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Automotive revenues decreased 4.3% year over year. Adjusting for foreign currency translation, phasing out the non-automotive and contract manufacturing electronics business as well as one-time benefits from recoveries in the prior year, Automotive revenues decreased 1.8% year over year. Revenues from Automotive Climate and Comfort Solutions increased 1.7% in the fourth quarter compared to the prior-year period.

According to S&P Global Mobility’s mid-February report, actual light vehicle production increased by 0.4% in the fourth quarter when compared with the same quarter of 2023 in the Company’s key markets of North America, Europe, China, Japan, and South Korea.

Gentherm Medical revenue increased 8.4% year over year. Adjusting for the impact of foreign currency translation, Medical revenues increased 8.9%.

Gross margin rate decreased to 24.4% in the current-year period, as compared with 26.2% in the prior-year period. The decrease from the prior-year period was driven by product mix, higher freight costs, the impact of foreign exchange, and the costs related to our new plants opening in Monterrey, Mexico and Tangier, Morocco.

Net research and development expenses of $21.1 million in the quarter decreased slightly compared to the prior-year period primarily as a result of lower third-party spend.

Selling, general and administrative expenses of $38.6 million in the quarter decreased $3.3 million versus the prior-year period. The year-over-year decrease was primarily driven by lower compensation expenses, partially offset by leadership transition expenses in 2024.

Restructuring expenses, net of $0.7 million in the current-year period, decreased $0.6 million, versus the prior-year period primarily as a result of higher costs associated with footprint optimization in the prior-year.

The Company recorded Adjusted EBITDA of $41.4 million in the quarter compared with $49.0 million in the prior-year period, a decrease of $7.6 million or 15.6%.

Income tax expense in the quarter was $20.8 million, as compared with income tax gain of $0.9 million in the prior-year period. The year-over-year increase was primarily driven by one-time tax settlements relating to prior period tax audits.

GAAP diluted earnings per share for the quarter was $0.49 compared with $0.56 for the prior-year period. Adjusted diluted earnings per share for the quarter was $0.29 compared with $0.90 for the prior-year period.

2024 Full Year Financial Review

For full year 2024, the Company reported product revenues of $1,456.1 million, a 0.9% decrease over the prior year. Excluding the impact of foreign currency translation, product revenues decreased 0.4% year over year.

In the Automotive segment, 2024 full-year revenue was $1,406.3 million, a 1.2% decrease compared to the prior year. Revenue increases in the Lumbar and Massage Comfort Solutions and Steering Wheel Heater product categories were offset by decreases in the Climate Control Seat and Seat Heater categories and automotive revenue not related to Automotive Climate and Comfort Solutions. Adjusting for foreign currency translation Automotive revenue decreased 0.7% year over year. Adjusting for foreign currency translation, phasing out the non-automotive and contract manufacturing electronics business as well as one-time benefits from recoveries in the prior year, Automotive revenue increased 0.8% year over year.

According to S&P Global Mobility’s mid-February 2025 report, actual light vehicle production decreased 1.0% for the full year 2024 compared to full year 2023 in the Company’s key markets of North America, Europe, China, Japan and South Korea.

Medical segment revenue was $49.8 million for full year 2024, an 8.1% increase compared to the prior year. Adjusting for foreign currency translation, Medical revenues increased 8.2%.

Gross margin rate was 25.2% in 2024, a 130 basis point increase from 2023, primarily as a result of strong material performance, productivity, and the impact of our previously announced exit of the non-automotive electronics business, partially offset by annual price reductions, wage inflation, and the costs related to our new plants opening in Monterrey, Mexico and Tangier, Morocco.

Net research and development expenses of $88.7 million in 2024 decreased 6.0% primarily as a result of lower project spend and a reduction in resources allocated to the battery performance solutions product category.

Selling, general and administrative expenses of $155.1 million in 2024 decreased $0.5 million, or 0.3%, versus the prior year period. The year over year decrease was primarily driven by acquisition and integration expenses in the prior year and lower compensation expenses, partially offset by leadership transition costs and increased investment in information technology in 2024.

The Company incurred $13.1 million in restructuring expenses, net in 2024, compared to $4.7 million in the prior year period primarily as a result of manufacturing footprint optimization and reductions to the global salaried workforce. The Company recorded impairment of goodwill charges of $19.5 million in 2023 related to the Medical segment.

The Company recorded Adjusted EBITDA of $182.9 million in 2024 compared with $180.6 million in the prior year, an increase of $2.3 million or 1.3%.

