gntx-20210331
00003558112021Q1FALSE--12-31P1YP5Yus-gaap:AccruedLiabilitiesCurrentus-gaap:OtherLiabilitiesNoncurrent00003558112021-01-012021-03-31xbrli:shares00003558112021-04-23iso4217:USD00003558112021-03-3100003558112020-12-3100003558112020-01-012020-03-31iso4217:USDxbrli:shares0000355811us-gaap:CommonStockMember2020-12-310000355811us-gaap:AdditionalPaidInCapitalMember2020-12-310000355811us-gaap:RetainedEarningsMember2020-12-310000355811us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310000355811us-gaap:CommonStockMember2021-01-012021-03-310000355811us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310000355811us-gaap:RetainedEarningsMember2021-01-012021-03-310000355811us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310000355811us-gaap:CommonStockMember2021-03-310000355811us-gaap:AdditionalPaidInCapitalMember2021-03-310000355811us-gaap:RetainedEarningsMember2021-03-310000355811us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310000355811us-gaap:CommonStockMember2019-12-310000355811us-gaap:AdditionalPaidInCapitalMember2019-12-310000355811us-gaap:RetainedEarningsMember2019-12-310000355811us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-3100003558112019-12-310000355811us-gaap:CommonStockMember2020-01-012020-03-310000355811us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310000355811us-gaap:RetainedEarningsMember2020-01-012020-03-310000355811us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310000355811us-gaap:CommonStockMember2020-03-310000355811us-gaap:AdditionalPaidInCapitalMember2020-03-310000355811us-gaap:RetainedEarningsMember2020-03-310000355811us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-3100003558112020-03-310000355811gntx:HomeLinkMember2013-12-310000355811gntx:VaporsensIncMember2020-04-012020-06-300000355811gntx:ArgilIncMember2020-10-012020-12-310000355811gntx:GuardianOpticalTechnologiesMember2021-01-012021-03-310000355811us-gaap:PatentsMember2021-03-310000355811us-gaap:TechnologyBasedIntangibleAssetsMember2021-03-310000355811us-gaap:TrademarksAndTradeNamesMember2021-03-310000355811us-gaap:DevelopedTechnologyRightsMember2021-03-310000355811us-gaap:DevelopedTechnologyRightsMember2021-01-012021-03-310000355811us-gaap:CustomerContractsMember2021-03-310000355811us-gaap:CustomerContractsMember2021-01-012021-03-310000355811us-gaap:LicensingAgreementsMember2021-03-310000355811us-gaap:InProcessResearchAndDevelopmentMembergntx:VaporsensIncMember2021-03-310000355811us-gaap:InProcessResearchAndDevelopmentMembergntx:ArgilIncMember2021-03-310000355811us-gaap:InProcessResearchAndDevelopmentMembergntx:AirCraftGlassMember2021-03-310000355811us-gaap:InProcessResearchAndDevelopmentMembergntx:GuardianOpticalTechnologiesMember2021-03-310000355811gntx:PatentsandOtherIntangibleAssetsMember2021-03-310000355811us-gaap:PatentsMember2020-12-310000355811us-gaap:TechnologyBasedIntangibleAssetsMember2020-12-310000355811us-gaap:TrademarksAndTradeNamesMember2020-12-310000355811us-gaap:DevelopedTechnologyRightsMember2020-12-310000355811us-gaap:DevelopedTechnologyRightsMember2020-01-012020-12-310000355811us-gaap:CustomerContractsMember2020-12-310000355811us-gaap:CustomerContractsMember2020-01-012020-12-310000355811us-gaap:LicensingAgreementsMember2020-12-310000355811us-gaap:InProcessResearchAndDevelopmentMembergntx:VaporsensIncMember2020-12-310000355811us-gaap:InProcessResearchAndDevelopmentMembergntx:ArgilIncMember2020-12-310000355811us-gaap:InProcessResearchAndDevelopmentMembergntx:AirCraftGlassMember2020-12-310000355811gntx:PatentsandOtherIntangibleAssetsMember2020-12-310000355811us-gaap:FairValueInputsLevel1Member2021-03-310000355811us-gaap:FairValueInputsLevel2Member2021-03-310000355811us-gaap:FairValueInputsLevel3Member2021-03-310000355811us-gaap:CertificatesOfDepositMemberus-gaap:ShortTermInvestmentsMember2021-03-310000355811us-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ShortTermInvestmentsMember2021-03-310000355811us-gaap:CertificatesOfDepositMemberus-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel2Member2021-03-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:CertificatesOfDepositMemberus-gaap:ShortTermInvestmentsMember2021-03-310000355811us-gaap:ShortTermInvestmentsMemberus-gaap:CorporateBondSecuritiesMember2021-03-310000355811us-gaap:FairValueInputsLevel1Memberus-gaap:ShortTermInvestmentsMemberus-gaap:CorporateBondSecuritiesMember2021-03-310000355811us-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CorporateBondSecuritiesMember2021-03-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:ShortTermInvestmentsMemberus-gaap:CorporateBondSecuritiesMember2021-03-310000355811us-gaap:USTreasurySecuritiesMemberus-gaap:ShortTermInvestmentsMember2021-03-310000355811us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ShortTermInvestmentsMember2021-03-310000355811us-gaap:USTreasurySecuritiesMemberus-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel2Member2021-03-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMemberus-gaap:ShortTermInvestmentsMember2021-03-310000355811us-gaap:ShortTermInvestmentsMemberus-gaap:MunicipalBondsMember2021-03-310000355811us-gaap:FairValueInputsLevel1Memberus-gaap:ShortTermInvestmentsMemberus-gaap:MunicipalBondsMember2021-03-310000355811us-gaap:ShortTermInvestmentsMemberus-gaap:MunicipalBondsMemberus-gaap:FairValueInputsLevel2Member2021-03-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:ShortTermInvestmentsMemberus-gaap:MunicipalBondsMember2021-03-310000355