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, 20222023 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)
Michigan38-2030505
(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 filerAccelerated filer
Non-accelerated filerSmaller 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.
ClassShares Outstanding, October 28, 202227, 2023
Common Stock, $.06 Par Value234,582,146233,252,591

1


GENTEX CORPORATION AND SUBSIDIARIES
For the Three and Nine Months Ended September 30, 20222023
FORM 10-Q
Index
Part I - Financial InformationPage
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, 20222023 and December 31, 20212022
September 30, 2022 (Unaudited)
December 31, 2021
(Note)
September 30, 2023 (Unaudited)
December 31, 2022
(Note)
ASSETSASSETSASSETS
CURRENT ASSETSCURRENT ASSETSCURRENT ASSETS
Cash and cash equivalentsCash and cash equivalents$222,933,723 $262,311,670 Cash and cash equivalents$260,633,625 $214,754,638 
Restricted CashRestricted Cash— 4,000,000 
Short-term investmentsShort-term investments16,122,519 5,423,612 Short-term investments17,464,830 23,007,385 
Accounts receivable, netAccounts receivable, net292,413,491 249,794,906 Accounts receivable, net351,142,147 276,493,752 
InventoriesInventories418,286,161 316,267,442 Inventories395,452,780 404,360,270 
Prepaid expenses and otherPrepaid expenses and other39,567,381 39,178,119 Prepaid expenses and other30,758,445 26,036,331 
Total current assetsTotal current assets989,323,275 872,975,749 Total current assets1,055,451,827 948,652,376 
PLANT AND EQUIPMENT—NETPLANT AND EQUIPMENT—NET526,680,787 464,121,676 PLANT AND EQUIPMENT—NET606,180,738 550,033,036 
OTHER ASSETSOTHER ASSETSOTHER ASSETS
GoodwillGoodwill313,851,944 313,960,209 Goodwill313,157,393 313,807,494 
Long-term investmentsLong-term investments154,429,190 207,693,147 Long-term investments272,615,535 202,331,983 
Equity method investments39,680,791 — 
Intangible assets, netIntangible assets, net224,185,910 239,189,627 Intangible assets, net204,885,910 219,360,910 
Deferred tax assetDeferred tax asset36,513,490 25,528,700 
Patents and other assets, netPatents and other assets, net63,171,166 33,450,758 Patents and other assets, net69,513,945 67,515,425 
Total other assetsTotal other assets795,319,001 794,293,741 Total other assets896,686,273 828,544,512 
Total assetsTotal assets$2,311,323,063 $2,131,391,166 Total assets$2,558,318,838 $2,327,229,924 
LIABILITIES AND SHAREHOLDERS’ INVESTMENTLIABILITIES AND SHAREHOLDERS’ INVESTMENTLIABILITIES AND SHAREHOLDERS’ INVESTMENT
CURRENT LIABILITIESCURRENT LIABILITIESCURRENT LIABILITIES
Accounts payableAccounts payable$171,436,605 $98,342,928 Accounts payable$171,359,850 $151,740,046 
Accrued liabilitiesAccrued liabilities93,728,038 83,313,172 Accrued liabilities103,045,653 98,812,706 
Total current liabilitiesTotal current liabilities265,164,643 181,656,100 Total current liabilities274,405,503 250,552,752 
OTHER NON-CURRENT LIABILITIESOTHER NON-CURRENT LIABILITIES12,112,756 11,746,599 OTHER NON-CURRENT LIABILITIES15,459,528 10,884,351 
Total liabilitiesTotal liabilities277,277,399 193,402,699 Total liabilities289,865,031 261,437,103 
SHAREHOLDERS’ INVESTMENTSHAREHOLDERS’ INVESTMENTSHAREHOLDERS’ INVESTMENT
Common stockCommon stock14,075,843 14,186,450 Common stock13,995,548 14,050,160 
Additional paid-in capitalAdditional paid-in capital908,622,409 879,413,385 Additional paid-in capital961,199,149 917,499,323 
Retained earningsRetained earnings1,108,061,455 1,042,461,388 Retained earnings1,306,931,850 1,148,386,272 
Accumulated other comprehensive (loss) income3,285,957 1,927,244 
Accumulated other comprehensive lossAccumulated other comprehensive loss(13,672,740)(14,142,934)
Total shareholders’ investmentTotal shareholders’ investment2,034,045,664 1,937,988,467 Total shareholders’ investment2,268,453,807 2,065,792,821 
Total liabilities and shareholders’ investmentTotal liabilities and shareholders’ investment$2,311,323,063 $2,131,391,166 Total liabilities and shareholders’ investment$2,558,318,838 $2,327,229,924 

Note: The condensed consolidated balance sheet at December 31, 20212022 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, 20222023 and 20212022
 
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
20222021202220212023202220232022
NET SALESNET SALES$493,636,695 $399,598,744 $1,425,310,472 $1,311,328,609 NET SALES$575,848,490 $493,636,695 $1,710,082,647 $1,425,310,472 
COST OF GOODS SOLDCOST OF GOODS SOLD346,435,670 258,698,723 969,330,474 835,531,679 COST OF GOODS SOLD384,407,857 346,435,670 1,150,821,744 969,330,474 
Gross profitGross profit147,201,025 140,900,021 455,979,998 475,796,930 Gross profit191,440,633 147,201,025 559,260,903 455,979,998 
OPERATING EXPENSES:OPERATING EXPENSES:OPERATING EXPENSES:
Engineering, research and developmentEngineering, research and development33,541,331 29,750,973 98,373,737 86,462,112 Engineering, research and development40,197,517 33,541,331 112,825,054 98,373,737 
Selling, general & administrativeSelling, general & administrative26,868,154 22,984,108 81,717,848 67,511,555 Selling, general & administrative28,826,587 26,868,154 83,479,285 81,717,848 
Total operating expensesTotal operating expenses60,409,485 52,735,081 180,091,585 153,973,667 Total operating expenses69,024,104 60,409,485 196,304,339 180,091,585 
Income from operationsIncome from operations86,791,540 88,164,940 275,888,413 321,823,263 Income from operations122,416,529 86,791,540 362,956,564 275,888,413 
OTHER (LOSS) INCOME
OTHER INCOME (LOSS)OTHER INCOME (LOSS)
Investment incomeInvestment income1,496,852 856,351 3,205,452 2,782,900 Investment income3,851,967 1,496,852 9,682,096 3,205,452 
Other (loss) income, net(2,126,039)872,943 (4,828,119)2,370,527 
Total other (loss) income(629,187)1,729,294 (1,622,667)5,153,427 
Other loss, netOther loss, net(1,788,335)(2,126,039)(3,559,613)(4,828,119)
Total other income (loss)Total other income (loss)2,063,632 (629,187)6,122,483 (1,622,667)
INCOME BEFORE PROVISION FOR INCOME TAXESINCOME BEFORE PROVISION FOR INCOME TAXES86,162,353 89,894,234 274,265,746 326,976,690 INCOME BEFORE PROVISION FOR INCOME TAXES124,480,161 86,162,353 369,079,047 274,265,746 
PROVISION FOR INCOME TAXESPROVISION FOR INCOME TAXES13,506,358 13,233,686 41,676,723 50,358,854 PROVISION FOR INCOME TAXES19,754,749 13,506,358 57,619,971 41,676,723 
NET INCOMENET INCOME$72,655,995 $76,660,548 $232,589,023 $276,617,836 NET INCOME$104,725,412 $72,655,995 $311,459,076 $232,589,023 
EARNINGS PER SHARE: (1)
EARNINGS PER SHARE: (1)
EARNINGS PER SHARE: (1)
BasicBasic$0.31 $0.32 $0.99 $1.15 Basic$0.45 $0.31 $1.33 $0.99 
DilutedDiluted$0.31 $0.32 $0.99 $1.15 Diluted$0.45 $0.31 $1.33 $0.99 
Cash Dividends Declared per ShareCash Dividends Declared per Share$0.120 $0.120 $0.360 $0.360 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.
(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.
(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, 20222023 and 20212022
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
20222021202220212023202220232022
Net incomeNet income$72,655,995 $76,660,548 $232,589,023 $276,617,836 Net income$104,725,412 $72,655,995 $311,459,076 $232,589,023 
Other comprehensive (loss) income before tax:Other comprehensive (loss) income before tax:Other comprehensive (loss) income before tax:
Foreign currency translation adjustmentsForeign currency translation adjustments17,751,603 (349,165)13,723,857 (238,378)Foreign currency translation adjustments(717,457)17,751,603 (2,295,001)13,723,857 
Unrealized losses on debt securities, net(4,442,743)(816,801)(15,652,081)(4,230,473)
Unrealized gains (losses) on debt securities, netUnrealized gains (losses) on debt securities, net363,905 (4,442,743)3,500,247 (15,652,081)
Other comprehensive income (loss), before tax13,308,860 (1,165,966)(1,928,224)(4,468,851)
Other comprehensive (loss) income, before taxOther comprehensive (loss) income, before tax(353,552)13,308,860 1,205,246 (1,928,224)
Income tax impact related to components of other comprehensive (loss) income(932,976)(171,528)(3,286,937)(888,399)
Income tax impact related to components of other comprehensive income (loss)Income tax impact related to components of other comprehensive income (loss)76,420 (932,976)735,052 (3,286,937)
Other comprehensive income (loss), net of tax14,241,836 (994,438)1,358,713 (3,580,452)
Other comprehensive (loss) income, net of taxOther comprehensive (loss) income, net of tax(429,972)14,241,836 470,194 1,358,713 
Comprehensive incomeComprehensive income$86,897,831 $75,666,110 $233,947,736 $273,037,384 Comprehensive income$104,295,440 $86,897,831 $311,929,270 $233,947,736 

5



GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
For the Three Months Ended September 30, 20222023 and 20212022
Common 
Stock
Shares
Common 
Stock
Amount
Additional 
Paid-In
Capital
Retained 
Earnings
Accumulated 
Other
Comprehensive
Income (Loss)
Total 
Shareholders’
Investment
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, 2022235,132,265 $14,107,936 $900,576,404 $1,082,846,019 $(10,955,879)$1,986,574,480 
BALANCE AS OF JULY 1, 2023BALANCE AS OF JULY 1, 2023233,429,994 $14,005,799 $942,660,764 $1,252,525,531 $(13,242,768)$2,195,949,326 
Issuance of common stock from stock plan transactionsIssuance of common stock from stock plan transactions315,433 18,926 3,351,010 — — 3,369,936 Issuance of common stock from stock plan transactions605,637 36,338 10,385,712 10,422,050 
Repurchases of common stockRepurchases of common stock(850,306)(51,019)(2,916,551)(19,289,212)— (22,256,782)Repurchases of common stock(776,488)(46,589)(2,795,358)(22,327,431)(25,169,378)
Stock-based compensation expense related to stock options, employee stock purchases and restricted stockStock-based compensation expense related to stock options, employee stock purchases and restricted stock— — 7,611,546 — — 7,611,546 Stock-based compensation expense related to stock options, employee stock purchases and restricted stock10,948,031 10,948,031 
Dividends declared ($0.12 per share)Dividends declared ($0.12 per share)— — — (28,151,347)— (28,151,347)Dividends declared ($0.12 per share)(27,991,662)(27,991,662)
Net incomeNet income— — — 72,655,995 — 72,655,995 Net income104,725,412 104,725,412 
Other comprehensive income— — — — 14,241,836 14,241,836 
BALANCE AS OF SEPTEMBER 30, 2022234,597,392 $14,075,843 $908,622,409 $1,108,061,455 $3,285,957 $2,034,045,664 
Other comprehensive lossOther comprehensive loss(429,972)(429,972)
BALANCE AS OF SEPTEMBER 30, 2023BALANCE AS OF SEPTEMBER 30, 2023233,259,143 $13,995,548 $961,199,149 $1,306,931,850 $(13,672,740)$2,268,453,807 
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 
BALANCE AS OF JULY 1, 2022BALANCE AS OF JULY 1, 2022235,132,265 $14,107,936 $900,576,404 $1,082,846,019 $(10,955,879)$1,986,574,480 
Issuance of common stock from stock plan transactionsIssuance of common stock from stock plan transactions398,873 23,932 7,093,058 — — 7,116,990 Issuance of common stock from stock plan transactions315,433 18,926 3,351,010 — — 3,369,936 
Repurchases of common stockRepurchases of common stock(2,830,850)(169,851)(9,200,264)(81,211,798)— (90,581,913)Repurchases of common stock(850,306)(51,019)(2,916,551)(19,289,212)— (22,256,782)
Stock-based compensation expense related to stock options, employee stock purchases and restricted stockStock-based compensation expense related to stock options, employee stock purchases and restricted stock— — 7,492,763 — — 7,492,763 Stock-based compensation expense related to stock options, employee stock purchases and restricted stock— — 7,611,546 — — 7,611,546 
Dividends declared ($0.12 per share)Dividends declared ($0.12 per share)— — — (28,382,653)— (28,382,653)Dividends declared ($0.12 per share)— — — (28,151,347)— (28,151,347)
Net incomeNet income— — — 76,660,548 — 76,660,548 Net income— — — 72,655,995 — 72,655,995 
Other comprehensive lossOther comprehensive loss— — — — (994,438)(994,438)Other comprehensive loss— — — — 14,241,836 14,241,836 
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 SEPTEMBER 30, 2022BALANCE AS OF SEPTEMBER 30, 2022234,597,392 $14,075,843 $908,622,409 $1,108,061,455 $3,285,957 $2,034,045,664 

