Gentherm Reports 2012 Third Quarter, Nine-Month Results; Record Revenues For Both Periods

NORTHVILLE, Mich., Nov. 1, 2012 /PRNewswire/ -- Gentherm (NASDAQ-GS:THRM), the global market leader and developer of innovative thermal management technologies, today announced its financial results for the third quarter and nine months ended September 30, 2012. 

On May 16, 2011, Gentherm closed the previously announced acquisition of a majority interest in W.E.T. Automotive Systems AG, a publicly-traded German automotive thermal control and electronic components company.  As a result, the 2011 nine-month period includes operating results of W.E.T. beginning May 16, 2011.  The 2012 third quarter is the first quarter where the year-over-year comparisons include a full three months of W.E.T. financial results for both periods since the acquisition.

President and CEO Daniel R. Coker said, "We had another strong quarter of growth and achieved a significant milestone with the shipment of our 10 millionth Climate Control Seat™ (CCS™) during the period.  Our seat systems for the automotive market continue to gain popularity, which we think reflects the importance of our proprietary thermal technology and our engineering capabilities, as well as the growing consumer interest in driver and passenger comfort during the driving experience.

"We believe this desire for thermal comfort has broad applications, which is why we are now offering our heated and cooled technology in a chair for the office furniture market.  In addition, building on the growing interest we are seeing with our technology in bedding products offered in the U.S., we are now working on another line of bedding products with a partner in the United Arab Emirates," added Coker.  "We remain on track with our guidance for the remainder of the year and continue to move forward in cooperation with W.E.T."

Third Quarter Financial Highlights
Revenues for the 2012 third quarter increased 12 percent to $141.1 million from $125.6 million in the prior year period.  W.E.T. revenues include the positive effect of the first historical Gentherm vehicle program being produced in a W.E.T. facility, which totaled $6.5 million for the 2012 third quarter and $4.4 million for the 2011 third quarter.  Adding back the transferred program's revenues for both periods, historical Gentherm product revenues would have increased $5.6 million, or 16 percent, reflecting new vehicle program launches since the end of the 2011 third quarter and expansion of certain programs into new geographic regions by customers on existing vehicles.  New program launches for CCS include the Ford Flex, Nissan Pathfinder, Infiniti JX, Hyundai i40 and Kia K9 Cadenza.  Certain existing vehicle programs had higher revenue during the period as a result of Gentherm's customers expanding the availability of the product to additional geographic regions.  This includes the Kia Optima, which is now also offered in China and North America. 

Partially offsetting higher product revenues during the 2012 third quarter is a decline related to the weakening of the Euro against the U.S. dollar which negatively impacted the Company's Euro–denominated revenues.  The Euro–denominated product revenue for the 2012 third quarter was €31.9 million and the average U.S. Dollar/Euro exchange rate for the quarter was 1.2514.  If the average exchange rate for the quarter had been equal to the average U.S. Dollar/Euro rate for all of 2011 which was 1.4070, Gentherm would have reported incrementally higher revenue of approximately $5.0 million.

This year's third quarter net income attributable to common shareholders was $2.6 million, or $0.09 per share.  Non-cash purchase accounting impacts related to the W.E.T. acquisition totaled $3.3 million, or $0.06 per basic and diluted share.  In addition, the 2012 third quarter results include convertible preferred stock dividends of $1.5 million, which reduced net income attributable to common shareholders by $0.05 per basic and diluted share.  Adjusting for these factors, Gentherm would have reported net income attributable to common shareholders of $0.20 per basic and diluted share. 

Net loss attributable to common shareholders for the third quarter of 2011 was $1.6 million, or $0.07 loss per share, which included acquisition-related fees and expenses and debt retirement costs totaling $203,000.  In addition, non-cash purchase accounting impacts totaling $5.3 million and convertible preferred stock dividends of $2.8 million were recorded during last year's third quarter.  Excluding these charges, Gentherm would have earned $4.4 million, or $0.12 per share, in the 2011 third quarter.  The fees and expenses associated with the W.E.T. acquisition are detailed in the Acquisition Transaction Expenses, W.E.T. Purchase Accounting Impacts and Other Effects table accompanying the release.

