GENTHERM INCORPORATED Gentherm Reports 2023 Third Quarter Results.
Hghlights
* Delivered Highest Quarterly Adjusted EBITDA in Ten Quarters
* Secured
* Updates 2023 Guidance
Third Quarter Highlights
Product revenues of
Automotive revenues increased 10.0% year over year; excluding the impact of foreign currency translation and contributions from the Alfmeier acquisition, increased 3.1% year over year
GAAP diluted earnings per share was
Adjusted diluted earnings per share (1) was
Secured new automotive business awards totaling
Repurchased
(1) We provide adjusted diluted earnings per share and other non-GAAP financial measures in this release.
See 'Use of Non-GAAP Measures' below for additional information, including definitions, usefulness for
investors and limitations, as well reconciliations below to the most directly comparable GAAP financial
measures.
He concluded: 'While the automotive production environment remains challenging including the UAW strike, our relentless focus on strong operational execution, innovation and cash flow generation along with our record performance on new business awards position us well to continue to drive shareholder value over the long term.'
2023 Third Quarter Financial Review
Product revenues for the third quarter of 2023 increased by
Automotive revenues increased 10.0% year over year as a result of the contribution from Alfmeier, as well as record quarterly revenues in Climate Control Seat and Steering Wheel Heaters, partially offset by decreased revenue in Electronics, Battery Performance Solutions and
Gentherm Medical revenue increased 9.7% year over year, primarily as a result of increased revenues from its Dacheng air warming blankets.
See the 'Revenues by Product Category' table included below for additional detail.
Gross margin rate decreased to 23.5% in the current year period, as compared with 24.1% in the prior year period. The decrease from the prior year period resulted from the acquired Alfmeier business having a lower gross margin rate relative to the Company's organic Automotive business, non-automotive electronics inventory charge, material and wage inflation, and lower price recoveries from customers. These were partially offset by lower freight costs, increased productivity at the factories, and fixed cost leverage from higher unit volume.
Net research and development expenses of
Selling, general and administrative expenses of
Acquisition and integration expenses of
As described more fully in the 'Reconciliation of Net Income to Adjusted EBITDA' table included below, the Company recorded Adjusted EBITDA of
Income tax expense in the third quarter was
GAAP diluted earnings per share for the third quarter was
Guidance
The Company updates its full year 2023 guidance that was initially provided in its year-end 2022 earnings release on
Revised Outlook for FY 2023 Prior Outlook
Low High Low High
Product revenues (1)(2)$1.45B $1.47B $1.45B $1.55B
Adjusted EBITDA Margin Rate (3) 11.5% 12.5% 11.5% 13.5%
Full-year Adjusted Effective Tax Rate (4) 28% 32% 28% 32%
Capital Expenditures$40M $50M $60M $70M
(1) Based on the current forecast of customer orders, inflation and pricing recovery, and a EUR to USD exchange rate
of
(2) Assumes OEM plants impacted by the UAW strike as of
(3) Starting with 2023 reporting, the Company excludes the impact of non-cash stock-based compensation from the
Adjusted EBITDA results
(4) Excluding the impact of non-cash goodwill impairment on earnings before income tax of
second quarter of 2023, which includes the associated deferred tax effect, and income tax benefit of
Conference Call
As previously announced,
A live webcast and one-year archived replay of the call can be accessed on the Events page of the Investor section of
A telephonic replay will be available approximately two hours after the call until
Investor Contact
investors@gentherm.com
248.308.1702
Media Contact
media@gentherm.com
248.289.9702
About
Forward-Looking Statements
Except for historical information contained herein, statements in this release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent
macroeconomic, geopolitical and similar global factors on the cyclical Automotive industry;
the production levels of our major customers and OEMs in our key markets and sudden fluctuations in such production levels, in particular with respect to models for which we supply significant amounts of product;
our ability to integrate our recent acquisitions and realize synergies, as well as to consummate additional strategic acquisitions, investments and exits;
our implementation activities to execute our long-term strategy of Fit-for-Growth 2.0, including profitability improvement and cost reductions;
our ability to effectively manage new product launches and research and development;
increasing competition, including with non-traditional entrants;
the ongoing supply-constrained environment, including raw material and component shortages, manufacturing disruptions and delays, logistics challenges, inflationary and other cost pressures;
the impact of our global operations, including our global supply chain, operations within
our business in
a tightening labor market, labor shortages or work stoppages impacting us, our customers or our suppliers, including the potential impact of ongoing and future labor strikes among certain OEMs and suppliers;
our achievement of product cost reductions to offset customer-imposed price reductions or other pricing pressures;
any security breaches and other disruptions to our information technology networks and systems, as well as privacy, data security and data protection risks;
our product quality and safety;
the evolution of the automotive industry towards electric vehicles, autonomous vehicles and mobility on demand services, and related consumer behaviors and preferences;
the development of and market acceptance of our existing and future products;
our borrowing availability under our revolving credit facility, as well as our ability to access the capital markets, to support our planned growth;
our indebtedness and compliance with our debt covenants;
the effects of climate change and catastrophic events, as well as regulatory and stakeholder-imposed requirements to address climate change and other sustainability issues;
our efforts to optimize our global supply chain and manufacturing footprint;
our ability to project future sales volume based on third-party information, based on which we manage our business;
our ability to convert new business awards into product revenues;
any loss or insolvency of our key customers and OEMs, or key suppliers;
risks associated with our manufacturing processes;
the extensive regulation of our patient temperature management business;
the protection of our intellectual property in certain jurisdictions;
our compliance with anti-corruption laws and regulations; and
legal and regulatory proceedings and claims involving us or one of our major customers.
The foregoing risks should be read in conjunction with the Company's reports filed with or furnished to the
Except as required by law, the Company expressly disclaims any obligation or undertaking to update any forward-looking statements to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME: see full release at:
https://gentherm.gcs-web.com/news-releases/news-release-details/gentherm-reports-2023-third-quarter-results
(C) 2023 Electronic News Publishing, source
