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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 September 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, October 22, 2021
Common Stock, $.06 Par Value
236,520,081

1


GENTEX CORPORATION AND SUBSIDIARIES
For the Three and Nine Months Ended September 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 Condensed Consolidated Financial Statements.
GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2021 and December 31, 2020
September 30, 2021 (Unaudited)
December 31, 2020
(Note)
ASSETS
CURRENT ASSETS
Cash and cash equivalents$269,965,105 $423,371,036 
Short-term investments6,936,547 27,164,369 
Accounts receivable, net241,225,710 284,925,335 
Inventories292,599,881 226,291,843 
Prepaid expenses and other63,979,883 17,577,981 
Total current assets874,707,126 979,330,564 
PLANT AND EQUIPMENT—NET451,811,914 468,135,135 
OTHER ASSETS
Goodwill314,805,654 311,922,787 
Long-term investments204,671,558 162,028,068 
Intangible assets, net243,163,539 249,748,127 
Patents and other assets, net27,268,962 26,776,489 
Total other assets789,909,713 750,475,471 
Total assets$2,116,428,753 $2,197,941,170 
LIABILITIES AND SHAREHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Accounts payable$100,532,642 $84,784,423 
Accrued liabilities91,909,057 92,952,434 
Total current liabilities192,441,699 177,736,857 
OTHER NON-CURRENT LIABILITIES18,680,307 17,300,442 
DEFERRED INCOME TAXES17,676,461 38,960,743 
Total liabilities228,798,467 233,998,042 
SHAREHOLDERS’ INVESTMENT
Common stock14,192,076 14,621,572 
Additional paid-in capital865,063,949 852,771,508 
Retained earnings1,005,103,661 1,089,698,996 
Accumulated other comprehensive income3,270,600 6,851,052 
Total shareholders’ investment1,887,630,286 1,963,943,128 
Total liabilities and shareholders’ investment$2,116,428,753 $2,197,941,170 

Note: The condensed consolidated balance sheet at December 31, 2020 has been derived from the audited consolidated 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 Nine Months Ended September 30, 2021 and 2020
 
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
NET SALES
$399,598,744 $474,638,584 $1,311,328,609 $1,158,325,866 
COST OF GOODS SOLD
258,698,723 286,401,872 835,531,679 769,556,865 
Gross profit140,900,021 188,236,712 475,796,930 388,769,001 
OPERATING EXPENSES:
Engineering, research and development29,750,973 27,812,730 86,462,112 86,421,121 
Selling, general & administrative22,984,108 21,571,093 67,511,555 65,206,080 
Total operating expenses52,735,081 49,383,823 153,973,667 151,627,201 
Income from operations88,164,940 138,852,889 321,823,263 237,141,800 
OTHER INCOME
Investment income856,351 1,825,257 2,782,900 5,733,939 
Other income, net872,943 2,218,852 2,370,527 3,423,881 
Total other income1,729,294 4,044,109 5,153,427 9,157,820 
INCOME BEFORE PROVISION FOR INCOME TAXES89,894,234 142,896,998 326,976,690 246,299,620 
PROVISION FOR INCOME TAXES13,233,686 25,804,396 50,358,854 42,075,250 
NET INCOME$76,660,548 $117,092,602 $276,617,836 $204,224,370 
EARNINGS PER SHARE: (1)
Basic$0.32 $0.48 $1.15 $0.83 
Diluted$0.32 $0.48 $1.15 $0.82 
Cash Dividends Declared per Share$0.120 $0.120 $0.360 $0.360 
(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 and Nine Months Ended September 30, 2021 and 2020
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Net income$76,660,548 $117,092,602 $276,617,836 $204,224,370 
Other comprehensive income (loss) before tax:
Foreign currency translation adjustments(349,165)1,823,667 (238,378)1,268,204 
Unrealized (losses) gains on debt securities, net(816,801)(146,647)(4,230,473)5,655,644 
Other comprehensive income (loss), before tax(1,165,966)1,677,020 (4,468,851)6,923,848 
Income tax impact related to components of other comprehensive income (loss)(171,528)(30,796)(888,399)1,187,685 
Other comprehensive income (loss), net of tax(994,438)1,707,816 (3,580,452)5,736,163 
Comprehensive income$75,666,110 $118,800,418 $273,037,384 $209,960,533 

