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
second quarter ending June 30, 2023.
Second Quarter Highlights
- Product revenues of $372.3 million increased 42.8% from $260.7
million in the second quarter of 2022. Excluding the impact of
foreign currency translation, product revenues increased 43.4% year
over year
- Automotive revenues increased 45.1% year over year; excluding
the impact of foreign currency translation and contributions from
the Alfmeier acquisition, automotive revenues increased 19.6% year
over year
- GAAP diluted earnings per share was $(0.05) as compared with
$0.21 for the prior-year period
- Adjusted diluted earnings per share (1) was $0.58. Adjusted
diluted earnings per share in the prior-year period was $0.25
- Secured new automotive business awards totaling $670 million in
the quarter
- Repurchased $10.0 million of the Company’s common stock
|
(1) |
We
provide adjusted diluted earnings per share and other 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. |
Phil Eyler, the Company's President and CEO, said “I am proud of
the global Gentherm team for continued strong momentum in winning
awards, delivering record revenue and expanding profitability. In
the second quarter we secured a record $670 million dollars in new
automotive business awards, bringing us to nearly $1.2 billion in
the first half. Leveraging Alfmeier’s industry leading technologies
and Gentherm’s strong customer relationships, we have also won six
conquest pneumatic lumbar and massage awards since the close of the
acquisition, including a breakthrough award from Stellantis in
July.
Eyler continued, “In addition, we are investing in two new
manufacturing plants and implementing our Fit for Growth 2.0
initiatives to deliver high teens Adjusted EBITDA Margin by 2026 as
part of our previously announced profitability improvement roadmap.
The momentum on revenue and awards combined with the steps we are
taking to optimize our footprint and cost structure, will drive
Gentherm’s flywheel of profitable growth.”
2023 Second Quarter Financial Review
Product revenues for the second quarter of 2023 increased by
$111.6 million, or 42.8%, as compared with the prior-year period.
Excluding the impact of foreign currency translation, product
revenues increased 43.4% year over year.
Automotive revenues increased 45.1% year over year, with revenue
increases in all product categories except Electronics and Other
Automotive product categories. Adjusting for foreign currency
translation and the contribution from Alfmeier, organic Automotive
revenues increased 19.6% year over year. According to S&P
Global’s mid-July report, actual light vehicle production increased
by 18.4% in the current year’s second quarter when compared with
the second quarter of 2022 in the Company’s key markets of North
America, Europe, China, Japan and Korea.
Gentherm Medical revenue decreased 6.7% year over year,
primarily as a result of lower demand in the U.S. and Asia as well
as a large one-time order in the prior year period in Europe.
See the “Revenues by Product Category” table included below for
additional detail.
Gross margin rate increased to 23.6% in the current-year period,
as compared with 22.8% in the prior-year period. The increase from
the prior-year period resulted from fixed cost leverage from higher
unit volume, inflationary customer price adjustments, lower freight
costs and productivity at the factories. These were partially
offset by the impact of the acquired Alfmeier business, which has a
lower gross margin rate relative to the Company’s organic business,
as well as wage inflation and the negative impact from foreign
currency translation.
Net research and development expenses of $24.7 million in the
2023 second quarter increased $5.4 million, or 27.8% over the
prior-year period, primarily as a result of the additional expenses
from the Alfmeier business and lower customer reimbursements for
research and development costs on an organic basis.
Selling, general and administrative expenses of $38.4 million in
the 2023 second quarter increased $6.5 million, or 20.3%, versus
the prior-year period. The year-over-year increase was primarily
driven by additional expenses from the acquired businesses and
higher compensation expenses.
Acquisition and integration expenses of $1.5 million in the
current year period were $2.3 million lower than the prior-year
period as a result of reduced expenses associated with the Alfmeier
acquisition. Restructuring expenses were $1.0 million in the
current-year period as compared to $0.4 million in the prior-year
period.
The Company recorded non-cash impairment charges of $19.5
million, or $0.52 per share after tax, to write down goodwill for
its Medical business in order to align the reporting unit’s book
value with its fair value.
As described more fully in the “Reconciliation of Net Income
(Loss) to Adjusted EBITDA” table included below, the Company
recorded Adjusted EBITDA of $42.4 million in the 2023 second
quarter compared with $24.8 million in the prior-year period, an
increase of $17.5 million or 70.6%.
