GENTEX CORP
For the period ended Jun 30, 2024. Filed Aug 2, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 2, 2024
GNTX$19.88-1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-03.
0000355811-24-000027
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-02.
0000355811-24-000038
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 76 previous paragraphs and 85 current paragraphs.
33 unchanged; 38 reworded; 12 added; 5 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
SECOND QUARTER 2024 VERSUS SECOND QUARTER 2023
Current report
Total Other (Loss) Income. Total other (loss) income for the second quarter of 2024 decreased by $14.9 million, when compared with the second quarter of 2023.
Current report
SIX MONTHS ENDED JUNE 30, 2024 VERSUS SIX MONTHS ENDED JUNE 30, 2023
Current report
Net Sales. Net Sales for the six months ended June 30, 2024 increased by $28.9 million or 3%, when compared with the same period in 2023.
Current report
Automotive net sales for the first six months of 2024 were $1.1 billion, up 2.3% compared with automotive net sales of $1.1 billion for the first six months of 2023. Domestic automotive mirror shipments in the six months ended June 30, 2024 decreased 4% to 7.9 million units, compared with 8.2 million units in the same period in 2023. International automotive mirror shipments in the six months ended June 30, 2024 decreased 4% to 16.7 million units, compared with 17.4 million units in the same period in 2023.
Current report
Other net sales were $26.3 million for the first six months of 2024, compared to $22.7 million for the same period last year. This increase is primarily due to the 63.3% increase in dimmable window aircraft sales for the first six months of 2024 to $12.1 million, from $7.4 million for the same period in 2023. Fire protection sales decreased by 7.4% to $14.2 million for the first six months of 2024, compared to $15.3 million in the same period of 2023.
Current report
Cost of Goods Sold. As a percentage of net sales, cost of goods sold decreased to 66.4% for the first six months of 2024, versus 67.6% in the same period last year. The period over period increase in the gross profit margin was primarily the result of reductions in material costs, improved fixed overhead leverage, freight expense decreases and tariff cost reductions, which were partially offset by customer price reductions.
Current report
Operating Expenses. E, R & D expenses for the six months ended June 30, 2024 were $86.2 million, compared with $72.6 million for the same period last year. The 19% increase in E, R & D expenses, in the first six months of 2024 compared to the same period in 2023, was primarily due to additional staffing, professional fees, and new product development.
Current report
S, G & A expenses for the first six months of 2024 increased $5.7 million to $60.4 million, when compared to $54.7 million for the same period in 2023. S, G & A expenses were approximately 5% of net sales in the first six months of 2024 and approximately 5% of net sales in the same period in 2023. S, G, & A expenses increased on a year over year basis primarily due to increased staffing.
Current report
Total Other (Loss) Income. Total other (loss) income for the six months ended June 30, 2024 was $15.3 million, compared with a total other income of $4.1 million for the same period last year.
Current report
Net Income. Net income for the six months ended June 30, 2024 decreased by $12.5 million or 6% to $194.3 million, compared to $206.7 million in the same period last year. The decrease in net income for the six months ended June 30, 2024 was primarily the result of the lower net sales and income from operations compared to the first six months of 2023.
Current report
•Revenue is expected to be between $2.40 and $2.50 billion
Removed paragraphs (5)
Previous report
FIRST QUARTER 2024 VERSUS FIRST QUARTER 2023
Previous report
Total Other Income (Loss). Total other income for the first quarter of 2024 decreased by $4.4 million, when compared with the first quarter of 2023.
