[10-Q] Gentherm Inc Quarterly Earnings Report
Form 4 highlights – Zillow Group, Inc. (ZG, Z): Co-Executive Chairman, President and Co-Founder Lloyd D. Frink reported paired option exercises and open-market sales on 22-23 Jul 2025.
- Options exercised: 52,866 shares on 7/22/25 and 27,134 shares on 7/23/25 at a fixed $22.41 strike (grants dated 05/18/16, expiring 03/28/26).
- Shares sold: Exactly the same totals (80,000 shares) were sold under a 10b5-1 plan at weighted-average prices of $80.25, $80.60 and $81.24.
- Holdings after transactions: 2,383,189 Class C shares held directly and 797,765 shares held indirectly through the Frink Descendants’ Trust.
- Ownership status: Frink remains a director, executive officer and co-founder; filing made individually.
No Class A or Class B activity was reported. The trades convert in-the-money options to cash without changing Frink’s overall direct share count materially.
Punti salienti del Modulo 4 – Zillow Group, Inc. (ZG, Z): Lloyd D. Frink, Co-Presidente Esecutivo, Presidente e Co-Fondatore, ha riportato esercizi di opzioni abbinati a vendite sul mercato aperto il 22 e 23 luglio 2025.
- Opzioni esercitate: 52.866 azioni il 22/07/25 e 27.134 azioni il 23/07/25 a un prezzo di esercizio fisso di 22,41 $ (concessioni datate 18/05/16, scadenza 28/03/26).
- Azioni vendute: Esattamente lo stesso totale (80.000 azioni) venduto secondo un piano 10b5-1 a prezzi medi ponderati di 80,25 $, 80,60 $ e 81,24 $.
- Detenzioni dopo le operazioni: 2.383.189 azioni di Classe C detenute direttamente e 797.765 azioni detenute indirettamente tramite il Frink Descendants’ Trust.
- Stato di proprietà: Frink rimane direttore, dirigente esecutivo e co-fondatore; la comunicazione è stata effettuata a titolo individuale.
Non sono state segnalate attività su azioni di Classe A o Classe B. Le operazioni convertono opzioni in-the-money in liquidità senza modificare sostanzialmente il numero complessivo di azioni detenute direttamente da Frink.
Aspectos destacados del Formulario 4 – Zillow Group, Inc. (ZG, Z): Lloyd D. Frink, Copresidente Ejecutivo, Presidente y Cofundador, informó ejercicios de opciones combinados con ventas en el mercado abierto los días 22 y 23 de julio de 2025.
- Opciones ejercidas: 52,866 acciones el 22/07/25 y 27,134 acciones el 23/07/25 a un precio de ejercicio fijo de 22,41 $ (concesiones fechadas el 18/05/16, con vencimiento el 28/03/26).
- Acciones vendidas: Exactamente el mismo total (80,000 acciones) vendido bajo un plan 10b5-1 a precios promedio ponderados de 80,25 $, 80,60 $ y 81,24 $.
- Participaciones después de las transacciones: 2,383,189 acciones Clase C poseídas directamente y 797,765 acciones poseídas indirectamente a través del Frink Descendants’ Trust.
- Estado de propiedad: Frink sigue siendo director, ejecutivo y cofundador; la presentación fue realizada a título individual.
No se reportó actividad en acciones Clase A o Clase B. Las operaciones convierten opciones in-the-money en efectivo sin cambiar materialmente el número total de acciones directas de Frink.
Form 4 주요 내용 – Zillow Group, Inc. (ZG, Z): 공동 집행 의장이자 사장, 공동 창립자인 Lloyd D. Frink가 2025년 7월 22~23일에 옵션 행사 및 공개시장 매도를 보고했습니다.
- 행사된 옵션: 2025년 7월 22일 52,866주, 7월 23일 27,134주, 고정 행사가격 $22.41 (2016년 5월 18일 부여, 2026년 3월 28일 만료).
- 매도된 주식: 10b5-1 계획에 따라 정확히 동일한 총량(80,000주)을 가중평균 가격 $80.25, $80.60, $81.24에 매도.
- 거래 후 보유 주식: 직접 보유한 클래스 C 주식 2,383,189주와 Frink 후손 신탁을 통한 간접 보유 797,765주.
- 소유 상태: Frink는 이사, 임원, 공동 창립자로 남아 있으며, 개별적으로 신고함.
클래스 A 또는 클래스 B 주식 활동은 보고되지 않았습니다. 이번 거래는 Frink의 직접 보유 주식 수를 크게 변경하지 않고, 인더머니 옵션을 현금으로 전환하는 것입니다.
Points clés du formulaire 4 – Zillow Group, Inc. (ZG, Z) : Lloyd D. Frink, coprésident exécutif, président et cofondateur, a déclaré des exercices d’options jumelés à des ventes sur le marché ouvert les 22 et 23 juillet 2025.
- Options exercées : 52 866 actions le 22/07/25 et 27 134 actions le 23/07/25 à un prix d’exercice fixe de 22,41 $ (attributions datées du 18/05/16, expirant le 28/03/26).
- Actions vendues : Exactement le même total (80 000 actions) vendu dans le cadre d’un plan 10b5-1 à des prix moyens pondérés de 80,25 $, 80,60 $ et 81,24 $.
- Portefeuille après transactions : 2 383 189 actions de classe C détenues directement et 797 765 actions détenues indirectement via le Frink Descendants’ Trust.
- Statut de propriété : Frink reste administrateur, dirigeant exécutif et cofondateur ; déclaration faite à titre individuel.
Aucune activité concernant les actions de classe A ou B n’a été signalée. Ces transactions convertissent des options dans la monnaie en liquidités sans modifier de manière significative le nombre total d’actions détenues directement par Frink.
Formular 4 Highlights – Zillow Group, Inc. (ZG, Z): Lloyd D. Frink, Co-Executive Chairman, Präsident und Mitbegründer, meldete ausgeübte Optionen und Verkäufe am offenen Markt am 22. und 23. Juli 2025.
- Ausgeübte Optionen: 52.866 Aktien am 22.07.25 und 27.134 Aktien am 23.07.25 zu einem festen Ausübungspreis von 22,41 $ (Zuteilungen vom 18.05.16, Laufzeit bis 28.03.26).
- Verkaufte Aktien: Genau die gleiche Gesamtzahl (80.000 Aktien) wurde im Rahmen eines 10b5-1-Plans zu gewichteten Durchschnittspreisen von 80,25 $, 80,60 $ und 81,24 $ verkauft.
- Bestände nach den Transaktionen: 2.383.189 Class-C-Aktien direkt gehalten und 797.765 Aktien indirekt über den Frink Descendants’ Trust gehalten.
- Eigentumsstatus: Frink bleibt Direktor, leitender Angestellter und Mitbegründer; die Meldung erfolgte individuell.
Keine Aktivitäten mit Class-A- oder Class-B-Aktien wurden gemeldet. Die Transaktionen wandeln im Geld befindliche Optionen in Bargeld um, ohne Frinks direkte Gesamtaktienanzahl wesentlich zu verändern.
- None.
- Approximately 80,000 shares sold by a top executive could be interpreted as reduced near-term confidence, despite being under a 10b5-1 plan.
Insights
TL;DR: Insider exercised 80k options and immediately sold, monetising gain; net share count unchanged, sentiment mildly negative.
Frink’s exercise-and-sell suggests liquidity taking rather than incremental investment. The ~80k share sale is <1 % of his 2.38 M direct stake, so limited structural impact, yet insider selling near $80—4× the $22.41 strike—may be viewed as a short-term confidence check. No new options granted. The 10b5-1 plan reduces signal noise, but investors often discount when multiple sales occur at multi-year highs. Overall, the filing is moderately negative for sentiment but not financially material to Zillow.
TL;DR: Routine 10b5-1 cash-out; governance risk low, market impact minimal.
Use of a pre-arranged 10b5-1 plan aligns with best-practice, limiting potential misuse of insider knowledge. Exercising options close to expiry and selling equal shares keeps exposure level steady, signalling portfolio rebalancing rather than exit. Remaining holdings and board role preserve alignment with shareholders. I classify the event as low governance risk and largely non-impactful.
Punti salienti del Modulo 4 – Zillow Group, Inc. (ZG, Z): Lloyd D. Frink, Co-Presidente Esecutivo, Presidente e Co-Fondatore, ha riportato esercizi di opzioni abbinati a vendite sul mercato aperto il 22 e 23 luglio 2025.
- Opzioni esercitate: 52.866 azioni il 22/07/25 e 27.134 azioni il 23/07/25 a un prezzo di esercizio fisso di 22,41 $ (concessioni datate 18/05/16, scadenza 28/03/26).
- Azioni vendute: Esattamente lo stesso totale (80.000 azioni) venduto secondo un piano 10b5-1 a prezzi medi ponderati di 80,25 $, 80,60 $ e 81,24 $.
- Detenzioni dopo le operazioni: 2.383.189 azioni di Classe C detenute direttamente e 797.765 azioni detenute indirettamente tramite il Frink Descendants’ Trust.
- Stato di proprietà: Frink rimane direttore, dirigente esecutivo e co-fondatore; la comunicazione è stata effettuata a titolo individuale.
Non sono state segnalate attività su azioni di Classe A o Classe B. Le operazioni convertono opzioni in-the-money in liquidità senza modificare sostanzialmente il numero complessivo di azioni detenute direttamente da Frink.
Aspectos destacados del Formulario 4 – Zillow Group, Inc. (ZG, Z): Lloyd D. Frink, Copresidente Ejecutivo, Presidente y Cofundador, informó ejercicios de opciones combinados con ventas en el mercado abierto los días 22 y 23 de julio de 2025.
- Opciones ejercidas: 52,866 acciones el 22/07/25 y 27,134 acciones el 23/07/25 a un precio de ejercicio fijo de 22,41 $ (concesiones fechadas el 18/05/16, con vencimiento el 28/03/26).
- Acciones vendidas: Exactamente el mismo total (80,000 acciones) vendido bajo un plan 10b5-1 a precios promedio ponderados de 80,25 $, 80,60 $ y 81,24 $.
- Participaciones después de las transacciones: 2,383,189 acciones Clase C poseídas directamente y 797,765 acciones poseídas indirectamente a través del Frink Descendants’ Trust.
- Estado de propiedad: Frink sigue siendo director, ejecutivo y cofundador; la presentación fue realizada a título individual.
No se reportó actividad en acciones Clase A o Clase B. Las operaciones convierten opciones in-the-money en efectivo sin cambiar materialmente el número total de acciones directas de Frink.
Form 4 주요 내용 – Zillow Group, Inc. (ZG, Z): 공동 집행 의장이자 사장, 공동 창립자인 Lloyd D. Frink가 2025년 7월 22~23일에 옵션 행사 및 공개시장 매도를 보고했습니다.
- 행사된 옵션: 2025년 7월 22일 52,866주, 7월 23일 27,134주, 고정 행사가격 $22.41 (2016년 5월 18일 부여, 2026년 3월 28일 만료).
- 매도된 주식: 10b5-1 계획에 따라 정확히 동일한 총량(80,000주)을 가중평균 가격 $80.25, $80.60, $81.24에 매도.
- 거래 후 보유 주식: 직접 보유한 클래스 C 주식 2,383,189주와 Frink 후손 신탁을 통한 간접 보유 797,765주.
- 소유 상태: Frink는 이사, 임원, 공동 창립자로 남아 있으며, 개별적으로 신고함.
클래스 A 또는 클래스 B 주식 활동은 보고되지 않았습니다. 이번 거래는 Frink의 직접 보유 주식 수를 크게 변경하지 않고, 인더머니 옵션을 현금으로 전환하는 것입니다.
Points clés du formulaire 4 – Zillow Group, Inc. (ZG, Z) : Lloyd D. Frink, coprésident exécutif, président et cofondateur, a déclaré des exercices d’options jumelés à des ventes sur le marché ouvert les 22 et 23 juillet 2025.
- Options exercées : 52 866 actions le 22/07/25 et 27 134 actions le 23/07/25 à un prix d’exercice fixe de 22,41 $ (attributions datées du 18/05/16, expirant le 28/03/26).
- Actions vendues : Exactement le même total (80 000 actions) vendu dans le cadre d’un plan 10b5-1 à des prix moyens pondérés de 80,25 $, 80,60 $ et 81,24 $.