Income tax expense in the second quarter of 2023 was $4.8
million, as compared with $3.9 million in the prior-year period.
The effective tax rate was 147.1% in the 2023 second quarter.
Excluding the impact of the non-cash goodwill impairment charge the
adjusted effective tax rate was 31.9%.
GAAP diluted loss per share for the second quarter of 2023 was
$(0.05) compared with earnings per share of $0.21 for the
prior-year period. Adjusted diluted earnings per share, excluding
the impairment of goodwill, non-cash purchase accounting impact,
acquisition and integration expenses, restructuring expenses, and
other items specified on the table below, was $0.58. Adjusted
diluted earnings per share in the prior-year period was $0.25.
Guidance
The Company reaffirms its full-year 2023 guidance that was
initially provided in its year-end 2022 earnings release
on February 22, 2023:
- Product revenues between $1.45 billion and $1.55 billion
- Adjusted EBITDA between 11.5% and 13.5% of product
revenues(1)
- Full-year adjusted effective tax rate between 28% and
32%(2)
- Capital expenditures between $60 million and $70 million
|
(1) |
Starting with 2023 reporting, the Company excludes the impact of
non-cash stock-based compensation from the Adjusted EBITDA
results. |
|
(2) |
Excluding the impact of non-cash
goodwill impairment on earnings before income tax of $19.5 million,
which includes the associated deferred tax effect, and income tax
benefit of $2.4 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 13739903.
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 August 15, 2023. 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 13739903.
Investor Contact Yijing
Brentano investors@gentherm.com 248.308.1702
Media Contact Melissa
Fischer media@gentherm.com 248.289.9702
About GenthermGentherm (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, 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. 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 on the
cyclical Automotive industry;
- the production levels of our major customers and OEMs in our
key markets and sudden fluctuations in such production levels
(including the impact of customer employee strikes), in particular
with respect to models for which we supply significant amounts of
product;
- our ability to integrate our recent acquisitions and realize
synergies, as well as to consummate additional strategic
acquisitions and investments;
- our ability to effectively manage new product launches and
research and development;
- increasing competition, including with non-traditional
entrants;
- the ongoing supply-constrained environment, including raw
material and component shortages, manufacturing disruptions and
delays, logistics challenges, inflationary and other cost
pressures, and our resulting increased inventory;
- the impact of our global operations, including our global
supply chain, operations within Ukraine, economic and trade
policies by various jurisdictions, and foreign currency risk and
foreign exchange exposure;
- our business in China, which is subject to unique operational,
competitive, regulatory and economic risks;
- a tightening labor market, labor shortages or work stoppages
impacting us, our customers or our suppliers;
- our achievement of product cost reductions to offset
customer-imposed price reductions or other pricing pressures;
- any security breaches and other disruptions to our information
technology networks and systems, as well as privacy, data security
and data protection risks;
- our product quality and safety;
- the evolution of the automotive industry towards electric
vehicles, autonomous vehicles and mobility on demand services, and
related consumer behaviors and preferences;
- the development of and market acceptance of our existing and
future products;
- our borrowing availability under our revolving credit facility,
as well as our ability to access the capital markets, to support
our planned growth;
- our increased level of indebtedness and compliance with our
debt covenants;
- 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 efforts to optimize our global supply chain;
- our ability to project future sales volume based on third-party
information, based on which we manage our business;
- our ability to convert new business awards into product
revenues;
- any loss or insolvency of our key customers and OEMs, or key
suppliers;
- risks associated with our manufacturing processes;
- the extensive regulation of our patient temperature management
business;
- the protection of our intellectual property in certain
jurisdictions;
- our compliance with anti-corruption laws and regulations;
and
- legal and regulatory proceedings and claims involving us or one
of our major customers.