Gross margin as a percentage of revenue for the third quarter of 2012 increased to 26.1 percent, up from 24.5 percent for the third quarter of 2011.  Margins for both Gentherm and W.E.T. improved compared with the prior year's third quarter.

Adjusted EBITDA for the third quarter of 2012 was $18.6 million compared with Adjusted EBITDA of $15.5 million for the prior year period, and was $728,000 higher than Adjusted EBITDA during this year's second quarter of $17.8 million.

Historical Gentherm financial results and Adjusted EBITDA for the third quarter of 2012 (which are non-GAAP measures) are provided to help shareholders understand Gentherm's results of operations due to the acquisition of W.E.T.  These non-GAAP financial measures should be viewed in addition to, and not as an alternative for, Gentherm's reported results prepared in accordance with GAAP.

The Company's balance sheet as of September 30, 2012, had total cash and cash equivalents of $72.3 million, total assets of $458.5 million and shareholders' equity of $212.0 million.  Total debt was $60.3 million, and the book value of the unredeemed Series C Convertible Preferred Stock was $29.6 million as of September 30, 2012.

Year-to-Date Summary
For the first nine months of 2012, revenues increased to $406.7 million from $238.6 million in the prior year period.  The increase in revenues primarily reflects a full nine months of W.E.T. revenues in the first nine months of 2012 compared with four and a half months of W.E.T. revenues in the first nine months of 2011 and higher revenues for historical Gentherm.  Had Gentherm acquired W.E.T. on January 1, 2011, pro-forma combined revenues during the first nine months of 2011 would have been $371.1 million.  Revenues for the first nine months of 2012 were approximately 9.6 percent higher than the pro-forma combined results.  W.E.T. revenues include the positive effect of the first historical Gentherm vehicle program to be produced in a W.E.T. facility which totaled $20.7 million for the first nine months of 2012 and $4.4 million for the year-earlier period.  Adding back the transferred program's revenues for both periods, historical Gentherm product revenues would have increased $14.1 million, or 14 percent.  

Partially offsetting higher product revenues during the first nine months of 2012 is a decline related to the weakening of the Euro against the U.S. dollar which negatively impacted the Company's Euro–denominated revenues.  The Euro–denominated product revenue for the first nine months of 2012 was €95.5 million and the average U.S. Dollar/Euro exchange rate for the first nine months was 1.2824.  If the average exchange rate for the first nine months of 2012 had been equal to the average U.S. Dollar/Euro rate for all of 2011 which was 1.4086, Gentherm would have reported incrementally higher revenue of approximately $12.1 million.

Net income attributable to common shareholders for the first nine months of 2012 was $9.0 million, or $0.32 per basic and $0.31 per diluted share.  Non-cash purchase accounting impacts related to the W.E.T. acquisition totaled $9.8 million, or $0.20 per basic and diluted share.  In addition, the results for the first nine months of 2012 include convertible preferred stock dividends of $5.5 million, which reduced net income attributable to common shareholders by $0.20 per basic and $0.19 per diluted share.  Adjusting for these factors, Gentherm would have reported net income attributable to common shareholders of $0.72 per basic and $0.71 per diluted share. 

Net loss attributable to common shareholders for the first nine months of 2011 was $3.9 million, or $0.17 loss per share, which included acquisition-related one-time fees and expenses totaling $5.4 million, debt retirement expense of $970,000, non-cash purchase accounting impacts totaling $9.6 million and convertible preferred stock dividends of $5.7 million.  Excluding these charges, Gentherm would have earned $12.9 million, or $0.58 per basic and $0.55 per diluted share, in the first nine months of 2011.  The fees and expenses associated with the W.E.T. acquisition are detailed in the Acquisition Transaction Expenses, W.E.T. Purchase Accounting Impacts and Other Effects table accompanying the release.

