UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
(Exact name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction |
(Commission File Number) |
(IRS Employer |
||
|
|
|
|
|
|
||||
|
||||
(Address of Principal Executive Offices) |
|
(Zip Code) |
||
Registrant’s Telephone Number, Including Area Code: |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
|
|
Trading |
|
|
|
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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. ☐
Item 2.02 Results of Operations and Financial Condition.
On April 30, 2024, Gentherm Incorporated (the “Company”) publicly announced its financial results for the first quarter of 2024. A copy of the Company’s news release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On April 30, 2024 at 8:00 a.m. Eastern Time, the Company will host a conference call to discuss the first quarter of 2024 financial results. A copy of the supplemental materials that will be used during the conference call is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
The information in Items 2.02 and 7.01 herein and the attached exhibits 99.1 and 99.2 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly stated by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit 99.1 |
|
Company news release dated April 30, 2024 concerning financial results |
Exhibit 99.2 |
|
|
Exhibit 104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
GENTHERM INCORPORATED |
||
|
|
|
|
|
By: |
|
/s/ Wayne Kauffman |
|
|
|
Wayne Kauffman |
|
|
|
Senior Vice President, General Counsel and Secretary |
Date: April 30, 2024 |
|
|
|
|
|
Exhibit 99.1
Gentherm Reports 2024 First Quarter Results
Achieved 86% Year over Year Growth in Net Income
Secured $530M of Automotive New Business Awards
Reaffirms 2024 Guidance
NORTHVILLE, Michigan, April 30, 2024 /Global Newswire/ -- Gentherm (NASDAQ:THRM), the global market leader of innovative thermal management and pneumatic comfort technologies for the automotive industry and a leader in medical patient temperature management systems, today announced its financial results for the first quarter ending March 31, 2024.
First Quarter Highlights
Phil Eyler, the Company's President and CEO, said “I am proud of the Gentherm team’s solid execution to start the year. We continue to see strong demand from OEMs for our thermal comfort, massage and lumbar solutions and secured $530 million dollars of automotive new business awards, setting a record for a first quarter. Notably, we recently won a conquest high-end lumbar and massage award from General Motors for their next generation truck platform including Chevrolet Silverado and GMC Sierra. With this win, we will supply the entire suite of climate and comfort seating solutions including seat heat, CCS®, lumbar and massage as well as multifunction electronic control unit, for our largest customer, on their largest platform. Despite the volatile global production environment, revenues from our Automotive Climate and Comfort Solutions outperformed actual light vehicle production in our key markets by approximately 300 basis points.
Eyler continued, “On the profitability front, our Fit-for-Growth 2.0 initiatives enabled over 200 basis points year over year improvement in gross margin rate through supplier cost reductions, value engineering and increased productivity at the factories. Our momentum in the first quarter positions us well to continue to drive revenue growth and margin expansion in 2024.”
2024 First Quarter Financial Review
Product revenues for the first quarter of 2024 decreased by $7.6 million, or 2.1%, as compared with the prior-year period. Excluding the impact of foreign currency translation, product revenues decreased 1.3% year over year.
Automotive revenues decreased 2.3% year over year. Excluding the impact of foreign currency translation, the phasing out of the non-automotive electronics business as well as one-time benefits from recoveries and retrofits in both periods, Automotive revenues increased 0.1%. Revenues from Automotive Climate and Comfort Solutions increased 2.2% in the first quarter compared to the prior year period. According to S&P Global’s mid-April report, actual light vehicle production decreased by 0.6% in the current year’s first quarter when compared with the first quarter of 2023 in the Company’s key markets of North America, Europe, China, Japan and Korea.
|
|
Excluding the impact of foreign currency translation, Gentherm Medical revenue increased 4.7% year over year, primarily as a result of higher FilterFlo® and Astopad® sales.
See the “Revenues by Product Category” table included below for additional detail.
Gross margin rate increased to 24.9% in the current-year period, as compared with 22.3% in the prior-year period. The increase from the prior-year period was driven by Fit-for-Growth 2.0 initiatives including supplier cost reductions, value engineering activities, and net productivity at the factories as well as the non-automotive inventory charge in the prior-year period. These were partially offset by lower price recoveries relative to the prior year period and negative impact from foreign exchange.
Net research and development expenses of $22.7 million in the 2024 first quarter decreased $2.4 million, or 9.5% as compared with the prior-year period, primarily related to the reduction in resources allocated to certain battery performance solutions products.
Selling, general and administrative expenses of $40.7 million in the 2024 first quarter increased $3.7 million, or 9.9%, versus the prior-year period.The year over year increase was primarily driven by higher compensation expenses and increased investment in information technology.