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
INCORPORATEDCONSOLIDATED CONDENSED STATEMENTS OF
(LOSS) INCOME (In thousands, except per share
data) (Unaudited)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Product revenues |
|
$ |
372,323 |
|
|
$ |
260,715 |
|
|
$ |
735,948 |
|
|
$ |
528,372 |
|
Cost of sales |
|
|
284,335 |
|
|
|
201,338 |
|
|
|
566,830 |
|
|
|
404,882 |
|
Gross margin |
|
|
87,988 |
|
|
|
59,377 |
|
|
|
169,118 |
|
|
|
123,490 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Net research and development expenses |
|
|
24,696 |
|
|
|
19,325 |
|
|
|
49,841 |
|
|
|
39,759 |
|
Selling, general and administrative expenses |
|
|
38,418 |
|
|
|
31,943 |
|
|
|
75,460 |
|
|
|
61,251 |
|
Impairment of goodwill |
|
|
19,509 |
|
|
|
— |
|
|
|
19,509 |
|
|
|
— |
|
Restructuring expenses |
|
|
1,044 |
|
|
|
374 |
|
|
|
2,313 |
|
|
|
555 |
|
Total operating expenses |
|
|
83,667 |
|
|
|
51,642 |
|
|
|
147,123 |
|
|
|
101,565 |
|
Operating income |
|
|
4,321 |
|
|
|
7,735 |
|
|
|
21,995 |
|
|
|
21,925 |
|
Interest expense, net |
|
|
(1,932 |
) |
|
|
(1,430 |
) |
|
|
(6,076 |
) |
|
|
(1,999 |
) |
Foreign currency gain (loss) |
|
|
346 |
|
|
|
4,552 |
|
|
|
(1,723 |
) |
|
|
6,769 |
|
Other income |
|
|
556 |
|
|
|
134 |
|
|
|
786 |
|
|
|
338 |
|
Earnings before income tax |
|
|
3,291 |
|
|
|
10,991 |
|
|
|
14,982 |
|
|
|
27,033 |
|
Income tax expense |
|
|
4,842 |
|
|
|
3,919 |
|
|
|
8,570 |
|
|
|
8,214 |
|
Net (loss) income |
|
$ |
(1,551 |
) |
|
$ |
7,072 |
|
|
$ |
6,412 |
|
|
$ |
18,819 |
|
Basic (loss) earnings per
share |
|
$ |
(0.05 |
) |
|
$ |
0.21 |
|
|
$ |
0.19 |
|
|
$ |
0.57 |
|
Diluted (loss) earnings per
share |
|
$ |
(0.05 |
) |
|
$ |
0.21 |
|
|
$ |
0.19 |
|
|
$ |
0.56 |
|
Weighted average number of shares
– basic |
|
|
33,019 |
|
|
|
33,119 |
|
|
|
33,100 |
|
|
|
33,077 |
|
Weighted average number of shares
– diluted |
|
|
33,019 |
|
|
|
33,426 |
|
|
|
33,328 |
|
|
|
33,422 |
|
GENTHERM
INCORPORATEDREVENUE BY PRODUCT CATEGORY AND
RECONCILIATION OF FOREIGN CURRENCY TRANSLATION
IMPACT(In
thousands)(Unaudited)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
% Change |
|
2023 |
|
|
2022 |
|
|
% Change |
Climate Control Seat |
|
$ |
121,210 |
|
|
$ |
96,488 |
|
|
25.6 |
% |
|
$ |
235,963 |
|
|
$ |
199,222 |
|
|
|
18.4 |
% |
Seat Heaters |
|
|
78,258 |
|
|
|
65,903 |
|
|
18.7 |
% |
|
|
153,894 |
|
|
|
134,799 |
|
|
|
14.2 |
% |
Steering Wheel Heaters |
|
|
38,958 |
|
|
|
28,951 |
|
|
34.6 |
% |
|
|
75,305 |
|
|
|
57,687 |
|
|
|
30.5 |
% |
Lumbar and Massage Comfort
Solutions (a) |
|
|
37,604 |
|
|
|
— |
|
|
100.0 |
% |
|
|
76,342 |
|
|
|
— |
|
|
|
100.0 |
% |
Valve Systems (a) |
|
|
27,692 |
|
|
|
— |
|
|
100.0 |
% |
|
|
54,686 |
|
|
|
— |
|
|
|
100.0 |
% |
Automotive Cables |
|
|
20,243 |
|
|
|
19,280 |
|
|
5.0 |
% |
|
|
40,463 |
|
|
|
41,325 |
|
|
|
(2.1 |
)% |
Battery Performance
Solutions |
|
|
19,587 |
|
|
|
17,451 |
|
|
12.2 |
% |
|
|
39,896 |
|
|
|
35,064 |
|
|
|
13.8 |
% |
Electronics |
|
|
9,323 |
|
|
|
10,278 |
|
|
(9.3 |
)% |
|
|
20,293 |
|
|
|
21,106 |
|
|
|
(3.9 |
)% |
Other Automotive |
|
|
8,658 |
|
|
|
10,801 |
|
|
(19.8 |
)% |
|
|
17,383 |
|
|
|
17,813 |
|
|
|
(2.4 |
)% |
Subtotal Automotive segment |
|
|
361,533 |
|
|
|
249,152 |
|
|
45.1 |
% |
|
|
714,225 |
|
|
|
507,016 |
|
|
|
40.9 |
% |
Medical segment (b) |
|
|
10,790 |
|
|
|
11,563 |
|
|
(6.7 |
)% |
|