Previous report
On March 31, 2014, the Alliance of Automobile Manufacturers petitioned the National Highway Traffic Safety Administration ("NHTSA") to allow automakers to use camera monitoring systems as an option to replace conventional rearview mirrors within the United States. At the annual SAE Government-Industry Meeting in January 2017, NHTSA requested that SAE develop Recommended Procedures for test protocols and performance criteria for camera monitoring systems that would replace mirror systems on light vehicles in the U.S. market. SAE assigned the task to the Driver Vision Committee, and the SAE Driver Vision Committee created a CMS Task Force to draft the Recommended Procedures. NHTSA published a report dated October 2018 related to camera monitoring systems for outside mirror replacements. On October 10, 2019, an Advanced Notice of Proposed Rulemaking (ANPRM) was published seeking public comment on permitting camera-based rear visibility systems, as an alternative to inside and outside rearview mirrors required under Federal Motor Vehicle Safety Standard (FMVSS) No. 111, “Rear Visibility,” which currently requires that vehicles be equipped with rearview mirrors to provide drivers with a view of objects that are to their side or to their side and rear. This ANPRM builds on NHTSA's prior efforts to obtain supporting technical information, data, and analysis on CMS so that the agency can determine whether these systems can provide the same level of safety as the rearview mirrors currently required under FMVSS No. 111. The ANPRM states that one reason NHTSA is seeking additional information is because research conducted by NHTSA and others between 2006 and 2017 has consistently shown that prototype and preproduction camera-based rear visibility systems can exhibit safety-relevant performance issues. In November 2022, NHTSA conducted a public meeting and discussed the on-going research of this technology.
Previous report
Connected Car
Previous report
•Revenue is expected to be between $2.45 and $2.55 billion
Reworded paragraphs (38)
Previous wording
Net Sales. Net sales for the first quarter of 2024 increased by $39.5 million or 7%, when compared with the first quarter of 2023.
Current wording
Net Sales. Net sales for the second quarter of 2024 decreased by $10.5 million or 2%, when compared with the second quarter of 2023.
Previous wording
Automotive net sales for the first quarter of 2024 were $577.6 million, a 7% increase when compared with automotive net sales of $537.4 million in the first quarter of 2023. The 2% decrease in automotive mirror unit shipments in the first quarter of 2024 to 12.5 million units, compared with 12.7 million units in the first quarter of 2023, was driven by a 5% quarter over quarter decrease in interior auto-dimming mirror unit shipments, which was partially offset by a 3% quarter over quarter increase in exterior auto-dimming mirror unit shipments.
Current wording
Automotive net sales for the second quarter of 2024 were $559.3 million, a 3% decrease when compared with automotive net sales of $574.1 million in the second quarter of 2023. The 6% decrease in automotive mirror unit shipments in the second quarter of 2024 to 12.2 million units, compared with 12.9 million units in the second quarter of 2023, was driven by a 6% quarter over quarter decrease in interior auto-dimming mirror unit shipments, and a 5% quarter over quarter decrease in exterior auto-dimming mirror unit shipments.
Previous wording
The below table represents the Company's auto-dimming mirror unit shipments for the three months ended March 31, 2024, and 2023(in thousands):
Current wording
The below table represents the Company's auto-dimming mirror unit shipments for the three and six months ended June 30, 2024, and 2023(in thousands):
Previous wording
Other net sales were $12.6 million in the first quarter of 2024, compared to $13.3 million in the first quarter of 2023. Fire protection sales decreased to $6.8 million for the first quarter of 2024, compared to $9.3 million in the same quarter of last year. Dimmable aircraft sales increased during the first quarter of 2024 to $5.8 million, compared to $4.0 million in the same quarter of last year.
Current wording
Other net sales were $13.6 million in the second quarter of 2024, compared to $9.4 million in the second quarter of 2023. Fire protection sales increased to $7.4 million for the second quarter of 2024, compared to $6.0 million in the same quarter of last year. Dimmable aircraft sales increased during the second quarter of 2024 to $6.3 million, compared to $3.3 million in the same quarter of last year.
Previous wording
Cost of Goods Sold. As a percentage of net sales, cost of goods sold decreased to 65.7% for the first quarter of 2024, versus 68.3% in the same quarter last year. The quarter over quarter increase in the gross profit margin was primarily the result of raw material cost reductions, customer price changes made after the first quarter of 2023, and manufacturing related efficiencies. On a quarter over quarter basis, raw material cost reductions had a positive impact on gross margin of approximately 100 -150 basis points. Manufacturing related efficiencies, including direct labor related efficiencies had a positive impact of approximately 100 - 150 basis points on gross margin. Other positive factors to gross margin on a year over year basis included lower freight and tariff costs.