Gross margin as a percentage of revenue for the first nine months of 2012 was 25.4 percent compared with 25.5 percent in the year-earlier period.  This decrease reflects the full year impact of including W.E.T. revenues, which have an overall lower gross margin than historical Gentherm, in the consolidated total revenues.

Adjusted EBITDA for the first nine months of 2012 was $52.2 million compared with Adjusted EBITDA of $35.5 million for the prior year period.

Interest Expense and Revaluation of Derivatives
Interest expense for the third quarter and first nine months of this year was $898,000 and $3.1 million, respectively, compared with $1.2 million and $2.5 million for the prior year periods.  Approximately $1.1 million in interest expense during the first nine months was related to the debt of W.E.T., and the balance resulted from financing used to fund a portion of the W.E.T. acquisition.

For this year's third quarter and first nine months, the Company recorded losses related to the revaluation of derivative financial instruments of $993,000 and $1.1 million, respectively, compared with losses of $4.3 million and $5.6 million for the prior year periods.   Derivative losses stem from W.E.T.'s Cash Related Swap (CRS) contract and portfolio of currency derivative instruments.

Research and Development, Selling, General and Administrative Expenses
The 2012 third quarter results include a year-over-year decrease in net research and development expenses of $1.2 million.  Net research and development expenses for the first nine months of 2012 were up $11.4 million, reflecting a full nine months of W.E.T. research and development expenses incurred the first nine months of this year compared with four and a half months of W.E.T. expenses incurred in the year-earlier period.

Selling, general and administrative (SG&A) expenses for this year's third quarter and first nine months increased $3.0 million and $19.9 million, respectively.  This was primarily due to a full nine months of W.E.T. expenses incurred in the first nine months of this year compared with four and a half months of W.E.T. expenses in the prior year period.  Increases in historical Gentherm SG&A expenses for both periods include expenses related to a Domination and Profit and Loss Transfer Agreement (DPLTA) for W.E.T., expenses related to the Sarbanes-Oxley compliance implementation for W.E.T., and one-time fees during the quarter associated with an investigation of a potential acquisition which was not completed.

Guidance
The Company expects combined revenues of Gentherm/W.E.T. in the 2012 fourth quarter to be in-line with the Company's full year forecast.  Barring unforeseen economic turbulence, including worsening of the European market or unfavorable fluctuations of the Euro exchange rate, 2012 revenue appears to be strong for the combined companies.  Gentherm is expecting revenue growth for the full year in the range of 10 percent over the combined Gentherm/W.E.T. 2011 revenues (which were $501.2 million on a full year pro-forma basis).

Conference Call
As previously announced, Gentherm is conducting a conference call today to be broadcast live over the Internet at 11:30 AM Eastern Time to review these financial results.  The dial-in number for the call is 1-877-941-1427.  The live webcast and archived replay of the call can be accessed in the Events page of the Investor section of Gentherm's website at www.gentherm.com.

Note Regarding Use of Non-GAAP Financial Measures
Certain of the information set forth herein, including Adjusted EBITDA and historical Gentherm financial results, may be considered non-GAAP financial measures.  Gentherm believes this information is useful to investors because it provides a basis for measuring Gentherm's available capital resources, the operating performance of Gentherm's business and Gentherm's cash flow that would normally be included in the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles. Gentherm's management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating Gentherm's operating performance, capital resources and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP.  Reconciliation between net income and EBITDA is provided in the financial tables at the end of this news release.

About Gentherm
Gentherm (NASDAQ-GS:THRM) is a global developer and marketer of innovative thermal management technologies for a broad range of heating and cooling and temperature control applications. Automotive products include actively heated and cooled seat systems and cup holders, heated and ventilated seat systems, thermal storage bins, heated seat and steering wheel systems, cable systems and other electronic devices.  The Company's advanced technology team is developing more efficient materials for thermoelectrics and systems for waste heat recovery and electrical power generation for the automotive market that may have far-reaching applications for consumer products as well as industrial and technology markets.  Gentherm has more than 6,000 employees in facilities in the U.S., Germany, Mexico, China, Canada, Japan, England, Korea, Malta, Hungary and the Ukraine.  For more information, go to www.gentherm.com.

