gntx-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024 or


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-10235

GENTEX CORPORATION

(Exact name of registrant as specified in its charter)


Michigan						38-2030505
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

600 N. Centennial
Zeeland
Michigan						49464
(Address of principal executive offices)						(Zip Code)

(616) 772-1800

(Registrant’s telephone number, including area code)

________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.06 per share	GNTX	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes: þ No: o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes: þ No: o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes: ☐ No: þ

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes: ☐ No: o

APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						Shares Outstanding, April 26, 2024
Common Stock, $.06 Par Value						231,184,476

GENTEX CORPORATION AND SUBSIDIARIES

For the Three Months Ended March 31, 2024

FORM 10-Q

Index


Part I - Financial Information		Page
Item 1.	Unaudited Condensed Consolidated Financial Statements	3
	Unaudited Condensed Consolidated Balance Sheets	3
	Unaudited Condensed Consolidated Statements of Income	4
	Unaudited Condensed Consolidated Statements of Comprehensive Income	5
	Unaudited Condensed Consolidated Statements of Shareholders' Investment	6
	Unaudited Condensed Consolidated Statements of Cash Flows	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32

Part II - Other Information
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 6.	Exhibits	34
	Signatures	34
	Exhibit Index	36

PART I —FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements.

GENTEX CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

As of March 31, 2024 and December 31, 2023


	March 31, 2024 (Unaudited)		December 31, 2023 (Note)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	249,004,534	$	226,435,019
Short-term investments	16,758,924		14,356,476
Accounts receivable, net	341,591,131		321,809,868
Inventories	436,537,244		402,473,028
Prepaid expenses and other	28,702,868		32,663,762
Total current assets	1,072,594,701		997,738,153

PLANT AND EQUIPMENT—NET	664,788,932		652,877,672

OTHER ASSETS
Goodwill	340,105,631		340,105,631
Long-term investments	311,028,408		299,080,876

Intangible assets, net	209,809,035		214,005,910
Deferred tax asset	44,741,075		41,113,759
Patents and other assets, net	70,146,788		66,515,551
Total other assets	975,830,937		960,821,727

Total assets	$	2,713,214,570	$	2,611,437,552

LIABILITIES AND SHAREHOLDERS’ INVESTMENT

CURRENT LIABILITIES
Accounts payable	$	191,736,616	$	184,398,820

Accrued liabilities	112,674,602		87,210,156
Total current liabilities	304,411,218		271,608,976

OTHER NON-CURRENT LIABILITIES	32,439,563		27,311,507





Total liabilities	336,850,781		298,920,483

SHAREHOLDERS’ INVESTMENT
Common stock	13,871,933		13,887,326
Additional paid-in capital	991,053,652		968,245,875
Retained earnings	1,378,904,530		1,336,940,990
Accumulated other comprehensive loss	(7,466,326)		(6,557,122)
Total shareholders’ investment	2,376,363,789		2,312,517,069
Total liabilities and shareholders’ investment	$	2,713,214,570	$	2,611,437,552

Note: The condensed consolidated balance sheet at December 31, 2023 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.

GENTEX CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

For the Three Months Ended March 31, 2024 and 2023


	Three Months Ended March 31,
	2024		2023
NET SALES	$	590,225,211	$	550,761,311

COST OF GOODS SOLD	387,987,605		376,024,080
Gross profit	202,237,606		174,737,231

OPERATING EXPENSES:
Engineering, research and development	42,181,986		34,653,747
Selling, general & administrative	30,709,308		26,832,837
Total operating expenses	72,891,294		61,486,584

Income from operations	129,346,312		113,250,647

OTHER INCOME (LOSS)
Investment (loss) income	(3,368,524)		2,939,195
Other income (loss), net	1,670,139		(194,740)
Total other (loss) income	(1,698,385)		2,744,455

INCOME BEFORE PROVISION FOR INCOME TAXES	127,647,927		115,995,102

PROVISION FOR INCOME TAXES	19,417,213		18,416,841

NET INCOME	$	108,230,714	$	97,578,261

EARNINGS PER SHARE: (1)
Basic	$	0.47	$	0.42
Diluted	$	0.47	$	0.42

Cash Dividends Declared per Share	$	0.120	$	0.120

(1) Earnings Per Share has been adjusted to exclude the portion of net income allocated to participating securities as a result of share-based payment awards.