6



GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
For the Nine Months Ended September 30, 20222023 and 20212022
Common 
Stock
Shares
Common 
Stock
Amount
Additional 
Paid-In
Capital
Retained 
Earnings
Accumulated 
Other
Comprehensive
(Loss) Income
Total 
Shareholders’
Investment
Common 
Stock
Shares
Common 
Stock
Amount
Additional 
Paid-In
Capital
Retained 
Earnings
Accumulated 
Other
Comprehensive
Loss
Total 
Shareholders’
Investment
BALANCE AS OF JANUARY 1, 2022236,440,840 $14,186,450 $879,413,385 $1,042,461,388 $1,927,244 $1,937,988,467 
BALANCE AS OF JANUARY 1, 2023BALANCE AS OF JANUARY 1, 2023234,169,335 $14,050,160 $917,499,323 $1,148,386,272 $(14,142,934)$2,065,792,821 
Issuance of common stock from stock plan transactionsIssuance of common stock from stock plan transactions1,284,615 77,077 12,288,026 — — 12,365,103 Issuance of common stock from stock plan transactions1,833,596 110,016 24,194,845 — — 24,304,861 
Issuance of common stock for equity investment purchases162,433 9,7464,990,266 — — 5,000,012 
Repurchases of common stockRepurchases of common stock(3,290,496)(197,430)(11,042,381)(82,268,993)— (93,508,804)Repurchases of common stock(2,743,788)(164,628)(9,707,255)(68,863,618)— (78,735,501)
Stock-based compensation expense related to stock options, employee stock purchases and restricted stockStock-based compensation expense related to stock options, employee stock purchases and restricted stock— — 22,973,113 — — 22,973,113 Stock-based compensation expense related to stock options, employee stock purchases and restricted stock— — 29,212,236 — — 29,212,236 
Dividends declared ($0.36 per share)Dividends declared ($0.36 per share)— — — (84,719,963)— (84,719,963)Dividends declared ($0.36 per share)— — — (84,049,880)— (84,049,880)
Net incomeNet income— — — 232,589,023 — 232,589,023 Net income— — — 311,459,076 — 311,459,076 
Other comprehensive incomeOther comprehensive income— — — — 1,358,713 1,358,713 Other comprehensive income— — — — 470,194 470,194 
BALANCE AS OF SEPTEMBER 30, 2022234,597,392 $14,075,843 $908,622,409 $1,108,061,455 $3,285,957 $2,034,045,664 
BALANCE AS OF SEPTEMBER 30, 2023BALANCE AS OF SEPTEMBER 30, 2023233,259,143 $13,995,548 $961,199,149 $1,306,931,850 $(13,672,740)$2,268,453,807 
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 
BALANCE AS OF JANUARY 1, 2022BALANCE AS OF JANUARY 1, 2022236,440,840 $14,186,450 $879,413,385 $1,042,461,388 $1,927,244 $1,937,988,467 
Issuance of common stock from stock plan transactionsIssuance of common stock from stock plan transactions1,838,789 110,327 20,663,547 — — 20,773,874 Issuance of common stock from stock plan transactions1,284,615 77,077 12,288,026 — — 12,365,103 
Issuance of common stock related to acquisitionsIssuance of common stock related to acquisitions162,433 9,746 4,990,266 — — 5,000,012 
Repurchases of common stockRepurchases of common stock(8,997,046)(539,823)(28,486,027)(275,169,905)— (304,195,755)Repurchases of common stock(3,290,496)(197,430)(11,042,381)(82,268,993)— (93,508,804)
Stock-based compensation expense related to stock options, employee stock purchases and restricted stockStock-based compensation expense related to stock options, employee stock purchases and restricted stock— — 20,114,921 — — 20,114,921 Stock-based compensation expense related to stock options, employee stock purchases and restricted stock— — 22,973,113 — — 22,973,113 
Dividends declared ($0.36 per share)Dividends declared ($0.36 per share)— — — (86,043,266)— (86,043,266)Dividends declared ($0.36 per share)— — — (84,719,963)— (84,719,963)
Net incomeNet income— — — 276,617,836 — 276,617,836 Net income— — — 232,589,023 — 232,589,023 
Other comprehensive lossOther comprehensive loss— — — — (3,580,452)(3,580,452)Other comprehensive loss— — — — 1,358,713 1,358,713 
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 SEPTEMBER 30, 2022BALANCE AS OF SEPTEMBER 30, 2022234,597,392 $14,075,843 $908,622,409 $1,108,061,455 $3,285,957 $2,034,045,664 

7


GENTEX CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 20222023 and 20212022
2022202120232022
CASH FLOWS FROM OPERATING ACTIVITIES:CASH FLOWS FROM OPERATING ACTIVITIES:CASH FLOWS FROM OPERATING ACTIVITIES:
Net incomeNet income$232,589,023 $276,617,836 Net income$311,459,076 $232,589,023 
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortizationDepreciation and amortization73,289,065 75,105,881 Depreciation and amortization71,001,177 73,289,065 
(Gain) on disposal of assets(Gain) on disposal of assets(56,257)(459,528)(Gain) on disposal of assets(271,510)(56,257)
Loss on disposal of assetsLoss on disposal of assets22,096 213,430 Loss on disposal of assets250,435 22,096 
(Gain) on sale of investments(391,378)(969,971)
Loss on sale of investments1,248,450 192,346 
(Gain) on sale of investments and equity method investment income(Gain) on sale of investments and equity method investment income(2,747,586)(391,378)
Loss on sale of investments and equity method investment lossesLoss on sale of investments and equity method investment losses6,840,692 1,248,450 
Change in deferred income taxesChange in deferred income taxes4,785,787 (20,269,706)Change in deferred income taxes(11,870,944)4,785,787 
Stock-based compensation expense related to employee stock options, employee stock purchases and restricted stockStock-based compensation expense related to employee stock options, employee stock purchases and restricted stock22,973,113 20,114,921 Stock-based compensation expense related to employee stock options, employee stock purchases and restricted stock29,212,236 22,973,113 
Change in operating assets and liabilities:Change in operating assets and liabilities:Change in operating assets and liabilities:
Accounts receivable, netAccounts receivable, net(42,618,585)43,704,625 Accounts receivable, net(74,648,395)(42,618,585)
InventoriesInventories(102,018,719)(66,308,038)Inventories8,907,490 (102,018,719)
Prepaid expenses and otherPrepaid expenses and other(16,978,469)(45,504,501)Prepaid expenses and other(5,416,624)(16,978,469)
Accounts payableAccounts payable52,511,201 15,748,219 Accounts payable27,451,773 52,511,201 
Accrued liabilities, excluding dividends declared and short-term debt11,002,238 1,195,477 
Accrued liabilities, excluding dividends declaredAccrued liabilities, excluding dividends declared7,500,486 11,002,238 
Net cash provided by operating activitiesNet cash provided by operating activities236,357,565 299,380,991 Net cash provided by operating activities367,668,306 236,357,565 
CASH FLOWS USED FOR INVESTING ACTIVITIES:CASH FLOWS USED FOR INVESTING ACTIVITIES:CASH FLOWS USED FOR INVESTING ACTIVITIES:
Activity in available-for-sale securities:
Activity in investments:Activity in investments:
Sales proceedsSales proceeds37,429,595 34,250,068 Sales proceeds32,839,883 37,429,595 
Maturities and callsMaturities and calls3,500,000 26,110,000 Maturities and calls14,435,000 3,500,000 
PurchasesPurchases(25,304,476)(86,228,584)Purchases(112,608,739)(49,554,476)
Purchase of equity method investments(24,250,000)— 
Plant and equipment additionsPlant and equipment additions(108,475,787)(44,357,786)Plant and equipment additions(121,393,801)(108,475,787)
Proceeds from sale of plant and equipmentProceeds from sale of plant and equipment91,949 2,550,805 Proceeds from sale of plant and equipment185,610 91,949 
Acquisition of businesses, net of cash acquired— (12,023,440)
Increase in other assetsIncrease in other assets(2,310,428)(2,763,847)Increase in other assets(2,533,687)(2,310,428)
Net cash used for investing activitiesNet cash used for investing activities(119,319,147)(82,462,784)Net cash used for investing activities(189,075,734)(119,319,147)
CASH FLOWS USED FOR FINANCING ACTIVITIES:CASH FLOWS USED FOR FINANCING ACTIVITIES:CASH FLOWS USED FOR FINANCING ACTIVITIES:
Issuance of common stock from stock plan transactionsIssuance of common stock from stock plan transactions12,365,103 20,773,874 Issuance of common stock from stock plan transactions24,304,861 12,365,103 
Cash dividends paidCash dividends paid(84,941,178)(86,902,257)Cash dividends paid(84,159,105)(84,941,178)
Repurchases of common stockRepurchases of common stock(83,840,290)(304,195,755)Repurchases of common stock(76,859,341)(83,840,290)
Net cash used for financing activitiesNet cash used for financing activities(156,416,365)(370,324,138)Net cash used for financing activities(136,713,585)(156,416,365)
NET DECREASE IN CASH AND CASH EQUIVALENTS(39,377,947)(153,405,931)
NET INCREASE IN CASH AND CASH EQUIVALENTSNET INCREASE IN CASH AND CASH EQUIVALENTS41,878,987 (39,377,947)
CASH AND CASH EQUIVALENTS, beginning of period262,311,670 423,371,036 
CASH, CASH EQUIVALENTS, and RESTRICTED CASH, beginning of periodCASH, CASH EQUIVALENTS, and RESTRICTED CASH, beginning of period218,754,638 262,311,670 
CASH AND CASH EQUIVALENTS, end of period$222,933,723 $269,965,105 
CASH, CASH EQUIVALENTS, and RESTRICTED CASH, end of periodCASH, CASH EQUIVALENTS, and RESTRICTED CASH, end of period$260,633,625 $222,933,723 

Nine Months Ended September 30,
SUPPLEMENTAL CASH FLOW DATA20232022
Non-cash investing and financing activities:
Property and equipment in accounts payable and accrued expenses and other current liabilities$9,708,125 $5,064,356 
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 20212022 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, 2022,2023, 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; $0.2 million as part of the acquisition of Air-Craftglass Production BV ("Air-Craftglass") in the third quarter of 2020; $1.0 million as a part of the acquisition of Argil, Inc. ("Argil") in the fourth quarter of 2020; and $2.0 million as part of the acquisition of Guardian Optical Technologies ("Guardian") in the first quarter of 2021. The carrying value of Goodwill as of both September 30, 20222023 and December 31, 20212022 was $313.9$313.2 million and $314.0$313.8 million, respectively, as set forth in the table below:

Carrying Amount
Balance as of December 31, 20212022$313,960,209313,807,494 
Acquisitions— 
Divestitures— 
Impairments— 
Other(108,265)(650,101)
Balance as of September 30, 20222023$313,851,944313,157,393 

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,UAW strike, component shortages, supply chain constraints, inflation, 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 ("In-Process R & D") as part of the acquisitions of: Vaporsens; Air-Craftglass; Argil; and Guardian, each of which has been previously disclosed.

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, 2022:2023:
Other Intangible AssetsOther Intangible AssetsGrossAccumulated AmortizationNetAssumed Useful LifeOther Intangible AssetsGrossAccumulated AmortizationNetAssumed Useful Life
Gentex PatentsGentex Patents$39,510,640 $(27,796,894)$11,713,746 VariousGentex Patents$39,170,904 $(27,611,804)$11,559,100 Various
Vaporsens Technology Licenses351,290 (81,911)269,379 Various
Other Intangible AssetsOther Intangible AssetsOther Intangible Assets
HomeLink® Trade Names and Trademarks
HomeLink® Trade Names and Trademarks
$52,000,000 $— $52,000,000 Indefinite
HomeLink® Trade Names and Trademarks
$52,000,000 $— $52,000,000 Indefinite
HomeLink® Technology
HomeLink® Technology
180,000,000 (135,000,000)45,000,000 12 years
HomeLink® Technology
180,000,000 (150,000,000)30,000,000 12 years
Existing Customer PlatformsExisting Customer Platforms43,000,000 (38,700,000)4,300,000 10 yearsExisting Customer Platforms43,000,000 (43,000,000)— 10 years
Exclusive Licensing AgreementExclusive Licensing Agreement96,000,000 — 96,000,000 IndefiniteExclusive Licensing Agreement96,000,000 — 96,000,000 Indefinite
Vaporsens In-Process R&DVaporsens In-Process R&D11,000,000 — 11,000,000 IndefiniteVaporsens In-Process R&D11,000,000 — 11,000,000 Indefinite
Argil In-Process R&DArgil In-Process R&D6,278,132 — 6,278,132 IndefiniteArgil In-Process R&D6,278,132 — 6,278,132 Indefinite
Air-Craftglass In-Process R&DAir-Craftglass In-Process R&D1,507,778 — 1,507,778 IndefiniteAir-Craftglass In-Process R&D1,507,778 — 1,507,778 Indefinite
Guardian Trade NamesGuardian Trade Names1,300,000 — 1,300,000 IndefiniteGuardian Trade Names1,300,000 — 1,300,000 Indefinite
Guardian In-Process R&DGuardian In-Process R&D6,800,000 — 6,800,000 IndefiniteGuardian In-Process R&D6,800,000 — 6,800,000 Indefinite
Total Other Intangible AssetsTotal Other Intangible Assets$397,885,910 $(173,700,000)$224,185,910 Total Other Intangible Assets$397,885,910 $(193,000,000)$204,885,910 
Total Patents & Other Intangible AssetsTotal Patents & Other Intangible Assets$437,747,840 $(201,578,805)$236,169,035 Total Patents & Other Intangible Assets$437,056,814 $(220,611,804)$216,445,010 

As of December 31, 2021:2022:
Other Intangible AssetsOther Intangible AssetsGrossAccumulated AmortizationNetAssumed Useful LifeOther Intangible AssetsGrossAccumulated AmortizationNetAssumed Useful Life
Gentex PatentsGentex Patents$39,362,187 $(26,506,155)$12,856,032 VariousGentex Patents$40,653,851 $(27,820,383)$12,833,468 Various
Vaporsens Technology Licenses351,290 (50,107)301,183 Various
Other Intangible AssetsOther Intangible AssetsOther Intangible Assets
HomeLink® Trade Names and Trademarks
HomeLink® Trade Names and Trademarks
$52,000,000 $— $52,000,000 Indefinite
HomeLink® Trade Names and Trademarks
$52,000,000 $— $52,000,000 Indefinite
HomeLink® Technology
HomeLink® Technology
180,000,000 (123,750,000)56,250,000 12 years
HomeLink® Technology
180,000,000 (138,750,000)41,250,000 12 years
Existing Customer PlatformsExisting Customer Platforms43,000,000 (35,475,000)7,525,000 10 yearsExisting Customer Platforms43,000,000 (39,775,000)3,225,000 10 years
Exclusive Licensing AgreementExclusive Licensing Agreement96,000,000 — 96,000,000 IndefiniteExclusive Licensing Agreement96,000,000 — 96,000,000 Indefinite
Vaporsens In-Process R&D Vaporsens In-Process R&D11,000,000 — 11,000,000 Indefinite Vaporsens In-Process R&D11,000,000 — 11,000,000 Indefinite
Argil In-Process R&D Argil In-Process R&D6,278,132 — 6,278,132 Indefinite Argil In-Process R&D6,278,132 — 6,278,132 Indefinite
Air-Craftglass In-Process R&D Air-Craftglass In-Process R&D1,507,778 — 1,507,778 Indefinite Air-Craftglass In-Process R&D1,507,778 — 1,507,778 Indefinite
Guardian Trade Names Guardian Trade Names1,384,857 — 1,384,857 Indefinite Guardian Trade Names1,300,000 — 1,300,000 Indefinite
Guardian In-Process R&D Guardian In-Process R&D7,243,860 — 7,243,860 Indefinite Guardian In-Process R&D6,800,000 — 6,800,000 Indefinite
Total Other Intangible AssetsTotal Other Intangible Assets$398,414,627 $(159,225,000)$239,189,627 Total Other Intangible Assets$397,885,910 $(178,525,000)$219,360,910 
Total Patents & Other Intangible AssetsTotal Patents & Other Intangible Assets$438,128,104 $(185,781,262)$252,346,842 Total Patents & Other Intangible Assets$438,539,761 $(206,345,383)$232,194,378 

Amortization expense on patents and intangible assets was approximately $5.5$5.2 million and $16.6$15.6 million during the three and nine months ended September 30, 2022,2023, respectively, andcompared to approximately $5.5 million and $16.7$16.6 million for the same periods ended September 30, 2021,2022, respectively.

Excluding the impact of any future acquisitions, the Company estimates amortization expense for the year ending December 31, 2023 to be approximately $20 million, for the year ending December 31, 2024 to be
10


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Excluding the impact of any future acquisitions, the Company estimates amortization expense for the year ending December 31, 2022 to be approximately $22$16 million, for the year ending December 31, 20232025 to be approximately $20 million, for the year ending December 31, 2024 to be approximately $16$13 million, and for each of the years ending December 31, 20252026 and December 31, 20262027 to be approximately $12$5 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 323, Investments - Equity Method and Joint Ventures. The Company's share of the earnings or losses of non-controlled affiliates, over which the Company exercises significant influence (generally a 20% to 50% common shares ownership interest), is included in the consolidated operating results using the equity method of accounting. These equity method investments, over which the Company exercises significant influence, totaled approximately $39.7 million as of September 30, 2022 (including approximately $11.1 million of investments accounted for under ASC 321, Investments - Equity Securities, as of December 31, 2021, for which the Company obtained significant influence during 2022). On June 3, 2022, the Company purchased an equity investment in GreenMarbles for $20.0 million, in addition to an issuance of $5.0 million worth of common stock. GreenMarbles is a leading provider of sustainable solutions for integration into properties. The Company did not have equity method investments as of December 31, 2021. These investments are classified within Equity Method Investments in the condensed consolidated balance sheets. 

