THRM - Earnings call transcript Q3 2019

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Operator

Greetings, and welcome to Gentherm Inc.

Third quarter 2019 Earnings Conference Call. [Operator Instructions]. Please note, this conference is being recorded.

I would now turn the conference over to your host, Ms. Relations. Investor Brentano, Yijing ahead. go Please

Yijing Brentano

available you, Sian, joining earlier Thank for release morning, morning, and today. Gentherm's good is the us of released a everyone. gentherm.com. earnings and you copy Thank at results this were

will Additionally, today available of website. on today's section later Relations be a Investor of webcast Gentherm's replay call the

to We views the laws. and These performance. statements see this results and may forward-looking no differ Gentherm's make and of security During undertake to statements within events uncertainties may our SEC federal for XX-K and various reports, update latest underlying current with actual them, statements. call, materially. we such risk factors filings, the respect Please including future meaning of subsequent obligation forward-looking reflect financial discussions the

measures in we by release. financial measures During may defined G. of financial financial GAAP our included comparable non-GAAP discuss measures these as Reconciliations call, are earnings to non-GAAP Regulation SEC the the

and Phil Matteo will at On the note available we and made their Phil call to President Officer. comments, Financial Anversa, that website with Officer; are on have during Please be gentherm.com/events. me Eyler, Matteo Chief our and presentation Chief that deck the today referring Executive

be assets refer to excluding to will addition, business, In will take they sale divested held assets your as include and pleased performance prepared Gentherm we their remarks, and Automotive for questions. which core our Medical. After

other SG&A a item items. financial million automotive in our as $X.X reported revenue each call. like to I discussed our a before Matteo for as relationships remind So XQ year, which quarter of reclassification customer being call industrial continue of impact would about our into reclassified to amortization last certain third on quarter adjustments contra of for the Phil, from to previously related earnings of the I you some revenue XXXX, businesses. of resulted well adjustments impacted to turn third These This revenue for which XXXX

As for revenue pointed the million out annual impact both Matteo earnings SG&A. product XQ and $XX.X call, was in XXXX on our increase

As also basis gross full and respectively, rate a EBITDA and XX points, XX by for rate basis were result, points margin year the margin XXXX. impacted

like I'd Phil. over call turn to Now the to

Phillip Eyler

Good and you, joining us Thank everyone, you thank morning, today. for Yijing.

and During quarter, continued. industry the conditions third the challenging macroeconomic automotive

As despite we light move still below Motors, vehicle levels The strike estimates actual General able quarter. revenues short through our being fallen in of shrinking strong production the performance we our the well magnified year, largest production quarter were operating every expectations. have to the Nonetheless, of volume. customer, the at impact industry deliver

we key outperform First, we were that automotive the in able serve. to to continue versus markets

translation the GM vehicle Excluding of in our production. organic and approximately X.X% revenue compares the decline to foreign impact currency in global a strike, X% decline of automotive

we which product growth X% and automotive of excludes our line, In non-automotive the nearly in core saw electronics, cables quarter year-over-year.

addition $X.X in million beginning $XXX now awards quarter, automotive XXXX. during With the have the the since billion of in of awards we secured

in our light existing confidence to our the addition of even growth a the the or for products as term. portfolio. as of double-digit as the result Our of in well a of products, pipeline awards Year-to-date, as of of award Medical saw Blanketrol OEMs for in activity gives balance of in many near growth automotive are a our Stihler the level we to continued seeing that XXXX reduced delayed ability outperform we us by market, potential such

and controls. activities to cost the rigorous progress purchasing On we excellent front, through make our cost on continue Fit-for-Growth

us apparent. production X rate our has in rightsize proactive slowdown This In addition, margin we steps quarters. took allowed to the factories lower automotive volume year volumes for our earlier the highest when to achieve in became gross in

cost, restructuring X% momentum in operating adjusting reducing operating expenses in our declined which expenses, quarter. XX%. continued declined We for the After

first a quarterly XXXX. quarterly adjusted revenues. This since EBITDA As $XX is or the of approximately of XX% EBITDA the highest we of result, quarter delivered adjusted million

late announced In September, global manufacturing improve we plans our footprint productivity. to to rationalize

certain reduce X. automotive consolidate the manufacturing as existing plants and a by of result, and number We relocate will

the employees to million XXXX complete plant the over details expect and million $XX We're provide structure more we levels. coming with annual current We the the months our communications cost consolidations our to end customers by of by $XX will and reduce from time. pursuing and in

in a provide will our about details Matteo few more results financial minutes.