Income tax expense in 2024 was $37.3 million, as compared with $14.6 million in the prior year. The effective tax rate was 36.5% for 2024. This rate differed from the Federal statutory rate of 21%, primarily due to unfavorable geographic mix of earnings as well as the impact of one-time tax settlements relating to prior period tax audits. Excluding the impact of prior period tax audits, the effective tax rate was 26.9%. GAAP diluted earnings per share for full year 2024 was $2.06 as compared with $1.22 for the prior year. Adjusted diluted earnings per share for full year 2024 was $2.33 as compared with $2.59 for the prior year.

The Company provides various 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 as reconciliations below to the most directly comparable GAAP financial measures.

Guidance

The Company is providing the following guidance for full year 2025:

• Product revenues between $1.4 billion and $1.5 billion

• Adjusted EBITDA between 12% and 13% of product revenues

• Full year effective tax rate between 26% and 29%

• Capital expenditures between $70 million and $80 million

Guidance assumptions:

• Based on the current forecast of customer orders, our expectations of near-term conditions, and light vehicle production in our key markets decreasing at low single digit rate for full year 2025 versus 2024, and a EUR to USD exchange rate of $1.03/Euro. These assumptions do not include any impact of potential changes to tariffs.
  

Conference Call
As previously announced, Gentherm will conduct a conference call today at 8:00 am Eastern Time to review these results. The dial-in number for the call is 1-877-407-4018 (callers in the U.S.) or +1-201-689-8471 (callers outside this U.S.). The passcode for the live call is 13751539.

A live webcast and one-year archived replay of the call can be accessed on the Events page of the Investor section of Gentherm's website at www.gentherm.com.

A telephonic replay will be available approximately two hours after the call until 11:59 pm Eastern Time on March 5, 2025. The replay can be accessed by dialing 1-844-512-2921 (callers in the U.S.), or +1-412-317-6671 (callers outside the U.S.). The passcode for the replay is 13751539.

Investor Contact 
Gregory Blanchette
investors@gentherm.com  
248.308.1702

Media Contact 
Melissa Fischer 
media@gentherm.com  
248.289.9702

About Gentherm
Gentherm (NASDAQ: THRM) is a global market leader of innovative thermal management and pneumatic comfort technologies. Automotive products include variable temperature Climate Control Seats^®, heated automotive interior systems (including heated seats, steering wheels, armrests and other components), battery performance solutions, cable systems, lumbar and massage comfort solutions, valve system technologies, and other electronic devices. Medical products include patient temperature management systems. The Company is also developing a number of new technologies and products that will help enable improvements to existing products and to create new product applications for existing and new markets. Gentherm has more than 14,000 employees in facilities in the United States, Germany, China, Czech Republic, Hungary, Japan, Malta, Mexico, Morocco, North Macedonia, South Korea, United Kingdom, Ukraine, and Vietnam. For more information, go to www.gentherm.com.

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 Gentherm Incorporated's goals, beliefs, plans and expectations about its prospects for the future and other future events. The forward-looking statements included in this release 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 analysis based on our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we consider appropriate under the circumstances. Such statements are subject to a number of important assumptions, significant risks and uncertainties (some of which are beyond our control) and other factors that may cause actual results or performance to differ materially from that described in or indicated by the forward-looking statements, including but not limited to:

• macroeconomic, geopolitical and similar global factors in the cyclical Automotive industry;

• increasing U.S. and global competition, including with non-traditional entrants;

• our ability to effectively manage new product launches and research and development, and the market acceptance of such products and technologies;

• the evolution and recent challenges of the automotive industry towards electric vehicles, autonomous vehicles and mobility on demand services, and related consumer behaviors and preferences;

• our ability to convert automotive new business awards into product revenues;

• the recent supply-constrained environment, and inflationary and other cost pressures;

• the production levels of our major customers and OEMs in our key markets and sudden fluctuations in such production levels;

• our business in China, which is subject to unique operational, competitive, regulatory and economic risks;

• the impact of our global operations, including our global supply chain, operations within Ukraine, and foreign currency and exchange risk;

• the impact of global economic and trade policies, including increases in duties, tariffs and taxation on the import or export of our products related to U.S. trade disputes;

• our ability to attract and retain highly skilled employees and wage inflation;

• a tightening labor market, labor shortages or work stoppages impacting us, our customers or our suppliers, such as recent labor strikes among certain OEMs and suppliers;

• our achievement of product cost reductions to offset customer-imposed price reductions or other pricing pressures;

• our product quality and safety and impact of product safety recalls and alleged defects in products;

• our ability to execute efforts to optimize our global supply chain and manufacturing footprint, including opening new facilities and transferring production;