Certain matters discussed in this release are forward-looking statements that involve risks and uncertainties, and actual results may be different.  Important factors that could cause the Company's actual results to differ materially from its expectations in this release are risks that sales may not significantly increase, additional financing, if necessary, may not be available, new competitors may arise and adverse conditions in the automotive industry may negatively affect its results.  The liquidity and trading price of its common stock may be negatively affected by these and other factors.  Please also refer to Gentherm's Securities and Exchange Commission (SEC) filings and reports, including, but not limited to, its Form 10-Q for the period ended September 30, 2012, and its Form 10-K for the year ended December 31, 2011; all of which are available free of charge on the SEC's website at www.sec.gov. Amerigon expressly disclaims any intent or obligation to update any forward-looking statements.

Contact: 

Allen & Caron Inc 


Jill Bertotti (investors) 


jill@allencaron.com 


Len Hall (media) 


len@allencaron.com 


(949) 474-4300

TABLES FOLLOW

GENTHERM INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)





Three Months Ended

Nine Months Ended


September 30,

September 30,


2012

2011

2012

2011

Product revenues

$      141,058

$      125,639

$      406,737

$      238,572

Cost of sales

104,258

94,795

303,275

177,671

            Gross margin

36,800

30,844

103,462

60,901

Operating expenses:





      Research and development

10,702

11,520

31,480

18,921

      Research and development reimbursements

(656)

(235)

(1,763)

(581)

            Net research and development expenses

10,046

11,285

29,717

18,340

      Acquisition transaction expenses

200

5,380

      Selling, general and administrative

16,560

13,545

45,972

26,092

            Total operating expenses

26,606

25,030

75,689

49,812

Operating income

10,194

5,814

27,773

11,089

Interest expense

(898)

(1,213)

(3,082)

(2,450)

Debt retirement expense

(3)

(970)

Revaluation of derivatives

(993)

(4,305)

(1,056)

(5,574)

Foreign currency gain (loss)

(421)

2,006

2,357

3,412

Other income

313

193

631

281

Earnings before income tax

8,195

2,492

26,623

5,788

Income tax expense

2,425

973

7,580

4,117

Net income

5,770

1,519

19,043

1,671

Loss (gain) attributable to non-controlling interest

(1,672)

(348)

(4,491)

175

Net income attributable to Gentherm Incorporated

4,098

1,171

14,552

1,846

Convertible preferred stock dividends

(1,516)

(2,815)

(5,521)

(5,738)

 

Net income (loss) attributable to common shareholders

 

$           2,582

 

$          (1,644)

 

$           9,031

 

$          (3,892)






Basic earnings (loss) per share

$            0.09

$           (0.07)

$            0.32

$           (0.17)

Diluted earnings (loss) per share

$            0.09

$           (0.07)

$            0.31

$           (0.17)






Weighted average number of shares – basic

29,619

22,753

28,177

22,351

Weighted average number of shares – diluted

30,003

22,753

28,676

22,351

 

 

 

GENTHERM INCORPORATED


RESULTS EXCLUDING W.E.T


The following table presents select operations data for the period as reported, amounts for W.E.T. operations and amounts for Gentherm less the W.E.T. amounts representing the historical portion of Gentherm. These historical Gentherm financial results, which are non-GAAP measures, are provided to help shareholders understand Gentherm's results of operations in light of the 2011 acquisition of W.E.T. These non-GAAP financial measures should be viewed in addition to, and not as an alternative for, Gentherm's reported results prepared in accordance with GAAP.




Three month period ended September 30, 2012




(In Thousands)




As Reported


Less: W.E.T.


Historical Gentherm

Product revenues


$         141,058


$         107,092


$           33,966

Cost of sales


104,258


80,203


24,055

Gross margin


36,800


26,889


9,911

Gross margin percent


26.1%


25.1%


29.2%

Operating expenses:








Net research and development expenses

10,046


7,988


2,058


Selling, general and administrative  expenses (1)

16,560


10,652


5,908


Operating income

10,194


8,249


1,945

Earnings before income tax 

8,195


6,875


1,320


(1) During the 2012 third quarter, historical Gentherm incurred approximately $600 in expenses related to the DPLTA and Sarbanes-Oxley compliance for W.E.T. within selling, general and administrative expenses.