- Portefeuille après transactions : 2 383 189 actions de classe C détenues directement et 797 765 actions détenues indirectement via le Frink Descendants’ Trust.
- Statut de propriété : Frink reste administrateur, dirigeant exécutif et cofondateur ; déclaration faite à titre individuel.
Aucune activité concernant les actions de classe A ou B n’a été signalée. Ces transactions convertissent des options dans la monnaie en liquidités sans modifier de manière significative le nombre total d’actions détenues directement par Frink.
Formular 4 Highlights – Zillow Group, Inc. (ZG, Z): Lloyd D. Frink, Co-Executive Chairman, Präsident und Mitbegründer, meldete ausgeübte Optionen und Verkäufe am offenen Markt am 22. und 23. Juli 2025.
- Ausgeübte Optionen: 52.866 Aktien am 22.07.25 und 27.134 Aktien am 23.07.25 zu einem festen Ausübungspreis von 22,41 $ (Zuteilungen vom 18.05.16, Laufzeit bis 28.03.26).
- Verkaufte Aktien: Genau die gleiche Gesamtzahl (80.000 Aktien) wurde im Rahmen eines 10b5-1-Plans zu gewichteten Durchschnittspreisen von 80,25 $, 80,60 $ und 81,24 $ verkauft.
- Bestände nach den Transaktionen: 2.383.189 Class-C-Aktien direkt gehalten und 797.765 Aktien indirekt über den Frink Descendants’ Trust gehalten.
- Eigentumsstatus: Frink bleibt Direktor, leitender Angestellter und Mitbegründer; die Meldung erfolgte individuell.
Keine Aktivitäten mit Class-A- oder Class-B-Aktien wurden gemeldet. Die Transaktionen wandeln im Geld befindliche Optionen in Bargeld um, ohne Frinks direkte Gesamtaktienanzahl wesentlich zu verändern.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from to .
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
At July 18, 2025, there were
GENTHERM INCORPORATED
TABLE OF CONTENTS
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Part I. Financial Information |
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Item 1. |
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Financial Statements (Unaudited) |
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Consolidated Condensed Balance Sheets |
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Consolidated Condensed Statements of Income |
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Consolidated Condensed Statements of Comprehensive Income |
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Consolidated Condensed Statements of Cash Flows |
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Consolidated Condensed Statements of Changes in Shareholders’ Equity |
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Notes to Unaudited Consolidated Condensed Financial Statements |
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Note 1 - Overview |
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Note 2 - New Accounting Pronouncements |
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Note 3 - Restructuring |
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Note 4 - Details of Certain Balance Sheet Components |
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Note 5 - Goodwill and Other Intangibles |
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Note 6 - Debt |
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Note 7 - Commitments and Contingencies |
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Note 8 - Supplier Finance Program |
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Note 9 - Earnings Per Share |
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Note 10 - Financial Instruments |
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Note 11 - Fair Value Measurements |
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Note 12 - Equity |
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Note 13 - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) |
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Note 14 - Income Taxes |
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Note 15 - Segment Reporting |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Quantitative and Qualitative Disclosures About Market Risk |
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Controls and Procedures |
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Part II. Other Information |
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Legal Proceedings |
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Risk Factors |
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Unregistered Sales of Equity Securities and Use of Proceeds |
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Other Information |
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Exhibits |
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Signatures |
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Table of Contents
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GENTHERM INCORPORATED
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
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June 30, 2025 |
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December 31, 2024 |
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ASSETS |
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Current Assets: |
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Inventory: |
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Raw materials |
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Work in process |
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Finished goods |
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Inventory, net |
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Other current assets |
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Total current assets |
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Property and equipment, net |
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Goodwill |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current Liabilities: |
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Total current liabilities |
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Long-term debt, less current maturities |
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Total liabilities |
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Shareholders’ equity: |
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Common Stock: |
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Paid-in capital |
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Accumulated other comprehensive income (loss) |
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Accumulated earnings |
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Total shareholders’ equity |
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Total liabilities and shareholders’ equity |
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See accompanying notes to the consolidated condensed financial statements.
3
Table of Contents
GENTHERM INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2025 |
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2024 |
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2025 |
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2024 |
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Product revenues |
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Cost of sales |
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Gross margin |
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Operating expenses: |
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Net research and development expenses |
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Selling, general and administrative expenses |
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Restructuring expenses, net |
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Loss on sale of land and building, net |
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Total operating expenses |
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Operating income |
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Interest expense, net |
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Foreign currency (loss) gain |
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|
|
|
|
Other (loss) income |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Earnings before income tax |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Basic earnings per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted earnings per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Weighted average number of shares – basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of shares – diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
See accompanying notes to the consolidated condensed financial statements.
4
Table of Contents
GENTHERM INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Pension benefit obligations, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Unrealized gain (loss) on cash flow derivative securities, net of tax |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Other comprehensive income (loss), net of tax |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Comprehensive income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
See accompanying notes to the consolidated condensed financial statements.
5
Table of Contents
GENTHERM INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|
Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Operating Activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
( |
) |
|
|
|
|
Stock based compensation |
|
|
|
|
|
|
||
Loss on disposition of property and equipment |
|
|
|
|
|
( |
) |
|
Provisions for inventory |
|
|
|
|
|
|
||
Other non-cash items, including unrealized foreign currency (gain) loss |
|
|
|
|
|
( |
) |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
( |
) |
|
|
( |
) |
Inventory |
|
|
( |
) |
|
|
( |
) |
Other assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable |
|
|
|
|
|
|
||
Other liabilities |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
|
||
Investing Activities: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
( |
) |
|
|
( |
) |
Proceeds from the sale of property and equipment |
|
|
|
|
|
|
||
Proceeds from deferred purchase price of factored receivables |
|
|
|
|
|
|
||
Cost of technology investments |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Financing Activities: |
|
|
|
|
|
|
||
Borrowings on debt |
|
|
|
|
|
|
||
Repayments of debt |
|
|
( |
) |
|
|
( |
) |
Proceeds from the exercise of Common Stock options |
|
|
— |
|
|
|
|
|
Taxes withheld and paid on employees' stock based compensation |
|
|
( |
) |
|
|
( |
) |
Cash paid for the repurchase of Common Stock |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
Foreign currency effect |
|
|
|
|
|
( |
) |
|
Net decrease in cash and cash equivalents |
|
|
( |
) |
|
|
( |
) |
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents at end of period |
|
$ |
|
|
$ |
|
||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Cash paid for taxes |
|
$ |
|
|
$ |
|
||
Cash paid for interest |
|
|
|
|
|
|
||
Non-Cash Investing Activities: |
|
|
|
|
|
|
||
Period-end balance of accounts payable for property and equipment |
|
$ |
|
|
$ |
|
||
Deferred purchase price of receivables factored in the period |
|
|
— |
|
|
|
|
|
See accompanying notes to the consolidated condensed financial statements.
6
Table of Contents
GENTHERM INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
||||||
|
|
Common Stock |
|
|
Paid-in |
|
|
Comprehensive |
|
|
Accumulated |
|
|
|
|
|||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Income (Loss) |
|
|
Earnings |
|
|
Total |
|
||||||
Balance at December 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Stock based compensation, net |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Balance at March 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Stock based compensation, net |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock repurchase |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at June 30, 2025 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
||||||
|
|
Common Stock |
|
|
Paid-in |
|
|
Comprehensive |
|
|
Accumulated |
|
|
|
|
|||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Income (Loss) |
|
|
Earnings |
|
|
Total |
|
||||||
Balance at December 31, 2023 |
|
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock based compensation, net |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|||
Balance at March 31, 2024 |
|
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock based compensation, net |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock repurchase |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
|
|
( |
) |
||
Balance at June 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
See accompanying notes to the consolidated condensed financial statements.
7
Table of Contents
Note 1 – Overview
Gentherm Incorporated, a Michigan corporation, and its consolidated subsidiaries (“Gentherm”, “we”, “us”, “our” or the “Company”) is a global market leader of innovative thermal management and pneumatic comfort technologies. Our automotive products include variable temperature Climate Control Seats (CCS®), Climate Control Interiors (CCI™), Lumbar and Massage Comfort Solutions, Valve Systems, and electronic solutions for climate and comfort technologies. Our automotive products can be found on light vehicles manufactured by nearly all the major original equipment manufacturers (“OEMs”) operating in North America and Europe, and several major OEMs in Asia. We operate in locations aligned with our major customers’ product strategies to provide locally enhanced design, integration and production capabilities. Our medical products include patient temperature management systems that can be found in hospitals throughout the world, primarily in the U.S., China, Germany and Brazil. The Company is also developing a number of new technologies and products that will help enable improvements to existing products, improve health, wellness and patient outcomes and will lead to new product applications for existing and new and adjacent markets.
Basis of Presentation and Significant Accounting Policies
The unaudited consolidated condensed financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations. The information furnished in the consolidated condensed financial statements include all adjustments (consisting of only normal, recurring adjustments) considered necessary to present fairly the results of operations, financial position and cash flows of the Company. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. The operating results for interim periods are not necessarily indicative of results that may be expected for other interim periods or for the full year.
In preparing these financial statements, management was required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and assumptions are based on our historical experience, the terms of existing contracts, our evaluation of trends in the industry, information provided by our customers and suppliers and information available from other third-party sources, as appropriate. These estimates and assumptions are subject to an inherent degree of uncertainty and may change as new events occur and additional information is obtained. As a result, actual results may differ significantly from our estimates, and any such differences may be material to our financial statements.
All amounts in these notes to the consolidated condensed financial statements are presented in thousands, except share and per share data.
Principles of Consolidation
The consolidated condensed financial statements include the accounts of the Company, its wholly owned subsidiaries and those entities in which it has a controlling financial interest. The Company evaluates its relationship with other entities for consolidation and to identify whether such entities are variable interest entities and to assess whether the Company is the primary beneficiary of such entities. Investments in affiliates in which Gentherm does not have control but does have the ability to exercise significant influence over operating and financial policies are accounted for under the equity method. When Gentherm does not have the ability to exercise significant influence (generally when ownership interest is less than
Revenue Recognition - payments to customers
From time to time, the Company provides cash incentives to customers in exchange for new business awards. The Company evaluates the underlying economics of each amount of consideration payable to a customer to determine the proper accounting by understanding the reasons for the payment, the rights and obligations resulting from the payment, the nature of the promises in the contract, and other relevant facts and circumstances. When the Company concludes that the payment is incurred only if the new business is obtained and the Company expects to recover the amounts from the customer over the term of the new business arrangement, the Company recognizes these payments as an asset. The Company amortizes the asset as a reduction of revenue as products related to the payment are transferred to the customer, based on the total amount of products expected to be sold over the
8
Table of Contents
term of the arrangement (generally
As of June 30, 2025 and December 31, 2024, total capitalized payments to customers were $
Loss on Sale of Land and Building, net
In connection with our move to a new global headquarters location, we completed the sale of our former headquarters building in Northville, Michigan in January 2025. The sale resulted in cash proceeds of $
Note 2 – Recently Issued Accounting Pronouncements
Income Taxes
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) ". ASU 2024-03 enhances disclosures around certain costs and expenses. Retrospective adoption is required for all periods presented in the financial statements and early adoption is permitted. This update is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. We are currently in the process of determining the impact the implementation of ASU 2024-03 will have on the Company’s financial statement disclosures.
Note 3 – Restructuring
The Company continuously monitors market developments, industry trends and changing customer needs and in response, has taken and may continue to undertake restructuring actions, as necessary, to execute management’s strategy, streamline operations and optimize the Company’s cost structure. Restructuring actions may include the realignment of existing manufacturing footprint, facility closures or similar actions, either in the normal course of business or pursuant to significant restructuring programs.
These actions may result in employees receiving voluntary or involuntary employee termination benefits, which are mainly statutory requirements or other contractual agreements. Voluntary termination benefits are accrued when an employee accepts the related offer. Involuntary termination benefits are accrued upon the commitment to a termination plan and when the benefit arrangement is communicated to affected employees, or when liabilities are determined to be probable and estimable, depending on the existence of a substantive plan for severance or termination.
