Gentex(US:GNTX)2026-02-24 20:18Financial Performance - In 2025, the Company's consolidated net sales increased by $221.0 million, or 10% compared to 2024, with core Gentex sales at $2.27 billion, a 2% decline from 2024[144]. - The Company recorded a net income decrease of $19.6 million in 2025, or 5% compared to 2024, mainly due to changes in Other (loss) income[153]. - Adjusted net income attributable to Gentex Corporation for 2025 was $389.7 million, resulting in an adjusted earnings per share of $1.76[166]. Cost and Expenses - Cost of goods sold as a percentage of net sales decreased from 66.7% in 2024 to 65.8% in 2025, resulting in a gross margin improvement of 12.4% year-over-year[146]. - Engineering, research and development expenses increased by $21.8 million, or 12%, from 2024 to 2025, primarily due to the VOXX acquisition[147]. - Selling, general and administrative expenses rose by $56.8 million, or 47%, from 2024 to 2025, largely attributed to the addition of VOXX[148]. - Total operating expenses increased to 15.5% of net sales in 2025, up from 13.5% in 2024, reflecting the impact of the VOXX acquisition and severance expenses[149]. Sales and Revenue Guidance - Automotive net sales without VOXX were $2.22 billion in 2025, a 2% decrease from $2.26 billion in 2024, with a 6% decline in auto-dimming mirror shipments[145]. - VOXX contributed total net sales of $267.2 million for calendar year 2025, included in the Company's financial statements from Q2 2025[144]. - The company estimates top line revenue for 2026 will be between $2.60 billion and $2.70 billion, influenced by light vehicle production forecasts and the VOXX acquisition[181]. - The Company provides revenue guidance for calendar year 2027, estimating revenue will be between $2.75 billion and $2.85 billion, based on light vehicle production forecasts[189]. Cash Flow and Assets - Cash flow from operating activities increased by $88.9 million to $587.1 million in 2025, primarily due to increases in accounts payable and accrued sales incentives[168]. - Cash flow used for investing activities rose to $266.9 million in 2025, driven by increased business acquisitions[169]. - As of December 31, 2025, cash and cash equivalents were $145.6 million, down from $233.3 million in 2024[167]. - Accounts receivable increased by $73.2 million as of December 31, 2025, mainly due to the addition of VOXX sales[173]. Future Projections - Gross margin for 2026 is projected to be between 34.0% and 35.0%, with efforts to offset customer price reductions through operational efficiencies[183]. - Operating expenses for 2026 are expected to be between $410 million and $420 million, reflecting investments in growth initiatives and the full year of VOXX operating expenses[184]. - Capital expenditures for 2026 are anticipated to be between $125 million and $140 million, primarily for production equipment purchases[186]. - The Company estimates depreciation and amortization expense for calendar year 2026 will be between $100 million and $110 million[187]. Market Risks - The Company is exposed to market risks including interest rate fluctuations, commodity price risks, and foreign currency exchange rates[191]. - The Company does not believe that interest rate risk has a material impact on its financial condition or cash flows[192]. - Less than 10% of revenues for the years ended December 31, 2025, 2024, and 2023 were earned in non-U.S. dollar denominated currencies[194]. Business Combinations - The Company accounts for business combinations in accordance with ASC 805, allocating purchase price to tangible and intangible assets based on fair values[202]. - Contingent consideration may be paid for certain acquisitions based on future performance, recorded at fair value at the acquisition date[205]. - The Company does not have significant off-balance sheet arrangements or commitments not recorded in its Consolidated Financial Statements[195]. Share Repurchase Plan - The Company intends to continue its share repurchase plan in 2026 and beyond, depending on market and economic conditions[188].