The Company has also made technology investments in certain non-consolidated affiliates for common share ownership interests of less than 20% (where the Company does not have the ability to exercise significant influence). These equity investments are accounted for in accordance with ASC 321, Investments - Equity Securities. For these 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, the equity investments are then held at cost. These

Such technology investments totaled approximately $14.1$125.3 million and $16.8$69.5 million as of September 30, 20222023 and December 31, 2021,2022, respectively. AsOn March 9, 2023, the Company purchased a 15% equity investment in Adasky, LTD. for $21.5 million. On July 5, 2023, the Company purchased an additional 12% equity investment in Adasky, for an additional $21.5 million. Adasky is an Israeli-based leading developer and manufacturer of September 30, 2022, $1.6intelligent thermal sensing technologies. $2.2 million and $3.8 million of these technology investments are classified within Short-Term Investments in the condensed consolidated balance sheets. $12.5sheets as of September 30, 2023 and December 31, 2022, respectively. $123.1 million and $16.8$65.7 million of these investments are classified within Long-Term Investments in the condensed consolidated balance sheets as of September 30, 20222023 and December 31, 2021,2022, respectively.  
Assets or liabilities that have recurring fair value measurements are shown below as of September 30, 20222023 and December 31, 2021:2022:






11


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)





As of September 30, 2022:2023:
Fair Value Measurements at Reporting Date UsingFair Value Measurements at Reporting Date Using
Total as of
Quoted Prices in
Active Markets for
Identical Assets
Significant Other
Observable
Inputs
Significant
Unobservable
Inputs
Total as of
Quoted Prices in
Active Markets for
Identical Assets
Significant Other
Observable
Inputs
Significant
Unobservable
Inputs
DescriptionDescriptionSeptember 30, 2022(Level 1)(Level 2)(Level 3)DescriptionSeptember 30, 2023(Level 1)(Level 2)(Level 3)
Cash & Cash EquivalentsCash & Cash Equivalents$222,933,723 $222,933,723 $— $— Cash & Cash Equivalents$260,633,625 $260,633,625 $— $— 
Short-Term Investments:Short-Term Investments:Short-Term Investments:
Certificate of DepositCertificate of Deposit1,732,547 1,732,547 — — Certificate of Deposit989,198 989,198 — — 
Corporate BondsCorporate Bonds5,446,048 — 5,446,048 — Corporate Bonds1,927,301 — 1,927,301 — 
Government SecuritiesGovernment Securities2,209,331 — 2,209,331 — Government Securities5,176,215 — 5,176,215 — 
Municipal BondsMunicipal Bonds3,509,688 — 3,509,688 — Municipal Bonds2,409,861 — 2,409,861 — 
OtherOther1,230,180 1,230,180 — — Other4,723,625 1,256,600 3,467,025 — 
Long-Term Investments:Long-Term Investments:Long-Term Investments:
Asset Backed SecuritiesAsset Backed Securities20,942,859 — 20,942,859 — Asset Backed Securities21,064,870 — 21,064,870 — 
Certificate of DepositCertificate of Deposit238,793 238,793 — — Certificate of Deposit740,950 740,950 — — 
Corporate BondsCorporate Bonds34,522,617 — 34,522,617 — Corporate Bonds50,484,099 — 50,484,099 — 
Government SecuritiesGovernment Securities37,693,740 — 37,693,740 — Government Securities28,297,530 — 28,297,530 — 
Municipal BondsMunicipal Bonds48,946,743 — 48,946,743 — Municipal Bonds47,583,725 — 47,583,725 — 
Common StockCommon Stock1,386,988 1,386,988 — — 
TotalTotal$379,406,269 $226,135,243 $153,271,026 $— Total$425,417,987 $265,007,361 $160,410,626 $— 

As of December 31, 2021:2022:
Fair Value Measurements at Reporting Date UsingFair Value Measurements at Reporting Date Using
Total as of
Quoted Prices in
Active Markets for
Identical Assets
Significant Other
Observable
Inputs
Significant
Unobservable
Inputs
Total as of
Quoted Prices in
Active Markets for
Identical Assets
Significant Other
Observable
Inputs
Significant
Unobservable
Inputs
DescriptionDescriptionDecember 31, 2021(Level 1)(Level 2)(Level 3)DescriptionDecember 31, 2022(Level 1)(Level 2)(Level 3)
Cash & Cash EquivalentsCash & Cash Equivalents$262,311,670 $262,311,670 $— $— Cash & Cash Equivalents$214,754,638 $214,754,638 $— $— 
Restricted CashRestricted Cash4,000,000 4,000,000 — — 
Short-Term Investments:Short-Term Investments:Short-Term Investments:
Certificate of DepositCertificate of Deposit1,507,770 1,507,770 — — Certificate of Deposit1,736,163 1,736,163 — — 
Corporate BondsCorporate Bonds2,018,440 — 2,018,440 — Corporate Bonds5,473,341 — 5,473,341 — 
Government SecuritiesGovernment Securities— — — — Government Securities4,423,041 — 4,423,041 — 
Municipal BondsMunicipal Bonds— — — — Municipal Bonds5,174,773 — 5,174,773 — 
OtherOther1,897,402 1,897,402 — — Other2,347,602 1,093,602 1,254,000 — 
Long-Term Investments:Long-Term Investments:Long-Term Investments:
Asset-backed SecuritiesAsset-backed Securities25,799,513 — 25,799,513 — Asset-backed Securities18,829,696 — 18,829,696 — 
Certificate of DepositCertificate of Deposit2,056,710 2,056,710 — — Certificate of Deposit238,925 238,925 — — 
Corporate BondsCorporate Bonds40,354,929 — 40,354,929 — Corporate Bonds36,310,477 — 36,310,477 — 
Governmental SecuritiesGovernmental Securities47,944,036 — 47,944,036 — Governmental Securities36,532,634 — 36,532,634 — 
Municipal BondsMunicipal Bonds74,720,480 — 74,720,480 — Municipal Bonds48,430,166 — 48,430,166 
Common StockCommon Stock293,300 293,300 — — 
TotalTotal$458,610,950 $267,773,552 $190,837,398 $— Total$378,544,756 $222,116,628 $156,428,128 $— 

12


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


The amortized cost, unrealized gains and losses, and market value of investment securities are shown as of September 30, 20222023 and December 31, 2021:2022:

As of September 30, 2022:2023:
UnrealizedUnrealized
CostGainsLossesMarket ValueCostGainsLossesMarket Value
Short-Term Investments:Short-Term Investments:Short-Term Investments:
Certificate of DepositCertificate of Deposit$1,750,623 $— $(18,076)$1,732,547 Certificate of Deposit$1,000,000 $— $(10,802)$989,198 
Corporate BondsCorporate Bonds5,600,869 — (154,821)5,446,048 Corporate Bonds1,982,128 — (54,827)1,927,301 
Government SecuritiesGovernment Securities2,211,230 — (1,899)2,209,331 Government Securities5,198,015 — (21,800)5,176,215 
Municipal BondsMunicipal Bonds3,549,066 — (39,378)3,509,688 Municipal Bonds2,431,031 — (21,170)2,409,861 
OtherOther1,230,180 — — 1,230,180 Other4,723,625 — — 4,723,625 
Long-Term Investments:Long-Term Investments:Long-Term Investments:
Asset Backed SecuritiesAsset Backed Securities21,716,039 — (773,180)20,942,859 Asset Backed Securities21,273,402 — (208,532)21,064,870 
Certificate of DepositCertificate of Deposit250,000 — (11,207)238,793 Certificate of Deposit750,000 — (9,050)740,950 
Corporate BondsCorporate Bonds39,223,627 — (4,701,010)34,522,617 Corporate Bonds53,814,699 — (3,330,600)50,484,099 
Government SecuritiesGovernment Securities41,116,603 — (3,422,863)37,693,740 Government Securities29,640,890 — (1,343,360)28,297,530 
Municipal BondsMunicipal Bonds54,202,144 186,625 (5,442,026)48,946,743 Municipal Bonds51,881,686 378,802 (4,676,763)47,583,725 
Common StockCommon Stock1,637,386 2,311 (252,709)1,386,988 
TotalTotal$170,850,381 $186,625 $(14,564,460)$156,472,546 Total$174,332,862 $381,113 $(9,929,613)$164,784,362 


As of December 31, 2021:2022:    
UnrealizedUnrealized
CostGainsLossesMarket ValueCostGainsLossesMarket Value
Short-Term Investments:Short-Term Investments:Short-Term Investments:
Certificate of DepositCertificate of Deposit$1,500,543 $7,227 $— $1,507,770 Certificate of Deposit$1,750,256 $— $(14,093)$1,736,163 
Corporate BondsCorporate Bonds1,994,639 23,801 — 2,018,440 Corporate Bonds5,571,417 — (98,076)5,473,341 
Government SecuritiesGovernment Securities4,476,613 — (53,572)4,423,041 
Municipal BondsMunicipal Bonds5,223,500 — (48,727)5,174,773 
OtherOther1,897,402 — — 1,897,402 Other2,347,602 — — 2,347,602 
Long-Term Investments:Long-Term Investments:Long-Term Investments:
Asset-backed SecuritiesAsset-backed Securities26,352,630 34,771 (587,888)25,799,513 Asset-backed Securities19,151,229 — (321,533)18,829,696 
Certificate of DepositCertificate of Deposit2,001,714 54,996 — 2,056,710 Certificate of Deposit250,000 — (11,075)238,925 
Corporate BondsCorporate Bonds40,716,866 168,416 (530,353)40,354,929 Corporate Bonds40,410,206 — (4,099,729)36,310,477 
Government SecuritiesGovernment Securities48,385,672 55,939 (497,575)47,944,036 Government Securities39,637,461 — (3,104,827)36,532,634 
Municipal BondsMunicipal Bonds72,175,568 2,747,964 (203,052)74,720,480 Municipal Bonds53,476,883 235,713 (5,282,430)48,430,166 
Common StockCommon Stock292,638 662 — 293,300 
TotalTotal$195,025,034 $3,093,114 $(1,818,868)$196,299,280 Total$172,587,805 $236,375 $(13,034,062)$159,790,118 

Unrealized losses on investments as of September 30, 2022,2023, are as follows:
Aggregate Unrealized LossesAggregate Fair Value of Investments
Loss duration of less than one year$8,189,761 $112,298,649 
Loss duration of greater than one year6,374,699 42,011,693 
       Total$14,564,460 $154,310,342 

Aggregate Unrealized LossesAggregate Fair Value of Investments
Loss duration of less than one year$1,340,283 $51,123,646 
Loss duration of greater than one year8,589,330 103,252,208 
       Total$9,929,613 $154,375,854 
13


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



Unrealized losses on investments as of December 31, 2021,2022, are as follows:
Aggregate Unrealized LossesAggregate Fair Value of InvestmentsAggregate Unrealized LossesAggregate Fair Value of Investments
Loss duration of less than one yearLoss duration of less than one year$1,244,053 $94,417,123 Loss duration of less than one year$4,816,103 $77,701,146 
Loss duration of greater than one yearLoss duration of greater than one year574,815 6,875,230 Loss duration of greater than one year8,217,959 76,643,586 
Total Total$1,818,868 $101,292,353  Total$13,034,062 $154,344,732 

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, 20222023 have contractual maturities as follows:
Due within one year$12,897,61410,502,575 
Due between one and five years90,409,87898,587,270 
Due over five years51,934,87449,583,904 
$155,242,366158,673,749 

(4)    Inventories
Inventories consisted of the following at the respective balance sheet dates:
September 30, 2022December 31, 2021September 30, 2023December 31, 2022
Raw materialsRaw materials$315,110,961 $235,014,277 Raw materials$281,802,062 $304,184,004 
Work-in-processWork-in-process39,805,042 34,032,164 Work-in-process44,896,661 45,512,275 
Finished goodsFinished goods63,370,158 47,221,001 Finished goods68,754,057 54,663,991 
Total InventoryTotal Inventory$418,286,161 $316,267,442 Total Inventory$395,452,780 $404,360,270 


(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, 20222023 and September 30, 2021:2022:
14


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
20222021202220212023202220232022
Basic Earnings Per ShareBasic Earnings Per ShareBasic Earnings Per Share
Net IncomeNet Income$72,655,995 $76,660,548 $232,589,023 $276,617,836 Net Income$104,725,412 $72,655,995 $311,459,076 $232,589,023 
Less: Dividends and undistributed earnings allocated to participating securitiesLess: Dividends and undistributed earnings allocated to participating securities1,096,274 1,240,581 3,563,605 4,240,503 Less: Dividends and undistributed earnings allocated to participating securities1,537,105 1,096,274 4,636,523 3,563,605 
Net Income available to common shareholdersNet Income available to common shareholders$71,559,721 $75,419,967 $229,025,418 $272,377,333 Net Income available to common shareholders$103,188,307 $71,559,721 $306,822,553 $229,025,418 
Basic weighted average shares outstandingBasic weighted average shares outstanding231,316,879 234,005,573 231,072,421 236,628,999 Basic weighted average shares outstanding230,047,014 231,316,879 229,866,008 231,072,421 
Net Income per share - BasicNet Income per share - Basic$0.31 $0.32 $0.99 $1.15 Net Income per share - Basic$0.45 $0.31 $1.33 $0.99 
Diluted Earnings Per ShareDiluted Earnings Per ShareDiluted Earnings Per Share
Allocation of Net Income used in basic computationAllocation of Net Income used in basic computation$71,559,721 $75,419,967 $229,025,418 $272,377,333 Allocation of Net Income used in basic computation$103,188,307 $71,559,721 $306,822,553 $229,025,418 
Reallocation of undistributed earningsReallocation of undistributed earnings848 2,943 4,412 13,289 Reallocation of undistributed earnings1,978 848 4,577 4,412 
Net Income available to common shareholders - DilutedNet Income available to common shareholders - Diluted$71,560,569 $75,422,910 $229,029,830 $272,390,622 Net Income available to common shareholders - Diluted$103,190,285 $71,560,569 $306,827,130 $229,029,830 
Number of shares used in basic computationNumber of shares used in basic computation231,316,879 234,005,573 231,072,421 236,628,999 Number of shares used in basic computation230,047,014 231,316,879 229,866,008 231,072,421 
Additional weighted average dilutive common stock equivalentsAdditional weighted average dilutive common stock equivalents300,138 897,636 457,032 1,108,216 Additional weighted average dilutive common stock equivalents410,397 300,138 315,666 457,032 
Diluted weighted average shares outstandingDiluted weighted average shares outstanding231,617,017 234,903,209 231,529,453 237,737,215 Diluted weighted average shares outstanding230,457,411 231,617,017 230,181,674 231,529,453 
Net Income per share - DilutedNet Income per share - Diluted$0.31 $0.32 $0.99 $1.15 Net Income per share - Diluted$0.45 $0.31 $1.33 $0.99 
Shares related to stock plans not included in diluted average common shares outstanding because their effect would be anti-dilutiveShares related to stock plans not included in diluted average common shares outstanding because their effect would be anti-dilutive2,456,463 987,757 1,526,986 180,669 Shares related to stock plans not included in diluted average common shares outstanding because their effect would be anti-dilutive1,384,066 2,456,463 1,410,341 1,526,986 

(6)    Stock-Based Compensation Plans
As of September 30, 2022,2023, 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 awards and 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.
15


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


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, 2021,2022, for additional information related to the Prior Plans.
The Company recognized total compensation expense for share-based payments of $7,611,545$10,948,031 and $29,212,236 for the three months ended September 30, 2022, and total compensation expense for share-based payments of $22,973,113 for the nine months ended September 30, 2022.2023, respectively. The Company recognized compensation expense for share-based payments of $7,492,763$7,611,546 and $20,114,921$22,973,113 for the three and nine months ended
15


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


September 30, 2021,2022, respectively. A portion of the compensation cost for share based payment awards is capitalized as part of inventory.
2019 Omnibus Incentive Plan

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. Pursuant to the terms of the 2019 Omnibus Plan, each type of award counts against the available shares based on a predetermined conversion rate (shown in the table below). As of September 30, 2022, 7,994,7612023, 9,733,895 share awards have been made under the Plan, resulting in 19,523,86524,797,549 shares granted of the 45,000,000 total shares available to be issued under the Plan. The shares issued are presented net of shares from canceled/expired options and shares.