Current wording
Cost of Goods Sold. As a percentage of net sales, cost of goods sold increased to 67.1% for the second quarter of 2024, versus 66.9% in the same quarter last year. The quarter over quarter decrease in the gross profit margin was primarily impacted by lower sales levels and unfavorable product mix due to lower than expected shipments of full display mirrors and exterior auto-dimming rearview mirrors. On a quarter over quarter basis, product mix had a negative impact on gross margin of approximately 100-125 basis points. Purchasing cost reductions had a positive impact on gross margin on a quarter over quarter basis of approximately 150-200 basis points.
Previous wording
Operating Expenses. Engineering, research and development expenses for the first quarter of 2024 increased by $7.5 million, when compared with the first quarter of 2023, primarily due to staffing and engineering related professional fees and testing expenses.
Current wording
Operating Expenses. Engineering, research and development ("E,R&D") expenses for the second quarter of 2024 increased by $6.0 million, when compared with the second quarter of 2023, primarily due to staffing and engineering related professional fees.
Previous wording
Selling, general and administrative ("S, G & A") expenses increased by 14% or $3.9 million for the first quarter of 2024, compared to the first quarter of 2023, primarily due to increased staffing. S, G & A expenses were remained at 5% of net sales in the first quarter of both 2024 and 2023.
Current wording
Selling, general and administrative ("S, G & A") expenses increased by 7% or $1.9 million for the second quarter of 2024, compared to the second quarter of 2023, primarily due to increased staffing. S, G & A expenses remained at approximately 5% of net sales in the second quarters of 2024 and 2023.
Previous wording
Total operating expenses were $72.9 million in the first quarter of 2024, an increase of 19% quarter over quarter or $11.4 million, compared to $61.5 million in the first quarter of 2023.
Current wording
Total operating expenses were $73.7 million in the second quarter of 2024, an increase of 12% quarter over quarter or $7.9 million, compared to $65.8 million in the second quarter of 2023.
Previous wording
Provision for Income Taxes. The effective tax rate was 15.2% for, and an income tax expense of $19.4 million was recorded in, the first quarter of 2024, compared to an effective tax rate of 15.9% for, and an income tax expense of $18.4 million recorded in, the same quarter of 2023. Typically, effective tax rates for the Company differ from statutory federal income tax rates, due to provisions for state and local income taxes, permanent tax differences, research and development tax credits and the foreign-derived intangible income tax deduction.
Current wording
Provision for Income Taxes. The effective tax rate was 15.1% for, and an income tax expense of $15.3 million was recorded in, the second quarter of 2024, compared to an effective tax rate of 15.1% for, and an income tax expense of $19.4 million recorded in, the same quarter of 2023. Typically, effective tax rates for the Company differ from statutory federal income tax rates, due to provisions for state and local income taxes, permanent tax differences, research and development tax credits and the foreign-derived intangible income tax deduction.
Previous wording
Net Income. Net income for the first quarter of 2024 was $108.2 million, up from a net income of $97.6 million in the first quarter of 2023. The change in net income was primarily the result of quarter over quarter increases in net sales and operating profits.
Current wording
Net Income. Net income for the second quarter of 2024 was $86.0 million, down from a net income of $109.2 million in the second quarter of 2023. The change in net income was driven by the lower net sales and income from operations.
Previous wording
Earnings Per Share. The Company had earnings per diluted share for the first quarter of 2024 of $0.47, which compared to earnings per diluted share of $0.42 for the first quarter of 2023.
Current wording
Earnings Per Share. The Company had earnings per diluted share for the second quarter of 2024 of $0.37, which compared to earnings per diluted share of $0.47 for the second quarter of 2023.
Previous wording
The Company's cash and cash equivalents as of March 31, 2024 were $249.0 million, an increase of $22.6 million, compared to $226.4 million as of December 31, 2023. The increase was primarily due to cash flows from operations, which were partially offset by capital expenditures, investment purchases, dividend payments, and share repurchases during the three months ended March 31, 2024.
