Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 28, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | THRM | |
Entity Registrant Name | GENTHERM INC | |
Entity Central Index Key | 903,129 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 36,837,303 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 164,177 | $ 177,187 |
Accounts receivable, less allowance of $1,424 and $1,391, respectively | 181,273 | 170,084 |
Inventory: | ||
Raw materials | 58,364 | 60,525 |
Work in process | 15,704 | 13,261 |
Finished goods | 32,500 | 31,288 |
Inventory, net | 106,568 | 105,074 |
Derivative financial instruments | 2,545 | 18 |
Prepaid expenses and other assets | 39,939 | 32,000 |
Total current assets | 494,502 | 484,363 |
Property and equipment, net | 187,391 | 172,052 |
Goodwill | 53,497 | 51,735 |
Other intangible assets, net | 54,356 | 57,557 |
Deferred financing costs | 1,079 | 1,221 |
Deferred income tax assets | 37,805 | 35,299 |
Other non-current assets | 37,867 | 40,803 |
Total assets | 866,497 | 843,030 |
Current Liabilities: | ||
Accounts payable | 83,719 | 84,511 |
Accrued liabilities | 65,946 | 105,625 |
Current maturities of long-term debt | 3,414 | 2,092 |
Derivative financial instruments | 1,395 | |
Total current liabilities | 153,079 | 193,623 |
Pension benefit obligation | 7,937 | 7,419 |
Other liabilities | 5,355 | 4,092 |
Long-term debt, less current maturities | 159,871 | 169,433 |
Deferred income tax liabilities | 7,287 | 8,058 |
Total liabilities | 333,529 | 382,625 |
Common Stock: | ||
No par value; 55,000,000 shares authorized, 36,821,656 and 36,534,464 issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 266,077 | 262,251 |
Paid-in capital | 12,166 | 10,323 |
Accumulated other comprehensive loss | (37,608) | (69,091) |
Accumulated earnings | 292,333 | 256,922 |
Total shareholders’ equity | 532,968 | 460,405 |
Total liabilities and shareholders’ equity | $ 866,497 | $ 843,030 |
Consolidated Condensed Balance3
Consolidated Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 1,424 | $ 1,391 |
Common Stock, par value | ||
Common Stock, shares authorized | 55,000,000 | 55,000,000 |
Common Stock, shares issued | 36,821,656 | 36,534,464 |
Common Stock, shares outstanding | 36,821,656 | 36,534,464 |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Product revenues | $ 243,378 | $ 232,720 | $ 492,645 | $ 448,434 |
Cost of sales | 164,973 | 161,225 | 329,080 | 308,697 |
Gross margin | 78,405 | 71,495 | 163,565 | 139,737 |
Operating expenses: | ||||
Net research and development expenses | 21,407 | 19,111 | 40,912 | 34,807 |
Acquisition transaction expenses | 634 | 671 | ||
Selling, general and administrative expenses | 31,775 | 29,397 | 62,581 | 52,021 |
Total operating expenses | 53,182 | 49,142 | 103,493 | 87,499 |
Operating income | 25,223 | 22,353 | 60,072 | 52,238 |
Interest expense | (1,261) | (950) | (2,383) | (1,627) |
Foreign currency (loss) gain | (13,251) | 2,796 | (14,580) | 961 |
Other income | 173 | 30 | 409 | 395 |
Earnings before income tax | 10,884 | 24,229 | 43,518 | 51,967 |
Income tax expense | 2,371 | 5,783 | 9,603 | 21,628 |
Net income | $ 8,513 | $ 18,446 | $ 33,915 | $ 30,339 |
Basic earnings per share | $ 0.23 | $ 0.51 | $ 0.92 | $ 0.83 |
Diluted earnings per share | $ 0.23 | $ 0.50 | $ 0.92 | $ 0.83 |
Weighted average number of shares – basic | 36,776,545 | 36,442,296 | 36,698,618 | 36,399,635 |
Weighted average number of shares – diluted | 36,840,371 | 36,637,218 | 36,796,168 | 36,572,230 |
Consolidated Condensed Stateme5
Consolidated Condensed Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 8,513 | $ 18,446 | $ 33,915 | $ 30,339 |
Other comprehensive income (loss), gross of tax: | ||||
Foreign currency translation adjustments gain (loss) | 23,285 | (7,274) | 28,800 | 636 |
Unrealized gain (loss) on foreign currency derivative securities | 815 | (1,049) | 3,775 | 244 |
Unrealized gain on commodity derivative securities | 16 | 109 | 48 | 405 |
Other comprehensive income (loss), gross of tax | 24,116 | (8,214) | 32,623 | 1,285 |
Other comprehensive income (loss), related tax effect: | ||||
Foreign currency translation adjustments gain (loss) | (106) | (142) | (109) | 1,100 |
Unrealized gain (loss) on foreign currency derivative securities | (219) | 282 | (1,014) | (65) |
Unrealized gain on commodity derivative securities | (6) | (41) | (17) | (150) |
Other comprehensive income (loss), related tax effect | (331) | 99 | (1,140) | 885 |
Other comprehensive income (loss), net of tax | 23,785 | (8,115) | 31,483 | 2,170 |
Comprehensive income | $ 32,298 | $ 10,331 | $ 65,398 | $ 32,509 |
Consolidated Condensed Stateme6
Consolidated Condensed Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating Activities: | ||
Net income | $ 33,915 | $ 30,339 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 21,191 | 17,547 |
Deferred income taxes | (2,278) | (3,707) |
Stock compensation | 4,761 | 4,505 |
Defined benefit plan expense | 94 | 117 |
Provision of doubtful accounts | 6 | 274 |
Loss on sale of property and equipment | 249 | 254 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (6,949) | (12,668) |
Inventory | 1,149 | 6,624 |
Prepaid expenses and other assets | (5,147) | (6,890) |
Accounts payable | (2,932) | 1,749 |
Accrued liabilities | (37,944) | 13,029 |
Net cash provided by operating activities | 6,115 | 51,173 |
Investing Activities: | ||
Proceeds from the sale of property and equipment | 34 | 27 |
Acquisition of subsidiary, net of cash acquired | (2,000) | (73,666) |
Purchases of property and equipment | (25,750) | (30,828) |
Net cash used in investing activities | (27,716) | (104,467) |
Financing Activities: | ||
Borrowing of debt | 75,000 | |
Repayments of debt | (8,428) | (31,918) |
Excess tax expense from equity awards | (385) | |
Cash paid for financing costs | (650) | |
Cash paid for the cancellation of restricted stock | (1,100) | (793) |
Cash paid for the repurchase of common stock | (53) | |
Proceeds from the exercise of Common Stock options | 2,061 | 566 |
Net cash (used in) provided by financing activities | (7,520) | 41,820 |
Foreign currency effect | 16,111 | (998) |
Net decrease in cash and cash equivalents | (13,010) | (12,472) |
Cash and cash equivalents at beginning of period | 177,187 | 144,479 |
Cash and cash equivalents at end of period | 164,177 | 132,007 |
Supplemental disclosure of cash flow information: | ||
Cash paid for taxes | 58,831 | 13,400 |
Cash paid for interest | 2,190 | 1,526 |
Supplemental disclosure of non-cash transactions: | ||
Common Stock issued to Board of Directors and employees | $ 2,229 | $ 2,432 |
Consolidated Condensed Stateme7
Consolidated Condensed Statement of Changes In Shareholders' Equity - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Total | Common Stock | Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Earnings |
Beginning Balance at Dec. 31, 2016 | $ 460,405 | $ 262,251 | $ 10,323 | $ (69,091) | $ 256,922 |
Beginning Balance (in shares) at Dec. 31, 2016 | 36,534,464 | 36,534,000 | |||
Cumulative effect of accounting change due to adoption of ASU 2016-09 | $ 1,496 | 1,496 | |||
Stock Repurchase | (53) | $ (53) | |||
Stock Repurchase (in shares) | (2,000) | ||||
Exercise of Common Stock options for cash | 2,061 | $ 2,750 | (689) | ||
Exercise of Common Stock options for cash (in shares) | 168,000 | ||||
Cancellation of restricted stock | (1,100) | $ (1,100) | |||
Cancellation of restricted stock (in shares) | (31,000) | ||||
Stock option compensation | 2,532 | 2,532 | |||
Common Stock issued to Board of Directors and employees | 2,229 | $ 2,229 | |||
Common Stock issued to Board of Directors and employees (in shares) | 153,000 | ||||
Currency translation, net | 28,691 | 28,691 | |||
Foreign currency hedge, net | 2,761 | 2,761 | |||
Commodity hedge, net | 31 | 31 | |||
Net income | 33,915 | 33,915 | |||
Ending Balance at Jun. 30, 2017 | $ 532,968 | $ 266,077 | $ 12,166 | $ (37,608) | $ 292,333 |
Ending Balance (in shares) at Jun. 30, 2017 | 36,821,656 | 36,822,000 |
The Company and Subsequent Even
The Company and Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Company And Subsequent Events [Abstract] | |
The Company and Subsequent Events | Note 1 – The Company and Subsequent Events Gentherm Incorporated is a global technology and industry leader in the design, development, and manufacturing of innovative thermal management technologies. Unless the context otherwise requires, the terms “Company”, “we”, “us” and “our” used herein refer to Gentherm Incorporated and its consolidated subsidiaries. Our products provide solutions for automotive passenger comfort and convenience, battery thermal management, remote power generation, patient temperature management, environmental product testing and other consumer and industrial temperature control needs. Our automotive products can be found on the vehicles of nearly all major automotive manufacturers operating in North America, Europe and Asia. We operate in locations aligned with our major customers’ product strategies in order to provide locally enhanced design, integration and production capabilities and to identify future thermal technology product opportunities in both automotive and other markets. We concentrate our research on the development of new technologies and new applications from existing technologies to create product and market opportunities for a wide array of thermal management solutions. North American Reorganization On January 4, 2016 and January 5, 2016, the Company completed reorganization transactions (the “Reorganization”) related to our North American business operated from Windsor, Ontario, Canada (the “Windsor Operations”). As part of our original integration plan to eliminate redundancies associated with the 2011 acquisition of Gentherm GmbH (formerly named W.E.T. Automotive Systems AG), the Windsor Operations have been consolidated into our existing European and North American facilities. As a result of the Reorganization, some of the business activities previously performed by the Windsor Operations are now being performed by other subsidiaries. Related to the Reorganization, the Company declared intercompany dividends, incurred and paid withholding taxes to the Canadian Revenue Agency of $7,600 during 2016. Additionally, the Company incurred income tax expense of $2,500 related to the intercompany dividends. These amounts incurred are expected to cover all future intercompany dividends needed to distribute the remaining earnings of the subsidiary to its parent in conjunction with the potential future liquidation of the subsidiary. In addition to the $7,600 of withholding tax and $2,500 of income taxes, the Reorganization required the Company to make a one-time income tax payment of approximately $32,600. The one-time income tax payment was accrued during the first quarter of 2016; however, the Company also recorded an offsetting deferred charge for approximately the same amount because the one-time income tax payment will result in tax deductions against income taxes in future periods. Therefore, the income tax payment did not have a material impact on the Company’s earnings during the first quarter of 2016 nor any subsequent quarter. The withholding tax payment was paid entirely in 2016. The income tax payments of $2,500 and $32,600 were paid during the first quarter of 2017. Subsequent Events We have evaluated subsequent events through the date that our consolidated condensed financial statements are issued. No events have taken place that meet the definition of a subsequent event requiring adjustments to or disclosures in this Form 10-Q. |
Basis of Presentation and New A
Basis of Presentation and New Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2017 | |
Basis Of Presentation And New Accounting Pronouncements [Abstract] | |
Basis of Presentation and New Accounting Pronouncements | Note 2 – Basis of Presentation and New Accounting Pronouncements The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in the audited annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair presentation of our results of operations, financial position and cash flows have been included. The balance sheet as of December 31, 2016 was derived from audited annual consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. These consolidated condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016. Note 2 – Basis of Presentation and New Accounting Pronouncements – Continued Balance Sheet Reclassification In June, 2017, the Company changed its classification of prepayments made during the construction of plant assets from prepaid expenses and other assets to other non-current assets on the consolidated condensed balance sheet. The Company reclassified $4,390 from prepaid expenses and other assets to other non-current assets on the December 31, 2016 consolidated condensed balance sheet in order to conform with the current year’s presentation. Share-Based Payment Awards In May, 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” ASU 2017-09 clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting, in accordance with Topic 718. An entity should account for the effect of a modification unless all of the following are met: 1. The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified. If the modification does not affect any of the inputs of the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification. 2. The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified. 3. The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. ASU 2017-09 is effective for annual and any interim periods beginning after December 15, 2017. Early adoption of the amendments in this update are permitted. The amendments in ASU 2017-09 should be applied on a prospective basis and in the initial period of adoption, entities must disclose the nature of and reason for the change in accounting principle. The Company has not historically made changes to the terms or conditions of shared-based payment awards and does not expect adoption of ASU 2017-09 to have a material impact the consolidated financial statements. Goodwill Impairment In January, 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 modified the concept of impairment of goodwill to be a condition that exists when the carrying value of a reporting unit that includes goodwill exceeds its fair value. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the total amount of goodwill allocated to that reporting unit. Entities no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if the reporting unit had been acquired in a business combination. ASU 2017-04 is effective for annual and any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The amendments in ASU 2017-04 must be applied on a prospective basis and in the initial period of adoption, entities must disclose the nature of and reason for the change in accounting principle. The Company expects adoption of ASU 2017-04 will reduce the complexity of evaluating goodwill for impairment. Business Combinations In January, 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. To be considered a business, the integrated set of activities and assets to be evaluated must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create an output. If substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the integrated set or activities and assets is not considered a business. ASU 2017-01 provides a framework to assist entities in evaluating whether an integrated set of activities and assets include both an input and a substantive process when the assets’ fair value is not concentrated in a single identifiable asset or group of similar identifiable assets. Note 2 – Basis of Presentation and New Accounting Pronouncements – Continued ASU 2017-01 is effective for fiscal years and interim periods beginning after December 15, 2017. The amendments in ASU 2017-01 should be applied on or after the effective date. No disclosure is required at adoption. The Company expects the impact from adopting this update to be immaterial to the consolidated financial statements. Income Taxes In October, 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” ASU 2016-16 modifies the current prohibition to recognize deferred income taxes from differences between the tax basis of assets in the buyer’s tax jurisdiction and their cost resulting from an intra-entity transfer from one tax-paying component to another tax-paying component of the same consolidated group. Under current GAAP, deferred income taxes for intra-entity asset transfers are not recognized until the asset is sold to an outside party. ASU 2016-16 allows entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU 2016-16 is effective for fiscal years and interim periods beginning after December 15, 2017. For entities that issue interim financial statements and whose current fiscal year end date is December 31, 2016, early adoption was permitted during the three month period ending March 31, 2017. The amendments in ASU 2016-16 must be applied on a modified retrospective basis through a cumulate-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We did not early adopt ASU 2016-16 during the three month period ending March 31, 2017. We are currently evaluating the amendments in this update to determine the effect it will have on the Company's consolidated financial statements. Leases In February, 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires lessees to recognize on their balance sheet a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. Payments to be made in optional periods should be included in the measurement of lease assets and liabilities if the lessee is reasonably certain it will exercise an option to extend the lease or not exercise an option to terminate the lease. While ASU 2016-02 continues to differentiate between finance or capital leases and operating leases, the principal change from current lease accounting guidance is that lease assets and liabilities arising from operating leases will be recognized on the balance sheet. ASU 2016-02 is effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption of the amendments in this update are permitted. Lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach which includes a number of practical expedients, including the ability to use hindsight in evaluating lessee options to extend or terminate a lease. An entity that elects to apply the practical expedients will be required to recognize a right-of-use asset and lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payment that were tracked and disclosed under previous GAAP. We are currently in the process of determining the impact the implementation of ASU 2016-02 will have on the Company’s financial statements. Statement of Cash Flows In August, 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 provides guidance on the classification of eight specific cash receipt and cash payment transactions in the statement of cash flows. The Company is currently evaluating the following transactions to determine the effect ASU 2016-15 will have on the Company’s consolidated statements of cash flows: 1) Debt extinguishment payments and debt prepayments are to be shown as cash outflows for financing activities. Presently, Gentherm classifies debt extinguishment payments within operating activities. 2) Payments made to settle contingent consideration liabilities not made soon after the acquisition date of a business combination should be recognized as cash outflows for financing activities up to the amount of the liability recognized at the acquisition date. Payments, or the portion of a payment, to settle contingent consideration liabilities that exceed the amount of the liability recognized at the acquisition date will be recognized as cash outflows for operating activities. 