ZEELAND, Mich., Oct. 01, 2025 (GLOBE NEWSWIRE) -- Gentex Corporation (NASDAQ: GNTX), the Zeeland, Michigan-based supplier of digital vision, connected car, dimmable glass, fire protection technologies and consumer electronics, is pleased to announce that it will release its third quarter 2025 financial results on Friday, October 24, before the market opens. The Company will host a conference call for the investment community at 9:30am ET to discuss the results. The call will also be available to the general ...

Core Viewpoint - Gentex (GNTX) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, indicating a positive earnings outlook that may lead to increased stock price [1][3]. Earnings Estimates and Stock Price Correlation - The Zacks rating system emphasizes the importance of changing earnings estimates in influencing near-term stock price movements, making it a valuable tool for investors [2][4]. - A strong correlation exists between earnings estimate revisions and stock price movements, with institutional investors using these estimates to determine fair value [4][6]. Gentex's Earnings Outlook - For the fiscal year ending December 2025, Gentex is expected to earn $1.77 per share, which remains unchanged from the previous year, but the Zacks Consensus Estimate has increased by 3.2% over the past three months [8]. - The rising earnings estimates and the Zacks rating upgrade suggest an improvement in Gentex's underlying business, which could lead to higher stock prices as investors respond positively [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Gentex's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9][10].

Group 1 - Gentex Corporation is a key partner in the U.S. Army's Soldier Borne Mission Command (SBMC) program awarded to Anduril Industries [1] - Gentex will provide advanced helmet and communications integration for the Army's next-generation Heads Up Displays (HUDs) [1] - The program aims to ensure seamless soldier adoption and enhanced survivability in demanding environments [1]

Industry Overview - The Zacks Automotive - Original Equipment industry is expected to benefit from acquisitions, collaborations, a diverse customer base, and the global expansion of original equipment manufacturers [1][2] - The industry focuses on designing and producing passive safety systems, driveline, and metal forming technologies for various vehicle types, including electric and hybrid vehicles [2] Factors Influencing the Industry Outlook - Automation technology is enhancing efficiency, productivity, quality, and safety while reducing labor costs for manufacturers, providing a competitive edge [3] - A new tax incentive allows car buyers to deduct up to $10,000 annually in auto loan interest from their federal taxable income, which is anticipated to increase demand for new vehicles [4] Demand and Production Trends - A decline in vehicle production due to weak demand, particularly for unsold electric vehicles, is expected to negatively impact the demand for auto equipment [5] - The U.S. government has implemented a 25% import tax on essential auto components, raising costs for domestic equipment manufacturers [6] Industry Performance and Valuation - The Zacks Automotive - Original Equipment Industry ranks 91, placing it in the top 37% of over 250 Zacks industries, indicating positive near-term prospects [7][8] - The industry has underperformed the S&P 500, declining 3% over the past year compared to the S&P 500's growth of 16.6% [10] - The industry is currently trading at an EV/EBITDA ratio of 18.57X, higher than the S&P 500's 17.77X and lower than the sector's 22.63X [13] Company Highlights - **Gentex Corporation (GNTX)**: Supplies automatic-dimming mirrors and electronics, with growth potential in tech products and a recent acquisition of VOXX International expanding its portfolio [16][17] - **Adient plc (ADNT)**: A leading automotive seating supplier focusing on automation and modularity, with a diverse customer base and international presence [22][23] - **American Axle & Manufacturing Holdings, Inc. (AXL)**: A supplier of driveline systems advancing in electrification, with a strong market position bolstered by recent acquisitions [26][27]

Company Overview - Gentex Corporation, founded in 1974, is a leading supplier in various sectors including digital vision, connected car technologies, dimmable glass, fire protection technologies, medical devices, and consumer electronics [2] Dividend Announcement - The Board of Directors of Gentex Corporation declared a quarterly cash dividend of $0.12 per share, which will be payable on October 22, 2025 [1] - Shareholders of record will be those holding common stock at the close of business on October 8, 2025 [1]

```markdown [Part I - Financial Information](index=3&type=section&id=Part%20I%20-%20Financial%20Information) This section encompasses Gentex Corporation's unaudited financial statements, management's analysis, market risk disclosures, and controls [Item 1. Unaudited Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents Gentex Corporation's unaudited condensed consolidated financial statements and detailed explanatory notes [Unaudited Condensed Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This section details Gentex Corporation's financial position through its unaudited condensed consolidated balance sheets - The unaudited condensed consolidated balance sheets show the financial position of Gentex Corporation as of June 30, 2025, compared to December 31, 2024. Key changes include a **decrease in cash and cash equivalents**, an **increase in accounts receivable and inventories**, and an **increase in total liabilities**, primarily due to the VOXX acquisition and timing of payments[10](index=10&type=chunk) Balance Sheet Highlights (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :---------------- | :---------------- | :------- | | Cash and cash equivalents | $119,774,840 | $233,318,766 | $(113,543,926) | | Accounts receivable, net | $372,961,789 | $295,344,353 | $77,617,436 | | Inventories, net | $475,719,663 | $436,497,445 | $39,222,218 | | Total current assets | $1,061,976,626 | $1,037,328,170 | $24,648,456 | | Total assets | $2,813,817,336 | $2,760,820,975 | $52,996,361 | | Accounts payable | $204,675,277 | $168,314,912 | $36,360,365 | | Accrued liabilities | $128,326,091 | $84,377,764 | $43,948,327 | | Total current liabilities | $336,933,865 | $252,692,676 | $84,241,189 | | Total liabilities | $380,689,351 | $288,721,320 | $91,968,031 | | Total Shareholders' Investment | $2,430,637,724 | $2,472,099,655 | $(41,461,931) | [Unaudited Condensed Consolidated Statements of Income](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income) This section outlines Gentex