GENTEX CORP

(1)Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Gentex Corporation and Subsidiaries ("Gentex" or the "Company") included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission as defined in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 270 for interim financial information, and in accordance with financial standards generally accepted in the United States of America ("GAAP"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP 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 2024 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, 2025, and the results of operations and cash flows for the interim periods presented.

(2)Adoption of New Accounting Standards

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. Under this ASU, public business entities must annually “(1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate).” This ASU is effective on a prospective basis for the Company in the fiscal year ending December 31, 2025 and will result in additional disclosures being included in the consolidated financial statements for the Company's Form 10-K for the year ended December 31, 2025.

In March 2024, the Securities and Exchange Commission ("SEC") issued Final Rule No. 33-11275, "The Enhancement and Standardization of Climate-Related Disclosures for Investors." If such rule becomes effective, the rule will require disclosure of climate-related information outside of the audited financial statements and disclosure in the footnotes to such financial statements addressing specified financial statement effects of severe weather events and other natural conditions above certain financial thresholds, certain carbon offsets and renewable energy credits or certificates, if material. Such disclosure requirements were scheduled to begin phasing in for fiscal years beginning on or after January 1, 2025. On April 4, 2024, the SEC exercised its discretion to voluntarily stay the effective date of the final rules pending completion of certain judicial review. The SEC has signaled that it may not move forward with these rules. The Company continues to evaluate the impact of adopting these rules and to monitor the status of the related legal challenges and position of the SEC with respect to the foregoing.

In November 2024, the FASB issued ASU No. 2024-03, "Disaggregation of Income Statement Expenses (Subtopic 220-40)." The ASU requires public business entities to disaggregate, in a tabular presentation, certain income statement expenses into different categories, such as purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Companies have the option to apply the guidance either on a retrospective or prospective basis, and early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on the consolidated financial statements and related disclosures. In January 2025, the FASB issued ASU No. 2025-01, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date." This ASU amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity ("VIE"), which provides clarifying guidance on determining the accounting acquirer in certain transactions involving VIE's. The update aims to improve consistency and comparability in financial reporting. The guidance will be effective for annual periods beginning after December 15, 2026, including interim periods within those annual periods. Early adoption is permitted. Upon adoption, the guidance will be applied prospectively. The Company is currently evaluating the provisions of the guidance and the impact on its future consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which introduces a practical expedient for the application of the current expected credit loss model to current accounts receivable and contract assets in which all entities can assume that current conditions as of the balance sheet date do not change for the remaining life of the assets. This ASU is effective for annual periods beginning after December 15, 2025, and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This ASU updates the cost capitalization threshold for internal-use software development costs by removing all references to software project development stages and providing new guidance on how to evaluate whether the probable-to-complete recognition threshold has been met. ASU 2025-06, which can be applied prospectively, retrospectively, or with a modified transition approach, is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures.

(3)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 carrying value of Goodwill is as follows:

In addition to annual impairment testing, which is performed as of the first day of the Company's 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. No such events or circumstances that might negatively impact the key assumptions were observed in the third quarter of 2025 and, as such, nothing indicated 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, Inc. ("Vaporsens") and Argil Inc. ("Argil"), 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.

Amortization expense of patents and intangible assets was approximately $4.6 million and $13.9 million during the three and nine months ended September 30, 2025, respectively, compared to approximately $4.5 million and $13.4 million for the three and nine months ended September 30, 2024, respectively.

Excluding the impact of any future acquisitions, the Company estimates amortization expense for the remainder of the year ending December 31, 2025 to be approximately $1.3 million, and for each of the years ending December 31, 2026, December 31, 2027, December 31, 2028, and December 31, 2029 to be approximately $4 million.

(4)Investments

Available for sale securities

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.