Three month period ended September 30, 2011




(In Thousands)




As Reported


Less: W.E.T.


Historical Gentherm

Product revenues


$         125,639


$         95,122


$           30,517

Cost of sales


94,795


72,584


22,211

Gross margin


30,844


22,538


8,306

Gross margin percent


24.5%


23.7%


27.2%

Operating expenses:








Net research and development expenses

11,285


8,949


2,336


Acquisition transaction expenses

200


6


194


Selling, general and administrative  expenses

13,545


9,838


3,707


Operating income

5,814


3,745


2,069

Earnings before income tax 

2,492


1,030


1,462


 

 

 

GENTHERM INCORPORATED


RESULTS EXCLUDING W.E.T.


The following table presents select operations data for the period as reported, amounts for W.E.T. operations and amounts for Gentherm less the W.E.T. amounts representing the historical portion of Gentherm. These historical Gentherm financial results, which are non-GAAP measures, are provided to help shareholders understand Gentherm's results of operations in light of the 2011 acquisition of W.E.T. These non-GAAP financial measures should be viewed in addition to, and not as an alternative for, Gentherm's reported results prepared in accordance with GAAP.








Nine month period ended September 30, 2012




(In Thousands)




As Reported


Less: W.E.T.


Historical Gentherm

Product revenues


$         406,737


$         310,620


$           96,117

Cost of sales


303,275


234,362


68,913

Gross margin


103,462


76,258


27,204

Gross margin percent


25.4%


24.6%


28.3%

Operating expenses:








Net research and development expenses

29,717


22,974


6,743


Selling, general and administrative  expenses (1)

45,972


31,010


14,962


Operating income

27,773


22,274


5,499

Earnings before income tax 

26,623


23,001


3,622


(1)During the nine month period ending September 30, 2012, historical Gentherm incurred approximately $1,690 in expenses related to the DPLTA and Sarbanes-Oxley compliance for W.E.T. within selling, general and administrative expenses. 




Nine month period ended September 30, 2011




(In Thousands)




As Reported


Less: W.E.T.


Historical Gentherm

Product revenues


$         238,572


$         140,300


$           98,272

Cost of sales


177,671


107,042


70,629

Gross margin


60,901


33,258


27,643

Gross margin percent


25.5%


23.7%


28.1%

Operating expenses:








Net research and development expenses

18,340


11,054


7,286


Acquisition transaction expenses

5,380


713


4,667


Selling, general and administrative  expenses

26,092


15,912


10,180


Operating income

11,089


5,579


5,510

Earnings before income tax 

5,788


(353)


6,141

 

 

GENTHERM INCORPORATED
RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME
(Unaudited, in thousands)





Three Months Ended

September 30,

Nine Months Ended

September 30,


2012

2011

2012

2011

Net income (loss)

$         5,770

$         1,519

$       19,043

$         1,671

Add Back:





   Income tax expense

2,425

973

7,580

4,117

   Interest expense (income)

898

1,213

3,082

2,450

   Depreciation and amortization

7,225

9,076

22,100

14,956

Adjustments:





   Acquisition transaction expense

200

5,380

   Debt retirement expense

3

970

   Unrealized currency (gain) loss

2,505

(353)

1,913

1,855

   Unrealized revaluation of derivatives

(252)

2,872

(1,482)

4,141

Adjusted EBITDA

$       18,571

$       15,503

$       52,236

$       35,540

Use of Non-GAAP Financial Measures
In evaluating its business, Gentherm considers and uses Adjusted EBITDA as a supplemental measure of its operating performance.  The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, and deferred financing cost amortization, less transaction expenses, debt retirement expenses, unrealized currency (gain) loss and unrealized revaluation of derivatives.  Management believes that Adjusted EBITDA is a meaningful measure of liquidity and the Company's ability to service debt because it provides a measure of cash available for such purposes. Management provides an Adjusted EBITDA measure so that investors will have the same financial information that management uses with the belief that it will assist investors in properly assessing the Company's performance on a period-over-period basis.