Corporation's financial performance through its unaudited condensed consolidated statements of income - The unaudited condensed consolidated statements of income show an **increase in net sales and net income** for the three months ended June 30, 2025, compared to the same period in 2024, largely driven by the VOXX acquisition. For the six months, net sales increased, but net income slightly decreased[12](index=12&type=chunk) Income Statement Highlights (Three Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :-------------------------------- | :---------------- | :---------------- | :------- | :------- | | Net Sales | $657,858,210 | $572,925,778 | $84,932,432 | 14.8% | | Gross profit | $225,290,903 | $188,563,309 | $36,727,594 | 19.5% | | Income from operations | $118,520,135 | $114,884,022 | $3,636,113 | 3.2% | | Net Income Attributable to Gentex Corporation | $96,039,584 | $86,040,438 | $9,999,146 | 11.6% | | Basic EPS | $0.43 | $0.37 | $0.06 | 16.2% | | Diluted EPS | $0.43 | $0.37 | $0.06 | 16.2% | Income Statement Highlights (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :-------------------------------- | :---------------- | :---------------- | :------- | :------- | | Net Sales | $1,234,631,300 | $1,163,150,989 | $71,480,311 | 6.1% | | Gross profit | $417,024,490 | $390,800,916 | $26,223,574 | 6.7% | | Income from operations | $231,507,241 | $244,230,334 | $(12,723,093) | -5.2% | | Net Income Attributable to Gentex Corporation | $190,913,629 | $194,271,153 | $(3,357,524) | -1.7% | | Basic EPS | $0.85 | $0.84 | $0.01 | 1.2% | | Diluted EPS | $0.85 | $0.84 | $0.01 | 1.2% | [Unaudited Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents Gentex Corporation's unaudited condensed consolidated statements of comprehensive income - The unaudited condensed consolidated statements of comprehensive income show an **increase in comprehensive income** for both the three and six months ended June 30, 2025, compared to the prior year, primarily due to positive foreign currency translation adjustments and unrealized gains on debt securities, offsetting unrealized losses on derivatives[15](index=15&type=chunk) Comprehensive Income Highlights (Three Months Ended June 30) | Metric | 2025 | 2024 | Change | | :--------------------------------------- | :---------------- | :---------------- | :------- | | Net income from consolidated operations | $95,650,450 | $86,040,438 | $9,610,012 | | Foreign currency translation adjustments | $2,109,011 | $(509,541) | $2,618,552 | | Unrealized losses on derivatives | $(1,245,367) | — | $(1,245,367) | | Unrealized gains on debt securities, net | $643,420 | $271 | $643,149 | | Comprehensive income from consolidated operations | $97,283,923 | $85,531,111 | $11,752,812 | Comprehensive Income Highlights (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | | :--------------------------------------- | :---------------- | :---------------- | :------- | | Net income from consolidated operations | $190,524,495 | $194,271,153 | $(3,746,658) | | Foreign currency translation adjustments | $1,763,781 | $(1,459,754) | $3,223,535 | | Unrealized losses on derivatives | $(1,245,367) | — | $(1,245,367) | | Unrealized gains on debt securities, net | $2,826,267 | $52,181 | $2,774,086 | | Comprehensive income from consolidated operations | $193,537,187 | $192,852,622 | $684,565 | [Unaudited Condensed Consolidated Statements of Shareholders' Investment](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Investment) This section details changes in Gentex Corporation's shareholders' investment over specified periods - The statements detail changes in shareholders' investment for the three and six months ended June 30, 2025 and 2024. The **total shareholders' investment decreased** for the six months ended June 30, 2025, primarily due to share repurchases and dividends, partially offset by net income[18](index=18&type=chunk) Shareholders' Investment Changes (Six Months Ended June 30, 2025) | Activity | Amount | | :------------------------------------------------ | :---------------- | | Balance as of January 1, 2025 | $2,472,099,655 | | Issuance of common stock from stock plan transactions | $6,350,684 | | Repurchases of common stock | $(202,167,048) | | Stock-based compensation expense | $16,160,289 | | Dividends declared ($0.24 per share) | $(53,321,754) | | Net income (loss) attributable to Gentex Corporation | $190,913,629 | | Other comprehensive income | $3,012,692 | | Balance as of June 30, 2025 | $2,430,637,724 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes Gentex Corporation's cash inflows and outflows from operating, investing, and financing activities - The statements show cash flows for the six months ended June 30, 2025 and 2024. **Net cash provided by operating activities increased**, while **net cash used for investing and financing activities also increased significantly**, leading to a **net decrease in cash and cash equivalents** for the 2025 period, primarily due to the VOXX acquisition and share repurchases[21](index=21&type=chunk) Cash Flow Highlights (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | | :--------------------------------------- | :---------------- | :---------------- | :------- | | Net cash provided by operating activities | $314,644,872 | $259,127,445 | $55,517,427 | | Net cash used for investing activities | $(181,358,214) | $(102,078,900) | $(79,279,314) | | Net cash used for financing activities | $(246,830,584) | $(123,241,613) | $(123,588,971) | | Net (decrease) increase in cash and cash equivalents | $(113,543,926) | $33,806,932 | $(147,350,858) | | Cash and cash equivalents, end of period | $119,774,840 | $260,241,951 | $(140,467,111) | - Key drivers for cash flow changes in H1 2025 include significant outflows for the **acquisition of businesses ($143.3 million)**, **repurchases of common stock ($198.9 million)**, and **cash dividends paid ($54.2 million)**[21](index=21&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the unaudited condensed consolidated financial statements - This section provides detailed explanations and disclosures for the unaudited condensed consolidated financial statements, covering accounting policies, recent accounting standard adoptions, specifics on goodwill, intangible assets, investments, inventories, earnings per share calculations, stock-based compensation, comprehensive income components, debt arrangements, equity changes, contingencies, segment reporting, income taxes, revenue disaggregation, leases, and significant acquisitions[23](index=23&type=chunk) [(1) Basis of Presentation](index=10&type=section&id=(1)%20Basis%20of%20Presentation) - The unaudited condensed consolidated financial statements are prepared under SEC rules and GAAP, with