3) Cash receipts from the settlement of insurance claims, excluding those related to corporate-owned life insurance policies, shall be classified on the basis of the related insurance coverage. For example, proceeds received to cover claims issued under product recall liability insurance would be classified as cash inflows from operating activities. Note 2 – Basis of Presentation and New Accounting Pronouncements – Continued 4) Cash receipts from the settlement of corporate-owned life insurance policies shall be classified as cash inflows from investing activities. The other cash receipt and cash payment transactions addressed by this update are not expected to impact the Company. For public companies Revenue from Contracts with Customers In May, 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 was developed to enable financial statement users to better understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This update’s core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Companies are to use a five-step contract review model to ensure revenue is recognized, measured and disclosed in accordance with this principle. The FASB has issued several amendments to the new standard, including a one-year deferral of the original effective date, and new methods for identifying performance obligations intended to reduce the cost and complexity of compliance. This update permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). We currently anticipate adopting this update using the cumulative catch-up transition method. ASU 2014-09 will be effective for fiscal years and interim periods beginning after December 15, 2017. Early application is not permitted. Gentherm is executing a plan to complete the five-step contract review process for all existing contracts with customers, across all business units. While we continue to assess all potential impacts from this update, we currently believe the most significant impact relates to our accounting for options that give customers the right to purchase additional goods under long-term supply agreements in the future. Due to the complexity of certain of our automotive supply contracts, the actual revenue recognition treatment for customer purchase options will depend on contract-specific terms and could vary from other contracts that are similar in nature. We are currently in the process of determining the total impact implementation of ASU 2014-09 and any corresponding amendments will have on the Company’s consolidated financial statements. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Note 3 – Basic earnings per share are computed by dividing net income by the weighted average number of shares of stock outstanding during the period. The Company’s diluted earnings per share give effect to all potential Common Stock outstanding during a period that do not have an anti-dilutive impact to the calculation. In computing the diluted earnings per share, the treasury stock method is used in determining the number of shares assumed to be issued from the exercise of Common Stock equivalents. The following summarizes the Common Stock included in the basic and diluted shares, as disclosed on the face of the consolidated condensed statements of income: Three Months Six Months 2017 2016 2017 2016 Weighted average number of shares for calculation of basic EPS 36,776,545 36,442,296 36,698,618 36,399,635 Stock options under equity incentive plans 63,826 194,922 97,550 172,595 Weighted average number of shares for calculation of diluted EPS 36,840,371 36,637,218 36,796,168 36,572,230 Note 3 – Earnings Per Share – Continued The accompanying table represents Common Stock issuable upon the exercise of certain stock options that have been excluded from the diluted earnings calculation because the effect of their inclusion would be anti-dilutive. Three Months Six Months 2017 2016 2017 2016 Stock options outstanding for equity incentive plans 1,857,284 1,437,534 1,857,284 1,437,534 |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 4 – Segment Reporting Segment information is used by management for making strategic operating decisions for the Company. Management evaluates the performance of the Company’s segments based primarily on operating income or loss. The Company’s reportable segments are as follows: Automotive • Industrial – the combined operating results of Gentherm Global Power Technologies (“GPT”), Cincinnati Sub-Zero Products, LLC (“CSZ”) and Gentherm’s advanced research and development division. Advanced research and development includes efforts focused on improving the efficiency of thermoelectric technologies and advanced heating wire technology as well as other applications. The segment includes government sponsored research projects. Reconciling Items – The tables below present segment information about the reported product revenues, depreciation and amortization and operating income (loss) of the Company for three and six month periods ended June 30, 2017 and 2016. With the exception of goodwill, asset information by segment is not reported since the Company does not manage assets at a segment level. As of June 30, 2017, goodwill assigned to our Automotive and Industrial segments were $22,724 and $30,773, respectively. As of June 30, 2016, goodwill assigned to our Automotive and Industrial segments were $22,119 and $28,890, respectively. Three Months Ended June 30, Automotive Industrial Reconciling Consolidated 2017: Product revenues $ 215,812 $ 27,566 $ — $ 243,378 Depreciation and amortization 9,048 1,288 663 10,999 Operating income (loss) 40,082 (2,648 ) (12,211 ) 25,223 2016: Product revenues $ 211,833 $ 20,887 $ — $ 232,720 Depreciation and amortization 7,652 1,199 532 9,383 Operating income (loss) 36,162 (7,113 ) (6,696 ) 22,353 Six Months Ended June 30, Automotive Industrial Reconciling Consolidated 2017: Product revenues $ 437,645 $ 55,000 $ — $ 492,645 Depreciation and amortization 17,179 2,706 1,306 21,191 Operating income (loss) 90,839 (5,134 ) (25,633 ) 60,072 2016: Product revenues $ 422,267 $ 26,167 $ — $ 448,434 Depreciation and amortization 14,935 1,589 1,023 17,547 Operating income (loss) 78,863 (9,729) (16,896 ) 52,238 Note 4 – Segment Reporting – Continued Total product revenues information by geographic area is as follows: Three Months Ended June 30, 2017 2016 United States $ 114,141 47 % $ 113,138 49 % China 19,962 8 % 18,988 8 % Germany 17,694 7 % 18,424 8 % South Korea 17,754 7 % 21,053 9 % Japan 13,093 5 % 9,779 4 % Canada 11,113 5 % 10,091 4 % Czech Republic 9,944 4 % 10,290 4 % United Kingdom 8,439 4 % 7,071 3 % Mexico 5,322 2 % 5,980 3 % Other 25,916 11 % 17,906 8 % Total Non U.S. 129,237 53 % 119,582 51 % $ 243,378 100 % $ 232,720 100 % Six Months Ended June 30, 2017 2016 United States $ 233,664 47 % $ 214,878 48 % China 40,427 8 % 36,410 8 % Germany 35,562 7 % 36,591 8 % South Korea 34,145 7 % 40,149 9 % Japan 27,376 6 % 22,013 5 % Canada 22,042 5 % 19,073 4 % Czech Republic 20,651 4 % 19,961 4 % United Kingdom 18,107 4 % 13,738 3 % Mexico 10,692 2 % 11,561 3 % Other 49,979 10 % 34,060 8 % Total Non U.S. 258,981 53 % 233,556 52 % $ 492,645 100 % $ 448,434 100 % |
Debt
Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Note 5 – Debt Amended Credit Agreement The Company, together with certain direct and indirect subsidiaries, have an outstanding Credit Agreement (the “Credit Agreement”) with a consortium of lenders and Bank of America, N.A., as administrative agent. The Credit Agreement was most recently amended on December 15, 2016 (the “Amended Credit Agreement”). As a result of such amendment, the aggregate principal amount available for borrowing under the secured revolving credit facility increased from $ 250,000 350,000 All subsidiary borrowers and guarantors participating in The Amended Credit Agreement requires the Company to maintain a minimum Consolidated Interest Coverage Ratio and Consolidated Leverage Ratio, each defined therein. Note 5 – Debt – Continued Under the Amended Credit Agreement, U.S. Dollar denominated loans bear interest at either a base rate (“Base Rate Loans”) or Eurocurrency rate (“Eurocurrency Rate Loans”), plus a margin (“Applicable Rate”). The rate for Base Rate Loans is equal to the highest of the Federal Funds Rate (1.06% at June 30, 2017) plus 0.50%, Bank of America’s prime rate (4.25% at June 30, 2017), or a one month Eurocurrency rate (0.00% at June 30, 2017) plus 1.00%. The rate for Eurocurrency Rate Loans denominated in U.S. Dollars is equal to the London Interbank Offered Rate (1.22% at June 30, 2017). All loans denominated in a currency other than the U.S. Dollar must be Eurocurrency Rate Loans. Interest is payable at least quarterly. The Applicable Rate varies based on the Consolidated Leverage Ratio reported by the Company. As long as the Company is not in default of the terms and conditions of the Amended Credit Agreement, the lowest and highest possible Applicable Rate is 1.25% and 2.00%, respectively, for Eurocurrency Rate Loans and 0.25% and 1.00%, respectively, for Base Rate Loans. The Company also has two fixed interest rate loans with the German Investment Corporation (“DEG”), a subsidiary of KfW Banking Group, a Germany government-owned development bank: DEG China Loan The first DEG loan, a loan we used to fund capital investments in China (the “DEG China Loan”), is subject to semi-annual principal payments that began March, 2015 and end September, 2019. Under the terms of the DEG China Loan, the Company must maintain a minimum Debt-to-Equity Ratio, Current Ratio and Debt Service Coverage