811us-gaap:ShortTermInvestmentsMemberus-gaap:OtherDebtSecuritiesMember2021-03-310000355811us-gaap:FairValueInputsLevel1Memberus-gaap:ShortTermInvestmentsMemberus-gaap:OtherDebtSecuritiesMember2021-03-310000355811us-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:OtherDebtSecuritiesMember2021-03-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:ShortTermInvestmentsMemberus-gaap:OtherDebtSecuritiesMember2021-03-310000355811us-gaap:AssetBackedSecuritiesMemberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:AssetBackedSecuritiesMemberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:CertificatesOfDepositMemberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel1Memberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel2Memberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:CertificatesOfDepositMemberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:OtherLongTermInvestmentsMemberus-gaap:CorporateBondSecuritiesMember2021-03-310000355811us-gaap:FairValueInputsLevel1Memberus-gaap:OtherLongTermInvestmentsMemberus-gaap:CorporateBondSecuritiesMember2021-03-310000355811us-gaap:FairValueInputsLevel2Memberus-gaap:OtherLongTermInvestmentsMemberus-gaap:CorporateBondSecuritiesMember2021-03-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:OtherLongTermInvestmentsMemberus-gaap:CorporateBondSecuritiesMember2021-03-310000355811us-gaap:USTreasurySecuritiesMemberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMemberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:MunicipalBondsMemberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:FairValueInputsLevel1Memberus-gaap:MunicipalBondsMemberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:MunicipalBondsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:MunicipalBondsMemberus-gaap:OtherLongTermInvestmentsMember2021-03-310000355811us-gaap:FairValueInputsLevel1Member2020-12-310000355811us-gaap:FairValueInputsLevel2Member2020-12-310000355811us-gaap:FairValueInputsLevel3Member2020-12-310000355811us-gaap:CertificatesOfDepositMemberus-gaap:ShortTermInvestmentsMember2020-12-310000355811us-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ShortTermInvestmentsMember2020-12-310000355811us-gaap:CertificatesOfDepositMemberus-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel2Member2020-12-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:CertificatesOfDepositMemberus-gaap:ShortTermInvestmentsMember2020-12-310000355811us-gaap:ShortTermInvestmentsMemberus-gaap:CorporateBondSecuritiesMember2020-12-310000355811us-gaap:FairValueInputsLevel1Memberus-gaap:ShortTermInvestmentsMemberus-gaap:CorporateBondSecuritiesMember2020-12-310000355811us-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CorporateBondSecuritiesMember2020-12-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:ShortTermInvestmentsMemberus-gaap:CorporateBondSecuritiesMember2020-12-310000355811us-gaap:USTreasurySecuritiesMemberus-gaap:ShortTermInvestmentsMember2020-12-310000355811us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ShortTermInvestmentsMember2020-12-310000355811us-gaap:USTreasurySecuritiesMemberus-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel2Member2020-12-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMemberus-gaap:ShortTermInvestmentsMember2020-12-310000355811us-gaap:ShortTermInvestmentsMemberus-gaap:MunicipalBondsMember2020-12-310000355811us-gaap:FairValueInputsLevel1Memberus-gaap:ShortTermInvestmentsMemberus-gaap:MunicipalBondsMember2020-12-310000355811us-gaap:ShortTermInvestmentsMemberus-gaap:MunicipalBondsMemberus-gaap:FairValueInputsLevel2Member2020-12-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:ShortTermInvestmentsMemberus-gaap:MunicipalBondsMember2020-12-310000355811us-gaap:ShortTermInvestmentsMemberus-gaap:OtherDebtSecuritiesMember2020-12-310000355811us-gaap:FairValueInputsLevel1Memberus-gaap:ShortTermInvestmentsMemberus-gaap:OtherDebtSecuritiesMember2020-12-310000355811us-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:OtherDebtSecuritiesMember2020-12-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:ShortTermInvestmentsMemberus-gaap:OtherDebtSecuritiesMember2020-12-310000355811us-gaap:AssetBackedSecuritiesMemberus-gaap:OtherLongTermInvestmentsMember2020-12-310000355811us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:OtherLongTermInvestmentsMember2020-12-310000355811us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:OtherLongTermInvestmentsMember2020-12-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:AssetBackedSecuritiesMemberus-gaap:OtherLongTermInvestmentsMember2020-12-310000355811us-gaap:CertificatesOfDepositMemberus-gaap:OtherLongTermInvestmentsMember2020-12-310000355811us-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel1Memberus-gaap:OtherLongTermInvestmentsMember2020-12-310000355811us-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel2Memberus-gaap:OtherLongTermInvestmentsMember2020-12-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:CertificatesOfDepositMemberus-gaap:OtherLongTermInvestmentsMember2020-12-310000355811us-gaap:OtherLongTermInvestmentsMemberus-gaap:CorporateBondSecuritiesMember2020-12-310000355811us-gaap:FairValueInputsLevel1Memberus-gaap:OtherLongTermInvestmentsMemberus-gaap:CorporateBondSecuritiesMember2020-12-310000355811us-gaap:FairValueInputsLevel2Memberus-gaap:OtherLongTermInvestmentsMemberus-gaap:CorporateBondSecuritiesMember2020-12-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