certain information condensed or omitted[23](index=23&type=chunk) - Management believes the statements fairly present the Company's financial position, results of operations, and cash flows, with all necessary adjustments being normal and recurring[23](index=23&type=chunk) [(2) Adoption of New Accounting Standards](index=10&type=section&id=(2)%20Adoption%20of%20New%20Accounting%20Standards) - ASU 2023-09 (Improvements to Income Tax Disclosures) is effective for the fiscal year ending December 31, 2025, requiring specific categories in rate reconciliation and additional information for significant reconciling items[24](index=24&type=chunk) - SEC Final Rule No. 33-11275 (Climate-Related Disclosures) is currently stayed by the SEC pending judicial review; the Company is evaluating its potential impact[25](index=25&type=chunk) - ASU No. 2024-03 (Disaggregation of Income Statement Expenses) is effective for fiscal years beginning after December 15, 2026, requiring tabular disaggregation of certain income statement expenses. The Company is evaluating its impact[26](index=26&type=chunk) - ASU 2025-03 (Business Combinations and Consolidation) is effective for annual periods beginning after December 15, 2026, providing guidance on determining the accounting acquirer in VIE acquisitions. The Company is evaluating its impact[27](index=27&type=chunk) [(3) Goodwill and Other Intangible Assets](index=11&type=section&id=(3)%20Goodwill%20and%20Other%20Intangible%20Assets) - **Goodwill remained stable at $340.7 million** as of June 30, 2025, with no interim impairment testing deemed necessary[28](index=28&type=chunk) Goodwill Carrying Value | Date | Amount | | :----------------- | :---------------- | | January 1, 2025 | $340,668,927 | | June 30, 2025 | $340,668,927 | - The Company's intangible assets, including HomeLink trade names, exclusive licensing agreements, and various technologies, totaled **$186.5 million net** as of June 30, 2025, a **decrease from $195.2 million** at December 31, 2024, primarily due to amortization[30](index=30&type=chunk)[31](index=31&type=chunk) - Amortization expense of patents and intangible assets was approximately **$4.7 million** for Q2 2025 (vs. **$4.4 million** in Q2 2024) and **$9.3 million** for H1 2025 (vs. **$8.7 million** in H1 2024). Estimated amortization expense for the remainder of 2025 is **$5.5 million**, and approximately **$3 million** for each of 2026-2029[31](index=31&type=chunk)[32](index=32&type=chunk) [(4) Investments](index=13&type=section&id=(4)%20Investments) - The Company's investment portfolio includes available-for-sale securities (government, asset-backed, municipal, and corporate bonds), an equity method investment in ASA, and strategic Technology Investments[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) - The acquisition of VOXX on April 1, 2025, led to the reclassification of the VOXX investment and the acquisition of ASA. An **impairment charge of $6.2 million** was recorded for an equity method investment in Green Marbles LLC in Q2 2025 due to deteriorating financial performance[37](index=37&type=chunk)[38](index=38&type=chunk)[40](index=40&type=chunk) Investment (Loss) Income, Net | Period | 2025 | 2024 | | :-------------------------------- | :---------------- | :---------------- | | Three Months Ended June 30 | $(3,628,231) | $(12,393,771) | | Six Months Ended June 30 | $1,246,624 | $(15,762,295) | Fair Value Measurements (June 30, 2025) | Description | Total Fair Value | Level 1 | Level 2 | Level 3 | | :-------------------------- | :---------------- | :---------------- | :---------------- | :---------------- | | Cash & Cash Equivalents | $119,774,840 | $119,774,840 | — | — | | Short-Term Investments | $9,067,033 | $966,611 | $8,100,422 | — | | Long-Term Investments | $101,010,623 | — | $101,010,623 | — | | **Total** | **$229,856,496** | **$120,741,451** | **$109,115,045** | **—** | - **Unrealized losses on available-for-sale securities totaled $1,202,448** as of June 30, 2025, compared to $1,968,473 at December 31, 2024[45](index=45&type=chunk) [(5) Inventories, net](index=18&type=section&id=(5)%20Inventories,%20net) - **Total inventories increased to $475.7 million** as of June 30, 2025, from $436.5 million at December 31, 2024, primarily driven by a **significant increase in finished goods**, partly due to the VOXX acquisition[47](index=47&type=chunk)[136](index=136&type=chunk) Inventories, net (June 30, 2025 vs. December 31, 2024) | Category | June 30, 2025 | December 31, 2024 | Change | | :---------------- | :---------------- | :---------------- | :------- | | Raw materials | $282,343,416 | $307,098,829 | $(24,755,413) | | Work-in-process | $47,468,017 | $48,098,732 | $(630,715) | | Finished goods | $145,908,230 | $81,299,884 | $64,608,346 | | **Total Inventory** | **$475,719,663** | **$436,497,445** | **$39,222,218** | [(6) Earnings Per Share](index=18&type=section&id=(6)%20Earnings%20Per%20Share) - The Company calculates earnings per share using the two-class method due to unvested share-based payment awards with dividend rights[48](index=48&type=chunk) Basic and Diluted EPS (Three Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------------- | :---------------- | :---------------- | | Net Income available to common shareholders | $94,627,353 | $84,837,701 | | Basic weighted average shares outstanding | 219,631,876 | 227,377,169 | | Net Income per share - Basic | $0.43 | $0.37 | | Net Income per share - Diluted | $0.43 | $0.37 | Basic and Diluted EPS (Six Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------------- | :---------------- | :---------------- | | Net Income available to common shareholders | $187,439,850 | $191,488,981 | | Basic weighted average shares outstanding | 221,376,755 | 227,490,367 | | Net Income per share - Basic | $0.85 | $0.84 | | Net Income per share - Diluted | $0.85 | $0.84 | [(7) Stock-Based Compensation Plans](index=19&type=section&id=(7)%20Stock-Based%20Compensation%20Plans) - The Company recognized **$7.6 million in stock-based compensation expense** for Q2 2025 and **$16.3 million** for H1 2025, a decrease from the prior year[53](index=53&type=chunk) Total Stock-Based Compensation Expense | Period | 2025 | 2024 | | :-------------------------------- | :---------------- | :---------------- | | Three Months Ended June 30 | $7.6 million | $11.0 million | | Six Months Ended June 30 | $16.3 million | $21.5 million | - Unearned compensation costs as of June 30, 2025, include **$4.8 million for stock options**, **$56.1 million for restricted stock**, and **$13.1 million for performance shares**[56](index=56&type=chunk)[61](index=61&type=chunk)[63](index=63&type=chunk) [(8) Comprehensive Income (Loss)](index=21&type=section&id=(8)%20Comprehensive%20Income%20(Loss)) - Comprehensive income (loss) adjusts net income for non-owner sources, primarily unrealized gains/losses on debt securities, foreign currency translation adjustments, and derivative instruments[65](index=65&type=chunk) Net Current-Period Change in Accumulated Other Comprehensive Income (Loss) (Three Months Ended June 30, 2025) | Component | Amount | | :-------------------------------- | :---------------- | | Foreign currency translation adjustments | $2,109,011 | | Unrealized gains (losses) on debt securities | $508,302 | | Unrealized gains on derivatives | $(983,840) | - **Total accumulated other comprehensive loss at June 30, 2025, was $(3,396,649)**[66](index=66&type=chunk) [(9) Debt and Financing Arrangements](index=23&type=section&id=(9)%20Debt%20and%20Financing%20Arrangements) - The Company maintains a **$250.0 million unsecured revolving credit facility** with PNC, maturing in February 2026, with no outstanding balance as of June 30, 2025[68](index=68&type=chunk) - A subsidiary, VOXX (acquired April 1, 2025), has a **$3.9 million loan agreement** outstanding with shareholders of one of its joint ventures, secured by assets of its Onkyo subsidiary[70](index=70&type=chunk)[71](index=71&type=chunk) [(10) Equity](index=24&type=section&id=(10)%20Equity) - The Company's common stock decreased for the six months ended June 30, 2025, primarily due to **repurchases of 8.8 million shares**, partially offset by the issuance of **1.1 million shares** from stock plans, resulting in a **net decrease of 7.7 million shares**[72](index=72&type=chunk) - A cash dividend of **$0.120 per share** was declared in Q2 2025 (**$26.3 million**), consistent with Q2 2024[73](index=73&type=chunk) [(11) Contingencies](index=24&type=section&id=(11)%20Contingencies) - The Company is involved in various legal proceedings and claims in the normal course of business, including product liability and intellectual property matters[74](index=74&type=chunk) - Management does not believe any of these matters currently constitute material pending legal proceedings that would have a material adverse effect on the Company's financial position, results of operations, or cash flows[74](index=74&type=chunk) [(12) Segment Reporting](index=24&type=section&id=(12)%20Segment%20Reporting) - Effective April 1, 2025, following the VOXX acquisition, Gentex reorganized into nine operating segments under three reportable segments: Automotive Products, Premium Audio Products, and Other[76](index=76&type=chunk) Net Sales by Segment (Three Months Ended June 30) | Segment | 2025 | 2024 | | :---------------------- | :---------------- | :---------------- | | Automotive Products | $578,129,026 | $559,290,095 | | Premium Audio Products | $44,490,597 | — | | Other | $35,238,587 | $13,635,683 | | **Total** | **$657,858,210** | **$572,925,778** | Income (Loss) from Operations by Segment (Three Months Ended June 30) | Segment | 2025 | 2024 | | :---------------------- | :---------------- | :---------------- | | Automotive Products | $130,045,214 | $114,652,174 | | Premium Audio Products | $(2,086,649) | — | | Other | $(9,438,430) | $231,848 | | **Total** | **$118,520,135** | **$114,884,022** | [(13) Income Taxes](index=25&type=section&id=(13)%20Income%20Taxes) - The effective tax rate for Q2 2025 was **17.2%** (vs. 15.1% in Q2 2024) and for H1 2025 was **16.8%** (vs. 15.2% in H1 2024)[79](index=79&type=chunk) - The increase in effective tax rates was primarily due to lower tax benefits on stock-based compensation and reduced benefits from the foreign-derived intangible income (FDII) deduction in 2025[79](index=79&type=chunk) [(14) Revenue](index=26&type=section&id=(14)%20Revenue) - **Total revenue for Q2 2025 increased to $657.9 million** (from $572.9 million in Q2 2024), and for H1 2025 to **$1,234.6 million** (from $1,163.2 million in H1 2024), largely due to the VOXX acquisition[80](index=80&type=chunk) Total Revenue (Three Months Ended June 30) | Segment | 2025 | 2024 | | :---------------------- | :---------------- | :---------------- | | Automotive Products | $578,129,026 | $559,290,095 | | Premium Audio Products | $44,490,597 | — | | Other | $35,238,587 | $13,635,683 | | **Total Revenue** | **$657,858,210** | **$572,925,778** | Revenue by Major Source (Three Months Ended June 30, 2025) | Source | Amount | | :-------------------------- | :---------------- | | Automotive Mirrors & Electronics | $548,897,948 | | HomeLink Modules | $29,231,078 | | Premium Speaker Products | $32,430,491 | | Premium Receiver Products | $12,060,106 | | Fire Protection Products | $8,082,207 | | Aftermarket Products | $15,223,080 | | Consumer Electronic Products | $7,477,039 | - Assumed **$13.0 million in sales incentives liabilities** with the VOXX acquisition, accounted for as a reduction of net sales[83](index=83&type=chunk) [(15) Leases](index=28&type=section&id=(15)%20Leases) - The Company has operating leases for offices, vehicles, and equipment, with remaining terms ranging from less than 1 year to 7 years[84](index=84&type=chunk) - The **weighted average remaining lease term is 3 years**, with a **weighted average discount rate of 5.3%**[84](index=84&type=chunk) Future Minimum Lease Payments (as of June 30, 2025) | Year | Amount | | :------------------------------------------ | :---------------- | | 2025 (excluding H1 2025) | $1,945,507 | | 2026 | $2,960,319 | | 2027 | $2,135,249 | | 2028 | $1,645,337 | | 2029 | $772,904 | | Thereafter | $287,219 | | **Total future minimum lease payments** | **$9,746,535** | | Less imputed interest | $(729,590) | | **Total recognized lease liabilities** | **$9,016,945** | [(16) Acquisitions](index=28&type=section&id=(16)%20Acquisitions) - Gentex completed the acquisition of VOXX International Corporation on April 1, 2025, for **$148.3 million cash**, making it a wholly-owned subsidiary[86](index=86&type=chunk) - This strategic acquisition expands Gentex's portfolio into premium audio, automotive aftermarket electronics, consumer technologies, and enhances access to EyeLock iris biometric technology[89](index=89&type=chunk) - The Company also acquired GalvanEyes LLC in November 2024, gaining majority interest in BioCenturion, and subsequently acquired BioConnect Inc. on July 1, 2025, to further expand in the biometric industry[94](index=94&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) - **Net sales attributable to VOXX in H1 2025 were $78.8 million**, with a **net loss of $4.0 million**. Acquisition costs for VOXX totaled **$3.1 million** in H1 2025[92](index=92&type=chunk) - GalvanEyes and BioCenturion contributed approximately **$1.1 million in revenue** and **$1.8 million in net loss** to H1 2025 results[95](index=95&type=chunk) - Acquisition