Achieved 86% Year over Year Growth in Net IncomeSecured $530M of Automotive New Business AwardsReaffirms 2024 Guidance NORTHVILLE, Mich., April 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 first quarter ending March 31, 2024. First Quarter Highlights Product revenues of $356.0 million decreased 2.1% from $363.6 million in the first quarter of 2023. 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, automotive revenues decreased 1.5% year over year GAAP diluted earnings per share was $0.47 as compared with $0.24 for the prior-year period Adjusted diluted earnings per share (see table herein) was $0.62. Adjusted diluted earnings per share in the prior-year period was $0.49 Secured automotive new business awards totaling $530 million in the quarter 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: Product revenues between $1.5 billion and $1.6 billion, based on the current forecast of customer orders, light vehicle production in the Company's key markets declining at a low single digit rate, and a EUR to USD exchange rate of $1.10/Euro Adjusted EBITDA between 12.5% and 13.5% of product revenues Full year effective tax rate between 26% and 29% Capital expenditures between $65 million and $75 million 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 Media Contact Melissa 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 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 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 efforts to optimize our global supply chain and manufacturing footprint; 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.   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     $