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XBRL
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
| | | | | |
| ☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2020 or
| | | | | |
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 0-10235
GENTEX CORPORATION
(Exact name of registrant as specified in its charter)
| | | | | | | | |
Michigan | | 38-2030505 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
| | |
| 600 N. Centennial | | |
| Zeeland | | |
| Michigan | | 49464 |
(Address of principal executive offices) | | (Zip Code) |
(616) 772-1800
(Registrant’s telephone number, including area code)
________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, par value $0.06 per share | GNTX | NASDAQ Global Select Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes: þ No: o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes: þ No: o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | |
Large accelerated filer | ☑ | | Accelerated filer | ☐ |
| | | | |
Non-accelerated filer | ☐ | | Smaller reporting company | ☐ |
| | | | |
| | | Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes: ☐ No: þ
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes: o No: o
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| | | | | | | | |
Class | | Shares Outstanding, April 24, 2020 |
Common Stock, $.06 Par Value | | 244,871,910 |
GENTEX CORPORATION AND SUBSIDIARIES
For the Three Months Ended March 31, 2020
FORM 10-Q
Index
| | | | | | | | |
Part I - Financial Information | | Page |
Item 1. | | |
| | |
| | |
| | |
| | |
| | |
Item 2. | | |
Item 3. | | |
Item 4. | | |
| | |
Part II - Other Information | | |
Item 1A. | | |
Item 2. | | |
Item 6. | | |
| | |
| | |
PART I —FINANCIAL INFORMATION
Item 1. Unaudited Consolidated Financial Statements.
GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 31, 2020 and December 31, 2019
| | | | | | | | | | | |
| March 31, 2020 (Unaudited) | | December 31, 2019 (Note) |
ASSETS | | | |
| CURRENT ASSETS | | | |
| Cash and cash equivalents | $ | 278,524,928 | | | $ | 296,321,622 | |
| Short-term investments | 131,078,039 | | | 140,384,053 | |
| Accounts receivable, net | 233,578,125 | | | 235,410,326 | |
| Inventories | 251,006,414 | | | 248,941,855 | |
| Prepaid expenses and other | 16,539,990 | | | 29,319,036 | |
| Total current assets | 910,727,496 | | | 950,376,892 | |
| | | |
| PLANT AND EQUIPMENT—NET | 493,114,501 | | | 498,316,100 | |
| | | |
| OTHER ASSETS | | | |
| Goodwill | 307,365,845 | | | 307,365,845 | |
| Long-term investments | 177,794,760 | | | 139,909,323 | |
| Intangible assets, net | 245,550,000 | | | 250,375,000 | |
| Patents and other assets, net | 23,550,490 | | | 22,460,033 | |
| Total other assets | 754,261,095 | | | 720,110,201 | |
| | | |
| Total assets | $ | 2,158,103,092 | | | $ | 2,168,803,193 | |
| | | |
LIABILITIES AND SHAREHOLDERS’ INVESTMENT | | | |
| | | |
| CURRENT LIABILITIES | | | |
| Accounts payable | $ | 100,099,191 | | | $ | 97,553,917 | |
| Current portion of long-term debt | 75,000,000 | | | — | |
| Accrued liabilities | 88,858,713 | | | 74,292,883 | |
| Total current liabilities | 263,957,904 | | | 171,846,800 | |
| | | |
| OTHER NON-CURRENT LIABILITIES | 9,091,509 | | | 7,414,424 | |
| | | |
| | | |
| | | |
| DEFERRED INCOME TAXES | 50,448,046 | | | 51,454,149 | |
| | | |
| Total liabilities | 323,497,459 | | | 230,715,373 | |
| | | |
| SHAREHOLDERS’ INVESTMENT | | | |
| Common stock | 14,691,939 | | | 15,076,651 | |
| Additional paid-in capital | 801,388,454 | | | 807,928,139 | |
| Retained earnings | 1,018,310,446 | | | 1,116,372,133 | |
| Accumulated other comprehensive income (loss) | 214,794 | | | (1,289,103) | |
| Total shareholders’ investment | 1,834,605,633 | | | 1,938,087,820 | |
| Total liabilities and shareholders’ investment | $ | 2,158,103,092 | | | $ | 2,168,803,193 | |
Note: The condensed consolidated balance sheet at December 31, 2019 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.
GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended March 31, 2020 and 2019
| | | | | | | | | | | | | | | | | |
| | | | | Three Months Ended March 31, | | |
| | | | | 2020 | | 2019 |
NET SALES | | | | | $ | 453,761,726 | | | $ | 468,588,997 | |
| | | | | | | |
COST OF GOODS SOLD | | | | | 297,174,245 | | | 298,944,494 | |
| Gross profit | | | | | 156,587,481 | | | 169,644,503 | |
| | | | | | | |
OPERATING EXPENSES: | | | | | | | |
| Engineering, research and development | | | | | 29,615,422 | | | 28,089,181 | |
| Selling, general & administrative | | | | | 21,944,892 | | | 19,958,991 | |
| Total operating expenses | | | | | 51,560,314 | | | 48,048,172 | |
| | | | | | | |
| Income from operations | | | | | 105,027,167 | | | 121,596,331 | |
| | | | | | | |
| OTHER INCOME (LOSS) | | | | | | | |
| Investment income | | | | | 2,446,649 | | | 3,262,741 | |
| Other income (loss), net | | | | | (199,167) | | | 49,469 | |
| Total other income | | | | | 2,247,482 | | | 3,312,210 | |
| | | | | | | |
| INCOME BEFORE PROVISION FOR INCOME TAXES | | | | | 107,274,649 | | | 124,908,541 | |
| | | | | | | |
| PROVISION FOR INCOME TAXES | | | | | 17,768,848 | | | 20,628,130 | |
| | | | | | | |
| NET INCOME | | | | | $ | 89,505,801 | | | $ | 104,280,411 | |
| | | | | | | |
EARNINGS PER SHARE: (1) | | | | | | | |
| Basic | | | | | $ | 0.36 | | | $ | 0.40 | |
| Diluted | | | | | $ | 0.36 | | | $ | 0.40 | |
| | | | | | | |
| Cash Dividends Declared per Share | | | | | $ | 0.120 | | | $ | 0.115 | |
| | | | | | | |
(1) Earnings Per Share has been adjusted to exclude the portion of net income allocated to participating securities as a result of share-based payment awards. | | | | | | | |
GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months Ended March 31, 2020 and 2019
| | | | | | | | | | | | | | | | | |
| | | | | Three Months Ended March 31, | | |
| | | | | 2020 | | 2019 |
| Net Income | | | | | $89,505,801 | | $104,280,411 |
| | | | | | | |
| Other comprehensive income before tax: | | | | | | | |
| Foreign currency translation adjustments | | | | | (692,090) | | | 298,999 | |
| | | | | | | |
| Unrealized gains on debt securities, net | | | | | 2,779,730 | | | 1,298,236 | |
| | | | | | | |
| Other comprehensive income, before tax | | | | | 2,087,640 | | | 1,597,235 | |
| | | | | | | |
| Income tax impact related to components of other comprehensive income | | | | | 583,743 | | | 272,631 | |
| | | | | | | |
| Other comprehensive income, net of tax | | | | | 1,503,897 | | | 1,324,604 | |
| | | | | | | |
| Comprehensive Income | | | | | $ | 91,009,698 | | | $ | 105,605,015 | |
GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
For the Three Months Ended March 30, 2020 and 2019
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common
Stock
Shares | | Common
Stock
Amount | | Additional
Paid-In
Capital | | Retained
Earnings | | Accumulated
Other
Comprehensive
Income (Loss) | | Total
Shareholders’
Investment |
| BALANCE AS OF JANUARY 1, 2020 | 251,277,515 | | | | 15,076,651 | | | | 807,928,139 | | | | 1,116,372,133 | | | | (1,289,103) | | | 1,938,087,820 | |
| Issuance of common stock from stock plan transactions | 607,175 | | | | 36,431 | | | | 7,319,057 | | | | — | | | | — | | | 7,355,488 | |
| Repurchases of common stock | (7,019,032) | | | | (421,143) | | | | (20,214,812) | | | | (158,183,629) | | | | — | | | (178,819,584) | |
| Stock-based compensation expense related to stock options, employee stock purchases and restricted stock | — | | | | — | | | | 6,356,070 | | | | — | | | | — | | | 6,356,070 | |
Dividends declared ($0.12 per share) | — | | | | — | | | | — | | | | (29,383,859) | | | | — | | | (29,383,859) | |
| Net income | — | | | | — | | | | — | | | | 89,505,801 | | | | — | | | 89,505,801 | |
| Other comprehensive loss | — | | | | — | | | | — | | | | — | | | | 1,503,897 | | | 1,503,897 | |
| BALANCE AS OF MARCH 31, 2020 | 244,865,658 | | | | 14,691,939 | | | | 801,388,454 | | | | 1,018,310,446 | | | | 214,794 | | | | 1,834,605,633 | |
| | | | | | | | | | | |