Restructuring expenses of $7.2 million in the 2024 first quarter increased $6.0 million, versus the prior-year period primarily as a result of discrete restructuring activities associated with the Company’s Fit-for-Growth 2.0 initiatives.
As described more fully in the “Reconciliation of Net Income to Adjusted EBITDA” table included below, the Company recorded Adjusted EBITDA of $43.5 million in the 2024 first quarter compared with $41.5 million in the prior-year period, an increase of $2.0 million or 4.9%.
Income tax expense in the 2024 first quarter was $3.5 million, as compared with $3.7 million in the prior-year period. The effective tax rate was approximately 19% in the 2024 first quarter.
GAAP diluted earnings per share for the first quarter of 2024 was $0.47 compared with $0.24 for the prior-year period. Adjusted diluted earnings per share, excluding restructuring expenses, unrealized currency (gain) loss, non-cash purchase accounting impact, non-automotive electronics inventory (benefit) charge, acquisition and integration expenses and the tax impacts of such adjustments (see table herein), was $0.62. Adjusted diluted earnings per share in the prior-year period was $0.49.
The Company provides various non-GAAP financial measures in this release. See “Use of Non-GAAP Measures” below for additional information, including definitions, usefulness for investors and limitations, as well reconciliations below to the most directly comparable GAAP financial measures.
Guidance
The Company reaffirms its full-year 2024 guidance that was initially provided in its year-end 2023 earnings release on February 21, 2024:
|
|
Conference Call
As previously announced, Gentherm will conduct a conference call today at 8:00 am Eastern Time to review these results. The dial-in number for the call is 1-877-407-4018 (callers in the U.S.) or +1-201-689-8471 (callers outside this U.S.). The passcode for the live call is 13745957.
A live webcast and one-year archived replay of the call can be accessed on the Events page of the Investor section of Gentherm's website at www.gentherm.com.
A telephonic replay will be available at approximately two hours after the call until 11:59 pm Eastern Time on May 14, 2024. The replay can be accessed by dialing 1-844-512-2921 (callers in the U.S.), or +1-412-317-6671 (callers outside the U.S.). The passcode for the replay is 13745957.
Investor Contact
Yijing Brentano
investors@gentherm.com
248.308.1702
Media Contact
Melissa Fischer
media@gentherm.com
248.289.9702
About Gentherm
Gentherm (NASDAQ: THRM) is the global market leader of innovative thermal management and pneumatic comfort technologies for the automotive industry and a leader in medical patient temperature management systems. Automotive products include variable temperature Climate Control Seats, heated automotive interior systems (including heated seats, steering wheels, armrests and other components), battery performance solutions, cable systems, lumbar and massage comfort solutions, valve system technologies, and other electronic devices. Medical products include patient temperature management systems. The Company is also developing a number of new technologies and products that will help enable improvements to existing products and to create new product applications for existing and new markets. Gentherm has more than 14,000 employees in facilities in the United States, Germany, China, Czech Republic, Hungary, Japan, Malta, Mexico, Morocco, North Macedonia, South Korea, United Kingdom, Ukraine, and Vietnam. For more information, go to www.gentherm.com.
Forward-Looking Statements
Except for historical information contained herein, statements in this release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Gentherm Incorporated's goals, beliefs, plans and expectations about its prospects for the future and other future events. The forward-looking statements included in this release are made as of the date hereof or as of the date specified herein and are based on management's reasonable expectations and beliefs. In making these statements we rely on assumptions and analysis based on our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we consider appropriate under the circumstances. Such statements are subject to a number of important assumptions, significant risks and uncertainties (some of which are beyond our control) and other factors that may cause actual results or performance to differ materially from that described in or indicated by the forward-looking statements, including but not limited to:
|
|
The foregoing risks should be read in conjunction with the Company's reports filed with or furnished to the Securities and Exchange Commission (the “SEC”), including “Risk Factors,” in its most recent Annual Report on Form 10-K and subsequent SEC filings, for a discussion of these and other risks and uncertainties. In addition, with reasonable frequency, we have entered into business combinations, acquisitions, divestitures, strategic investments and other significant transactions. Such forward-looking statements do not include the potential impact of any such transactions that may be completed after the date hereof, each of which may present material risks to the Company’s future business and financial results.