plan. approximately and to our of shares $XX in third to the repurchase million continue XXbX-X during Finally, repurchased quarter we pursuant a more October

our $XXX opportunistically total deploy million As of launching week, program, repurchases our to in capital repurchased on current this authorization. and $XX million continue and since in share repurchase conditions. towards remaining market shares we've depending share evaluate of a We'll have we

get Gentherm's you quarter, into personalized, I a highlights from recent with on like ClimateSense, unique, Before I'd management share update few the a system of future. to the thermal

significant thermal Chevrolet select comfort of to ago, a and control and with at innovative, Symposium. excited objective development existing of To Society The Automotive on central very weeks results address occupant General discussed, a Management vehicle. was with integrated this and project, electric algorithm. that GM OEMs is previously system these personalized Gentherm largest the delivering I one share jointly As the new most presented comparison Bolt of in A the project our ClimateSense I'm development delivery project our the been of advanced couple still method, in importantly, to utilizing thermophysiology-based working Engineers challenge, of developed key electronics, microclimate Gentherm energy reduction best-in-class customer, while to Thermal a Systems system HVAC achieve we've Motors. consumption, ClimateSense

measure ClimateSense a results. and XX% energy We the comfort our cold passenger comfort. testing. happy testing novel very and saving utilized customers' XX% hot with addition, introduced weather savings were measurement they energy we exceeded delivered methodology human-centric to have XX% In And between to weather in in expectations.

to a provide the with thermal customers While OEMs extension, remains comfort need improving are target. energy increasingly range savings focused on superior and critical

occupant that to ClimateSense a approach demonstrates in solution. and is GM Our thermal innovative very Gentherm's strong a and relevant comfort work with others

different F-XXX, in is and MKC, the is Active Subaru Rover Outback. on Ford incremental Rover launched automotive industry-leading our solutions CCS both third continues let's on to CCS Slide we General Hyundai, and to product on Lincoln Legacy by and And on continue our XX launched solution, in quarter. Gentherm's Now Subaru this the value our Land see And we This seats. automotive including turn second XX SAIC. vehicles launched Jaguar to new Defender OEMs, VW, for the momentum X. highlights FAW, row the highly and and first BMW, Kia, Motors, across quarter, the Land CCS evidenced

on with unit seat and CSXX. electronics started for In production multifunction on our software and China, control control electronic Changan we mirror the integrated memory climate,

software to be and competitive is Our ability flexibly to a advantage. integrate proving strong hardware

important in electric. in BMW quarter, another This the noteworthy is in on MINI management, for Also BTM. thermal we battery launched the technology full connecting us very our cell milestone first

battery If cell air and you BTM, focused on connecting heating, now recall, battery electric, X technology. cell we're thermal primary management, Thermal lines. cooling Active product

and bringing $XXX new growth. on the to that wheel pace We platform X, Sports Mercedes program Starex, Aion, see program X that Now Kia the we new Mustang awards X. with customers, year-to-date. secured million in the Buick XX in to cumulative at awards for Slide including $XXX M MSL foundation win million OEMs Mercedes-AMG wins quarter, the Enclave, and Mach, BMW across where steering you sets CCS received new the Hyundai including business series and The the We us Ford Optima and across won multiple SL GT. X heaters awards third series. GAC different In future to we solid can awards a continue

While headwinds heaters revenue well our in to impacting this return to the award wheel growth near over steering our we've line term. in positions product XXXX, seen steering heater wheel in production revenues us momentum

quarter Asia, GAC, awards in are to over also I'm the in of Kia. secured and the Great XX% very excited that we with Hyundai, including Wall, OEMs share the

While in fast-growing thermal near Asia especially Asia, automotive for is are term, solution. in significant market China there a the headwinds management the automotive in in industry

to the She'll our Xu has board Gentherm's in operations growth a Infineon, beginning joined responsible Thomas announce and Infineon and been lead Technologies, semiconductor has from Hong head division to a us electronics -- International automotive comfort For reason, be for that Businesses have we truly I'm Combined September in pleased overall that held global team. or now this have to Components, lead she Kong business. our Helen where Lear. to China Germany, China and for launching for coming and comes leadership we executive global strong Mainland, the of to BTM business at portfolio, Prior developing operation Gentherm Automotive execution climate she Gentherm's IAC, Helen growth strategy company, and Stocker from on and growing and of also with products will She profitability. solutions China. new Taiwan region. positions oversee in driving and the electronics and

