Gentex Corporation (NASDAQ:GNTX) Q3 2021 Earnings Conference Call October 22, 2021 9:30 AM ET Company Participants Josh O'Berski - Director, Investor Relations Steve Downing - President and CEO Neil Boehm - Vice President, Engineering and CTO Kevin Nash - Vice President, Finance and CFO Conference Call Participants Luke Junk - Baird David Kelley - Jefferies John Murphy - Bank of America Ryan Brinkman - JPMorgan Josh Nichols - B. Riley David Whiston - Morningstar Charlie Sloan - Oak Family Advisors Operator ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 0-10235 GENTEX CORPORATION (Exact name of registrant as specified in its charter) Michigan 38-2030505 (State or other jurisdiction o ...

Gentex Corporation (NASDAQ:GNTX) Q2 2021 Earnings Conference Call July 23, 2021 9:30 AM ET Company Participants Josh O'Berski - Director, Investor Relations Steve Downing - President and CEO Neil Boehm - Vice President, Engineering and CTO Kevin Nash - Vice President, Finance and CFO Conference Call Participants James Picariello - KeyBanc Capital Markets Luke Junk - Baird Ryan Brinkman - JPMorgan David Kelley - Jefferies John Murphy - Bank of America Josh Nichols - B. Riley Mark Delaney - Goldman Sachs Davi ...

XBRL UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 0-10235 GENTEX CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporatio ...

Gentex Corporation (NASDAQ:GNTX) Q1 2021 Earnings Conference Call April 23, 2021 9:30 AM ET Company Participants Steve Downing - President and CEO Kevin Nash - VP of Finance and CFO Neil Boehm - VP of Engineering and CTO Josh O’Berski - Director, IR Conference Call Participants James Picariello - KeyBanc Capital Markets Luke Junk - Robert W. Baird Josh Nichols - B. Riley John Murphy - Bank of America Merrill Lynch Ryan Brinkman - JPMorgan David Whiston - Morningstar Charlie Sloan - Oak Family Advisors Opera ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2020 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 No.: 000-10235 GENTEX CORPORATION (Exact name of registrant as specified in its charter) Michigan 38-2030505 State or other ...

Gentex Corporation (NASDAQ:GNTX) Q4 2020 Earnings Conference Call January 29, 2021 9:30 AM ET Executives Josh O'Berski - Director, IR Steve Downing - President and CEO Neil Boehm - VP of Engineering and CTO Kevin Nash - VP of Finance and CFO Analysts James Picariello - KeyBanc Capital Markets David Kelley - Jefferies Ryan Brinkman - JPMorgan John Murphy - Bank of America Luke Junk - Robert W. Baird David Whiston - Morningstar Josh Nichols - B. Riley Operator Ladies and gentlemen, thank you for standing by, ...

[PART I — FINANCIAL INFORMATION](index=4&type=section&id=Part%20I%20-%20Financial%20Information) This part presents the company's unaudited financial statements and management's analysis for the period ended September 30, 2020 [Item 1. Unaudited Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Consolidated%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements and accompanying notes for the reported period [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Condensed Consolidated Balance Sheet Highlights (as of September 30, 2020 vs December 31, 2019) | Metric | Sep 30, 2020 | Dec 31, 2019 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $400,499,542 | $296,321,622 | $104,177,920 | 35.16% | | Short-term investments | $52,578,480 | $140,384,053 | $(87,805,573) | -62.55% | | Accounts receivable, net | $268,457,875 | $235,410,326 | $33,047,549 | 14.04% | | Inventories | $233,358,102 | $248,941,855 | $(15,583,753) | -6.26% | | Total current assets | $975,318,566 | $950,376,892 | $24,941,674 | 2.62% | | Total assets | $2,192,475,106 | $2,168,803,193 | $23,671,913 | 1.09% | | Total current liabilities | $236,489,170 | $171,846,800 | $64,642,370 | 37.62% | | Current portion of long-term debt | $25,000,000 | — | $25,000,000 | N/A | | Total liabilities | $296,862,807 | $230,715,373 | $66,147,434 | 28.67% | | Total shareholders' investment | $1,895,612,299 | $1,938,087,820 | $(42,475,521) | -2.19% | [Unaudited Condensed Consolidated Statements of Income](index=5&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) Condensed Consolidated Statements of Income Highlights | Metric | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | % Change (YoY) | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $474,638,584 | $477,761,417 | -0.65% | $1,158,325,866 | $1,415,061,768 | -18.15% | | Gross profit | $188,236,712 | $180,321,286 | 4.39% | $388,769,001 | $526,503,395 | -26.20% | | Income from operations | $138,852,889 | $128,135,680 | 8.36% | $237,141,800 | $377,636,979 | -37.20% | | Net Income | $117,092,602 | $111,897,852 | 4.64% | $204,224,370 | $325,136,888 | -37.19% | | Basic EPS | $0.48 | $0.44 | 9.09% | $0.83 | $1.27 | -34.65% | | Diluted EPS | $0.48 | $0.44 | 9.09% | $0.82 | $1.26 | -34.92% | | Cash Dividends Declared per Share | $0.120 | $0.115 | 4.35% | $0.360 | $0.345 | 4.35% | [Unaudited Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) Condensed Consolidated Statements of Comprehensive Income Highlights | Metric | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $117,092,602 | $111,897,852 | $204,224,370 | $325,136,888 | | Other comprehensive income (loss), net of tax | $1,707,816 | $(1,261,726) | $5,736,163 | $837,833 | | Comprehensive Income | $118,800,418 | $110,636,126 | $209,960,533 | $325,974,721 | [Unaudited Condensed Consolidated Statements of Shareholders' Investment](index=7&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20SHAREHOLDERS'%20INVESTMENT) Changes in Shareholders' Investment (Nine Months Ended September 30, 2020) | Item | Amount | | :--- | :--- | | Balance as of January 1, 2020 | $1,938,087,820 | | Issuance of common stock from stock plan transactions | $23,677,181 | | Issuance of common stock related to acquisitions | $3,559,229 | | Repurchases of common stock | $(210,480,446) | | Stock-based compensation expense | $19,093,196 | | Dividends declared | $(88,285,214) | | Net income | $204,224,370 | | Other comprehensive income | $5,736,163 | | Balance as of September 30, 2020 | $1,895,612,299 | - The total net decrease in common stock during the nine months ended September 30, 2020, was **6.2 million shares**, primarily due to repurchases of **8.2 million shares**, partially offset by the issuance of **1.9 million shares** from stock-based compensation plans and **0.1 million shares** for the Vaporsens acquisition[68](index=68&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Condensed Consolidated Statements of Cash Flows Highlights (Nine Months Ended September 30) | Cash Flow Activity | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $329,044,250 | $383,940,298 | $(54,896,048) | | Net cash (used for) investing activities | $24,711,570 | $(59,055,610) | $83,767,180 | | Net cash (used for) financing activities | $(249,577,900) | $(281,758,883) | $32,180,983 | | Net increase in cash and cash equivalents | $104,177,920 | $43,125,805 | $61,052,115 | | Cash and cash equivalents, end of period | $400,499,542 | $260,151,083 | $140,348,459 | [(1) Basis of Presentation](index=10&type=section&id=(1)%20Basis%20of%20Presentation) - The unaudited condensed consolidated financial statements are prepared by the Company in accordance with SEC rules and regulations, with certain information and footnote disclosures condensed or omitted[24](index=24&type=chunk) - Management believes the disclosures are adequate and the statements contain all necessary normal and recurring adjustments for fair presentation[24](index=24&type=chunk) [(2) Adoption of New Accounting Pronouncements](index=10&type=section&id=(2)%20Adoption%20of%20New%20Accounting%20Pronouncements) - Effective January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), which changes the measurement approach for credit losses from an incurred loss method to an expected loss method[25](index=25&type=chunk) - The adoption of this standard **did not have a material impact** on the Company's consolidated balance sheet, income statement, or cash flows[25](index=25&type=chunk) [(3) Goodwill and Other Intangible Assets](index=10&type=section&id=(3)%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill Carrying Amount | Date | Amount | | :--- | :--- | | Balance as of Dec 31, 2019 | $307,365,845 | | Acquisitions | $3,850,711 | | Balance as of Sep 30, 2020 | $311,216,556 | - The Company acquired In-Process Research & Development as part of the Vaporsens acquisition