Except as required by law, the Company expressly disclaims any obligation or undertaking to update any forward-looking statements to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
|
|
GENTHERM INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Product revenues |
|
$ |
356,015 |
|
|
$ |
363,625 |
|
Cost of sales |
|
|
267,262 |
|
|
|
282,495 |
|
Gross margin |
|
|
88,753 |
|
|
|
81,130 |
|
Operating expenses: |
|
|
|
|
|
|
||
Net research and development expenses |
|
|
22,745 |
|
|
|
25,145 |
|
Selling, general and administrative expenses |
|
|
40,721 |
|
|
|
37,042 |
|
Restructuring expenses |
|
|
7,238 |
|
|
|
1,269 |
|
Total operating expenses |
|
|
70,704 |
|
|
|
63,456 |
|
Operating income |
|
|
18,049 |
|
|
|
17,674 |
|
Interest expense, net |
|
|
(3,244 |
) |
|
|
(4,144 |
) |
Foreign currency gain (loss) |
|
|
2,549 |
|
|
|
(2,069 |
) |
Other income |
|
|
973 |
|
|
|
230 |
|
Earnings before income tax |
|
|
18,327 |
|
|
|
11,691 |
|
Income tax expense |
|
|
3,542 |
|
|
|
3,728 |
|
Net income |
|
$ |
14,785 |
|
|
$ |
7,963 |
|
Basic earnings per share |
|
$ |
0.47 |
|
|
$ |
0.24 |
|
Diluted earnings per share |
|
$ |
0.47 |
|
|
$ |
0.24 |
|
Weighted average number of shares – basic |
|
|
31,544 |
|
|
|
33,182 |
|
Weighted average number of shares – diluted |
|
|
31,691 |
|
|
|
33,386 |
|
|
|
GENTHERM INCORPORATED
REVENUE BY PRODUCT CATEGORY AND RECONCILIATION OF FOREIGN CURRENCY TRANSLATION IMPACT
(Dollars in thousands)
(Unaudited)
|
|
Three Months Ended March 31, |
|
||||||||
|
|
2024 |
|
|
2023 |
|
% Change |
|
|||
Climate Control Seat |
|
$ |
115,590 |
|
|
$ |
114,753 |
|
|
0.7 |
% |
Seat Heaters |
|
|
77,076 |
|
|
|
75,636 |
|
|
1.9 |
% |
Steering Wheel Heaters |
|
|
39,814 |
|
|
|
36,347 |
|
|
9.5 |
% |
Lumbar and Massage Comfort Solutions |
|
|
38,251 |
|
|
|
38,738 |
|
|
(1.3 |
)% |
Valve Systems |
|
|
26,625 |
|
|
|
26,994 |
|
|
(1.4 |
)% |
Automotive Cables |
|
|
21,519 |
|
|
|
20,220 |
|
|
6.4 |
% |
Battery Performance Solutions |
|
|
13,608 |
|
|
|
20,309 |
|
|
(33.0 |
)% |
Electronics |
|
|
8,185 |
|
|
|
10,970 |
|
|
(25.4 |
)% |
Other Automotive |
|
|
3,970 |
|
|
|
8,725 |
|
|
(54.5 |
)% |
Subtotal Automotive segment |
|
|
344,638 |
|
|
|
352,692 |
|
|
(2.3 |
)% |
Medical segment |
|
|
11,377 |
|
|
|
10,933 |
|
|
4.1 |
% |
Total Company |
|
$ |
356,015 |
|
|
$ |
363,625 |
|
|
(2.1 |
)% |
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation impact (a) |
|
|
(2,797 |
) |
|
|
— |
|
|
|
|
Total Company, excluding foreign |
|
$ |
358,812 |
|
|
$ |
363,625 |
|
|
(1.3 |
)% |
|
|
|
|
|
|
|
|
|
|||
(a) Foreign currency translation impacts for the Automotive segment and Medical segment were $(2,725) and $(72) respectively, for the three months ended March 31, 2024. |
|
||||||||||
|
|
GENTHERM INCORPORATED
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
AND ADJUSTED EBITDA MARGIN
(Dollars in thousands)
(Unaudited)
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Net income |
|
$ |
14,785 |
|
|
$ |
7,963 |
|
Add back: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
13,580 |
|
|
|
13,445 |
|
Income tax expense |
|
|
3,542 |
|
|
|
3,728 |
|
Interest expense, net (a) |
|
|
3,244 |
|
|
|
4,144 |
|
Adjustments: |
|
|
|
|
|
|
||
Non-cash stock-based compensation (b) |
|
|
3,797 |
|
|
|
2,095 |
|
Acquisition and integration expenses |
|
|
— |
|
|
|
1,632 |
|
Restructuring expense |
|
|
7,238 |
|
|
|
1,269 |
|
Non-automotive electronics inventory (benefit) charge |
|
|
(1,060 |
) |
|
|
1,419 |
|
Unrealized currency (gain) loss |
|
|
(1,856 |
) |
|
|
5,865 |
|
Other |
|
|
272 |
|
|
|
(50 |
) |
Adjusted EBITDA |
|
$ |
43,542 |
|
|
$ |
41,510 |
|
|
|
|
|
|
|
|
||
Product revenues |
|
$ |
356,015 |
|
|
$ |
363,625 |
|
Adjusted EBITDA Margin |
|
|
12.2 |
% |
|
|
11.4 |
% |
|
|
|
|
|
|
|
||
(a) Includes $304 of interest income for the three months ended March 31, 2024, related to mark-to-market adjustment of our floating-to-fixed interest rate swap agreement with a notional amount of $100,000. |
|
|||||||
(b) Includes operating expenses of $3,490 and $1,758 for the three months ended March 31, 2024 and 2023, respectively. |
|
|||||||
|
|
Use of Non-GAAP Financial Measures