Slide of quarter third turn for product from to fourth let's X orders of to Medical, discussion expectations In timing equipment segment. the the due our were revenues the quarter Now to below quarter. in Gentherm our a shifts industrial

strong double-digit However, Medical in for continue full year. growth we to expect the

large quarter, patient systems, State we Medical liquid-based, Medical from and Northwestern Center, a including U.S. During few. University New Boston the the Center awards secured thermal name of University to hospital Medical our management Center, York solution, for several Blanketrol,

of disinfection with new initial TREO UV our positive has UV in quarter. on addition, customer orders our feedback technology, we In system been initial as overwhelmingly cardiovascular shift heat/cool the integrated

technology next-generation make We we product. progress continue on new development as integrate to to product disinfection

ClimateSense understanding to to further our like of continue automotive human solution Medical develop our leverage through innovations the for our business market. We deep thermophysiology

we exits share in markets focused positioning have compete. that strategy, to pleased divestitures successfully that, we growth our under completed I'm October with Lastly, we the all divested on core With the you where now us GPT to and want X.

summarize. present environment global and industry continue The me automotive to the challenges. macroeconomic Let

revenue. profitability. However, this the income $XX.X point, year-to-date a X.X% in improved this I'm million, XX%, To nearly operating to deliver increased very highlight team's pleased despite decline with our ability

we our We deliver of take talented challenges as global steps commitment continue I the longer-term work towards mitigate work proud focused currently growth. to remain the team we to our for and of hard plan. on objectives face to Gentherm proactive the help

With the little call Matteo for over more that, I'll turn a on to results. financial the color

Matteo Anversa

call now on Slide third the quarter. X, Thanks, everyone to will our the start I impacted significantly focus joining and Phil, most that items and today. thank on you

of automotive declined X.X%. business. compared of the by revenues CSZ outpacing disposition same approximately production. revenues the the X.X% primarily impact due declined the Automotive Industrial chamber The to of quarter, foreign For declined After declined adjusting period to year. for product global the segment automotive last the X.X%, industrial revenues XX%, exchange,

GM the our segment automotive global was decline the which Excluding by our a sale The by X.X%. production impact in as of well vehicle the then as year-over-year X.X%. headwind revenue overall declined FX, result for strike, in and assets of held the impacted revenues automotive X.X%

outperformed year-over-year. quarter According we third production global latest light vehicle the the declined However, data, the slightly production X.X% in global quarter. to third in IHS

Our business discussed by quarters. the market award the a line, BTM result strength of winning continued XX% the the we solution in that outpaced increased our to primarily in due revenue as BTM where PACE automotive prior product in

addition, saw and seat in slight increase In heaters automotive. a we other

offset continued launches more New than at seat revenue the in decline heaters Volkswagen.

with result we XX% vehicle level, launches strong a actually This well automotive exclude by effect with rate of strike, production CCS if X.X%, growth FX, Our X.X% new lower new was as cancellation. GM other partially as several due automotive primarily BMW. and customers. increased offset as cupholders to thermal the changeover revenue almost new declined take platform of

X%, Steering the to FCA. heaters production by due at declined vehicle lower wheel revenue primarily

slowdown due Additionally, customer, also Ford. from revenue down electronic orders RV X%, declined cables Bosch. newly Electronics the to control to industry, with primarily unit launched Automotive continuous partially the in in was the due offset decrease the by cable continued XX% largest our multifunction

quarter. last of If X. XX% last CSZ has mostly we third due chamber If year. of in the primarily sold shifted X% disposed in the revenue declined business, absence compared lower acquisition, declined equipment decline to the due Industrial Medical from to we're the of the our the in the well a of as industrial. to by of move as third by which GPT, At from October of third for shipment digit to to revenue result which been February, revenue XX%. timing that Medical compared the Medical the revenues sales revenue exclude of fourth to was quarter still quarter. point, grow as And Industrial was decline XXXX business is expecting we impact to The quarter the the a order double full declined from Stihler as of year. year this strong fourth this