On December 31, 2024, the Company held a total of 6,463,808 shares of VOXX International Corporation ("VOXX") Class A Common Stock. The VOXX shares held by the Company as of December 31, 2024 were publicly traded, had a readily determinable fair market value, and were considered Level 1 assets. The Company accounted for the VOXX investment in accordance with ASC 323 –Investments – Equity Method and Joint Venture, with the election to use the Fair Value Option under ASC 825 -Fair Value. As a result of this election, changes in fair value of the shares were recorded in Investment income, net, in the Unaudited Condensed Consolidated Statements of Income prior to April 1, 2025. The Company recorded a gain of $0.8 million during the nine months ended September 30, 2025 within Investment income, net, in the accompanying Unaudited Condensed Consolidated Statements of Income related to its VOXX investment. During the three and nine months ended September 30, 2024, the Company recorded a gain of $14.9 million and a loss of $9.0 million, respectively, related to this investment.

On April 1, 2025, the Company completed its previously announced merger of VOXX pursuant to that certain Agreement and Plan of Merger dated as of December 17, 2024 (the "Merger Agreement"), acquiring all of the issued and outstanding shares of VOXX common stock not already owned by the Company for a purchase price of $7.50 per share. The Company's investment in VOXX has been included in the purchase price of the entity pursuant to step-acquisition accounting under ASC 805, Business Combinations (see Note 16).

Equity Method Investment - ASA

The Company has a 50% non-controlling ownership interest in ASA Electronics, LLC and Subsidiary ("ASA"), that was obtained in conjunction with the acquisition of VOXX on April 1, 2025 (see Note 16) and is accounted for in accordance with ASC 323, Investments – Equity Method and Joint Venture. ASA acts as a distributor of mobile electronics, specifically designed for niche markets, including: RV's; buses; and commercial, heavy duty, agricultural, construction, powersport, and marine vehicles. ASC 810, Consolidation, requires the Company to evaluate non-consolidated entities periodically, and as circumstances change, to determine if an implied controlling interest exists. In conjunction with the acquisition of VOXX on April 1, 2025, the Company evaluated this equity method investment and concluded that ASA is not a variable interest entity. The balance of the Company's investment in ASA as of September 30, 2025, was $19.1 million and is included in Long-term investments on the accompanying Condensed Consolidated Balance Sheet.

Technology Investments

The Company also periodically makes strategic investments in the non-marketable debt or equity securities of other non-consolidated third parties ("Technology Investments"). Such Technology Investments totaled approximately $144.1 million as of September 30, 2025, of which $142.4 million and $1.7 million are recorded in long-term investments and short-term investments, respectively, on the Unaudited Condensed Consolidated Balance Sheet. Such Technology Investments totaled approximately $155.9 million as of December 31, 2024, of which $149.9 million and $6.0 million are recorded in long-term investments and short-term investments, respectively, on the accompanying Condensed Consolidated Balance Sheets. Depending on the form of investment, and the degree of influence the Company has over the investee, the Company primarily accounts for the Technology Investments in accordance with ASC 321, Investments - Equity Securities or ASC 323, Investments – Equity Method and Joint Venture. The Company accounts for equity securities in non-controlled affiliates through which the Company exercises significant influence but does not have control over the investee under the equity method, with the Company’s share of the earnings or losses of non-controlled affiliates recognized within Other (loss) income, net, in the Company's accompanying Unaudited Condensed Consolidated Statements of Income. All other Technology Investments that the Company holds are primarily accounted for under the measurement alternative of ASC 321. Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