Shares GrantedConversion RateTotal Shares Under 2019 Omnibus PlanShares GrantedConversion RateTotal Shares Under 2019 Omnibus Plan
Non-Qualified Stock OptionsNon-Qualified Stock Options4,227,080 1.004,227,080 Non-Qualified Stock Options4,811,132 1.004,811,132 
Restricted StockRestricted Stock3,208,209 4.0613,025,329 Restricted Stock4,056,891 4.0616,470,977 
Performance SharesPerformance Shares559,472 4.062,271,456 Performance Shares865,872 4.063,515,440 
TotalTotal7,994,761 19,523,865 Total9,733,895 24,797,549 
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 September 30, 2022,2023, there was $9,723,678$8,461,373 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 September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
20222021202220212023202220232022
Dividend Yield (1)
Dividend Yield (1)
1.78 %1.83 %1.79 %1.86 %
Dividend Yield (1)
1.72 %1.78 %1.74 %1.79 %
Expected volatility (2)
Expected volatility (2)
29.02 %27.47 %28.62 %27.67 %
Expected volatility (2)
28.66 %29.02 %28.89 %28.62 %
Risk-free interest rate (3)
Risk-free interest rate (3)
4.06 %0.98 %3.16 %0.92 %
Risk-free interest rate (3)
4.60 %4.06 %4.11 %3.16 %
Expected term of options (years) (4)
Expected term of options (years) (4)
4.154.144.154.15
Expected term of options (years) (4)
4.144.154.154.15
Weighted-avg. grant date fair valueWeighted-avg. grant date fair value$5.97$6.32$6.28$6.49Weighted-avg. grant date fair value$8.40$5.97$7.54$6.28
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.





16


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


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 September 30, 2022,2023, the Company had unearned stock-based compensation of $45,827,137$46,555,320 associated with the restricted stock grants issued under the 2019 Omnibus Plan and the PriorSecond Restricted Stock Plan. The unearned stock-based compensation related to these grants is being amortized to compensation expense over the applicable restriction periods. Compensation expense from restricted stock grants in the three and nine months ended September 30, 20222023 was $5,504,462$6,369,348 and
16


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


$16,130,339, $18,178,157, respectively. Compensation expense from restricted stock grants in the three and nine months ended September 30, 20212022 was $5,215,981$5,504,462 and $13,978,358,$16,130,339, respectively.

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 September 30, 2022,2023, the Company had unearned stock-based compensation of $8,480,588$18,288,329 associated with these performance share grants. The unearned stock-based compensation related to these grants is being amortized to compensation expense over the applicable performance periods. Compensation expense related to these performance share grants in the three and nine months ended September 30, 2023 was $2,463,158 and $4,600,386, respectively. Compensation expense related to these performance share grants in the three and nine months ended September 30, 2022 was $308,812and $1,431,018, respectively.

As part of its objective of attracting and retaining management to fulfill the Company's strategic goals, the Compensation Committee recommended and the Board approved on February 16, 2023, a retention grant of performance share awards ("PSAs"). In addition to the retention of management, the PSAs have been granted to further align management goals with those of the Company's shareholders. For that reason, the PSAs have been granted with performance criteria and will be based upon achievement of the Company's relative total shareholder return ("TSR") over a four year period (2023-2026), against a predetermined peer group. The grant date fair value of PSAs with TSR targets was determined using a Monte Carlo simulation. Compensation expense related to these retention grants in the three and nine months ended September 30, 2023 was $441,115 and $1,082,333, respectively.

Employee Stock Purchase Plan

Prior to July 1, 2022, the Company had in place an employee stock purchase plan covering 2,000,000 shares of common stock. Under that plan, the Company sold shares at 85% of the stock’s market price at date of purchase. Under ASC 718, Compensation - Stock Compensation, the 15% discounted value was recognized as compensation expense. As of September 30, 2022,2023, the Company has issued 1,624,122 shares under this prior plan.

In May 2022, the 2022 Gentex Corporation Employee Stock Purchase Plan covering 2,000,000 shares of common stock was approved by shareholders replacing the above referenced prior plan effective July 1, 2022. Under the plan, the Company sells shares at 85% of the stock's market price at date of purchase. Under ASC 718, the 15% discounted value is recognized as compensation expense. As of September 30, 2022,2023, the Company has issued 54,977250,369 shares under this plan.
17


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)




(7)    Comprehensive Income (Loss)

Comprehensive income (loss) 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 incomeloss by component (all amounts shown are net of tax):
17


Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Foreign currency translation adjustments:
Balance at beginning of period$(5,609,783)$(3,107,157)$(4,032,239)$920,589 
Other Comprehensive (loss) income before reclassifications(717,457)17,751,603 (2,295,001)13,723,857 
Net current-period change(717,457)17,751,603 (2,295,001)13,723,857 
Balance at end of period(6,327,240)14,644,446 (6,327,240)14,644,446 
Unrealized (losses) gains on available-for-sale debt securities:
Balance at beginning of period(7,632,985)(7,848,722)(10,110,695)1,006,655 
Other Comprehensive (loss) income before reclassifications(1,293,419)(3,714,578)(468,359)(13,042,231)
Amounts reclassified from accumulated other comprehensive income1,580,904 204,811 3,233,554 677,087 
Net current-period change287,485 (3,509,767)2,765,195 (12,365,144)
Balance at end of period(7,345,500)(11,358,489)(7,345,500)(11,358,489)
Accumulated other comprehensive (loss) income, end of period$(13,672,740)$3,285,957 $(13,672,740)$3,285,957 
GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Foreign currency translation adjustments:
Balance at beginning of period$(3,107,157)$879,832 $920,589 $769,045 
Other Comprehensive (loss) income before reclassifications17,751,603 (349,165)13,723,857 (238,378)
Net current-period change17,751,603 (349,165)13,723,857 (238,378)
Balance at end of period14,644,446 530,667 14,644,446 530,667 
Unrealized gains on available-for-sale debt securities:
Balance at beginning of period(7,848,722)3,385,206 1,006,655 6,082,007 
Other Comprehensive (loss) income before reclassifications(3,714,578)(645,273)(13,042,231)(2,727,750)
Amounts reclassified from accumulated other comprehensive income204,811 — 677,087 (614,324)
Net current-period change(3,509,767)(645,273)(12,365,144)(3,342,074)
Balance at end of period(11,358,489)2,739,933 (11,358,489)2,739,933 
Accumulated other comprehensive (loss) income, end of period$3,285,957 $3,270,600 $3,285,957 $3,270,600 

The following table presents details of reclassifications out of accumulated other comprehensive (loss) incomeloss for the three and nine months ended September 30, 20222023 and 2021:
Details about Accumulated Other Comprehensive Income ComponentsAmounts Reclassified from Other Comprehensive (Loss) IncomeAffected Line item in the Consolidated Statements of Income
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Unrealized (losses) gains on available-for-sale debt securities
Realized (loss) gain on sale
 of securities
$(259,254)$— $(857,072)$777,625 Investment income
Provision for income taxes54,443 — 179,985 (163,301)Provision for income taxes
Total net reclassifications for the period$(204,811)$— $(677,087)$614,324 Net of tax
2022:


(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 $20 million, both subject to certain conditions. The obligations of the Company under the Credit Agreement are not secured,
Details about Accumulated Other Comprehensive Loss ComponentsAmounts Reclassified from Other Comprehensive LossAffected Line item in the Consolidated Statements of Income
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Unrealized gains (losses) on available-for-sale debt securities
Realized gain (loss) on sale of securities$(2,001,144)$(259,254)$(4,093,106)$(857,072)Investment income
Provision for income taxes420,240 54,443 859,552 179,985 Provision for income taxes
Total net reclassifications for the period$(1,580,904)$(204,811)$(3,233,554)$(677,087)
18


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


but are



(8)    Debt and Financing Arrangements

On October 15, 2018, the Company entered into a credit agreement with PNC as the administrative agent and sole lender, which has now been amended and restated as discussed below.

On February 21, 2023, as previously disclosed, the Company entered into an amended and restated credit agreement ("Credit Agreement") that provides for, among other things, a three-year unsecured revolving credit facility with a borrowing capacity of up to $250.0 million ("Revolver") that matures on February 21, 2026, replacing in its entirety the Company's above referenced prior $150.0 million revolving credit facility scheduled to mature on October 15, 2023. Included in the Revolver is a $20.0 million sublimit for standby letters of credit and a $35.0 million sublimit for swingline loans, each subject to certain covenants.conditions. Funds are available under the Revolver for working capital, capital expenditures, and other lawful corporate purposes, including, but not limited to, acquisitions and common stock repurchases, subject in each case to compliance with certain financial covenants, as defined in the Credit Agreement. As of September 30, 2022,2023, 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 September 30, 2022,2023, the Company is in compliance with its covenants under the Credit Agreement.


(9)    Equity

The decrease in common stock during the nine months ended September 30, 2022,2023, was primarily due to the repurchases of 3.32.7 million shares, partially offset by the issuance of 1.41.8 million shares of the Company’s common stock, net of cancellations, under the Company’s stock-based compensation plans and the issuance of 0.2 million shares of common stock as partial consideration for an investment in Green Marbles.plans. The total net decrease was 1.80.9 million shares.

The Company recorded a cash dividend of $0.120 per share during the third quarter of 20222023 as compared to a cash dividend of $0.120 per share during the third quarter of 2021.2022. The third quarter 20222023 dividend of $28.2$28.0 million was declared on August 31, 2022September 1, 2023 and was paid on October 19, 2022.18, 2023.


(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 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.
The Company is responding to a subpoena issued by the staff of the Division of Enforcement of the SEC for records from approximately 2015-2019. The Company has been informed that the SEC staff may be reviewing certain accounting determinations, including determinations that the staff believes could have impacted the Company’s reported earnings per share for certain periods during that time frame. The Company has continued to assert that its financial statements filed with the SEC in Forms 10-K and 10-Q in 2015-2019 present fairly, in all material respects, its financial condition, results of operations and cash flows as of or for the periods ending on their respective dates. The Company maintains that its actions were appropriate; however, the Company remains open to resolving this matter with the SEC, and therefore, the Company has an amount accrued as of September 30, 2022 for an estimated liability. The Company does not believe the accrued liability is material to the financial statements.


(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 and laminate products 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, which is combined in the Automotive Segment below. Further information in regards to the Guardian transaction is included inNote 15 of the financial statements.
19


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
20222021202220212023202220232022
Revenue:Revenue:Revenue:
Automotive ProductsAutomotive Products$480,937,253 $391,338,185 $1,391,840,835 $1,287,578,273 Automotive Products$564,510,277 $480,937,253 $1,676,043,013 $1,391,840,835 
OtherOther12,699,442 8,260,559 33,469,637 23,750,336 Other11,338,213 12,699,442 34,039,634 33,469,637 
TotalTotal$493,636,695 $399,598,744 $1,425,310,472 $1,311,328,609 Total$575,848,490 $493,636,695 $1,710,082,647 $1,425,310,472 
Income (Loss) from operations:Income (Loss) from operations:Income (Loss) from operations:
Automotive ProductsAutomotive Products$87,109,317 $89,121,170 $277,492,945 $325,579,533 Automotive Products$121,875,176 $87,109,317 $362,044,032 $277,492,945 
OtherOther(317,777)(956,230)(1,604,532)(3,756,270)Other541,353 (317,777)912,532 (1,604,532)
TotalTotal$86,791,540 $88,164,940 $275,888,413 $321,823,263 Total$122,416,529 $86,791,540 $362,956,564 $275,888,413 




(12)    Income Taxes
The effective tax rate was 15.2%15.6% in the nine months ended September 30, 2022,2023, compared to an effective tax rate of 15.4%15.2% for the same period in 2021.2022. 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, 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 and nine month periods ended September 30, 20222023 and September 30, 2021:2022:
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
RevenueRevenue2022202120222021Revenue2023202220232022
Automotive ProductsAutomotive ProductsAutomotive Products
U.S.U.S.$147,865,393 $128,570,314 $435,877,621 $410,852,689 U.S.$171,312,177 $147,865,393 $520,034,256 $435,877,621 
GermanyGermany65,508,444 55,162,289 204,653,773 183,513,145 Germany72,169,634 65,508,444 226,739,945 204,653,773 
Japan Japan63,797,49753,750,242165,215,741161,814,352 Japan73,330,09163,797,497229,664,642165,215,741
MexicoMexico32,024,141 25,239,690 93,951,398 85,574,821 Mexico38,494,969 32,024,141 109,585,767 93,951,398 
OtherOther171,741,778128,615,650492,142,302 445,823,266 Other209,203,406171,741,778590,018,403 492,142,302 
Total Automotive ProductsTotal Automotive Products$480,937,253 $391,338,185 $1,391,840,835 $1,287,578,273 Total Automotive Products$564,510,277 $480,937,253 $1,676,043,013 $1,391,840,835 
Other Products (U.S.)Other Products (U.S.)12,699,442 8,260,559 33,469,637 23,750,336 Other Products (U.S.)11,338,213 12,699,442 34,039,634 33,469,637 
Total RevenueTotal Revenue$493,636,695 $399,598,744 $1,425,310,472 $1,311,328,609 Total Revenue$575,848,490 $493,636,695 $1,710,082,647 $1,425,310,472 

Revenue by geographic area may fluctuate based on many factors, including: exposure to local economic, political, and labor conditions; a pandemic; global supply chain constraints; unexpected changes in laws, regulations, trade or monetary or fiscal policy, including interest rates, foreign currency exchange rates and changes in the rate of inflation in the U.S. and other foreign countries; labor strikes, armed conflicts and acts of terrorism and war; and tariffs, quotas, customs and other import or export restrictions and other trade barriers.

