On July 31, 2024, Gentherm Inc (THRM, Financial) released its 8-K filing for the second quarter ending June 30, 2024. Gentherm Inc is an automotive parts manufacturer operating through its Automotive and Medical segments, with the majority of its revenue derived from the Automotive segment.
Performance Overview
Gentherm Inc (THRM, Financial) reported record quarterly revenue of $375.7 million, a 0.9% increase from $372.3 million in the same quarter of 2023. Excluding the impact of foreign currency translation, product revenues increased by 2.0% year over year. The company's GAAP diluted earnings per share (EPS) was $0.60, compared to a loss of $0.05 in the prior-year period. Adjusted diluted EPS was $0.66, surpassing the analyst estimate of $0.60.
Key Financial Achievements
Gentherm Inc (THRM, Financial) achieved several significant milestones in the second quarter:
- Automotive revenues increased by 0.7% year over year, or 1.8% excluding the impact of foreign currency translation.
- Secured $660 million in new automotive business awards, including the first proprietary Puls.A™ massage solution award.
- Gross margin rate improved to 25.7%, up from 23.6% in the prior-year period.
- Adjusted EBITDA increased by 17.7% to $49.9 million, compared to $42.4 million in the prior-year period.
Income Statement Highlights
Product revenues for the second quarter of 2024 increased by $3.4 million, or 0.9%, compared to the prior-year period. Automotive Climate and Comfort Solutions revenue outperformed actual light vehicle production in key markets by 500 basis points, driven by double-digit growth in Lumbar and Massage Comfort Solutions.
Balance Sheet and Cash Flow
Net research and development expenses decreased by $2.8 million, or 11.5%, primarily due to reduced resources allocated to certain battery performance solutions products and higher R&D reimbursements. Selling, general, and administrative expenses increased by $1.0 million, or 2.6%, driven by higher compensation expenses. Restructuring expenses rose by $1.4 million due to discrete restructuring activities associated with the Fit-for-Growth 2.0 initiatives.
Commentary from Leadership
"The financial and operating results of the second quarter demonstrate the continued strong execution of our growth strategy. With record quarterly revenue, the highest quarterly operating income in three years, a 190 basis point year-over-year expansion in Adjusted EBITDA margin rate, and $660 million in automotive new business awards – including our first proprietary Puls.A™ massage solution award, the Gentherm team continues to deliver solid results in this challenging environment," said Phil Eyler, President and CEO of Gentherm Inc.
Analysis and Outlook
Gentherm Inc (THRM, Financial) has shown resilience and strategic growth in a challenging market environment. The company's ability to secure significant new business awards and improve its gross margin rate highlights its competitive edge in the automotive and medical segments. The continued development of next-generation technologies such as ClimateSense®, WellSense™, and ComfortScale™ positions Gentherm for sustained growth.
For the full year 2024, Gentherm Inc (THRM, Financial) maintains its guidance with product revenues expected to be at the low end of the $1.5 billion to $1.6 billion range and an Adjusted EBITDA margin rate above the mid-point of the 12.5% to 13.5% range. The company's strategic initiatives and robust pipeline of new business awards provide a solid foundation for future performance.
Explore the complete 8-K earnings release (here) from Gentherm Inc for further details.