:OtherLongTermInvestmentsMemberus-gaap:CorporateBondSecuritiesMember2020-12-310000355811us-gaap:MunicipalBondsMemberus-gaap:OtherLongTermInvestmentsMember2020-12-310000355811us-gaap:FairValueInputsLevel1Memberus-gaap:MunicipalBondsMemberus-gaap:OtherLongTermInvestmentsMember2020-12-310000355811us-gaap:MunicipalBondsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:OtherLongTermInvestmentsMember2020-12-310000355811us-gaap:FairValueInputsLevel3Memberus-gaap:MunicipalBondsMemberus-gaap:OtherLongTermInvestmentsMember2020-12-3100003558112020-01-012020-12-310000355811us-gaap:FixedIncomeSecuritiesMember2021-03-31gntx:plan0000355811us-gaap:StockCompensationPlanMember2021-03-310000355811gntx:OmnibusIncentivePlanMember2021-01-012021-03-310000355811gntx:EmployeeStockOptionPlanMembersrt:MinimumMember2021-01-012021-03-310000355811gntx:EmployeeStockOptionPlanMembersrt:MaximumMember2021-01-012021-03-310000355811gntx:EmployeeStockOptionPlanMember2021-03-31xbrli:pure0000355811gntx:RestrictedStockPlanMember2021-01-012021-03-310000355811gntx:RestrictedStockPlanMember2021-03-310000355811gntx:RestrictedStockPlanMember2020-01-012020-03-310000355811us-gaap:PerformanceSharesMember2021-03-310000355811us-gaap:PerformanceSharesMember2021-01-012021-03-310000355811us-gaap:PerformanceSharesMember2020-01-012020-03-310000355811gntx:EmployeeStockPurchasePlanMember2021-03-310000355811gntx:EmployeeStockPurchasePlanMember2021-01-012021-03-310000355811us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310000355811us-gaap:AccumulatedTranslationAdjustmentMember2019-12-310000355811us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-03-310000355811us-gaap:AccumulatedTranslationAdjustmentMember2020-01-012020-03-310000355811us-gaap:AccumulatedTranslationAdjustmentMember2021-03-310000355811us-gaap:AccumulatedTranslationAdjustmentMember2020-03-310000355811us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-12-310000355811us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2019-12-310000355811us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-01-012021-03-310000355811us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-01-012020-03-310000355811us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-03-310000355811us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-03-310000355811us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-01-012021-03-310000355811us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-01-012020-03-310000355811us-gaap:RevolvingCreditFacilityMember2018-10-150000355811us-gaap:LineOfCreditMember2018-10-150000355811gntx:SwingLoansMember2018-10-150000355811us-gaap:LetterOfCreditMember2018-10-150000355811us-gaap:RevolvingCreditFacilityMember2021-03-3100003558112021-03-022021-03-020000355811gntx:AutomotiveProductsSegmentMember2021-01-012021-03-310000355811gntx:AutomotiveProductsSegmentMember2020-01-012020-03-310000355811us-gaap:AllOtherSegmentsMember2021-01-012021-03-310000355811us-gaap:AllOtherSegmentsMember2020-01-012020-03-310000355811country:USgntx:AutomotiveProductsMember2021-01-012021-03-310000355811country:USgntx:AutomotiveProductsMember2020-01-012020-03-310000355811country:DEgntx:AutomotiveProductsMember2021-01-012021-03-310000355811country:DEgntx:AutomotiveProductsMember2020-01-012020-03-310000355811country:JPgntx:AutomotiveProductsMember2021-01-012021-03-310000355811country:JPgntx:AutomotiveProductsMember2020-01-012020-03-310000355811country:MXgntx:AutomotiveProductsMember2021-01-012021-03-310000355811country:MXgntx:AutomotiveProductsMember2020-01-012020-03-310000355811gntx:OtherCountriesMembergntx:AutomotiveProductsMember2021-01-012021-03-310000355811gntx:OtherCountriesMembergntx:AutomotiveProductsMember2020-01-012020-03-310000355811gntx:AutomotiveProductsMember2021-01-012021-03-310000355811gntx:AutomotiveProductsMember2020-01-012020-03-310000355811gntx:OtherProductsMembercountry:US2021-01-012021-03-310000355811gntx:OtherProductsMembercountry:US2020-01-012020-03-310000355811gntx:AutomotiveSegmentMembergntx:AutomotiveMirrorsElectronicsMember2021-01-012021-03-310000355811gntx:AutomotiveSegmentMembergntx:AutomotiveMirrorsElectronicsMember2020-01-012020-03-310000355811gntx:AutomotiveSegmentMembergntx:HomeLinkModulesMember2021-01-012021-03-310000355811gntx:AutomotiveSegmentMembergntx:HomeLinkModulesMember2020-01-012020-03-310000355811gntx:AutomotiveSegmentMember2021-01-012021-03-310000355811gntx:AutomotiveSegmentMember2020-01-012020-03-310000355811gntx:OtherSegmentMembergntx:FireProtectionProductsMember2021-01-012021-03-310000355811gntx:OtherSegmentMembergntx:FireProtectionProductsMember2020-01-012020-03-310000355811gntx:OtherSegmentMembergntx:WindowsProductsMember2021-01-012021-03-310000355811gntx:OtherSegmentMembergntx:WindowsProductsMember2020-01-012020-03-310000355811gntx:OtherSegmentMember2021-01-012021-03-310000355811gntx:OtherSegmentMember2020-01-012020-03-310000355811srt:MinimumMember2021-03-310000355811srt:MaximumMember2021-03-310000355811gntx:AirCraftGlassMember2020-09-182020-09-180000355811gntx:AirCraftGlassMember2021-03-310000355811gntx:ArgilIncMember2020-12-142020-12-140000355811gntx:ArgilIncMember2020-12-140000355811gntx:ArgilIncMember2021-03-310000355811gntx:GuardianOpticalTechnologiesMember2021-03-030000355811gntx:GuardianOpticalTechnologiesMember2021-03-310000355811us-gaap:InProcessResearchAndDevelopmentMembergntx:GuardianOpticalTechnologiesMember2021-03-030000355811us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-03-31