costs for BioConnect totaled **$0.2 million** in H1 2025[99](index=99&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance, condition, and future outlook [RESULTS OF OPERATIONS: NON-GAAP MEASURES](index=33&type=section&id=RESULTS%20OF%20OPERATIONS:%20NON-GAAP%20MEASURES) This section introduces and explains the use of non-GAAP financial measures for evaluating core business performance - This subsection introduces the use of non-GAAP financial measures, such as Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Expenses, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss) Attributable to Gentex Corporation, and Adjusted Earnings per Diluted Share Attributable to Gentex Corporation[100](index=100&type=chunk) - These non-GAAP measures are provided to help investors evaluate core business performance by excluding the impact of certain purchase price adjustments, acquisition-related costs, and severance costs, and are also used by management internally[100](index=100&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) [SECOND QUARTER 2025 VERSUS SECOND QUARTER 2024](index=33&type=section&id=SECOND%20QUARTER%202025%20VERSUS%20SECOND%20QUARTER%202024) This section analyzes Gentex Corporation's financial performance for Q2 2025 compared to Q2 2024 - Consolidated net sales for Q2 2025 **increased by 15% to $657.9 million**, with VOXX contributing **$78.8 million**. Core Gentex revenue increased **1%** despite a **2% decrease** in light vehicle production[101](index=101&type=chunk) - Gross margin improved to **34.2%** (**35.3% for core Gentex**), driven by cost reductions and improved product mix. Operating expenses rose **45%** due to the VOXX acquisition, acquisition-related costs, and severance expenses[106](index=106&type=chunk)[107](index=107&type=chunk) - Net income attributable to Gentex **increased 12% to $96.0 million**, and diluted EPS increased to **$0.43 from $0.37**[112](index=112&type=chunk)[113](index=113&type=chunk) Automotive Mirror Unit Shipments (Q2 2025 vs. Q2 2024, in thousands) | Metric | 2025 | 2024 | % Change | | :-------------------------- | :---- | :---- | :------- | | Total Auto-Dimming Mirror Units | 11,575 | 12,184 | (5)% | | Total Interior Mirrors | 7,534 | 7,535 | —% | | Total Exterior Mirrors | 4,041 | 4,649 | (13)% | [NON-GAAP FINANCIAL MEASURES](index=35&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES:) This section reconciles GAAP to non-GAAP financial measures for the three months ended June 30, 2025 - This section provides a reconciliation of GAAP to non-GAAP financial measures for the three months ended June 30, 2025. Adjustments primarily relate to inventory purchase price step-up, acquisition-related costs, and severance costs, aiming to provide a clearer view of core business performance[115](index=115&type=chunk)[118](index=118&type=chunk) Reconciliation of Non-GAAP Measures (Three Months Ended June 30, 2025) | Metric | GAAP | Adjustments | Non-GAAP | | :--------------------------------------- | :---------------- | :---------------- | :---------------- | | Gross Profit | $225,290,903 | $2,498,442 | $227,789,345 | | Gross Margin | 34.2% | N/A | 34.6% | | Operating Expenses | $106,770,768 | $(9,257,187) | $97,513,581 | | Income (Loss) from Operations | $118,520,135 | $11,755,629 | $130,275,764 | | Net Income Attributable to Gentex Corporation | $96,039,584 | $9,733,661 | $105,773,245 | | Diluted EPS | $0.43 | N/A | $0.47 | [SIX MONTHS ENDED JUNE 30, 2025 VERSUS SIX MONTHS ENDED JUNE 30, 2024](index=37&type=section&id=SIX%20MONTHS%20ENDED%20JUNE%2030,%202025%20VERSUS%20SIX%20MONTHS%20ENDED%20JUNE%2030,%202024) This section analyzes Gentex Corporation's financial performance for H1 2025 compared to H1 2024 - Consolidated net sales for H1 2025 **increased 6% to $1.23 billion**, with VOXX contributing **$78.8 million**. Core Gentex revenue **decreased 1%** due to lower China market sales and a **6% drop** in automotive mirror unit shipments[121](index=121&type=chunk)[122](index=122&type=chunk) - Gross margin slightly decreased to **66.2%** as a percentage of net sales, impacted by VOXX and tariffs. Operating expenses increased **26.6%** due to the VOXX acquisition, acquisition costs, and severance[124](index=124&type=chunk)[126](index=126&type=chunk) - Net income attributable to Gentex **decreased 2% to $190.9 million**, while diluted EPS slightly increased to **$0.85 from $0.84**[131](index=131&type=chunk)[132](index=132&type=chunk) [FINANCIAL CONDITION](index=39&type=section&id=FINANCIAL%20CONDITION:) This section discusses Gentex Corporation's financial position, including cash, receivables, inventories, and working capital - As of June 30, 2025, **cash and cash equivalents decreased by $113.5 million to $119.8 million**, primarily due to the VOXX acquisition, share repurchases, capital expenditures, and dividends[134](index=134&type=chunk) - Accounts receivable and inventories increased, while **working capital decreased to $725.0 million from $784.6 million**[136](index=136&type=chunk)[144](index=144&type=chunk) - The Company completed two building expansions in Q4 2024 (distribution center and manufacturing facility) and is constructing an on-site daycare, all funded by cash on hand[140](index=140&type=chunk)[141](index=141&type=chunk) Working Capital and Long-Term Investments | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------- | :---------------- | :---------------- | | Working Capital | $725,042,761 | $784,635,494 | | Fixed Income Long-Term Investments | $101,014,623 | $141,961,474 | | **Total** | **$826,057,384** | **$926,596,968** | [BUSINESS UPDATE](index=40&type=section&id=BUSINESS%20UPDATE) This section provides an update on Gentex Corporation's business performance and strategic initiatives - For Q2 2025, consolidated net sales **increased 15% to $657.9 million**, with core Gentex revenue up **1%** despite a **2% decrease** in global light vehicle production[145](index=145&type=chunk) - The Company launched **18 net new nameplates** for auto-dimming mirrors and electronic features, with over half including advanced features, bringing the total to **139 nameplates**[146](index=146&type=chunk) [PRODUCT UPDATE](index=40&type=section&id=PRODUCT%20UPDATE) This section details updates on Gentex Corporation's product lines, including new features and market expansions - China's new GB15084 regulations allow frameless inside mirrors, and the UN ECE is investigating glare, where auto-dimming mirrors can offer a solution[147](index=147&type=chunk)[148](index=148&type=chunk) - Full Display Mirror (FDM) production is shipping to **eighteen automakers and 139 nameplates**, with enhancements like a three-camera rear vision system and DVR capability with a new ReVu