During the three and nine months ended September 30, 2025, the Company recorded other-than-temporary impairment charges of $2.2 million and $8.4 million, respectively, related to two of its technology investments within Investment income, net, on the accompanying Unaudited Condensed Consolidated Statement of Income. During the third quarter of 2025, the Company determined that a triggering event had taken place related to its New Compliance B.V. investment following a funding round conducted by the investee at a per-share price below the Company's carrying value of this investment. As a result, the Company recorded an impairment charge of $2.2 million for the three and nine months ended September 30, 2025 to reduce the carrying value of the investment to an amount consistent with the value implied by the investee's recent financing. During the second quarter of 2025, the Company determined that a triggering event had taken place related to its investment in Green Marbles, LLC, as a result of a deterioration in financial performance of the investee. The Company performed an impairment analysis of this equity method investment and recorded a charge of $6.2 million for the nine months ended September 30, 2025. The fair value of the investment was estimated using a discounted cash flow model. The Company's assumptions in estimating the fair value of Green Marbles, LLC utilized Level 3 inputs, including projected revenue growth, gross margins, EBITDA margins, and weighted average costs of capital. Based on the foregoing, the Company determined that the fair values of these equity method investments were below their carrying values at the respective quarter end dates and does not expect the fair values to recover under current conditions.

From time to time, the Company makes loans in the ordinary course of business to certain of its technology investees. Such loans vary in length and are interest bearing, and as such are not deemed to be additional investments in the technology investees as the parties intend for the loans to be repaid. These loans are classified within Prepaid expenses and other and Patents and other assets, net, on the accompanying Unaudited Condensed Consolidated Balance Sheets based on the maturity dates of the loans. During the third quarter of 2025, the Company established an allowance for credit losses for these loans receivable in accordance with ASC 326, Financial Instruments - Credit Losses. This allowance reflects the Company's estimate of expected credit losses over the contractual life of the loans, considering historical loss experience, current conditions, and reasonable and supportable forecasts. The estimate is developed using a combination of quantitative data and qualitative factors, including borrower creditworthiness, loan-specific risk characteristics, macroeconomic trends, and other relevant information, all of which is updated quarterly. The allowance is adjusted through a provision for credit losses in the Company's Unaudited Condensed Consolidated Statements of Income. For the three and nine months ended September 30, 2025, the Company recorded an increase to the credit loss allowance of $4.8 million. The balance of the loans included in Prepaid expenses and other on the accompanying Unaudited Condensed Consolidated Balance Sheet at September 30, 2025 was $15.0 million, net of credit loss allowance. The balance of the loans included in Patents and other assets, net, on the accompanying Unaudited Condensed Consolidated Balance Sheet at September 30, 2025 was $8.1 million, net of credit loss allowance.

Assets or liabilities that have recurring fair value measurements are shown below as of September 30, 2025 and December 31, 2024.

The amortized cost, unrealized gains and losses, and market value of investment securities are shown below as of September 30, 2025 and December 31, 2024.

Unrealized losses on available-for-sale securities as of September 30, 2025, are as follows:

Unrealized losses on available-for-sale securities as of December 31, 2024, are as follows:

The Company utilizes the guidance provided by ASC 326 -Financial Instruments - Credit Losses, which provides an accounting model for purchased financial assets with credit deterioration since their origination, to determine whether any of the available-for-sale debt securities held by the Company are impaired. No such 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, 2025 have contractual maturities as follows:

(5)Inventories, net

Inventories consisted of the following at the respective balance sheet dates:

(6)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, 2025 and September 30, 2024:

(7)Stock-Based Compensation Plans

As of September 30, 2025, the Company hadtwo 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.

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, 2024, for additional information related to the Prior Plans.

The Company recognized total compensation expense for share-based payments of $10.6 million and $27.0 million for the three and nine months ended September 30, 2025, respectively. The Company recognized compensation expense for share-based payments of $9.6 million and $31.0 million for the three and nine months ended September 30, 2024, 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 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, 2025,12,518,406 share awards have been made under the Plan, resulting in 35,103,596 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.

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 afterone tofive years and expire after five toten years. As of September 30, 2025, there was $4.2 million 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:

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.