in Q2 2020 and Air-Craftglass Production BV in Q3 2020[28](index=28&type=chunk) Amortization Expense on Patents and Intangible Assets | Period | 2020 (Approx.) | 2019 (Approx.) | | :--- | :--- | :--- | | Three Months Ended September 30 | $5.6 million | $5.6 million | | Nine Months Ended September 30 | $16.8 million | $16.8 million | - Estimated annual amortization expense is approximately **$22 million for 2020 and 2021**, **$21 million for 2022**, **$19 million for 2023**, and **$16 million for 2024**, excluding future acquisitions[31](index=31&type=chunk) [(4) Investments](index=12&type=section&id=(4)%20Investments) - The Company classifies government securities, asset-backed securities, municipal bonds, and corporate bonds as **Level 2 assets**, with fair values determined by broker valuations and third-party sources[33](index=33&type=chunk) - Certificates of deposit are classified as available-for-sale and **Level 1 assets**, carried at cost approximating fair value[34](index=34&type=chunk) Market Value of Investment Securities (as of September 30, 2020 vs December 31, 2019) | Category | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Short-Term Investments | $52,578,480 | $140,384,053 | | Long-Term Investments | $150,390,100 | $130,891,695 | | Total Market Value | $202,968,580 | $271,275,748 | - **No investments were considered impaired** during the periods presented, and the Company intends and has the ability to hold debt investments until the amortized cost basis has been recovered[40](index=40&type=chunk) [(5) Inventories](index=16&type=section&id=(5)%20Inventories) Inventories (as of September 30, 2020 vs December 31, 2019) | Category | Sep 30, 2020 | Dec 31, 2019 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Raw materials | $160,155,658 | $164,974,553 | $(4,818,895) | -2.92% | | Work-in-process | $30,308,212 | $33,069,255 | $(2,761,043) | -8.35% | | Finished goods | $42,894,232 | $50,898,047 | $(8,003,815) | -15.72% | | Total Inventory | $233,358,102 | $248,941,855 | $(15,583,753) | -6.26% | [(6) Earnings Per Share](index=16&type=section&id=(6)%20Earnings%20Per%20Share) - The Company computes earnings per share using the **two-class method** due to unvested share-based payment awards with non-forfeitable dividends, which are considered participating securities[43](index=43&type=chunk) Earnings Per Share (Three and Nine Months Ended September 30) | Metric | Q3 2020 | Q3 2019 | 9M 2020 | 9M 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Income per share - Basic | $0.48 | $0.44 | $0.83 | $1.27 | | Net Income per share - Diluted | $0.48 | $0.44 | $0.82 | $1.26 | | Diluted weighted average shares outstanding | 242,817,067 | 252,578,982 | 244,267,615 | 254,267,851 | [(7) Stock-Based Compensation Plans](index=17&type=section&id=(7)%20Stock-Based%20Compensation%20Plans) Stock-Based Compensation Expense | Period | 2020 | 2019 | | :--- | :--- | :--- | | Three Months Ended September 30 | $6,904,725 | $5,712,132 | | Nine Months Ended September 30 | $22,865,087 | $15,927,434 | - The 2019 Omnibus Incentive Plan covers **45,000,000 shares** of common stock, with **9,191,249 shares issued** as of September 30, 2020[50](index=50&type=chunk) - As of September 30, 2020, unearned compensation costs include **$7.2 million** for stock options, **$40.8 million** for restricted stock grants, and **$5.1 million** for performance share grants[51](index=51&type=chunk)[55](index=55&type=chunk)[57](index=57&type=chunk) [(8) Comprehensive Income](index=19&type=section&id=(8)%20Comprehensive%20Income) - Comprehensive income reflects changes in equity from non-owner sources, including net income, unrealized gains and losses on certain debt investments, foreign currency translation adjustments, and derivatives[58](index=58&type=chunk) Accumulated Other Comprehensive Income (Loss) (Net of Tax) | Component | Sep 30, 2020 | Sep 30, 2019 | | :--- | :--- | :--- | | Foreign currency translation adjustments | $(1,116,385) | $(3,474,676) | | Unrealized gains on available-for-sale debt securities | $5,563,445 | $2,712,171 | | Total Accumulated Other Comprehensive Income (Loss) | $4,447,060 | $(762,505) | [(9) Debt and Financing Arrangements](index=20&type=section&id=(9)%20Debt%20and%20Financing%20Arrangements) - The