Re-opens Wonderland: Gentherm Inc (NASDAQ: THRM)

On Monday, Gentherm Inc (NASDAQ: THRM) remained among the day gainers losers and traded with change of 0.14% on volume of 134514 shares in the last session as compared to average volume of 149971 shares. During last trade its minimum price was $43.47 and it gained highest price of $44.07. THRM has total market capitalization of $1429834183. Its closing value stands at $43.78.

Gentherm (THRM) recently reported its financial results for the third quarter ended September 30, 2019.

Third Quarter Highlights

  • Product revenues of $240.1M reduced 8.2% from $261.5M in the 2018 third quarter
  • Not Including the impact of foreign currency translation, divested assets and assets held for sale, product revenues reduced 2.8% year over year
  • GAAP diluted earnings per share was $0.48 as contrast to a loss per share of $0.01 for the prior-year period
  • Adjusted earnings per share (see table herein) was $0.68. Adjusted earnings per share in the prior-year period was $0.54
  • Secured automotive new business awards totaling $270M
  • Repurchased $25M of the Company’s stock

2019 Third Quarter Financial Review

Product revenues for the third quarter of 2019 of $240.1M declined $21.4M, or 8.2%, as contrast to the prior-year period. Not Including the impact of foreign currency translation, divested assets and assets held for sale, product revenues declined 2.8% year over year.

Automotive revenues declined 4.4% year over year. The increase in Seat Heaters, Battery Thermal Management (BTM) and Other Automotive was over offset by revenue declines in all other product categories. Adjusting for foreign currency translation, organic Automotive revenues reduced 2.8% year over year. The GM strike negatively influenced automotive revenues by 1.3%. According to IHS Markit’s mid-October forecast for the third quarter of 2019, actual light vehicle production declined by 3.2% contrast to the third quarter of 2018.

The revenue decline in the Industrial section resulted primarily from the absence of revenue in this year’s third quarter from the divested Cincinnati Sub-Zero (CSZ) industrial chamber business and lower sales in the Global Power Technologies (GPT) business, which has been classified as “assets held for sale.”  On October 1, 2019, the Company divested the GPT business. Gentherm Medical revenue declined 1.3% year over year as a result of a shift in timing of equipment orders from the third quarter to the fourth quarter.

See the “Revenue by Product Category” table included below for additional detail.

The gross margin rate increased to 31.1% in the current-year period, a 220-basis point improvement over the prior-year period, primarily as a result of higher labor productivity, supplier cost reductions, Fit-for-Growth cost reduction initiatives and a one-time benefit from improved cost of quality. These were partially offset by yearly consumer price reductions, wage inflation, tariffs, as well as the negative fixed cost leverage from lower unit volume.

Net research and development (R&D) expenses of $18.8M in the third quarter of 2019 reduced $0.2M, or 1.1%, year over year as a direct result of the Company’s focused portfolio and Fit-for-Growth cost reduction initiatives which over offset higher than normal reimbursement in the prior-year period.

Selling, general and administrative (SG&A) expenses of $26.8M in the third quarter of 2019 reduced $8.3M, or 23.5%, versus the prior-year period. The year-over-year decline was primarily driven by the sale of the CSZ industrial chambers business and the impact of the Fit-for-Growth cost reduction initiatives.

EPS growth for this year is -22.90% and EPS growth for next year is expected to reach at 17.67%. EPS growth in past five years was 4.20% while EPS growth in next five years is projected to arrive at 25.00%. Sales growth past 5 years was measured at 9.40%.

Ronald Hemphill

Ronald Hemphill– Business Stories My Name is Ronald Hemphill and I am also the main source from the ‘’ of all the exclusive and most delicate visualization of the activities in the business sector. My first step towards this journey was taken in the very early years of my life. I started with an independent financial consultant. However, I only had almost 4 years of skills and experience in this market. I have always been a free personality and like to fly one place to another, to explore more and more. Moreover, this passion and craze of traveling gave me a chance to report a section for best news associations. Last but not least, I am presently working full-time as an editor.

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