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 exceedten years under the terms of such plans. As of September 30, 2025, the Company had unearned stock-based compensation of $54.6 million associated with the restricted stock grants issued under the 2019 Omnibus Plan and the Second 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 for the three and nine months ended September 30, 2025 was $6.1 million and $16.9 million, respectively. Compensation expense from restricted stock grants for the three and nine months ended September 30, 2024 was $5.9 million and $19.5 million, 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, 2025, the Company had unearned stock-based compensation of $11.3 million 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 for the three and nine months ended September 30, 2025 was $2.7 million and $4.7 million, respectively. Compensation expense related to these performance share grants for the three and nine months ended September 30, 2024 was $1.6 million and $5.4 million, 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 afour-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 for the three and nine months ended September 30, 2025 was $0.5 million and $1.4 million, respectively. Compensation expense related to these retention grants for the three and nine months ended September 30, 2024 was $0.5 million and $1.3 million, respectively.

Employee Stock Purchase Plan

The 2022 Gentex Corporation Employee Stock Purchase Plan covering 2,000,000 shares of common stock was approved by shareholders 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, Compensation - Stock Compensation, the 15% discounted value is recognized as compensation expense. As of September 30, 2025, the Company has issued 730,907 shares under this plan.

(8)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 securities, foreign currency translation adjustments, and derivative instruments.

The following table presents the net changes in the Company's accumulated other comprehensive loss by component (all amounts shown are net of tax):

The following table presents details of reclassifications out of accumulated other comprehensive loss for the three and nine months ended September 30, 2025 and 2024:

(9)Debt and Financing Arrangements

On February 21, 2023, the Company entered into a credit agreement with PNC as the administrative agent and sole lender, as amended (the "Credit Agreement"), that provides for, among other things, athree-year unsecured revolving credit facility with a borrowing capacity of up to $250.0 million (the "Revolver") that matures on February 21, 2026. 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 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, 2025, there wasno outstanding balance on the Revolver. On October 2, 2025, the Company, in the ordinary course of business, amended the Credit Agreement, increasing the borrowing capacity of the Revolver to $350.0 million, and extending the maturity date three years through October 1, 2028. All other sub-limits under the Credit Agreement remain the same.

As of September 30, 2025, the Company is in compliance with its covenants under the Credit Agreement.

The Company's subsidiary, VOXX, which was acquired on April 1, 2025 (see Note 16), has a loan agreement with the shareholders of its joint venture in Onkyo Technology KK ("Onkyo"). The loan balance outstanding at September 30, 2025 was $4.0 million and is included in Short-term debt on the accompanying Unaudited Condensed Consolidated Balance Sheet, representing the portion of the loan payable to the joint venture partner. All amounts outstanding under the loan will mature and become payable on September 8, 2031. The loan may be prepaid subject to the approval of the board of directors of the joint venture and must be repaid if either a put or call option is exercised in accordance with the joint venture agreement. The rate of interest for the shareholder loan is 2.5% and the loan is secured by a second priority lien on and secured interest in all assets of Onkyo.

(10)Equity

The decrease in common stock for the nine months ended September 30, 2025, was primarily due to the repurchases of 9.8 million shares, partially offset by the issuance of 1.6 million shares of the Company’s common stock, net of cancellations, under the Company’s stock-based compensation plans. The total net decrease for the nine months ended September 30, 2025, was 8.3 million shares.

The Company recorded a cash dividend of $0.120 per share during the third quarter of 2025, as compared to a cash dividend of $0.120 per share during the third quarter of 2024. The third quarter 2025 dividend of $26.3 million was declared on August 22, 2025, and was paid on October 22, 2025.

(11)Contingencies

The Company is periodically involved in legal proceedings, legal actions and claims arising in the normal course of business, including proceedings relating to, for example, 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.

On April 1, 2025, the Company completed its acquisition of VOXX (see Note 16). As part of the acquisition, VOXX as acquired, maintained responsibility for a legal proceeding in which VOXX was named a defendant prior to the acquisition date and the Company recorded a provisional liability as part of the purchase price allocation, based on a preliminary estimate of the fair value of the assumed obligation. The Company will continue to monitor the status of such litigation and adjust this provisional liability, as appropriate, as additional information becomes available or the matter is resolved. Any changes in such liability will be reflected as a purchase price allocation adjustment during the measurement period, or as a charge to earnings if outside the measurement period.