Company has access to a **$150 million senior revolving credit facility** ('Revolver') with PNC, which is unsecured but subject to certain covenants[63](index=63&type=chunk) - During Q3 2020, the Company made principal repayments of **$50 million** on the Revolver, leaving an outstanding balance of **$25 million** as of September 30, 2020, classified as a current liability[64](index=64&type=chunk) - The borrowing rate on the Revolver was **1.03%** as of September 30, 2020, and the Company was in compliance with all covenants[65](index=65&type=chunk)[67](index=67&type=chunk) [(10) Equity](index=21&type=section&id=(10)%20Equity) - The decrease in common stock during the nine months ended September 30, 2020, was primarily due to the repurchase of **8.2 million shares**, partially offset by the issuance of **1.9 million shares** from stock plans and **0.1 million shares** for the Vaporsens acquisition, resulting in a net decrease of **6.2 million shares**[68](index=68&type=chunk) - The Company increased its quarterly cash dividend rate by **$0.005 per share** in Q1 2020, declaring a **$0.120 per share** dividend in Q3 2020 ($29.4 million total)[69](index=69&type=chunk) [(11) Contingencies](index=21&type=section&id=(11)%20Contingencies) - The Company is involved in various legal proceedings and claims arising in the normal course of business, including product liability and intellectual property matters[70](index=70&type=chunk) - Management does not believe that any of these matters currently constitute material pending legal proceedings that will have a **material adverse effect** on the Company's financial position, future results of operations, or cash flows[70](index=70&type=chunk) [(12) Segment Reporting](index=21&type=section&id=(12)%20Segment%20Reporting) - The Company operates in two segments: **Automotive** (digital vision and connected car products) and **'Other'** (variably dimming windows for aerospace and fire protection products), with Vaporsens also classified under 'Other'[71](index=71&type=chunk) Segment Revenue and Income from Operations (Three Months Ended September 30, 2020 vs 2019) | Metric | Automotive Products (2020) | Automotive Products (2019) | Other (2020) | Other (2019) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $464,673,587 | $464,280,707 | $9,964,997 | $13,480,710 | | Income from operations | $138,428,628 | $123,342,538 | $424,261 | $4,793,142 | [(13) Income Taxes](index=22&type=section&id=(13)%20Income%20Taxes) - The effective tax rate for the nine months ended September 30, 2020, was **17.1%**, an increase from **15.9%** for the same period in 2019[73](index=73&type=chunk) - Differences from statutory federal income tax rates are primarily due to state and local income taxes, permanent tax differences, foreign-derived intangible income tax deduction, and research and development tax credits[73](index=73&type=chunk) [(14) Revenue](index=22&type=section&id=(14)%20Revenue) Automotive Products Revenue by Geography (Three Months Ended September 30, 2020 vs 2019) | Region | 2020 | 2019 | % Change | | :--- | :--- | :--- | :--- | | U.S. | $156,521,110 | $145,798,028 | 7.35% | | Germany | $56,514,969 | $74,047,596 | -23.70% | | Japan | $64,353,263 | $60,641,977 | 6.12% | | Mexico | $33,342,171 | $43,884,609 | -24.03% | | Other | $153,942,074 | $139,908,497 | 10.03% | | Total Automotive Products | $464,673,587 | $464,280,707 | 0.08% | Revenue by Major Source (Three Months Ended September 30, 2020 vs 2019) | Segment/Source | 2020 | 2019 | % Change | | :--- | :--- | :--- | :--- | | Automotive Mirrors & Electronics | $427,426,159 | $418,746,334 | 2.07% | | HomeLink Modules | $37,247,428 | $45,534,373 | -18.20% | | Fire Protection Products | $6,378,303 | $5,977,245 | 6.71% | | Windows Products | $3,586,694 | $7,503,465 | -52.19% | [(15) Leases](index=23&type=section&id=(15)%20Leases) - The Company has operating leases for corporate offices, warehouses, vehicles, and other equipment, with remaining lease terms of **1 to 5 years**[77](index=77&type=chunk) - As of September 30, 2020, the weighted average remaining lease term for operating leases was **2 years**, with a weighted average discount rate of **1.2%**[77](index=77&type=chunk) Future Minimum Lease Payments for Operating Leases (as of September 30, 2020) | Year ending December 31, | Amount | | :--- | :--- | | 2020 (excluding 9 months ended Sep 30, 2020) | $394,431 | | 2021 | $1,345,977 | | 2022 | $825,645 | | 2023 | $268,705 | | 2024 | $32,956 | | Thereafter | $5,951 | | Total future minimum lease payments | $2,873,665 | | Less imputed interest | $(24,182) | | Total | $2,849,483 | [(16) Acquisitions](index=24&type=section&id=(16)%20Acquisitions) - On April 3, 2020, the Company acquired Vaporsens, Inc for **$10.6 million** (stock purchase), funded with **$7.1 million cash** and **$3.5 million common stock**, adding nanofiber chemical sensing R&D to its 'Other' segment[79](index=79&type=chunk) Vaporsens Acquisition - Fair Values of Assets Acquired and Liabilities Assumed (April 3, 2020) | Item | Fair Value | | :--- | :--- | | Current Assets | $435,722 | | Personal Property | $562,840 | | Technology Licenses | $245,335 | | In-Process R&D | $11,000,000 | | Goodwill | $3,850,711 | | Total assets acquired | $16,094,608 | | Current liabilities | $255,522 | | Deferred Tax Liability | $2,220,086 | | Total Liabilities assumed | $2,475,608 | | Net Assets Acquired | $13,619,000 | - On September 18, 2020, the Company acquired Air-Craftglass, a Belgian company specializing in R&D for aircraft windows, for an initial cash payment of **$1.1 million**, also classified within the 'Other' segment[82](index=82&type=chunk)[83](index=83&type=chunk) - Acquisition-related costs of approximately **$600,000** were incurred and expensed through September 30, 2020, in 'Selling, general & administrative'[85](index=85&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial performance, condition, business updates, and future outlook [RESULTS OF OPERATIONS: THIRD QUARTER 2020 VERSUS THIRD QUARTER 2019](index=26&type=section&id=RESULTS%20OF%20OPERATIONS%3A%20THIRD%20QUARTER%202020%20VERSUS%20THIRD%20QUARTER%202019) - Net sales for Q3 2020 decreased by **1% ($3.1 million)** compared to Q3 2019, while automotive net sales remained strong at **$464.7 million** despite a **3% decrease** in interior auto-dimming mirror unit shipments, driven by Full Display Mirror product growth[86](index=86&type=chunk)[87](index=87&type=chunk) Auto-Dimming Mirror Unit Shipments (Q3 2020 vs Q3 2019, in thousands) | Category | 2020 | 2019 | % Change | | :--- | :--- | :--- | :--- | | Total North American Mirror Units | 3,638 | 3,551 | 2% | | Total International Mirror Units | 6,921 | 7,290 | (5)% | | Total Auto-Dimming Mirror Units | 10,559 | 10,841 | (3)% | - Other net sales decreased by **26% to $10.0 million**, primarily due to a **52% decline** in variable dimmable aircraft windows sales, partially offset by a **7% increase** in fire protection sales[89](index=89&type=chunk) - Cost of goods sold as a percentage of net sales decreased to **60.3% (from 62.3%)**, positively impacted by **$35 million** in annualized structural cost reductions, purchasing cost reductions, and tariff improvements, which offset annual customer price reductions[90](index=90&type=chunk)[91](index=91&type=chunk) - Total operating expenses decreased by **5% ($2.8 million) to $49.4 million**, driven by reductions in wages and discretionary spending[93](index=93&type=chunk) Key Financial Metrics (Q3 2020 vs Q3 2019) | Metric | 2020 | 2019 | % Change | | :--- | :--- | :--- | :--- | | Net Income | $117.1 million | $111.9 million | 4.7% | | Diluted EPS | $0.48 | $0.44 | 9.1% | | Effective Tax Rate | 18.1% | 15.0% | 3.1 ppt | | Income Tax Expense | $25.8 million | $19.7 million | 31.0% | [NINE MONTHS ENDED SEPTEMBER 30, 2020 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 2019](index=27&type=section&id=NINE%20MONTHS%20ENDED%20SEPTEMBER%2030%2C%202020%20VERSUS%20NINE%20MONTHS%20ENDED%20SEPTEMBER%2030%2C%202019) - Net Sales for the nine months ended September 30, 2020, decreased by **18% ($256.7 million)** compared to the same period in 2019, with automotive net sales down **18% to $1.13 billion** due to a **17% decrease** in automotive mirror unit shipments[96](index=96&type=chunk)[97](index=97&type=chunk) - Cost of goods sold as a percentage of net sales increased to **66.4% (from 62.8%)**, primarily