Current wording
The Company's cash and cash equivalents as of June 30, 2024 were $260.2 million, an increase of $33.8 million, compared to $226.4 million as of December 31, 2023. The increase was primarily due to cash flows from operations, which were partially offset by capital expenditures, investment purchases, dividend payments, and share repurchases during the six months ended June 30, 2024.
Previous wording
Short-term investments as of March 31, 2024 were $16.8 million, up from $14.4 million as of December 31, 2023, and long-term investments were $311.0 million as of March 31, 2024, up from $299.1 million as of December 31, 2023, primarily due to the $15.7 million investment in VOXX, as discussed in Note 4 of the consolidated financial statements.
Current wording
Short-term investments as of June 30, 2024 were $15.5 million, up from $14.4 million as of December 31, 2023, and long-term investments were $308.1 million as of June 30, 2024, up from $299.1 million as of December 31, 2023.
Previous wording
Accounts receivable as of March 31, 2024 increased approximately $19.8 million compared to December 31, 2023, primarily due to the increase in sales and timing thereof during the three months ended March 31, 2024. As of March 31, 2024, all of the Company's material tier one and OEM customers continue to be in good standing.
Current wording
Accounts receivable as of June 30, 2024 decreased approximately $15.2 million compared to December 31, 2023, primarily due to the decrease in sales and timing thereof during the six months ended June 30, 2024.
Previous wording
Inventories as of March 31, 2024 were $436.5 million, compared to $402.5 million as of December 31, 2023, primarily due to increases in finished goods in order to meet forecasted customer demands.
Current wording
Inventories as of June 30, 2024 were $463.5 million, compared to $402.5 million as of December 31, 2023, primarily due to increases in raw materials and finished goods.
Previous wording
Accounts payable as of March 31, 2024 increased approximately $7.3 million to $191.7 million, when compared to December 31, 2023, primarily driven by supplier payment terms and increased inventory purchases.
Current wording
Accounts payable as of June 30, 2024 increased approximately $21.6 million to $206.0 million, when compared to December 31, 2023, primarily driven by supplier payment terms and increased inventory purchases.
Previous wording
Accrued liabilities as of March 31, 2024 increased approximately $25.5 million compared to December 31, 2023, primarily due to an increase in accrued salaries and wages.
Current wording
Accrued liabilities as of June 30, 2024 increased approximately $11.5 million compared to December 31, 2023, primarily due to an increase in accrued salaries and wages.
Previous wording
Cash flow from operating activities for the three months ended March 31, 2024 increased $9.0 million to $129.9 million, compared with $120.9 million during the same three month period last year, primarily due to an increase in net income, which was partially offset by changes in working capital.
Current wording
Cash flow from operating activities for the six months ended June 30, 2024 increased $17.4 million to $259.1 million, compared with $241.8 million during the same six month period last year, primarily due to changes in working capital.
Previous wording
Capital expenditures for the three months ended March 31, 2024 were approximately $31.9 million, compared with approximately $42.8 million for the same quarter last year. The decrease was primarily due to timing of payments and a decrease in expenditures related to building and facility construction projects previously disclosed as certain manufacturing facility construction was completed, as further described below.
Current wording
Capital expenditures for the six months ended June 30, 2024 were approximately $63.6 million, compared with approximately $90.3 million for the same period last year. The decrease was primarily due to timing of payments and a decrease in expenditures related to building and facility construction projects previously disclosed as certain manufacturing facility construction was completed, as further described below.
Previous wording
The Company believes its existing and planned facilities are currently suitable, adequate, and have the capacity required for current and near-term planned business. Nevertheless, the Company continues to evaluate longer term facility needs. In 2023, the Company completed construction on a 345,000 square-foot manufacturing facility located at a 140 acre site in Zeeland, Michigan. The total cost of the building project was approximately $85 million, which was funded with cash and cash equivalents on hand. The Company has began construction on two building expansions during 2022. The Company is expanding its current distribution center for an additional 300,000 square feet, with a total cost still expected to be approximately $40 - $45 million. The Company is also expanding one of its manufacturing facilities for an additional 60,000 feet, with a total cost still expected to be $20 - $30 million. Both expansion projects will be funded with cash and cash equivalents on hand. The Company also entered into a multi-year lease for 32,000 square feet of manufacturing space at a location approximately 20 miles from its main campus that began operations during the second quarter of 2023.