(12)Segment Reporting

ASC 280, Segment Reporting, requires that a public business entity report financial and descriptive information about its reportable operating segments, subject to certain aggregation criteria and quantitative thresholds. Operating segments are defined by ASC 280 as components of a public business entity about which separate financial information is available that is evaluated regularly by the chief operating decision-maker ("CODM") in deciding how to allocate resources and in assessing performance. The Company's CODM is its Chief Executive Officer. The CODM evaluates performance and allocates resources based upon a number of factors, including the nature of the business, relevant industry, and profitability of the same, with the primary profit measure being income (loss) from operations of each segment. The CODM uses this information to evaluate the profitability of the Company's reportable segments and make decisions on future business plans.

In connection with the acquisition of VOXX (see Note 16), effective April 1, 2025, the Company reorganized its financial reporting into nine distinct operating segments based on its products and internal organizational structure. These operating segments are disclosed by the Company under three reportable segments, which are Automotive Products, Premium Audio Products, and Other. The Company's Automotive Products 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's Premium Audio Products segment designs, manufactures, markets, and distributes high quality audio equipment designed to deliver superior sound quality and performance, including premium loudspeakers, architectural speakers, commercial and cinema speakers, wireless and Bluetooth speakers, A/V receivers, and home theater systems. The Company's Other segment includes the operating segments of Fire Protection, Dimmable Aircraft Windows, Nanofiber, Medical, Aftermarket, Consumer Electronics, and Biometrics. As there was no change to legacy operating segments of Gentex or how the legacy operations are organized and evaluated by the CODM, the Company determined it is not necessary to recast its prior year segment presentation or perform goodwill impairment testing.

The segments share many common resources, infrastructures, and assets in the normal course of business. Thus, the Company does not report assets or capital expenditures by segment to the CODM.

The table below presents net sales and the significant expense categories that are included in reportable segment operating profit, which are regularly provided to the CODM:

(13)Income Taxes

The effective tax rate was 16.3% for the three months ended September 30, 2025, compared to an effective tax rate of 15.7% for the three months ended September 30, 2024. The effective tax rate was 16.7% for the nine months ended September 30, 2025, compared to an effective tax rate of 15.4% for the same period in 2024. Change in the effective tax rates during these periods were driven by lower tax benefits on stock-based compensation in the 2025 periods, compared to the 2024 periods. Generally, effective tax rates for these periods differ from statutory federal income tax rates due to provisions for state and local income taxes, the foreign-derived intangible income tax deduction, and research and development tax credits.

(14)Revenue

The following table shows the Company’s Automotive revenue, Premium Audio revenue and Other revenue disaggregated by geographical location for Automotive and Premium Audio Products for the three and nine months ended September 30, 2025 and 2024 (which did not include VOXX), respectively:

Revenue by geographic area may fluctuate based on many factors, including: exposure to local economic, political, and labor conditions; global supply chain constraints; unexpected changes in laws, regulations, and trade, 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; tariffs, quotas, customs, and other import or export restrictions; and other trade barriers.

The following table disaggregates the Company’s Automotive, Premium Audio, and Other revenue by major source for the three and nine months ended September 30, 2025 and 2024 (which did not include VOXX), respectively:

Sales Incentives

In conjunction with the acquisition of VOXX on April 1, 2025, the Company assumed liabilities for sales incentives valued at $13.4 million. Sales incentives are offered to customers in the form of (1) co-operative advertising allowances; (2) market development funds; (3) volume incentive rebates; and (4) other trade allowances. The Company accounts for sales incentives in accordance with ASC 606 "Revenue from Contracts with Customers" ("ASC 606"). These sales incentives represent variable consideration provided to customers. Depending on the specific facts and circumstances, either the most likely amount or expected value methods are utilized to estimate the effect of uncertainty on the amount of variable consideration to which the Company would be entitled. The most likely amount method considers the single most likely amount from a range of possible consideration amounts, while the expected value method is the sum of the probability-weighted amounts in a range of possible consideration amounts. Both methods are based upon the contractual terms of the incentives and historical experience with each customer. Except for other trade allowances, all sales incentives require the customer to purchase the Company's products during a specified period of time. All sales incentives require customers to claim the sales incentive within a certain time period (referred to as the "claim period") and claims are settled either by the customer claiming a deduction against an outstanding account receivable or by the customer requesting a cash payout. All costs associated with sales incentives are classified as a reduction of net sales. Although the Company makes its best estimate of its sales incentive liability, many factors, including significant unanticipated changes in the purchasing volume of its customers and the lack of claims made by customers, could have a significant impact on the sales incentives liability and reported operating results. The balance of accrued sales incentives at September 30, 2025 was $14.9 million and is included within Accrued liabilities on the Unaudited Condensed Consolidated Balance Sheet.

(15)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" on the Unaudited Condensed Consolidated Balance Sheets. The leases have remaining lease terms of less than 1 year to 7 years. The weighted average remaining lease term for operating leases as of September 30, 2025, was 3 years, with a weighted average discount rate of 5.1%.

Future minimum lease payments for operating leases as of September 30, 2025 were as follows:

(16)Acquisitions

BioConnect Inc.

On July 1, 2025, in the ordinary course of business, the Company completed its acquisition of BioConnect Inc. ("BioConnect"), for a purchase price of $13.0 million, subject to adjustment for working capital plus related transaction fees and expenses. BioConnect is a multi-modal biometric authentication platform provider for access control, and the Company intends to utilize the acquisition to expand its reach in the biometric industry. The acquisition was accounted for under the acquisition method of accounting pursuant to ASC 805, Business Combinations("ASC 805"), and accordingly, the results of operations and cash flows for BioConnect have been included in the Company's Unaudited Condensed Consolidated Financial Statements since July 1, 2025.

The following summarizes the preliminary allocation of the BioConnect purchase price based on the fair value of the assets acquired and liabilities assumed, as of July 1, 2025:

The preliminary fair values of the assets acquired were estimated with the assistance of a third-party valuation expert. The purchase price allocation above is preliminary, given the relatively recent timing of the BioConnect acquisition. The Company is in the process of refining the valuation of acquired assets and assumed liabilities, including net working capital and intangible assets, and expects to finalize the purchase price allocation no later than one year after the acquisition date, which is July 1, 2026, in accordance with applicable guidance. Finalization of the valuation during the measurement period could result in significant changes in the amounts recorded for the acquisition date fair value. The goodwill recognized in this acquisition is primarily attributable to the assembled workforce and expected synergies from the integration of the acquired business. All of the goodwill acquired in connection with the BioConnect acquisition has been allocated to the Company's biometrics business. The amount of goodwill that is deductible for tax purposes has not been finalized as of September 30, 2025.

Net sales attributable to BioConnect in the Company's Unaudited Condensed Consolidated Statement of Income for the three and nine months ended September 30, 2025, were $2.5 million. Net income attributable to BioConnect for the three and nine months ended September 30, 2025, was $0.4 million. During the three and nine months ended September 30, 2025, the Company incurred $0.2 million and $0.4 million, respectively in acquisition costs related to the BioConnect acquisition, which has been expensed as incurred in the "Selling, general & administrative" section of its Unaudited Condensed Consolidated Statement of Income. Since July 1, 2025, BioConnect's results of operations are included in the Unaudited Condensed Consolidated Financial Statements within the Biometrics operating segment, which is presented within the Company's Other reportable segment.