Fit-for-Growth gross the factories, If was third basis points the price volume. to well we reductions, XXX the benefit as These labor were positive well the Gross increase impact in primarily year the leverage of annual fixed from of margin. move improved cost as actions reductions, This XX.X%, of improvements to margin onetime cost year-over-year ago by our by a supplier compared quarter. partially increase wage was gross unit productivity negative quality. the the as lower inflation cost as for quarter offset driven an at margin from

result, manufacturing XX% the the Now as of rightsizing productivity approximately volume proactively may actions, production the the year. our volume in the labor mentioned automotive apparent. levels. taken beginning decreased lower became improvement our year, quarter earlier the when These was in Phil And a by as by factories headcount since the earlier, to recall, in slowdown you achieved the as were

Additionally, particularly out last compared our in efficiencies us premium allowed minimize factories year, to to of Mexico. better freight

continue cost in quality, we gross which impacted the reduction margin quarter. manufacturing scrap Regarding a to of rate, our see positively this and

issue. a we reduction Additionally, due had of previous of quality approximately $X expense to million by warranty resolution our onetime

only in line last the with tariffs, third much in is was the the prior quarters. was approximately slightly what incurred negative impact On this $XXX,XXX, the was which China year. And than of quarter in higher quarter pretty amount

move expenses. the we in were If to Operating expenses $XX.X quarter million. operating

Industrial I included announced If factory related periods, initial mentioned million charges million, driven operating in million incentive $XX.X of September charges, the Now GPT. that expenses Fit-for-Growth in cost, last primarily cost from we the the to both well CSZ quarter the of as $X.X decline late earlier. sales restructuring this This amount adjust restructuring by the of plan mostly impact of down that well as the reduction of was year-over-year were business, initiatives, rightsizing third the as the for of year. the compensation $XX.X restructuring we in cost XX% chamber lower in actions lower

did in a mark-to-market million we we last to Additionally, the were offset year's had repeat year. high by for that in R&D reimbursement this had not level the period. that prior lower reimbursement compared quarter $X.X unusually option cash-settled charge These effects partially third year

Adjusting quarter, the the to evaluate for we the value assets held an XXXX, XX.X%. charge, in charge related to the effective million tax X first we impact this rate for impairment impairment And charges our tax rate was Also nondeductible sale, in effective the impairment GPT our adjusting for continuously the $XX the fair the quarter recorded of months XX.X%. of business. as $XXX,XXX for of was related GPT business, the

adjusted share the quarter to was quarter share of year. $X.XX $X.XX last compared our in in EPS the third a Finally,

point we Now fourth will I before for move out X Slide quarter. to item the X,

previously in approximate to foreign losses. faired And we mentioned, will divested earlier on as of loss As quarter, this we pretax we a translation release month. primarily sale recording previously be an GPT result, related is the the million $X which fourth currency

X Slide balance sheet. to on the Moving

$X.X million business. CSZ from coming of was restricted of the the Industrial position disposition cash $XX.X in chamber the million including Our quarter cash

cash last from million $XX.X by versus XX% year. the very generating quarter. operating the generated $XX.X decline. cash operating quarter of activities year-to-date, generated the period increased from revenue during in second. team We the in the our $XX for Our proud quarter same in cash we despite activities to the million $XX.X position ago of operating compared cash to million actually compared million sequentially more We're $XX third actually, And year in million in

a $XX for at had million And Additionally $XX $XX repurchase third. outlay approximately the share the million of the as at decreased to million of our net quarter second from by of our end result, in million debt end program. we $XX the quarter, cash the

provides as million. credit of with result As of of facility, secured a amended a the quarter, we And an in recall, with our the which million actually agreement we liquidity revolving This uncertain is announced interest at of may debt And new $XXX provide as credit during the September you the million. end third stands second agreement. total credit lower will the end line expenses. Gentherm $XXX our company the well macroeconomic amended of quarter, credit as new availability revolving our ample at approximately facility, $XXX as also approximately environment that

We for XX guidance. decline we to guidance results, our XXXX move our revenue. X% growth. to prior and we in are of General to If of environment our to as expect Slide on XXXX the excluding impact strike of to the This third approximately on Based core at macroeconomic revenue quarter our guidance continued Motors, XXXX challenging reducing exchange. X% as now the well foreign compares impact business X% compared for the

to percentage expected higher is to previous now margin revenue. XX.X%. We XX.X%, slightly expecting of expenses, XX% just a as are XX% be to our gross be rate approximately in the to revenue, reduction approximately of Operating than due range

as result despite reduction activities, adjusted at profitability margin guidance XX%. in decline the maintaining on we come the EBITDA continued cost However, revenue to of are a our progress approximately with expected

line third would line. the aggressively I steps results challenging deliver once continue summary, to top performance say we In on bottom manage cost quarter to our and solid quarter demonstrate, again, take despite structure that our a that the

that, begin to turn back the Q&A Sian? the I'll Sian with call And to session.

