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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 June 30, 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, July 23, 2021
Common Stock, $.06 Par Value
238,954,080

1


GENTEX CORPORATION AND SUBSIDIARIES
For the Three and Six Months Ended June 30, 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 June 30, 2021 and December 31, 2020
June 30, 2021 (Unaudited)
December 31, 2020
(Note)
ASSETS
CURRENT ASSETS
Cash and cash equivalents$353,032,803 $423,371,036 
Short-term investments13,798,827 27,164,369 
Accounts receivable, net234,145,996 284,925,335 
Inventories263,899,976 226,291,843 
Prepaid expenses and other59,698,574 17,577,981 
Total current assets924,576,176 979,330,564 
PLANT AND EQUIPMENT—NET458,943,776 468,135,135 
OTHER ASSETS
Goodwill311,922,787 311,922,787 
Long-term investments193,418,570 162,028,068 
Intangible assets, net251,213,561 249,748,127 
Patents and other assets, net26,723,061 26,776,489 
Total other assets783,277,979 750,475,471 
Total assets$2,166,797,931 $2,197,941,170 
LIABILITIES AND SHAREHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Accounts payable$101,262,288 $84,784,423 
Accrued liabilities95,134,329 92,952,434 
Total current liabilities196,396,617 177,736,857 
OTHER NON-CURRENT LIABILITIES18,668,444 17,300,442 
DEFERRED INCOME TAXES35,413,881 38,960,743 
Total liabilities250,478,942 233,998,042 
SHAREHOLDERS’ INVESTMENT
Common stock14,337,995 14,621,572 
Additional paid-in capital859,678,392 852,771,508 
Retained earnings1,038,037,564 1,089,698,996 
Accumulated other comprehensive income4,265,038 6,851,052 
Total shareholders’ investment1,916,318,989 1,963,943,128 
Total liabilities and shareholders’ investment$2,166,797,931 $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 and Six Months Ended June 30, 2021 and 2020
 
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
NET SALES
$428,005,026 $229,925,556 $911,729,865 $683,687,281 
COST OF GOODS SOLD
276,408,285 185,980,748 576,832,956 483,154,994 
Gross profit151,596,741 43,944,808 334,896,909 200,532,287 
OPERATING EXPENSES:
Engineering, research and development29,059,058 28,992,968 56,711,139 58,608,390 
Selling, general & administrative22,613,062 21,690,096 44,527,448 43,634,987 
Total operating expenses51,672,120 50,683,064 101,238,587 102,243,377 
Income (Loss) from operations99,924,621 (6,738,256)233,658,322 98,288,910 
OTHER INCOME
Investment income903,139 1,462,033 1,926,549 3,908,682 
Other income, net987,959 1,404,196 1,497,584 1,205,030 
Total other income1,891,098 2,866,229 3,424,133 5,113,712 
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES101,815,719 (3,872,027)237,082,455 103,402,622 
PROVISION FOR (BENEFIT FROM) INCOME TAXES15,309,301 (1,497,994)37,125,167 16,270,854 
NET INCOME (LOSS)$86,506,418 $(2,374,033)$199,957,288 $87,131,768 
EARNINGS (LOSS) PER SHARE: (1)
Basic$0.36 $(0.01)$0.83 $0.35 
Diluted$0.36 $(0.01)$0.82 $0.35 
Cash Dividends Declared per Share$0.120 $0.120 $0.240 $0.240 
(1) Earnings (Loss) Per Share has been adjusted to exclude the portion of net income (loss) 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 and Six Months Ended June 30, 2021 and 2020
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Net income (Loss)$86,506,418 $(2,374,033)$199,957,288 $87,131,768 
Other comprehensive income (loss) before tax:
Foreign currency translation adjustments963,199 136,627 110,787 (555,463)
Unrealized gains (losses) on debt securities, net1,705,281 3,022,561 (3,413,672)5,802,291 
Other comprehensive income (loss), before tax2,668,480 3,159,188 (3,302,885)5,246,828 
Income tax impact related to components of other comprehensive income (loss)358,109 634,738 (716,871)1,218,481 
Other comprehensive income (loss), net of tax2,310,371 2,524,450 (2,586,014)4,028,347 
Comprehensive income$88,816,789 $150,417 $197,371,274 $91,160,115 