The term Adjusted EBITDA is not defined under GAAP, and is not a measure of operating income, operating performance or liquidity presented in accordance with GAAP.  Adjusted EBITDA has limitations as an analytical tool, and when assessing the Company's operating performance, investors should not consider Adjusted EBITDA in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with GAAP.  Gentherm compensates for these limitations by relying primarily on its GAAP results and using Adjusted EBITDA only supplementally.

 

GENTHERM INCORPORATED

ACQUISITION TRANSACTION EXPENSES, W.E.T. PURCHASE ACCOUNTING IMPACTS AND OTHER EFFECTS

(In thousands, except per share data)




   Three Months Ended

         September 30,      

Nine Months Ended

   September 30,    

                  Future Periods (estimated)                    






2012

2011

2012

2011

2012

2013

2014

Thereafter










Transaction related current expenses









Acquisition transaction expenses

$  –

$  200

$  –

$  5,380

$  –

$  –

$  –

$  –

Debt retirement expense

3

970


203

6,350

Non-cash purchase accounting impacts









Customer relationships amortization

$  1,924

$  2,110

$  5,771

$  3,165

$  7,712

$  7,712

$  7,712

$  47,493

Technology amortization

807

885

2,420

1,328

3,234

3,234

3,234

9,322

Product development costs amortization

520

446

1,561

568

2,086

2,135

2,135

1,258

Order backlog amortization

1,532

3,063

Inventory fair value adjustment

374

1,497


$  3,251

$  5,347

$  9,752

$  9,621

$  13,032

$  13,081

$  13,081

$  58,073










Tax effect

(753)

(1,313)

(2,259)

(3,189)

(3,018)

(3,030)

(3,030)

(13,450)

Net Income effect

2,498

4,237

7,493

12,782

10,014

10,051

10,051

44,623

Non-controlling interest effect

(602)

(975)

(1,805)

(1,754)

(2,411)

(2,421)

(2,421)

(10,746)

Net income available to shareholders effect

$  1,897

$  3,262

$  5,689

$  11,029

$  7,602

$  7,631

$  7,631

$  33,877










Earnings (loss) per share - difference









Basic

$  0.06

$  0.14

$  0.20

$  0.49





Diluted

$  0.06

$  0.14

$  0.20

$  0.48














Series C Preferred Stock dividend

$  1,516

$  2,815

$  5,521

$  5,738

$  6,711

$  1,622

$  –

$  –










Earnings (loss) per share - difference









Basic

$  0.05

$  0.12

$  0.20

$  0.26





Diluted

$  0.05

$  0.12

$  0.19

$  0.25





 

 

GENTHERM INCORPORATED

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands, except share data)





September 30,

2012

December 31,

2011


(unaudited)


ASSETS



Current Assets:



Cash & cash equivalents

$         72,279

$            23,839

Accounts receivable, less allowance of $2,207 and $1,937, respectively

101,044

82,395

Inventory:



Raw Materials

29,975

29,073

Work in process

2,416

2,497

Finished goods

19,409

14,774




Inventory

51,800

46,344

Derivative financial instruments

590

2,675

Deferred income tax assets

9,273

12,732

Prepaid expenses and other assets

17,042

9,685




Total current assets

252,028

177,670

Property and equipment, net

50,702

44,794

Goodwill

24,076

24,245

Other intangible assets

103,193

108,481

Deferred financing costs

1,789

2,441

Derivative financial instruments

5,082

Deferred income tax assets

11,739

11,402

Other non-current assets

9,928

8,774




Total assets

$       458,537

$          377,807




LIABILITIES AND SHAREHOLDERS' EQUITY



Current Liabilities:



Accounts payable

$         43,270

$            42,533

Accrued liabilities

68,212

46,293

Current maturities of long-term debt

18,172

14,570

Derivative financial instruments

3,355

5,101

Deferred tax liabilities

3,218




Total current liabilities

133,009

111,715

Pension benefit obligation

3,548

3,872

Other liabilities

3,788

1,862

Long-term debt, less current maturities

42,110

61,677

Derivative financial instruments

13,072

17,189

Deferred tax liabilities

21,397

23,679




Total liabilities

216,924

219,994

Series C Convertible Preferred Stock

29,633

50,098

Shareholders' equity:



Common Stock:



No par value; 55,000,000 shares authorized, 29,701,225 and 23,515,571 issued and outstanding at September 30, 2012 and December 31, 2011, respectively

166,126

80,502

Paid-in capital

25,383

23,489

Accumulated other comprehensive income (loss)

(13,513 )

(14,754 )

Accumulated deficit

(16,685 )

(25,716 )




Total Gentherm Incorporated shareholders' equity

161,311

63,521

Non-controlling interest

50,669

44,194




Total shareholders' equity

211,980

107,715




Total liabilities and shareholders' equity

$       458,537

$          377,807




 

 

GENTHERM INCORPORATED

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)




Nine Months Ended September 30,


2012

2011

Operating Activities:



Net income

$          19,043

$            1,671

Adjustments to reconcile net income to cash provided by operating activities:



Depreciation and amortization

22,902

15,454

Deferred tax provision

2,390

148

Stock compensation

911

1,565

Defined benefit plan expense

(303 )

3

Provision of doubtful accounts

(305 )

Loss (gain) on revaluation of financial derivatives

(1,064 )

5,574

Debt retirement expense

970

Loss on equity investment

228

Loss on sale of property, plant and equipment

53

Excess tax benefit from equity awards

(1,577 )

(3,044)

Changes in operating assets and liabilities:



Accounts receivable

(16,728 )

(17,201 )

Inventory

(4,250 )

(5,904 )

Prepaid expenses and other assets

(7,264 )

(124 )

Accounts payable

4,622

9,630

Accrued liabilities

10,715

(2,107 )




Net cash provided by operating activities

29,373

6,635

Investing Activities:



Purchases of derivative financial instruments

(7,787 )

Maturities of short-term investments

9,761

Purchase of W.E.T. Automotive AG, net of cash acquired

(113,432)

Cash invested in corporate owned life insurance

(265 )

Proceeds from the sale of property, plant and equipment

20

Purchase of property and equipment

(15,344 )

(3,824)

Loan to equity investment

(590 )

Patent costs

(2,593 )

(921)




Net cash used in investing activities

(26,559 )

(108,416)

Financing Activities:



Distribution paid to non-controlling interest

(290 )

Borrowing of debt

3,286

137,083

Repayments of debt

(19,149 )

(105,900 )

Cash paid for financing costs

(4,157 )

Proceeds from the sale of Series C Convertible Preferred Stock

61,403

Proceeds from the sale of embedded derivatives

2,610

Excess tax benefit from equity awards

1,577

3,044

Proceeds from public offering of common stock

75,487

Cash paid to Series C Preferred Stock Holders

(17,340 )

(121 )

Proceeds from sale of W.E.T. equity to non-controlling interest

1,921

1,175

Proceeds from the exercise of Common Stock options

733

1,258




Net cash provided by financing activities

46,225

96,395




Foreign currency effect

(599)

(4,136 )




Net increase (decrease) in cash and cash equivalents

48,440

(9,522 )

 Cash and cash equivalents at beginning of period

23,839

26,584




                      Cash and cash equivalents at end of period

$          72,279

$          17,062




Supplemental disclosure of cash flow information:



Cash paid for taxes

$            5,678

$            3,062




          Cash paid for interest

$            2,787

$            2,322




Supplemental disclosure of non-cash transactions:



Issuance of Common Stock for Series C Preferred Stock redemption

$            7,780

$            7,780




        Issuance of Common Stock for Series C Preferred Stock dividend

$            1,030

$            2,322




        Common stock issued to Board of Directors and employees

$               314

$               666




 

SOURCE Gentherm



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