
(616)772-1590 x5814

Exhibit 99.1

GENTEX CORPORATION
AUTO-DIMMING MIRROR SHIPMENTS
(Thousands)
Three Months Ended September 30,Nine Months Ended September 30,
20232022% Change20232022% Change
North American Interior Mirrors2,366 2,156 10 %7,192 6,444 12 %
North American Exterior Mirrors1,614 1,602 1 %5,033 4,532 11 %
Total North American Mirror Units3,980 3,758 6 %12,224 10,976 11 %
International Interior Mirrors5,709 5,287 8 %17,100 15,282 12 %
International Exterior Mirrors2,915 2,444 19 %8,918 6,926 29 %
Total International Mirror Units8,624 7,731 12 %26,018 22,208 17 %
Total Interior Mirrors8,076 7,443 9 %24,292 21,727 12 %
Total Exterior Mirrors4,529 4,046 12 %13,950 11,457 22 %
Total Auto-Dimming Mirror Units12,604 11,489 10 %38,242 33,184 15 %
Note: Percent change and amounts may not total due to rounding.


Exhibit 99.1
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Net Sales$575,848,490 $493,636,695 $1,710,082,647 $1,425,310,472 
Cost of Goods Sold384,407,857 346,435,670 1,150,821,744 969,330,474 
Gross Profit191,440,633 147,201,025 559,260,903 455,979,998 
Engineering, Research & Development40,197,517 33,541,331 112,825,054 98,373,737 
Selling, General & Administrative28,826,587 26,868,154 83,479,285 81,717,848 
Operating Expenses69,024,104 60,409,485 196,304,339 180,091,585 
Income from Operations122,416,529 86,791,540 362,956,564 275,888,413 
Other Income2,063,632 (629,187)6,122,483 (1,622,667)
Income before Income Taxes124,480,161 86,162,353 369,079,047 274,265,746 
Provision for Income Taxes19,754,749 13,506,358 57,619,971 41,676,723 
Net Income$104,725,412 $72,655,995 $311,459,076 $232,589,023 
Earnings Per Share(1)
Basic$0.45 $0.31 $1.33 $0.99 
Diluted$0.45 $0.31 $1.33 $0.99 
Cash Dividends Declared per Share$0.120 $0.120 $0.360 $0.360 
(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.


Exhibit 99.1
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)
September 30, 2023December 31, 2022
ASSETS
Cash and Cash Equivalents$260,633,625 $214,754,638 
Restricted Cash— 4,000,000 
Short-Term Investments17,464,830 23,007,385 
Accounts Receivable, net351,142,147 276,493,752 
Inventories395,452,780 404,360,270 
Other Current Assets30,758,445 26,036,331 
Total Current Assets1,055,451,827 948,652,376 
Plant and Equipment - Net606,180,738 550,033,036 
Goodwill313,157,393 313,807,494 
Long-Term Investments272,615,535 202,331,983 
Intangible Assets, net204,885,910 219,360,910 
Patents and Other Assets, net106,027,435 93,044,125 
Total Other Assets896,686,273 828,544,512 
Total Assets$2,558,318,838 $2,327,229,924 
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities$274,405,503 $250,552,752 
Other Non-current Liabilities15,459,528 10,884,351 
Shareholders' Investment2,268,453,807 2,065,792,821 
Total Liabilities & Shareholders' Investment$2,558,318,838 $2,327,229,924 


v3.23.3
Document and Entity Information
Oct. 27, 2023
Cover [Abstract]  
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Document Period End Date Oct. 27, 2023
Entity Registrant Name GENTEX CORPORATION
Entity Central Index Key 0000355811
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Entity Incorporation, State or Country Code MI
Entity File Number 0-10235
Entity Tax Identification Number 38-2030505
Entity Address, Address Line One 600 North Centennial Street
Entity Address, City or Town Zeeland
Entity Address, State or Province MI
Entity Address, Postal Zip Code 49464
City Area Code 616
Local Phone Number 772-1800
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Title of 12(b) Security Common Stock, par value $0.06 per share
Trading Symbol GNTX
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