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Gentherm Reports 2024 Third Quarter Results

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Gentherm (THRM) reported Q3 2024 financial results with product revenues of $371.5 million, up 1.5% year-over-year. The company achieved $0.51 GAAP diluted EPS compared to $0.48 in Q3 2023, and $0.75 adjusted EPS versus $0.64 last year. Automotive revenues increased 1.1%, outperforming light vehicle production in key markets by 800 basis points. The company secured record Q3 automotive new business awards of $600 million. Gentherm updated its 2024 guidance, now expecting product revenues of $1.45B-$1.47B and adjusted EBITDA margin near mid-point of 12.5%-13.5%.

Gentherm (THRM) ha riportato i risultati finanziari del terzo trimestre 2024 con ricavi da prodotto di 371,5 milioni di dollari, in aumento dell'1,5% rispetto all'anno precedente. L'azienda ha raggiunto un EPS diluito GAAP di $0,51 rispetto a $0,48 nel terzo trimestre 2023, e un EPS aggiustato di $0,75 rispetto a $0,64 dell'anno scorso. I ricavi automobilistici sono aumentati dell'1,1%, superando la produzione di veicoli leggeri nei mercati chiave di 800 punti base. L'azienda ha ottenuto un record di premi per nuovi affari automobilistici nel terzo trimestre di 600 milioni di dollari. Gentherm ha aggiornato le sue previsioni per il 2024, ora prevedendo ricavi da prodotto tra 1,45 miliardi e 1,47 miliardi di dollari e un margine EBITDA aggiustato vicino al punto medio del 12,5%-13,5%.

Gentherm (THRM) reportó los resultados financieros del tercer trimestre de 2024, con ingresos por productos de 371,5 millones de dólares, un aumento del 1,5% interanual. La compañía logró un EPS diluido GAAP de $0,51 en comparación con $0,48 en el tercer trimestre de 2023, y un EPS ajustado de $0,75 frente a $0,64 del año pasado. Los ingresos automotrices aumentaron un 1,1%, superando la producción de vehículos ligeros en mercados clave por 800 puntos básicos. La compañía aseguró un récord de premios por nuevos negocios automotrices en el tercer trimestre de 600 millones de dólares. Gentherm actualizó sus proyecciones para 2024, ahora esperando ingresos por productos de entre 1,45 y 1,47 mil millones de dólares y un margen EBITDA ajustado cerca del punto medio del 12,5%-13,5%.

Gentherm (THRM)는 2024년 3분기 재무 결과를 발표하며 제품 수익이 3억 7,150만 달러로 전년 대비 1.5% 증가했다고 밝혔습니다. 회사는 3분기 GAAP 희석 EPS가 0.51달러로, 2023년 3분기 0.48달러와 비교되며, 조정 EPS는 0.75달러로 지난해 0.64달러에 비해 증가했습니다. 자동차 수익은 1.1% 증가하였으며, 주요 시장의 경량차 생산을 800 기본점 초과했습니다. 회사는 3분기 새로운 자동차 사업 수주에서 기록적인 6억 달러를 확보했습니다. Gentherm은 2024년 가이던스를 업데이트하여 이제 제품 수익이 14억 5천 만 달러에서 14억 7천 만 달러 사이가 될 것으로 예상하고 있으며, 조정 EBITDA 마진은 12.5%-13.5%의 중간 지점에 가까울 것으로 보입니다.

Gentherm (THRM) a rapporté des résultats financiers pour le troisième trimestre 2024, avec des revenus produits de 371,5 millions de dollars, en hausse de 1,5 % par rapport à l'année précédente. L'entreprise a atteint un EPS dilué GAAP de 0,51 $ contre 0,48 $ au troisième trimestre 2023, et un EPS ajusté de 0,75 $ par rapport à 0,64 $ l'année dernière. Les revenus automobiles ont augmenté de 1,1 %, dépassant la production de véhicules légers sur les marchés clés de 800 points de base. L'entreprise a obtenu un nombre record de nouveaux contrats d'affaires automobiles pour le 3ème trimestre de 600 millions de dollars. Gentherm a mis à jour ses prévisions pour 2024, s'attendant désormais à des revenus produits entre 1,45 milliard et 1,47 milliard de dollars et une marge d'EBITDA ajustée proche du point médian de 12,5 % à 13,5 %.

