Forward-Looking Statements



This Quarterly Report on Form 10-Q (this "Report") contains forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
represent our goals, beliefs, plans and expectations about our prospects for the
future and other future events, such as the impact of the COVID-19 pandemic on
our financial statements, liquidity, and business as well as the global economy,
global supply chain and automotive and medical industries, the impact of
sustained price increases for various material components and shipping costs,
the impact of the conflict in Ukraine on our operations, the expected synergies
and growth prospects following the closing of recent acquisitions, the
significant supply disruptions and shifts in the labor market currently faced by
the automotive and medical industries, our ability and our customers' ability to
maintain production levels, the amount of borrowing availability under the
Second Amended and Restated Credit Agreement and the sufficiency of our cash
balances and cash generated from operating, investing and financing activities
for our future liquidity and capital resource needs and our ability to finance
sufficient working capital. Reference is made in particular to forward-looking
statements included in this "Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations". Such statements may be
identified by the use of forward-looking terminology such as "may", "will",
"expect", "believe", "estimate", "anticipate", "intend", "continue", or similar
terms, variations of such terms or the negative of such terms. The
forward-looking statements included in this Report are made as of the date
hereof or as of the date specified herein and are based on management's current
expectations and beliefs. Such statements are subject to a number of
assumptions, risks, uncertainties and other factors, which are set forth in
"Item 1A. Risk Factors" and elsewhere in our Annual Report on Form 10-K for the
year ended December 31, 2021, as amended by Part II "Item 1A. Risk Factors" in
our Quarterly Report on Form 10-Q for the three months ended March 31, 2022 and
subsequent reports filed with the Securities and Exchange Commission, and which
could cause actual results to differ materially from that described in the
forward-looking statements. In addition, except for the recently consummated
acquisitions, such forward-looking statements do not include the potential
impact of any other business combinations, acquisitions, divestitures, strategic
investments and other significant transactions that may be completed after the
date hereof, each of which may present material risks to the Company's business
and financial results. Except as required by law, we expressly disclaim any
obligation or undertaking to update any forward-looking statements to reflect
any change in our expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.

The following discussion and analysis should be read in conjunction with, and is
qualified in its entirety by, our consolidated condensed financial statements
and related notes thereto included elsewhere in this Report and our consolidated
financial statements and related notes included in our Annual Report on Form
10-K for the year ended December 31, 2021.

Overview

Gentherm Incorporated is the global market leader of innovative thermal
management and pneumatic comfort technologies for the automotive industry.
Automotive products include variable temperature Climate Control Seats, heated
automotive interior systems (including heated seats, steering wheels, armrests
and other components), battery performance solutions, cable systems, lumbar and
massage comfort solutions, valve system technologies, and other electronic
devices. Medical products include patient temperature management systems. The
Company is also developing a number of new technologies and products that will
help enable improvements to existing products and to create new product
applications for existing and new markets. Our automotive products can be found
on vehicles manufactured by nearly all the major OEMs operating in North America
and Europe, and several major OEMs in Asia. We operate in locations aligned with
our major customers' product strategies to provide locally enhanced design,
integration and production capabilities. The Company is also developing a number
of new technologies and products that are expected to enable improvements to
existing products and to create new product applications for existing and new
markets.