GENTEX CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months Ended March 31, 2024 and 2023


	Three Months Ended March 31,
	2024		2023
Net income	$	108,230,714	$	97,578,261

Other comprehensive (loss) income before tax:
Foreign currency translation adjustments	(950,213)		(121,167)

Unrealized gains (losses) on debt securities, net	51,910		2,581,777

Other comprehensive (loss) income, before tax	(898,303)		2,460,610

Income tax impact related to components of other comprehensive income (loss)	10,901		542,173

Other comprehensive (loss) income, net of tax	(909,204)		1,918,437

Comprehensive income	$	107,321,510	$	99,496,698

GENTEX CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT

For the Three Months Ended March 31, 2024 and 2023


	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Investment
BALANCE AS OF JANUARY 1, 2024	231,455,443	$	13,887,326	$	968,245,875	$	1,336,940,990	$	(6,557,122)	$	2,312,517,069
Issuance of common stock from stock plan transactions	944,345	56,661		16,777,325		—		—		16,833,986

Repurchases of common stock	(1,200,903)	(72,054)		(4,443,340)		(38,523,693)		—		(43,039,087)

Stock-based compensation expense related to stock options, employee stock purchases and restricted stock	—	—		10,473,792		—		—		10,473,792
Dividends declared ($0.12 per share)	—	—		—		(27,743,481)		—		(27,743,481)
Net income	—	—		—		108,230,714		—		108,230,714
Other comprehensive loss	—	—		—		—		(909,204)		(909,204)
BALANCE AS OF MARCH 31, 2024	231,198,885	$	13,871,933	$	991,053,652	$	1,378,904,530	$	(7,466,326)	$	2,376,363,789

BALANCE AS OF JANUARY 1, 2023	234,169,335	$	14,050,160	$	917,499,323	$	1,148,386,272	$	(14,142,934)	$	2,065,792,821
Issuance of common stock from stock plan transactions	603,636	36,218		5,919,804		—		—		5,956,022

Repurchases of common stock	(1,046,926)	(62,815)		(3,653,772)		(24,746,045)		—		(28,462,632)
Stock-based compensation expense related to stock options, employee stock purchases and restricted stock	—	—		8,519,535		—		—		8,519,535
Dividends declared ($0.12 per share)	—	—		—		(28,046,798)		—		(28,046,798)
Net income	—	—		—		97,578,261		—		97,578,261
Other comprehensive loss	—	—		—		—		1,918,437		1,918,437
BALANCE AS OF MARCH 31, 2023	233,726,045	$	14,023,563	$	928,284,890	$	1,193,171,690	$	(12,224,497)	$	2,123,255,646

GENTEX CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31, 2024 and 2023


	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	108,230,714	$	97,578,261
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	23,953,768		24,041,648
(Gain) on disposal of assets	(25,671)		(106,743)
Loss on disposal of assets	6,838		41,843
(Gain) on sale of investments and technology investment income	(4,687,471)		(1,199,707)
Loss on sale of investments and technology investment losses	10,384,965		1,671,583
Change in deferred income taxes	(3,638,218)		141,959
Stock-based compensation expense related to employee stock options, employee stock purchases and restricted stock	10,473,792		8,519,535

Change in operating assets and liabilities:
Accounts receivable, net	(19,781,263)		(56,373,376)
Inventories	(34,064,216)		2,590,294
Prepaid expenses and other	4,663,897		(629,502)
Accounts payable	6,080,702		11,112,425
Accrued liabilities, excluding dividends declared	28,279,293		33,525,890
Net cash provided by operating activities	129,877,130		120,914,110

CASH FLOWS USED FOR INVESTING ACTIVITIES:
Activity in investments:
Sales proceeds	16,121,684		3,128,110
Maturities and calls	1,420,000		1,465,000
Purchases	(37,537,250)		(32,178,155)

Plant and equipment additions	(31,871,370)		(42,819,075)
Proceeds from sale of plant and equipment	9,500		118,410

Increase in other assets	(3,285,058)		(2,110,935)
Net cash used for investing activities	(55,142,494)		(72,396,645)

CASH FLOWS USED FOR FINANCING ACTIVITIES:



Issuance of common stock from stock plan transactions	16,833,987		5,956,022
Cash dividends paid	(27,774,268)		(28,099,993)
Repurchases of common stock	(41,224,840)		(25,675,972)

Net cash used for financing activities	(52,165,121)		(47,819,943)

NET INCREASE IN CASH AND CASH EQUIVALENTS	22,569,515		697,522

CASH, CASH EQUIVALENTS, and RESTRICTED CASH, beginning of period	226,435,019		218,754,638

CASH, CASH EQUIVALENTS, and RESTRICTED CASH, end of period	$	249,004,534	$	219,452,160

SEC Form 10-Q filed by Gentex Corporation