due to the inability to leverage fixed overhead during COVID-19 related shutdowns and annual customer price reductions, partially offset by improvements in product mix (Full Display Mirror), purchasing, and structural cost reductions[98](index=98&type=chunk) - Net income decreased by **37% ($120.9 million) to $204.2 million**, and diluted EPS decreased to **$0.82 (from $1.26)**, primarily as a result of the COVID-19 pandemic and related shutdowns[102](index=102&type=chunk)[103](index=103&type=chunk) Key Financial Metrics (Nine Months Ended September 30, 2020 vs 2019) | Metric | 2020 | 2019 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,158.3 million | $1,415.1 million | -18.1% | | Net Income | $204.2 million | $325.1 million | -37.2% | | Diluted EPS | $0.82 | $1.26 | -34.9% | | Effective Tax Rate | 17.1% | 15.9% | 1.2 ppt | | E, R & D expenses | Increased 1% ($0.6 million) | | | [FINANCIAL CONDITION](index=29&type=section&id=FINANCIAL%20CONDITION) - Cash and cash equivalents increased by **$104.2 million to $400.5 million** as of September 30, 2020, driven by operating cash flows and a **$75 million line of credit draw-down**, partially offset by share repurchases, dividends, capital expenditures, and **$50 million line of credit repayment**[104](index=104&type=chunk) Working Capital and Long-Term Investments | Metric | Sep 30, 2020 | Dec 31, 2019 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Working Capital | $738,829,396 | $778,530,092 | $(39,700,696) | -5.10% | | Long Term Investments | $159,011,362 | $139,909,323 | $19,102,039 | 13.65% | | Total | $897,840,758 | $918,439,415 | $(20,598,657) | -2.24% | - Capital expenditures for the nine months ended September 30, 2020, were approximately **$37.0 million**, down from **$58.3 million** in the prior year, reflecting spending containment strategies[112](index=112&type=chunk) - The Company repurchased **1,175,756 shares in Q3 2020** and **8,194,788 shares in 9M 2020** under its share repurchase plan, with **11,870,531 shares remaining available**[116](index=116&type=chunk) [BUSINESS UPDATE](index=30&type=section&id=BUSINESS%20UPDATE) - For Q3 2020, net sales decreased by **1%** compared to a **4% decline** in global light vehicle production, with revenue out-performance largely due to the success of the Full Display Mirror®[117](index=117&type=chunk) - **23 net new nameplates** launched in Q3 2020 for auto-dimming mirrors and advanced electronic features, with approximately **50% including advanced features** like HomeLink®, Integrated Toll Module®, and Full Display Mirror®[117](index=117&type=chunk) [PRODUCT UPDATE](index=30&type=section&id=PRODUCT%20UPDATE) - The Full Display Mirror® (FDM) is shipping to **eight automaker customers on 50 nameplates**, with **18 nameplates launched in 2020**, including the first FDM with Digital Video Recording (DVR) capability for the Toyota Harrier[118](index=118&type=chunk)[119](index=119&type=chunk) - The Company's three-camera rear vision system (CMS) streams video to the FDM, and a collaboration with Aston Martin was announced in January 2020; regulatory discussions for CMS to replace mirrors are ongoing in the U.S[119](index=119&type=chunk)[120](index=120&type=chunk) - The Integrated Toll Module® (ITM) is shipping on **nine Audi platforms**, with an initial launch at a second OEM targeted for late 2020, and was honored with an Automotive News PACE Award[123](index=123&type=chunk) - The Company is providing variably dimmable windows for the **Boeing 787 Dreamliner and 777X**, and Airbus will also offer them starting late 2020[124](index=124&type=chunk) - A new intelligent lighting technology for medical applications, co-developed with Mayo Clinic, is in preparation for clinical trials, estimated to take **18 to 24 months** before commercial availability[125](index=125&type=chunk)[126](index=126&type=chunk) [OTHER](index=34&type=section&id=OTHER) - Automotive revenues constitute approximately **97% - 98%** of the Company's total revenue[127](index=127&type=chunk) - The Company continues to experience pricing pressure from automotive customers and competitors, which puts downward pressure on sales and profit margins, though efforts are made to offset this with cost