In addition to the results reported in accordance with GAAP throughout this release, the Company has provided here or elsewhere information regarding adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), Adjusted EBITDA margin, adjusted earnings per share (“Adjusted earnings per share” or “Adjusted EPS”), free cash flow, Net Debt, revenue excluding foreign currency translation, Automotive revenue excluding the impact of non-automotive electronics, one-time benefits from recoveries and retrofits and foreign currency translation, Automotive Climate and Comfort Solutions revenue excluding the impact of one-time benefits from recoveries and retrofits and foreign currency translation, adjusted operating expenses, each a non-GAAP financial measure. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, deferred financing cost amortization, non-cash stock-based compensation expenses, and other gains and losses not reflective of the Company’s ongoing operations and related tax effects including transaction expenses, debt retirement expenses, impairment of assets held for sale, impairment of goodwill, gain or loss on sale of business, restructuring expense, unrealized currency gain or loss and unrealized revaluation of derivatives. The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by product revenues. The Company defines Adjusted EPS as earnings adjusted by gains and losses not reflective of the Company’s ongoing operations and related tax effects including transaction expenses, debt retirement expenses, impairment of assets held for sale, impairment of goodwill, gain or loss on sale of business, restructuring expense, unrealized currency gain or loss and unrealized revaluation of derivatives. The Company defines Free Cash Flow as Net cash provided by operating activities less Purchases of property and equipment. The Company defines Net Debt as the principal amount of all Consolidated Funded Indebtedness (as defined in the Credit Agreement) less cash and cash equivalents. The Company defines revenue excluding foreign currency translation as revenue, excluding the estimated effects of foreign currency exchange on revenue by translating actual revenue using the prior period foreign currency exchange rates. The Company defines Automotive revenue excluding the impact of non-automotive electronics, one-time benefits from recoveries and retrofits and foreign currency translation as Automotive revenue excluding the items specified. The Company defines Automotive Climate and Comfort Solutions revenue excluding the impact of one-time benefits from recoveries and retrofits and foreign currency translation as Automotive Climate and Comfort Solutions revenue ( which includes primarily Climate Control Seat, Seat Heaters, Steering Wheel Heaters and Lumbar and Massage Comfort Solutions) excluding the items specified. The Company defines adjusted operating expenses as operating expenses excluding impairment of intangible assets and property and equipment, restructuring, related non-cash stock-based compensation, acquisition, integration and divestiture expenses.
The Company’s reconciliations are included in this release or can be found in the supplemental materials furnished as Exhibit 99.2 to the Company’s Form 8-K dated April 30, 2024.
In evaluating its business, the Company considers and uses Free Cash Flow and Net Debt as supplemental measures of its liquidity and the other non-GAAP financial measures as supplemental measures of its operating performance. Management provides such non-GAAP financial measures so that investors will have the same financial information that management uses with the belief that it will assist investors in properly assessing the Company's performance on a period-over-period basis by excluding matters not indicative of the Company’s ongoing operating or liquidity results and therefore enhance the comparability of the Company's results and provide additional information for analyzing trends in the business. In evaluating our non-GAAP financial measures, you should be aware that in the future we may incur revenues, expenses, and cash and non-cash obligations that are the same as or similar to some of the adjustments in our presentation of non-GAAP financial measures. Our presentation of non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There also can be no assurance that we will not modify the presentation of our non-GAAP financial measures in the future, and any such modification may be material. Other companies in our industry may define and calculate these non-GAAP financial measures differently than we do and those calculations may not be comparable to our metrics. These non-GAAP measures have limitations as analytical tools, and when assessing the Company's operating performance or liquidity, investors should not consider these non-GAAP measures in isolation, or
|
|
as a substitute for net income, revenue or other consolidated income statement or cash flow statement data prepared in accordance with GAAP.