2025 EMEA Plan
In February 2025, the Company committed to a restructuring plan to further optimize the Company’s manufacturing footprint by realigning its manufacturing capacity in Europe (“2025 EMEA Plan”). As a result, the Company will close its facility in Plzeň, Czech Republic and relocate the manufacturing activities into other existing facilities within the region.
9
Table of Contents
The Company expects to incur cash restructuring costs of between $
During the three and six months ended June 30, 2025, the Company recognized restructuring expense of $
2025 Asia Plan
In February 2025, the Company committed to an additional restructuring plan to further optimize the Company’s manufacturing footprint by realigning its manufacturing capacity in Asia (“2025 Asia Plan”). As a result, the Company will relocate certain manufacturing activities from its facility in Shanghai, China to its new facility in Tianjin, China.
The Company expects to incur cash restructuring costs of between $
During the three and six months ended June 30, 2025, the Company recognized restructuring expense of $
Other Restructuring Actions
The Company has undertaken several discrete restructuring actions in an effort to optimize its cost structure.
During the three and six months ended June 30, 2025, the Company recognized $
During the three and six months ended June 30, 2024, the Company recognized $
During the three and six months ended June 30, 2025, the Company recognized $(
During the three and six months ended June 30, 2024, the Company recognized $
Restructuring Expenses, Net By Reporting Segment
The following table summarizes restructuring expenses, net for the three and six months ended June 30, 2025 and 2024 by reporting segment:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Automotive |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Medical |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
10
Table of Contents
Restructuring Liability
Restructuring liabilities are classified as other current liabilities in the consolidated condensed balance sheets.
|
|
Employee Separation Costs |
|
|
Other Related Costs, Net |
|
|
Total |
|
|||
Balance at December 31, 2024 |
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
Additions, charged to restructuring expenses, net |
|
|
|
|
|
|
|
|
|
|||
Cash payments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Change in estimate |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Currency translation |
|
|
|
|
|
— |
|
|
|
|
||
Balance at March 31, 2025 |
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
Additions, charged to restructuring expenses, net |
|
|
|
|
|
|
|
|
|
|||
Cash payments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Change in estimate |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Currency translation |
|
|
|
|
|
— |
|
|
|
|
||
Balance at June 30, 2025 |
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
Note 4 – Details of Certain Balance Sheet Components
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
Other current assets: |
|
|
|
|
|
|
||
Billable tooling |
|
$ |
|
|
$ |
|
||
Income tax and other tax receivable |
|
|
|
|
|
|
||
Prepaid expenses |
|
|
|
|
|
|
||
Notes receivable |
|
|
|
|
|
|
||
Short-term derivative financial instruments |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total other current assets |
|
$ |
|
|
$ |
|
||
Other current liabilities: |
|
|
|
|
|
|
||
Accrued employee liabilities |
|
$ |
|
|
$ |
|
||
Income tax and other taxes payable |
|
|
|
|
|
|
||
Liabilities from discounts and rebates |
|
|
|
|
|
|
||
Restructuring |
|
|
|
|
|
|
||
Accrued warranty |
|
|
|
|
|
|
||
Short-term derivative financial instruments |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total other current liabilities |
|
$ |
|
|
$ |
|
||
Note 5 – Goodwill and Other Intangibles
Goodwill
Changes in the carrying amount of goodwill, by reportable segment, for the six months ended June 30, 2025 were as follows:
|
|
Automotive |
|
|
Medical |
|
|
Total |
|
|||
Balance as of December 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Currency translation |
|
|
|
|
|
|
|
|
|
|||
Balance as of June 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
The accumulated impairment losses of goodwill for Automotive and Medical were $
11
Table of Contents
Other Intangible Assets
Other intangible assets and accumulated amortization balances as of June 30, 2025 and December 31, 2024 were as follows:
|
|
Gross |
|
|
Accumulated |
|
|
Accumulated |
|
|
Net Carrying |
|
||||
Definite-lived: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Customer relationships |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||
Technology |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
Product development costs |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Software development |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Indefinite-lived: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Tradenames |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Balance as of June 30, 2025 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Gross |
|
|
Accumulated |
|
|
Accumulated |
|
|
Net Carrying |
|
||||
Definite-lived: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Customer relationships |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||
Technology |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
Product development costs |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Software development |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Indefinite-lived: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Tradenames |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Balance as of December 31, 2024 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||
Note 6 – Debt
The following table summarizes the Company’s debt as of June 30, 2025 and December 31, 2024:
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||
|
|
Interest |
|
|
Principal |
|
|
Interest |
|
|
Principal |
|
||||
Revolving Credit Facility (U.S. Dollar denominations) |
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
||||
Finance leases |
|
|
% |
|
|
|
|
|
% |
|
|
|
||||
Total debt |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: current maturities |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Long-term debt, less current maturities |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Credit Agreement
On June 10, 2022, the Company entered into a Second Amended and Restated Credit Agreement (the “Second Amended and Restated Credit Agreement”) with a consortium of lenders and Bank of America, N.A., as administrative agent (the “Agent”). The amendment, among other things, extended the maturity date to
The Second Amended and Restated Credit Agreement provides for a $
12
Table of Contents
Under the Second Amended and Restated Credit Agreement, all obligations are unconditionally guaranteed by certain of the Company’s subsidiaries and a security interest is granted in substantially all of the personal property of the Company and its U.S. subsidiaries designated as borrowers, including the stock and membership interests of specified subsidiaries. The Second Amended and Restated Credit Agreement contains covenants, that, among other things, (i) prohibit or limit the ability to incur additional indebtedness, create liens, pay dividends, make certain types of investments (including acquisitions), enter into certain types of transactions with affiliates, prepay other indebtedness, sell assets or enter into certain other transactions outside the ordinary course of business, and (ii) require that Gentherm maintain a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Net Leverage Ratio (based on consolidated EBITDA for the applicable trailing four fiscal quarters) as of the end of any fiscal quarter. The Second Amended and Restated Credit Agreement also contains customary events of default. As of June 30, 2025, the Company was in compliance, in all material respects, with the terms of the Second Amended and Restated Credit Agreement.
Under the Second Amended and Restated Credit Agreement, U.S. Dollar denominated loans bear interest at either a base rate (“Base Rate Loans”) or Term Secured Overnight Financing Rate (“SOFR”) rate (“Term SOFR Rate Loans”), plus a margin (“Applicable Rate”). The rate for Base Rate Loans is equal to the highest of the Federal Funds Rate plus
The Applicable Rate varies based on the Consolidated Net Leverage Ratio reported by the Company. As long as the Company is not in default of the terms and conditions of the Second Amended and Restated Credit Agreement, the lowest and highest possible Applicable Rate is
Based upon consolidated EBITDA for the trailing four fiscal quarters calculated for purposes of the Consolidated Net Leverage Ratio, $
The Company had $
The scheduled principal maturities of our debt as of June 30, 2025 were as follows:
|
|
U.S. |
|
|
Other Debt |
|
|
Total |
|
|||
2025 |
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
2026 |
|
|
— |
|
|
|
|
|
|
|
||
2027 |
|
|
|
|
|
— |
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Note 7 – Commitments and Contingencies
Legal and Other Contingencies
The Company is subject to various legal actions and claims in the ordinary course of its business, which may include those arising out of breach of contracts, intellectual property rights, environmental matters, regulatory matters and employment-related matters. The Company establishes accruals for matters which it believes that losses are probable and can be reasonably estimated. Although it is not possible to predict with certainty the outcome of these matters, the Company is of the opinion that the ultimate resolution of these matters outstanding as of June 30, 2025 will not have a material adverse effect on its results of operations or financial position. Product liability and warranty reserves are recorded separately from legal reserves.
Product Liability and Warranty Matters
Our products subject us to warranty claims and, from time to time product liability claims, based on the Company’s products alleged failure to perform as expected or resulting in alleged bodily injury or property damage. If any of our products are or are
13
Table of Contents
alleged to be defective, we may be required to participate in a recall or other corrective action involving such products. The Company maintains warranty and product liability insurance coverage at levels based on commercial norms and historical claims experience. The Company can provide no assurances that it will not experience material warranty or product liability claims or liabilities in the future or that it will not incur significant costs to defend such claims.
The Company accrues warranty obligations for products sold based on management estimates of future failure rates and current claim cost experience, with support from the sales, engineering, quality and legal functions. Using historical information available to the Company, including any claims filed by customers, the warranty accrual is adjusted quarterly to reflect management’s estimate of future claims.
In February 2024, the National Highway Traffic Safety Administration (“NHTSA”) announced that Volkswagen Group of America, Inc. (“VW”) is recalling
In April 2025, NHTSA announced that VW and Porsche Cars North America, Inc. (“Porsche”) are each recalling vehicles from model years 2022-2023 to remedy a problem with their passenger occupant detection system that is alleged to be affected by the crimp connection of the seat cushion heating mat, which is produced by Gentherm. Total vehicles included in these recall campaigns are
The following is a reconciliation of the changes in accrued warranty costs:
|
|
Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Balance at the beginning of the period |
|
$ |
|
|
$ |
|
||
Warranty claims paid |
|
|
( |
) |
|
|
( |
) |
Warranty expense for products shipped during the current period |
|
|
|
|
|
|
||
Adjustments to warranty estimates from prior periods |
|
|
|
|
|
|
||
Adjustments due to currency translation |
|
|
|
|
|
( |
) |
|
Balance at the end of the period |
|
$ |
|
|
$ |
|
||
Note 8 – Supplier Finance Program
The Company is party to a supplier finance program with a third-party service provider (“Service Provider”), pursuant to which the Company has offered the opportunity to participate to certain of the Company's suppliers. The Company has no economic interest in a supplier’s participation and the Company has not pledged any assets to the Service Provider under this program.
Under this program, the Company and supplier initially agree on the contractual payment terms for the goods to be procured for the Company in the ordinary course. A supplier’s participation in this program is voluntary and does not impact its contractual payment terms with the Company, including the payment amount and timing of when payments are due. A participating supplier has the sole discretion to determine whether to discount one or more invoices, if any, to the Service Provider in exchange for payment by the Service Provider on an earlier date than provided for in the contract with the Company. Amounts due to participating suppliers are
14
Table of Contents
included in accounts payable in the consolidated condensed balance sheets until the Company makes payment to the Service Provider, even though the payment of such amount will be made to the supplier at an earlier date by the Service Provider. As of June 30, 2025, the Company had supplier obligations that had been confirmed under these arrangements of $
Note 9 – Earnings Per Share
Basic earnings per share are computed by dividing net income by the weighted average number of shares of the Company’s Common Stock, no par value (“Common Stock”), outstanding during the period. The Company’s diluted earnings per share give effect to all potential shares of Common Stock outstanding during a period that do not have an anti-dilutive impact to the calculation. There were
The following table illustrates earnings per share and the weighted average shares outstanding used in calculating basic and diluted earnings per share:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic weighted average shares of Common Stock outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of restricted stock, restricted stock units and performance stock units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted weighted average shares of Common Stock outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted earnings per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Note 10 – Financial Instruments
Derivative Financial Instruments
The Company is exposed to various market risks including, but not limited to, changes in foreign currency exchange rates, changes in interest rates and price fluctuations of certain material commodities.
The Company regularly enters into derivative contracts with the objective of managing its financial and operational exposure arising from these risks by offsetting gains and losses on the underlying exposures with gains and losses on the financial instruments used to hedge them. The decision of whether and when to execute derivative financial instruments, along with the duration of the instrument, may vary from period to period depending on market conditions, the relative costs of the instruments and capacity to hedge. The Company does not enter into derivative financial instruments for speculative or trading purposes. Some derivative contracts do not qualify for hedge accounting; for other derivative contracts, we elect to not apply hedge accounting.
