Gentex(US:GNTX)2024-11-01 17:20Part I - Financial Information Unaudited Condensed Consolidated Financial Statements Gentex Corporation's unaudited condensed consolidated financial statements for Q3 and nine months ended September 30, 2024 Unaudited Condensed Consolidated Balance Sheets Total assets increased to $2.74 billion by September 30, 2024, driven by inventory and receivables, shareholders' investment also rose Condensed Consolidated Balance Sheet Data (in USD) | Account | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $1,045,684,218 | $997,738,153 | | Total Assets | $2,735,296,843 | $2,611,437,552 | | Total Current Liabilities | $283,164,653 | $271,608,976 | | Total Liabilities | $317,669,501 | $298,920,483 | | Total Shareholders' Investment | $2,417,627,342 | $2,312,517,069 | Unaudited Condensed Consolidated Statements of Income Q3 2024 net sales increased 6% to $608.5 million, with net income rising to $122.5 million Key Income Statement Data (in USD) | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $608,525,777 | $575,848,490 | $1,771,676,766 | $1,710,082,647 | | Gross Profit | $204,063,635 | $191,440,633 | $594,864,551 | $559,260,903 | | Income from Operations | $125,728,152 | $122,416,529 | $369,958,486 | $362,956,564 | | Net Income | $122,549,041 | $104,725,412 | $316,820,194 | $311,459,076 | | Diluted EPS | $0.53 | $0.45 | $1.38 | $1.33 | Unaudited Condensed Consolidated Statements of Cash Flows Net cash from operating activities decreased to $343.8 million for the nine months ended September 30, 2024, due to investing and financing Cash Flow Summary - Nine Months Ended Sep 30 (in USD) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $343,817,752 | $367,668,306 | | Net Cash used for Investing Activities | ($146,883,017) | ($189,075,734) | | Net Cash used for Financing Activities | ($243,730,011) | ($136,713,585) | | Net (Decrease) / Increase in Cash | ($46,795,276) | $41,878,987 | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail accounting policies, goodwill, VOXX investments, inventory, automotive segment revenue, and eSight technology acquisition - Goodwill remained unchanged at $340.1 million as of September 30, 2024. The company monitors for impairment triggers but found no indication for interim testing during Q3 20241617 - The company holds a significant investment in VOXX International Corporation, which it accounts for using the Fair Value Option. This resulted in a recorded gain of $14.9 million in Q3 20242425 Inventory Breakdown (in USD) | Component | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Raw materials | $317,505,698 | $283,126,566 | | Work-in-process | $47,856,981 | $46,343,955 | | Finished goods | $83,948,341 | $73,002,507 | | Total Inventory | $449,311,020 | $402,473,028 | - The Automotive Products segment generated $1.73 billion in revenue for the first nine months of 2024, representing the vast majority of the company's total revenue. The "Other" segment, which includes aerospace, fire protection, and medical products, generated $38.3 million65 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q3 2024 financial results, covering net sales, gross margin, financial condition, product updates, and future outlook Results of Operations Q3 2024 net sales increased 6% to $608.5 million, net income grew 17% to $122.5 million, driven by gross margin improvements Q3 2024 vs Q3 2023 Performance | Metric | Q3 2024 | Q3 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $608.5M | $575.8M | +6% | | Automotive Net Sales | $596.5M | $564.5M | +6% | | Auto-Dimming Mirror Units | 12.2M | 12.6M | -3% | | Net Income | $122.5M | $104.7M | +17% | - The gross profit margin increased in Q3 2024 compared to Q3 2023, primarily driven by purchasing cost reductions (positive impact of 200-250 bps), which were partially offset by an unfavorable product mix (negative impact of 100-150 bps)79 Financial Condition Cash and cash equivalents decreased by $46.8 million due to share repurchases, capital expenditures, and dividends - Cash and cash equivalents decreased by $46.8 million during the first nine months of 2024, primarily due to share repurchases, capital expenditures, and dividend payments96 - The company is expanding its distribution center and a manufacturing facility, with total expected costs of $40-$45 million and $20-$30 million, respectively. It also began construction on an on-site daycare with an expected cost of $15-$20 million101102 - During the first nine months of 2024, the company repurchased 5.8 million shares. As of September 30, 2024, 10.1 million shares remain available for repurchase under the current plan105122 Business and Product Update Product portfolio expanded with 25 new launches, including Full Display Mirror® and Integrated Toll Module®, and initial eSight medical device sales - The Full Display Mirror® is in production for 19 different automaker customers across 124 vehicle nameplates as of Q3 2024108 - The company's Integrated Toll Module (ITM) is currently shipping on 11 Audi platforms and to a second OEM, Mercedes, on the EQS model110 - Following the acquisition of eSight technology, the company recorded its first official sales of medical devices, amounting to $0.8 million in Q3 202478114 Outlook Updated 2024 guidance projects revenue of $2.35 billion to $2.40 billion and 33.5%-34.0% gross margin, with 2025 revenue forecast of $2.45 billion to $2.55 billion Updated 2024 Full-Year Guidance | Metric | Expected Range | | :--- | :--- | | Revenue | $2.35 - $2.40 billion | | Gross Margin | 33.5% - 34.0% | | Operating Expenses | $295 - $305 million | | Capital Expenditures | $150 - $175 million | - The company provided initial revenue guidance for calendar year 2025, expecting approximately $2.45 billion to $2.55 billion123 Quantitative and Qualitative Disclosures About Market Risk Market risks include foreign exchange, interest rates, economic uncertainties, inflation, and supply chain constraints impacting vehicle demand - The company is subject to market risks from foreign exchange rates and interest rates, which can impact investment values and vehicle demand126 - Economic uncertainties, inflation, and global supply chain issues continue to pose risks by potentially reducing product demand118127 Controls and Procedures Disclosure controls and procedures are effective as of September 30, 2024, with no material changes to internal control over financial reporting - As of September 30, 2024, the CEO and CFO concluded that the company's disclosure controls and procedures are effective128 - No material changes to the company's internal control over financial reporting occurred during Q3 2024129 Part II - Other Information Risk Factors No material changes to risk factors previously disclosed in the company's 2023 Form 10-K were noted - No material changes to the risk factors disclosed in the company's 2023 Form 10-K134 Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 5.8 million shares in the first nine months of 2024, with 10.1 million shares remaining for repurchase Share Repurchase Activity - 2024 | Period | Total Shares Purchased | | :--- | :--- | | Q1 2024 | 1,200,903 | | Q2 2024 | 1,402,667 | | Q3 2024 | 3,194,815 | | Total YTD | 5,798,385 | - As of September 30, 2024, the company has 10,052,794 shares remaining for repurchase under its publicly announced plan136 Exhibits Exhibits filed with Form 10-Q include CEO/CFO certifications and Inline XBRL data files - The report includes required certifications from the CEO and CFO under Sections 302 and 906 of the Sarbanes-Oxley Act141 - Inline XBRL (iXBRL) data files are included as exhibits, embedding financial data directly within the report141