Non-GAAP measures referenced in this release and other public communications may include estimates of future Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS. The Company has not reconciled the non-GAAP forward-looking guidance included in this release to the most directly comparable GAAP measures because this cannot be done without unreasonable effort due to the variability and low visibility with respect to taxes and non-recurring items, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.
|
|
GENTHERM INCORPORATED
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE
(Dollars in thousands, except per share data)
(Unaudited)
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Net income |
|
$ |
14,785 |
|
|
$ |
7,963 |
|
Non-cash purchase accounting impact |
|
|
1,605 |
|
|
|
1,850 |
|
Restructuring expenses |
|
|
7,238 |
|
|
|
1,269 |
|
Unrealized currency (gain) loss |
|
|
(1,856 |
) |
|
|
5,865 |
|
Acquisition and integration expenses |
|
|
— |
|
|
|
1,632 |
|
Non-automotive electronics inventory (benefit) charge |
|
|
(1,060 |
) |
|
|
1,419 |
|
Other |
|
|
272 |
|
|
|
(50 |
) |
Tax effect of above |
|
|
(1,397 |
) |
|
|
(3,517 |
) |
Adjusted net income |
|
$ |
19,587 |
|
|
$ |
16,431 |
|
|
|
|
|
|
|
|
||
Weighted average shares outstanding: |
|
|
|
|
|
|
||
Basic |
|
|
31,544 |
|
|
|
33,182 |
|
Diluted |
|
|
31,691 |
|
|
|
33,386 |
|
|
|
|
|
|
|
|
||
Earnings per share, as reported: |
|
|
|
|
|
|
||
Basic |
|
$ |
0.47 |
|
|
$ |
0.24 |
|
Diluted |
|
$ |
0.47 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
||
Adjusted earnings per share: |
|
|
|
|
|
|
||
Basic |
|
$ |
0.62 |
|
|
$ |
0.50 |
|
Diluted |
|
$ |
0.62 |
|
|
$ |
0.49 |
|
|
|
|
|
|
|
|
||
|
|
GENTHERM INCORPORATED
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands, except share data)
(Unaudited)
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||
ASSETS |
|
|
|
|
|
|
||
Current Assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
125,107 |
|
|
$ |
149,673 |
|
Accounts receivable, net |
|
|
265,149 |
|
|
|
253,579 |
|
Inventory: |
|
|
|
|
|
|
||
Raw materials |
|
|
134,463 |
|
|
|
126,013 |
|
Work in process |
|
|
18,611 |
|
|
|
15,704 |
|
Finished goods |
|
|
66,510 |
|
|
|
64,175 |
|
Inventory, net |
|
|
219,584 |
|
|
|
205,892 |
|
Other current assets |
|
|
90,592 |
|
|
|
78,420 |
|
Total current assets |
|
|
700,432 |
|
|
|
687,564 |
|
Property and equipment, net |
|
|
241,798 |
|
|
|
245,234 |
|
Goodwill |
|
|
102,194 |
|
|
|
104,073 |
|
Other intangible assets, net |
|
|
63,165 |
|
|
|
66,482 |
|
Operating lease right-of-use assets |
|
|
34,631 |
|
|
|
27,358 |
|
Deferred income tax assets |
|
|
81,395 |
|
|
|
81,930 |
|
Other non-current assets |
|
|
29,095 |
|
|
|
21,730 |
|
Total assets |
|
$ |
1,252,710 |
|
|
$ |
1,234,371 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
||
Current Liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
226,190 |
|
|
$ |
215,827 |
|
Current lease liabilities |
|
|
7,642 |
|
|
|
7,700 |
|
Current maturities of long-term debt |
|
|
324 |
|
|
|
621 |
|
Other current liabilities |
|
|
98,939 |
|
|
|
100,805 |
|
Total current liabilities |
|
|
333,095 |
|
|
|
324,953 |
|
Long-term debt, less current maturities |
|
|
222,173 |
|
|
|
222,217 |
|
Non-current lease liabilities |
|
|
23,126 |
|
|
|
16,175 |
|
Pension benefit obligation |
|
|
2,768 |
|
|
|
3,209 |
|
Other non-current liabilities |
|
|
24,489 |
|
|
|
23,095 |
|
Total liabilities |
|
$ |
605,651 |
|
|
$ |
589,649 |
|
Shareholders’ equity: |
|
|
|
|
|
|
||
Common Stock: |
|
|
|
|
|
|
||
No par value; 55,000,000 shares authorized 31,629,224 and 31,542,001 issued and outstanding at March 31, 2024 and December 31, 2023, respectively |
|
|
53,269 |
|
|
|
50,503 |
|
Paid-in capital |
|
|
— |
|
|
|
— |
|
Accumulated other comprehensive loss |
|
|
(45,195 |
) |
|
|
(30,160 |
) |
Accumulated earnings |
|
|
638,985 |
|
|
|
624,379 |
|
Total shareholders’ equity |
|
|
647,059 |
|
|
|
644,722 |
|
Total liabilities and shareholders’ equity |
|
$ |
1,252,710 |
|
|
$ |
1,234,371 |
|
|
|
GENTHERM INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Operating Activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