15
Table of Contents
Information related to the recurring fair value measurement of derivative instruments in the consolidated condensed balance sheet as of June 30, 2025 is as follows:
|
|
|
|
|
|
|
Asset Derivatives |
|
|
Liability Derivatives |
|
|
|
|
||||||||
|
|
Fair Value |
|
Notional Amount |
|
|
Balance Sheet |
|
Fair |
|
|
Balance Sheet |
|
Fair |
|
|
Net Assets/ (Liabilities) |
|
||||
Derivatives Designated as Cash Flow Hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency derivatives |
|
Level 2 |
|
$ |
|
|
Other current assets |
|
$ |
|
|
Other current liabilities |
|
$ |
|
|
$ |
|
||||
Interest rate contracts |
|
Level 2 |
|
$ |
|
|
Other current assets |
|
$ |
|
|
Other current liabilities |
|
$ |
|
|
$ |
( |
) |
|||
Derivatives Not Designated as Hedging Instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate contracts |
|
Level 2 |
|
$ |
|
|
Other current assets |
|
$ |
|
|
Other current liabilities |
|
$ |
|
|
$ |
|
||||
Information related to the recurring fair value measurement of derivative instruments in the consolidated condensed balance sheet as of December 31, 2024 is as follows:
|
|
|
|
|
|
|
Asset Derivatives |
|
|
Liability Derivatives |
|
|
|
|
||||||||
|
|
Fair Value |
|
Notional Amount |
|
|
Balance Sheet |
|
Fair |
|
|
Balance Sheet |
|
Fair |
|
|
Net Assets/ (Liabilities) |
|
||||
Derivatives Designated as Cash Flow Hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency derivatives |
|
Level 2 |
|
$ |
|
|
Other current assets |
|
$ |
— |
|
|
Other current liabilities |
|
$ |
|
|
$ |
( |
) |
||
Derivatives Not Designated as Hedging Instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate contracts |
|
Level 2 |
|
$ |
|
|
Other current assets |
|
$ |
|
|
Other current liabilities |
|
$ |
— |
|
|
$ |
|
|||
Information relating to the effect of derivative instruments on the consolidated condensed statements of income and the consolidated condensed statements of comprehensive income is as follows:
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
Location (Income/(Loss)) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Derivatives Designated as Cash Flow Hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency derivatives |
|
Cost of sales – (loss) income |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
|
|
Other comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Total foreign currency derivatives |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate contracts |
|
Interest expense, net |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
|
|
Other comprehensive income (loss) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Total interest rate derivatives |
|
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives Not Designated as Hedging Instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate contracts |
|
Interest expense, net |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Total interest rate derivatives |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
16
Table of Contents
The Company did
Accounts Receivable Factoring
The Company previously sold certain customer trade receivables on a non-recourse basis under factoring arrangements with designated financial institutions. The sale of receivables under these agreements was considered an off-balance sheet arrangement to the Company and was accounted for as a true sale and excluded from accounts receivable in the consolidated condensed balance sheets. These factoring arrangements included a deferred purchase price component in which a portion of the purchase price for the receivable was paid by the financial institution in cash upon sale and the remaining portion was recorded as a deferred purchase price receivable and paid at a later date. Deferred purchase price receivables are recorded in other current assets within the consolidated condensed balance sheets. Cash proceeds received upon the sale of the receivables are included in net cash from operating activities and the cash proceeds received on the deferred purchase price receivables are included in net cash from investing activities. During the year ended December 31, 2024, the factoring agreements the Company was party to either expired or were terminated.
Receivables factored under receivables factoring agreements balances as of December 31, 2024 were as follows:
|
|
December 31, 2024 |
|
|
Receivables factored and outstanding |
|
$ |
|
|
Trade receivables sold and factoring fees incurred during the three and six months ended June 30, 2024 were as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||
|
|
2024 |
|
|
2024 |
|
||
Trade receivables sold |
|
$ |
|
|
$ |
|
||
Factoring fees incurred |
|
|
|
|
|
|
||
Note 11 – Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and also considers counterparty credit risk in its assessment of fair value. Fair value measurements are classified under the following fair value hierarchy:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2: Inputs, other than quoted market prices included in Level 1, that are observable either directly or indirectly for the asset or liability.
Level 3: Unobservable inputs that are used when little or no market data is available. Unobservable inputs are used if there is little or no market data for the asset or liability at the measurement date.
Items Measured at Fair Value on a Recurring Basis
The Company uses an income approach to value derivatives instruments, analyzing quoted market prices to calculate the forward values and then discounting such forward values to the present value using benchmark rates at commonly quoted intervals for the instrument’s full term. The Company had
Items Measured at Fair Value on a Nonrecurring Basis
The Company measures certain assets and liabilities at fair value on a non-recurring basis. During the six months ended June 30, 2025, there was a decrease in the fair value of an equity investment of $
17
Table of Contents
Items Not Carried at Fair Value
The Company uses an income valuation technique to measure the fair values of its debt instruments by converting amounts of future cash flows to a single present value amount using rates based on current market expectations (Level 2 inputs). As of June 30, 2025, and December 31, 2024, the carrying values of the indebtedness under the Company’s Second Amended and Restated Credit Agreement were not materially different than the estimated fair values because the interest rates on variable rate debt approximated rates currently available to the Company (see Note 6).
Note 12 – Equity
In June 2024, the Board of Directors authorized a stock repurchase program (the “2024 Stock Repurchase Program”) to commence upon expiration of the Company’s prior stock repurchase program on June 30, 2024. Under the 2024 Stock Repurchase Program, the Company is authorized to repurchase up to $
Share repurchases and related activity during the three and six months ended June 30, 2025 and 2024 were as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Total number of shares repurchased |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average price paid per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Excise tax charged |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
As of June 30, 2025, the 2024 Stock Repurchase Program had $
Note 13 – Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
Reclassification adjustments and other activities impacting accumulated other comprehensive income (loss) during the three and six months ended June 30, 2025 and 2024 were as follows:
|
|
Defined |
|
|
Foreign |
|
|
Cash Flow |
|
|
Total |
|
||||
Balance at March 31, 2025 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Other comprehensive income before reclassifications |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Income tax effect of other comprehensive income before reclassifications |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Amounts reclassified from accumulated other comprehensive income (loss) into net income |
|
|
|
|
|
— |
|
|
|
( |
) |
a |
|
( |
) |
|
Income taxes reclassified into net income |
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
|
||
Net current period other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at June 30, 2025 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||
18
Table of Contents
|
|
Defined |
|
|
Foreign |
|
|
Cash Flow |
|
|
Total |
|
||||
Balance at March 31, 2024 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Other comprehensive (loss) income before reclassifications |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income tax effect of other comprehensive (loss) income before reclassifications |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Amounts reclassified from accumulated other comprehensive loss into net income |
|
|
|
|
|
— |
|
|
|
( |
) |
a |
|
( |
) |
|
Income taxes reclassified into net income |
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
|
||
Net current period other comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Balance at June 30, 2024 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
Defined |
|
|
Foreign |
|
|
Cash Flow |
|
|
Total |
|
||||
Balance at December 31, 2024 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Other comprehensive income before reclassifications |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Income tax effect of other comprehensive income before reclassifications |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Amounts reclassified from accumulated other comprehensive income (loss) into net income |
|
|
|
|
|
— |
|
|
|
( |
) |
a |
|
( |
) |
|
Income taxes reclassified into net income |
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
|
||
Net current period other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at June 30, 2025 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||
|
|
Defined |
|
|
Foreign |
|
|
Cash Flow |
|
|
Total |
|
||||
Balance at December 31, 2023 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Other comprehensive (loss) income before reclassifications |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income tax effect of other comprehensive (loss) income before reclassifications |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Amounts reclassified from accumulated other comprehensive loss into net income |
|
|
|
|
|
— |
|
|
|
( |
) |
a |
|
( |
) |
|
Income taxes reclassified into net income |
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
|
||
Net current period other comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Balance at June 30, 2024 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The Company expects that substantially all of the existing gains and losses related to foreign currency derivatives reported in accumulated other comprehensive income (loss) as of June 30, 2025 to be reclassified into earnings during the next twelve months. See Note 10 for additional information about derivative financial instruments and the effects from reclassification to net income.
19
Table of Contents
Note 14 – Income Taxes
At the end of each interim period, the Company makes an estimate of the annual expected effective income tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to unusual or infrequent items, if applicable, that will be separately reported or reported net of their related tax effects are individually computed and recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or income tax contingencies is recognized in the interim period in which the change occurs.
The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (and/or loss) earned and taxed in respective jurisdictions, permanent and temporary differences, and the likelihood of the realizability of deferred tax assets generated in the current year. Jurisdictions with a projected loss for the year for which no tax benefit can be recognized due to a valuation allowance are excluded from the estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the composition and timing of actual earnings compared to annual projections. The estimates used to compute the provision or benefit for income taxes may change as new events occur, additional information is obtained or as our tax environment changes. To the extent that the expected annual effective income tax rate changes, the effect of the change on prior interim periods is included in the income tax provision in the period in which the change in estimate occurs.
A summary of the provision for income taxes and the corresponding effective tax rate for the three and six months ended June 30, 2025 and 2024, is shown below:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Income tax expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Earnings before income tax |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Effective tax rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Income tax expense was $
Income tax expense was $
Income tax expense was $
Income tax expense was $
Subsequent Events
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple
20
Table of Contents
effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently in the process of determining the impact the implementation of these provisions will have on the Company’s results of operations, cash flow or financial condition.
In addition, on July 19, 2025, the Act for an Immediate Tax Investment Programme to Strengthen Germany's Business Location (“German Tax Package”) was enacted in Germany. The German Tax Package includes significant provisions, including a gradual reduction in the corporate tax rate from 15% in 2027 to 10% by 2032, in 1% increments beginning in 2028, enhanced depreciation provisions and expanded relief for research and development expenses.We are currently in the process of determining the impact the implementation of these provisions will have on the Company’s results of operations, cash flow or financial condition.
Note 15 – Segment Reporting
The Company is organized under
The Automotive reporting segment is comprised of the results from our global automotive businesses, including the design, development, manufacturing and sales of our automotive climate and comfort solutions (including Climate Control Seats, Climate Control Interiors, lumbar and massage comfort solutions and electronic solutions for climate and comfort technologies), valve system solutions and other automotive products.
The Medical reporting segment is comprised of the results from our patient temperature management business in the medical industry. Patient temperature management includes temperature management systems across multiple product categories addressing the needs of hyper-hypothermia therapy in intensive care, normothermia in surgical procedures and additional warming/cooling therapies utilized in acute and chronic care departments and non-hospital facilities.
The Corporate and other unallocated expenses category includes certain enterprise and governance activities resulting in unallocated corporate costs and other activity and net costs that the Company may choose not to allocate directly to its business segments.
A measure of assets has not been disclosed for each segment as it is not regularly reviewed by our chief operating decision maker.
21
Table of Contents
The table below presents segment information about the reported product revenues, significant segment expenses, operating income (loss) and depreciation and amortization of the Company for the three and six months ended June 30, 2025 and 2024.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Product Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Automotive |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Medical |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Significant Segment Expenses and Operating Performance |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Automotive |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net research and development expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restructuring expenses, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on sale of land and building, net |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
Automotive operating income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Medical |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Impairment of intangible assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Medical operating (loss) income |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate and Other Unallocated Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate and other unallocated expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total consolidated operating income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other Segment Disclosures |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and Amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Automotive |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Medical |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate and other unallocated expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
22
Table of Contents
Automotive and Medical segment product revenues by product category for the three and six months ended June 30, 2025 and 2024 were as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Climate Control Seats (a) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Lumbar and Massage Comfort Solutions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Climate Control Interiors (a) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Climate and Comfort Electronics (a) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Automotive Climate and Comfort Solutions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Valve Systems |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other Automotive (a) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subtotal Automotive segment |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Medical segment |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Company |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Revenue (based on shipment destination) by geographic area for the three and six months ended June 30, 2025 and 2024 is as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
China |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Germany |
|
|
|
|
|
|
|
|
|
|
|
|
||||
South Korea |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Czech Republic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mexico |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Slovakia |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Romania |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Japan |
|
|
|
|
|
|
|
|
|
|
|
|
||||
United Kingdom |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Non-U.S. |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Company |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Property and equipment, net, for each of the geographic areas in which the Company operates as of June 30, 2025 and December 31, 2024 is as follows:
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
Property and equipment, net |
|
|
|
|
|
|
||
Germany |
|
$ |
|
|
$ |
|
||
Mexico |
|
|
|
|
|
|
||
China |
|
|
|
|
|
|
||
United States |
|
|
|
|
|
|
||
North Macedonia |
|
|
|
|
|
|
||
Vietnam |
|
|
|
|
|
|
||
Czech Republic |
|
|
|
|
|
|
||
Hungary |
|
|
|
|
|
|
||
Ukraine |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
23
Table of Contents
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events, such as: the expected light vehicle production in the Company’s key markets; the impact of macroeconomic and geopolitical conditions, including adverse global trade conditions and actual and threatened global tariffs; the components and our execution of our strategic plan and restructuring plans; long-term consumer and technological trends in the automotive industry and our related market opportunity for our existing and new products and technologies; the competitive landscape; the impact of global tax reform legislation; the sufficiency of our cash balances and cash generated from operating, investing and financing activities for our future liquidity and capital resource needs; and our ability to finance sufficient working capital. Reference is made in particular to forward-looking statements included in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Such statements may be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “anticipate”, “intend”, “continue”, or similar terms, variations of such terms or the negative of such terms. The forward-looking statements included in this Report 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 analyses based on our experience and perception of historical trends, current conditions and expected future developments, third-party information and projections from sources that management believes to be reputable, as well as other factors we consider appropriate under the circumstances. Such statements are subject to a number of assumptions, risks, uncertainties and other factors, which are set forth in “Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2024 and subsequent reports filed with the Securities and Exchange Commission, and which could cause actual results to differ materially from that described in the forward-looking statements. 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, we expressly disclaim any obligation or undertaking to update any forward-looking statements to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by, the consolidated condensed financial statements and related notes thereto included elsewhere in this Report and our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024.