Current wording
The Company believes its existing and planned facilities are currently suitable, adequate, and have the capacity required for current and near-term planned business. Nevertheless, the Company continues to evaluate longer term facility needs. In 2023, the Company completed construction on a 345,000 square-foot manufacturing facility located at a 140 acre site in Zeeland, Michigan. The total cost of the building project was approximately $85 million, which was funded with cash and cash equivalents on hand. The Company began construction on two building expansions during 2022. The Company is expanding its current distribution center for an additional 300,000 square feet, with a total cost still expected to be approximately $40 - $45 million. The Company is also expanding one of its manufacturing facilities for an additional 60,000 feet, with a total cost still expected to be $20 - $30 million. Both expansion projects will be funded with cash and cash equivalents on hand. The Company also entered into a multi-year lease for 32,000 square feet of manufacturing space at a location approximately 20 miles from its main campus that began operations during the second quarter of 2023.
Previous wording
The Company estimates that it currently has building capacity to manufacture approximately 34 - 37 million interior mirror units annually and approximately 19 - 22 million exterior mirror units annually, based on current product mix (excluding the impact of the above referenced ongoing construction). The Company also evaluates equipment capacity on an ongoing basis and adds equipment as needed.
Current wording
The Company estimates that it currently has building capacity to manufacture approximately 42 - 45 million interior mirror units annually and approximately 19 - 22 million exterior mirror units annually, based on current product mix. The Company also evaluates equipment capacity on an ongoing basis and adds equipment as needed.
Previous wording
The Company has a previously announced share repurchase plan under which the Board of Directors has authorized the repurchase of shares of the Company's common stock, which remains a part of the broader publicly disclosed capital allocation strategy. Future share repurchases may vary from time to time and will take into account macroeconomic events (including, but not limited to, industry-wide parts shortages, and global supply chain and labor constraints), market trends, and other factors the Company deems appropriate (including, but not limited to, the market price of the stock, anti-dilutive effect of repurchases, and available cash). During the three months ended March 31, 2024, the Company repurchased 1,200,903 shares. The Company has 14,650,276 shares remaining under the plan as of March 31, 2024, as is further detailed in Part II, Item 2 of this Form 10-Q.
Current wording
The Company has a previously announced share repurchase plan under which the Board of Directors has authorized the repurchase of shares of the Company's common stock, which remains a part of the broader publicly disclosed capital allocation strategy. Future share repurchases may vary from time to time and will take into account macroeconomic events, market trends, and other factors the Company deems appropriate (including, but not limited to, the market price of the stock, anti-dilutive effect of repurchases, and available cash). During the three and six months ended June 30, 2024, the Company repurchased 1,402,667 and 2,603,570 shares respectively. The Company has 13,247,609 shares remaining under the plan as of June 30, 2024, as is further detailed in Part II, Item 2 of this Form 10-Q.
Previous wording
For the first quarter of 2024, the Company reported net sales of $590.2 million, compared to net sales of $550.8 million in the first quarter of 2023, a 7% increase quarter over quarter. For the first quarter of 2024, global light vehicle production in North America, Europe, and Japan/Korea decreased approximately 3%, when compared to the first quarter of 2023.
Current wording
For the second quarter of 2024, the Company reported net sales of $572.9 million, compared to net sales of $583.5 million in the second quarter of 2023, a 2% decrease quarter over quarter. For the second quarter of 2024, global light vehicle production in North America, Europe, and Japan/Korea decreased approximately 3%, when compared to the second quarter of 2023.
Previous wording
In the first quarter of 2024, the Company had 31 net new launches of interior and exterior auto-dimming mirrors and electronic features. Over 60% of the launches in the first quarter of 2024 were advanced feature launches, with HomeLink®,Full Display Mirror®, and outside auto-dimming mirrors being the bulk of such launches.