app[151](index=151&type=chunk)[152](index=152&type=chunk) - HomeLink is expanding with cloud-based connectivity and applications for various vehicle types, and the Integrated Toll Module (ITM) is shipping on Audi and Mercedes platforms[153](index=153&type=chunk) - Biometric solutions leveraging iris scanning are being integrated for vehicle security and personalization, with future plans to integrate with HomeLink[153](index=153&type=chunk) - The Company is providing variably dimmable windows for Boeing 787 Dreamliner and 777X aircraft, and Airbus now offers them as optional content[154](index=154&type=chunk) - Gentex is developing intelligent medical lighting systems with Mayo Clinic and has acquired eSight technology for low-vision smart glasses, with **e-Sight Go product shipments beginning in Q3 2024**[155](index=155&type=chunk)[156](index=156&type=chunk) - The PLACE fire protection product line, a suite of advanced smoke and carbon monoxide alarms, **began shipments in Q2 2025**[158](index=158&type=chunk) - The VOXX acquisition on April 1, 2025, strategically adds automotive OEM/aftermarket electronics, consumer technologies, and premium audio products to the portfolio[159](index=159&type=chunk) [OTHER](index=44&type=section&id=OTHER) This section addresses various other business aspects, including revenue composition, market challenges, and intellectual property - Automotive revenues constitute **88%-92% of total revenue**[160](index=160&type=chunk) - The Company faces ongoing challenges from tariffs, trade regulatory actions, pricing pressure from customers, and increased costs for raw materials, labor, and logistics[161](index=161&type=chunk) - It actively works to offset these pressures through cost reductions, productivity improvements, and customer negotiations[161](index=161&type=chunk) - The Company relies on patents and trade secrets for competitive advantage and does not have significant off-balance sheet arrangements[163](index=163&type=chunk)[164](index=164&type=chunk) [OUTLOOK](index=45&type=section&id=OUTLOOK) This section provides Gentex Corporation's revised full-year 2025 guidance and future market expectations - Gentex revised its full-year 2025 guidance due to reduced demand in the China market from counter-tariffs and the expected contribution from the VOXX acquisition[166](index=166&type=chunk) Light Vehicle Production Forecast (S&P Global Mobility, mid-July 2025) | Region | Q3 2025 vs Q3 2024 % Change | CY 2025 vs CY 2024 % Change | CY 2026 vs CY 2025 % Change | | :---------------- | :-------------------------- | :-------------------------- | :-------------------------- | | North America | —% | (4)% | (4)% | | Europe | (1)% | (3)% | —% | | Japan and Korea | 1% | (1)% | (4)% | | China | 1% | 4% | —% | | Total Global | —% | —% | (1)% | 2025 Annual Guidance (as of July 25, 2025) | Metric | Guidance | Previous Guidance | | :-------------------------------- | :---------------- | :---------------- | | Consolidated Revenue | $2.44 – $2.61 billion | $2.15 – $2.32 billion | | Gentex primary markets revenue | $2.10 – $2.20 billion | N/A | | Gentex China market revenue | $100 – $125 million | N/A | | VOXX Revenue estimate | $240 – $280 million | N/A | | Gross Margin (Consolidated) | 33% – 34% | N/A | | Gentex (stand-alone) Gross Margin | 34% – 34.5% | 33% – 34% | | VOXX (stand-alone) Gross Margin | 27% – 29% | N/A | | Operating Expenses (excl. severance) | $370 – $390 million | N/A | | Tax Rate | 16% – 17% | 15% – 17% | | Capital Expenditures | $100 – $125 million | Unchanged | | Depreciation & Amortization | $91 – $96 million | N/A | - The Company will continue to withhold 2026 revenue guidance due to ongoing geopolitical and market uncertainties[170](index=170&type=chunk) - A new share repurchase authorization of **40 million shares** was announced on July 16, 2025, bringing the total available for repurchase to approximately **40.6 million shares**[171](index=171&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=47&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES:) This section highlights the critical accounting policies requiring significant management estimates and assumptions - The preparation of financial statements requires management to make estimates and assumptions, which are continuously evaluated based on historical experience and reasonable assumptions[172](index=172&type=chunk) - While actual results have historically not differed materially, they may vary under different conditions. The Company refers to its Annual Report on Form 10-K for a comprehensive list of critical accounting policies[172](index=172&type=chunk)[173](index=173&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the Company's exposure to market risks, including foreign exchange, interest rate, commodity, and tariff risks - The Company is subject to market risk exposures including foreign exchange rate risk, interest rate risk, commodity price risk, and tariffs[174](index=174&type=chunk) - Fluctuating interest rates could negatively impact financial performance due to realized losses on fixed income investments, impairment adjustments, and reduced demand for light vehicles[175](index=175&type=chunk) - Geopolitical environment, especially with China, and associated tariffs cause uncertainty, increase input costs, and disrupt automotive supply chains, negatively impacting the Company's business and financial condition[177](index=177&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and internal control over financial reporting - The Company's disclosure controls and procedures were evaluated and concluded to be effective as of June 30, 2025[178](index=178&type=chunk) - There were no material changes in the Company's internal control over financial reporting during the quarter ended June 30, 2025[179](index=179&type=chunk) [Part II - Other Information](index=49&type=section&id=Part%20II%20-%20Other%20Information) This section covers additional information including risk factors, equity security sales, exhibits, and official signatures [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the Company's risk factors, noting no material changes except as described in this report - Information regarding risk factors appears in Management's Discussion and Analysis of Financial Condition and Results of Operations in Part I – Item 2 of this Form 10-Q and in Part I – Item 1A – Risk Factors of the Company's report on Form 10-K for the fiscal year ended December 31, 2024[183](index=183&type=chunk) - There have been no material changes to the risk factors previously disclosed in the Company's report on Form 10-K for the year ended December 31, 2024, except to the extent described in Part I – Item 2 and Item 3 of this Form 10-Q, and otherwise