Operator

[Operator Instructions].

comes from Gary Prestopino from question The Research. first Barrington

Gary Prestopino

looks looking gross in at the back that was XX.X%. the at like margin margin Just running factored warranty gross and expense, about you

the plant the kind think what a high range? XX% or Phil, that -- going level company with that initiatives the is you that, in and the watermark can Fit-for-Growth you're -- consolidation, your forward, the company of do Given doing somewhere that maintain

Phillip Eyler

Yes, Gary, I do.

level levels quarter, we feel basis, but if certainly of this going very we to operated to look in obviously volume relative about I the kind on run it's quarterly good volume at the XX%-plus being you be that think, our rate. a somewhat

good continued downs customers. our have offset improvements a price of cost us from We pipeline will future help that

we're that about to longer And we've feeling term. of really so good XX% XX% been guiding this range towards

Gary Prestopino

then the consolidating the Firt-For-Growth the is that -- totaled you're already expense factories, And in that you're for what with doing getting plants, the that you numbers already that that's Okay. from in two that's -- targeting? -- initiatives you're capture there

Phillip Eyler

won't completion of And targeting, the part from benefit we're to until of until our won't those of done Fit-for-Growth projects is cost see the in end the XXXX. that yes. that start It kick We XXXX. be

the XXXX going those see full forward. of really will effect in you So

Gary Prestopino

Okay. quick two other And then ones.

On I I that correct? was that a you big the that were revenues I CCSC, mentioned so lot of to think of Where -- Matteo, just know is GM make almost there, right. a want I got that due was to Is client the XX% a GM. lot due sure down but

Phillip Eyler

continued So there Gary. cancellations, just certainly hit The market that our a year, vehicle year-over-year, too, some many the new to GM a QX. talked yes, if so things That me was combination model. was especially you But the across, significant the are cars in last about transition disappeared. pretty quarter of of of And quarter, grab if let at significant -- then from to in look compared decline model U.S. decline. one in last the to customers, have handful that impact And old CCS. GM you sedans the look the We too. other part stock truck

Japan that the feel We But VW, some are, Subaru Honda, A in net we a sales of We Nissan, new of the few seen all in come did and quarter. new have you in increases in the give quarter. nice customers significant offset kind Mazda saw vehicles at If year-over-year those quarter, have nice for some customers online the impact. offsets you quarter. in though. especially -- like and had they examples look decline the

to forward. We confident be continue in still very CCS going

our we rate note, in of very, a hit with CCS. targets, year-to-date, or CCS high very, on actually quarter as -- Just the won we've acquisition very still XX%

Gary Prestopino

core revenue decline right? revenue, right? the revenues, -- just just new Core lastly, and pegged of your actually that the year, the given that's off growth Okay. that you Medical, And automotive then Gentherm this have decline core

Matteo Anversa

is That correct.

Operator

Horn FBR. next question B. Chris Riley comes from Your from Van

Christopher Van Horn

Congrats on a the environment. execution challenging despite

effect the really top ex the strike So GM strike? to on just had the quick might that have what what on on be The GM able would adjustment? been guidance. adjustment And it quantify line, you

Phillip Eyler

Yes.

necessarily a decline there. strike Let The me versus bit last terms was GM. period of market XX%-or-so that this the in of that impact over period. little is the to not correlates break down of half in continued terms guidance overall deterioration,

some look X.X%, seen as back overall GM about you and we've specific that other If of a market, change. that the July customers. across impact automotive of and outside call very areas, some between XX% mostly it, example, Take at in the, specific in let's product October, but look play the X.X% in definitely standard equation, an deterioration market just our a also half the -- we're the seeing That's the related, we about second at of headwinds, about market. out of We're seeing let's line.