| BALANCE AS OF JANUARY 1, 2019 | 259,328,613 | | | | 15,559,717 | | | | 745,324,144 | | | | 1,102,468,137 | | | | (1,600,338) | | | | 1,861,751,660 | |
| Issuance of common stock from stock plan transactions | 980,670 | | | | 58,840 | | | | 10,455,714 | | | | — | | | | — | | | | 10,514,554 | |
| Repurchases of common stock | (4,724,938) | | | | (283,496) | | | | (12,001,344) | | | | (83,982,388) | | | | — | | | | (96,267,228) | |
| Stock-based compensation expense related to stock options, employee stock purchases and restricted stock | — | | | | — | | | | 4,862,947 | | | | — | | | | — | | | | 4,862,947 | |
Dividends declared ($0.115 per share) | — | | | | — | | | | — | | | | (29,392,200) | | | | — | | | | (29,392,200) | |
| Net income | — | | | | — | | | | — | | | | 104,280,411 | | | | — | | | | 104,280,411 | |
| Other comprehensive loss | — | | | | — | | | | — | | | | — | | | | 1,324,604 | | | | 1,324,604 | |
| BALANCE AS OF MARCH 31, 2019 | 255,584,345 | | | | 15,335,061 | | | | 748,641,461 | | | | 1,093,373,960 | | | | (275,734) | | | | 1,857,074,748 | |
GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2020 and 2019
| | | | | | | | | | | |
| 2020 | | 2019 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | |
| Net income | $ | 89,505,801 | | | $ | 104,280,411 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation and amortization | 26,295,146 | | | 28,098,804 | |
| (Gain) on disposal of assets | (151,910) | | | (43,338) | |
| Loss on disposal of assets | 54,279 | | | 122,296 | |
| (Gain) on sale of investments | (42,461) | | | (88,576) | |
| Loss on sale of investments | 5,487 | | | — | |
| Change in deferred income taxes | (1,589,855) | | | (1,233,853) | |
| Stock-based compensation expense related to employee stock options, employee stock purchases and restricted stock | 6,356,070 | | | 4,862,947 | |
| | | |
| Change in operating assets and liabilities: | | | |
| Accounts receivable, net | 1,832,201 | | | (30,728,497) | |
| Inventories | (2,064,558) | | | (21,443) | |
| Prepaid expenses and other | 12,779,046 | | | 10,847,705 | |
| Accounts payable | 2,545,274 | | | (2,692,820) | |
| Accrued liabilities, excluding dividends declared and short-term debt | 15,755,950 | | | 20,436,582 | |
| Net cash provided by operating activities | 151,280,470 | | | 133,840,218 | |
| | | |
| CASH FLOWS (USED FOR) INVESTING ACTIVITIES: | | | |
| Activity in available-for-sale securities: | | | |
| Sales proceeds | 3,124,008 | | | 17,139,689 | |
| Maturities and calls | 19,720,000 | | | 3,000,000 | |
| Purchases | (48,606,718) | | | (18,475,158) | |
| Plant and equipment additions | (15,574,443) | | | (16,844,301) | |
| Proceeds from sale of plant and equipment | 165,533 | | | 117,455 | |
| | | |
| Decrease in other assets | (2,544,554) | | | 164,215 | |
| Net cash (used for) investing activities | (43,716,174) | | | (14,898,100) | |
| | | |
| CASH FLOWS (USED FOR) FINANCING ACTIVITIES: | | | |
| Proceeds from borrowings on Credit Agreement | 75,000,000 | | | — | |
| | | |
| | | |
| Issuance of common stock from stock plan transactions | 7,355,488 | | | 10,514,554 | |
| Cash dividends paid | (28,896,894) | | | (28,526,146) | |
| Repurchases of common stock | (178,819,584) | | | (96,267,229) | |
| | | |
| Net cash (used for) financing activities | (125,360,990) | | | (114,278,821) | |
| | | |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (17,796,694) | | | 4,663,297 | |
| | | |
| CASH AND CASH EQUIVALENTS, beginning of period | 296,321,622 | | | 217,025,278 | |
| | | |
| CASH AND CASH EQUIVALENTS, end of period | $ | 278,524,928 | | | $ | 221,688,575 | |
GENTEX CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Basis of Presentation
The unaudited condensed consolidated financial statements included herein have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's 2019 annual report on Form 10-K. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only a normal and recurring nature, necessary to present fairly the financial position of the Company as of March 31, 2020, and the results of operations and cash flows for the interim periods presented.