Current wording
In the second quarter of 2024, the Company had 32 net new launches of interior and exterior auto-dimming mirrors and electronic features. Over 65% of the launches in the second quarter of 2024 were advanced feature launches, with HomeLink®, Full Display Mirror®, and outside auto-dimming mirrors being the bulk of such launches.
Previous wording
As of the first quarter of 2024, the Company is shipping production Full Display Mirrors® to sixteen different automaker customers. The Company remains confident that ongoing discussions with certain other customers may in the future cause such customers to consider adding the Full Display Mirror® into their product road-map for future vehicles.
Current wording
As of the second quarter of 2024, the Company is shipping production Full Display Mirrors® to nineteen different automaker customers. The Company remains confident that ongoing discussions with certain other customers may in the future cause such customers to consider adding the Full Display Mirror® into their product road-map for future vehicles.
Previous wording
In July 2016, a revision to UN-ECE Regulation 46 was published with an effective date of June 18, 2016, which allows for camera monitoring systems to replace mirrors in Japan and European countries. Since January 2017, camera monitoring systems are also permitted as an alternative to replace mirrors in the Korea market. As noted, China released an updated version of its GB15084, effective in 2023, which allows for camera monitoring systems, frameless mirrors and aspheric (free-form) glass surfaces. Notwithstanding the foregoing, the Company continues to believe rearview mirrors provide a robust, simple and cost effective means to view the surrounding areas of a vehicle and remain a primary safety function for rear vision today. Cameras when used as the primary rear vision delivery mechanism have some inherent limitations, such as: electrical failure; cameras being blocked or obstructed; depth perception challenges; and viewing angles of the camera. Nonetheless, the Company continues designing and manufacturing not only rearview mirrors, but CMOS imagers and video displays as well. The Company believes that combining video displays with mirrors may well provide a more robust product by addressing all driving conditions in a single solution that can be controlled by the driver. As noted, the Company has been in production with the Company's Full Display Mirror® since 2015 and has, in the ordinary course of business, been awarded programs with sixteen OEM customers. The Company is currently shipping production Full Display Mirrors® to all sixteen of these automaker customers. The Company's CMS solution uses three cameras to provide a comprehensive view of the sides and rear of the vehicle while still providing the traditional safety of interior and exterior mirrors, which mirrors continue to function when cameras are obstructed or are not functioning. The Company has also previously announced that it continues development in the areas of imager performance, camera dynamic range, lens design, image processing from the camera to the display, and camera lens cleaning. The Company acknowledges that as such technology evolves over time, such as cameras replacing mirrors and/or autonomous driving, there is increased competition.
Current wording
In July 2016, a revision to UN-ECE Regulation 46 was published with an effective date of June 18, 2016, which allows for camera monitoring systems to replace mirrors in Japan and European countries. Since January 2017, camera monitoring systems are also permitted as an alternative to replace mirrors in the Korea market. As noted, China released an updated version of its GB15084, effective in 2023, which allows for camera monitoring systems, frameless mirrors and aspheric (free-form) glass surfaces. Notwithstanding the foregoing, the Company continues to believe rearview mirrors provide a robust, simple and cost effective means to view the surrounding areas of a vehicle and remain a primary safety function for rear vision today. Cameras when used as the primary rear vision delivery mechanism have some inherent limitations, such as: electrical failure; cameras being blocked or obstructed; depth perception challenges; and viewing angles of the camera. Nonetheless, the Company continues designing and manufacturing not only rearview mirrors, but CMOS imagers and video displays as well. The Company believes that combining video displays with mirrors may well provide a more robust product by addressing all driving conditions in a single solution that can be controlled by the driver. As noted, the Company has been in production with the Company's Full Display Mirror® since 2015 and has, in the ordinary course of business, been awarded programs with nineteen OEM customers. The Company is currently shipping production Full Display Mirrors® to all nineteen of these automaker customers. The Company's CMS solution uses three cameras to provide a comprehensive view of the sides and rear of the vehicle while still providing the traditional safety of interior and exterior mirrors, which mirrors continue to function when cameras are obstructed or are not functioning. The Company has also previously announced that it continues development in the areas of imager performance, camera dynamic range, lens design, image processing from the camera to the display, and camera lens cleaning. The Company acknowledges that as such technology evolves over time, such as cameras replacing mirrors and/or autonomous driving, there is increased competition.