Ratio, as defined by the DEG China Loan agreement, based on the financial statements of Gentherm’s wholly owned subsidiary, Gentherm Automotive Systems (China) Ltd. DEG Vietnam Loan The Company’s second fixed interest rate loan agreement with DEG was used to finance the construction and set up of the Vietnam production facility (“DEG Vietnam Loan”). The DEG Vietnam Loan is subject to semi-annual principal payments beginning November, 2017 and ending May, 2023. Under the terms of the DEG Vietnam Loan, the Company must maintain a minimum Current Ratio, Equity Ratio and Enhanced Equity Ratio, as defined by the DEG Vietnam Loan agreement, based on the financial statements of Gentherm’s wholly owned subsidiary, Gentherm Vietnam Co. Ltd. The following table summarizes the Company’s debt at June 30, 2017 and at December 31, 2016. June 30, 2017 December 31, Interest Principal Principal Credit Agreement: Revolving Note (U.S. Dollar Denominations) 2.98 % $ 146,000 $ 154,000 DEG China Loan 4.25 % 2,285 2,525 DEG Vietnam Loan 5.21 % 15,000 15,000 Total debt 163,285 171,525 Current portion (3,414 ) (2,092 ) Long-term debt, less current maturities $ 159,871 $ 169,433 Note 5 – Debt – Continued The scheduled principal maturities of our debt as of June 30, 2017 are as follows: Year Revolving (U.S. Dollar) DEG DEG Total Remainder of 2017 $ — $ 457 $ 1,250 $ 1,707 2018 — 914 2,500 3,414 2019 — 914 2,500 3,414 2020 — — 2,500 2,500 2021 146,000 — 2,500 148,500 2022 — — 2,500 2,500 Thereafter — — 1,250 1,250 Total $ 146,000 $ 2,285 $ 15,000 $ 163,285 Principal outstanding under the Revolving Note will be due and payable in full on March 17, 2021. As of June 30, 2017, we were in compliance, in all material respects, with all terms as outlined in the Amended Credit Agreement, DEG China Loan and DEG Vietnam Loan. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Note 6 – Derivative Financial Instruments We are exposed to market risk from changes in foreign currency exchange rates, short-term interest rates and price fluctuations of certain material commodities such as copper. Market risks for changes in interest rates relate primarily to our debt obligations under our Amended Credit Agreement. Foreign currency exchange risks are attributable to sales to foreign customers and purchases from foreign suppliers not denominated in the location’s functional currency, foreign plant operations, intercompany indebtedness, intercompany investments and include exposures to the European Euro, Mexican Peso, Canadian Dollar, Hungarian Forint, Macedonian Denar, Ukrainian Hryvnia, Japanese Yen, Chinese Renminbi, Korean Won and Vietnamese Dong. The Company regularly enters into derivative contracts with the objective of managing its financial and operational exposure arising from these risks by offsetting gains and losses on the underlying exposures with gains and losses on the financial instruments used to hedge them. The maximum length of time over which we hedge our exposure to foreign currency exchange risks is one year. We had foreign currency derivative contracts with a notional value of $36,170 and $29,538 outstanding as of June 30, 2017 and December 31, 2016, respectively. The maximum length of time over which we hedge our exposure to price fluctuations in material commodities is one year. We had copper commodity swap contracts with a notional value of $2,830 and $407 outstanding at June 30, 2017 and December 31, 2016, respectively. We do not enter into derivative financial instruments for speculative or trading purposes. Our hedging relationships are formally documented at the inception of the hedge, and hedges must be highly effective in offsetting changes to future cash flows on hedged transactions both at the inception of a hedge and on an ongoing basis to be designated for hedge accounting treatment. For derivative contracts which can be classified as a cash flow hedge, the effective portion of the change in the fair value of the derivative is recorded to accumulated other comprehensive income (loss) in the consolidated condensed balance sheet. When the underlying hedge transaction is realized, the gain or loss included in accumulated other comprehensive income (loss) is recorded in earnings in the consolidated condensed statements of income on the same line as the gain or loss on the hedged item attributable to the hedged risk. We record the ineffective portion of foreign currency hedging instruments, if any, to foreign currency gain (loss) in the consolidated condensed statements of income. Though we continuously monitor the hedging program, derivative positions and hedging strategies, foreign currency forward exchange agreements have not always been designated as hedging instruments for accounting purposes. The Company uses an income approach to value derivative instruments, analyzing quoted market prices to calculate the forward values and then discounts such forward values to the present value using benchmark rates at commonly quoted intervals for the instrument’s full term. Note 6 – Derivative Financial Instruments – Continued Information related to the recurring fair value measurement of derivative instruments in our consolidated condensed balance sheet as of June 30, 2017 is as follows: Asset Derivatives Net Asset Hedge Fair Value Balance Sheet Fair Foreign currency derivatives Cash flow hedge Level 2 Current assets $ 2,479 $ 2,479 Commodity derivatives Cash flow hedge Level 2 Current assets $ 66 $ 66 Information relating to the effect of derivative instruments on our consolidated condensed statements of income is as follows: Location Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 Six Months Ended June 30, 2017 Six Months Ended June 30, 2016 Foreign currency derivatives Cost of sales $ 351 $ 100 $ (121 ) $ 135 Selling, general and administrative — — (216 ) 139 Other comprehensive income 815 (1,049 ) 3,775 244 Foreign currency (loss) gain (20 ) 71 (77 ) 149 Total foreign currency derivatives $ 1,146 $ (878 ) $ 3,361 $ 667 Commodity derivatives Cost of sales $ 10 $ (142 ) $ 29 $ (353 ) Other comprehensive income 16 109 48 405 Total commodity derivatives $ 26 $ (33 ) $ 77 $ 52 We did not incur any hedge ineffectiveness during the three and six months ended June 30, 2017 and 2016. |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Note 7 – Fair Value Measurement The Company bases fair value on a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We have adopted a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Inputs, other than quoted market prices included in Level 1, that are observable either directly or indirectly for the asset or liability. Level 3: Unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and also considers counterparty credit risk in its assessment of fair value. Note 7 – Fair Value Measurement – Continued Except for derivative instruments (see Note 6), pension liabilities, pension plan assets and a corporate owned life insurance policy, the Company has no material financial assets and liabilities that are carried at fair value at June 30, 2017 and December 31, 2016. The carrying amounts of financial instruments comprising cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the relatively short maturity of such instruments. The Company uses an income valuation technique to measure the fair values of its debt instruments by converting amounts of future cash flows to a single present value amount using rates based on current market expectations (Level 2 inputs). The carrying values of the Company’s Amended Credit Agreement indebtedness for the periods ending June 30, 2017 and December 31, 2016, respectively, were not materially different than their estimated fair values because the interest rates on variable rate debt approximated rates currently available to the Company (see Note 5). Discount rates used to measure the fair value of Gentherm’s DEG Vietnam Loan and DEG China Loan are based on quoted swap rates. As of June 30, 2017, the carrying values of the DEG Vietnam Loan and DEG China Loan were $15,000 and $2,285, respectively, as compared to an estimated fair value of $15,000 and $2,400 respectively. As of December 31, 2016, the carrying value of the DEG Vietnam Loan and DEG China Loan were $15,000 and $2,525, respectively, as compared to an estimated fair value of $14,900 and $2,600, respectively. Certain Company assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value may not be recoverable. As of June 30, 2017 and December 31, 2016, the Company did not realize any changes to the fair value of these assets due to the non-occurrence of events or circumstances that could negatively impact their recoverability. |
Reclassifications Out of Accumu