20


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


The following table disaggregates the Company’s Automotive revenue and Other revenue by major source for the three and nine month periods ended September 30, 20222023 and September 30, 2021:2022:
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
RevenueRevenue2022202120222021Revenue2023202220232022
Automotive SegmentAutomotive SegmentAutomotive Segment
Automotive Mirrors & ElectronicsAutomotive Mirrors & Electronics$448,773,060 $360,415,449 $1,291,891,664 $1,185,997,034 Automotive Mirrors & Electronics$531,423,832 $448,773,060 $1,577,792,206 $1,291,891,664 
HomeLink Modules*HomeLink Modules*32,164,193 30,922,736 99,949,171 101,581,239 HomeLink Modules*33,086,445 32,164,193 98,250,807 99,949,171 
Total Automotive ProductsTotal Automotive Products$480,937,253 $391,338,185 $1,391,840,835 $1,287,578,273 Total Automotive Products$564,510,277 $480,937,253 $1,676,043,013 $1,391,840,835 
Other SegmentOther SegmentOther Segment
Fire Protection ProductsFire Protection Products10,484,680 5,886,227 28,577,916 18,010,048 Fire Protection Products5,151,785 10,484,680 20,471,868 28,577,916 
Aerospace ProductsAerospace Products2,214,762 2,374,332 4,891,721 5,740,288 Aerospace Products6,186,428 2,214,762 13,567,766 4,891,721 
Total OtherTotal Other$12,699,442 $8,260,559 $33,469,637 $23,750,336 Total Other$11,338,213 $12,699,442 $34,039,634 $33,469,637 
*Excludes HomeLink revenue where HomeLink electronics are integrated into interior auto-dimming mirrors.*Excludes HomeLink revenue where HomeLink electronics are integrated into interior auto-dimming mirrors.*Excludes HomeLink revenue where HomeLink electronics are integrated into interior auto-dimming mirrors.


(14)    Leases

The Company has operating leases for certain sales, manufacturing, and engineering offices, as well as other vehicles and equipment, which are included within "Plant and Equipment - Net" section of the Condensed Consolidated Balance Sheets.condensed consolidated balance sheets. The leases have remaining lease terms of 1 year to 5 years. The weighted average remaining lease term for operating leases as of September 30, 20222023 was 23 years, with a weighted average discount rate of 5.7%6.3%.

Future minimum lease payments for operating leases as of September 30, 20222023 were as follows:
Year ending December 31,Year ending December 31,Year ending December 31,
2022 (excluding the nine months ended September 30, 2022)$337,069 
20231,039,840 
2023 (excluding the nine months ended September 30, 2023)2023 (excluding the nine months ended September 30, 2023)$499,620 
20242024297,208 20241,526,098 
2025202597,778 20251,058,401 
2026202618,388 2026455,548 
20272027215,734 
ThereafterThereafter888 Thereafter— 
Total future minimum lease paymentsTotal future minimum lease payments1,791,171 Total future minimum lease payments3,755,401 
Less imputed interestLess imputed interest(44,590)Less imputed interest(189,042)
TotalTotal$1,746,581 Total$3,566,359 

Reported as of September 30, 2022
Accrued Liabilities$1,145,5381,633,120 
Other Non-Current Liabilities601,0431,933,239 
Total$1,746,5813,566,359 



21


GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


(15)    AcquisitionSubsequent Event

On March 3, 2021,November 2, 2023, the Company acquired Guardiancertain technology assets from eSight Corporation for approximately $12.0 million. Guardian$18.9 million in cash, in addition to the 20% equity the Company previously held in the assets, as well as an earn out provision over a ten year period. The technology acquired from eSight provides the most advanced and versatile low-vision smart glasses available for those with visual impairments and is an Israeli researchcompatible with more than 20 eye conditions including Macular Degeneration, Diabetic Retinopathy, and development company that specializes in in-cabin sensing technologies forStargardt disease. These assets will be classified within the automotive industry. The Company funded the acquisition with cash on hand. The valuation process was completed during the fourth quarter of 2021.Company's Other segment.

Guardian is now a 100% owned subsidiary of the Company as Gentex Technologies (Israel), LTD, and is classified within the Automotive segment. The Company accountedwill account for the acquisition under the provisions of FASB ASC Topic 805, Business Combinations.
22



Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.


THIRD QUARTER 20222023 VERSUS THIRD QUARTER 20212022
Net Sales. Net sales for the third quarter of 20222023 increased by $94.0$82.2 million or 24%17%, when compared with the third quarter of 2021.2022.
Automotive net sales for the third quarter of 20222023 were $480.9$564.5 million, a 17% increase when compared with automotive net sales of $391.3$480.9 million in the third quarter of 2021.2022. The 17%10% increase in automotive mirror unit shipments in the third quarter of 20222023 to 11.512.6 million units, compared with 9.811.5 million units in the third quarter of 2021,2022, was driven primarily by a 23%12% quarter over quarter increase in exterior auto-dimming mirror unit shipments and a 9% quarter over quarter increase in interior auto-dimming mirror unit shipments.

The below table represents the Company's auto-dimming mirror unit shipments for the three and nine months ended September 30, 2022,2023, and 20212022 (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
20222021% Change20222021% Change20232022% Change20232022% Change
North American Interior MirrorsNorth American Interior Mirrors2,156 1,897 14%6,444 5,843 10%North American Interior Mirrors2,366 2,156 10%7,192 6,444 12%
North American Exterior MirrorsNorth American Exterior Mirrors1,602 1,355 18%4,532 4,345 4%North American Exterior Mirrors1,614 1,602 1%5,033 4,532 11%
Total North American Mirror UnitsTotal North American Mirror Units3,758 3,252 16%10,976 10,188 8%Total North American Mirror Units3,980 3,758 6%12,224 10,976 11%
International Interior MirrorsInternational Interior Mirrors5,287 4,629 14%15,282 15,219 —%International Interior Mirrors5,709 5,287 8%17,100 15,282 12%
International Exterior MirrorsInternational Exterior Mirrors2,444 1,928 27%6,926 6,605 5%International Exterior Mirrors2,915 2,444 19%8,918 6,926 29%
Total International Mirror UnitsTotal International Mirror Units7,731 6,557 18%22,208 21,823 2%Total International Mirror Units8,624 7,731 12%26,018 22,208 17%
Total Interior MirrorsTotal Interior Mirrors7,443 6,526 14%21,727 21,062 3%Total Interior Mirrors8,076 7,443 9%24,292 21,727 12%
Total Exterior MirrorsTotal Exterior Mirrors4,046 3,283 23%11,457 10,949 5%Total Exterior Mirrors4,529 4,046 12%13,950 11,457 22%
Total Auto-Dimming Mirror UnitsTotal Auto-Dimming Mirror Units11,489 9,809 17%33,184 32,011 4%Total Auto-Dimming Mirror Units12,604 11,489 10%38,242 33,184 15%
Note: Percent change and amounts may not total due to rounding.

Other net sales were $11.3 million$12.7 in the third quarter of 2023, compared to $12.7 million in the third quarter of 2022,2022. Fire protection sales decreased to $5.2 million for the compared to $8.3 million in the third quarter of 2021. This increase is in large part attributable to a 78% quarter over quarter increase in fire protection sales, which increased to $10.5 million for the third quarter of 2022,2023, compared to $5.9$10.5 million in the same quarter of last year. Dimmable aircraft sales decreased by 7% forincreased during the third quarter of 20222023 to $2.2$6.2 million, from $2.4compared to $2.2 million in the same quarter of last year.

Cost of Goods Sold. As a percentage of net sales, cost of goods sold increaseddecreased to 70.2%66.8% for the third quarter of 2022,2023, versus 64.7%70.2% in the same quarter last year. The quarter over quarter decreaseincrease in the gross profit margin was primarily the result of as a result of improved fixed overhead leverage, improvements in freight and tariff related costs, cost recoveries and price increases from customers, and improvements in product mix. However, some of these improvements were partially offset by increased raw material costcosts, labor costs, and scrap and yield loss increases, unfavorable product mix, prior commitmentsas compared to annual customer price reductions, and labor cost increases.the third quarter of 2022. On a quarter over quarter basis, raw material increases had a negative impact of approximately 250 - 300 basis points on gross margin. Both product mix shiftsboth decreases in freight expense and annual customer price reductionsimproved fixed overhead leverage each had a separate negativepositive impact on gross margin of approximately 100150 - 150200 basis points, on a quarter over quarter. Laborand customer cost increasesrecoveries and product mix each had a negativepositive impact of approximately 50 - 100 basis points on gross margin. Raw material increases, labor cost, and scrap and yield loss each had a negative impact on gross margin of approximately 25-50 basis points on a quarter over quarter basis.

Operating Expenses
. Engineering, research and development ("E, R & D") expenses for the third quarter of 20222023 increased by $3.8$6.7 million, when compared with the third quarter of 2021.2022.
.
23


Selling, general and administrative ("S, G & A") expenses increased by 17%7% or $3.9$2.0 million for the third quarter of 2022,2023, compared to the third quarter of 2021.2022, primarily due to increased staffing. S, G & A expenses were 5% of net sales in the third
23


quarter of 2022, compared to 6%2023 and 5% of net sales in the third quarter of 2021. S, G, & A expenses increased on a quarter over quarter basis primarily due to staffing, professional fees, outbound freight expenses, and travel related expenses.2022.

Total operating expenses were $69.0 million in the third quarter of 2023, an increase of 14% quarter over quarter or $8.6 million, compared to $60.4 million in the third quarter of 2022, an increase of 15% quarter over quarter or $7.7 million, from $52.7 million in the third quarter of 2021.2022.

Total Other Income (Loss) Income.. Total other income for the third quarter of 2022 decreased2023 increased by $2.4$2.7 million, when compared with the third quarter of 2021.2022.

Provision for Income Taxes. The effective tax rate was 15.9% for, and an income tax expense of $19.8 million was recorded in, the third quarter of 2023, compared to an effective tax rate of 15.7% for, and an income tax expense of $13.5 million was recorded in, the third quarter of 2022, compared to an income tax expense of $13.2 million for the same quarter of 2021.2022. Typically, effective tax rates for the Company differ from statutory federal income tax rates, due to provisions for state and local income taxes, permanent tax differences, research and development tax credits and the foreign-derived intangible income tax deduction.
Net Income. Net income for the third quarter of 20222023 was $72.7$104.7 million, downup from a net income of $76.7$72.7 million in the third quarter of 2021.2022. The change in net income was primarily the result of quarter over quarter changesincreases in gross marginsnet sales and operating profits.
Earnings Per Share. The Company had earnings per diluted share for the third quarter of 20222023 of $0.31,$0.45, which compared to earnings per diluted share of $0.32$0.31 for the third quarter of 2021.2022.

NINE MONTHS ENDED SEPTEMBER 30, 20222023 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 20212022
Net Sales. Net Sales for the nine months ended September 30, 20222023 increased by $114.0$284.8 million or 9%20%, when compared with the same period in 2021.2022.
Automotive net sales for the first nine months of 20222023 were $1.4$1.7 billion, up 8%20% compared with automotive net sales of $1.3$1.4 billion for the first nine months of 2021,2022, primarily due to a 4%15% period over period increase in automotive mirror unit shipments. Domestic automotive mirror shipments in the nine months ended September 30, 20222023 increased 8%11% to 10.212.2 million units, compared with 11.0 million units in the same period in 2021.2022. International automotive mirror shipments in the nine months ended September 30, 2023 increased 17% to 26.0 million units, compared with 22.2 million units in the same period in 2022.
Other net sales were $33.5$34.0 million for the first nine months of 2022,2023, compared to $23.8$33.5 million for the same period last year. This increase is in large part attributableprimarily due to a 59% period over periodthe 177% increase in firedimmable window aircraft sales for the first nine months of 2023 to $13.6 million, from $4.9 million for the same period in 2022. Fire protection sales which increaseddecreased by 28% to $28.6$20.5 million for the first nine months of 2022,2023, compared to $18.0$28.6 million in the same period of 2021. Dimmable aircraft sales decreased by 15% for the first nine months of 2022 to $4.9 million, from $5.7 million for the same period in 2021.

2022.
Cost of Goods Sold. As a percentage of net sales, cost of goods sold increaseddecreased to 68.0%67.3% for the first nine months of 2022,2023, versus 63.7%68.0% in the same period last year. The period over period decreaseincrease in the gross profit margin was primarily the result of improved fixed overhead leverage, cost recoveries and customer price increases, and freight expense decreases. These were partially offset by increases in raw material cost increases, unfavorable product mix,costs and labor costs, as well as prior commitments to annual customer price reductions, and labor cost increases in response to a tight labor market.reductions. On a period over period basis, raw material increasesfreight expense and unfavorable product mixfixed overhead leverage each had a separate negativepositive impact on gross margin of approximately 100 - 150 basis points on gross margin. Annualpoints. Cost recoveries and customer price reductions had a negative impact of approximately 100 - 150 basis points on gross margin on a period over period basis. Labor cost increases had a negativepositive impact on gross margin of approximately 50 - 100 basis points on a period over period basis. Raw material cost increases and annual customer price reductions each had a negative impact of approximately 50 - 150 basis points on gross margin on a period over period basis.
Operating Expenses. E, R & D expenses for the nine months ended September 30, 20222023 were$98.4 $112.8 million, compared with $86.5$98.4 millionfor the same period last year. The 14%15% increase in E, R & D expenses, in the first nine months of 20222023 compared to the same period in 20212022 was primarily due to additional staffing, professional fees, and new product development, and the ongoing product re-designs necessary to mitigate electronics part shortages.development.

24


S, G & A expenses for the first nine months of 20222023 increased 21% or $14.2$1.8 million to $83.5 million, when compared withto $81.7 million for the same period last year. The increase in 2022. S, G & A expenses were 5% of net sales in the first nine months of 2022 compared to
24


2023 and 6% of net sales in the first nine months of 2021 wassame period in 2022. S, G, & A expenses increased on a year over year basis primarily due to staffing, professional fees, increases in outbound freight expenses, and the return of in-person customer meetings and trade show related expenses.increased staffing.
Total Other Income (Loss) Income.. Total other lossincome for the nine months ended September 30, 20222023 was $1.6$6.1 million, compared with a total other incomeloss of $5.2$1.6 million for the same period last year.
Provision for Income Taxes. The effective tax rate was 15.2%15.6% for the nine months ended September 30, 2022,2023, compared to 15.4%15.2% for the same period of 2021.2022. Generally, effective tax rates for these periodsthe Company differ from statutory federal income tax rates, due to provisions for state and local income taxes, permanent tax differences, the foreign-derived intangible income tax deduction, and research and development tax credits.
Net Income. Net income for the nine months ended September 30, 2022 decreased2023 increased by $44.0$78.9 million or 16%34% to $232.6$311.5 million, versus $276.6compared to $232.6 million in the same period last year. The decreaseincrease in net income was primarily the result of the period over period changes gross margins,increases in net sales and operating profits.
Earnings Per Share. The Company had earnings per diluted share for the nine months ended September 30, 20222023 of $0.99, which$1.33, compared to earnings per diluted share of $1.15$0.99 for the nine months ended September 30, 2021. The period over period decrease in earnings per share is primarily due to the lower net income, but was positively impacted by a lower diluted share count when compared to the same period of 2021.2022.
25


FINANCIAL CONDITION:
The Company's cash and cash equivalents as of September 30, 20222023 were $222.9$260.6 million, which decreased $39.4an increase of $45.9 million, compared to $262.3$214.8 million as of December 31, 2021. 2022. The decreaseincrease was primarily due to cash flows from operations, which were partially offset by capital expenditures, investment purchases, dividend payments, and share repurchases during the nine months ended September 30, 2022, which was partially offset by cash flows from operations.2023.
Short-term investments as of September 30, 20222023 were $16.1$17.5 million, updown from $5.4$23.0 million as of December 31, 2021,2022, and long-term investments were $154.4$272.6 million as of September 30, 2022, compared to $207.72023, up from $202.3 million as of December 31, 2021. Equity method investments2022, primarily due to the $43.0 million investment in Adasky, as discussed in Note 3 of the consolidated financial statements.
Accounts receivable as of September 30, 2023 increased approximately $74.6 million compared to $39.7 million,December 31, 2022, primarily as a result of additional investment purchasesdue to the increase in sales and timing thereof during the nine months ended September 30, 2022, including the investment in GreenMarbles in the second quarter of 2022. This investment in GreenMarbles was made with $20.0 million in cash and the issuance of $5.0 million of the Company's common stock.
Accounts receivable as of September 30, 2022 increased approximately $42.6 million compared to December 31, 2021, primarily due to the timing of sales during the nine months ended September 30, 2022.2023. As of September 30, 2022,2023, all of the Company's material tier one and OEM customers continue to be in good standing.
Inventories as of September 30, 20222023 were $418.3$395.5 million, compared to $316.3$404.4 million as of December 31, 2021,2022, primarily due to increasesdecreases in raw materials, andwhich was partially offset by increases in finished goods.