VOXX International Corporation

On April 1, 2025 (the "Closing Date"), the Company completed its acquisition of VOXX pursuant to the previously announced Merger Agreement. Pursuant to the terms and conditions set forth in the Merger Agreement, the Company acquired all of the issued and outstanding shares of VOXX common stock not already owned by the Company for a purchase price of $7.50 per share, resulting in VOXX becoming a wholly owned subsidiary of Gentex as of the Closing Date. Cash consideration totaling $148.3 million was paid by the Company on the Closing Date using cash on hand. The acquisition was accounted for under the acquisition method of accounting pursuant to ASC 805, Business Combinations("ASC 805"), and accordingly, the results of operations and cash flows for VOXX have been included in the Company's Unaudited Condensed Consolidated Financial Statements since the Closing Date.

Prior to obtaining a controlling interest in VOXX, the Company owned 6,463,808 shares of VOXX Class A Common Stock, or approximately 29%, and accounted for this investment as an equity method investment, as the Company had the ability to exercise significant influence, but not control, over VOXX (see Note 4). The acquisition transaction was accounted for as a business combination achieved in stages, or a step-acquisition, pursuant to ASC 805 and, as such, the Company was required to remeasure its preexisting equity interest in VOXX immediately prior to the completion of the acquisition to its estimated fair value of $48.5 million using the $7.50 per share acquisition price to determine the fair value of the equity investment. As the Company previously recorded changes in fair value of the equity method investment in Investment (loss) income, net, in the Unaudited Condensed Consolidated Statements of Income each reporting period, the fair value of the investment on the Closing Date was equal to the fair value of the investment on March 31, 2025, the date immediately prior to the acquisition, and no additional gain or loss was recorded on the Closing Date.

VOXX is a leading manufacturer and distributor of automotive OEM and aftermarket electronics, and consumer technologies for the global markets, as well as premium audio solutions through world-renowned brands such as Klipsch®, Onkyo®, and Integra®. The merger also included EyeLock LLC ("EyeLock®"), a majority-owned subsidiary of VOXX, which holds iris biometric technology through its 50% ownership interest in the BioCenturion LLC joint venture. This additional interest in BioCenturion LLC was acquired by the Company in a separate transaction as discussed below. The acquisition of VOXX is a strategic addition to the Company's portfolio of products, as VOXX's product lines will both compliment the Company's existing businesses and help the Company continue to expand in the consumer technology and connected home space. The Company has also gained all access to the EyeLock® iris biometric technology, which will provide further product applications in the Gentex automotive, aerospace, and medical markets.

The following summarizes the preliminary allocation of the purchase price based on the fair value of the assets acquired and liabilities assumed, as of the Closing Date. The fair value of the Class A Common Stock acquired through this step acquisition is included in the totals presented below:

The preliminary fair values of the assets acquired were estimated with the assistance of a third-party valuation expert. The purchase price allocation above is preliminary, given the relatively recent timing of the Closing Date. The Company is in the process of refining the valuation of acquired assets and assumed liabilities, including net working capital, real property, equity method investments, and non-controlling interests, and expects to finalize the purchase price allocation no later than one year after the acquisition date, which is April 1, 2026, in accordance with applicable guidance. Finalization of the valuation during the measurement period could result in significant changes in the amounts recorded for the acquisition date fair value. The Company recorded net measurement period adjustments totaling $12.8 million during the three and nine months ended September 30, 2025, relating primarily to the revised fair value estimates of liabilities for certain legal contingencies and employee compensation, which increased total liabilities assumed and increased goodwill. The goodwill recognized in this acquisition was attributable to the assembled workforce, expected synergies, and expanded market opportunities, none of which qualify for recognition as a separate intangible asset. All of the goodwill acquired in connection with the VOXX acquisition has been allocated to the Company's Premium Audio Products business. The amount of goodwill that is deductible for tax purposes has not been finalized as of September 30, 2025.