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, 2021 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
Michigan49464
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.06 per shareGNTXNASDAQ 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 23, 2021
Common Stock, $.06 Par Value
241,537,423

1


GENTEX CORPORATION AND SUBSIDIARIES
For the Three Months Ended March 31, 2021
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.


2


PART I —FINANCIAL INFORMATION
Item 1. Unaudited Consolidated Financial Statements.
GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 31, 2021 and December 31, 2020
March 31, 2021 (Unaudited)
December 31, 2020
(Note)
ASSETS
CURRENT ASSETS
Cash and cash equivalents$455,940,751 $423,371,036 
Short-term investments25,944,114 27,164,369 
Accounts receivable, net277,676,643 284,925,335 
Inventories233,060,307 226,291,843 
Prepaid expenses and other17,893,732 17,577,981 
Total current assets1,010,515,547 979,330,564 
PLANT AND EQUIPMENT—NET460,593,013 468,135,135 
OTHER ASSETS
Goodwill314,681,508 311,922,787 
Long-term investments172,934,410 162,028,068 
Intangible assets, net256,911,809 249,748,127 
Patents and other assets, net26,809,257 26,776,489 
Total other assets771,336,984 750,475,471 
Total assets$2,242,445,544 $2,197,941,170 
LIABILITIES AND SHAREHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Accounts payable$107,061,936 $84,784,423 
Current portion of long-term debt  
Accrued liabilities116,168,057 92,952,434 
Total current liabilities223,229,993 177,736,857 
OTHER NON-CURRENT LIABILITIES18,059,874 17,300,442 
DEFERRED INCOME TAXES40,174,963 38,960,743 
Total liabilities281,464,830 233,998,042 
SHAREHOLDERS’ INVESTMENT
Common stock14,492,329 14,621,572 
Additional paid-in capital859,355,232 852,771,508 
Retained earnings1,085,178,486 1,089,698,996 
Accumulated other comprehensive income (loss)1,954,667 6,851,052 
Total shareholders’ investment1,960,980,714 1,963,943,128 
Total liabilities and shareholders’ investment$2,242,445,544 $2,197,941,170 

Note: The condensed consolidated balance sheet at December 31, 2020 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.
3


GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended March 31, 2021 and 2020
 
Three Months Ended March 31,
20212020
NET SALES
$483,724,839 $453,761,726 
COST OF GOODS SOLD
300,424,671 297,174,245 
Gross profit183,300,168 156,587,481 
OPERATING EXPENSES:
Engineering, research and development27,652,081 29,615,422 
Selling, general & administrative21,914,386 21,944,892 
Total operating expenses49,566,467 51,560,314 
Income from operations133,733,701 105,027,167 
OTHER INCOME
Investment income1,023,410 2,446,649 
Other income, net509,625 (199,167)
Total other income1,533,035 2,247,482 
INCOME BEFORE PROVISION FOR INCOME TAXES135,266,736 107,274,649 
PROVISION FOR INCOME TAXES21,815,866 17,768,848 
NET INCOME$113,450,870 $89,505,801 
EARNINGS PER SHARE: (1)
Basic$0.47 $0.36 
Diluted$0.46 $0.36 
Cash Dividends Declared per Share$0.120 $0.120 
(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.

4


GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months Ended March 31, 2021 and 2020
Three Months Ended March 31,
20212020
Net income$113,450,870 $89,505,801 
Other comprehensive income (loss) before tax:
Foreign currency translation adjustments(852,412)(692,090)
Unrealized (losses) gains on debt securities, net(5,118,953)2,779,730 
Other comprehensive income (loss), before tax(5,971,365)2,087,640 
Income tax impact related to components of other comprehensive income (loss)(1,074,980)583,743 
Other comprehensive income (loss), net of tax(4,896,385)1,503,897 
Comprehensive income$108,554,485 $91,009,698 

5



GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
For the Three Months Ended March 31, 2021 and 2020
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, 2021243,692,869 $14,621,572 $852,771,508 $1,089,698,996 $6,851,052 $1,963,943,128 
Issuance of common stock from stock plan transactions601,020 36,061 9,229,779 — — 9,265,840 
Repurchases of common stock(2,755,065)(165,304)(8,540,700)(88,986,759)— (97,692,763)
Stock-based compensation expense related to stock options, employee stock purchases and restricted stock— — 5,894,645 — — 5,894,645 
Dividends declared ($0.12 per share)
— — — (28,984,621)— (28,984,621)
Net income— — — 113,450,870 — 113,450,870 
Other comprehensive loss— — — — (4,896,385)(4,896,385)
BALANCE AS OF MARCH 31, 2021241,538,824 $14,492,329 $859,355,232 $1,085,178,486 $1,954,667 $1,960,980,714 
BALANCE AS OF JANUARY 1, 2020251,277,515 $15,076,651 $807,928,139 $1,116,372,133 $(1,289,103)$1,938,087,820 
Issuance of common stock from stock plan transactions607,175 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 income— — — — 1,503,897 1,503,897 
BALANCE AS OF MARCH 31, 2020244,865,658 $14,691,939 $801,388,454 $1,018,310,446 $214,794 $1,834,605,633 