Overview
Gentherm Incorporated is a global market leader of innovative thermal management and pneumatic comfort technologies. Our automotive products include variable temperature Climate Control Seats (CCS®), Climate Control Interiors (CCI™), Lumbar and Massage Comfort Solutions, Valve Systems, and electronic solutions for climate and comfort technologies. Our automotive products can be found on light vehicles manufactured by nearly all the major original equipment manufacturers (“OEMs”) operating in North America and Europe, and several major OEMs in Asia. We operate in locations aligned with our major customers’ product strategies to provide locally enhanced design, integration and production capabilities. Our medical products include patient temperature management systems that can be found in hospitals throughout the world, primarily in the U.S., China, Germany and Brazil. The Company is also developing a number of new technologies and products that will help enable improvements to existing products, improve health, wellness and patient outcomes and will lead to new product applications for existing and new and adjacent markets.
Our Automotive sales are driven by the number of light vehicles produced by the OEMs primarily in our key markets of North America, Europe, China, Japan and South Korea, which is ultimately dependent on consumer demand for automotive light vehicles, our product content per vehicle, and other factors that may limit or otherwise impact production by us, our supply chain and our customers. Historically, new vehicle demand and product content (i.e. vehicle features) have been driven by macroeconomic and other factors, such as interest rates, automotive manufacturer and dealer sales incentives, fuel prices, consumer confidence, employment levels, income growth trends and government incentives. Vehicle content has also been driven by trends in consumer preferences, such as preferences for smart devices and features, personalized user experience, and comfort, health and wellness. We believe our diversified OEM customer base and geographic revenue base, along with our flexible cost structure, have well positioned us to withstand the impact of industry downturns and benefit from industry upturns in the ordinary course. However, shifts in the mix of global automotive production to higher cost regions or to vehicles that contain less of our product content and inflationary pressures
24
Table of Contents
could have adverse impacts on our profitability. In addition, we have been and may in the future be adversely impacted by volatility or weakness in markets for hybrid or electric vehicles specifically. We believe our products offer certain advantages for hybrid and electric vehicles, including improved energy efficiency, and position us well to withstand changes in the volume mix between vehicles driven by internal combustion engines and hybrid and other electric vehicles. We believe our industry is increasingly progressing towards a focus on human comfort, health and wellness, which is evidenced by increasing adoption rates for comfort products. Gentherm is an independent partner that can cooperate with any combination of the vehicle OEMs and seat manufacturers globally, including those that are vertically integrated, to create innovative and unique configurations that adapt to industry trends.
Recent Trends
Tariffs and Global Trade Environment
Since March 2025, the U.S. government has periodically announced additional significant tariffs on various goods imported to the U.S. and other countries have periodically announced reciprocal tariffs on goods imported to such countries, including goods used by or manufactured by us. There has been significant uncertainty resulting from the implementation, termination and/or conditional pause of these additional tariffs. Further, it is reasonably possible that new or additional tariffs will be periodically announced in the future given the current global trade environment. We continue to monitor and evaluate the direct and indirect impacts of these tariffs and heightened global trade disputes. Our business model of manufacturing by regions for the regions limit the global impact of certain trade restrictions and tariffs. Further, the majority of our supply components are not currently subject to the additional tariffs or are compliant with exceptions, and we believe that we can generally mitigate the direct impact of any such tariffs currently in effect by directly or indirectly passing the additional costs through to customers. We are taking and will continue to take additional actions to mitigate any direct and indirect impacts.
For the six months ended June 30, 2025, the additional tariffs did not have a material impact on our results of operations, financial position, and cash flows. However, these matters are changing rapidly and there is significant uncertainty as to how long and to what degree that Gentherm and the automotive industry will be impacted by these additional tariffs, the adverse global trade environment and the resulting economic uncertainty. See Part II, Item 1A, “Risk Factors” in this Report for additional information.
Global Conditions
The global automotive light vehicle industry is impacted by a number of factors, including global and regional economic conditions. At times in recent years, the global economy has experienced significant volatility, inflationary pressures and supply chain disruptions, which have a widespread adverse effect on the global automotive industry. These macroeconomic conditions have resulted in fluctuating demand and production disruptions, facility closures, labor shortages, work stoppages, and increased prices of inputs to our products. Although some supply chain conditions have steadily improved and certain inflationary pressures have moderated, rising costs of materials, labor, equipment and other inputs used to manufacture and sell our products, including freight and logistics costs, have adversely impacted, and may in the future adversely impact, operating costs and operating results. We continue to employ measures to mitigate the impact of cost increases through identification of sourcing and manufacturing efficiencies where possible. However, we have been unable to fully mitigate or pass through the increases in our operating costs, which may continue in the future.
We are exposed to foreign currency risk due to the translation and remeasurement of the results of certain international operations into U.S. Dollars as part of the consolidation process. Therefore, fluctuations in foreign currency exchange rates can create volatility in the results of operations and may adversely affect our financial condition.
We have a global manufacturing footprint that enables us to serve our customers in the regions they operate and shift production between regions to remain competitive. There have been various ongoing geopolitical conflicts, such as the current conflicts between Russia and Ukraine and in the Middle East and heightened tensions in the Red Sea and in the South China Sea. These conflicts have interrupted ocean freight shipping and if prolonged or intensified, could have a substantial adverse effect on our financial results. Further, it is reasonably possible that certain political pressures, such as changes to international trade agreements, increases in tariffs, import quotas or other trade restrictions or actions, including export controls and other retaliatory responses to such actions, could continue to affect the operations of our OEM customers, resulting in reduced automotive production in certain regions or shifts in the mix of production to higher cost regions. See “—Tariffs and Global Trade Environment” above for further information on the impact
25
Table of Contents
of tariffs and the global trade environment in 2025. We, like other manufacturers, have a high proportion of fixed structural costs, and therefore relatively small changes in industry vehicle production can have a substantial effect on our financial results.
Light Vehicle Production Volumes
Our sales are driven by the number of vehicles produced by the automotive manufacturers, which is ultimately dependent on consumer demand for automotive vehicles, our content per vehicle, and other factors that may limit or otherwise impact production by us, our supply chain and our customers. According to the forecasting firm S&P Global Mobility (July 2025 release), global light vehicle production in the three and six months ended June 30, 2025 in the Company’s key markets of North America, Europe, China, Japan and South Korea, as compared to the three and six months ended June 30, 2024, are shown below (in millions of units):
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
% Change |
|
|
2025 |
|
|
2024 |
|
|
% Change |
|
||||||
North America |
|
|
4.0 |
|
|
|
4.1 |
|
|
|
(3.0 |
)% |
|
|
7.7 |
|
|
|
8.1 |
|
|
|
(4.1 |
)% |
Europe |
|
|
4.4 |
|
|
|
4.5 |
|
|
|
(1.7 |
)% |
|
|
8.8 |
|
|
|
9.1 |
|
|
|
(3.3 |
)% |
Greater China |
|
|
7.6 |
|
|
|
7.0 |
|
|
|
9.0 |
% |
|
|
14.8 |
|
|
|
13.3 |
|
|
|
11.7 |
% |
Japan / South Korea |
|
|
3.0 |
|
|
|
3.0 |
|
|
|
0.0 |
% |
|
|
6.1 |
|
|
|
5.9 |
|
|
|
3.4 |
% |
Total light vehicle production volume in key markets |
|
|
19.0 |
|
|
|
18.6 |
|
|
|
2.3 |
% |
|
|
37.4 |
|
|
|
36.3 |
|
|
|
3.1 |
% |
The S&P Global Mobility (July 2025 release) forecasted light vehicle production volume in the Company’s key markets for full year 2025 to remain consistent at 74.7 million units, in line with full year 2024 light vehicle production volumes. Forecasted light vehicle production volumes are a component of the data we use in forecasting future business. However, these forecasts generally are updated monthly, and future forecasts have been and may continue to be significantly different from period to period due to changes in macroeconomic and geopolitical conditions or matters specific to the automotive industry. Further, due to differences in regional product mix at our manufacturing facilities, as well as material production schedules from our customers for our products on specific vehicle programs, our future forecasted results do not directly correlate with the global and/or regional light vehicle production forecasts of S&P Global Mobility or other third-party sources.
Automotive New Business Awards
We believe that innovation is an important element to gaining market acceptance of our products and strengthening our market position. During the second quarter of 2025, we secured automotive new business awards totaling $620 million. Automotive new business awards represent the aggregate projected lifetime revenue of new awards provided by our customers to Gentherm in the applicable period, with the value based on the price and volume projections received from each customer as of the award date. Although automotive new business awards are not firm customer orders, we believe that automotive new business awards are an indicator of future revenue. Automotive new business awards are not projections of revenue or future business as of June 30, 2025, the date of this Report or any other date. Customer projections regularly change over time, and we do not update our calculation of any automotive new business award after the date initially communicated. Automotive new business awards in the second quarter of 2025 also do not reflect, in particular, the impact of macroeconomic and geopolitical challenges on future business. Revenues resulting from automotive new business awards also are subject to additional risks and uncertainties that are included in this Report or incorporated by reference in “Forward-Looking Statements” above.
Stock Repurchase Program
In June 2024, the Board of Directors authorized a stock repurchase program (the “2024 Stock Repurchase Program”) to commence upon expiration of the Company’s prior stock repurchase program on June 30, 2024. Under the 2024 Stock Repurchase Program, the Company is authorized to repurchase up to $150.0 million of its issued and outstanding Common Stock over a three-year period, expiring June 30, 2027. Repurchases under the 2024 Stock Repurchase Program may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations. Any such repurchases may be executed using open market purchases, accelerated share repurchase programs, privately
26
Table of Contents
negotiated agreements or other transactions. Repurchases may be funded from cash on hand, available borrowings or proceeds from potential debt or other capital markets sources.
During the three and six months ended June 30, 2025, the Company repurchased $10.0 million with an average price paid per share of $26.24. The 2024 Stock Repurchase Program had $110.1 million of repurchase authorization remaining as of June 30, 2025.
Reportable Segments
The Company has two reportable segments for financial reporting purposes: Automotive and Medical.
See Note 15, “Segment Reporting,” to the consolidated condensed financial statements included in this Report for a description of our reportable segments as well as their proportional contribution to the Company’s reported product revenues, significant segment expenses, operating income (loss), and depreciation and amortization.