running into So ICE related diesels. to be a cables that and We'll on headwind. keep revenue sensors continue oxygen from especially most Bosch, of declining vehicles to

Boost and also -- to do declines see from -- that which we Volt them, a year. that's orders anything. in production expect think this forecast come Daimler related item BTM to than really correction in our an we discrete QX, We recovery integral. non-automotive next continued in system X RV this EQ is the on and believe, related in to endeavor expect we decline have from of solution is for And we more to to the electronic, is We XX customers which tied their our is see

Christopher Van Horn

my Got view. award just to be Okay. activity The in the it. activity level continues -- impressive,

cool, row, around on And OEMs here. the the first on there well? side? you think dynamics it's active you thinking what second starting of little wins as a activity the more number Active So -- to you've Are bit a see mentioned and are of maybe your seen and I that some

Phillip Eyler

we quarter, more the X Last award. interest. Series Definitely, announced we are seeing BMW

around Rover. active EVs. we on announced Land becomes of with interest discussions of relevant going more on other be it, around more adding even that lot as some systems, form seems and the forward part solutions I launch many OEMs vehicles. there with to incremental And more electrified to the a And happening think, cool quarter This the

of to So going increase, new let's that XXXX as in. say, gradually part following see we're pretty awards the optimistic CCS that we're rolling year these start

Christopher Van Horn

to Got then forgot on are programs? Land and those And it. Rover the just ask, BMW, global

Phillip Eyler

is, BMW yes. I yes. is, Rover Land believe

Christopher Van Horn

BEV remind And any cell on Okay. of and then us connecting technology, can the And the just opportunities there? you maybe that what that that around product detail does? give are

Phillip Eyler

the is imagine, cell be product can to literally network system this exceedingly high high copper system the -- EV, in MINI on that the every So connects and complex standards. happens has, this a complex device you that performance the wire-based battery-packed as reliability high and BMW

happy gives of are one. this credibility, market. We with the a about ton but in us This the not only BMW

technologies connecting we On are garnering interest cell innovative some of lot a by very of have that, the that heels OEMs.

a will part electrification technology we of our space. really sell-connecting So that think the be in big growth

Christopher Van Horn

of expanding, difference terms you specifically growing in business to you regions? relative on see Okay. is China, Got front. want one to margin percent there hire, of I And update then any how some aggressive see the And an And on you're of it. it your and get a starting in new that like that bit the the other for get Asian seems with me, last just little more to revenue? how

Phillip Eyler

China. objectives of is major accelerate the mean, I for That's -- us one Yes. growth the obviously, to in

think in very we're market across platforms. our all I underserved product that still of

let's is of product. too business most there our If right And business, it, X% it's about -- it's traditional more you for look year, at our just now our, low. is which the call

we're a really going Helen electronic. to get high-tech with in has quite especially electronic. product Obviously, So aggressive in background lines,

revenue as and as dramatically might China? will drive a really opportunities well we're specific solutions our there management that look the that we're partner key pushing Are coming share for over at opportunity to more climate also lines we be are What that well opportunities in strategic. thermal grow in years. total as China? look unique to product looking But of battery comfort And solution. to as as we'll -- So

of in do terms the now margin question, In we otherwise as worldwide. about operate China, your margin right at same we

Operator

comes from from Steve Your next question Dyer Craig-Hallum.

Steven Dyer

A lot answered. little quarters just softer quarters of you auto there? versus before in you've the a I been little They've what X new X look a in it guess, been to you're the as remarks bit. and awards, delays touched mine and the last have you you X, willing at that, that your there bit referenced Can sort reductions. the little are you color of a degree some give more prepared seeing on

Phillip Eyler

they have and Yes, -- and in seen definitely this want some is Sure. tracking. Sure. somewhere a year. we're to on on We be we've that majority our results between I would it nice The decisions pipeline expect suppliers. in XXXX. reductions appears kind of how decision-making to do delays the now year vehicles make their XXXX be of architect delayed to by the of OEMs

activity certainly but a there year banner it's to was I So in manner, a close year. a lot of year, and still was last going out think last solid

Steven Dyer

Got it.

that see sort Okay. that a last business, the then. And since then over really, business just little Is been flat bit of came a year, to rate sort of it's future? really of business win you then and the do or how in driving new Anything that? the in had jumping on? particularly ECU on run program, strongly a at the function quarter and sort a I to it's down you know that of programs that