(2) Adoption of New Accounting Pronouncements
Effective January 1, 2020, the Company adopted Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retained earnings in the period of adoption. Based on the insignificant impact of this ASU on the Company's financial statements, a cumulative-effect adjustment to retained earnings was not deemed necessary. The standard requires a change in the measurement approach for credit losses on financial assets measured on an amortized cost basis from an incurred loss method to an expected loss method, thereby eliminating the requirement that a credit loss be considered probable to impact the valuation of a financial asset measured on an amortized cost basis. The standard requires the measurement of expected credit losses to be based on relevant information about past events, including historical experience, current conditions, and a reasonable and supportable forecast that affects the collectability of the related financial asset. It also modifies the impairment model for available-for-sale debt securities and provides a simplified accounting model for purchased financial assets with credit deterioration since their origination. The adoption of this standard did not have a material impact on the Company's consolidated balance sheet, consolidated income statement, or consolidated statement of cash flows.
(3) Goodwill and Other Intangible Assets
Goodwill represents the cost of an acquisition in excess of the fair values assigned to identifiable net assets acquired. The Company recorded Goodwill of $307.4 million as part of the HomeLink® acquisition. The carrying value of Goodwill as of both March 31, 2020 and December 31, 2019 was $307.4 million.
In addition to annual impairment testing, which is performed as of the first day of the fourth quarter, the Company continuously monitors for events and circumstances that could negatively impact the key assumptions in determining fair value thus resulting in the need for interim impairment testing, including long-term revenue growth projections, profitability, discount rates, recent market valuations from transactions by comparable companies, volatility in the Company's market capitalization, and general industry, market and macroeconomic conditions. The impact of COVID-19 was considered in the most recently completed quarter, but did not indicate the need for interim impairment testing.
GENTEX CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The patents and intangible assets and related change in carrying values are set forth in the tables below:
As of March 31, 2020:
| | | | | | | | | | | | | | |
| Other Intangible Assets | Gross | Accumulated Amortization | Net | Assumed Useful Life |
| Gentex Patents | $ | 37,496,822 | | $ | (23,003,239) | | $ | 14,493,583 | | Various |
| | | | |
| Other Intangible Assets | | | | |
HomeLink® Trade Names and Trademarks | $ | 52,000,000 | | $ | — | | $ | 52,000,000 | | Indefinite |
HomeLink® Technology | 180,000,000 | | (97,500,000) | | 82,500,000 | | 12 years |
| Existing Customer Platforms | 43,000,000 | | (27,950,000) | | 15,050,000 | | 10 years |
| Exclusive Licensing Agreement | 96,000,000 | | — | | 96,000,000 | | Indefinite |
| Total Other Intangible Assets | $ | 371,000,000 | | $ | (125,450,000) | | $ | 245,550,000 | | |
| | | | |
| Total Patents & Other Intangible Assets | $ | 408,496,822 | | $ | (148,453,239) | | $ | 260,043,583 | | |
As of December 31, 2019:
| | | | | | | | | | | | | | |
Other Intangible Assets | Gross | Accumulated Amortization | Net | Assumed Useful Life |
Gentex Patents | $ | 37,328,963 | | $ | (22,491,010) | | $ | 14,837,953 | | Various |
| | | | |
| Other Intangible Assets | | | | |
HomeLink® Trade Names and Trademarks | $ | 52,000,000 | | $ | — | | $ | 52,000,000 | | Indefinite |
HomeLink® Technology | 180,000,000 | | (93,750,000) | | 86,250,000 | | 12 years |
| Existing Customer Platforms | 43,000,000 | | (26,875,000) | | 16,125,000 | | 10 years |
Exclusive Licensing Agreement | 96,000,000 | | — | | 96,000,000 | | Indefinite |
| Total Other Intangible Assets | $ | 371,000,000 | | $ | (120,625,000) | | $ | 250,375,000 | | |
| | | | |
| Total Patents & Other Intangible Assets | $ | 408,328,963 | | $ | (143,116,010) | | $ | 265,212,953 | | |
Amortization expense on patents and intangible assets was approximately $5.6 million during the three months ended March 31, 2020, compared to approximately $5.6 million for the same quarter ended March 31, 2019.