Consolidated Results of Operations
The results of operations for the three and six months ended June 30, 2025 and 2024, in thousands, were as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
||||||
Product revenues |
|
$ |
375,090 |
|
|
$ |
375,683 |
|
|
$ |
(593 |
) |
|
$ |
728,944 |
|
|
$ |
731,698 |
|
|
$ |
(2,754 |
) |
Cost of sales |
|
|
285,328 |
|
|
|
278,982 |
|
|
|
(6,346 |
) |
|
|
552,717 |
|
|
|
546,244 |
|
|
|
(6,473 |
) |
Gross margin |
|
|
89,762 |
|
|
|
96,701 |
|
|
|
(6,939 |
) |
|
|
176,227 |
|
|
|
185,454 |
|
|
|
(9,227 |
) |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net research and development expenses |
|
|
22,558 |
|
|
|
21,861 |
|
|
|
(697 |
) |
|
|
46,774 |
|
|
|
44,606 |
|
|
|
(2,168 |
) |
Selling, general and administrative expenses |
|
|
41,087 |
|
|
|
39,410 |
|
|
|
(1,677 |
) |
|
|
79,565 |
|
|
|
80,131 |
|
|
|
566 |
|
Restructuring expenses, net |
|
|
2,108 |
|
|
|
2,442 |
|
|
|
334 |
|
|
|
6,622 |
|
|
|
9,680 |
|
|
|
3,058 |
|
Loss on sale of land and building, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,196 |
|
|
|
— |
|
|
|
(2,196 |
) |
Total operating expenses |
|
|
65,753 |
|
|
|
63,713 |
|
|
|
(2,040 |
) |
|
|
135,157 |
|
|
|
134,417 |
|
|
|
(740 |
) |
Operating income |
|
|
24,009 |
|
|
|
32,988 |
|
|
|
(8,979 |
) |
|
|
41,070 |
|
|
|
51,037 |
|
|
|
(9,967 |
) |
Interest expense, net |
|
|
(4,043 |
) |
|
|
(4,002 |
) |
|
|
(41 |
) |
|
|
(7,598 |
) |
|
|
(7,246 |
) |
|
|
(352 |
) |
Foreign currency (loss) gain |
|
|
(17,432 |
) |
|
|
(282 |
) |
|
|
(17,150 |
) |
|
|
(27,730 |
) |
|
|
2,267 |
|
|
|
(29,997 |
) |
Other (loss) income |
|
|
— |
|
|
|
(284 |
) |
|
|
284 |
|
|
|
(1,124 |
) |
|
|
689 |
|
|
|
(1,813 |
) |
Earnings before income tax |
|
|
2,534 |
|
|
|
28,420 |
|
|
|
(25,886 |
) |
|
|
4,618 |
|
|
|
46,747 |
|
|
|
(42,129 |
) |
Income tax expense |
|
|
2,057 |
|
|
|
9,544 |
|
|
|
7,487 |
|
|
|
4,269 |
|
|
|
13,086 |
|
|
|
8,817 |
|
Net income |
|
$ |
477 |
|
|
$ |
18,876 |
|
|
$ |
(18,399 |
) |
|
$ |
349 |
|
|
$ |
33,661 |
|
|
$ |
(33,312 |
) |
Product revenues by product category, in thousands, for the three and six months ended June 30, 2025 and 2024, were as follows:
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
||||||||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
% Change |
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
% Change |
Climate Control Seats (a) |
|
$ |
200,020 |
|
$ |
199,766 |
|
$ |
254 |
|
0.1 % |
|
$ |
391,173 |
|
$ |
391,815 |
|
$ |
(642) |
|
(0.2)% |
Lumbar and Massage Comfort Solutions |
|
|
52,530 |
|
|
45,869 |
|
|
6,661 |
|
14.5 % |
|
|
97,843 |
|
|
84,120 |
|
|
13,723 |
|
16.3 % |
Climate Control Interiors (a) |
|
|
49,585 |
|
|
47,031 |
|
|
2,554 |
|
5.4 % |
|
|
94,926 |
|
|
91,429 |
|
|
3,497 |
|
3.8 % |
Climate and Comfort Electronics (a) |
|
|
5,906 |
|
|
4,157 |
|
|
1,749 |
|
42.1 % |
|
|
13,621 |
|
|
8,383 |
|
|
5,238 |
|
62.5 % |
Automotive Climate and Comfort Solutions |
|
|
308,041 |
|
|
296,823 |
|
|
11,218 |
|
3.8 % |
|
|
597,563 |
|
|
575,747 |
|
|
21,816 |
|
3.8 % |
Valve Systems |
|
|
25,143 |
|
|
29,267 |
|
|
(4,124) |
|
(14.1)% |
|
|
48,316 |
|
|
55,892 |
|
|
(7,576) |
|
(13.6)% |
Other Automotive (a) |
|
|
30,668 |
|
|
37,912 |
|
|
(7,244) |
|
(19.1)% |
|
|
59,847 |
|
|
77,001 |
|
|
(17,154) |
|
(22.3)% |
Subtotal Automotive segment |
|
|
363,852 |
|
|
364,002 |
|
|
(150) |
|
(0.0)% |
|
|
705,726 |
|
|
708,640 |
|
|
(2,914) |
|
(0.4)% |
Medical segment |
|
|
11,238 |
|
|
11,681 |
|
|
(443) |
|
(3.8)% |
|
|
23,218 |
|
|
23,058 |
|
|
160 |
|
0.7 % |
Total Company |
|
$ |
375,090 |
|
$ |
375,683 |
|
$ |
(593) |
|
(0.2)% |
|
$ |
728,944 |
|
$ |
731,698 |
|
$ |
(2,754) |
|
(0.4)% |
27
Table of Contents
Product Revenues
Below is a summary of our product revenues, in thousands, for the three months ended June 30, 2025 and 2024:
|
|
Three Months Ended June 30, |
|
|
|
Variance Due To: |
|
||||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|
|
Automotive |
|
|
FX |
|
|
Pricing / |
|
|
Total |
|
|||||||
Product revenues |
|
$ |
375,090 |
|
|
$ |
375,683 |
|
|
$ |
(593 |
) |
|
|
$ |
(1,597 |
) |
|
$ |
5,514 |
|
|
$ |
(4,510 |
) |
|
$ |
(593 |
) |
Product revenues for the three months ended June 30, 2025 decreased 0.2% as compared to the three months ended June 30, 2024. The decrease in product revenues is due to unfavorable pricing, unfavorable automotive volumes and unfavorable foreign currency impacts primarily attributable to the Chinese Renminbi and Korean Won, partially offset by favorable currency impacts primarily attributable to the Euro.
Below is a summary of our product revenues, in thousands, for the six months ended June 30, 2025 and 2024:
|
|
Six Months Ended June 30, |
|
|
|
Variance Due To: |
|
||||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|
|
Automotive |
|
|
FX |
|
|
Pricing / |
|
|
Total |
|
|||||||
Product revenues |
|
$ |
728,944 |
|
|
$ |
731,698 |
|
|
$ |
(2,754 |
) |
|
|
$ |
3,603 |
|
|
$ |
93 |
|
|
$ |
(6,450 |
) |
|
$ |
(2,754 |
) |
Product revenues for the six months ended June 30, 2025 decreased 0.4% as compared to the six months ended June 30, 2024. The decrease in product revenues is due to unfavorable pricing and unfavorable foreign currency impacts primarily attributable to the Korean Won and Chinese Renminbi, partially offset by favorable automotive volumes and favorable currency impacts primarily attributable to the Euro.
Cost of Sales
Below is a summary of our cost of sales and gross margin, in thousands, for the three months ended June 30, 2025 and 2024:
|
|
Three Months Ended June 30, |
|
|
|
Variance Due To: |
|
||||||||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|
|
Automotive |
|
|
Operational |
|
|
FX |
|
|
Other |
|
|
Total |
|
||||||||
Cost of sales |
|
$ |
285,328 |
|
|
$ |
278,982 |
|
|
$ |
(6,346 |
) |
|
|
$ |
1,186 |
|
|
$ |
1,689 |
|
|
$ |
(3,141 |
) |
|
$ |
(6,080 |
) |
|
$ |
(6,346 |
) |
Gross margin |
|
|
89,762 |
|
|
|
96,701 |
|
|
|
(6,939 |
) |
|
|
|
(411 |
) |
|
|
1,689 |
|
|
|
2,373 |
|
|
|
(10,590 |
) |
|
|
(6,939 |
) |
Gross margin - Percentage |
|
|
23.9 |
% |
|
|
25.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of sales for the three months ended June 30, 2025 increased 2.3% as compared to the three months ended June 30, 2024. The increase in cost of sales is primarily due to higher labor costs, unfavorable foreign currency impacts primarily attributable to the Euro and higher quality costs, partially offset by lower automotive volumes, material purchasing savings and favorable foreign currency impacts (net of foreign currency hedges) primarily attributable to the Mexican Peso.
Below is a summary of our cost of sales and gross margin, in thousands, for the six months ended June 30, 2025 and 2024:
|
|
Six Months Ended June 30, |
|
|
|
Variance Due To: |
|
||||||||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|
|
Automotive |
|
|
Operational |
|
|
FX |
|
|
Other |
|
|
Total |
|
||||||||
Cost of sales |
|
$ |
552,717 |
|
|
$ |
546,244 |
|
|
$ |
(6,473 |
) |
|
|
$ |
(1,901 |
) |
|
$ |
1,611 |
|
|
$ |
566 |
|
|
$ |
(6,749 |
) |
|
$ |
(6,473 |
) |
Gross margin |
|
|
176,227 |
|
|
|
185,454 |
|
|
|
(9,227 |
) |
|
|
|
1,702 |
|
|
|
1,611 |
|
|
|
659 |
|
|
|
(13,199 |
) |
|
|
(9,227 |
) |
Gross margin - Percentage |
|
|
24.2 |
% |
|
|
25.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
28
Table of Contents
Cost of sales for the six months ended June 30, 2025 increased 1.2% as compared to the six months ended June 30, 2024. The increase in cost of sales is primarily due to higher labor costs, higher automotive volumes, unfavorable foreign currency impacts primarily attributable to the Euro and higher quality costs, partially offset by material purchasing savings and favorable foreign currency impacts (net of foreign currency hedges) primarily attributable to the Mexican Peso.
Net Research and Development Expenses
Below is a summary of our net research and development expenses, in thousands, for the three months ended June 30, 2025 and 2024:
|
|
Three Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|||
Research and development expenses |
|
$ |
29,601 |
|
|
$ |
29,103 |
|
|
$ |
(498 |
) |
Reimbursed research and development expenses |
|
|
(7,043 |
) |
|
|
(7,242 |
) |
|
|
(199 |
) |
Net research and development expenses |
|
$ |
22,558 |
|
|
$ |
21,861 |
|
|
$ |
(697 |
) |
Percentage of product revenues |
|
|
6.0 |
% |
|
|
5.8 |
% |
|
|
|
|
Net research and development expenses for the three months ended June 30, 2025 increased 3.2% as compared to the three months ended June 30, 2024. The increase in net research and development expenses is primarily related to higher employee compensation expenses.
Below is a summary of our net research and development expenses, in thousands, for the six months ended June 30, 2025 and 2024:
|
|
Six Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|||
Research and development expenses |
|
$ |
59,108 |
|
|
$ |
56,845 |
|
|
$ |
(2,263 |
) |
Reimbursed research and development expenses |
|
|
(12,334 |
) |
|
|
(12,239 |
) |
|
|
95 |
|
Net research and development expenses |
|
$ |
46,774 |
|
|
$ |
44,606 |
|
|
$ |
(2,168 |
) |
Percentage of product revenues |
|
|
6.4 |
% |
|
|
6.1 |
% |
|
|
|
|
Net research and development expenses for the six months ended June 30, 2025 increased 4.9% as compared to the six months ended June 30, 2024. The increase in net research and development expenses is primarily related to higher employee compensation expenses.
Selling, General and Administrative Expenses
Below is a summary of our selling, general and administrative expenses, in thousands, for the three months ended June 30, 2025 and 2024:
|
|
Three Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|||
Selling, general and administrative expenses |
|
$ |
41,087 |
|
|
$ |
39,410 |
|
|
$ |
(1,677 |
) |
Percentage of product revenues |
|
|
11.0 |
% |
|
|
10.5 |
% |
|
|
|
|
Selling, general and administrative expenses for the three months ended June 30, 2025 increased 4.3% as compared to the three months ended June 30, 2024. The increase in selling, general and administrative expenses is primarily related to higher expenses for leadership transition, leases and information technology, partially offset by lower employee compensation expenses.