Net sales attributable to VOXX in the Company's Unaudited Condensed Consolidated Statement of Income for the three and nine months ended September 30, 2025 were $84.9 million and $163.8 million, respectively. The net income (loss) attributable to VOXX for the three and nine months ended September 30, 2025 was $3.7 million and $(0.3) million, respectively. During the three and nine months ended September 30, 2025, the Company incurred $0.3 million and $3.4 million, respectively, in acquisition costs related to the VOXX acquisition, which has been expensed as incurred in the "Selling, general & administrative" section of its Unaudited Condensed Consolidated Statement of Income. VOXX's results of operations are included in the consolidated financial statements of the Company within the Automotive, Premium Audio, Aftermarket, Consumer Electronics, and Biometrics operating segments. The Aftermarket, Consumer Electronics, and Biometrics operating segments are presented within the Company's Other reportable segment.

The non-controlling interests included in the net assets acquired in the transaction are comprised of a redeemable non-controlling interest in VOXX's Onkyo subsidiary, and a non-redeemable non-controlling interest in its EyeLock® subsidiary. In conjunction with VOXX's acquisition of Onkyo, a joint venture was formed between VOXX's wholly-owned Premium Audio Company ("PAC") subsidiary and its partner Sharp Corporation ("Sharp"). PAC owns 77.2% of the joint venture and has an 85.1% voting interest and Sharp owns 22.8% of the joint venture and has a 14.9% voting interest. The joint venture agreement between PAC and Sharp contains a put/call option, whereby Sharp has the right to put its interest in the joint venture back to VOXX and VOXX has the right to call Sharp’s ownership interest in the joint venture at any time after the approval of Onkyo’s annual financial statements for the year ending February 28, 2025, at a purchase price based on a formula as defined in the joint venture agreement.

The Onkyo non-controlling interest has been classified as redeemable non-controlling interest outside of equity on the accompanying Unaudited Condensed Consolidated Balance Sheet as the exercise of the put/call option is not within VOXX’s control. The following table provides the rollforward of the redeemable non-controlling interest for the nine months ended September 30, 2025:

As of April 1, 2025, the net assets acquired in the VOXX transaction also included VOXX's non-redeemable non-controlling interest in its EyeLock® subsidiary. On August 18, 2025, the Company further acquired the remaining equity interests in EyeLock®from its minority owners for cash consideration totaling $0.1 million.

GalvanEyes LLC

In November 2024, the Company, in the ordinary course of business, acquired GalvanEyes LLC ("GalvanEyes"), which is the managing partner and 50% owner of the BioCenturion joint venture with Eyelock®. The Company paid $2.9 million in cash, as well as an earnout over the following fifteen calendar years, not to exceed $15 million in the aggregate, for which the acquisition date fair value was $1.5 million. The earnout is based on adjusted earnings before interest and taxes. The Company accounted for the acquisition under the provisions of ASC 805 and consolidated GalvanEyes, and the joint venture BioCenturion, in the Company's Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 in accordance with ASC 810, Consolidation. Approximately $0.3 million and $1.4 million of combined revenue and $0.4 million and $2.2 million of combined net loss of the businesses of GalvanEyes and BioCenturion is included in the Company's Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2025, in each case respectively. GalvanEyes and BioCenturion's results of operations are included in the consolidated financial statements of the Company within its Biometrics operating segment, which is presented within the Company's Other reportable segment.

At December 31, 2024, the Company had $4.1 million in non-controlling interest related to BioCenturion. In conjunction with the acquisition of VOXX on April 1, 2025, the Company acquired VOXX's interest in BioCenturion through its majority ownership of Eyelock for cash consideration of $4.1 million. Prior to the acquisition of this additional equity interest, the Company's 50% interest in BioCenturion was accounted for as a variable interest entity for which Gentex was the primary beneficiary, and was consolidated within the Company's financial statements, with the remaining 50% interest of BioCenturion presented within non-controlling interest.