Previous wording
The Company began shipping Full Display Mirror® with Digital Video Recording ("DVR" capability) for the Toyota Harrier in 2020. This mirror and system launched in the Japan market and combine the superior functionality of the Full Display Mirror®, with the added capability to record video from the rearward facing and forward-facing cameras simultaneously. The data is stored to an SD storage card as requested by the customer. This integrated solution provides consumers with the features they want, while allowing the OEM to control the integration and execution in the vehicle. The Company also continues shipping auto-dimming mirrors containing DVR for both the Toyota Yaris and the Yaris Cross for the Japan market. This product is the first Gentex DVR product that has an app available to allow the consumer to pull recorded information from the mirror to a phone, which creates a more user friendly experience.
Current wording
The Company began shipping Full Display Mirror® with Digital Video Recording ("DVR" capability) in 2020. This mirror and system launched in the Japan market and combine the superior functionality of the Full Display Mirror®, with the added capability to record video from the rearward facing and forward-facing cameras simultaneously. The data is stored to an SD storage card as requested by the customer. This integrated solution provides consumers with the features they want, while allowing the OEM to control the integration and execution in the vehicle.
Previous wording
Even as the Company engages with automotive customers regarding the inflationary aspects of the business, it continues to experience pricing pressure from such customers and competitors, in addition to raw material cost increases, labor cost increases, and logistics costs, which will continue to cause downward pressure on its sales and profit margins. The Company works continuously to offset these supply chain issues and inflationary pressures with engineering and purchasing cost reductions, productivity improvements, increases in unit sales volume, and negotiations with customers to reduce the impact of the inflationary pressures, but there is no assurance the Company will be able to do so in the future.
Current wording
The Company continues to experience pricing pressure from automotive customers and competitors, in addition to raw material cost increases, labor cost increases, and logistics costs, which will continue to cause downward pressure on its sales and profit margins. The Company works continuously to offset these supply chain issues and inflationary pressures with engineering and purchasing cost reductions, productivity improvements, increases in unit sales volume, and negotiations with customers to reduce the impact of the inflationary pressures, but there is no assurance the Company will be able to do so in the future.
Previous wording
Because the Company sells its products throughout the world, and automotive manufacturing is highly dependent on economic conditions, the Company can be affected by uncertain economic conditions that can reduce demand for its products, including the current inflationary environment. The Company has been likewise affected by industry-wide parts shortages and global supply constraints and labor shortages, as well as the UAW strikes.
Current wording
Because the Company sells its products throughout the world, and automotive manufacturing is highly dependent on economic conditions, the Company can be affected by uncertain economic conditions that can reduce demand for its products, including the current inflationary environment. The Company has been likewise affected by industry-wide parts shortages and global supply constraints and labor shortages.
Previous wording
The Company’s current forecasts for light vehicle production for the second quarter of 2024, and full years 2024 and 2025 are based on the mid-April 2024 S&P Global Mobility forecast for light vehicle production in North America, Europe, Japan/Korea, and China. Second quarter of 2024, and calendar years 2024 and 2025, forecasted light vehicle production volumes are shown below:
Current wording
The Company’s current forecasts for light vehicle production for the third quarter of 2024, and full years 2024 and 2025, are based on the mid-July 2024 S&P Global Mobility forecast for light vehicle production in North America, Europe, Japan/Korea, and China. Third quarter of 2024, and calendar years 2024 and 2025, forecasted light vehicle production volumes are shown below:
Previous wording
Based on the aforementioned light vehicle production forecast and the actual results for the first three months of 2024, the Company is making no changes to its previously provided guidance for calendar year 2024 as shown below.
Current wording
Based on the aforementioned light vehicle production forecast and the actual results for the first six months of 2024, the Company previously updated certain guidance for calendar year 2024 as shown below.