6


GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2021 and 2020
20212020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$113,450,870 $89,505,801 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization25,599,131 26,295,146 
(Gain) on disposal of assets(2,391)(151,910)
Loss on disposal of assets131,490 54,279 
(Gain) on sale of investments(486,433)(42,461)
Loss on sale of investments41,681 5,487 
Change in deferred income taxes(1,544,501)(1,589,855)
Stock-based compensation expense related to employee stock options, employee stock purchases and restricted stock5,894,645 6,356,070 
Change in operating assets and liabilities:
Accounts receivable, net7,253,692 1,832,201 
Inventories(6,768,464)(2,064,558)
Prepaid expenses and other768,229 12,779,046 
Accounts payable22,277,513 2,545,274 
Accrued liabilities, excluding dividends declared and short-term debt24,233,539 15,755,950 
Net cash provided by operating activities190,849,001 151,280,470 
CASH FLOWS (USED FOR) INVESTING ACTIVITIES:
Activity in available-for-sale securities:
Sales proceeds15,019,323 3,124,008 
Maturities and calls2,000,000 19,720,000 
Purchases(31,379,609)(48,606,718)
Plant and equipment additions(12,599,388)(15,574,443)
Proceeds from sale of plant and equipment17,744 165,533 
Acquisition of businesses, net of cash acquired(12,023,440) 
Increase in other assets(1,643,884)(2,544,554)
Net cash (used for) investing activities(40,609,254)(43,716,174)
CASH FLOWS (USED FOR) FINANCING ACTIVITIES:
Proceeds from borrowings on Credit Agreement 75,000,000 
Issuance of common stock from stock plan transactions9,265,840 7,355,488 
Cash dividends paid(29,243,108)(28,896,894)
Repurchases of common stock(97,692,763)(178,819,584)
Net cash (used for) financing activities(117,670,032)(125,360,990)
NET INCREASE IN CASH AND CASH EQUIVALENTS32,569,715 (17,796,694)
CASH AND CASH EQUIVALENTS, beginning of period423,371,036 296,321,622 
CASH AND CASH EQUIVALENTS, end of period$455,940,751 $278,524,928 

7


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 2020 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, 2021, and the results of operations and cash flows for the interim periods presented.

(2)    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 in 2013 and recorded an additional $3.7 million in Goodwill as part of the acquisition of Vaporsens that occurred in the second quarter of 2020 and an additional $0.9 million in Goodwill as a part of the acquisition of Argil, Inc. ("Argil") during the fourth quarter of 2020. The Company also recorded an additional $2.8 million in Goodwill as a part of the acquisition of Guardian that occurred in the first quarter of 2021. The carrying value of Goodwill as of March 31, 2021 and December 31, 2020 was $314.7 million and $311.9 million, respectively.


Carrying Amount
Balance as of December 31, 2020$311,922,787 
Acquisitions2,758,721 
Divestitures 
Impairments 
Other  
Balance as of March 31, 2021$314,681,508 


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 of goodwill or other intangible assets 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 again considered in the most recently completed quarter, but did not indicate the need for interim impairment testing.

The Company also acquired In-Process Research & Development as part of the acquisition of Vaporsens that occurred in the second quarter of 2020, the acquisition of Air-Craftglass Production BV ("Air-Craftglass") in the third quarter of 2020, and the acquisition of Argil in the fourth quarter of 2020, each of which has been previously disclosed. The Company also acquired Guardian in the first quarter of 2021. See Note 15 for more information on the Guardian transaction.

The patents and intangible assets and related change in carrying values are set forth in the tables below:

8


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


As of March 31, 2021:
Other Intangible AssetsGrossAccumulated AmortizationNetAssumed Useful Life
Gentex Patents$38,906,267 $(25,116,962)$13,789,305 Various
Vaporsens Technology Licenses$315,425 $(54,062)$261,363 Various
Other Intangible Assets
HomeLink® Trade Names and Trademarks
$52,000,000 $— $52,000,000 Indefinite
HomeLink® Technology
180,000,000 (112,500,000)67,500,000 12 years
Existing Customer Platforms43,000,000 (32,250,000)10,750,000 10 years
Exclusive Licensing Agreement96,000,000 — 96,000,000 Indefinite
Vaporsens In-Process R&D11,000,000 — 11,000,000 Indefinite
Argil In- Process R&D6,278,132 — 6,278,132 Indefinite
Air-Craftglass In-Process R&D1,389,237 — 1,389,237 Indefinite
Guardian In-Process R&D11,994,440 — 11,994,440 Indefinite
Total Other Intangible Assets$401,661,809 $(144,750,000)$256,911,809 
Total Patents & Other Intangible Assets$440,883,501 $(169,921,024)$270,962,477 

As of December 31, 2020:

Other Intangible Assets
Gross
Accumulated Amortization
Net
Assumed Useful Life
Gentex Patents
$38,625,292 $(24,528,853)$14,096,439 Various
Vaporsens Technology Licenses$300,985 $(38,856)$262,129 Various
Other Intangible Assets
HomeLink® Trade Names and Trademarks
$52,000,000 $— $52,000,000 Indefinite
HomeLink® Technology
180,000,000 (108,750,000)71,250,000 12 years
Existing Customer Platforms43,000,000 (31,175,000)11,825,000 10 years
Exclusive Licensing Agreement
96,000,000 — 96,000,000 Indefinite
    Vaporsens In-Process R&D11,000,000 $— 11,000,000 Indefinite
    Argil In-Process R&D6,278,132 $— 6,278,132 Indefinite
    Air-Craftglass In-Process R&D1,394,995 $— 1,394,995 Indefinite
Total Other Intangible Assets$389,673,127 $(139,925,000)$249,748,127 
Total Patents & Other Intangible Assets$428,298,419 $(164,453,853)$263,844,566 

Amortization expense on patents and intangible assets was approximately $5.6 million during the three months ended March 31, 2021, compared to approximately $5.6 million for the same period ended March 31, 2020, respectively.

Excluding the impact of any future acquisitions, the Company estimates amortization expense for each of the years ending December 31, 2021 and 2022 to be approximately $22 million annually, for the year
9


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


ending December 31, 2023 to be approximately $19 million, for the year ending December 31, 2024 to be approximately $16 million, and for the year ending December 31, 2025 to be approximately $12 million.