5


GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
For the Three Months Ended June 30, 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 APRIL 1, 2021241,538,824 $14,492,329 $859,355,232 $1,085,178,486 $1,954,667 $1,960,980,714 
Issuance of common stock from stock plan transactions838,896 50,334 4,340,710 — — 4,391,044 
Repurchases of common stock(3,411,131)(204,668)(10,745,063)(104,971,348)— (115,921,079)
Stock-based compensation expense related to stock options, employee stock purchases and restricted stock— — 6,727,513 — — 6,727,513 
Dividends declared ($0.12 per share)
— — — (28,675,992)— (28,675,992)
Net income— — — 86,506,418 — 86,506,418 
Other comprehensive income— — — — 2,310,371 2,310,371 
BALANCE AS OF JUNE 30, 2021238,966,589 $14,337,995 $859,678,392 $1,038,037,564 $4,265,038 $1,916,318,989 
BALANCE AS OF APRIL 1, 2020244,865,658 $14,691,939 $801,388,454 $1,018,310,446 $214,794 $1,834,605,633 
Issuance of common stock from stock plan transactions746,112 44,767 8,310,437 — — 8,355,204 
Issuance of common stock related to acquisitions163,718 9,823 3,549,406 — — 3,559,229 
Stock-based compensation expense related to stock options, employee stock purchases and restricted stock— — 5,430,583 — — 5,430,583 
Dividends declared ($0.12 per share)
— — — (29,493,653)— (29,493,653)
Net loss— — — (2,374,033)— (2,374,033)
Other comprehensive income— — — — 2,524,450 2,524,450 
BALANCE AS OF JUNE 30, 2020245,775,488 $14,746,529 $818,678,880 $986,442,760 $2,739,244 $1,822,607,413 


6


GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
For the Six Months Ended June 30, 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 transactions1,439,916 86,395 13,570,489 — — 13,656,884 
Repurchases of common stock(6,166,196)(369,972)(19,285,763)(193,958,107)— (213,613,842)
Stock-based compensation expense related to stock options, employee stock purchases and restricted stock— — 12,622,158 — — 12,622,158 
Dividends declared ($0.24 per share)
— — — (57,660,613)— (57,660,613)
Net income— — — 199,957,288 — 199,957,288 
Other comprehensive loss— — — — (2,586,014)(2,586,014)
BALANCE AS OF June 30, 2021238,966,589 $14,337,995 $859,678,392 $1,038,037,564 $4,265,038 $1,916,318,989 
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 transactions1,353,287 81,198 15,629,494 — — 15,710,692 
Issuance of common stock related to acquisitions163,718 9,823 3,549,406 — — 3,559,229 
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— — 11,786,653 — — 11,786,653 
Dividends declared ($0.24 per share)
— — — (58,877,512)— (58,877,512)
Net income— — — 87,131,768 — 87,131,768 
Other comprehensive income— — — — 4,028,347 4,028,347 
BALANCE AS OF June 30, 2020245,775,488 $14,746,529 $818,678,880 $986,442,760 $2,739,244 $1,822,607,413 

7


GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2021 and 2020
20212020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$199,957,288 $87,131,768 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization51,497,665 53,437,698 
(Gain) on disposal of assets(19,891)(155,229)
Loss on disposal of assets133,036 88,357 
(Gain) on sale of investments(969,971)(1,023,683)
Loss on sale of investments192,346 72,871 
Change in deferred income taxes(3,546,862)(2,176,462)
Stock-based compensation expense related to employee stock options, employee stock purchases and restricted stock12,622,158 15,960,362 
Change in operating assets and liabilities:
Accounts receivable, net50,784,339 64,981,864 
Inventories(37,608,133)(10,710,548)
Prepaid expenses and other(41,394,722)14,230,026 
Accounts payable16,477,865 (37,452,944)
Accrued liabilities, excluding dividends declared and short-term debt4,117,051 6,068,104 
Net cash provided by operating activities252,242,169 190,452,184 
CASH FLOWS (USED FOR) FROM INVESTING ACTIVITIES:
Activity in available-for-sale securities:
Sales proceeds34,250,068 5,607,634 
Maturities and calls16,685,000 90,017,368 
Purchases(71,596,074)(52,650,769)
Plant and equipment additions(31,352,443)(28,828,066)
Proceeds from sale of plant and equipment99,850 200,475 
Acquisition of businesses, net of cash acquired(12,023,440)(7,031,827)
Increase in other assets(458,637)(3,886,518)
Net cash (used for) provided by investing activities(64,395,676)3,428,297 
CASH FLOWS (USED FOR) FINANCING ACTIVITIES:
Proceeds from borrowings on Credit Agreement 75,000,000 
Issuance of common stock from stock plan transactions13,656,884 15,710,692 
Cash dividends paid(58,227,768)(58,281,727)
Repurchases of common stock(213,613,842)(178,819,584)
Net cash (used for) financing activities(258,184,726)(146,390,619)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS(70,338,233)47,489,862 
CASH AND CASH EQUIVALENTS, beginning of period423,371,036 296,321,622 
CASH AND CASH EQUIVALENTS, end of period$353,032,803 $343,811,484 