14,785 |
|
|
$ |
7,963 |
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
13,818 |
|
|
|
13,583 |
|
Deferred income taxes |
|
|
(184 |
) |
|
|
(1,786 |
) |
Stock based compensation |
|
|
3,789 |
|
|
|
2,023 |
|
Loss on disposition of property and equipment |
|
|
69 |
|
|
|
16 |
|
Provisions for inventory |
|
|
296 |
|
|
|
1,704 |
|
Other |
|
|
(842 |
) |
|
|
(44 |
) |
Changes in assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
(14,856 |
) |
|
|
(8,237 |
) |
Inventory |
|
|
(16,648 |
) |
|
|
(1,137 |
) |
Other assets |
|
|
(29,226 |
) |
|
|
(6,417 |
) |
Accounts payable |
|
|
12,337 |
|
|
|
24,289 |
|
Other liabilities |
|
|
6,340 |
|
|
|
(6,848 |
) |
Net cash (used in) provided by operating activities |
|
|
(10,322 |
) |
|
|
25,109 |
|
Investing Activities: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(11,320 |
) |
|
|
(6,294 |
) |
Proceeds from the sale of property and equipment |
|
|
22 |
|
|
|
17 |
|
Proceeds from deferred purchase price of factored receivables |
|
|
2,732 |
|
|
|
3,728 |
|
Cost of technology investments |
|
|
(265 |
) |
|
|
— |
|
Net cash used in investing activities |
|
|
(8,831 |
) |
|
|
(2,549 |
) |
Financing Activities: |
|
|
|
|
|
|
||
Borrowings on debt |
|
|
10,000 |
|
|
|
— |
|
Repayments of debt |
|
|
(10,324 |
) |
|
|
(564 |
) |
Proceeds from the exercise of Common Stock options |
|
|
812 |
|
|
|
263 |
|
Taxes withheld and paid on employees' share-based payment awards |
|
|
(2,022 |
) |
|
|
(2,667 |
) |
Cash paid for the repurchase of Common Stock |
|
|
— |
|
|
|
(9,997 |
) |
Net cash used in financing activities |
|
|
(1,534 |
) |
|
|
(12,965 |
) |
Foreign currency effect |
|
|
(3,879 |
) |
|
|
3,144 |
|
Net (decrease) increase in cash and cash equivalents |
|
|
(24,566 |
) |
|
|
12,739 |
|
Cash and cash equivalents at beginning of period |
|
|
149,673 |
|
|
|
153,891 |
|
Cash and cash equivalents at end of period |
|
$ |
125,107 |
|
|
$ |
166,630 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Cash paid for taxes |
|
$ |
4,900 |
|
|
$ |
5,536 |
|
Cash paid for interest |
|
|
3,310 |
|
|
|
3,235 |
|
|
|
GENTHERM INCORPORATED
OTHER NON-GAAP RECONCILIATIONS
(Dollars in thousands)
(Unaudited)
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Automotive revenues |
|
$ |
344,638 |
|
|
$ |
352,692 |
|
Non-automotive electronics revenues |
|
|
1,263 |
|
|
|
3,581 |
|
One-time benefits from recoveries and retrofits |
|
|
— |
|
|
|
3,501 |
|
Adjusted Automotive revenues |
|
|
343,375 |
|
|
|
345,610 |
|
Foreign currency translation impact |
|
|
(2,647 |
) |
|
|
— |
|
Adjusted Automotive revenues, excluding foreign currency translation impact |
|
$ |
346,022 |
|
|
$ |
345,610 |
|
Year over Year % change |
|
|
0.1 |
% |
|
|
|
|
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Automotive revenues |
|
$ |
344,638 |
|
|
$ |
352,692 |
|
Less: Valve Systems |
|
|
26,625 |
|
|
|
26,994 |
|
Less: Automotive Cables |
|
|
21,519 |
|
|
|
20,220 |
|
Less: Battery Performance Solutions |
|
|
13,608 |
|
|
|
20,309 |
|
Less: Non-automotive electronics revenues |
|
|
1,263 |
|
|
|
3,581 |
|
Automotive Climate and Comfort Solutions revenues |
|
|
281,623 |
|
|
|
281,588 |
|
Less: One-time benefits from recoveries and retrofits |
|
|
— |
|
|
|
3,501 |
|
Adjusted Automotive Climate and Comfort Solutions revenues |
|
|
281,623 |
|
|
|
278,087 |
|
Foreign currency translation impact |
|
|
(2,543 |
) |
|
|
— |
|
Adjusted Automotive Climate and Comfort Solutions revenues, excluding foreign currency translation impact |
|
$ |
284,166 |
|
|
$ |
278,087 |
|
Year over Year % change |
|
|
2.2 |
% |
|
|
|
|
Proprietary © Gentherm 2024 2024 First Quarter Results April 30, 2024 Exhibit 99.2
