Gentherm Inc. Reports Loss and Plans Major Acquisition

News Summary

Gentherm Inc. reported a first-quarter loss of $128,000, yet exceeded Wall Street’s expectations for earnings and revenue. The company is planning a substantial acquisition of Alfmeier Präzision SE’s automotive division for $189.6 million, aimed at enhancing passenger comfort solutions. This acquisition is expected to generate $10 million in annual cost savings and is viewed as a strategic move for future growth, pending regulatory approvals by Q3 2022.

Gentherm Inc. Reports First Quarter Loss and Plans on Big Acquisition

In the charming city of Northville, Michigan, Gentherm Inc. has recently unveiled its first-quarter results, and while the news comes with a small loss, there’s also some exciting news lurking just around the corner for the automotive giant. The company’s recent report shows a loss of $128,000, which, for those keeping track, translates to less than 1 cent per share. However, looking at the adjusted numbers, Gentherm posted earnings of 51 cents per share, which is actually above Wall Street’s estimates of 48 cents.

As for revenue, Gentherm raked in $353.9 million this first quarter, comfortably surpassing analysts’ expectations of $350.6 million. Now, that’s a number worth celebrating! The company is optimistic about its financial outlook for the year, projecting full-year revenue to reach between $1.4 billion and $1.5 billion.

Acquisition Alert!

Alfmeier Präzision SE. This deal is valued at a hefty $189.6 million, or €177.5 million in cash. Alfmeier is lauded for its specialized focus on automotive lumbar and massage comfort solutions, boasting a deep expertise in advanced valve systems, electronics, and software.

200 patents. Last year, their automotive sector generated $244.4 million (€232 million) in revenue, which puts them in a prime position as Gentherm moves forward with this acquisition.

Enhancing Comfort and Wellness Solutions

2,200 employees tucked under Alfmeier’s umbrella, their operations spread across regions like Germany, the Czech Republic, the U.S., Mexico, and even China. This extensive reach will surely benefit Gentherm as they integrate Alfmeier’s capabilities into their own offerings.

Cost Savings and Funding the Acquisition

$10 million in annual run-rate cost savings. The funding for this ambitious acquisition will come from Gentherm’s existing cash reserves alongside a revolving credit facility, which indicates they are well-equipped to handle this strategic move.

What’s Next?

third quarter of 2022. As we wait for the green light, all eyes will be on how this acquisition unfolds and the future enhancements that it brings to passenger comfort in vehicles.

Deeper Dive: News & Info About This Topic

HERE Resources

Gentherm Inc. Reports Mixed Fourth-Quarter Earnings

Additional Resources

• DBusiness: Gentherm to Acquire German Automotive Seating Business
• Greenwich Time: Gentherm Q1 Earnings Snapshot
• GlobeNewswire: Gentherm Announces Planned Retirement
• Cincinnati.com: Cincinnati Sub Zero Sold
• Crain’s Detroit: Gentherm Inc. Automotive Supplier
• Wikipedia: Gentherm
• Google Search: Gentherm automotive
• Google Scholar: Gentherm Inc.
• Encyclopedia Britannica: Automotive Seating Comfort
• Google News: Gentherm

Author: HERE Northville