Gentherm (THRM) hat die finanziellen Ergebnisse für das 3. Quartal 2024 veröffentlicht, mit Produktumsätzen von 371,5 Millionen Dollar, was einem Anstieg von 1,5 % im Vergleich zum Vorjahr entspricht. Das Unternehmen erzielte ein GAAP-diluted EPS von 0,51 USD im Vergleich zu 0,48 USD im 3. Quartal 2023, und ein adjustiertes EPS von 0,75 USD gegenüber 0,64 USD im letzten Jahr. Die Automobilumsätze stiegen um 1,1 % und übertrafen die Produktion von Leichtfahrzeugen in wichtigen Märkten um 800 Basispunkte. Das Unternehmen sicherte sich Rekordaufträge für neue Automobile im 3. Quartal in Höhe von 600 Millionen Dollar. Gentherm hat seine Prognose für 2024 aktualisiert und erwartet nun Produktumsätze zwischen 1,45 Milliarden und 1,47 Milliarden Dollar sowie eine angepasste EBITDA-Marge nahe dem Mittelwert von 12,5 % - 13,5 %.

Positive
  • Product revenues increased 1.5% to $371.5 million
  • Adjusted EPS improved to $0.75 from $0.64 year-over-year
  • Gross margin rate increased to 25.5% from 23.5%
  • Secured $600 million in new automotive business awards
  • Outperformed light vehicle production by 800 basis points
Negative
  • Lowered full-year revenue guidance to $1.45B-$1.47B from previous low end of $1.5B-$1.6B
  • Restructuring expenses increased by $1.6 million year-over-year

Insights

Gentherm's Q3 2024 results show modest growth with several positive indicators. Product revenues increased 1.5% to $371.5 million, while adjusted EPS improved to $0.75 from $0.64 year-over-year. The company's automotive segment outperformed market production by 800 basis points, demonstrating strong competitive positioning.

Notable achievements include a record $600 million in new business awards and improved gross margins of 25.5%, up from 23.5%. However, the lowered full-year revenue guidance to $1.45-1.47 billion from previous $1.5-1.6 billion range signals some headwinds. The strong operational execution through Fit-for-Growth 2.0 initiatives and continued share repurchases ($100 million in last 12 months) demonstrate solid financial management despite market challenges.

Strong Outperformance Over Light Vehicle Production
Secured Third Quarter Record $600 Million in Automotive New Business Awards
Updates 2024 Guidance

NORTHVILLE, Mich., Oct. 30, 2024 (GLOBE 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 third quarter ending September 30, 2024.

Third Quarter Highlights

  • Product revenues of $371.5 million increased 1.5% from $366.2 million in the third quarter of 2023. Excluding the impact of foreign currency translation, product revenues increased 1.0% year over year
  • Automotive revenues increased 1.1% year over year; excluding the impact of foreign currency translation, automotive revenues increased 0.7% year over year
  • GAAP diluted earnings per share was $0.51 as compared with $0.48 for the prior-year period
  • Adjusted diluted earnings per share (see table herein) was $0.75. Adjusted diluted earnings per share in the prior-year period was $0.64
  • Secured automotive new business awards totaling $600 million in the quarter

Phil Eyler, the Company's President and CEO, said, “The financial and operating results of the third quarter reflect the continued momentum of our strategy to bring innovation and unique solutions to our customers. Our Automotive Climate and Comfort Solutions revenue outperformed actual light vehicle production in our key markets by nearly 800 basis points. We achieved quarterly automotive new business awards of $600 million, a third quarter record, keeping us on track for annual awards of over $2 billion for the second consecutive year.