Use of Non-GAAP Financial Measures* In addition to the results reported herein in accordance with GAAP, the Company has provided here or may discuss on the related conference call adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), Adjusted EBITDA margin, adjusted earnings per share (“Adjusted earnings per share” or “Adjusted EPS”), free cash flow, Net Debt, revenue excluding foreign currency translation, Automotive revenue excluding the impact of non-automotive electronics, one-time benefits from recoveries and retrofits and foreign currency translation, Climate and Comfort revenue excluding the impact of one-time benefits from recoveries and retrofits and foreign currency translation, adjusted operating expenses, each a non-GAAP financial measure. See the Company’s earnings release dated April 30, 2024, for the definitions of each non-GAAP financial measure, information regarding why the Company utilizes such non-GAAP measures as supplemental measures of performance or liquidity, and their limitations, and for certain reconciliations of GAAP to non-GAAP historical financial measures. * See Appendix for certain reconciliations of GAAP to non-GAAP historical financial measures. Proprietary © Gentherm 2024
Forward-Looking Statement Proprietary © Gentherm 2024 Except for historical information contained herein, statements in this presentation are forward-looking statements that are made by Gentherm Incorporated (the “Company”) pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements that address future operating, financial or business performance or strategies or expectations are forward-looking statements. The forward-looking statements included in this presentation are made as of the date specified herein and are based on management's reasonable expectations and beliefs. In making these statements we rely on assumptions and analysis based on our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we consider appropriate under the circumstances. Except as required by law, the Company expressly disclaims any obligation or undertaking to update any forward-looking statements to reflect any change in its strategies or expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. The forward-looking statements are subject to a number of important assumptions, risks, uncertainties and other factors that may cause actual results or performance to differ materially from that expressed or implied by such statements. For a discussion of these risks and uncertainties and other factors, please see the Company’s most recent Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission, including “Risk Factors.” In addition, the business outlook discussed in this presentation does not include the potential impact of any business combinations, acquisitions, divestitures, strategic investments and other significant transactions that may be completed after the date hereof, each of which may present material risks to the Company’s future business and financial results.
ClimateSense® Recognized at 2024 Pace Awards Innovation Partnership Award with General Motors Proprietary © Gentherm 2024 4
Automotive Highlights Automotive Climate and Comfort Solutions revenues continued to outperform actual light vehicle production in our key markets despite volatile global production environment 27 Vehicle launches with 13 OEMs Grand Opening of the Extended Advanced Engineering Lab in Hyderabad, India Multiple CCS® Launches BMW 5-Series Chevrolet Traverse GMC Acadia Honda Prologue Subaru Forester Volkswagen Magotan BEV with large EV Manufacturer Li Auto L8 & L9 Proprietary © Gentherm 2024 5
Automotive New Business Awards $530M in awards in 1Q, a 1Q record 17 Steering Wheel Heater awards across 9 OEMs including hands-on-detection enabled heater awards with Geely, General Motors, Li Auto, Mercedes Benz and Volkswagen Continue to see strong demand from OEMs for our thermal comfort, massage and lumbar solutions, setting a record for a first quarter Pneumatic Comfort Awards from: Audi | Li Auto | Volkswagen Multiple CCS® Awards from: Ford | General Motors | Great Wall | Hyundai | Li Auto Volkswagen | Large Global EV Manufacturer Conquest high-end lumbar and massage award for General Motors’ next generation truck platform Proprietary © Gentherm 2024 6
