Gentex(GNTX) - 2024 Q4 - Annual Report

Financial Performance - In 2024, the Company's net sales increased by $14.1 million, or 1$23.9 million, or 6%, in 2024 compared to 2023, primarily due to changes in operating profits [139]. - Cash flow from operating activities was $498.2 million in 2024, a decrease of$39.0 million from 2023, attributed to lower net income and changes in working capital [149]. - Total operating expenses increased to 13.5% of net sales in 2024, up from 11.6% in 2023, driven by higher engineering and administrative costs [132]. - The effective tax rate decreased to 14.3% in 2024 from 15.2% in 2023, influenced by the Foreign Derived Intangible Income Deduction and R&D tax credits [139]. Future Projections - The Company estimates top line revenue for calendar year 2025 will be between $2.40 and$2.45 billion, based on light vehicle production forecasts and product mix [161]. - Gross margin is estimated to be between 33.5% and 34.5% for calendar year 2025, with potential offsets from raw material cost decreases and operational efficiencies [162]. - Operating expenses are expected to be between $310 and$320 million for calendar year 2025, reflecting continued investments in growth and new product development [163]. - Capital expenditures for calendar year 2025 are anticipated to be between $125 and$150 million, primarily for production equipment purchases [165]. - Depreciation and amortization expense for calendar year 2025 is estimated to be between $85 and$90 million [166]. - The Company projects a tax rate between 15% and 17% for calendar year 2025 based on current statutory rates [167]. - Revenue guidance for calendar year 2026 is estimated to be between $2.55 and$2.65 billion, considering anticipated increases in light vehicle production [169]. Investment and Expenses - Engineering, research and development expenses increased by $27.1 million, or 18$97.3 million to $202.1 million in 2024, primarily due to reduced capital expenditures [150]. - The Company recorded impairment charges of$8.9 million for Goodwill and in-process research and development related to the Vaporsens technology [138]. Market Outlook - The S&P Global Mobility forecast for light vehicle production in 2025 estimates approximately 15.1 million units for North America and 30.2 million units for China [160]. - Approximately 7% of the Company's net sales in calendar year 2024 were invoiced and paid in foreign currencies, with expectations of 7-8% for 2025 [172]. Shareholder Actions - The Company intends to continue share repurchases in 2025, influenced by market and economic conditions [168]. Strategic Focus - The Company is focused on maintaining a competitive advantage through investments in proprietary technology and product development [164].