Accounts payable as of September 30, 20222023 increased approximately $73.1$19.6 million to $171.4 million, when compared to December 31, 2021,2022, primarily driven by month end payment timing increased inventory, and increased capital expenditures.
Accrued liabilities as of September 30, 20222023 increased approximately $10.4$4.2 million compared to December 31, 2021,2022, primarily due to an increase in accrued salaries and wages, as well as accrued income taxes.wages.
Cash flow from operating activities for the nine months ended September 30, 2022 decreased $63.02023 increased $131.3 million to $236.4$367.7 million, compared with $299.4$236.4 million during the same nine month period last year, primarily due to decreasesan increase in net income and changes in working capital.
Capital expenditures for the nine months ended September 30, 20222023 were approximately $108.5$121.4 million, compared with approximately $44.4$108.5 million for the same nine month period last year. The increase was primarily due to an increase in expenditures related to building and facility construction projects previously disclosed.
The Company believes its existing and planned facilities are currently suitable, adequate, and have the capacity required for current and near-term planned business. Nevertheless, the Company continues to evaluate longer term facility needs. In the first quarter of 2022, the Company began construction on a 350,000 square-foot manufacturing facility located at a 140 acre site in Zeeland, Michigan, where the Company previously performed master planning and completed land infrastructure improvements. The total cost of the building project is still expected to be approximately $80 - $90 million, which will be funded with cash and cash equivalents on hand. The facility is expected to be operational in the fourth quarter of 2023. The Company has also begun construction on two building expansions during the second quarter of 2022. The Company is expanding its current distribution center for an additional 300,000 square feet, with a total cost still expected to be approximately $40 - $45 million. The Company is also expanding one of its manufacturing facilities for an additional 60,000 feet, with a total cost still expected to be $20 - $30 million. Both expansion projects will be funded with cash and cash equivalents on hand. The Company also entered into a multi-year lease for 32,000 square feet of manufacturing space at a location approximately 20 miles from its main campus that began operations during the second quarter of 2023.
The Company estimates that it currently has building capacity to manufacture approximately 3442 - 3745 million interior mirror units annually and approximately 1517 - 1820 million exterior mirror units annually, based on current product mix. The Company also evaluates equipment capacity on an ongoing basis and adds equipment as needed.
Management considers the current working capital and long-term investments, in addition to internally generated cash flow, its Credit Agreement, and credit worthiness, to be sufficient to cover anticipated cash needs for the foreseeable future considering its contractual obligations and commitments.
26


The following is a summary of working capital and long-term investments:
September 30, 2022December 31, 2021September 30, 2023December 31, 2022
Working CapitalWorking Capital$724,158,632 $691,319,649 Working Capital$781,046,324 $698,099,624 
Long-Term InvestmentsLong-Term Investments154,429,190 207,693,147 Long-Term Investments272,615,535 202,331,983 
TotalTotal$878,587,822 $899,012,796 Total$1,053,661,859 $900,431,607 

The Company has a previously announced share repurchase plan under which the Board of Directors has authorized the repurchase of shares of the Company's common stock, which remains a part of the broader publicly disclosed capital allocation strategy. Future share repurchases may vary from time to time and will take into account macroeconomic events (including, the COVID-19 pandemic,but not limited to, industry-wide parts shortages, and global supply chain and labor constraints), market trends, and other factors the Company deems appropriate (including, but not limited to, the market price of the stock, anti-dilutive effect of repurchases, and available cash). During the three and nine months ended September 30, 2022,2023, the Company repurchased 3,290,496 shares.776,488 and 2,743,788 shares, respectively. The Company has 21,533,57218,039,377 shares remaining under the plan as of September 30, 2022,2023, as is further detailed in Part II, Item 2 of this Form 10-Q.

BUSINESS UPDATE

For the third quarter of 2022,2023, the Company reported net sales of $493.6$575.8 million, compared to net sales of $399.6$493.6 million in the third quarter of 2021,2022, a 24%17% increase quarter over quarter. For the third quarter of 2022,2023, global light vehicle production in North America, Europe, Japan/Korea, and China increased approximately 26%5%, when compared to the third quarter of 2021. Light vehicle production in the Company's primary markets of North America, Europe, and Japan/Korea was up 22% on a quarter over quarter basis. These increases were primarily a result of some improvements in the ongoing global supply chain constraints, as well as overall light vehicle production growth. Nevertheless, product mix and overall sales were impacted in the third quarter by customer order adjustments, supply chain related issues, and labor availability issues, causing unit shipments to be approximately 750,000 units lower than forecasted at the beginning of the quarter, resulting in a significant revenue shortfall versus beginning of quarter forecast. While there appears to be some improved stability in the light vehicle production environment as compared to a year ago, the Company is still experiencing significant customer order fluctuations on a week-to-week basis and difficulty in sourcing advanced electronics components..2022.

In the third quarter of 2022,2023, the Company had 50 total28 net new launches of interior and exterior auto-dimming mirrors and electronic features. Over 50%70% of the launches in the third quarter of 20222023 were advanced feature launches, with HomeLink®,and Full Display Mirror®, and the Digital Video Recorder being the bulk of such launches.

The Company is engaged in ongoing conversations with certain customers regarding the inflationary aspects of the business and how to address the higher cost structure that has come as a result of electronics and supply chain issues and labor shortages during the last 18 months. The Company is working in a collaborative manner with its customers with the goal of growing the business and maintaining good business relationships, while at the same time meaningfully addressing the impact of existing inflationary pressures. These conversations and negotiations are expected to last throughout 2022 and likely into calendar 2023 for some customers, as the Company works to offset cost increases with updated pricing.PRODUCT UPDATE

Mirror Systems

PRODUCT UPDATEIn the second quarter of 2023, The People's Republic of China newly issued GB15084 and the related procedures, which allow for the Company's frameless inside mirrors to be used on vehicles in the China domestic market.

Camera Systems

The Full Display Mirror® began production in the fourth quarter of 2015. Current automotive design trends are yielding vehicles with small rear windows that are often further obstructed by headrests, passengers, and roof support pillars which can significantly hinder the mirror’s rearward view. The Company's Full Display Mirror® is an intelligent rear vision system that uses a custom, internally or externally mounted video camera and mirror-integrated video display to optimize a vehicle driver’s rearward view. This rear vision system consists of a hybrid Full Display Mirror® that offers bi-modal functionality. In mirror mode, the product functions as an auto-dimming rearview mirror which means that during nighttime driving, digital light
27


sensors talk to one another via a microprocessor to automatically darken the mirror when glare is detected. With the flip of a switch, the mirror enters display mode, and a clear, bright display appears through the mirror’s reflective surface, providing a wide, unobstructed rearward view. The bi-modality of the Full Display Mirror® is essential, because in the event of any failure of the camera or display, the product is able to function as a mirror, which meets long-standing safety requirements in the automotive industry. In addition, the driver has the ability to switch between modes to accommodate usage preferences for various weather conditions, lighting conditions, and driving tasks.

As of the third quarter of 2022,2023, the Company is shipping production Full Display Mirrors® to fourteenfifteen different automaker customers, which are General Motors, Subaru, Toyota, Nissan, Jaguar Land Rover, Mitsubishi, Aston Martin, Stellantis, along with Maserati, and Fiat, Mercedes, Ferrari, Ford, Hyundai, and Hyundai. As of the end of the third quarter of 2022, the Company is shipping Full Display Mirror® on 79 nameplates.Mazda. The Company remains confident that ongoing discussions with certain other customers may in the future cause such customers to consider adding the Full Display Mirror® into their product road-map for future vehicles. As of the end of the third quarter of 2022, the Company has been awarded Full Display Mirror
27

®
programs with 14 OEMs.

To enhance capability and usability of the Company's Full Display Mirror®, the Company previously introduced its three-camera rear vision system that streams rear video in multiple composite views to its Full Display Mirror®. The Company believes it is the industry’s first practical and comprehensive rear vision solution designed to meet automaker, driver, safety, and regulatory requirements. The Company's rear vision system, known generally as a camera monitoring system ("CMS"), uses three cameras to provide a comprehensive view of the sides and rear of the vehicle. The side-view cameras are discretely housed in downsized, automatic-dimming exterior mirrors. Their video feeds are combined with that of a roof-mounted or rear window based camera and stitched together into multiple composite views, which are streamed to the driver using the Full Display Mirror®. The system’s modular nature lets the automaker customize functionality while offering it as an affordable, optional feature thereby enhancing safety by allowing the system to fail safe. During any failures due to weather conditions or otherwise that disrupt the digital view, drivers can still safely use the interior and exterior mirrors. The system also supports user preference by permitting drivers to use standard mirror views, camera views, or both. The system can also be tuned to meet the various regulatory field-of-view requirements around the world by using different types of flat and curved glass, combined with simple alterations to the video viewing modes. Downsized exterior mirrors provide automakers with significant weight savings and fuel efficiency improvements. To further enhance safety, the Company's CMS solution can also work in conjunction with a vehicle’s side blind zone warning system. When a trailing vehicle enters a side blind zone, a warning indicator illuminates in both the interior and exterior mirrors, while the corresponding side-view video feed appears in the display until the vehicle passes.

On March 31, 2014, the Alliance of Automobile Manufacturers petitioned the National Highway Traffic Safety Administration ("NHTSA") to allow automakers to use camerascamera monitoring systems as an option to replace conventional rearview mirrors within the United States. At the annual SAE Government-Industry Meeting in January 2017, NHTSA requested that SAE develop Recommended Procedures for test protocols and performance criteria for camera monitoring systems that would replace mirror systems on light vehicles in the U.S. market. SAE assigned the task to the Driver Vision Committee, and the SAE Driver Vision Committee created a CMS Task Force to draft the Recommended Procedures. NHTSA published a report dated October 2018 related to camera monitoring systems for outside mirror replacements. On October 10, 2019, an Advanced Notice of Proposed Rulemaking (ANPRM) was published seeking public comment on permitting camera-based rear visibility systems, as an alternative to inside and outside rearview mirrors required under Federal motor vehicle safety standard (FMVSS) No. 111, “Rear Visibility,” which currently requires that vehicles be equipped with rearview mirrors to provide drivers with a view of objects that are to their side or to their side and rear. This ANPRM builds on NHTSA's prior efforts to obtain supporting technical information, data, and analysis on CMS so that the agency can determine whether these systems can provide the same level of safety as the rearview mirrors currently required under FMVSS No. 111. The ANPRM states that one reason NHTSA is seeking additional information is because research conducted by NHTSA and others between 2006 and 2017 has consistently shown that prototype and preproduction camera-based rear visibility systems can exhibit safety-relevant performance issues.
28


On October 18, 2019, In November 2022, NHTSA conducted a petition for temporary exemption from FMVSS 111 submitted by Audipublic meeting and discussed the on-going research of America was published requesting NHTSA to grant a two-year exemption to sell up to 2,500 vehicles for each twelve month period (up to 5,000 vehicles) that are equipped with camera monitoring systems and do not include FMVSS 111 compliant outside mirrors.this technology.
In July 2016, a revision to UN-ECE Regulation 46 was published with an effective date of June 18, 2016, which allows for CMScamera monitoring systems to replace mirrors in Japan and European countries. Since January 2017, camera monitoring systems are also permitted as an alternative to replace mirrors in the KoreanKorea market. As noted, China has now released an updated version of its GB15084, which will be effective later in 2023, and allows for camera monitoring systems, frameless mirrors and aspheric (free-form) glass surfaces. Notwithstanding the foregoing, the Company continues to believe rearview mirrors provide a robust, simple and cost effective means to view the surrounding areas of a vehicle and remain thea primary safety function for rear vision today. Cameras when used as the primary rear vision delivery mechanism have some inherent limitations, such as: electrical failure; cameras being blocked or obstructed; depth perception challenges; and viewing angles of the camera. Nonetheless, the Company continues designing and manufacturing not only rearview mirrors, but CMOS imagers and video displays as well. The Company believes that combining video displays with mirrors may well provide a more robust product by addressing all driving conditions in a single solution that can be controlled by the driver. As noted, the Company has been in production with the Company's Full Display Mirror® since 2015 and has, in the ordinary course of business, been awarded programs with fourteenfifteen OEM customers. The Company is currently shipping production Full Display Mirrors® to fourteenall fifteen of these automaker customers. The Company's CMS solution
28


uses three cameras to provide a comprehensive view of the sides and rear of the vehicle while still providing the traditional safety of interior and exterior mirrors, which mirrors continue to function when cameras are obstructed or are not functioning. The Company has also previously announced that it continues development in the areas of imager performance, camera dynamic range, lens design, image processing from the camera to the display, and camera lens cleaning. The Company acknowledges that as such technology evolves over time, such as cameras replacing mirrors and/or autonomous driving, there will be increased competition.
The Company began shipping Full Display Mirror® with Digital Video Recording ("DVR" capability) for the Toyota Harrier in the second quarter of 2020. This mirror and system launched in the Japan market and combine the superior functionality of the Full Display Mirror®, with the added capability to record video from the rearward facing and forward-facing cameras simultaneously. The data is stored to an SD storage card as requested by the customer. This integrated solution provides consumers with the features they want, while allowing the OEM to control the integration and execution in the vehicle. InDuring the third quarter of 2022,2023, the Company beganalso continued shipping auto-dimming mirrors containing DVR for both the Toyota Yaris and the Yaris Cross for the Japan market. These are the Company's first launches of a base auto-dimming mirror with this DVR capability. This product is also the first Gentex DVR product that has an app available to allow the consumer to pull recorded information from the mirror to a phone, which creates a more user friendly experience.
SmartBeam® is the Company's proprietary high beam control system integrated into its auto-dimming mirror. SmartBeam® Generation 4, which was developed using the fourth generation of the Company's custom designed CMOS imager, has an advanced feature set made possible by the high dynamic range of the imager including: high beam assist; dynamic forward lighting with high beams constantly on; LED matrix beam; and a variety of specific detection applications including tunnel, fog, and road type as well as certain lane tracking features to assist with lighting control. The Company has the ability to package the control electronics inside of its interior rearview mirrors with a self-calibrating camera attached to the mirror mount with optimal mechanical packaging which also provides for ease of service. In addition, the Company has long been integrating its camera products to optimize performance by combining with other systems on the vehicle, including radar, navigation, steering, and related modules provided by other suppliers. This enables the Company to provide its customers with highly customizable solutions that meets their unique needs and specifications.