reductions and productivity improvements[128](index=128&type=chunk) - The Company is affected by uncertain economic conditions and the **COVID-19 pandemic**, which can reduce demand for its products[129](index=129&type=chunk) - The Company believes its patents and trade secrets provide a competitive advantage in dimmable devices, electronics, and other features for the automotive, aerospace, and medical industries[130](index=130&type=chunk) [OUTLOOK](index=36&type=section&id=OUTLOOK) Light Vehicle Production Forecast (IHS Markit mid-October 2020) | Region | Q4 2020 % Change (YoY) | Calendar Year 2020 % Change (YoY) | Calendar Year 2021 % Change (YoY) | | :--- | :--- | :--- | :--- | | North America | (1)% | (20)% | 22% | | Europe | (1)% | (23)% | 16% | | Japan and Korea | (3)% | (15)% | 7% | | China | (4)% | (7)% | 6% | | Total Light Vehicle Production | (2)% | (16)% | 12% | Second Half 2020 Guidance Estimates | Metric | Estimate | | :--- | :--- | | Top line revenue | $940 - $960 million | | Gross margin | 39% - 40% | | Operating expenses | $95 - $100 million | | Capital expenditures | $25 - $30 million | | Depreciation and amortization | $50 - $55 million | | Effective annual tax rate | 16% - 17% | - The Company estimates that revenue for calendar year 2021 will be approximately **15% - 20% higher** than estimated revenue in calendar year 2020, despite ongoing macroeconomic uncertainties and the impact of the COVID-19 pandemic[142](index=142&type=chunk) - The Company has **11.9 million shares remaining available for repurchase** under its previously announced share repurchase plan and will consider the appropriateness of future repurchases based on macroeconomic events and market trends[141](index=141&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=38&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) - The preparation of financial statements requires management to make estimates and assumptions, which are evaluated on an ongoing basis[143](index=143&type=chunk) - Historically, actual results have not been materially different from the Company's estimates, but may differ under different assumptions or conditions[143](index=143&type=chunk) - Critical accounting policies are detailed in the Company's 2019 Annual Report on Form 10-K[144](index=144&type=chunk) [Item 3. Quantitative And Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20And%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the Company's exposure to foreign exchange, interest rate, and other market risks - The Company is subject to market risk exposures, including **foreign exchange rate risk** and **interest rate risk**[145](index=145&type=chunk) - Fluctuating interest rates could negatively impact financial performance due to outstanding debt and potential losses on fixed income investments[145](index=145&type=chunk) - Uncertain economic conditions in North American and foreign markets, exacerbated by the **COVID-19 pandemic**, have reduced and will continue to reduce demand for the Company's products[146](index=146&type=chunk) [Item 4. Controls And Procedures](index=38&type=section&id=Item%204.%20Controls%20And%20Procedures) This section confirms the effectiveness of disclosure controls and procedures and reports no material changes in internal controls [Evaluation of Disclosure Controls and Procedures](index=38&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - The Company's Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of disclosure controls and procedures as of September 30, 2020[147](index=147&type=chunk) - They concluded that as of that date, the Company's disclosure controls and procedures were **effective**[147](index=147&type=chunk) [Changes in Internal Control Over Financial Reporting](index=38&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - There were **no changes** in the Company's internal control over financial reporting during the quarter ended September 30, 2020, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[148](index=148&type=chunk) [SAFE HARBOR STATEMENT](index=38&type=section&id=SAFE%20HARBOR%20STATEMENT) - This report contains forward-looking statements subject to risks and uncertainties, including changes in market conditions, competition, raw