|
21,723 |
|
|
|
21,356 |
|
|
|
1.7 |
% |
Total Company |
|
$ |
372,323 |
|
|
$ |
260,715 |
|
|
42.8 |
% |
|
$ |
735,948 |
|
|
$ |
528,372 |
|
|
|
39.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
impact (c) |
|
|
(1,656 |
) |
|
|
— |
|
|
|
|
|
(9,787 |
) |
|
|
— |
|
|
|
|
Total Company, excluding foreign currency translation impact |
|
$ |
373,979 |
|
|
$ |
260,715 |
|
|
43.4 |
% |
|
$ |
745,735 |
|
|
$ |
528,372 |
|
|
|
41.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents
product revenues from Alfmeier (acquired on August 1,
2022). |
(b) Includes product
revenues of $1,672 and $2,951 for the three and six months ended
June 30, 2023, from Dacheng (acquired on July 13, 2022). |
(c) Foreign currency
translation impacts for the Automotive segment and Medical segment
were $(1,714) and $58, respectively, for the three months ended
June 30, 2023. Foreign currency translation impacts for the
Automotive segment and Medical segment were $(9,735) and $(52),
respectively, for the six months ended June 30, 2023. |
GENTHERM
INCORPORATEDRECONCILIATION OF NET (LOSS) INCOME TO
ADJUSTED EBITDA(In
thousands)(Unaudited)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net (loss) income |
|
$ |
(1,551 |
) |
|
$ |
7,072 |
|
|
$ |
6,412 |
|
|
$ |
18,819 |
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
12,393 |
|
|
|
8,998 |
|
|
|
25,838 |
|
|
|
18,485 |
|
Income tax expense (a) |
|
|
4,842 |
|
|
|
3,919 |
|
|
|
8,570 |
|
|
|
8,214 |
|
Interest expense, net (b) |
|
|
1,932 |
|
|
|
1,430 |
|
|
|
6,076 |
|
|
|
1,999 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of goodwill |
|
|
19,509 |
|
|
|
— |
|
|
|
19,509 |
|
|
|
— |
|
Non-cash stock-based compensation (c) |
|
|
3,076 |
|
|
|
3,401 |
|
|
|
5,171 |
|
|
|
6,190 |
|
Acquisition and integration expenses |
|
|
1,480 |
|
|
|
3,794 |
|
|
|
3,112 |
|
|
|
7,008 |
|
Restructuring expense |
|
|
1,044 |
|
|
|
374 |
|
|
|
2,313 |
|
|
|
555 |
|
Non-automotive electronics inventory charge |
|
|
644 |
|
|
|
— |
|
|
|
2,063 |
|
|
|
— |
|
Unrealized currency (gain) loss |
|
|
(740 |
) |
|
|
(4,024 |
) |
|
|
5,125 |
|
|
|
(6,340 |
) |
Other |
|
|
(251 |
) |
|
|
(128 |
) |
|
|
(301 |
) |
|
|
(326 |
) |
Adjusted EBITDA |
|
$ |
42,378 |
|
|
$ |
24,836 |
|
|
$ |
83,888 |
|
|
$ |
54,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenues |
|
$ |
372,323 |
|
|
$ |
260,715 |
|
|
$ |
735,948 |
|
|
$ |
528,372 |
|
Adjusted EBITDA Margin |
|
|
11.4 |
% |
|
|
9.5 |
% |
|
|
11.4 |
% |
|
|
10.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes
$2,423 of deferred income tax benefit associated with the goodwill
impairment of the Medical Reporting Unit. |
(b) Includes
$1,371 and $672 of interest income for the three months and six
months ended June 30, 2023, 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 $3,076 and $3,401 for the three months ended
June 30, 2023 and 2022, respectively. Includes operating expenses
of $4,834 and $6,074 for the six months ended June 30, 2023 and
2022, respectively. |
|
|
Three MonthsEndedJune 30, |
|
|
Six MonthsEndedJune 30, |
|
|
|
2022 |
|
|
2022 |
|
Adjusted EBITDA |
|
$ |
24,836 |
|
|
$ |
54,604 |
|
Non-cash stock-based compensation |
|
|
(3,401 |
) |
|
|
(6,190 |
) |
Adjusted EBITDA as reported in Q2
2022 (1) |
|
$ |
21,435 |
|
|
$ |
48,414 |
|
Adjusted EBITDA Margin as
reported in Q2 2022 (1) |
|
|
8.2 |
% |
|
|
9.2 |
% |
|
|