He added, “We continue to execute on securing awards and launching new programs, particularly for our new innovative solutions. We had our first market launch of ClimateSense® with a five-zone micro-climate solution on the Cadillac Escalade IQ. Additionally, we won an award for ComfortScale™, our patented, next generation integrated thermal, lumbar and massage system. We have seen an acceleration of new technology wins that we expect will fuel future growth.

He concluded, “Year to date, our relentless focus on operational excellence and financial discipline has yielded not only continued growth over market, but also a nearly 100 basis point expansion in Adjusted EBITDA margin. Including share repurchases in the quarter, we returned more than $100 million dollars to shareholders through share repurchases in the last twelve months. I would like to thank the Gentherm team for their unwavering efforts to drive our business and generate shareholder returns.”

2024 Third Quarter Financial Review
Product revenues for the third quarter of 2024 increased by $5.3 million, or 1.5%, as compared with the prior-year period. Excluding the impact of foreign currency translation, product revenues increased 1.0% year over year.

Automotive revenues increased 1.1% year over year. Adjusting for foreign currency translation, phasing out the non-automotive and contract manufacturing electronics business as well as one-time benefits from recoveries in both periods, Automotive revenues increased 1.2% year over year. Revenues from Automotive Climate and Comfort Solutions increased 3.3% in the third quarter compared to the prior-year period.

According to S&P Global Mobility’s mid-October report, actual light vehicle production decreased by 4.5% in the third quarter when compared with the same quarter of 2023 in the Company’s key markets of North America, Europe, China, Japan, and Korea.

Gentherm Medical revenue increased 11.3% year over year, primarily as a result of higher Blanketrol® sales in the U.S., and Astopad® in Europe. Adjusting for the impact of foreign currency translation, Medical revenues increased 10.4%.

See the “Revenues by Product Category and Reconciliation of Foreign Currency Translation Impact” table included below for additional detail.

Gross margin rate increased to 25.5% in the current-year period, as compared with 23.5% 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, as well as the impact of our previously announced exit of the non-automotive electronics business. These were partially offset by annual price reductions and start-up costs from our new plants opening in Monterrey, Mexico and Tangier, Morrocco.

Net research and development expenses of $23.0 million in the quarter were relatively unchanged compared to the prior-year period.

Selling, general and administrative expenses of $36.9 million in the quarter decreased $1.4 million, or 3.6%, versus the prior-year period. The year-over-year decrease was primarily driven by acquisition and integration expenses in the prior year.

Restructuring expenses, net of $2.7 million in the current-year period increased $1.6 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 and previously announced footprint optimization.

As described more fully in the “Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITDA Margin” table included below, the Company recorded Adjusted EBITDA of $48.1 million in the quarter compared with $47.7 million in the prior-year period, an increase of $0.4 million or 0.9%.

Income tax expense in the quarter was $3.4 million, as compared with $6.9 million in the prior-year period. The effective tax rate was approximately 18% in the quarter.

GAAP diluted earnings per share for the quarter was $0.51 compared with $0.48 for the prior-year period. Adjusted diluted earnings per share, excluding restructuring expenses, net, non-cash purchase accounting impact, non-automotive electronics inventory benefit, unrealized currency loss, and other items specified on the table below, was $0.75. Adjusted diluted earnings per share in the prior-year period was $0.64.

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 as reconciliations below to the most directly comparable GAAP financial measures.

Guidance
The Company’s full-year 2024 guidance as of October 30, 2024 is shown below:

 As of July 31, 2024 As of October 30, 2024(1)
Product RevenuesLow end of $1.5B$1.6B $1.45B$1.47B
Adjusted EBITDA Margin RateAbove mid-point of 12.5%13.5% Near mid-point of 12.5%13.5%
Full-year Adjusted Effective Tax Rate26%29% No change
Capital Expenditures$65M$75M No change
 
(1) Based on the current forecast of customer orders, our expectations of near-term conditions, and light vehicle production in our relevant markets decreasing at low to mid-single digit rate for full year 2024 versus 2023, and a EUR to USD exchange rate of $1.08/Euro.
 