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | Note 8 – Reclassifications Out of Accumulated Other Comprehensive Income (Loss) Reclassification adjustments and other activities impacting accumulated other comprehensive income (loss) during the three months ended June 30, 2017 and June 30, 2016 are as follows: Defined Benefit Pension Plans Foreign Currency Translation Adjustments Commodity Hedge Derivatives Foreign Currency Hedge Derivatives Total Balance at March 31, 2017 $ (2,550 ) $ (60,250 ) $ 262 $ 1,145 $ (61,393 ) Other comprehensive income before reclassifications — 23,285 28 1,092 24,405 Income tax effect of other comprehensive income before reclassifications — (106 ) (10 ) (293 ) (409 ) Amounts reclassified from accumulated other comprehensive income (loss) into net income — — (12 ) a (277 ) a (289 ) Income taxes reclassified into net income — — 4 74 78 Net current period other comprehensive income — 23,179 10 596 23,785 Balance at June 30, 2017 $ (2,550 ) $ (37,071 ) $ 272 $ 1,741 $ (37,608 ) (a) The amounts reclassified from accumulated other comprehensive income (loss) are included in cost of sales. Note 8 – Reclassifications Out of Accumulated Other Comprehensive Income (Loss) – Continued Defined Benefit Pension Plans Foreign Currency Translation Adjustments Commodity Hedge Derivatives Foreign Currency Hedge Derivatives Total Balance at March 31, 2016 $ (2,060 ) $ (40,229 ) $ (42 ) $ 946 $ (41,385 ) Other comprehensive income before reclassifications — (7,274 ) (12 ) (592 ) (7,878 ) Income tax effect of other comprehensive income before reclassifications — (142 ) 4 159 21 Amounts reclassified from accumulated other comprehensive income (loss) into net income — — 121 a (457 ) a (336 ) Income taxes reclassified into net income — — (45 ) 123 78 Net current period other comprehensive income — (7,416 ) 68 (767 ) (8,115 ) Balance at June 30, 2016 $ (2,060 ) $ (47,645 ) $ 26 $ 179 $ (49,500 ) (a) The amounts reclassified from accumulated other comprehensive income (loss) are included in cost of sales. Reclassification adjustments and other activities impacting accumulated other comprehensive income (loss) during the six months ended June 30, 2017 and June 30, 2016 are as follows: Defined Benefit Pension Plans Foreign Currency Translation Adjustments Commodity Hedge Derivatives Foreign Currency Hedge Derivatives Total Balance at December 31, 2016 $ (2,550 ) $ (65,762 ) $ 241 $ (1,020 ) $ (69,091 ) Other comprehensive income before reclassifications — 28,800 78 2,965 31,843 Income tax effect of other comprehensive income before reclassifications — (109 ) (28 ) (796 ) (933) Amounts reclassified from accumulated other comprehensive income (loss) into net income — — (30 ) a 810 a 780 Income taxes reclassified into net income — — 11 (218 ) (207 ) Net current period other comprehensive income — 28,691 31 2,761 31,483 Balance at June 30, 2017 $ (2,550 ) $ (37,071 ) $ 272 $ 1,741 $ (37,608 ) (a) The amounts reclassified from accumulated other comprehensive income (loss) are included in cost of sales. Note 8 – Reclassifications Out of Accumulated Other Comprehensive Income (Loss) – Continued Defined Benefit Pension Plans Foreign Currency Translation Adjustments Commodity Hedge Derivatives Foreign Currency Hedge Derivatives Total Balance at December 31, 2015 $ (2,060 ) $ (49,381 ) $ (229 ) $ — $ (51,670 ) Other comprehensive income before reclassifications — 636 102 701 1,439 Income tax effect of other comprehensive income before reclassifications — 1,100 (38 ) (188 ) 874 Amounts reclassified from accumulated other comprehensive income (loss) into net income — — 303 a (457 ) a (154 ) Income taxes reclassified into net income — — (112 ) 123 11 Net current period other comprehensive income — 1,736 255 179 2,170 Balance at June 30, 2016 $ (2,060 ) $ (47,645 ) $ 26 $ 179 $ (49,500 ) (a) The amounts reclassified from accumulated other comprehensive income (loss) are included in cost of sales. We expect all of the existing gains and losses related to foreign currency and commodity derivatives reported in accumulated other comprehensive income as of June 30, 2017 to be reclassified into earnings during the twelve month period ending December 31, 2017. |
Basis of Presentation and New16
Basis of Presentation and New Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Basis Of Presentation And New Accounting Pronouncements [Abstract] | |
Balance Sheet Reclassification | Balance Sheet Reclassification In June, 2017, the Company changed its classification of prepayments made during the construction of plant assets from prepaid expenses and other assets to other non-current assets on the consolidated condensed balance sheet. The Company reclassified $4,390 from prepaid expenses and other assets to other non-current assets on the December 31, 2016 consolidated condensed balance sheet in order to conform with the current year’s presentation. |
Share-Based Payment Awards | Share-Based Payment Awards In May, 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” ASU 2017-09 clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting, in accordance with Topic 718. An entity should account for the effect of a modification unless all of the following are met: 1. The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified. If the modification does not affect any of the inputs of the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification. 2. The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified. 3. The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. ASU 2017-09 is effective for annual and any interim periods beginning after December 15, 2017. Early adoption of the amendments in this update are permitted. The amendments in ASU 2017-09 should be applied on a prospective basis and in the initial period of adoption, entities must disclose the nature of and reason for the change in accounting principle. The Company has not historically made changes to the terms or conditions of shared-based payment awards and does not expect adoption of ASU 2017-09 to have a material impact the consolidated financial statements. |
Goodwill Impairment | Goodwill Impairment In January, 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 modified the concept of impairment of goodwill to be a condition that exists when the carrying value of a reporting unit that includes goodwill exceeds its fair value. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the total amount of goodwill allocated to that reporting unit. Entities no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if the reporting unit had been acquired in a business combination. ASU 2017-04 is effective for annual and any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The amendments in ASU 2017-04 must be applied on a prospective basis and in the initial period of adoption, entities must disclose the nature of and reason for the change in accounting principle. The Company expects adoption of ASU 2017-04 will reduce the complexity of evaluating goodwill for impairment. |
Business Combinations | Business Combinations In January, 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. To be considered a business, the integrated set of activities and assets to be evaluated must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create an output. If substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the integrated set or activities and assets is not considered a business. ASU 2017-01 provides a framework to assist entities in evaluating whether an integrated set of activities and assets include both an input and a substantive process when the assets’ fair value is not concentrated in a single identifiable asset or group of similar identifiable assets. Note 2 – Basis of Presentation and New Accounting Pronouncements – Continued ASU 2017-01 is effective for fiscal years and interim periods beginning after December 15, 2017. The amendments in ASU 2017-01 should be applied on or after the effective date. No disclosure is required at adoption. The Company expects the impact from adopting this update to be immaterial to the consolidated financial statements. |
Income Taxes | Income Taxes In October, 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” ASU 2016-16 modifies the current prohibition to recognize deferred income taxes from differences between the tax basis of assets in the buyer’s tax jurisdiction and their cost resulting from an intra-entity transfer from one tax-paying component to another tax-paying component of the same consolidated group. Under current GAAP, deferred income taxes for intra-entity asset transfers are not recognized until the asset is sold to an outside party. ASU 2016-16 allows entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU 2016-16 is effective for fiscal years and interim periods beginning after December 15, 2017. For entities that issue interim financial statements and whose current fiscal year end date is December 31, 2016, early adoption was permitted during the three month period ending March 31, 2017. The amendments in ASU 2016-16 must be applied on a modified retrospective basis through a cumulate-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We did not early adopt ASU 2016-16 during the three month period ending March 31, 2017. We are currently evaluating the amendments in this update to determine the effect it will have on the Company's consolidated financial statements. |
Leases | Leases In February, 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires lessees to recognize on their balance sheet a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. Payments to be made in optional periods should be included in the measurement of lease assets and liabilities if the lessee is reasonably certain it will exercise an option to extend the lease or not exercise an option to terminate the lease. While ASU 2016-02 continues to differentiate between finance or capital leases and operating leases, the principal change from current lease accounting guidance is that lease assets and liabilities arising from operating leases will be recognized on the balance sheet. ASU 2016-02 is effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption of the amendments in this update are permitted. Lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach which includes a number of practical expedients, including the ability to use hindsight in evaluating lessee options to extend or terminate a lease. An entity that elects to apply the practical expedients will be required to recognize a right-of-use asset and lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payment that were tracked and disclosed under previous GAAP. We are currently in the process of determining the impact the implementation of ASU 2016-02 will have on the Company’s financial statements. |