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Our sales are driven by the number of vehicles produced by the OEMs, which is
ultimately dependent on consumer demand for automotive vehicles, our product
content per vehicle, and other factors that may limit or otherwise impact
production by us, our supply chain and our customers. Historically, new vehicle
demand and product content (i.e. vehicle features) have been driven by
macro-economic and other factors, such as interest rates, automotive
manufacturer and dealer sales incentives, fuel prices, consumer confidence,
employment levels, income growth trends and government and tax incentives.
Vehicle content has also been driven by trends in consumer preferences, such as
preferences for smart devices and features, personalized user experience, and
comfort, health and wellness. Economic volatility or weakness, as well as
geopolitical factors, in North America, Europe or Asia, have had and could
result in a significant reduction in automotive sales and production by our
customers, which have and would have an adverse effect on our business, results
of operations and financial condition. In 2020 and 2021, and continuing into
2022, the automotive industry has experienced fluctuating demand and production
disruptions related to supply chain challenges, facility closures, labor
shortages, work stoppages and inflationary pressures, as described below. We
believe our diversified OEM customer base and geographic revenue base, along
with our flexible cost structure, have well positioned us to withstand the
impact of industry downturns and benefit from industry upturns in the ordinary
course. However, shifts in the mix of global automotive production to higher
cost regions or to vehicles with less of our product content as well as
continuing production challenges and inflationary pressures could adversely
impact our profitability. In addition, we may be adversely impacted by
volatility, weakness or accelerated growth in markets for hybrid or electric
vehicles specifically. We believe our products offer certain advantages for
hybrid and electric vehicles, including improved energy efficiency, and position
us well to withstand changes in the volume mix between vehicles driven by
internal combustion engines and hybrid and other electric vehicles. We also
believe that products we are developing, such as ClimateSense® and our
acquisition of Alfmeier's pneumatic comfort solutions, position us well to
address trends in consumer preferences such as personalized user experience,
comfort, health and wellness.

Recent Trends

General Economic Conditions

The COVID-19 pandemic that began around December 2019 introduced significant
volatility to the global economy, disrupted supply chains and had a widespread
adverse effect on the global automotive industry in the first half of 2020, with
various direct and indirect adverse impacts continuing throughout 2021 and into
2022.

Beginning in February 2020 and continuing into June 2020, substantially all of
the Company's major OEM and Tier 1 customers temporarily ceased or significantly
reduced production as a result of restrictions that were requested or mandated
by governmental authorities. As a result, substantially all of our manufacturing
facilities either temporarily suspended production or experienced significant
reductions in volumes during this period. By the end of the second quarter of
2020, the Company had reopened all of its manufacturing facilities, in line with
industry demand, and in accordance with local government requirements. Although
global automotive industry production has improved relative to the first half of
2020, production remains below recent historic levels.

The lingering impacts of COVID-19 throughout 2021 and into 2022 have impeded
global supply chains, resulted in longer lead times and delays in procuring
component parts and raw materials, and resulted in inflationary cost increases
in certain raw materials, labor and transportation. These broad-based
inflationary impacts have negatively impacted the Company's financial condition,
results of operations and cash flows throughout 2021 and into 2022. We expect
these inflationary impacts to continue for the foreseeable future.

Supply shortages of semiconductor chips and other components have resulted in
decreases in global automotive vehicle production and significant volatility in
customer vehicle production schedules. The Company's semiconductor suppliers,
along with most automotive component supply companies that use semiconductors,
including Gentherm, have been unable to fully meet the vehicle production
demands of the OEMs due to events which are outside the Company's control,
including but not limited to, the COVID-19 pandemic, the global semiconductor
shortage, fires at suppliers' facilities, significant weather events impacting
semiconductor supplier facilities in the southern United States, and other
extraordinary events. The Company was able to mitigate the impacts of supply
chain disruptions in order to satisfy customer orders during the first three
quarters of 2021; however, during the fourth quarter of 2021 and continuing into
2022 we have experienced and may continue to experience direct adverse impacts
of ongoing shortages of semiconductors. Our ability to meet customer orders
without significant delay and/or expense for the remainder of 2022 and beyond
remains subject to significant uncertainty.

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In response to the global supply chain instability and inflationary cost
increases the Company has taken several actions to minimize any potential and
actual adverse impacts by working closely with its suppliers and customers to
closely monitor the availability of semiconductor microchips and other component
parts and raw materials, customer vehicle production schedules and any other
supply chain inefficiencies that may arise. We expect global supply chain
instability will continue to have an adverse impact on our business and
financial performance for the foreseeable future, and such adverse impact may be
material. The consequences of the pandemic, global supply chain instability and
inflationary cost increases and their adverse impact to the global economy
continue to evolve. Accordingly, the significance of the future adverse impact
on our business and financial statements remains subject to significant
uncertainty as of the date of this filing.