29
Table of Contents
Below is a summary of our selling, general and administrative expenses, in thousands, for the six months ended June 30, 2025 and 2024:
|
|
Six Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|||
Selling, general and administrative expenses |
|
$ |
79,565 |
|
|
$ |
80,131 |
|
|
$ |
566 |
|
Percentage of product revenues |
|
|
10.9 |
% |
|
|
11.0 |
% |
|
|
|
|
Selling, general and administrative expenses for the six months ended June 30, 2025 decreased 0.7% as compared to the six months ended June 30, 2024. The decrease in selling, general and administrative expenses is primarily related to lower employee compensation expenses and favorable foreign currency impacts, partially offset by higher expenses for leadership transition, leases and information technology.
Restructuring Expenses, net
Below is a summary of our restructuring expenses, net, in thousands, for the three months ended June 30, 2025 and 2024:
|
|
Three Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|||
Restructuring expenses, net |
|
$ |
2,108 |
|
|
$ |
2,442 |
|
|
$ |
334 |
|
During the three months ended June 30, 2025, the Company recognized expenses of $1.5 million for employee separation costs and $0.7 million for other costs.
During the three months ended June 30, 2024, the Company recognized expenses of $2.1 million for employee separation costs and $0.3 million for other costs.
Below is a summary of our restructuring expenses, net, in thousands, for the six months ended June 30, 2025 and 2024:
|
|
Six Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|||
Restructuring expenses, net |
|
$ |
6,622 |
|
|
$ |
9,680 |
|
|
$ |
3,058 |
|
During the six months ended June 30, 2025, the Company recognized expenses of $5.7 million for employee separation costs and $1.0 million for other costs.
During the six months ended June 30, 2024, the Company recognized expenses of $8.9 million for employee separation costs and $0.8 million for other costs.
See Note 3, “Restructuring,” to the consolidated condensed financial statements included in this Report for additional information.
Loss on Sale of Land and Building, net
Below is a summary of our loss on sale of land and building, net, in thousands, for the six months ended June 30, 2025 and 2024:
|
|
Six Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|||
Loss on sale of land and building, net |
|
$ |
2,196 |
|
|
$ |
— |
|
|
$ |
(2,196 |
) |
30
Table of Contents
Loss on sale of land and building, net for the six months ended June 30, 2025 is primarily related to the sale of our former headquarters building in Northville, Michigan in January 2025.
Interest Expense, net
Below is a summary of our interest expense, net, in thousands, for the three months ended June 30, 2025 and 2024:
|
|
Three Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|||
Interest expense, net |
|
$ |
(4,043 |
) |
|
$ |
(4,002 |
) |
|
$ |
(41 |
) |
Interest expense, net for the three months ended June 30, 2025 remained relatively flat as compared to the three months ended June 30, 2024.
Below is a summary of our interest expense, net, in thousands, for the six months ended June 30, 2025 and 2024:
|
|
Six Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|||
Interest expense, net |
|
$ |
(7,598 |
) |
|
$ |
(7,246 |
) |
|
$ |
(352 |
) |
Interest expense, net for the six months ended June 30, 2025 increased 4.9% as compared to the six months ended June 30, 2024. The increase in interest expense, net is primarily related to the change in fair value of an interest rate swap derivative.
Foreign Currency (Loss) Gain
Below is a summary of our foreign currency loss, in thousands, for the three months ended June 30, 2025 and 2024:
|
|
Three Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|||
Foreign currency loss |
|
$ |
(17,432 |
) |
|
$ |
(282 |
) |
|
$ |
(17,150 |
) |
Foreign currency loss for the three months ended June 30, 2025 included net realized foreign currency gain of $1.4 million and net unrealized foreign currency loss of $18.9 million. The unrealized foreign currency loss is primarily related to a non-current intercompany U.S. dollar receivable at one of our foreign subsidiaries.
Foreign currency loss for the three months ended June 30, 2024 included net realized foreign currency loss of $0.8 million and net unrealized foreign currency gain of $0.5 million.
Below is a summary of our foreign currency (loss) gain, in thousands, for the six months ended June 30, 2025 and 2024:
|
|
Six Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|||
Foreign currency (loss) gain |
|
$ |
(27,730 |
) |
|
$ |
2,267 |
|
|
$ |
(29,997 |
) |
Foreign currency loss for the six months ended June 30, 2025 included net realized foreign currency gain of $0.7 million and net unrealized foreign currency loss of $28.5 million. The unrealized foreign currency loss is primarily related to a non-current intercompany U.S. dollar receivable at one of our foreign subsidiaries.
Foreign currency gain for the six months ended June 30, 2024 included net realized foreign currency loss of $0.1 million and net unrealized foreign currency gain of $2.4 million.
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Other (Loss) Income
Below is a summary of our other loss, in thousands, for the three months ended June 30, 2025 and 2024:
|
|
Three Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|||
Other loss |
|
$ |
— |
|
|
$ |
(284 |
) |
|
$ |
284 |
|
Other loss for the three months ended June 30, 2025 decreased as compared to other loss for the three months ended June 30, 2024, primarily due to a decrease in miscellaneous expenses.
Below is a summary of our other (loss) income, in thousands, for the six months ended June 30, 2025 and 2024:
|
|
Six Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|||
Other (loss) income |
|
$ |
(1,124 |
) |
|
$ |
689 |
|
|
$ |
(1,813 |
) |
Other (loss) income for the six months ended June 30, 2025 was unfavorable as compared to the six months ended June 30, 2024. The change in other (loss) income is primarily due to a $1.3 million decrease in the fair value of an equity investment in the current year period and a $1.1 million increase in the fair value of an equity investment in the prior year period.
Income Tax Expense
Below is a summary of our income tax expense, in thousands, for the three months ended June 30, 2025 and 2024:
|
|
Three Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|||
Income tax expense |
|
$ |
2,057 |
|
|
$ |
9,544 |
|
|
$ |
7,487 |
|
Income tax expense was $2.1 million for the three months ended June 30, 2025 on earnings before income tax of $2.5 million, representing an effective tax rate of 81.2%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate and the unfavorable impact of GILTI.
Income tax expense was $9.5 million for the three months ended June 30, 2024 on earnings before income tax of $28.4 million, representing an effective tax rate of 33.6%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate, the quarterly accrual for uncertain tax positions and the unfavorable impact of the GILTI, partially offset by certain favorable tax effects of equity vesting.
Below is a summary of our income tax expense, in thousands, for the six months ended June 30, 2025 and 2024:
|
|
Six Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Favorable / |
|
|||
Income tax expense |
|
$ |
4,269 |
|
|
$ |
13,086 |
|
|
$ |
8,817 |
|
Income tax expense was $4.3 million for the six months ended June 30, 2025 on earnings before income tax of $4.6 million, representing an effective tax rate of 92.4%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the unfavorable impact of GILTI, unfavorable tax effects of equity vesting and a valuation allowance established in the U.S. related to a capital loss carryforward.
32
Table of Contents
Income tax expense was $13.1 million for the six months ended June 30, 2024 on earnings before income tax of $46.7 million, representing an effective tax rate of 28.0%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate, the quarterly accrual for uncertain tax positions and the unfavorable impact of the GILTI, partially offset by a one-time benefit related to the Alfmeier acquisition.
Liquidity and Capital Resources
Overview
Our primary sources of liquidity and capital resources are cash flows from operations and borrowings available under our Second Amended and Restated Credit Agreement. Our cash requirements consist principally of working capital, capital expenditures, research and development, operating lease payments, income tax payments and general corporate purposes. We generally reinvest available cash flows from operations into our business, while opportunistically utilizing our authorized stock repurchase program. Further, we continuously evaluate acquisition and investment opportunities that will enhance our business strategies.
As of June 30, 2025, the Company had $128.3 million of cash and cash equivalents and $288.0 million of availability under our Second Amended and Restated Credit Agreement. We may issue debt or equity securities, which may provide an additional source of liquidity. However, there can be no assurance equity or debt financing will be available to us when we need it or, if available, the terms will be satisfactory to us and not dilutive to our then-current shareholders.
We continue to expect to be able to move funds between different countries to manage our global liquidity needs without material adverse tax implications, subject to current monetary policies and the terms of the Second Amended and Restated Credit Agreement. We utilize a combination of strategies, including dividends, cash pooling arrangements, intercompany loan repayments and other distributions and advances to provide the funds necessary to meet our global liquidity needs. There are no significant restrictions on the ability of our subsidiaries to pay dividends or make other distributions to Gentherm Incorporated. As of June 30, 2025, the Company’s cash and cash equivalents held by our non-U.S. subsidiaries totaled $91.3 million. If additional non-U.S. cash was needed for our U.S. operations, we may be required to accrue and pay withholding if we were to distribute such funds from non-U.S. subsidiaries to the U.S.; however, based on our current liquidity needs and strategies, we do not anticipate a need to accrue and pay such additional amounts.
We currently believe that our cash and cash equivalents, borrowings available under our Second Amended and Restated Credit Agreement, and cash flows from operations will be adequate to meet anticipated cash requirements for at least the next twelve months and the foreseeable future.
Cash and Cash Flows
The following table represents our cash and cash equivalents, in thousands:
|
|
Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Cash and cash equivalents at beginning of period |
|
$ |
134,134 |
|
|
$ |
149,673 |
|
Net cash provided by operating activities |
|
|
31,701 |
|
|
|
26,824 |
|
Net cash used in investing activities |
|
|
(19,829 |
) |
|
|
(24,680 |
) |
Net cash used in financing activities |
|
|
(22,329 |
) |
|
|
(21,777 |
) |
Foreign currency effect on cash and cash equivalents |
|
|
4,620 |
|
|
|
(6,574 |
) |
Cash and cash equivalents at end of period |
|
$ |
128,297 |
|
|
$ |
123,466 |
|
Cash Flows From Operating Activities
Net cash provided by operating activities totaled $31.7 million during the six months ended June 30, 2025 primarily reflecting net income of $0.3 million, $69.7 million for non-cash charges for depreciation, amortization, stock based compensation, loss on disposition of property, provisions for inventory and other, including unrealized foreign currency loss, and $20.5 million related to changes in accounts payable, partially offset by $23.7 million related to changes in accounts receivable, net, $13.4 million related to changes in inventory, $12.2 million for non-cash deferred income taxes and $9.5 million related to changes in net other assets and liabilities.
33
Table of Contents
Cash Flows From Investing Activities
Net cash used in investing activities was $19.8 million during the six months ended June 30, 2025, reflecting purchases of property and equipment of $23.7 million and investments in technology companies of $0.6 million, partially offset by proceeds from the sale of property and equipment of $3.7 million and proceeds from deferred purchase price of factored receivables of $0.8 million.
Cash Flows From Financing Activities
Net cash used in financing activities was $22.3 million during the six months ended June 30, 2025, reflecting $63.1 million of debt repayments, $10.0 million paid to repurchase Common Stock and $1.2 million paid for employee taxes related to the net settlement of restricted stock units that vested during the year, partially offset by the borrowing of debt of $52.0 million.
Debt
The following table summarizes the Company’s debt, in thousands, as of June 30, 2025 and December 31, 2024:
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||
|
|
Interest |
|
|
Principal |
|
|
Interest |
|
|
Principal |
|
||||
Revolving Credit Facility (U.S. Dollar denominations) |
|
|
5.80 |
% |
|
$ |
209,000 |
|
|
|
5.86 |
% |
|
$ |
220,000 |
|
Finance leases |
|
|
3.36 |
% |
|
|
146 |
|
|
|
3.46 |
% |
|
|
201 |
|
Total debt |
|
|
|
|
|
209,146 |
|
|
|
|
|
|
220,201 |
|
||
Less: current maturities |
|
|
|
|
|
(146 |
) |
|
|
|
|
|
(137 |
) |
||
Long-term debt, less current maturities |
|
|
|
|
$ |
209,000 |
|
|
|
|
|
$ |
220,064 |
|
||
Credit Agreement
Gentherm, together with certain of its subsidiaries, maintain a revolving credit note (the “Revolving Credit Facility”) under its Second Amended and Restated Credit Agreement (the “Second Amended and Restated Credit Agreement”) with a consortium of lenders and Bank of America, N.A. as administrative agent. The Second Amended and Restated Credit Agreement was entered into on June 10, 2022 and amended and restated in its entirety the Amended and Restated Credit Agreement dated June 27, 2019, by and among Gentherm, certain of its direct and indirect subsidiaries, the lenders party thereto and the Agent. The Second Amended and Restated Credit Agreement has a maximum borrowing capacity of $500 million and matures on June 10, 2027. The Second Amended and Restated Credit Agreement contains covenants, that, among other things, (i) prohibit or limit the ability of the borrowers and any material subsidiary to incur additional indebtedness, create liens, pay dividends, make certain types of investments (including acquisitions), enter into certain types of transactions with affiliates, prepay other indebtedness, sell assets or enter into certain other transactions outside the ordinary course of business, and (ii) require that Gentherm maintain a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Net Leverage Ratio (based on consolidated EBITDA for the applicable trailing four fiscal quarters) as of the end of any fiscal quarter. As of June 30, 2025, the Company was in compliance, in all material respects, with the terms of the Second Amended and Restated Credit Agreement.