Statement of Cash Flows | Statement of Cash Flows In August, 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 provides guidance on the classification of eight specific cash receipt and cash payment transactions in the statement of cash flows. The Company is currently evaluating the following transactions to determine the effect ASU 2016-15 will have on the Company’s consolidated statements of cash flows: 1) Debt extinguishment payments and debt prepayments are to be shown as cash outflows for financing activities. Presently, Gentherm classifies debt extinguishment payments within operating activities. 2) Payments made to settle contingent consideration liabilities not made soon after the acquisition date of a business combination should be recognized as cash outflows for financing activities up to the amount of the liability recognized at the acquisition date. Payments, or the portion of a payment, to settle contingent consideration liabilities that exceed the amount of the liability recognized at the acquisition date will be recognized as cash outflows for operating activities. 3) Cash receipts from the settlement of insurance claims, excluding those related to corporate-owned life insurance policies, shall be classified on the basis of the related insurance coverage. For example, proceeds received to cover claims issued under product recall liability insurance would be classified as cash inflows from operating activities. Note 2 – Basis of Presentation and New Accounting Pronouncements – Continued 4) Cash receipts from the settlement of corporate-owned life insurance policies shall be classified as cash inflows from investing activities. The other cash receipt and cash payment transactions addressed by this update are not expected to impact the Company. For public companies |
Revenue from Contracts with Customers | Revenue from Contracts with Customers In May, 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 was developed to enable financial statement users to better understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This update’s core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Companies are to use a five-step contract review model to ensure revenue is recognized, measured and disclosed in accordance with this principle. The FASB has issued several amendments to the new standard, including a one-year deferral of the original effective date, and new methods for identifying performance obligations intended to reduce the cost and complexity of compliance. This update permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). We currently anticipate adopting this update using the cumulative catch-up transition method. ASU 2014-09 will be effective for fiscal years and interim periods beginning after December 15, 2017. Early application is not permitted. Gentherm is executing a plan to complete the five-step contract review process for all existing contracts with customers, across all business units. While we continue to assess all potential impacts from this update, we currently believe the most significant impact relates to our accounting for options that give customers the right to purchase additional goods under long-term supply agreements in the future. Due to the complexity of certain of our automotive supply contracts, the actual revenue recognition treatment for customer purchase options will depend on contract-specific terms and could vary from other contracts that are similar in nature. We are currently in the process of determining the total impact implementation of ASU 2014-09 and any corresponding amendments will have on the Company’s consolidated financial statements. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Shares of Consolidated Condensed Statements of Income | The following summarizes the Common Stock included in the basic and diluted shares, as disclosed on the face of the consolidated condensed statements of income: Three Months Six Months 2017 2016 2017 2016 Weighted average number of shares for calculation of basic EPS 36,776,545 36,442,296 36,698,618 36,399,635 Stock options under equity incentive plans 63,826 194,922 97,550 172,595 Weighted average number of shares for calculation of diluted EPS 36,840,371 36,637,218 36,796,168 36,572,230 |
Common Stock Issuable upon Exercise of Certain Stock Options | Note 3 – Earnings Per Share – Continued The accompanying table represents Common Stock issuable upon the exercise of certain stock options that have been excluded from the diluted earnings calculation because the effect of their inclusion would be anti-dilutive. Three Months Six Months 2017 2016 2017 2016 Stock options outstanding for equity incentive plans 1,857,284 1,437,534 1,857,284 1,437,534 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information about Reported Product Revenues, Depreciation and Amortization and Operating Income (Loss) | The tables below present segment information about the reported product revenues, depreciation and amortization and operating income (loss) of the Company for three and six month periods ended June 30, 2017 and 2016. With the exception of goodwill, asset information by segment is not reported since the Company does not manage assets at a segment level. As of June 30, 2017, goodwill assigned to our Automotive and Industrial segments were $22,724 and $30,773, respectively. As of June 30, 2016, goodwill assigned to our Automotive and Industrial segments were $22,119 and $28,890, respectively. Three Months Ended June 30, Automotive Industrial Reconciling Consolidated 2017: Product revenues $ 215,812 $ 27,566 $ — $ 243,378 Depreciation and amortization 9,048 1,288 663 10,999 Operating income (loss) 40,082 (2,648 ) (12,211 ) 25,223 2016: Product revenues $ 211,833 $ 20,887 $ — $ 232,720 Depreciation and amortization 7,652 1,199 532 9,383 Operating income (loss) 36,162 (7,113 ) (6,696 ) 22,353 Six Months Ended June 30, Automotive Industrial Reconciling Consolidated 2017: Product revenues $ 437,645 $ 55,000 $ — $ 492,645 Depreciation and amortization 17,179 2,706 1,306 21,191 Operating income (loss) 90,839 (5,134 ) (25,633 ) 60,072 2016: Product revenues $ 422,267 $ 26,167 $ — $ 448,434 Depreciation and amortization 14,935 1,589 1,023 17,547 Operating income (loss) 78,863 (9,729) (16,896 ) 52,238 |
Product Revenues Information by Geographic Area | Note 4 – Segment Reporting – Continued Total product revenues information by geographic area is as follows: Three Months Ended June 30, 2017 2016 United States $ 114,141 47 % $ 113,138 49 % China 19,962 8 % 18,988 8 % Germany 17,694 7 % 18,424 8 % South Korea 17,754 7 % 21,053 9 % Japan 13,093 5 % 9,779 4 % Canada 11,113 5 % 10,091 4 % Czech Republic 9,944 4 % 10,290 4 % United Kingdom 8,439 4 % 7,071 3 % Mexico 5,322 2 % 5,980 3 % Other 25,916 11 % 17,906 8 % Total Non U.S. 129,237 53 % 119,582 51 % $ 243,378 100 % $ 232,720 100 % Six Months Ended June 30, 2017 2016 United States $ 233,664 47 % $ 214,878 48 % China 40,427 8 % 36,410 8 % Germany 35,562 7 % 36,591 8 % South Korea 34,145 7 % 40,149 9 % Japan 27,376 6 % 22,013 5 % Canada 22,042 5 % 19,073 4 % Czech Republic 20,651 4 % 19,961 4 % United Kingdom 18,107 4 % 13,738 3 % Mexico 10,692 2 % 11,561 3 % Other 49,979 10 % 34,060 8 % Total Non U.S. 258,981 53 % 233,556 52 % $ 492,645 100 % $ 448,434 100 % |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Company's Debt | The following table summarizes the Company’s debt at June 30, 2017 and at December 31, 2016. June 30, 2017 December 31, Interest Principal Principal Credit Agreement: Revolving Note (U.S. Dollar Denominations) 2.98 % $ 146,000 $ 154,000 DEG China Loan 4.25 % 2,285 2,525 DEG Vietnam Loan 5.21 % 15,000 15,000 Total debt 163,285 171,525 Current portion (3,414 ) (2,092 ) Long-term debt, less current maturities $ 159,871 $ 169,433 |
Principal Maturities of Debt | Note 5 – Debt – Continued The scheduled principal maturities of our debt as of June 30, 2017 are as follows: Year Revolving (U.S. Dollar) DEG DEG Total Remainder of 2017 $ — $ 457 $ 1,250 $ 1,707 2018 — 914 2,500 3,414 2019 — 914 2,500 3,414 2020 — — 2,500 2,500 2021 146,000 — 2,500 148,500 2022 — — 2,500 2,500 Thereafter — — 1,250 1,250 Total $ 146,000 $ 2,285 $ 15,000 $ 163,285 |
Derivative Financial Instrume20
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Information Related to Recurring Fair Value Measurement of Derivative Instruments in Our Consolidated Condensed Balance Sheet | Information related to the recurring fair value measurement of derivative instruments in our consolidated condensed balance sheet as of June 30, 2017 is as follows: Asset Derivatives Net Asset Hedge Fair Value Balance Sheet Fair Foreign currency derivatives Cash flow hedge Level 2 Current assets $ 2,479 $ 2,479 Commodity derivatives Cash flow hedge Level 2 Current assets $ 66 $ 66 |
Information Related to Effect of Derivative Instruments on Our Consolidated Condensed Statements of Income | Information relating to the effect of derivative instruments on our consolidated condensed statements of income is as follows: Location Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 Six Months Ended June 30, 2017 Six Months Ended June 30, 2016 Foreign currency derivatives Cost of sales $ 351 $ 100 $ (121 ) $ 135 Selling, general and administrative — — (216 ) 139 Other comprehensive income 815 (1,049 ) 3,775 244 Foreign currency (loss) gain (20 ) 71 (77 ) 149 Total foreign currency derivatives $ 1,146 $ (878 ) $ 3,361 $ 667 Commodity derivatives Cost of sales $ 10 $ (142 ) $ 29 $ (353 ) Other comprehensive income 16 109 48 405 Total commodity derivatives $ 26 $ (33 ) $ 77 $ 52 |
Reclassifications Out of Accu21