herein[183](index=183&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's share repurchase activities and available authorization for future repurchases - The Company repurchased **8.8 million shares of common stock** during the first six months of 2025 under its share repurchase plan[184](index=184&type=chunk) Share Repurchase Activity (Six Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Weighted Average Price Paid Per Share | | :---------------- | :------------------------------- | :------------------------------------ | | January 2025 | — | — | | February 2025 | 250,015 | $24.74 | | March 2025 | 2,850,336 | $24.50 | | April 2025 | 300,084 | $22.02 | | May 2025 | 2,400,790 | $22.39 | | June 2025 | 3,001,190 | $21.93 | | **2025 Total** | **8,802,415** | N/A | - As of June 30, 2025, **646,983 shares remained available for repurchase**. On July 16, 2025, a new authorization for **40 million shares** was announced, bringing the total available for repurchase to approximately **40.6 million shares**[185](index=185&type=chunk)[186](index=186&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section refers to the Exhibit Index for a comprehensive list of all accompanying exhibits - See Exhibit Index on Page 51 for a list of exhibits[187](index=187&type=chunk) [Signatures](index=50&type=section&id=Signatures) This section contains the official signatures certifying the report's compliance with regulatory requirements - The report is signed by Steven R. Downing (President and CEO) and Kevin C. Nash (VP, Finance, CFO, and Treasurer) on August 8, 2025[189](index=189&type=chunk) [Exhibit Index](index=51&type=section&id=Exhibit%20Index) This index lists all exhibits accompanying the Form 10-Q, including certifications and XBRL documents - The Exhibit Index includes CEO and CFO certifications (Exhibits 31.1, 31.2, 32) and Inline XBRL documents (Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE)[191](index=191&type=chunk) ```

Core Insights - Gentex Corporation (GNTX) reported second-quarter 2025 adjusted earnings per share (EPS) of 47 cents, exceeding the Zacks Consensus Estimate of 40 cents and reflecting a year-over-year increase of 27.03% [1][10] - The company achieved net sales of $657.9 million, surpassing the Zacks Consensus Estimate of $584 million and marking a 14.8% increase from the previous year [2][10] - Gentex revised its 2025 revenue guidance upward to a range of $2.44-$2.61 billion, incorporating the VOXX acquisition and higher expected sales from China [7][10] Financial Performance - The gross margin for the quarter was reported at 34.2%, an increase of 130 basis points from the second quarter of 2024, attributed to reduced purchasing costs and operational efficiencies [2] - Total operating expenses rose by 43.8% year over year to $106.77 million, with engineering and R&D expenses increasing to $51.47 million and SG&A expenses rising to $48.52 million [5] - Gentex paid a dividend of 12 cents per share and repurchased 5.7 million shares at an average price of $22.13, with approximately 40.6 million shares authorized for repurchase as of July 25, 2025 [6] Segment Performance - The Automotive segment generated net sales of $566.5 million, up from $559.3 million in the prior year and exceeding estimates of $548.9 million [3] - Auto-dimming mirror shipments in North America decreased by 8% to 3,746,000 units, while international shipments fell by 4% to 7,830,000 units, leading to a total shipment decline of 5% to 11,575,000 units [3] - Other net sales, including dimmable aircraft windows and fire protection products, decreased from $13.6 million to $12.5 million, missing estimates of $17.1 million [4] Guidance and Projections - The company expects consolidated revenues for 2025 to be between $2.44 billion and $2.61 billion, with primary market sales projected at $2.10-$2.20 billion and China market sales revised to $100-$125 million [7] - The VOXX segment is anticipated to contribute sales in the range of $240-$280 million [7] - Gentex's gross margin is projected to be between 34% and 34.5%, with capital expenditures expected to be between $100 million and $125 million [8]

Financial Data and Key Metrics Changes - Consolidated net sales for Q2 2025 were $657.9 million, a 15% increase year-over-year. Core Gentex revenue was $579 million, reflecting a 1% growth despite a 2% decline in light vehicle production [6][10] - Consolidated gross margin improved to 34.2% from 32.9% in the same quarter last year, while core Gentex gross margin rose to 35.3%, a 240 basis point improvement [7][10] - Consolidated net income increased by 12% to $96 million, with adjusted net income rising 23% to $105.8 million [10] Business Line Data and Key Metrics Changes - Gentex Automotive net sales were $566.5 million, impacted by lower-than-expected sales in China but offset by increased advanced feature mirror sales [11] - Revenue from other product lines, including dimmable aircraft windows and fire protection devices, decreased to $12.5 million from $13.6 million year-over-year [11] Market Data and Key Metrics Changes - Sales into China were approximately $33 million, significantly below the forecast of $50 million to $60 million due to tariffs and reduced demand [6][10] - The company expects light vehicle production in primary markets to decline by approximately 3% year-over-year for 2025, with North American production projected to fall by about 4% [25][26] Company Strategy and Development Direction - The company completed the acquisition of VOXX on April 1, focusing on aligning product strategies and optimizing customer relationships [5][11] - Gentex is committed to advancing its Full Display Mirror technology and investing in next-generation camera and display technologies [20][24] - The launch of the PLACE product line marks a significant milestone in expanding Gentex's presence in the smart home market [23][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the China market due to tariffs and decreasing OEM profitability, leading to decontenting of features [38][82] - The company revised its full-year 2025 revenue guidance to a range of $2.44 billion to $2.61 billion, reflecting the impact of tariffs and the VOXX acquisition [26][27] - Management expressed optimism about margin improvement initiatives and operational efficiencies, targeting a long-term gross margin of 35% to 36% [29][90] Other Important Information - The company repurchased 5.7 million shares at an average price of $22.13 per share during the quarter, with a total of 8.8 million shares repurchased year-to-date [12] - Cash and cash equivalents decreased to $119.8 million from $233.3 million at year-end, primarily due to the VOXX acquisition and share repurchases [14] Q&A Session