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 13749599.

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 November 13, 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 13749599.

Investor Contact 
Gregory Blanchette
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:

  • macroeconomic, geopolitical and similar global factors in the cyclical Automotive industry;
  • increasing U.S. and global competition, including with non-traditional entrants;
  • our ability to effectively manage new product launches and research and development, and the market acceptance of such products and technologies;
  • the evolution and recent challenges of the automotive industry towards electric vehicles, autonomous vehicles and mobility on demand services, and related consumer behaviors and preferences;
  • our ability to convert automotive new business awards into product revenues;
  • the recent supply-constrained environment, and inflationary and other cost pressures;
  • the production levels of our major customers and OEMs in our key markets and sudden fluctuations in such production levels;
  • our business in China, which is subject to unique operational, competitive, regulatory and economic risks;
  • our ability to attract and retain highly skilled employees and wage inflation;
  • a tightening labor market, labor shortages or work stoppages impacting us, our customers or our suppliers, such as recent labor strikes among certain OEMs and suppliers;
  • our achievement of product cost reductions to offset customer-imposed price reductions or other pricing pressures;
  • our product quality and safety and impact of product safety recalls and alleged defects in products;
  • our ability to execute efforts to optimize our global supply chain and manufacturing footprint, including opening new facilities and transferring production;
  • our ability to integrate our recent acquisitions and realize synergies, as well as to consummate additional strategic acquisitions, investments and exits, and achieve planned benefits;
  • any security breaches and other disruptions to our information technology networks and systems, as well as privacy, data security and data protection risks;
  • the impact of our global operations, including our global supply chain, operations within Ukraine, economic and trade policies, and foreign currency and exchange risk;
  • any loss or insolvency of our key customers and OEMs, or key suppliers;
  • our ability to project future sales volume based on third-party information, based on which we manage our business;
  • the protection of our intellectual property in certain jurisdictions;
  • our compliance with anti-corruption laws and regulations;
  • legal and regulatory proceedings and claims involving us or one of our major customers;
  • the extensive regulation of our patient temperature management business;
  • risks associated with our manufacturing processes;
  • the effects of climate change and catastrophic events, as well as regulatory and stakeholder-imposed requirements to address climate change and other sustainability issues;
  • our product quality and safety;
  • our borrowing availability under our revolving credit facility, as well ability to access the capital markets, to support our planned growth; and
  • our indebtedness and compliance with our debt covenants.

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. 

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, segment revenue and product revenue excluding foreign currency translation and other specified gains and losses; Automotive Climate and Comfort Solutions revenues; and 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 expenses, net, 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 expenses, net, 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, segment revenue or product revenue excluding foreign currency translation and other specified gains and losses as such revenue, excluding the estimated effects of foreign currency exchange on revenue by translating actual revenue using the prior period foreign currency exchange rates and excluding the other items specified in the reconciliation tables herein. The Company defines Automotive Climate and Comfort Solutions revenues as Automotive revenue excluding specified product revenues and the impact of non-automotive electronics and contract manufacturing electronics revenues. The Company defines adjusted operating expenses as operating expenses excluding impairment of intangible assets and property and equipment, restructuring expenses, net, 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 October 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 (loss), 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
 