Phillip Eyler

is what we're and Etratech the I And that's decline, acquisition XXXX. that business took to that most business related where the the call in of non-automotive lump I place RV most Sure. into that. late Yes, ECU of back seeing is

that's a is are we and revenue the down had big RV over years, couple So impact. new products. said, That launching of significantly last

have the full We Ford ECU. platform, Changan the platform product. announced a We for our first the now for Multifunction production had quarter of

vehicles. module integrated that reminder, a as memory Ford heat an controls for device Just that and is CCS

And nonautomotive run that. grow we're obviously, side tough it's about electronics. business. But excited the pretty of been opportunities pursuing a certainly, to So for other aggressively that

Steven Dyer

Got it.

me. longer-term at then out had do auto could And the sort I Can little in sort a for guidance obviously, the you day-to-day me, how of one -- know lot two? Okay. last year us the bit a recently there one changing about just point, or targets but have said you're or is of remind year haven't more next anything you you you this remind thinking and industry,

Phillip Eyler

Yes.

situation market, to one the the call thing the -- next general stop our estimates direction future year quarterly beyond XXXX. we on some and last we on plan We updates that we are that giving let's obviously made dynamic our on in early announced beyond giving with performance, was a quarter caveat given XXXX decision

come that. we'll Obviously, dramatically of in have line pressured June market downward. since So been XXXX conditions back with

to ahead we'll that we're say area an that's So have of our schedule will closely look activities. on margin at. expansion I

the good profitability that So that when have direction very we look strong are feel along, we you in all there. at given shape still we

Operator

Instructions]. [Operator

comes CL Stember Scott King. Your from from next question

Scott Stember

next I of pipeline talk this or guess, to level that bidding year and delays, delayed just there you year quotation come better just couple maybe giving, in that have appreciate for through you're answered of of questions I people lot that a it items. could the of about year the well, that was a are was new some Most a as but like could assure activity awards, there's my been sounds year? stuff but obviously, last

Phillip Eyler

the nice Yes. of next think XX I we're that over pipeline opportunities very is a months. there No, tracking

to As I is I think, said, solid. be QX going

and that our a continues got -- related are to And and new seeing we vehicles there, to devices. On that's on products. we next continue RFQs I And come grow. core to lines, year. well heating more innovation we've in and that some our think RFQs whether Those growth I top more to opportunities pretty into more and connecting obviously, nice innovations nice product, believe, we for that, other focused see through ETM-type grow And of we're these track got we've pipeline a CCS X within positioned we continue customers strategy. battery a see for still, or good then flow cell will exciting the product CCS flow.

Scott Stember

touch going Can XXXX Got particularly that that. out? to potentially for I year, you targets have some year the new, early for you just now given it. you one well. have on maybe BTM, maybe will of that this think this this run I on this last me you touched be exit helping And I you for and guess, those, as guess, fourth leg to stool rates

Phillip Eyler

of in on Yes. products those are years. I going launch we're to most mean new that obviously outer adding

new product in and the it, launch Our first, will XXXX, heating device. that's line call cell let's

QX, talked So most in seen we the to to in exit Unfortunately which back then of related Daimler QX. come and Daimler seeing related declines QX, the and are about we orders was rate and FCA of we've that order in adjustment to FCA. most an we is that from BTM, in expect from

the run $XX as rate the run on to you, opposed For $XX we XXXX. to that probably expect million up to close pick but in million, rate based we're declines, those

Operator

have end closing I Phil over of question-and-answer for session. reached to Eyler now We remarks. will hand Mr. And the the

Phillip Eyler

joining for our everyone, call today. Thanks, Okay.

to the As I've of that team's cost proud to of to ability we action automotive levels. current allow confident extremely our in operating on shareholder the light in in improvement. consistently the with in execution, and and take deliver us will shared our efforts macroeconomic be very swift the I'm remain value focused past, challenges future. significant global production environment I continue innovation

through and to well you progress. grow, interest keeping we're to We our and continues forward grow to our look of pipeline support your appreciate strategy. apprised innovation positioned growth and Our focused

Operator

Thank today's concludes lines disconnect your this for participation. you your you now time. and This may at conference,

Gentherm (THRM) 29 Oct 192019 Q3 Earnings call transcript