material shortages, currency fluctuations, regulatory changes, litigation, and the length and severity of the **COVID-19 pandemic**[149](index=149&type=chunk)[151](index=151&type=chunk) - Several executives, including the President and CEO, CFO, VP of Sales, and CTO, entered into **Rule 10b5-1 stock trading plans** in November 2020 for selling shares acquired from vesting restricted shares and exercising stock options[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - The Compensation Committee is assessing potential changes to officer compensation to ensure proper incentives, given the significant impact of macroeconomic factors and industry conditions (like decreased light vehicle production due to COVID-19) on performance metrics[158](index=158&type=chunk)[159](index=159&type=chunk) [PART II — OTHER INFORMATION](index=42&type=section&id=Part%20II%20-%20Other%20Information) This part contains information on risk factors, share repurchases, and other required disclosures for the period [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section highlights significant risk factors, emphasizing the material adverse effects of the COVID-19 pandemic - The **COVID-19 pandemic** has significantly impacted worldwide economic and industry conditions, and has had and may continue to have a **material adverse effect** on the Company's business, financial condition, and results of operations[162](index=162&type=chunk) - The full extent of the pandemic's effect remains **highly uncertain**, depending on its duration, severity, and governmental actions, which could lead to work stoppages, quarantines, and decreased customer demand[163](index=163&type=chunk) - The overall negative financial impact is **material, not fully known**, and expected to last for an extended period[164](index=164&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's share repurchase activity during the third quarter and first nine months of 2020 [Issuer Purchase of Equity Securities](index=42&type=section&id=Issuer%20Purchase%20of%20Equity%20Securities) - The Company repurchased **1,175,756 shares** of common stock during the third quarter of 2020 under its share repurchase plan[165](index=165&type=chunk) - For the nine months ended September 30, 2020, the Company repurchased a total of **8,194,788 shares**[165](index=165&type=chunk) - As of September 30, 2020, **11,870,531 shares remained available** for repurchase under the plan[165](index=165&type=chunk) Summary of Share Repurchase Activity (Nine Months Ended September 30, 2020) | Period | Total Number of Shares Purchased | Weighted Average Price Paid Per Share | | :--- | :--- | :--- | | 1st Quarter 2020 Total | 7,019,032 | $25.48 | | 2nd Quarter 2020 Total | — | — | | 3rd Quarter 2020 Total | 1,175,756 | $26.93 | | 2020 Total | 8,194,788 | $25.68 | [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including required CEO and CFO certifications [Signatures](index=43&type=section&id=Signatures) - The report was signed on November 5, 2020, by Steven R Downing, President and Chief Executive Officer, and Kevin C Nash, Vice President, Finance, Chief Financial Officer and Treasurer[171](index=171&type=chunk) [Exhibit Index](index=44&type=section&id=Exhibit%20Index) - The exhibit index includes Certificates of the Chief Executive Officer and Chief Financial Officer pursuant to **Sections 302 and 906 of the Sarbanes-Oxley Act of 2002**[173](index=173&type=chunk) - It also lists Inline XBRL Instance Document and Taxonomy Extension Schema, Calculation, Definition, Label, and Presentation Linkbases[173](index=173&type=chunk)

Gentex Corporation (NASDAQ:GNTX) Q3 2020 Earnings Conference Call October 23, 2020 9:30 AM ET Company Participants Josh O'Berski - Director of Investor Relations Steve Downing - President & Chief Executive Officer Kevin Nash - Vice President of Finance & Chief Financial Officer Neil Boehm - Vice President of Engineering & Chief Technology Officer Conference Call Participants James Picariello - KeyBanc Capital Markets David Kelley - Jefferies John Murphy - BoA Ryan Brinkman - JPMorgan Mark Delaney - Goldman ...

XBRL UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 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 jurisdict ...