Excluding the impact of any future acquisitions, the Company estimates amortization expense for each of the years ended December 31, 2020 and 2021 to be approximately $22 million annually, for the year ended December 31, 2022 to be approximately $21 million, for the year ended December 31, 2023 to be approximately $19 million, and for the year ended December 31, 2024 to be approximately $16 million.
(4) Investments
The Company follows the provisions of Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures, for its financial assets and liabilities, and for its non-financial assets and liabilities subject to fair value measurements. ASC 820 provides a framework for measuring the fair value of assets and liabilities. This framework is intended to provide increased consistency in how fair value determinations are made under various existing accounting standards that permit, or in some cases, require
GENTEX CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
estimates of fair-market value. This standard also expanded financial statement disclosure requirements with respect to a company’s use of fair-value measurements, including the effect of such measurements on earnings. The cost of securities sold is based on the specific identification method.
The Company determines the fair value of its government securities, asset-backed securities, municipal bonds, and corporate bonds by utilizing monthly valuation statements that are provided by its broker. The broker determines the investment valuation by utilizing the bid price in the market and also refers to third party sources to validate valuations, and as such are classified as Level 2 assets.
The Company's certificates of deposit are classified as available for sale and are considered as Level 1 assets. These investments are carried at cost, which approximates fair value.
The Company also periodically makes technology investments in certain non-consolidated third-parties. These equity investments are accounted for in accordance with ASC 321, Investments - Equity Securities. Equity investments that do not have readily determinable fair values, and where the Company has not identified any observable events that would cause adjustment of the valuation to date, such equity investments are held at cost. These technology investments totaled approximately $9.0 million as of March 31, 2020 and December 31, 2019. These investments are classified within Long-Term Investments in the consolidated balance sheet.
Assets or liabilities that have recurring fair value measurements are shown below as of March 31, 2020 and December 31, 2019:
As of March 31, 2020:
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Fair Value Measurements at Reporting Date Using | | | | |
| Total as of | | Quoted Prices in Active Markets for Identical Assets | | Significant Other Observable Inputs | | Significant Unobservable Inputs |
Description | March 31, 2020 | | (Level 1) | | (Level 2) | | (Level 3) |
Cash & Cash Equivalents | $ | 278,524,928 | | | $ | 278,524,928 | | | $ | — | | | $ | — | |
Short-Term Investments: | | | | | | | |
| Certificate of Deposit | 50,099,795 | | | 50,099,795 | | | — | | | — | |
| Corporate Bonds | 29,122,402 | | | — | | | 29,122,402 | | | — | |
| Government Securities | 46,903,815 | | | — | | | 46,903,815 | | | — | |
| Municipal Bonds | 2,084,121 | | | — | | | 2,084,121 | | | — | |
| Other | 2,867,906 | | | 2,867,906 | | | — | | | — | |
| Long-Term Investments: | | | | | | | |
| Asset Backed Securities | 43,628,702 | | | — | | | 43,628,702 | | | — | |
| Certificate of Deposit | 5,086,858 | | | 5,086,858 | | | — | | | — | |
| Corporate Bonds | 20,397,525 | | | — | | | 20,397,525 | | | — | |
| Government Securities | 7,308,584 | | | — | | | 7,308,584 | | — | |
| Municipal Bonds | 92,358,822 | | | — | | | 92,358,822 | | | — | |
| | | | | | | |
| | | | | | | |
| Total | $ | 578,383,458 | | | $ | 336,579,487 | | | $ | 241,803,971 | | | $ | — | |
GENTEX CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
As of December 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Fair Value Measurements at Reporting Date Using | | | | |