In addition to the direct and indirect impacts of COVID-19, the United States
and global markets are experiencing volatility and disruption following the
escalation of geopolitical tensions and the military conflict between Russia and
Ukraine. In February 2022, Russia launched a full-scale military invasion of
Ukraine. As a result of the conflict, the United States, United Kingdom,
European Union and other countries have levied economic sanctions and bans on
Russia and Russia has responded with its own retaliatory measures. These
measures have impacted the price of certain raw materials and energy and could
have a lasting impact on regional and global economies.

Our facility in Vynohradiv is on the far western corner of Ukraine near the
Hungary border. In 2021, products manufactured at our Ukraine facility
represented approximately 11% of the Company's total revenue, including
automotive cables, seat heaters and steering wheel heaters. At this time, our
Ukraine facility is operating and we are in process of executing contingency
plans and, in coordination with certain customers, specific equipment and
production relocations leveraging our flexible global manufacturing footprint.
Our response to the escalating situation is based on a severity level
contingency response plan that has been developed with certain customers. As the
situation in Ukraine is very fluid, we continue to monitor its effects on our
business and we continue to work closely with our customers to adjust our
contingency response as necessary.

Acquisitions



On July 29, 2022, the Company transferred consideration to acquire 100% of the
equity interests of Alfmeier Präzision SE ("Alfmeier") a global leader in
automotive lumbar and massage comfort solutions and a leading provider of
advanced valve systems technology, integrated electronics and software. The
acquisition further expands the Company's current value proposition beyond
thermal in comfort, health, wellness, and energy efficiency and aligns well with
global consumer demand for expanded offerings in vehicle passenger comfort. The
total consideration for this acquisition was $164.9 million. On the closing
date, the Company made cash payments of approximately $188.9 million, net of
cash acquired. We expect to receive cash from the seller of $24.1 million
("Purchase Consideration Receivable") in connection with the finalization and
settlement of post-closing adjustments in accordance with the purchase
agreement. Substantially all of the adjustments known as of this filing relate
to lower cash on hand as of the closing date than estimated and a pre-closing
reorganization transaction. We expect additional adjustments for actual working
capital, cash and cash-like items and debt and debt-like items as of the closing
date. All post-closing adjustments are expected to be finalized within 120 days
of the closing date, provided there are no disputes. Potential disputes shall be
resolved in accordance with the purchase agreement. The Purchase Consideration
Receivable is recorded in Other current assets in the consolidated condensed
balance sheets as of September 30, 2022.

On July 13, 2022, the Company completed the acquisition of Jiangmen Dacheng
Medical Equipment Co. Ltd ("Dacheng") and its wholly owned subsidiary, IOB
Medical, Inc. ("IOB"). Dacheng, a privately held manufacturer of medical
materials and medical equipment, including patient temperature management
solutions, for numerous local and international customers. The acquisition
provides Gentherm Medical a local presence in China's high-growth market for
patient warming devices and other medical device products, while also expanding
overall manufacturing capacity to include a low-cost manufacturing site. The
total consideration for this acquisition was $35.0 million, which is comprised
of cash payments, net of cash acquired. The purchase agreement also includes
future cash payments of up to $3.0 million, contingent upon the achievement of
certain performance metrics and continued employment of the former majority
shareholder through a series of defined dates. These contingent payments will be
accounted for as compensation expense and will be recorded as a component of
selling, general and administrative.

See Note 3, "Acquisitions" of the consolidated condensed financial statements included in this Report for additional information.