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of Reclassification Adjustments and Other Activities Impacting Accumulated Other Comprehensive Income (Loss) | Reclassification adjustments and other activities impacting accumulated other comprehensive income (loss) during the three months ended June 30, 2017 and June 30, 2016 are as follows: Defined Benefit Pension Plans Foreign Currency Translation Adjustments Commodity Hedge Derivatives Foreign Currency Hedge Derivatives Total Balance at March 31, 2017 $ (2,550 ) $ (60,250 ) $ 262 $ 1,145 $ (61,393 ) Other comprehensive income before reclassifications — 23,285 28 1,092 24,405 Income tax effect of other comprehensive income before reclassifications — (106 ) (10 ) (293 ) (409 ) Amounts reclassified from accumulated other comprehensive income (loss) into net income — — (12 ) a (277 ) a (289 ) Income taxes reclassified into net income — — 4 74 78 Net current period other comprehensive income — 23,179 10 596 23,785 Balance at June 30, 2017 $ (2,550 ) $ (37,071 ) $ 272 $ 1,741 $ (37,608 ) (a) The amounts reclassified from accumulated other comprehensive income (loss) are included in cost of sales. Note 8 – Reclassifications Out of Accumulated Other Comprehensive Income (Loss) – Continued Defined Benefit Pension Plans Foreign Currency Translation Adjustments Commodity Hedge Derivatives Foreign Currency Hedge Derivatives Total Balance at March 31, 2016 $ (2,060 ) $ (40,229 ) $ (42 ) $ 946 $ (41,385 ) Other comprehensive income before reclassifications — (7,274 ) (12 ) (592 ) (7,878 ) Income tax effect of other comprehensive income before reclassifications — (142 ) 4 159 21 Amounts reclassified from accumulated other comprehensive income (loss) into net income — — 121 a (457 ) a (336 ) Income taxes reclassified into net income — — (45 ) 123 78 Net current period other comprehensive income — (7,416 ) 68 (767 ) (8,115 ) Balance at June 30, 2016 $ (2,060 ) $ (47,645 ) $ 26 $ 179 $ (49,500 ) (a) The amounts reclassified from accumulated other comprehensive income (loss) are included in cost of sales. Reclassification adjustments and other activities impacting accumulated other comprehensive income (loss) during the six months ended June 30, 2017 and June 30, 2016 are as follows: Defined Benefit Pension Plans Foreign Currency Translation Adjustments Commodity Hedge Derivatives Foreign Currency Hedge Derivatives Total Balance at December 31, 2016 $ (2,550 ) $ (65,762 ) $ 241 $ (1,020 ) $ (69,091 ) Other comprehensive income before reclassifications — 28,800 78 2,965 31,843 Income tax effect of other comprehensive income before reclassifications — (109 ) (28 ) (796 ) (933) Amounts reclassified from accumulated other comprehensive income (loss) into net income — — (30 ) a 810 a 780 Income taxes reclassified into net income — — 11 (218 ) (207 ) Net current period other comprehensive income — 28,691 31 2,761 31,483 Balance at June 30, 2017 $ (2,550 ) $ (37,071 ) $ 272 $ 1,741 $ (37,608 ) (a) The amounts reclassified from accumulated other comprehensive income (loss) are included in cost of sales. Note 8 – Reclassifications Out of Accumulated Other Comprehensive Income (Loss) – Continued Defined Benefit Pension Plans Foreign Currency Translation Adjustments Commodity Hedge Derivatives Foreign Currency Hedge Derivatives Total Balance at December 31, 2015 $ (2,060 ) $ (49,381 ) $ (229 ) $ — $ (51,670 ) Other comprehensive income before reclassifications — 636 102 701 1,439 Income tax effect of other comprehensive income before reclassifications — 1,100 (38 ) (188 ) 874 Amounts reclassified from accumulated other comprehensive income (loss) into net income — — 303 a (457 ) a (154 ) Income taxes reclassified into net income — — (112 ) 123 11 Net current period other comprehensive income — 1,736 255 179 2,170 Balance at June 30, 2016 $ (2,060 ) $ (47,645 ) $ 26 $ 179 $ (49,500 ) (a) The amounts reclassified from accumulated other comprehensive income (loss) are included in cost of sales. |
The Company and Subsequent Ev22
The Company and Subsequent Events - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Company And Subsequent Events [Abstract] | ||
Amount paid withholding taxes in Canadian Revenue Agency | $ 7,600 | |
Income tax expense related to intercompany dividends | $ 2,500 | |
Accrued one-time income tax payment | $ 32,600 |
Basis of Presentation and New23
Basis of Presentation and New Accounting Pronouncements (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Scenario, Forecast | |
Basis Of Presentation And New Accounting Pronouncements [Line Items] | |
Amount reclassified from prepaid expenses and other assets to other non-current assets | $ 4,390 |
Earnings Per Share (Detail)
Earnings Per Share (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Weighted average number of shares for calculation of basic EPS | 36,776,545 | 36,442,296 | 36,698,618 | 36,399,635 |
Stock options under equity incentive plans | 63,826 | 194,922 | 97,550 | 172,595 |
Weighted average number of shares for calculation of diluted EPS | 36,840,371 | 36,637,218 | 36,796,168 | 36,572,230 |
Stock options outstanding for equity incentive plans | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Common stock that have been excluded from the diluted shares calculation | 1,857,284 | 1,437,534 | 1,857,284 | 1,437,534 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Segment Reporting Information [Line Items] | |||
Goodwill | $ 53,497 | $ 51,735 | |
Automotive Segments | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 22,724 | $ 22,119 | |
Industrial Segments | |||
Segment Reporting Information [Line Items] | |||
Goodwill | $ 30,773 | $ 28,890 |
Segment Information about Repor
Segment Information about Reported Product Revenues, Depreciation and Amortization and Operating Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Product revenues | $ 243,378 | $ 232,720 | $ 492,645 | $ 448,434 |
Depreciation and amortization | 10,999 | 9,383 | 21,191 | 17,547 |
Operating income (loss) | 25,223 | 22,353 | 60,072 | 52,238 |
Operating Segments | Automotive Segments | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues | 215,812 | 211,833 | 437,645 | 422,267 |
Depreciation and amortization | 9,048 | 7,652 | 17,179 | 14,935 |
Operating income (loss) | 40,082 | 36,162 | 90,839 | 78,863 |
Operating Segments | Industrial Segments | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues | 27,566 | 20,887 | 55,000 | 26,167 |
Depreciation and amortization | 1,288 | 1,199 | 2,706 | 1,589 |
Operating income (loss) | (2,648) | (7,113) | (5,134) | (9,729) |
Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 663 | 532 | 1,306 | 1,023 |
Operating income (loss) | $ (12,211) | $ (6,696) | $ (25,633) | $ (16,896) |
Segment Reporting (Detail)
Segment Reporting (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Product revenues | $ 243,378 | $ 232,720 | $ 492,645 | $ 448,434 |
Sales Revenue, Net | Geographic Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Total product revenues in percentage | 100.00% | 100.00% | 100.00% | 100.00% |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues | $ 114,141 | $ 113,138 | $ 233,664 | $ 214,878 |
United States | Sales Revenue, Net | Geographic Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Total product revenues in percentage | 47.00% | 49.00% | 47.00% | 48.00% |
China | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues | $ 19,962 | $ 18,988 | $ 40,427 | $ 36,410 |
China | Sales Revenue, Net | Geographic Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Total product revenues in percentage | 8.00% | 8.00% | 8.00% | 8.00% |
Germany | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues | $ 17,694 | $ 18,424 | $ 35,562 | $ 36,591 |
Germany | Sales Revenue, Net | Geographic Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Total product revenues in percentage | 7.00% | 8.00% | 7.00% | 8.00% |
South Korea | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues | $ 17,754 | $ 21,053 | $ 34,145 | $ 40,149 |
South Korea | Sales Revenue, Net | Geographic Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Total product revenues in percentage | 7.00% | 9.00% | 7.00% | 9.00% |
Japan | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues | $ 13,093 | $ 9,779 | $ 27,376 | $ 22,013 |
Japan | Sales Revenue, Net | Geographic Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Total product revenues in percentage | 5.00% | 4.00% | 6.00% | 5.00% |
Canada | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues | $ 11,113 | $ 10,091 | $ 22,042 | $ 19,073 |
Canada | Sales Revenue, Net | Geographic Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Total product revenues in percentage | 5.00% | 4.00% | 5.00% | 4.00% |
Czech Republic | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues | $ 9,944 | $ 10,290 | $ 20,651 | $ 19,961 |
Czech Republic | Sales Revenue, Net | Geographic Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Total product revenues in percentage | 4.00% | 4.00% | 4.00% | 4.00% |
United Kingdom | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues | $ 8,439 | $ 7,071 | $ 18,107 | $ 13,738 |
United Kingdom | Sales Revenue, Net | Geographic Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Total product revenues in percentage | 4.00% | 3.00% | 4.00% | 3.00% |
Mexico | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues | $ 5,322 | $ 5,980 | $ 10,692 | $ 11,561 |
Mexico | Sales Revenue, Net | Geographic Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Total product revenues in percentage | 2.00% | 3.00% | 2.00% | 3.00% |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues | $ 25,916 | $ 17,906 | $ 49,979 | $ 34,060 |
Other | Sales Revenue, Net | Geographic Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Total product revenues in percentage | 11.00% | 8.00% | 10.00% | 8.00% |
Non U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues | $ 129,237 | $ 119,582 | $ 258,981 | $ 233,556 |