Previous wording
•Gross Margin is expected to be between 34% and 35%
Current wording
•Gross Margin is expected to be between 34% and 34.5%
Previous wording
•Estimated Annual Tax Rate, which assumes no changes to the statutory rate, is expected to be between 16% and 18%
Current wording
•Estimated Annual Tax Rate, which assumes no changes to the statutory rate, is expected to be between 15% and 16%
Previous wording
•Capital Expenditures are expected to be between $225 and $250 million
Current wording
•Capital Expenditures are expected to be between $175 and $200 million
Previous wording
•Depreciation and Amortization is expected to be between $95 and $105 million
Current wording
•Depreciation and Amortization is expected to be between $95 and $100 million
Previous wording
Due to ongoing volatility in customer orders and vehicle production volumes, the Ukraine-Russia war, Israel-Hamas war, labor shortages, and overall economic uncertainty, the Company believes that revenue remains difficult to forecast for the remainder of the year and beyond. Ongoing uncertainties remain, including: light vehicle production levels; industry-wide parts shortages and global supply chain constraints; impacts of already in place and potential additional future tariffs; impacts of regulation changes; automotive plant shutdowns; vehicle sales rates in Europe, Asia and North America; OEM strategies and cost pressures; customer inventory management and the impact of potential automotive customer (including their Tier 1 suppliers) and supplier bankruptcies; etc., all of which are disrupting and could further disrupt shipments to these customers and make forecasting difficult.
Current wording
Due to ongoing volatility in customer orders and vehicle production volumes, the Ukraine-Russia war, Israel-Hamas war, labor shortages, and overall economic uncertainty, the Company believes that revenue remains difficult to forecast for the remainder of the year and beyond. Ongoing uncertainties remain, including: light vehicle production levels; impacts of already in place and potential additional future tariffs; impacts of regulation changes; automotive plant shutdowns; vehicle sales rates in Europe, Asia and North America; OEM strategies and cost pressures; customer inventory management and the impact of potential automotive customer (including their Tier 1 suppliers) and supplier bankruptcies; etc., all of which are disrupting and could further disrupt shipments to these customers and make forecasting difficult.
Previous wording
In accordance with the previously announced share repurchase plan, the Company will consider the appropriateness of continuing to repurchase additional shares of common stock in the future in support of the capital allocation strategy, but share repurchases will vary from time to time and will take into account macroeconomic events, market trends, and other factors the Company deems appropriate (including the market price of the stock, anti-dilutive effect of repurchases, and available cash). As of March 31, 2024, the Company has 14.7 million shares remaining available for repurchase under the previously announced share repurchase plan.
Current wording
In accordance with the previously announced share repurchase plan, the Company will consider the appropriateness of continuing to repurchase additional shares of common stock in the future in support of the capital allocation strategy, but share repurchases will vary from time to time and will take into account macroeconomic events, market trends, and other factors the Company deems appropriate (including the market price of the stock, anti-dilutive effect of repurchases, and available cash). As of June 30, 2024, the Company has 13.2 million shares remaining available for repurchase under the previously announced share repurchase plan.
Previous wording
Additionally, based on the Company’s current forecasts for light vehicle production for calendar year 2025, the Company still expects calendar year 2025 revenue of approximately $2.65 to $2.75 billion. As noted above, continuing uncertainties make forecasting difficult.
Current wording
Additionally, based on the Company’s current forecasts for light vehicle production for calendar year 2025, the Company expects calendar year 2025 revenue of approximately $2.6 to $2.7 billion. As noted above, continuing uncertainties make forecasting difficult.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Provision for Income Taxes. The effective tax rate was 15.2% for the six months ended June 30, 2024, compared to 15.5% for the same period of 2023. Generally, effective tax rates for the Company differ from statutory federal income tax rates, due to provisions for state and local income taxes, permanent tax differences, the foreign-derived intangible income tax deduction, and research and development tax credits.
Current report — wording carried from elsewhere
Earnings Per Share. The Company had earnings per diluted share for the six months ended June 30, 2024 of $0.84, compared to earnings per diluted share of $0.88 for the six months ended June 30, 2023.