|
|
|
|
|
(1) Includes the
impact of non-cash stock-based compensation |
|
|
|
|
|
|
|
|
|
|
Three MonthsEndedJune 30, |
|
|
Six MonthsEndedJune 30, |
|
|
|
2022 |
|
|
2022 |
|
Adjusted EBITDA |
|
$ |
24,836 |
|
|
$ |
54,604 |
|
Pro forma EBITDA impact of Alfmeier acquisition |
|
|
1,233 |
|
|
|
1,822 |
|
Pro forma Adjusted EBITDA |
|
$ |
26,069 |
|
|
$ |
56,426 |
|
Pro forma Adjusted EBITDA
Margin |
|
|
8.2 |
% |
|
|
8.7 |
% |
|
|
|
|
|
|
|
|
|
Three MonthsEndedJune 30, |
|
|
Six MonthsEndedJune 30, |
|
|
|
2022 |
|
|
2022 |
|
Product revenues |
|
$ |
260,715 |
|
|
$ |
528,372 |
|
Pro forma revenue impact of Alfmeier acquisition |
|
|
57,626 |
|
|
|
123,725 |
|
Pro forma product revenues |
|
$ |
318,341 |
|
|
$ |
652,097 |
|
|
|
|
|
|
|
|
|
|
|
Three MonthsEndedJune 30, |
|
|
|
|
|
|
|
2023 |
|
|
|
|
|
Effective Tax Rate |
|
147.1 |
% |
|
|
|
|
Impact of non-cash goodwill impairment (2) |
|
-115.3 |
% |
|
|
|
|
Adjusted Effective Tax Rate |
|
31.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(2) Adjustment to
remove the impact of $19.5 million on earnings before income tax,
which includes the associated deferred tax effect, and $2.4 million
of income tax benefit. |
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, organic revenue,
revenue (for the Company and by each reporting segment) excluding
acquired businesses and foreign currency translation, revenue
excluding foreign currency translation, adjusted operating
expenses, pro forma product revenues, pro forma Adjusted EBITDA,
pro forma Adjusted EBITDA margin and adjusted effective tax rate,
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.
Note that in recent prior periods, the Company did not exclude
non-cash stock-based compensation expenses in the definition of
Adjusted EBITDA. Forward-looking references to Adjusted EBITDA and
Adjusted EBITDA margin herein exclude the impact of stock-based
compensation as newly defined. 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
organic revenue as revenue, excluding revenue from acquired
businesses. Note that in recent prior periods, the Company used
organic revenue instead to be revenue excluding foreign currency
translation (see below). The Company defines revenue excluding
acquired businesses and foreign currency translation as revenue,
excluding the revenue from acquired businesses and the estimated
effects of foreign currency exchange on revenue by translating
actual revenue using the prior period foreign currency exchange
rates. 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 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
defines pro forma product revenues as product revenues including
the product revenues of Alfmeier as if the acquisition had occurred
as of January 1, 2022. The Company defines pro forma Adjusted
EBITDA as Adjusted EBITDA, as defined above, including the results
of Alfmeier as if the acquisition had occurred as of January 1,
2022. The Company defines pro forma Adjusted EBITDA margin as pro
forma Adjusted EBITDA, as defined above, divided by pro forma
product revenues. The Company defines adjusted effective tax rate
as income tax expense excluding the tax benefit from non-cash
goodwill impairment divided by earnings before income tax excluding
the impact of non-cash goodwill impairment.
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 August 1, 2023.