Finance Leases
As of June 30, 2025 and December 31, 2024, there was $0.1 million and $0.2 million, respectively, of outstanding finance leases.
Material Cash Requirements
In February 2025, we committed to a restructuring plan to further optimize our manufacturing footprint by realigning our manufacturing capacity in Europe. We expect to incur cash restructuring costs of between $4 million and $6 million for employee severance and retention costs and between $2 million and $3 million of other transition costs primarily for machinery and equipment move and set up costs. Additionally, we expect to incur capital expenditures of between $1 million and $2 million.
In February 2025, we committed to an additional restructuring plan to further optimize our manufacturing footprint by realigning our manufacturing capacity in Asia. We expect to incur cash restructuring costs of between $2 million and $3 million for
34
Table of Contents
employee severance and retention costs and $1 million of other transition costs primarily for machinery and equipment move and set up costs. Additionally, we expect to incur capital expenditures of between $2 million and $3 million.
See Note 3, “Restructuring,” to the consolidated condensed financial statements included in this Report for additional information regarding these plans.
Except as described above, there have been no material changes in our cash requirements since December 31, 2024, the end of fiscal year 2024. See Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information regarding our material cash requirements.
Effects of Inflation
The automotive component supply industry has historically been subject to inflationary pressures with respect to materials and labor. At times in recent years, the automotive industry has experienced significant volatility in the costs of certain materials and components, labor and transportation. Although supply chain conditions have steadily improved and certain inflationary pressures have moderated, rising costs of materials, labor, equipment and other inputs used to manufacture and sell our products, including freight and logistics costs, have adversely impacted, and may in the future adversely impact, operating costs and operating results. The impact of additional significant tariffs could add to these inflationary pressures. Although the Company has developed and implemented strategies to mitigate the impact of higher material component costs and transportation costs through sourcing and manufacturing efficiencies where possible, these strategies together with commercial negotiations with Gentherm's customers and suppliers have not fully offset to date and may not fully offset our future cost increases. Such inflationary cost increase may increase the cash required to fund our operations by a material amount.
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based upon our consolidated condensed financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. For discussion of our significant accounting policies, see Note 2, “Summary of Significant Accounting Policies,” to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no significant changes in our critical accounting policies or critical accounting estimates during the three months ended June 30, 2025. We are not presently aware of any events or circumstances that would require us to update our estimates, assumptions or revise the carrying value of our assets or liabilities. Our estimates may change, however, as new events occur and additional information is obtained. As a result, actual results may differ significantly from our estimates, and any such differences may be material to our financial statements.
35
Table of Contents
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to various market risks including, but not limited to, changes in foreign currency exchange rates, changes in interest rates and price fluctuations of certain material commodities such as copper. Market risks for changes in interest rates relate primarily to the Company's debt obligations under the Second Amended and Restated Credit Agreement. Foreign currency exchange risks are attributable to sales to foreign customers and purchases from foreign suppliers not denominated in a location’s functional currency, foreign plant operations, intercompany indebtedness, acquisitions denominated in foreign currencies, intercompany investments and include exposures to the Euro, Mexican Peso, Canadian Dollar, Hungarian Forint, North Macedonian Denar, Ukrainian Hryvnia, Japanese Yen, Chinese Renminbi, Korean Won, Czech Koruna, Vietnamese Dong, British Pound, and Moroccan Dirham.
The Company regularly enters into derivative contracts with the objective of managing its financial and operational exposure arising from these risks by offsetting gains and losses on the underlying exposures with gains and losses on the financial instruments used to hedge them. The decision of whether and when to execute derivative financial instruments, along with the duration of the instrument, may vary from period to period depending on market conditions, the relative costs of the instruments and capacity to hedge. The duration is linked to the timing of the underlying exposure, with the connection between the two being regularly monitored. The Company does not enter into derivative financial instruments for speculative or trading purposes. Some derivative contracts do not qualify for hedge accounting; for other derivative contracts, we elect to not apply hedge accounting.
The Company’s designated hedging relationships are formally documented at the inception of the hedge, and hedges must be highly effective in offsetting changes to future cash flows on hedged transactions both at the inception of a hedge and on an ongoing basis to be designated for hedge accounting treatment. For derivative contracts that can be classified as a cash flow hedge, the effective portion of the change in the fair value of the derivative is recorded to accumulated other comprehensive income (loss) in the consolidated condensed balance sheets. When the underlying hedge transaction is realized, the gain or loss included in accumulated other comprehensive income (loss) is recorded in earnings in the consolidated condensed statements of income on the same line as the gain or loss on the hedged item attributable to the hedged risk. The Company records the ineffective portion of foreign currency hedging instruments, if any, to cost of sales, and the ineffective portion of interest rate swaps, if any, to interest expense, net in the consolidated condensed statements of income. Cash flows associated with derivatives are reported in net cash from operating activities in the consolidated condensed statements of cash flows.
Information related to the fair values of all derivative instruments in the consolidated condensed balance sheet as of June 30, 2025 is set forth in Note 10, “Financial Instruments” in the consolidated condensed financial statements included in this Report.
Interest Rate Sensitivity
The table below presents principal cash flows and related weighted average interest rates by expected maturity dates for each of the Company’s debt obligations, excluding finance leases. The information is presented in U.S. dollar equivalents, which is the Company’s reporting currency.
|
|
Expected Maturity Date |
|
|||||||||||||||||||||||||||||
|
|
2025 |
|
|
2026 |
|
|
2027 |
|
|
2028 |
|
|
2029 |
|
|
2030 |
|
|
Total |
|
|
Fair Value |
|
||||||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Long-Term Debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Variable rate |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
209,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
209,000 |
|
|
$ |
209,000 |
|
Variable interest rate as of June 30, 2025 |
|
|
|
|
|
|
|
|
5.80 |
% |
|
|
|
|
|
|
|
|
|
|
|
5.80 |
% |
|
|
|
||||||
Based on the amounts outstanding as of June 30, 2025, a hypothetical 100 basis point change (increase or decrease) in interest rates would impact annual interest expense by $2.1 million. To hedge the Company's exposure to interest payment fluctuations on a portion of these borrowings, we entered into floating-to-fixed interest rate swap agreements with notional amounts totaling $100.0 million.
36
Table of Contents
Exchange Rate Sensitivity
The table below provides information about the Company’s foreign currency exchange rate agreements that are sensitive to changes in foreign currency exchange rates. The table presents the notional amounts and weighted average exchange rates by expected maturity dates for each type of foreign currency exchange agreement. These notional amounts generally are used to calculate the payments to be exchanged under the contract.
|
|
Expected Maturity or Transaction Date |
|
|
|
|
||||||||||
Anticipated Transactions and Related Derivatives |
|
2025 |
|
|
2026 |
|
|
Total |
|
|
Fair Value |
|
||||
USD Functional Currency |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exchange Agreements: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
(Receive MXN / Pay USD) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total contract amount (a) |
|
$ |
40,493 |
|
|
$ |
35,122 |
|
|
$ |
75,615 |
|
|
$ |
5,514 |
|
Average contract rate |
|
|
20.37 |
|
|
|
20.50 |
|
|
|
20.43 |
|
|
|
|
|
(Receive HUF / Pay EUR) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total contract amount (a) |
|
$ |
6,747 |
|
|
$ |
— |
|
|
$ |
6,747 |
|
|
$ |
254 |
|
Average contract rate |
|
|
418.89 |
|
|
|
— |
|
|
|
418.89 |
|
|
|
|
|
The table below presents the potential gain and loss in fair value for the foreign currency derivative contracts from a hypothetical 10% change in quoted currency exchange rates.
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||
Exchange Rate Sensitivity |
|
Potential loss in fair value |
|
|
Potential gain in fair value |
|
|
Potential loss in fair value |
|
|
Potential gain in fair value |
|
||||
Exchange Agreement:(Receive MXN / Pay USD) |
|
$ |
5,040 |
|
|
$ |
7,807 |
|
|
$ |
6,243 |
|
|
$ |
7,359 |
|
Exchange Agreements:(Receive HUF / Pay EUR) |
|
|
637 |
|
|
|
779 |
|
|
|
917 |
|
|
|
1,120 |
|
ITEM 4. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Management of the Company, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of June 30, 2025. As defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (as amended, the “Exchange Act”), disclosure controls and procedures are controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported on a timely basis, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2025.
(b) Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the three months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
37
Table of Contents
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are subject to litigation from time to time in the ordinary course of business, however there was no material pending litigation to which we are a party and no material legal proceeding was terminated, settled or otherwise resolved during the three months ended June 30, 2025.
ITEM 1A. RISK FACTORS
In addition to the information set forth in this report, you should carefully consider the risk factors previously disclosed in Part 1, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and in Part II, Item 1A “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. The Company is not aware of any additional material risks or uncertainties.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities During Second Quarter 2025
Period |
|
Total Number |
|
|
Average Price |
|
|
Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs |
|
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs |
|
||||
April 1, 2025 to April 30, 2025 |
|
|
156,000 |
|
|
$ |
26.00 |
|
|
|
156,000 |
|
|
$ |
116,061,894 |
|
May 1, 2025 to May 31, 2025 |
|
|
225,600 |
|
|
|
26.42 |
|
|
|
225,600 |
|
|
|
110,102,528 |
|
June 1, 2025 to June 30, 2025 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
110,102,528 |
|
ITEM 5. OTHER INFORMATION
Trading Plans – Directors and Section 16 Officers
During the three months ended June 30, 2025, none of the Company's
38
Table of Contents
ITEM 6. EXHIBITS
Exhibits to this Report are as follows:
|
|
|
|
|
|
Incorporated by Reference |
||||||
Exhibit Number |
|
Exhibit Description |
|
Filed /Furnished Herewith |
|
Form |
|
Period Ending |
|
Exhibit / |
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Filing Date |
3.1 |
|
Second Amended and Restated Articles of Incorporation of Gentherm Incorporated |
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|
|
8-K |
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|
|
3.2 |
|
3/5/18 |
3.2 |
|
Amended and Restated Bylaws of Gentherm Incorporated |
|
|
|
8-K |
|
|
|
3.1 |
|
5/26/16 |
31.1 |
|
Section 302 Certification – CEO |
|
X |
|
|
|
|
|
|
|
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31.2 |
|
Section 302 Certification – CFO |
|
X |
|
|
|
|
|
|
|
|
32.1* |
|
Section 906 Certification – CEO |
|
X |
|
|
|
|
|
|
|
|
32.2* |
|
Section 906 Certification – CFO |
|
X |
|
|
|
|
|
|
|
|
101.INS |
|
Inline XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
|
X |
|
|
|
|
|
|
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101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
|
X |
|
|
|
|
|
|
|
|
104 |
|
Cover Page Interactive Date File – the cover page XBRL tags are embedded within the Inline XBRL document |
|
X |
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|
* Documents are furnished not filed.
39
Table of Contents
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 thereunto duly authorized.
|
Gentherm Incorporated |
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|
|
/s/ William Presley |
|
William Presley |
|
President and Chief Executive Officer |
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(Principal Executive Officer) |
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|
|
Date: July 24, 2025 |
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|
|
|
|
/s/ Jonathan Douyard |
|
Jonathan Douyard |
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Executive Vice President, Chief Financial Officer and Treasurer |
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(Principal Financial Officer) |
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|
|
Date: July 24, 2025 |
40
FAQ
How many Zillow (ZG) shares did Lloyd Frink sell in July 2025?
At what prices were the Zillow shares sold?
Did the executive exercise stock options before selling?
How many Zillow shares does Frink still own after the transactions?
Was the sale made under a 10b5-1 trading plan?