(3)    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 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 $4.0 million as of March 31, 2021 and December 31, 2020. These investments are classified within Long-Term Investments in the consolidated balance sheets. 
Assets or liabilities that have recurring fair value measurements are shown below as of March 31, 2021 and December 31, 2020:














10


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


As of March 31, 2021:
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, 2021(Level 1)(Level 2)(Level 3)
Cash & Cash Equivalents
$455,940,751 $455,940,751 $ $ 
Short-Term Investments:
Certificate of Deposit2,519,358 2,519,358   
Corporate Bonds5,065,020  5,065,020  
Government Securities6,641,463  6,641,463  
Municipal Bonds10,192,907  10,192,907  
Other1,525,366 1,525,366   
Long-Term Investments:
Asset Backed Securities26,720,719  26,720,719  
Certificate of Deposit2,613,503 2,613,503   
Corporate Bonds20,105,773  20,105,773  
Government Securities12,909,523  12,909,523  
Municipal Bonds106,540,254  106,540,254  
Total$650,774,637 $462,598,978 $188,175,659 $ 

As of December 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
December 31, 2020(Level 1)(Level 2)(Level 3)
Cash & Cash Equivalents
$423,371,036 $423,371,036 $ $ 
Short-Term Investments:
Certificate of Deposit1,516,693 1,516,693   
Corporate Bonds7,155,600  7,155,600  
Government Securities6,678,450  6,678,450  
Municipal Bonds10,284,765  10,284,765  
Other1,528,861 1,528,861   
Long-Term Investments:
Asset-backed Securities37,924,537  37,924,537  
Certificate of Deposit3,645,520 3,645,520  
Corporate Bonds9,024,035  9,024,035  
Municipal Bonds107,407,831  107,407,831  
Total$608,537,328 $430,062,110 $178,475,218 $ 

The amortized cost, unrealized gains and losses, and market value of investment securities are shown as of March 31, 2021 and December 31, 2020:



11


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



As of March 31, 2021:
Unrealized
Cost
Gains
Losses
Market Value
Short-Term Investments:
Certificate of Deposit$2,502,868 $17,097 $(607)$2,519,358 
Corporate Bonds5,052,118 12,902  5,065,020 
Government Securities6,634,876 6,587  6,641,463 
Municipal Bonds10,119,894 73,013  10,192,907 
Other1,525,366   1,525,366 
Long-Term Investments:
Asset Backed Securities27,213,749 69,001 (562,031)26,720,719 
Certificate of Deposit2,502,813 110,690  2,613,503 
Corporate Bonds20,001,918 298,615 (194,760)20,105,773 
Government Securities13,107,074  (197,551)12,909,523 
Municipal Bonds103,593,419 3,579,244 (632,409)106,540,254 
Total$192,254,095 $4,167,149 $(1,587,358)$194,833,886 


As of December 31, 2020:    
Unrealized
CostGainsLossesMarket Value
Short-Term Investments:
Certificate of Deposit$1,502,187 $14,506 $ $1,516,693 
Corporate Bonds7,084,638 70,962  7,155,600 
Government Securities6,635,132 43,318  6,678,450 
Municipal Bonds10,160,376 124,389  10,284,765 
Other1,528,861   1,528,861 
Long-Term Investments:
Asset-backed Securities37,681,113 800,802 (557,378)37,924,537 
Certificate of Deposit3,503,898 141,622  3,645,520 
Corporate Bonds8,595,020 429,015  9,024,035 
Municipal Bonds100,776,325 6,635,428 (3,922)107,407,831 
Total$177,467,550 $8,260,042 $(561,300)$185,166,292 

Unrealized losses on investments as of March 31, 2021, are as follows:
Aggregate Unrealized LossesAggregate Fair Value of Investments
Loss duration of less than one year$1,176,276 $56,463,167 
Loss duration of greater than one year411,082 1,958,502 
       Total
$1,587,358 $58,421,669 

Unrealized losses on investments as of December 31, 2020, are as follows: 
12


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Aggregate Unrealized Losses
Aggregate Fair Value of Investments
Loss duration of less than one year$561,300 $12,317,187 
Loss duration of greater than one year  
       Total
$561,300 $12,317,187 

Effective January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The guidance 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 Company utilized the guidance provided by ASC 326 to determine whether any of the available-for-sale debt securities held by the Company were impaired. No investments were considered to be impaired during the periods presented. The Company has the intention and current ability to hold its debt investments until the amortized cost basis has been recovered.

Fixed income securities as of March 31, 2021 have contractual maturities as follows:
Due within one year
$24,418,748 
Due between one and five years
39,844,725 
Due over five years
129,045,047 
$193,308,520 

4)    Inventories
Inventories consisted of the following at the respective balance sheet dates:
March 31, 2021December 31, 2020
Raw materials
$160,099,367 $151,688,455 
Work-in-process
30,301,068 32,791,675 
Finished goods
42,659,872 41,811,713 
Total Inventory
$233,060,307 $226,291,843 


(5)    Earnings Per Share

The Company has unvested share-based payment awards with a right to receive non-forfeitable dividends, which are considered participating securities under ASC 260, Earnings Per Share. The Company allocates earnings to participating securities and computes earnings per share using the two-class method. Under the two-class method, net income per share is computed by dividing net income allocated to common shareholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, net income is allocated to both common shares and participating securities based on their respective weighted average shares outstanding for the period. For a period of net loss, net loss is not allocated to participating securities.