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
INCORPORATEDADJUSTED NET INCOME AND ADJUSTED
EARNINGS PER SHARE(In thousands, except per share
data)(Unaudited)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net (loss) income |
|
$ |
(1,551 |
) |
|
$ |
7,072 |
|
|
$ |
6,412 |
|
|
$ |
18,819 |
|
Non-cash purchase accounting impact |
|
|
2,330 |
|
|
|
1,749 |
|
|
|
4,180 |
|
|
|
3,584 |
|
Restructuring expenses |
|
|
1,044 |
|
|
|
374 |
|
|
|
2,313 |
|
|
|
555 |
|
Unrealized currency (gain) loss |
|
|
(740 |
) |
|
|
(4,024 |
) |
|
|
5,125 |
|
|
|
(6,340 |
) |
Acquisition and integration expenses |
|
|
1,480 |
|
|
|
3,794 |
|
|
|
3,112 |
|
|
|
7,008 |
|
Non-automotive electronics inventory charge |
|
|
644 |
|
|
|
— |
|
|
|
2,063 |
|
|
|
— |
|
Impairment of goodwill |
|
|
19,509 |
|
|
|
— |
|
|
|
19,509 |
|
|
|
— |
|
Other |
|
|
(251 |
) |
|
|
(128 |
) |
|
|
(301 |
) |
|
|
(326 |
) |
Tax effect of above |
|
|
(3,425 |
) |
|
|
(462 |
) |
|
|
(6,942 |
) |
|
|
(1,198 |
) |
Adjusted net income |
|
$ |
19,040 |
|
|
$ |
8,375 |
|
|
$ |
35,471 |
|
|
$ |
22,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
33,019 |
|
|
|
33,119 |
|
|
|
33,100 |
|
|
|
33,077 |
|
Diluted |
|
|
33,019 |
|
|
|
33,426 |
|
|
|
33,328 |
|
|
|
33,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Earnings per share, as
reported: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.05 |
) |
|
$ |
0.21 |
|
|
$ |
0.19 |
|
|
$ |
0.57 |
|
Diluted |
|
$ |
(0.05 |
) |
|
$ |
0.21 |
|
|
$ |
0.19 |
|
|
$ |
0.56 |
|
Adjusted earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.58 |
|
|
$ |
0.25 |
|
|
$ |
1.07 |
|
|
$ |
0.67 |
|
Diluted |
|
$ |
0.58 |
|
|
$ |
0.25 |
|
|
$ |
1.06 |
|
|
$ |
0.66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENTHERM
INCORPORATEDCONSOLIDATED CONDENSED BALANCE
SHEETS (In thousands, except share
data)(Unaudited)
|
|
June 30,2023 |
|
|
December 31,2022 |
|
ASSETS |
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
168,671 |
|
|
$ |
153,891 |
|
Accounts receivable, net |
|
|
258,157 |
|
|
|
247,131 |
|
Inventory: |
|
|
|
|
|
|
Raw materials |
|
|
129,972 |
|
|
|
136,217 |
|
Work in process |
|
|
15,673 |
|
|
|
17,695 |
|
Finished goods |
|
|
62,295 |
|
|
|
64,336 |
|
Inventory, net |
|
|
207,940 |
|
|
|
218,248 |
|
Other current assets |
|
|
74,781 |
|
|
|
64,597 |
|
Total current assets |
|
|
709,549 |
|
|
|
683,867 |
|
Property and equipment, net |
|
|
239,920 |
|
|
|
244,480 |
|
Goodwill |
|
|
100,885 |
|
|
|
119,774 |
|
Other intangible assets, net |
|
|
69,096 |
|
|
|
73,933 |
|
Operating lease right-of-use
assets |
|
|
29,925 |
|
|
|
29,945 |
|
Deferred income tax assets |
|
|
74,537 |
|
|
|
69,840 |
|
Other non-current assets |
|
|
20,135 |
|
|
|
17,461 |
|
Total assets |
|
$ |
1,244,047 |
|
|
$ |
1,239,300 |
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
207,655 |
|
|
$ |
182,225 |
|
Current lease liabilities |
|
|
8,005 |
|
|
|
7,143 |
|
Current maturities of long-term debt |
|
|
684 |
|
|
|
2,443 |
|
Other current liabilities |
|
|
91,278 |
|
|
|
93,814 |
|
Total current liabilities |
|
|
307,622 |
|
|
|
285,625 |
|
Long-term debt, less current
maturities |
|
|
217,441 |
|
|
|
232,653 |
|
Non-current lease
liabilities |
|
|
18,095 |
|
|
|
20,538 |
|
Pension benefit obligation |
|
|
3,229 |
|