Medical Highlights Continuing to adapt the go-to-market model to leverage large partnerships, distribution channels, and white label opportunities Proprietary © Gentherm 2024 7 Proprietary © Gentherm 2024 7 Revenues from Astopad® grew 36% globally Strengthening our partnership with US Med-Equip for Blanketrol® equipment, consumable product and field services for the US market New major hospital account expansion in China including Sanxia Hospital at the Chongqing Medical University 21
Expansive Climate and Comfort Awards Significant content across flagship platforms General Motors: Truck platform including Chevrolet Silverado & GMC Sierra BMW: X Series SUVs including: X5 ∙ X6 ∙ X7 ∙ iX5 ∙ iX6 ∙ iX7 PCS™ Lumbar Support PCS™ Massage CCS® Vent CCS® Heat PCS™ Lumbar Support PCS™ Massage CCS® Vent CCS® Heat Multifunction ECU Heated Surface ClimateSense® Software Proprietary © Gentherm 2024 8
Strong revenue growth relative to market Revenue growth expected to outperform light vehicle production in our relevant markets by over 10 points between 2020 and 2024 Relevant Market Light Vehicle Production Volume¹ (in Millions) THRM Revenue² (Dollars in Millions) CAGR 2020-2024 Light Vehicle Production¹: 3.9% THRM Revenue²: 14.1% ¹S&P Global Light Vehicle Production Forecast April 2024 Relevant Regions Only: NA, EU, JP, KO, CH ²2024 revenue based on mid-point of THRM guidance Proprietary © Gentherm 2024 9
(Dollars in thousands, except per share data) 2024 2023 Product Revenues $ 356,015 $ 363,625 Automotive 344,638 352,692 Medical 11,377 10,933 Gross Margin 88,753 81,130 Gross Margin % 24.9 % 22.3 % Operating Expenses 70,704 63,456 Operating Income 18,049 17,674 Adjusted EBITDA 43,542 41,510 Adjusted EBITDA Margin 12.2 % 11.4 % Diluted EPS - As Adjusted $ 0.62 $ 0.49 Select Income Statement Data Three Months Ended March 31 Proprietary © Gentherm 2024 10
Select Balance Sheet Data March 31, 2024 June 30, 2023 December 31, 2023 December 31, 2022 December 31, 2022 Cash and Cash Equivalents $ 125,107 $ 149,673 Total Assets 1,252,710 1,234,371 Debt 222,497 222,838 Current 324 621 Non-Current 222,173 222,217 Revolving LOC Availability 278,000 278,000 Total Liquidity 403,107 427,673 Proprietary © Gentherm 2024 11 (Dollars in thousands)
2024 Guidance 2024 E Product Revenue (1)(2) $1.5B – $1.6B Adjusted EBITDA Margin (1)(2) 12.5% – 13.5% Adjusted Effective Tax Rate 26% – 29% Capital Expenditures $65M – $75M Based on the current forecast of customer orders and light vehicle production in the Company’s key markets declining at a low single-digit rate in 2024 versus 2023. Assumes a EUR to USD exchange rate of $1.10/Euro. Due to the inherent difficulty of forecasting the timing and amount of certain items that would impact net income margin, such as foreign currency gains and losses, we are unable to reasonably estimate net income margin, the GAAP financial measure most directly comparable to Adjusted EBITDA margin. Accordingly, we are unable to provide a reconciliation of Adjusted EBITDA margin to net income margin with respect to the guidance provided. Proprietary © Gentherm 2024 12
Appendix Proprietary © Gentherm 2024
Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin Three Months Ended March 31 2024 2023 Net Income $ 14,785 $ 7,963 Add Back: Income Tax Expense 3,542 3,728 Interest Expense, net 3,244 4,144 Depreciation and Amortization 13,580 13,445 Adjustments: Restructuring Expenses 7,238 1,269 Unrealized Currency (Gain) Loss (1,856) 5,865 Acquisition and Integration Expenses – 1,632 Non-Automotive Electronics Inventory (Benefit) Charge (1,060) 1,419 Non-Cash Stock-Based Compensation 3,797 2,095 Other 272 (50) Adjusted EBITDA $ 43,542 $ 41,510 Product Revenues $ 356,015 $ 363,625 Net Income Margin 4.2 % 2.2 % Adjusted EBITDA Margin 12.2 % 11.4 % (Dollars in thousands) Proprietary © Gentherm 2024 14
Reconciliation of Adjusted EPS 2024 2023 Diluted EPS - As Reported $ 0.47 $ 0.24 Acquisition and Integration Expenses – 0.05 Non-Cash Purchase Accounting Impacts 0.05 0.06 Unrealized Currency (Gain) Loss (0.06) 0.18 Restructuring Expenses 0.23 0.04 Non-Automotive Electronics Inventory (Benefit) Charge (0.03) 0.04 Other 0.01 – Tax Effect of Above (0.04) (0.11) Rounding (0.01) (0.01) Diluted EPS - As Adjusted $ 0.62 $ 0.49 Three Months Ended March 31 Proprietary © Gentherm 2024 15