Summary Question: Insights on gross margin improvement - Management noted that gross margin improvements are a result of internal efforts and operational efficiencies, with expectations for continued positive trends in the second half of the year [33][34] Question: Strategic outlook for the China market - The biggest challenge in China is the impact of counter tariffs, leading to reduced sales and decontenting by OEMs [36][38] Question: Updates on larger devices and production timelines - Management is optimistic about bringing large area devices to production within the next 24 months, with potential for earlier timelines [40] Question: VOXX revenue and operational synergies - Management expects to achieve operational synergies and cost savings from the VOXX acquisition over the next 12 to 18 months [46] Question: Future margin expectations for VOXX - Management anticipates a 200 to 300 basis point improvement in VOXX's gross margin over the next two years [72] Question: Core Gentex mirror business production outlook - Management expects Q3 production to be similar to Q2, with potential softening in Q4 due to market conditions [55] Question: Factors affecting the China market recovery - Management identified decontenting as the primary reason for the lack of recovery in the China market, alongside local competition and existing inventory [82]

Core Insights - Gentex (GNTX) reported revenue of $657.86 million for Q2 2025, a year-over-year increase of 14.8% and an EPS of $0.47, up from $0.37 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $583.51 million by 12.74%, and the EPS also surpassed the consensus estimate of $0.40 by 17.5% [1] Financial Performance Metrics - Gentex's stock has returned +8% over the past month, outperforming the Zacks S&P 500 composite's +4.6% change [3] - The company holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3] Auto-Dimming Mirror Shipments - Total Interior Mirrors shipped: 7.53 million, exceeding the average estimate of 7.46 million [4] - Total Exterior Mirrors shipped: 4.04 million, below the average estimate of 4.34 million [4] - Total Auto-Dimming Mirror Units shipped: 11.58 million, slightly below the average estimate of 11.8 million [4] - North American Mirror Units shipped: 3.75 million, below the average estimate of 3.94 million [4] - International Exterior Mirrors shipped: 2.52 million, below the average estimate of 2.72 million [4] - North American Exterior Mirrors shipped: 1.52 million, below the average estimate of 1.63 million [4] - Total International Mirror Units shipped: 7.83 million, slightly below the average estimate of 7.86 million [4] - International Interior Mirrors shipped: 5.31 million, above the average estimate of 5.14 million [4] - North American Interior Mirrors shipped: 2.22 million, below the average estimate of 2.32 million [4] Revenue Breakdown - Revenue from Other products: $12.5 million, below the average estimate of $16.14 million, representing an 8.1% decrease year-over-year [4] - Revenue from Automotive Products: $566.5 million, slightly below the average estimate of $574.89 million, with a year-over-year increase of 1.3% [4]

Financial Data and Key Metrics Changes - Consolidated net sales for Q2 2025 were $657.9 million, a 15% increase year-over-year [6] - Core Gentex revenue was $579 million, reflecting a 1% growth despite a 2% decline in light vehicle production [6] - Consolidated gross margin improved to 34.2% from 32.9% in the previous year [7] - Consolidated net income increased by 12% to $96 million, with adjusted net income rising 23% to $105.8 million [11] - Earnings per share (EPS) rose 16% to $0.43, and adjusted EPS increased 27% to $0.47 [11] Business Line Data and Key Metrics Changes - Gentex Automotive net sales were $566.5 million, impacted by lower sales in China but offset by advanced feature mirror sales [12] - Revenue from other product lines decreased to $12.5 million from $13.6 million year-over-year [12] - VOXX contributed $78.8 million in net sales during the quarter [12] Market Data and Key Metrics Changes - Sales into China were approximately $33 million, significantly below the forecast of $50 million to $60 million [6] - The company anticipates a decline in light vehicle production in primary markets by approximately 1% in Q3 and 6% in Q4 [26] Company Strategy and Development Direction - The company completed the acquisition of VOXX and is focusing on aligning product strategies and optimizing customer relationships [5][12] - Gentex is committed to advancing Full Display Mirror technology and investing in next-generation camera and display technologies [21] - The launch of the PLACE product line marks a significant milestone in expanding Gentex's presence in the smart home market [24] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains challenging due to tariffs and reduced demand in China, but operational efficiencies are improving [30] - The company revised its full-year 2025 revenue guidance to between $2.44 billion and $2.61 billion, reflecting the impact of tariffs and the VOXX acquisition [27] - The effective tax rate is expected to be between 16% and 17%, up from previous estimates [28] Other Important Information - The company repurchased 5.7 million shares at an average price of $22.13 per share during the quarter [13] - Cash and cash equivalents decreased to $119.8 million from $233.3 million at year-end, primarily due to the VOXX acquisition and share repurchases [14] Q&A Session Summary Question: Insights on gross margin improvement - Management indicated that margin improvement efforts are showing positive results, with operational efficiencies contributing significantly [34][35] Question: Strategic thoughts on the China market - The primary challenge in China is decontenting due to OEM profitability pressures, with tariffs also impacting sales [39][40] Question: Updates on larger devices and production timelines - Management expressed confidence in achieving production within the next 24 months, with potential for earlier success [41][42] Question: VOXX revenue and operational synergies - Management highlighted potential synergies from combining operations, with expectations for improved operating expenses over time [44][45] Question: Core Gentex mirror business production outlook - Management expects Q3 production to be similar to Q2, with anticipated softening in Q4 [53] Question: Future revenue expectations from China - Management projected a decline in China sales, estimating a run rate of approximately $25 million per quarter in the back half of the year [63] Question: Tariff reimbursement expectations - Management expects to recover most, if not all, of the unreimbursed tariff costs from the previous quarter [83]