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
  2024  2023  2024  2023 
Product revenues $371,512  $366,195  $1,103,210  $1,102,143 
Cost of sales  276,639   279,985   822,883   846,815 
Gross margin  94,873   86,210   280,327   255,328 
Operating expenses:            
Net research and development expenses  23,013   23,150   67,619   72,991 
Selling, general and administrative expenses  36,861   38,220   116,992   113,680 
Restructuring expenses, net  2,662   1,099   12,342   3,412 
Impairment of goodwill           19,509 
Total operating expenses  62,536   62,469   196,953   209,592 
Operating income  32,337   23,741   83,374   45,736 
Interest expense, net  (4,710)  (3,368)  (11,956)  (9,444)
Foreign currency (loss) gain  (8,480)  2,107   (6,213)  384 
Other income  263   272   952   1,058 
Earnings before income tax  19,410   22,752   66,157   37,734 
Income tax expense  3,445   6,908   16,531   15,478 
Net income $15,965  $15,844  $49,626  $22,256 
Basic earnings per share $0.51  $0.48  $1.58  $0.67 
Diluted earnings per share $0.51  $0.48  $1.57  $0.67 
Weighted average number of shares – basic  31,187   32,944   31,421   33,049 
Weighted average number of shares – diluted  31,365   33,196   31,605   33,311 
  


GENTHERM INCORPORATED
 
REVENUE BY PRODUCT CATEGORY AND RECONCILIATION OF FOREIGN CURRENCY TRANSLATION IMPACT
(Dollars in thousands)
(Unaudited)
 
  Three Months Ended September 30,  Nine Months Ended September 30, 
  2024  2023 % Change  2024  2023  % Change 
Climate Control Seat $115,498  $124,905  (7.5)% $352,789  $360,868   (2.2)%
Seat Heaters  72,982   77,238  (5.5)%  227,114   231,132   (1.7)%
Lumbar and Massage Comfort Solutions  48,970   33,260  47.2 %  133,090   109,602   21.4 %
Steering Wheel Heaters  44,711   39,861  12.2 %  126,939   115,166   10.2 %
Valve Systems  26,082   27,830  (6.3)%  81,974   82,516   (0.7)%
Automotive Cables  16,834   19,668  (14.4)%  57,185   60,131   (4.9)%
Battery Performance Solutions  16,869   17,242  (2.2)%  46,540   57,138   (18.5)%
Electronics  10,862   10,163  6.9 %  26,218   30,456   (13.9)%
Other Automotive  5,996   4,615  29.9 %  15,595   21,998   (29.1)%
Subtotal Automotive segment  358,804   354,782  1.1 %  1,067,444   1,069,007   (0.1)%
Medical segment  12,708   11,413  11.3 %  35,766   33,136   7.9 %
Total Company $371,512  $366,195  1.5 % $1,103,210  $1,102,143   0.1 %
                  
Foreign currency translation impact (a)  1,599        (5,134)      
Total Company, excluding foreign
currency translation impact
 $369,913  $366,195  1.0 % $1,108,344  $1,102,143   0.6 %
                  
(a) Foreign currency translation impacts for the Automotive segment and Medical segment were $1,487 and $112 respectively, for the three months ended September 30, 2024. Foreign currency translation impacts for the Automotive segment and Medical segment were $(5,129) and $(5) respectively, for the nine months ended September 30, 2024. 
  


GENTHERM INCORPORATED
 
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
AND ADJUSTED EBITDA MARGIN
(Dollars in thousands)
(Unaudited)
 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
  2024  2023  2024  2023 
Net income $15,965  $15,844  $49,626  $22,256 
Add back:            
Depreciation and amortization  12,351   12,516   38,742   38,354 
Income tax expense (a)  3,445   6,908   16,531   15,478 
Interest expense, net (b)  4,710   3,368   11,956   9,444 
Adjustments:            
Non-cash stock based compensation (c)  2,927   3,421   10,334   8,592 
Restructuring expenses, net  2,662   1,099   12,342   3,412 
Non-automotive electronics inventory (benefit) charge  (2,679)  3,426   (4,451)  5,489 
Unrealized currency loss (gain)  8,604   (898)  6,251   4,227 
Acquisition and integration expenses     1,618      4,730 
Impairment of goodwill           19,509 
Other  118   372   187   71 
Adjusted EBITDA $48,103  $47,674  $141,518  $131,562 
             
Product revenues $371,512  $366,195  $1,103,210  $1,102,143 
Net income margin  4.3%  4.3%  4.5%  2.0%
Adjusted EBITDA margin  12.9%  13.0%  12.8%  11.9%
             