5


GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
For the Three Months Ended September 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 JULY 1, 2021238,966,589 $14,337,995 $859,678,392 $1,038,037,564 $4,265,038 $1,916,318,989 
Issuance of common stock from stock plan transactions398,873 23,932 7,093,058 — — 7,116,990 
Repurchases of common stock(2,830,850)(169,851)(9,200,264)(81,211,798)— (90,581,913)
Stock-based compensation expense related to stock options, employee stock purchases and restricted stock— — 7,492,763 — — 7,492,763 
Dividends declared ($0.12 per share)
— — — (28,382,653)— (28,382,653)
Net income— — — 76,660,548 — 76,660,548 
Other comprehensive income— — — — (994,438)(994,438)
BALANCE AS OF SEPTEMBER 30, 2021236,534,612 $14,192,076 $865,063,949 $1,005,103,661 $3,270,600 $1,887,630,286 
BALANCE AS OF JULY 1, 2020245,775,488 $14,746,529 $818,678,880 $986,442,760 $2,739,244 $1,822,607,413 
Issuance of common stock from stock plan transactions461,983 27,719 7,938,770 — — 7,966,489 
Repurchases of common stock(1,175,756)(70,545)(3,515,510)(28,074,807)— (31,660,862)
Stock-based compensation expense related to stock options, employee stock purchases and restricted stock— — 7,306,543 — — 7,306,543 
Dividends declared ($0.12 per share)
— — — (29,407,702)— (29,407,702)
Net income— — — 117,092,602 — 117,092,602 
Other comprehensive income— — — — 1,707,816 1,707,816 
BALANCE AS OF SEPTEMBER 30, 2020245,061,715 $14,703,703 $830,408,683 $1,046,052,853 $4,447,060 $1,895,612,299 


6


GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
For the Nine Months Ended September 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 transactions1,838,789 110,327 20,663,547 — — 20,773,874 
Repurchases of common stock(8,997,046)(539,823)(28,486,027)(275,169,905)— (304,195,755)
Stock-based compensation expense related to stock options, employee stock purchases and restricted stock— — 20,114,921 — — 20,114,921 
Dividends declared ($0.36 per share)
— — — (86,043,266)— (86,043,266)
Net income— — — 276,617,836 — 276,617,836 
Other comprehensive loss— — — — (3,580,452)(3,580,452)
BALANCE AS OF SEPTEMBER 30, 2021236,534,612 $14,192,076 $865,063,949 $1,005,103,661 $3,270,600 $1,887,630,286 
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 transactions1,815,270 108,917 23,568,264 — — 23,677,181 
Issuance of common stock related to acquisitions163,718 9,823 3,549,406 — — 3,559,229 
Repurchases of common stock(8,194,788)(491,688)(23,730,322)(186,258,436)— (210,480,446)
Stock-based compensation expense related to stock options, employee stock purchases and restricted stock— — 19,093,196 — — 19,093,196 
Dividends declared ($0.36 per share)
— — — (88,285,214)— (88,285,214)
Net income— — — 204,224,370 — 204,224,370 
Other comprehensive income— — — — 5,736,163 5,736,163 
BALANCE AS OF SEPTEMBER 30, 2020245,061,715 $14,703,703 $830,408,683 $1,046,052,853 $4,447,060 $1,895,612,299 

7


GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2021 and 2020
20212020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$276,617,836 $204,224,370 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization75,105,881 78,489,026 
(Gain) on disposal of assets(459,528)(281,542)
Loss on disposal of assets213,430 146,195 
(Gain) on sale of investments(969,971)(1,504,757)
Loss on sale of investments192,346 143,370 
Change in deferred income taxes(20,269,706)(9,559,993)
Stock-based compensation expense related to employee stock options, employee stock purchases and restricted stock20,114,921 23,266,906 
Change in operating assets and liabilities:
Accounts receivable, net43,704,625 (32,832,997)
Inventories(66,308,038)15,659,539 
Prepaid expenses and other(45,504,501)8,934,297 
Accounts payable15,748,219 (7,389,582)
Accrued liabilities, excluding dividends declared and short-term debt1,195,477 49,749,418 
Net cash provided by operating activities299,380,991 329,044,250 
CASH FLOWS (USED FOR) FROM INVESTING ACTIVITIES:
Activity in available-for-sale securities:
Sales proceeds34,250,068 15,559,590 
Maturities and calls26,110,000 117,172,368 
Purchases(86,228,584)(59,933,780)
Plant and equipment additions(44,357,786)(37,048,073)
Proceeds from sale of plant and equipment2,550,805 331,465 
Acquisition of businesses, net of cash acquired(12,023,440)(8,043,217)
Increase in other assets(2,763,847)(3,326,783)
Net cash (used for) provided by investing activities(82,462,784)24,711,570 
CASH FLOWS (USED FOR) FINANCING ACTIVITIES:
Proceeds from borrowings on Credit Agreement 75,000,000 
Repayment of borrowings on Credit Agreement (50,000,000)
Issuance of common stock from stock plan transactions20,773,874 23,677,181 
Cash dividends paid(86,902,257)(87,774,635)
Repurchases of common stock(304,195,755)(210,480,446)
Net cash (used for) financing activities(370,324,138)(249,577,900)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS(153,405,931)104,177,920 
CASH AND CASH EQUIVALENTS, beginning of period423,371,036 296,321,622 
CASH AND CASH EQUIVALENTS, end of period$269,965,105 $400,499,542 