| Total as of | | Quoted Prices in Active Markets for Identical Assets | | Significant Other Observable Inputs | | Significant Unobservable Inputs |
Description | December 31, 2019 | | (Level 1) | | (Level 2) | | (Level 3) |
Cash & Cash Equivalents | $ | 296,321,622 | | | $ | 296,321,622 | | | $ | — | | | $ | — | |
Short-Term Investments: | | | | | | | |
| Certificate of Deposit | 50,099,795 | | | 50,099,795 | | | — | | | — | |
| Corporate Bonds | 29,219,685 | | | — | | | 29,219,685 | | | — | |
| Government Securities | 58,432,823 | | | — | | | 58,432,823 | | | — | |
| Other | 2,631,750 | | | 2,631,750 | | | — | | | — | |
| | | | | | | |
| Long-Term Investments: | | | | | | | |
| Asset-backed Securities | 25,791,029 | | | — | | | 25,791,029 | | | — | |
| Certificate of Deposit | 3,557,798 | | | 3,557,798 | | | | | | — | |
| Corporate Bonds | 22,815,998 | | | — | | | 22,815,998 | | | — | |
| Governmental Securities | 6,088,190 | | | — | | | 6,088,190 | | | — | |
| Municipal Bonds | 72,638,690 | | | — | | | 72,638,690 | | | — | |
| Total | $ | 567,597,380 | | | $ | 352,610,965 | | | $ | 214,986,415 | | | $ | — | |
The amortized cost, unrealized gains and losses, and market value of investment securities are shown as of March 31, 2020 and December 31, 2019:
As of March 31, 2020:
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Unrealized | | | | |
| Cost | | Gains | | Losses | | Market Value |
Short-Term Investments: | | | | | | | |
| Certificate of Deposit | $ | 50,099,795 | | | $ | — | | | $ | — | | | $ | 50,099,795 | |
| Corporate Bonds | 29,047,745 | | | 84,838 | | | (10,181) | | | 29,122,402 | |
| Government Securities | 46,564,204 | | | 339,611 | | | — | | | 46,903,815 | |
| Municipal Bonds | 2,079,998 | | | 4,123 | | | — | | | 2,084,121 | |
| Other | 2,867,906 | | | — | | | — | | | 2,867,906 | |
| Long-Term Investments: | | | | | | | |
| Asset Backed Securities | 43,046,638 | | | 988,808 | | | (406,744) | | | 43,628,702 | |
| Certificate of Deposit | 5,007,454 | | | 87,617 | | | (8,213) | | | 5,086,858 | |
| Corporate Bonds | 20,271,904 | | | 330,691 | | | (205,070) | | | 20,397,525 | |
| Government Securities | 7,150,365 | | | 158,219 | | | — | | | 7,308,584 | |
| Municipal Bonds | 89,556,097 | | | 2,905,405 | | | (102,680) | | | 92,358,822 | |
| Total | $ | 295,692,106 | | | $ | 4,899,312 | | | $ | (732,888) | | | $ | 299,858,530 | |
GENTEX CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
As of December 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Unrealized | | | | |
| Cost | | Gains | | Losses | | Market Value |
Short-Term Investments: | | | | | | | |
| Certificate of Deposit | $ | 50,099,795 | | | $ | — | | | $ | — | | | $ | 50,099,795 | |
| Corporate Bonds | 29,025,624 | | | 194,061 | | | — | | | 29,219,685 | |
| | | | | | | |
| Government Securities | 58,343,911 | | | 99,917 | | | (11,005) | | | 58,432,823 | |
| Other | 2,631,750 | | | — | | | — | | | 2,631,750 | |
| Long-Term Investments: | | | | | | | |
| Asset-backed Securities | 25,971,156 | | | — | | | (180,127) | | | 25,791,029 | |
| Certificate of Deposit | 3,500,000 | | | 58,808 | | | (1,010) | | | 3,557,798 | |
| Corporate Bonds | 22,306,130 | | | 509,868 | | | — | | | 22,815,998 | |
| Government Securities | 6,012,705 | | | 75,485 | | | — | | | 6,088,190 | |
| Municipal Bonds | 71,997,996 | | | 1,036,116 | | | (395,422) | | | 72,638,690 | |
| | | | | | | |
| Total | $ | 269,889,067 | | | $ | 1,974,255 | | | $ | (587,564) | | | $ | 271,275,758 | |
Unrealized losses on investments as of March 31, 2020, are as follows:
| | | | | | | | | | | |
| Aggregate Unrealized Losses | | Aggregate Fair Value |
| Loss duration of less than one year | $ | 732,888 | | | $ | 36,159,819 | |
| Loss duration of greater than one year | — | | | — | |
Total | $ | 732,888 | | | $ | 36,159,819 | |
Unrealized losses on investments as of December 31, 2019, are as follows:
| | | | | | | | | | | |
| Aggregate Unrealized Losses | | Aggregate Fair Value |
| Loss duration of less than one year | $ | 587,564 | | | $ | 90,721,081 | |
| Loss duration of greater than one year |