Non U.S. | Sales Revenue, Net | Geographic Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Total product revenues in percentage | 53.00% | 51.00% | 53.00% | 52.00% |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 6 Months Ended | ||
Jun. 30, 2017 | Dec. 15, 2016 | Dec. 14, 2016 | |
Debt Instrument [Line Items] | |||
Maximum percentage of stock of non US subsidiaries pledge to secure obligation | 66.00% | ||
Federal Funds Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate | 0.50% | ||
Federal Funds Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate | 1.06% | ||
London Interbank Offered Rate | |||
Debt Instrument [Line Items] | |||
Interest rate | 1.22% | ||
Revolving Note (U.S. Dollar) | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount available for borrowing | $ 203,000,000 | ||
Letter of credit net of outstanding amount | $ 611,000 | ||
Debt maturity date | Mar. 17, 2021 | ||
United State Bank Of America Credit Facility | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.25% | ||
Euro Currency Rate Loans | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate | 0.00% | ||
Euro Currency Rate Loans | Minimum | Amended Credit Agreement | |||
Debt Instrument [Line Items] | |||
Interest rate | 1.25% | ||
Euro Currency Rate Loans | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate | 1.00% | ||
Euro Currency Rate Loans | Maximum | Amended Credit Agreement | |||
Debt Instrument [Line Items] | |||
Interest rate | 2.00% | ||
Base Rate Loans | Minimum | Amended Credit Agreement | |||
Debt Instrument [Line Items] | |||
Interest rate | 0.25% | ||
Base Rate Loans | Maximum | Amended Credit Agreement | |||
Debt Instrument [Line Items] | |||
Interest rate | 1.00% | ||
DEG Loan | |||
Debt Instrument [Line Items] | |||
Semi-annual principal payments earliest date | 2015-03 | ||
Semi-annual principal payments latest date | 2019-09 | ||
DEG Vietnam Loan | |||
Debt Instrument [Line Items] | |||
Semi-annual principal payments earliest date | 2017-11 | ||
Semi-annual principal payments latest date | 2023-05 | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount available for borrowing | $ 350,000,000 | $ 250,000,000 |
Summary of Company's Debt (Deta
Summary of Company's Debt (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Total debt | $ 163,285 | $ 171,525 |
Current portion | (3,414) | (2,092) |
Long-term debt, less current maturities | $ 159,871 | 169,433 |
Revolving Note (U.S. Dollar Denominations) | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.98% | |
Total debt | $ 146,000 | 154,000 |
DEG China Loan | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.25% | |
Total debt | $ 2,285 | 2,525 |
DEG Vietnam Loan | ||
Debt Instrument [Line Items] | ||
Interest Rate | 5.21% | |
Total debt | $ 15,000 | $ 15,000 |
Principal Maturities of Debt (D
Principal Maturities of Debt (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Debt maturing in remainder of 2017 | $ 1,707 | |
Debt maturing in 2018 | 3,414 | |
Debt maturing in 2019 | 3,414 | |
Debt maturing in 2020 | 2,500 | |
Debt maturing in 2021 | 148,500 | |
Debt maturing in 2022 | 2,500 | |
Thereafter | 1,250 | |
Total debt | 163,285 | $ 171,525 |
Revolving Note (U.S. Dollar) | ||
Debt Instrument [Line Items] | ||
Debt maturing in 2021 | 146,000 | |
Total debt | 146,000 | 154,000 |
DEG China Loan | ||
Debt Instrument [Line Items] | ||
Debt maturing in remainder of 2017 | 457 | |
Debt maturing in 2018 | 914 | |
Debt maturing in 2019 | 914 | |
Total debt | 2,285 | 2,525 |
DEG Vietnam Loan | ||
Debt Instrument [Line Items] | ||
Debt maturing in remainder of 2017 | 1,250 | |
Debt maturing in 2018 | 2,500 | |
Debt maturing in 2019 | 2,500 | |
Debt maturing in 2020 | 2,500 | |
Debt maturing in 2021 | 2,500 | |
Debt maturing in 2022 | 2,500 | |
Thereafter | 1,250 | |
Total debt | $ 15,000 | $ 15,000 |
Derivative Financial Instrume31
Derivative Financial Instruments - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Derivative [Line Items] | |||||
Maximum length of time to hedge exposure to foreign currency exchange risk | 1 year | ||||
Maximum length of time to hedge exposure to price fluctuations in material commodities | 1 year | ||||
Foreign Currency Derivatives | |||||
Derivative [Line Items] | |||||
Notional Value | $ 36,170,000 | $ 36,170,000 | $ 29,538,000 | ||
Commodity Derivatives | |||||
Derivative [Line Items] | |||||
Notional Value | 2,830,000 | 2,830,000 | $ 407,000 | ||
Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Hedge Ineffectiveness Incurred | $ 0 | $ 0 | $ 0 | $ 0 |
Information Related to Recurrin
Information Related to Recurring Fair Value Measurement of Derivative Instruments in Our Consolidated Condensed Balance Sheet (Detail) - Fair Value, Inputs, Level 2 - Designated as Hedging Instrument - Current Assets $ in Thousands | Jun. 30, 2017USD ($) |
Foreign Currency Derivatives | |
Derivatives Fair Value [Line Items] | |
Asset Derivatives, Fair Value | $ 2,479 |
Net Asset | 2,479 |
Commodity Derivatives | |
Derivatives Fair Value [Line Items] | |
Asset Derivatives, Fair Value | 66 |
Net Asset | $ 66 |
Information Related to Effect o
Information Related to Effect of Derivative Instruments on Our Consolidated Condensed Statements of Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivative Instruments Gain Loss [Line Items] | ||||
Gain (loss) on derivatives | $ 1,146 | $ (878) | $ 3,361 | $ 667 |
Commodity Derivatives | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Gain (loss) on derivatives | 26 | (33) | 77 | 52 |
Other comprehensive income | Foreign Currency Derivatives | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Gain (loss) on derivatives | 815 | (1,049) | 3,775 | 244 |
Other comprehensive income | Commodity Derivatives | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Gain (loss) on derivatives | 16 | 109 | 48 | 405 |
Cost of sales | Foreign Currency Derivatives | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Gain (loss) on derivatives | 351 | 100 | (121) | 135 |
Cost of sales | Commodity Derivatives | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Gain (loss) on derivatives | 10 | (142) | 29 | (353) |
Selling, general and administrative expense | Foreign Currency Derivatives | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Gain (loss) on derivatives | (216) | 139 | ||
Foreign currency (loss) gain | Foreign Currency Derivatives | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Gain (loss) on derivatives | $ (20) | $ 71 | $ (77) | $ 149 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Detail) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial assets, fair value | $ 0 | $ 0 |
Financial liabilities, fair value | 0 | 0 |
Carrying value | 163,285,000 | 171,525,000 |
Changes to fair value of assets, realized | 0 | 0 |
DEG Vietnam Loan | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carrying value | 15,000,000 | 15,000,000 |
Fair value | 15,000,000 | 14,900,000 |
DEG China Loan | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carrying value | 2,285,000 | 2,525,000 |
Fair value | $ 2,400,000 | $ 2,600,000 |
Schedule of Reclassification Ad
Schedule of Reclassification Adjustments and Other Activities Impacting Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | $ (61,393) | $ (41,385) | $ (69,091) | $ (51,670) | |
Other comprehensive income before reclassifications | 24,405 | (7,878) | 31,843 | 1,439 | |
Income tax effect of other comprehensive income before reclassifications | (409) | 21 | (933) | 874 | |
Amounts reclassified from accumulated other comprehensive income (loss) into net income | (289) | (336) | 780 | (154) | |
Income taxes reclassified into net income | 78 | 78 | (207) | 11 | |
Other comprehensive income (loss), net of tax | 23,785 | (8,115) | 31,483 | 2,170 | |
Ending Balance | (37,608) | (49,500) | (37,608) | (49,500) | |
Defined Benefit Pension Plans | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | (2,550) | (2,060) | (2,550) | (2,060) | |
Ending Balance | (2,550) | (2,060) | (2,550) | (2,060) | |
Foreign Currency Translation Adjustments | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | (60,250) | (40,229) | (65,762) | (49,381) | |
Other comprehensive income before reclassifications | 23,285 | (7,274) | 28,800 | 636 | |
Income tax effect of other comprehensive income before reclassifications | (106) | (142) | (109) | 1,100 | |
Other comprehensive income (loss), net of tax | 23,179 | (7,416) | 28,691 | 1,736 | |
Ending Balance | (37,071) | (47,645) | (37,071) | (47,645) | |
Commodity Hedge Derivatives | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | 262 | (42) | 241 | (229) | |
Other comprehensive income before reclassifications | 28 | (12) | 78 | 102 | |
Income tax effect of other comprehensive income before reclassifications | (10) | 4 | (28) | (38) | |
Amounts reclassified from accumulated other comprehensive income (loss) into net income | [1] | (12) | 121 | (30) | 303 |
Income taxes reclassified into net income | 4 | (45) | 11 | (112) | |
Other comprehensive income (loss), net of tax | 10 | 68 | 31 | 255 | |
Ending Balance | 272 | 26 | 272 | 26 | |
Foreign Currency Hedge Derivatives | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | 1,145 | 946 | (1,020) | ||
Other comprehensive income before reclassifications | 1,092 | (592) | 2,965 | 701 | |
Income tax effect of other comprehensive income before reclassifications | (293) | 159 | (796) | (188) | |
Amounts reclassified from accumulated other comprehensive income (loss) into net income | [1] | (277) | (457) | 810 | (457) |
Income taxes reclassified into net income | 74 | 123 | (218) | 123 | |
Other comprehensive income (loss), net of tax | 596 | (767) | 2,761 | 179 | |
Ending Balance | $ 1,741 | $ 179 | $ 1,741 | $ 179 | |
[1] | The amounts reclassified from accumulated other comprehensive income (loss) are included in cost of sales. |