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 September 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; $3.7 million as part of the acquisition of Vaporsens, Inc. ("Vaporsens") in the second quarter of 2020; and $0.9 million as a part of the acquisition of Argil, Inc. ("Argil") in the fourth quarter of 2020. During the third quarter of 2021, the Company made adjustments as part of the open measurement periods for Argil and for Air-Craftglass Production BV ("Air-Craftglass"), which was acquired in the third quarter of 2020. The Company reduced Goodwill recorded for Argil by $0.1 million and recorded an additional $0.2 million for Air-Craftglass during the third quarter of 2021. The Company also recorded $2.8 million in Goodwill as part of the acquisition of Guardian Optical Technologies ("Guardian") in the first quarter of 2021. See Note 15 for more information on these transactions. The carrying value of Goodwill as of both September 30, 2021 and December 31, 2020 was $314.8 million and $311.9 million, respectively, as set forth in the table below:

Carrying Amount
Balance as of December 31, 2020$311,922,787 
Acquisitions2,848,364 
Divestitures 
Impairments 
Other (Net Measurement Period Adjustments)34,503 
Balance as of September 30, 2021$314,805,654 

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 ("I P R & D") as part of the acquisition of: Vaporsens; Air-Craftglass; and Argil, each of which has been previously disclosed. The Company also acquired I P R & D as part of the acquisition of 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:

9


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



As of September 30, 2021:
Other Intangible AssetsGrossAccumulated AmortizationNetAssumed Useful Life
Gentex Patents$39,124,090 $(25,858,926)$13,265,164 Various
Vaporsens Technology Licenses346,654 (62,740)283,914 Various
Other Intangible Assets
HomeLink® Trade Names and Trademarks
$52,000,000 $— $52,000,000 Indefinite
HomeLink® Technology
180,000,000 (120,000,000)60,000,000 12 years
Existing Customer Platforms43,000,000 (34,400,000)8,600,000 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&D800,000 — 800,000 Indefinite
Guardian In-Process R&D8,485,407 — 8,485,407 Indefinite
Total Other Intangible Assets$397,563,539 $(154,400,000)$243,163,539 
Total Patents & Other Intangible Assets$437,034,283 $(180,321,666)$256,712,617 

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 $5.5 million and $16.7 million during the three and nine months ended September 30, 2021, respectively, compared to approximately $5.6 million and $16.8 million for the same periods ended September 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 $20 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.

10


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



(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, are then held at cost. These technology investments totaled approximately $14.0 million and $4.0 million as of September 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 September 30, 2021 and December 31, 2020:

As of September 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
September 30, 2021(Level 1)(Level 2)(Level 3)
Cash & Cash Equivalents$269,965,105 $269,965,105 $ $ 
Short-Term Investments:
Certificate of Deposit1,765,030 1,765,030   
Corporate Bonds2,032,660  2,032,660  
Municipal Bonds1,334,868  1,334,868  
Other1,803,989 1,803,989   
Long-Term Investments:
Asset Backed Securities27,739,691  27,739,691  
Certificate of Deposit2,073,655 2,073,655   
Corporate Bonds32,845,042  32,845,042  
Government Securities39,596,133  39,596,133  
Municipal Bonds88,368,667  88,368,667  
Total$467,524,840 $275,607,779 $191,917,061 $ 

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 September 30, 2021 and December 31, 2020:

As of September 30, 2021:
Unrealized
Cost
Gains
Losses
Market Value
Short-Term Investments:
Certificate of Deposit$1,750,589 $14,441 $ $1,765,030 
Corporate Bonds1,992,456 40,204  2,032,660 
Municipal Bonds1,334,020 848  1,334,868 
Other1,803,989   1,803,989 
Long-Term Investments:
Asset Backed Securities28,223,803 80,480 (564,592)27,739,691 
Certificate of Deposit2,002,082 71,573  2,073,655 
Corporate Bonds32,791,105 300,347 (246,410)32,845,042 
Government Securities39,704,080 9,126 (117,073)39,596,133 
Municipal Bonds84,489,341 4,009,321 (129,995)88,368,667 
Total$194,091,465 $4,526,340 $(1,058,070)$197,559,735 


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 September 30, 2021, are as follows:
Aggregate Unrealized LossesAggregate Fair Value of Investments
Loss duration of less than one year$496,385 $63,013,355 
Loss duration of greater than one year561,685 7,864,526 
       Total
$1,058,070 $70,877,881 

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 any amortized cost basis has been recovered.

Fixed income securities as of September 30, 2021 have contractual maturities as follows:
Due within one year
$5,132,558 
Due between one and five years
61,209,692 
Due over five years
129,413,495 
$195,755,745 

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:
September 30, 2021December 31, 2020
Raw materials
$209,029,089 $151,688,455 
Work-in-process
33,882,944 32,791,675 
Finished goods
49,687,848 41,811,713 
Total Inventory
$292,599,881 $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 and nine months ended September 30, 2021 and September 30, 2020:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Basic Earnings Per Share
Net Income$