8


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 June 30, 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, Inc. ("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 carrying value of Goodwill as of both June 30, 2021 and December 31, 2020 was $311.9 million as set forth in the table below:

Carrying Amount
Balance as of December 31, 2020$311,922,787 
Acquisitions 
Divestitures 
Impairments 
Other  
Balance as of June 30, 2021$311,922,787 

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, the recent microchip shortage, supply chain constraints, and labor shortages were 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 Optical Technologies ("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:


As of June 30, 2021:
9


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Other Intangible AssetsGrossAccumulated AmortizationNetAssumed Useful Life
Gentex Patents$38,860,181 $(25,402,803)$13,457,378 Various
Vaporsens Technology Licenses333,850 (58,232)275,618 Various
Other Intangible Assets
HomeLink® Trade Names and Trademarks
$52,000,000 $— $52,000,000 Indefinite
HomeLink® Technology
180,000,000 (116,250,000)63,750,000 12 years
Existing Customer Platforms43,000,000 (33,325,000)9,675,000 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&D1,250,000 — 1,250,000 Indefinite
Guardian In-Process R&D11,260,429 — 11,260,429 Indefinite
Total Other Intangible Assets$400,788,561 $(149,575,000)$251,213,561 
Total Patents & Other Intangible Assets$439,982,592 $(175,036,035)$264,946,557 

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 Licenses300,985 (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$428,599,404 $(164,492,709)$264,106,695 

Amortization expense on patents and intangible assets was approximately $5.6 million and $11.2 million during the three and six months ended June 30, 2021, respectively, compared to approximately $5.6 million and $11.2 million for the same periods ended June 30, 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 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
10


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


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, are then held at cost. These technology investments totaled approximately $9.0 million and $4.0 million as of June 30, 2021 and December 31, 2020, respectively. 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 June 30, 2021 and December 31, 2020:

As of June 30, 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
June 30, 2021(Level 1)(Level 2)(Level 3)
Cash & Cash Equivalents
$353,032,803 $353,032,803 $ $ 
Short-Term Investments:
Certificate of Deposit1,511,377 1,511,377   
Corporate Bonds2,020,280  2,020,280  
Government Securities602,016  602,016  
Municipal Bonds7,951,512  7,951,512  
Other1,713,642 1,713,642   
Long-Term Investments:
Asset Backed Securities29,174,900  29,174,900  
Certificate of Deposit2,599,960 2,599,960   
Corporate Bonds27,966,498  27,966,498  
Government Securities35,738,826  35,738,826  
Municipal Bonds88,934,125  88,934,125  
Total$551,245,939 $358,857,782 $192,388,157 $ 

11


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


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 June 30, 2021 and December 31, 2020:

As of June 30, 2021:
Unrealized
Cost
Gains
Losses
Market Value
Short-Term Investments:
Certificate of Deposit$1,502,822 $10,107 $(1,552)$1,511,377 
Corporate Bonds2,013,237 7,043  2,020,280 
Government Securities601,784 232  602,016 
Municipal Bonds7,926,891 24,621  7,951,512 
Other1,713,642   1,713,642 
Long-Term Investments:
Asset Backed Securities29,690,643 69,718 (585,461)29,174,900 
Certificate of Deposit2,502,449 97,511  2,599,960 
Corporate Bonds27,724,234 362,001 (119,737)27,966,498 
Government Securities35,656,412 90,333 (7,919)35,738,826 
Municipal Bonds84,595,949 6,309,593 (1,971,417)88,934,125 
Total$193,928,063 $6,971,159 $(2,686,086)$198,213,136 


12


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


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 June 30, 2021, are as follows:
Aggregate Unrealized LossesAggregate Fair Value of Investments
Loss duration of less than one year$2,274,743 $40,341,064 
Loss duration of greater than one year411,342 1,956,482 
       Total
$2,686,085 $42,297,546 

Unrealized losses on investments as of December 31, 2020, are as follows:
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 June 30, 2021 have contractual maturities as follows:
Due within one year
$12,085,185 
Due between one and five years
42,578,597 
Due over five years
141,835,712 
$196,499,494 

13


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


4)    Inventories
Inventories consisted of the following at the respective balance sheet dates:
June 30, 2021December 31, 2020
Raw materials
$179,304,938 $151,688,455 
Work-in-process
35,083,146 32,791,675 
Finished goods
49,511,892 41,811,713 
Total Inventory
$263,899,976 $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.

14


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


The following table sets forth the computation of basic and diluted net income per common share under the two-class method for the three and six months ended June 30, 2021 and June 30, 2020 respectively:
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Basic Earnings (Loss) Per Share
Net Income (Loss)$86,506,418 $(2,374,033)$199,957,288 $