The following table sets forth the computation of basic and diluted net income per common share under the two-class method for the three months ended March 31, 2021 and March 31, 2020:
13


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Three Months Ended March 31,
20212020
Basic Earnings Per Share
Net Income$113,450,870 $89,505,801 
Less: Dividends and undistributed earnings allocated to participating securities1,671,188 1,221,016 
Net Income available to common shareholders$111,779,682 $88,284,785 
Basic weighted average shares outstanding239,559,370 246,309,869 
Net Income per share - Basic$0.47 $0.36 
Diluted Earnings Per Share
Allocation of Net Income used in basic computation$111,779,682 $88,284,785 
Reallocation of undistributed earnings10,883 4,184 
Net Income available to common shareholders - Diluted$111,790,565 $88,288,969 
Number of shares used in basic computation239,559,370 246,309,869 
Additional weighted average dilutive common stock equivalents2,133,781 1,306,574 
Diluted weighted average shares outstanding241,693,151 247,616,443 
Net Income per share - Diluted$0.46 $0.36 
Shares related to stock plans not included in diluted average common shares outstanding because their effect would be anti-dilutive271,383 177,966 

(6)    Stock-Based Compensation Plans
As of March 31, 2021, the Company had two equity incentive plans, which include the Gentex Corporation 2019 Omnibus Incentive Plan ("2019 Omnibus Plan"), and an employee stock purchase plan. Those plans and any prior material amendments thereto have previously been approved by shareholders.
The 2019 Omnibus Plan provides for the potential awards to: i) employees; and ii) non-employee directors of the Company or its subsidiaries, which potential awards may be stock options (both incentive stock options and non-qualified stock options), appreciation rights, restricted stock, restricted stock units, performance share awards and performance units, and other awards that are stock-based, cash-based or a combination of both. The 2019 Omnibus Plan replaced the Company's Employee Stock Option Plan, Second Restricted Stock Plan, and Amended and Restated Non-Employee Director Stock Option Plan (the "Prior Plans"), which were also approved by shareholders. Any existing awards previously granted under the Prior Plans remain outstanding in accordance with their terms and are governed by the Prior Plans as applicable.
Readers should refer to Note 5 of the consolidated financial statements in the Company's Annual Report on Form 10-K for the calendar year ended December 31, 2020, for additional information related to the Prior Plans.
The Company recognized total compensation expense for share-based payments of $5,894,645 for three months ended March 31, 2021. The Company recognized compensation expense for share-based payments of $6,356,070 for the three months ended March 31, 2020. A portion of the compensation cost for share based payment awards is capitalized as part of inventory.
2019 Omnibus Incentive Plan

14


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


The purpose of the 2019 Omnibus Incentive Plan is to attract and retain employees, officers, and directors of the Company and its subsidiaries and to motivate and provide such persons incentives and rewards for performance. As of March 31, 2021, 11,238,857 shares (net of shares from canceled/expired options) have been issued under the 2019 Omnibus Plan, which includes stock options (at a set conversion rate), restricted shares, and performance share awards.
Employee Stock Options
Under the 2019 Omnibus Plan and the Employee Stock Option Plan, the option exercise price equals the stock’s market price on the date of grant. The options vest after one to five years, and expire after five to ten years. As of March 31, 2021, there was $7,524,575 of unearned compensation cost associated with stock options granted under the 2019 Omnibus Incentive Plan and the Employee Stock Option Plan, which is expected to be recognized over the remaining vesting periods.
The fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions for the indicated periods:
Three Months Ended March 31,
20212020
Dividend Yield (1)
1.90 %2.00 %
Expected volatility (2)
27.85 %26.52 %
Risk-free interest rate (3)
0.92 %0.37 %
Expected term of options (years) (4)
4.144.16
Weighted-avg. grant date fair value
$6.85$3.82
1.Represents the Company’s estimated cash dividend yield over the expected term of option grant.
2.Amount is determined based on analysis of historical price volatility of the Company’s common stock. The expected volatility is based on the daily percentage change in the price of the stock over a period equal to the expected term of the option grant.
3.Represents the U.S. Treasury yield over the expected term of the option grant.
4.Represents the period of time that options granted are expected to be outstanding. Based on analysis of historical option exercise activity, the Company has determined that all employee groups exhibit similar exercise and post-vesting termination behavior.

Restricted Shares
Restricted shares awarded under the 2019 Omnibus Plan and the Second Restricted Stock Plan entitle the shareholder to all rights of common stock ownership except that the shares may not be sold, transferred, pledged, exchanged or otherwise disposed of during the restriction period. The restriction period is determined by the Compensation Committee, appointed by the Board of Directors, but may not exceed ten years under the terms of such plans. As of March 31, 2021, the Company had unearned stock-based compensation of $39,260,117 associated with the restricted stock grants issued under the 2019 Omnibus Plan and the prior plan. The unearned stock-based compensation related to these grants is being amortized to compensation expense over the applicable restriction periods. Amortization expense from restricted stock grants in the three months ended March 31, 2021 was $4,302,975. Amortization expense from restricted stock grants for the three months ended March 31, 2020 was $4,362,318.


Performance Shares

Performance shares awarded under the 2019 Omnibus Plan are considered performance condition awards as attainment is based on the Company's performance relative to pre-established metrics. The fair value of such performance share awards was determined using the Company's average closing stock price on the twenty days preceding the date of grant. The expected attainment of the metrics for these awards is then analyzed each reporting period, and the related expense is adjusted based on expected attainment, if the then expected attainment differs from previous expectations. The cumulative effect on current and prior periods of a change in expected attainment is recognized in the period of change.

As of March 31, 2021, the Company had unearned stock-based compensation of $11,273,771 associated with these performance share grants. The unearned stock-based compensation related to these grants is
15


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


being amortized to compensation expense over the applicable performance periods. Amortization expense from performance share grants in the three months ended March 31, 2021 was $104,231. Amortization expense from performance share grants in the three months ended March 31, 2020 was $393,777.