• our ability to integrate our recent acquisitions and realize synergies, as well as to consummate additional strategic acquisitions, investments and exits, and achieve planned benefits;

• any security breaches and other disruptions to our information technology networks and systems, as well as privacy, data security and data protection risks, including risks associated with use of artificial intelligence capabilities in our business operations;

• any loss or insolvency of our key customers and OEMs, or key suppliers;

• our ability to project future sales volume based on third-party information, based on which we manage our business;

• the protection of our intellectual property in certain jurisdictions;

• our compliance with global anti-corruption laws and regulations;

• legal and regulatory proceedings and claims involving us or one of our major customers;

• the extensive regulation of our patient temperature management business;

• risks associated with our manufacturing processes;

• 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 product quality and safety;

• our borrowing availability under our revolving credit facility, as well ability to access the capital markets, to support our planned growth; and

• our indebtedness and compliance with our debt covenants.

The foregoing risks should be read in conjunction with the Company's reports filed with or furnished to the Securities and Exchange Commission (the “SEC”), including “Risk Factors,” in its most recent Annual Report on Form 10-K and subsequent SEC filings, for a discussion of these and other risks and uncertainties. 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, 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.

Use of Non-GAAP Financial Measures
In addition to the results reported in accordance with GAAP throughout this release, the Company has provided here or elsewhere information regarding: adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”); Adjusted EBITDA margin; adjusted earnings per share (“Adjusted earnings per share” or “Adjusted EPS”); free cash flow; Net Debt, net leverage ratio (“net leverage”), revenue, segment revenue and product revenue excluding foreign currency translation and other specified gains and losses; Automotive Climate and Comfort Solutions revenues; and adjusted operating expenses, each a non-GAAP financial measure. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, deferred financing cost amortization, non-cash stock based compensation expenses, restructuring expenses, net, unrealized currency gain or loss and other gains and losses not reflective of the Company’s ongoing operations and related tax effects. The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by product revenues. The Company defines Adjusted EPS as earnings adjusted by restructuring expenses, net, unrealized currency gain or loss and other gains and losses not reflective of the Company’s ongoing operations and related tax effects. The Company defines Free Cash Flow as Net cash provided by operating activities less Purchases of property and equipment. The Company defines Net Debt as the principal amount of all Consolidated Funded Indebtedness (as defined in the Credit Agreement) less cash and cash equivalents. The Company defines net leverage as Net Debt divided by Adjusted EBITDA for the trailing four fiscal quarters. The Company defines revenue, segment revenue or product revenue excluding foreign currency translation and other specified gains and losses as such revenue, excluding the estimated effects of foreign currency exchange on revenue by translating actual revenue using the prior period foreign currency exchange rates and excluding the other items specified in the reconciliation tables herein. The Company defines Automotive Climate and Comfort Solutions revenues as Automotive revenue excluding specified product revenues and the impact of non-automotive electronics and contract manufacturing electronics revenues. The Company defines adjusted operating expenses as operating expenses excluding related non-cash stock based compensation, restructuring expenses, net, and other losses not reflective of the Company’s ongoing operations.

The Company’s reconciliations are included in this release or can be found in the supplemental materials furnished as Exhibit 99.2 to the Company’s Form 8-K dated February 19, 2025.

In evaluating its business, the Company considers and uses Free Cash Flow and Net Debt as supplemental measures of its liquidity and the other non-GAAP financial measures as supplemental measures of its operating performance. Management provides such non-GAAP financial measures 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 by excluding matters not indicative of the Company’s ongoing operating or liquidity results and therefore enhance the comparability of the Company's results and provide additional information for analyzing trends in the business. In evaluating our non-GAAP financial measures, you should be aware that in the future we may incur revenues, expenses, and cash and non-cash obligations that are the same as or similar to some of the adjustments in our presentation of non-GAAP financial measures. Our presentation of non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There also can be no assurance that we will not modify the presentation of our non-GAAP financial measures in the future, and any such modification may be material. Other companies in our industry may define and calculate these non-GAAP financial measures differently than we do and those calculations may not be comparable to our metrics. These non-GAAP measures have limitations as analytical tools, and when assessing the Company's operating performance or liquidity, investors should not consider these non-GAAP measures in isolation, or as a substitute for net income (loss), revenue or other consolidated income statement or cash flow statement data prepared in accordance with GAAP.

Non-GAAP measures referenced in this release and other public communications may include estimates of future Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS. The Company has not reconciled the non-GAAP forward-looking guidance included in this release to the most directly comparable GAAP measures because this cannot be done without unreasonable effort due to the variability and low visibility with respect to taxes and non-recurring items, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.