(a) Includes $2,423 of deferred income tax benefit associated with the goodwill impairment of the Medical reporting unit for the nine months ended September 30, 2023. 
(b) Includes $1,157 and $1,161 of interest expense for the three and nine months ended September 30, 2024, related to mark-to-market adjustment of our floating-to-fixed interest rate swap agreement with a notional amount of $100,000. 
(c) Includes operating expenses of $2,708 and $3,384 for the three months ended September 30, 2024 and 2023, respectively. Includes operating expenses of $9,717 and $8,218 for the nine months ended September 30, 2024 and 2023, respectively. 
  


GENTHERM INCORPORATED
 
RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME
AND ADJUSTED EARNINGS PER SHARE
(Dollars in thousands, except per share data)
(Unaudited)
 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
  2024  2023  2024  2023 
Net income $15,965  $15,844  $49,626  $22,256 
Non-cash purchase accounting impact  1,608   1,613   4,797   5,793 
Restructuring expenses, net  2,662   1,099   12,342   3,412 
Unrealized currency loss (gain)  8,604   (898)  6,251   4,227 
Non-automotive electronics inventory (benefit) charge  (2,679)  3,426   (4,451)  5,489 
Acquisition and integration expenses     1,618      4,730 
Impairment of goodwill           19,509 
Other  118   372   187   71 
Tax effect of above  (2,695)  (1,693)  (4,546)  (8,635)
Adjusted net income $23,583  $21,381  $64,206  $56,852 
             
Weighted average shares outstanding:            
Basic  31,187   32,944   31,421   33,049 
Diluted  31,365   33,196   31,605   33,311 
             
Earnings per share, as reported:            
Basic $0.51  $0.48  $1.58  $0.67 
Diluted $0.51  $0.48  $1.57  $0.67 
             
Adjusted earnings per share:            
Basic $0.76  $0.65  $2.04  $1.72 
Diluted $0.75  $0.64  $2.03  $1.71 
             


GENTHERM INCORPORATED
 
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands, except share data)
(Unaudited)
 
  September 30, 2024  December 31, 2023 
ASSETS      
Current Assets:      
Cash and cash equivalents $150,581  $149,673 
Accounts receivable, net  270,913   253,579 
Inventory:      
Raw materials  141,547   126,013 
Work in process  20,116   15,704 
Finished goods  72,083   64,175 
Inventory, net  233,746   205,892 
Other current assets  81,711   78,420 
Total current assets  736,951   687,564 
Property and equipment, net  253,531   245,234 
Goodwill  104,839   104,073 
Other intangible assets, net  61,067   66,482 
Operating lease right-of-use assets  29,366   27,358 
Deferred income tax assets  81,923   81,930 
Other non-current assets  30,502   21,730 
Total assets $1,298,179  $1,234,371 
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Current Liabilities:      
Accounts payable $254,555  $215,827 
Current lease liabilities  7,038   7,700 
Current maturities of long-term debt  210   621 
Other current liabilities  103,647   100,805 
Total current liabilities  365,450   324,953 
Long-term debt, less current maturities  222,104   222,217 
Non-current lease liabilities  21,929   16,175 
Pension benefit obligation  2,805   3,209 
Other non-current liabilities  25,182   23,095 
Total liabilities $637,470  $589,649 
Shareholders’ equity:      
Common Stock:      
No par value; 55,000,000 shares authorized 30,976,821 and 31,542,001 issued and outstanding at September 30, 2024 and December 31, 2023, respectively  10,698   50,503 
Paid-in capital  4,552    
Accumulated other comprehensive loss  (35,021)  (30,160)
Accumulated earnings  680,480   624,379 
Total shareholders’ equity  660,709   644,722 
Total liabilities and shareholders’ equity $1,298,179  $1,234,371 
 