The European New Car Assessment Program ("Euro NCAP") provides an incentive for automobiles sold in Europe to apply safety technologies that include driver assist features such as lane detection, vehicle detection, and pedestrian detection as standard equipment. Euro NCAP compliant driver assist systems are also capable of including high beam assist as a function. The increased application of Euro NCAP on European vehicles has had the effect of replacing, and could potentially continue replacing, the Company's SmartBeam® application on these vehicles.

29


On December 8, 2015, NHTSA proposed changes to the NHTSA's 5-Star Safety Ratings for new vehicles (also known as the New Car Assessment Program or NCAP) and initiated a comment period. The proposed changes will, for the first time, encompass assessment of crash-avoidance technologies, which includes lower beam headlamp performance, semi-automatic headlamp switching, and blind spot detection. NHTSA initially intended to implement the enhancements in NCAP in 2018, beginning with model year 2019 vehicles. The NCAP implementation has been delayed. Under these proposed changes, the Company believes that its SmartBeam® technology will qualify with the semi-automatic headlamp NCAP rating system, and that its SmartBeam® technology and exterior mirrors with blind spot alert lighting can be included in a system that qualifies with the lower beam headlamp performance and blind spot detection NCAP rating system, respectively. On October 16, 2019, NHTSA issued a press release comparing NCAP to other regions’ version of NCAP, identified new technologies that are not currently included in NCAP, and suggested Congress legislatively direct actions to improve NCAP. In March 2020, HR 6256 was introduced, which would requireOn January 14, 2021, NHTSA to update NCAP. There are multiple bills being discussed in both the U.S. House of Representativesissued a request for comment regarding NCAP with advanced driver assist features, including forward collision, lane keeping, blind spot detection, and the U.S. Senate that relate to NCAP.forward pedestrian impact avoidance technologies.

On October 12, 2018, NHTSA published a Notice of Proposed Rulemaking ("NPRM") for amendments to Federal Motor Vehicle Safety Standard ("FMVSS") No. 108: Lamps, reflective devices, and associated equipment, and initiated a comment period. The NPRM proposes amendments that would permit the certification of adaptive driving beam headlighting systems, if the manufacturer chooses to equip vehicles with these systems. NHTSA proposes to establish appropriate performance requirements to ensure the safe introduction of adaptive driving beam headlighting systems if equipped on newly manufactured vehicles. The Company believes that its dynamic SmartBeam® lighting control system (dynamic forward lighting or DFL), which has been sold in markets outside of North America for several years, will meet the requirements of the new FMVSS 108 standards, if amended. The Company's SmartBeam® application has and will continue to be affected by increased competition by suppliers of multi-function driver assist camera products, which are able to achieve some of the same functionality as SmartBeam® but at a lower cost, due to other suppliers leveraging similar hardware costs, but offering products with multiple software features.
29



As noted, on October 10, 2019, an Advanced Notice of Proposed Rulemaking ("ANPRM") was published seeking public comment on permitting camera-based rear visibility systems, as an alternative to inside and outside rearview mirrors required under FMVSS No. 111, “Rear Visibility,” which currently requires that vehicles be equipped with rearview mirrors to provide drivers with a view of objects that are to their side or to their side and rear. This ANPRM builds on NHTSA's prior efforts to obtain supporting technical information, data, and analysis on CMS so that the agency can determine whether these systems can provide the same level of safety as the rearview mirrors currently required under FMVSS No. 111. The ANPRM states that one reason NHTSA is seeking additional information is because research conducted by NHTSA and others between 2006 and 2017 has consistently shown that prototype and preproduction camera-based rear visibility systems can exhibit safety-relevant performance issues. In November 2022, NHTSA conducted a public meeting and discussed the ongoing research of this technology.

The final rule issued by NHTSA for adaptive driving beansbeams (AEB) was made effective February 22, 2022. The Company believes its adaptive SmartBeam® (dynamic lighting system), which has been manufactured and sold for many years in jurisdictions outside the United States, will be permitted under the NHTSA Final Rule.
Connected Car
The Company's HomeLink® products are the auto industry's most widely used and trusted car-to-home communication system, with an estimated 50 million units on the road. The system consists of two or three in-vehicle buttons that can be programmed to operate garage doors, security gates, home lighting, and other radio-frequency-controlled devices. During the first quarter of 2017, the Company demonstrated the next generation of HomeLink®, commonly referred to as HomeLink Connect®, which uses both RF and wireless cloud-based connectivity to deliver complete vehicle-to-home automation. With HomeLink Connect®, a HomeLink® button press communicates with the HomeLink Connect® app on the user’s smartphone. The app contains predefined, user-programmed actions, from single device operations to entire home automation scenes. The app, in turn, communicates to the home’s smart hub over the cloud activates the appropriate devices, including security systems, door locks, thermostats, lighting, and other home automation devices, providing comprehensive vehicle-to-home automation. The ability to prepare the home for arrival or departure can occur with one button press. For the automaker, it allows them to offer a customizable, yet proven solution without the engineering effort or security concerns associated with
30


integrating third party software into the vehicle’s computer network. The Company also continues to work on providing HomeLink® applications for alternative automobile and vehicle types which include, but are not limited to, motorcycles, mopeds, snowmobiles, tractors, combines, lawn mowers, loaders, bulldozers, road-graders, backhoes, and golf carts. In May 2021, the Company announced the Volkswagen as the first automaker to offer Bluetooth® enabled mirror for home automation that works in conjunction with HomeLink Connect®. The Company further continues to work with compatibility partners for HomeLink® applications in newerother markets, like China. The unique attributes of the China market allow for potential different use cases of these products and offer the potential for additional growth opportunities for the HomeLink® brand and products. In 2017, the Company began its first volume production shipments of HomeLink® units on vehicles for the China market.

In January 2016, the Company announced a partnership with TransCore to provide automobile manufacturers with a vehicle-integrated tolling solution that enables motorists to drive on nearly all U.S. toll roads without a traditional toll tag on the windshield. Currently more than 75 percent of new car registrations are in states with toll roads with over 50 million drivers accessing these roads each year. The interior mirror is the optimal location for a vehicle-integrated toll transponder and it eliminates the need to affix multiple toll tags to the windshield and helps automakers seamlessly integrate toll collection into the car. Since the Integrated Toll Module® or ITM® enables travel across almost all United States toll roads, and others in North America, motorists would no longer need multiple toll tags for different regions of the country or to manage multiple toll accounts. The Company's vehicle-integrated solution simplifies and expedites local, regional, and national travel. ITM® provides transportation agencies with an interoperability solution without costly infrastructure changes to the thousands of miles of toll lanes throughout North America. The Company believes that this product could potentially represent another growth opportunity over the next several years.

30


The Company haspreviously announced its first OEM award of ITM® with Audi. Currently, the Company is shipping ITM® on 11 Audi platforms, which are: the A4, A5, A6, A7, A8, Q5, Q5 Sportback, Q7, Q8, e-tron, and the e-tron Sportback. The Company expects further ITM® nameplate launches with Audi throughout the remainder of 20222023 and 2023. During the third quarter of 2021, the2024. The Company beganis also shipping ITM® to a second OEM customer, Mercedes, on the EQS model. In April 2020, the Company was honored with an Automotive News PACE Award for its ITM® product, which recognizes automotive suppliers for superior innovation, technological advancement, and business performance.

Further, the Company has previously announced an embedded biometric solution for vehicles that leverages iris scanning technology to create a secure environment in the vehicle. There are many use cases for authentication, which range from vehicle security to start functionality to personalization of mirrors, music, seat location and temperature, to the ability to control transactions not only for the ITM® system, but also the ride sharing car of the future. The Company believes iris recognition is among the most secure forms of biometric identification, with a false acceptance rate as low as one in 10 million, far superior to facial, voice, and other current biometric systems. The Company's future plans include integrating biometric authentication with HomeLink® and HomeLink Connect®. The biometric system will allow HomeLink® to provide added security and convenience for multiple drivers by activating the unique home automation presets of different authorized users. The Company announced in January 2018 that it completed an exclusive licensing agreement, in the ordinary course of business, with Fingerprint Cards AB to deploy its ActiveIRIS® iris-scanning biometric technology in automotive applications.

In November 2020, the Company announced a partnership, in the ordinary course of business, with PayByCar™, to pursue compatibility between the Company's Integrated Toll Module® and PayByCar's innovative payment solution that allows drivers to use their smartphones and toll transponder to fuel up at certain gas stations without using cash or a credit card. Compatibility between these two technologies can help to grow each company's respective consumer base, while introducing new users to the benefits of the transactional vehicle.

In January 2021, the Company announced a partnership, in the ordinary course of business, with Simplenight to provide drivers and vehicle occupants with access to enhanced mobile capability for booking personalized entertainment and lifestyle experiences in addition to everyday purchases. Simplenight delivers a customizable and robust platform that enables brands to globally offer real-time book-ability across multiple categories such as dining, accommodations, attractions, events, gas, parking, shopping and
31


more. The platform is unique in that it is designed to seamlessly integrate into automaker infotainment and navigation systems, as well as mobile applications and voice assistants. Simplenight can be integrated into the Company's current and future connected vehicle technologies, including HomeLink®HomeLink®, which, again, is the automotive industry’s leading car-to-home automation system. HomeLink®HomeLink® consists of vehicle-integrated buttons that can be programmed to operate a myriad of home automation devices. Integration of Simplenight into the Company's HomeLink Connect®Connect® app is underway and will allow users to program their HomeLink®HomeLink® buttons and control cloud-based devices from their vehicles.

Dimmable Devices

The Company previously announced that it is providing variably dimmable windows for the Boeing 787 Dreamliner series of aircraft. The Company continues to work with other aircraft manufacturers that have an interest in this technology regarding potential additional programs. In January 2019, the Company announced that its latest generation of dimmable aircraft windows will be offered as optional content on the new Boeing 777X. During the third quarter of 2019, the first production shipments of variably dimmable windows were made to Boeing for the 777X program. In January 2020, the CompanyAs also previously announced, that Airbus will also beis now offering, as optional content, the Company's dimmable aircraft windows on anits aircraft, with production having beganbegun in the fourth quarter of 2021.

Medical

In January 2020 the Company unveiled an innovative lighting technology for medical applications that was co-developed with Mayo Clinic. This new lighting concept represents the collaboration of a global, high-technology electronics company with a world leader in health care. The Company's new intelligent lighting system combines ambient room lighting with camera-controlled, adaptive task lighting to optimize
31


illumination for surgical and patient-care environments. The system was developed over an 18 month period of collaboration between Company engineers and Mayo Clinic surgeons, scientists, and operating room staff. The teams researched, designed, and rapidly iterated multiple prototypes in order to develop unique features intended to address major gaps in current surgical lighting solutions. In 2022,2023, the Company continues to further develop and work on the intelligent medical lighting system in order to assess system performance and work toward obtaining any necessary approvals.

On November 2, 2023, the Company acquired certain technology assets from eSight Corporation for approximately $18.9 million in cash, in addition to the 20% equity the Company previously held in the assets, as well as an earn out provision. The technology acquired from eSight provides the most advanced and versatile low-vision smart glasses available for those with visual impairments and is compatible with more than 20 eye conditions including Macular Degeneration, Diabetic Retinopathy, and Stargardt disease.

OTHER

Automotive revenues represent approximately 97% - 99% of the Company's total revenue, consisting of interior and exterior electrochromic automatic-dimming rearview mirrors and automotive electronics.

Even as the Company engages with automotive customers regarding the inflationary aspects of the business, it continues to experience pricing pressure from such customers and competitors, in addition to raw material cost increases, labor cost increases, and logistics costs, which will continue to cause downward pressure on its sales and profit margins. The Company works continuously to offset these supply chain issues and inflationary pressures with engineering and purchasing cost reductions, productivity improvements, increases in unit sales volume, and negotiations with customers to reduce the impact of the inflationary pressures, but there is no assurance the Company will be able to do so in the future.

Because the Company sells its products throughout the world, and automotive manufacturing is highly dependent on economic conditions, the Company can be affected by uncertain economic conditions that can reduce demand for its products, including the current inflationary environment. The Company has been likewise affected by the COVID-19 pandemic and industry-wide parts shortages and global supply constraints and labor shortages.shortages, as well as the UAW strikes.

The Company believes that its patents and trade secrets provide it with a competitive advantage in dimmable devices, electronics, and other features that it offers for the automotive, aerospace, and medical industry. Claims of patent infringement can be costly and time-consuming to address. To that end, the Company obtains intellectual property rights in the ordinary course of business to strengthen its intellectual property portfolio and to minimize the risk of infringement.

32


The Company does not have any significant off-balance sheet arrangements or commitments that have not been recorded in its consolidated financial statements.

3332


OUTLOOK

The Company’s most recentcurrent forecasts for light vehicle production for the fourth quarter of 2022,2023, and full years 20222023 and 20232024 are based on the mid-October 20222023 S&P Global Mobility light vehicle production forecast for light vehicle production in North America, Europe, Japan/Korea, and China. Fourthquarter of 20222023, and calendar years 20222023 and 20232024, forecasted light vehicle production volumes are shown below:

Light Vehicle Production (per S&P Global Mobility mid-October light vehicle production forecast)Light Vehicle Production (per S&P Global Mobility mid-October light vehicle production forecast)Light Vehicle Production (per S&P Global Mobility mid-October light vehicle production forecast)
(in Millions)(in Millions)(in Millions)
RegionRegionQ4 2022Q4 2021% ChangeCalendar Year 2023Calendar Year 2022Calendar Year 20212023 vs 2022
% Change
2022 vs 2021
% Change
RegionQ4 2023Q4 2022% ChangeCalendar Year 2024Calendar Year 2023Calendar Year 20222024 vs 2023
% Change
2023 vs 2022
% Change
North AmericaNorth America3.68 3.29 12 %15.39 14.47 13.05 %11 %North America3.24 3.55 (9)%16.29 15.20 14.30 %%
EuropeEurope4.16 4.02 %16.65 15.63 15.89 %(2)%Europe4.58 4.32 %17.44 17.71 15.83 (2)%12 %
Japan and KoreaJapan and Korea3.03 2.77 %11.88 11.06 10.87 %%Japan and Korea3.32 3.12 %12.14 12.69 11.14 (4)%14 %
ChinaChina7.39 7.69 (4)%26.65 26.41 24.84 %%China7.85 7.27 %28.05 27.89 26.40 %%
Total Light Vehicle ProductionTotal Light Vehicle Production18.26 17.77 %70.57 67.57 64.65 %%Total Light Vehicle Production18.99 18.26 %73.92 73.49 67.67 %%

Based on the aforementioned light vehicle production forecast and the results for the first nine months of 2022,2023, the Company is updatinghas updated certain guidance for calendar year 2022 as2023, included in what is shown below.
Revenue is expected to be between $1.90$2.2 and $1.95$2.3 billion
Gross Margin is expected to be between 32%32.5% and 33%
Operating Expenses are expected to be approximately $235$260 to $240$270 million
Estimated Annual Tax Rate, which assumes no changes to the statutory rate, is expected to be between 14%15% and 15%15.5%
Capital Expenditures are expected to be between $140$200 and $150$215 million
Depreciation and Amortization is expected to be between $100$95 and $105$100 million

Due to high levels ofongoing volatility in customer orders and vehicle production volumes, electronics supply chain constraints,work stoppages stemming from labor union strikes, the Ukraine-Russia conflict,war, Israel-Hamas war, labor shortages, and overall economic uncertainty, the Company believes that revenue remains difficult to forecast for the remainder of the year.year and beyond. Ongoing uncertainties remain, including: light vehicle production levels; industry-wide parts shortages and global supply chain constraints; impacts of already in place and potential additional future tariffs; impacts of regulation changes; automotive plant shutdowns; vehicle sales rates in Europe, Asia and North America; OEM strategies and cost pressures; the UAW strikes; customer inventory management and the impact of potential automotive customer (including their Tier 1 suppliers) and supplier bankruptcies; work stoppages; etc., all of which are disrupting and could further disrupt shipments to these customers and make forecasting difficult.