Employee Stock Purchase Plan

The Company has an employee stock purchase plan covering 2,000,000 shares of common stock. Under the plan, the Company sells shares at 85% of the stock’s market price at date of purchase. Under ASC 718, Compensation - Stock Compensation, the 15% discounted value is recognized as compensation expense. As of March 31, 2021, the Company has issued 1,386,879 shares under this plan.

(7)    Comprehensive Income

Comprehensive income reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For the Company, comprehensive income represents net income adjusted for unrealized gains and losses on certain debt investments and foreign currency translation adjustments.

The following table presents the net changes in the Company's accumulated other comprehensive income by component (all amounts shown are net of tax):

Three Months Ended March 31,
20212020
Foreign currency translation adjustments:
Balance at beginning of period$769,045 $(2,384,589)
Other Comprehensive income (loss) before reclassifications
(852,412)(692,090)
Net current-period change(852,412)(692,090)
Balance at end of period
(83,367)(3,076,679)
Unrealized gains on available-for-sale debt securities:
Balance at beginning of period
6,082,007 1,095,486 
Other Comprehensive income before reclassifications
(3,692,619)2,225,196 
Amounts reclassified from accumulated other comprehensive income
(351,354)(29,209)
Net current-period change
(4,043,973)2,195,987 
Balance at end of period
2,038,034 3,291,473 
Accumulated other comprehensive income (loss), end of period
$1,954,667 $214,794 












16


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


The following table presents details of reclassifications out of accumulated other comprehensive income for the three months ended March 31, 2021 and 2020.

Details about Accumulated Other Comprehensive Income ComponentsAmounts Reclassified from Other Comprehensive IncomeAffected Line item in the Statement of Consolidated Income
Three Months Ended March 31,
20212020
Unrealized gains on available-for-sale debt securities
Realized gain on sale
 of securities
$444,752 $36,974 Investment income
Provision for income taxes(93,398)(7,765)Provision for income taxes
Total net reclassifications for the period$351,354 $29,209 Net of tax


(8)    Debt and Financing Arrangements

On October 15, 2018, the Company entered into a Credit Agreement (“Credit Agreement”) with PNC as the administrative agent and sole lender.

Pursuant to this Credit Agreement, the Company has access to a $150 million senior revolving credit facility (“Revolver”). Under the terms of the Credit Agreement, the Company is entitled to further request an additional aggregate principal amount of up to $100 million, subject to the satisfaction of certain conditions. In addition, the Company is entitled to the benefit of swing loans from amounts otherwise available under the Revolver in the aggregate principal amount of up to $20 million and to request Letters of Credit from amounts otherwise available under the Revolver in the aggregate principle amount up to $20 million, both subject to certain conditions. The obligations of the Company under the Credit Agreement are not secured, but are subject to certain covenants. As of March 31, 2021, there was no outstanding balance on the Revolver. The Revolver expires on October 15, 2023.


The Credit Agreement contains customary representations and warranties and certain covenants that place certain limitations on the Company.

As of March 31, 2021, the Company is in compliance with its covenants under the Credit Agreement.

(9)    Equity

The decrease in common stock during the three months ended March 31, 2021, was primarily due to the repurchases of 2.8 million shares, partially offset by the issuance of 0.6 million shares of the Company’s common stock under the Company’s stock-based compensation plans. The total net decrease was 2.2 million shares.

The Company recorded a cash dividend of $0.120 per share during the first quarter of 2021 as compared to a cash dividend of $0.120 per share during the first quarter of 2020. The first quarter 2021 dividend of $29.0 million was declared on March 2, 2021, and was paid on April 21, 2021.


(10)    Contingencies
The Company is periodically involved in legal proceedings, legal actions and claims arising in the normal course of business, including proceedings relating to product liability, intellectual property, safety and health, employment, regulatory, and other matters. Such matters are subject to many uncertainties and outcomes
17


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


are not predictable. The Company does not believe, however, that at the current time any of these matters constitute material pending legal proceedings that will have a material adverse effect on the financial position or future results of operations or cash flows of the Company.

(11)    Segment Reporting

The Company's automotive segment develops and manufactures digital vision and connected car products and electronics, including: automatic-dimming rearview mirrors with and without electronic features; non-auto dimming rearview mirrors with and without electronic features; and other electronics. The Company also develops and manufactures variably dimming windows for the aerospace industry and fire protection products for the commercial construction industry. In 2020, the Company acquired Vaporsens, which specializes in nanofiber chemical sensing. These three non-automotive segments are combined into the "Other" segment as shown below. In first quarter of 2021, the Company acquired Guardian Optical, which is combined in the Automotive Segment below. Further information in regards to the Guardian transaction is included in Note 15 of the financial statements.
Three Months Ended March 31,
20212020
Revenue:
Automotive Products$475,617,436 $439,855,587 
Other8,107,403 13,906,139 
Total$483,724,839 $453,761,726 
Income from operations:
Automotive Products$134,668,052 $100,775,544 
Other(934,351)4,251,623 
Total$133,733,701 $105,027,167 


(12)    Income Taxes
The effective tax rate was 16.1% in the three months ended March 31, 2021 compared to 16.6% for the same period in 2020. Generally, effective tax rates for these periods differ from statutory federal income tax rates, due to provisions for state and local income taxes, permanent tax differences, and the foreign-derived intangible income tax deduction and research and development tax credits.

(13)    Revenue

The following table shows the Company’s Automotive revenue and Other Products revenue disaggregated by geographical location for Automotive Products for the three month periods ended March 31,2021 and March 31, 2020:

18


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


<