GENTHERM INCORPORATED
 
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
 
  Nine Months Ended September 30, 
  2024  2023 
Operating Activities:      
Net income $49,626  $22,256 
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization  40,085   38,531 
Deferred income taxes  1,568   (3,017)
Stock based compensation  10,291   8,451 
(Gain) loss on disposition of property and equipment  (1,702)  873 
Provisions for inventory  502   6,597 
Impairment of goodwill     19,509 
Other  (1,057)  81 
Changes in assets and liabilities:      
Accounts receivable, net  (16,179)  (19,813)
Inventory  (27,826)  3,733 
Other assets  (35,959)  (19,218)
Accounts payable  38,501   32,158 
Other liabilities  15,239   (10,099)
Net cash provided by operating activities  73,089   80,042 
Investing Activities:      
Purchases of property and equipment  (50,354)  (26,526)
Proceeds from the sale of property and equipment  7,537   72 
Proceeds from deferred purchase price of factored receivables  10,266   10,139 
Cost of technology investments  (590)  (630)
Net cash used in investing activities  (33,141)  (16,945)
Financing Activities:      
Borrowings on debt  53,000    
Repayments of debt  (53,520)  (27,166)
Proceeds from the exercise of Common Stock options  4,650   263 
Taxes withheld and paid on employees' stock based compensation  (3,157)  (2,754)
Cash paid for the repurchase of Common Stock  (41,578)  (31,094)
Net cash used in financing activities  (40,605)  (60,751)
Foreign currency effect  1,565   (1,883)
Net increase in cash and cash equivalents  908   463 
Cash and cash equivalents at beginning of period  149,673   153,891 
Cash and cash equivalents at end of period $150,581  $154,354 
Supplemental disclosure of cash flow information:      
Cash paid for taxes $19,470  $18,893 
Cash paid for interest  10,022   9,737 
         


GENTHERM INCORPORATED
 
OTHER NON-GAAP RECONCILIATIONS
(Dollars in thousands)
(Unaudited)
 
  Three Months Ended September 30, 
  2024  2023 
Automotive revenues $358,804  $354,782 
Non-automotive electronics revenues and contract manufacturing electronics  5,985   7,321 
One-time benefits from recoveries and retrofits     140 
Adjusted Automotive revenues  352,819   347,321 
Foreign currency translation impact  1,467    
Adjusted Automotive revenues, excluding foreign currency translation impact $351,352  $347,321 
Year over Year % change  1.2%   


  Three Months Ended September 30, 
  2024  2023 
Automotive revenues $358,804  $354,782 
Less: Valve Systems  26,082   27,830 
Less: Automotive Cables  16,834   19,668 
Less: Battery Performance Solutions  16,869   17,242 
Less: Non-automotive and contract manufacturing electronics  5,985   7,321 
Automotive Climate and Comfort Solutions revenues  293,034   282,721 
Less: One-time benefits from recoveries and retrofits     140 
Adjusted Automotive Climate and Comfort Solutions revenues  293,034   282,581 
Foreign currency translation impact  1,024    
Adjusted Automotive Climate and Comfort Solutions revenues, excluding foreign currency translation impact $292,010  $282,581 
Year over Year % change  3.3%   

FAQ

What was Gentherm's (THRM) revenue in Q3 2024?

Gentherm reported product revenues of $371.5 million in Q3 2024, representing a 1.5% increase from $366.2 million in Q3 2023.

How much did Gentherm (THRM) earn per share in Q3 2024?

Gentherm reported GAAP diluted earnings per share of $0.51 and adjusted diluted earnings per share of $0.75 in Q3 2024.

What is Gentherm's (THRM) updated revenue guidance for 2024?

Gentherm updated its 2024 revenue guidance to $1.45B-$1.47B, down from the previous guidance of low end of $1.5B-$1.6B.

How much in new business awards did Gentherm (THRM) secure in Q3 2024?

Gentherm secured $600 million in automotive new business awards during Q3 2024, marking a third quarter record for the company.

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