In accordance with the previously announced share repurchase plan, the Company will consider the appropriateness of continuing to repurchase additional shares of common stock in the future in support of the capital allocation strategy, but share repurchases maywill vary from time to time and will take into account macroeconomic events, (including the COVID-19 pandemic and issues related to the microchip shortage as well as other supply chain and labor constraints), market trends, and other factors the Company deems appropriate (including the market price of the stock, anti-dilutive effect of repurchases, and available cash). As of September 30, 2022,2023, the Company has21.5 18.0 millionshares remaining available for repurchase under the previously announced share repurchase plan.
Additionally, based on the mid-October 2022Company’s current forecasts for light vehicle production estimates for 2023, the Company is providing revenue guidance for 2023, despite the fact that there continues to be uncertainty regarding: macroeconomic conditions (including inflation); underlying overall consumer demand for light vehicles worldwide; supply chain and labor constraints; and the lingering impact from the COVID-19 pandemic. The Company still estimates that revenue for calendar year 2023 will be2024, the Company still expects calendar year 2024 revenue of approximately 15% - 20% higher than the updated 2022 estimated revenue estimates of $1.90 - $1.95$2.45 to $2.55 billion. As noted above, continuing uncertainties make forecasting difficult.         
3433


CRITICAL ACCOUNTING POLICIES:
The preparation of the Company’s consolidated condensed financial statements contained in this report, which have been prepared in accordance with accounting principles generally accepted in the United States, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates. Estimates are based on historical experience and/or on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that may not be readily apparent from other sources. Historically, actual results have not been materially different from the Company’s estimates. However, actual results may differ from these estimates under different assumptions or conditions.
The Company has identified critical accounting policies used in determining estimates and assumptions in the amounts reported in its Management’s Discussion and Analysis of Financial Condition and Results of Operations in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021.2022.

Item 3.    Quantitative And Qualitative Disclosures About Market Risk.

The Company is subject to market risk exposures of varying correlations and volatilities, including foreign exchange rate risk and interest rate risk. Fluctuating interest rates could negatively impact the Company's financial performance due to realized losses on the sale of fixed income investments and/or recognized losses due to an impairment of available for saleadjustment on investment securities, (mark-to-market adjustments), as well as the impact on demand for light vehicles. For the quarter ended September 30, 2022,2023, any material changes in risk factors that were disclosed in the Company's report on Form 10-K for the year ended December 31, 20212022 are set forth herein.herein, including potential work stoppages stemming from automaker or union labor strikes.
The Company has some assets, liabilities, and operations outside the United States, including euro-denominated and Chinese Yuan Renminbi accounts, which currently are not significant overall to the Company as a whole. Because the Company sells its automotive mirrors throughout the world, and automotive manufacturing is highly dependent on general economic conditions and the global supply chain, the Company has been and will continue to be affected by uncertain economic conditions in North American and foreign markets, including inflation, that have reduced, and could continue to reduce, demand for its products.
Item 4.    Controls And Procedures.

Evaluation of Disclosure Controls and Procedures.

Under the supervision of, and with the participation of management, the Company's Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2022,2023, and have concluded that as of that date, the Company's disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company's internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the quarter ended September 30, 20222023 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
SAFE HARBOR STATEMENT:

This Quarterly Report contains contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements contained in this communication that are not purely historical are forward-looking statements. Forward-looking statements give the Company’s current expectations or forecasts of future events.
These forward-looking statements generally can be identified by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “future,” “goal,” “guidance,” “hope,” “intend,” "likely", “may,” “opinion,” “optimistic,” “plan,” “poised,” “predict,” “project,” “should,” “strategy,” “target,” “will,” "work to," and variations of such words and similar expressions. Such statements are subject to risks and uncertainties that are often difficult to predict and beyond the Company’s control, and could cause the Company’s results to differ materially from those
34


described. These risks and uncertainties include, without limitation: changes in general industry or regional
35


market conditions, including the impact of inflation; potential work stoppages stemming from automaker or union labor strikes; changes in consumer and customer preferences for our products (such as cameras replacing mirrors and/or autonomous driving); our ability to be awarded new business; continued uncertainty in pricing negotiations with customers and suppliers; loss of business from increased competition; changes in strategic relationships; customer bankruptcies or divestiture of customer brands; fluctuation in vehicle production schedules (including the impact of customer employee strikes); changes in product mix; raw material and other supply shortages; labor shortages, supply chain constraints and disruptions; our dependence on information systems; higher raw material, fuel, energy and other costs; unfavorable fluctuations in currencies or interest rates in the regions in which we operate; costs or difficulties related to the integration and/or ability to maximize the value of any new or acquired technologies and businesses; changes in regulatory conditions; warranty and recall claims and other litigation and customer reactions thereto; possible adverse results of pending or future litigation or infringement claims; changes in tax laws; import and export duty and tariff rates in or with the countries with which we conduct business; negative impact of any governmental investigations and associated litigation including securities litigation relating to the conduct of our business; and the length and severityremaining impact of the COVID-19 (coronavirus) pandemic including its impact across our business on demand, operations, and the global supply chain. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made.

The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law or the rules of the NASDAQ Global Select Market. Accordingly, any forward-looking statement should be read in conjunction with the additional information about risks and uncertainties identified under the heading “Risk Factors” in the Company’s latest Form 10-K and Form 10-Q filed with the SEC, which risks and uncertainties now include the impacts of an inflationary environment,the UAW strikes and COVID-19 (coronavirus) pandemic and supply chain and labor constraints that have affected, are affecting, and will continue to affect, general economic and industry conditions, customers, suppliers, and the regulatory environment in which the Company operates.operates.. Includes content supplied by S&P Global Mobility Light Vehicle Production Forecast of October 18, 202216, 2023 (http://www.gentex.com/forecast-disclaimer).

Other Information

On November 1, 2022, Steve Downing, President and Chief Executive Officer of the Company, entered into a stock trading plan in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, providing for a third-party broker to sell shares of common stock of the Company that Mr. Downing may acquire upon the vesting of: 37,000 restricted shares awarded in 2018; 17,792 restricted shares awarded in 2020; and 41,516 performance shares (payable in common stock) awarded in 2020, subject to certain performance conditions. This plan also provides for a third-party broker to sell 17,730 shares of common stock issuable upon exercise of stock options awarded to Mr. Downing in 2016. Options will be exercised and/or shares will be sold under the stock trading plan on the open market over the period of time and in accordance with other parameters set forth in the stock trading plan. The stock trading plan terminates upon the earlier of all the transactions set forth in the plan being executed or March 1, 2023.

On November 1, 2022, Kevin Nash, Vice President of Finance, Chief Financial Officer, and Treasurer of the Company, entered into a stock trading plan in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, providing for a third-party broker to sell shares of common stock of the Company that Mr. Nash may acquire upon the vesting of: 5,535 restricted shares awarded in 2020; and 12,916 performance shares (payable in common stock) awarded in 2020, subject to certain performance conditions. This plan also provides for a third-party broker to sell 6,776 shares of common stock issuable upon exercise of stock options awarded to Mr. Nash in 2016. Options will be exercised and/or shares will be sold under the stock trading plan on the open market over the period of time and in accordance with other parameters set forth in the stock trading plan. The stock trading plan terminates upon the earlier of all the transactions set forth in the plan being executed or March 1, 2023.

On November 1, 2022, Matt Chiodo, Chief Sales Officer and Senior Vice President of Sales of the Company, entered into a stock trading plan in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, providing for a third-party broker to sell shares of common stock of the Company that Mr. Chiodo may acquire upon the vesting of: 5,000 restricted shares awarded in 2020; and11,394 performance shares (payable in common stock) awarded in 2020, subject to certain performance conditions. The shares will be sold under the stock trading plan on the open market over the period of time and in accordance with other
36


parameters set forth in the stock trading plan. The stock trading plan terminates upon the earlier of all the transactions set forth in the plan being executed or March 1, 2023.

On November 1, 2022, Neil Boehm, Chief Technology Officer and Vice President of Engineering, entered into a stock trading plan in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, providing for a third-party broker to sell shares of common stock of the Company that Mr. Boehm may acquire upon the vesting of: 6,035 restricted shares awarded in 2020; and 14,081 performance shares (payable in common stock) awarded in 2020, subject to certain performance conditions. This plan also provides for a third-party broker to sell 1,242 shares of common stock issuable upon exercise of stock options awarded to Mr. Boehm in 2016. Options will be exercised and/or shares will be sold under the stock trading plan on the open market over the period of time and in accordance with other parameters set forth in the stock trading plan. The stock trading plan terminates upon the earlier of all the transactions set forth in the plan being executed or April 15, 2023.

On November 1, 2022, Scott Ryan, Vice President, General Counsel, and Corporate Secretary, entered into a stock trading plan in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, providing for a third-party broker to sell shares of common stock of the Company that Mr. Ryan may acquire upon the vesting of: 4,325 restricted shares awarded in 2020; 10,091 performance shares (payable in common stock) awarded in 2020, subject to certain performance conditions. This plan also provides for a third-party broker to sell 4,580 shares of common stock issuable upon exercise of stock options awarded to Mr. Ryan in 2016. Options will be exercised and/or shares will be sold under the stock trading plan on the open market over the period of time and in accordance with to the other parameters set forth in the stock trading plan. The stock trading plan terminates upon the earlier of all the transactions set forth in the plan being executed or March 1, 2023.

Rule 10b5-1 trading plans are permitted under the Company’s insider trading policy and other policies, and, to the extent required, transactions under such trading plans will be disclosed publicly through Form 144 and/or Form 4 filings with the Securities and Exchange Commission. Except as may be required by law, the Company does not undertake any obligation to report Rule 10b5-1 plans by officers or directors of the Company in the future, or to report modifications or terminations of any such plans, whether or not any such plans were publicly announced.
3735


PART II—OTHER INFORMATION

Item 1A. Risk Factors.
Information regarding risk factors appears in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part I – Item 2 of this Form 10-Q and in Part I – Item 1A – Risk Factors of the Company’s report on Form 10-K for the fiscal year ended December 31, 2021.2022. There have been no material changes to the risk factors previously disclosed in the Company’s report on Form 10-K for the year ended December 31, 2021,2022, except to the extent described in Part I – Item 2 and Item 3 of this Form 10-Q, and otherwise herein.

Item 2. Unregistered Sales of Equity Securities, and Use of Proceeds.

(a)    Unregistered SalesProceeds, and Issuer Purchases of Equity Securities; Green Marbles

On June 3, 2022, the Company issued 162,433 shares of its common stock to GreenMarbles, at a value of $5 million, as partial consideration for an investment in GreenMarbles. The shares were issued under Section 4(a)(2) of the Securities Act of 1933, as amended. The Company believes the issuance of the foregoing restricted shares was exempt from registration as a privately negotiated, isolated, non-recurring transaction not involving a public solicitation. An appropriate legend is affixed to the stock certificates issued in such transaction.Securities.

(c)    Issuer Purchase of Equity Securities

The Company has a previously announced share repurchase plan under which the Board of Directors has authorized the repurchase of shares of the Company's common stock, which remains a part of the broader publicly disclosed capital allocation strategy. During the first nine months of 2022,2023, the Company repurchased 3.32.7 million shares under the share repurchase plan. As previously disclosed, the Company will consider the appropriateness of continuing to repurchase additional shares of common stock in the future in support of the capital allocation strategy, but share repurchases maywill vary from time to time and will take into account macroeconomic events (including the COVID-19 pandemic and shutdowns related to the microchip shortage as well as other supply chain and labor constraints), market trends, and other factors the Company deems appropriate (including the market price of the stock, anti-dilutive effect of repurchases, and available cash).

After the Company repurchased 3,290,4962,743,788 shares during the first nine months of 2022,2023, the Company has 21.518.0 million shares remaining under the plan as of September 30, 2022.2023.

38


The following is a summary of share repurchase activity during each month of the quarternine month period ended September 30, 2022:
Issuer Purchase of Equity Securities
PeriodTotal Number of Shares Purchased

Weighted
Average Price Paid Per Share
Total Number of Shares Purchased As Part of a Publicly Announced Plan or ProgramMaximum Number of Shares That May Yet Be Purchased Under the Plan or Program
January 2022— — — 24,824,068 
February 2022490,021 30.63 490,021 24,334,047 
March 20221,950,169 28.84 1,950,169 22,383,878 
1st Quarter 2022 Total2,440,190 29.20 2,440,190 
2nd Quarter 2022 Total— — — 22,383,878 
July 2022150,110 27.80 150,110 22,233,768 
August 2022300,135 28.04 300,135 21,933,633 
September 2022400,061 24.17 400,061 21,533,572
3rd Quarter 2022 Total850,306 26.18 850,306 
2022 Total3,290,496 28.42 3,290,496 21,533,572 
2023:
Issuer Purchase of Equity Securities
PeriodTotal Number of Shares Purchased

Weighted
Average Price Paid Per Share
Total Number of Shares Purchased As Part of a Publicly Announced Plan or ProgramMaximum Number of Shares That May Yet Be Purchased Under the Plan or Program
January 2023— — — 20,783,165 
February 202346,835 28.58 46,835 20,736,330 
March 20231,000,091 27.12 1,000,091 19,736,239 
1st Quarter 2023 Total1,046,926 27.19 1,046,926 
April 2023— — — 19,736,239
May 2023400,062 26.78 400,062 19,336,177
June 2023520,312 27.64 520,312 18,815,865
2nd Quarter 2023 Total920,374 27.28 920,374 
July 2023— — — 18,815,865 
August 2023210,525 32.51 210,525 18,605,340 
September 2023565,963 32.38 565,963 18,039,377
3rd Quarter 2023 Total776,488 32.41 776,488 
2023 Total2,743,788 28.70 2,743,788 18,039,377 

As of September 30, 2022,2023, the Company has repurchased 150,466,156153,960,351 shares at a total cost of $2,580,262,909$2,679,383,973 under its share repurchase plan or as otherwise previously disclosed.
36




Item 6.    Exhibits.
See Exhibit Index on Page 4038


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
GENTEX CORPORATION
Date:November 4, 20223, 2023/s/ Steven R. Downing
Steven R. Downing
President and Chief Executive Officer
(Principal Executive Officer) on behalf of Gentex Corporation
Date:November 4, 20223, 2023/s/ Kevin C. Nash
Kevin C. Nash
Vice President, Finance, Chief Financial Officer and Treasurer
(Principal Financial Officer and Principal Accounting Officer) on behalf of Gentex Corporation

3937


EXHIBIT INDEX
 
Exhibit No.Description
10
31.1
31.2
32
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCHInline XBRL Taxonomy Extension Schema
101.CALInline XBRL Taxonomy Extension Calculation Linkbase
101.DEFInline XBRL Taxonomy Extension Definition Linkbase
101.LABInline XBRL Taxonomy Extension Label Linkbase
101.PREInline XBRL Taxonomy Extension Presentation Linkbase



4038