|
|
3,638 |
|
Other non-current
liabilities |
|
|
27,100 |
|
|
|
24,573 |
|
Total liabilities |
|
$ |
573,487 |
|
|
$ |
567,027 |
|
Shareholders’ equity: |
|
|
|
|
|
|
Common Stock: |
|
|
|
|
|
|
No par value; 55,000,000 shares authorized 32,987,809 and
33,202,082 issued and outstanding at June 30, 2023 and December 31,
2022, respectively |
|
|
105,525 |
|
|
|
122,658 |
|
Paid-in capital |
|
|
5,379 |
|
|
|
5,447 |
|
Accumulated other comprehensive loss |
|
|
(37,413 |
) |
|
|
(46,489 |
) |
Accumulated earnings |
|
|
597,069 |
|
|
|
590,657 |
|
Total shareholders’ equity |
|
|
670,560 |
|
|
|
672,273 |
|
Total liabilities and shareholders’ equity |
|
$ |
1,244,047 |
|
|
$ |
1,239,300 |
|
GENTHERM
INCORPORATEDCONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS(In thousands)(Unaudited)
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
Operating Activities: |
|
|
|
|
|
|
Net income |
|
$ |
6,412 |
|
|
$ |
18,819 |
|
Adjustments to reconcile net income to net cash provided by (used
in) operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
26,077 |
|
|
|
18,635 |
|
Deferred income taxes |
|
|
(2,812 |
) |
|
|
(997 |
) |
Stock based compensation |
|
|
5,053 |
|
|
|
5,263 |
|
Loss on disposition of property and equipment |
|
|
828 |
|
|
|
518 |
|
Provisions for inventory |
|
|
1,930 |
|
|
|
1,807 |
|
Impairment of goodwill |
|
|
19,509 |
|
|
|
— |
|
Other |
|
|
(259 |
) |
|
|
708 |
|
Changes in assets and liabilities: |
|
|
— |
|
|
|
— |
|
Accounts receivable, net |
|
|
(11,624 |
) |
|
|
(31,762 |
) |
Inventory |
|
|
9,417 |
|
|
|
(35,444 |
) |
Other assets |
|
|
(12,241 |
) |
|
|
(10,443 |
) |
Accounts payable |
|
|
24,518 |
|
|
|
27,768 |
|
Other liabilities |
|
|
(8,196 |
) |
|
|
1,442 |
|
Net cash provided by (used in) operating activities |
|
|
58,612 |
|
|
|
(3,686 |
) |
Investing Activities: |
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(13,667 |
) |
|
|
(15,448 |
) |
Proceeds from the sale of property and equipment |
|
|
40 |
|
|
|
81 |
|
Proceeds from deferred purchase price of factored receivables |
|
|
7,351 |
|
|
|
— |
|
Cost of technology investments |
|
|
(500 |
) |
|
|
(350 |
) |
Net cash used in investing activities |
|
|
(6,776 |
) |
|
|
(15,717 |
) |
Financing Activities: |
|
|
|
|
|
|
Repayments of debt |
|
|
(16,982 |
) |
|
|
(1,250 |
) |
Proceeds from the exercise of Common Stock options |
|
|
263 |
|
|
|
569 |
|
Taxes withheld and paid on employees' share-based payment
awards |
|
|
(2,644 |
) |
|
|
(4,464 |
) |
Cash paid for the repurchase of Common Stock |
|
|
(19,993 |
) |
|
|
— |
|
Net cash used in financing activities |
|
|
(39,356 |
) |
|
|
(5,145 |
) |
Foreign currency effect |
|
|
2,300 |
|
|
|
(8,800 |
) |
Net increase (decrease) in cash and cash equivalents |
|
|
14,780 |
|
|
|
(33,348 |
) |
Cash and cash equivalents at beginning of period |
|
|
153,891 |
|
|
|
190,606 |
|
Cash and cash equivalents at end of period |
|
$ |
168,671 |
|
|
$ |
157,258 |
|
Supplemental disclosure of cash
flow information: |
|
|
|
|
|
|
Cash paid for taxes |
|
$ |
11,619 |
|
|
$ |
8,642 |
|
Cash paid for interest |
|
|
6,640 |
|
|
|
909 |
|
Gentherm (NASDAQ:THRM)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Gentherm (NASDAQ:THRM)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024