Gentex Corporation ( GNTX)

Q3 2011 Earnings Call

October 20, 2011 10:30 am ET

Executives

Connie Hamblin – Vice President, Investor Relations and Corporate Communications

Enoch Jen – Senior Vice President

Steve Dykman – Vice President, Finance and Treasurer

Analysts

Peter Nesvold – Jefferies & Company

David Lynn – Wells Fargo Securities

David Leiker – Robert W. Baird & Co., Inc.

Steven Dyer – Craig-Hallum Capital

Brett Hoselton – KeyBanc

John Murphy – Bank of America Merrill Lynch.

Adam Brooks – Sidoti & Company, LLC

Greg Halter – Great Lakes Review

Himanshu Patel – JPMorgan

Presentation

Operator

Welcome to the Gentex Third Quarter Financial Results Conference Call. Today's conference is being recorded. I would now like to turn the meeting over to Ms. Connie Hamblin, Vice President of Investor Relations and Corporate Communications. Please go ahead.

Connie Hamblin

Thank you. Good morning, everyone. Thank you for joining us for our conference call. On the call with me today are Enoch Jen, our Senior Vice President and Steve Dykman, our Chief Financial Officer. I’ll go through a few things and I’ll turn the call over to Enoch.

This call is being broadcast live on the Internet via our website www.gentex.com, the auto playback of the conference call will also be available there. All contents of Gentex Corporation conference calls are the property of Gentex that may not be copied, published, reproduced, rebroadcast, retransmitted or otherwise redistributed without the express or written consent of Gentex Corporation. Gentex Corporation alone holds such rights.

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Before we begin I’d like to remind you of our forward-looking statements. Gentex Corporation will make forward-looking statements in the presentation and earnings with financial results for the fourth quarter and calendar year 2011 and beyond that are based on preliminary data and are subject to risks and uncertainties. The forward-looking statements are based on managing its beliefs, assumptions, current expectations, estimates and projections of the global automotive industry, the economy, the ability to control and leverage fixed manufacturing overhead costs, unit shipment and that sales growth, product mix, the ability to control ER&D and SG&A expenses gross margins and the company itself.

All statements other than statements of historical facts are declarations that are consider to be forward-looking statements and include terms such as anticipate, outlook, expectations, estimates, projects, forecast and variations of such words and similar expressions. These statements do not guarantee future performance and involve certain risks and uncertainties and assumptions that are difficult to predict with regard to timing, expense, likelihood and degree of occurrence and actual results may differ materially from those in the forward-looking statements.

The company undertakes no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise. We urge you to review the full Safe Harbor statement that is contained in the news release that is posted on our website. At this time, we will make some remarks with respect to the quarter, when our remarks conclude. We will open the call up for Q&A (Operator Instructions)

We appreciate cooperation and at this point, Enoch Jen will make some comments about the quarter.

Enoch Jen

Good morning, we’re pleased to report an all time record quarter in terms of revenues and earnings. Our record third quarter, 2011 net sales were $269.5 million, a 30% increase compared with net sales of $206.8 million in the third quarter of 2010. Record net sales of $763.4 million for the first nine months of 2011, 28% increase compared with net sales of $594.2 million in the first nine months of 2010.

We also reported record third quarter 2011 operating income of $62.2 million, a 33% increase compared with operating income of $47 million in the third quarter of 2010. Record operating income of $175.6 million for the first nine months of 2011, a 25% increase compared with operating income of $140.4 million in the first nine months of 2010.

We reported record third quarter 2011 net income of $43.4 million, a 27% increase compared with net income of $34.3 million in the third quarter of 2010 and record net income of $124.2 million for the first nine months of 2011, a 23% increase compared with net income of $100.8 million in the first nine months of 2010.

We reported record earnings per diluted share of $0.30 in the third quarter of 2011 compared with $0.24 per share in the third quarter of 2010 and earnings per diluted share were $0.86 for the first nine months of 2011 compared with $0.72 per share in the first nine months of 2010.

Next, we’ll look at automotive net sales and auto-dimming mirror unit shipments. For the third quarter ended September 30, 2011 total auto-dimming mirror unit shipments increased by 31% in the third quarter of 2011, compared with the third quarter of last year. Automotive net sales also increased by 31% from $201.5 million in the third quarter of 2010 to $264 million in the third quarter of 2011.

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