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Light Vehicle Production Volumes



Our sales are driven by the number of vehicles produced by the automotive
manufacturers, which is ultimately dependent on consumer demand for automotive
vehicles, and our content per vehicle, and other factors that may limit or
otherwise impact production by us, our supply chain and our customers. According
to the forecasting firm S&P Global Mobility (October 2022 release), actual light
vehicle production in the three and nine months ended September 30, 2022 in the
Company's key markets of North America, Europe, China, Japan and Korea, as
compared to the three and nine months ended September 30, 2021, are shown below
(in millions of units):
                                         Three Months Ended September 30,                 Nine Months Ended September 30,
                                      2022             2021           % Change         2022             2021           % Change
North America                             3.7              3.0             24.2 %         10.8              9.8             10.6 %
Europe                                    3.6              3.0             20.3 %         11.5             11.9             (3.3 )%
Greater China                             7.2              5.5             31.2 %         19.0             17.2             10.9 %
Japan / South Korea                       2.8              2.3             22.0 %          8.0              8.1             (0.8 )%
Total light vehicle production
volume in key markets                    17.3             13.7             25.8 %         49.3             46.9              5.1 %


The S&P Global Mobility (October 2022 release) forecasted light vehicle
production volume in the Company's key markets for full year 2022 to increase to
67.6 million units, a 4.5% increase from full year 2021 light vehicle production
volumes. Forecasted light vehicle production volumes are a component of the data
we use in forecasting future business. However, these forecasts generally are
updated monthly, and future forecasts may be significantly different from period
to period due to changes in macroeconomic conditions or matters specific to the
automotive industry, such as the fluctuations that occurred in 2020 and remain
ongoing due to the direct and indirect impacts of the COVID-19 pandemic.
Further, due to differences in regional product mix at our manufacturing
facilities, as well as material production schedules from our customers for our
products on specific vehicle programs, our future forecasted results do not
directly correlate with the global and/or regional light vehicle production
forecasts of S&P Global Mobility or other third-party sources.

New Business Awards



We believe that innovation is an important element to gaining market acceptance
of our products and strengthening our market position. During the third quarter
of 2022, we secured new automotive business awards totaling $430 million in the
quarter. Automotive new business awards represent the aggregate projected
lifetime revenue of new awards provided by our customers to Gentherm in the
applicable period, with the value based on the price and volume projections
received from each customer as of the award date. Although automotive new
business awards are not firm customer orders, we believe that new business
awards are an indicator of future revenue. New business awards are not
projections of revenue or future business as of September 30, 2022, the date of
this Report or any other date. Customer projections regularly change over time
and we do not update our calculation of any new business award after the date
initially communicated. Automotive new business awards in the third quarter 2022
also do not reflect, in particular, the impact of the COVID-19 pandemic and
related macroeconomic challenges on future business. Revenues resulting from
automotive new business awards also are subject to additional risks and
uncertainties that are included in this Report or incorporated by reference in
"Forward-Looking Statements" above.

Stock Repurchase Program



On December 11, 2020, the Board of Directors authorized a new stock repurchase
program (the "2020 Stock Repurchase Program") to commence upon expiration of the
prior stock repurchase program on December 15, 2020. Under the 2020 Stock
Repurchase Program, the Company is authorized to repurchase up to $150.0 million
of its issued and outstanding Common Stock over a three-year period, expiring
December 15, 2023. Repurchases under the 2020 Stock Repurchase Program may be
made, from time to time, in amounts and at prices the Company deems appropriate,
subject to market conditions, applicable legal requirements, debt covenants and
other considerations. During the nine months ended September 30, 2022, we did
not make any repurchases under the 2020 Stock Repurchase Program and have a
remaining repurchase authorization of $130.0 million as of September 30, 2022.

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Reportable Segments

The Company has two reportable segments for financial reporting purposes: Automotive and Medical.



See Note 15, "Segment Reporting", to the consolidated condensed financial
statements included in this Report for a description of our reportable segments
as well as their proportional contribution to the Company's reported product
revenues and operating income (loss). The financial information used by our
chief operating decision maker to assess operating performance and allocate
resources is based on these reportable segments.

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