Gentherm Inc (NASDAQ:THRM) Q4 2016 Earnings Conference Call - Final Transcript

Feb 21, 2017 • 08:00 am ET

Previous

Gentherm Inc (NASDAQ:THRM) Q4 2016 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Presentation
Operator
operator

Greetings, and welcome to the Gentherm 2016 Fourth Quarter and Full Year Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce our host, Josh Clarkson, IR for Gentherm. Thank you. Mr. Clarkson, you may begin.

Executive
Josh Clarkson

Thank you, operator, and good morning, everyone, and thank you for joining us today. Gentherm's earnings results were released earlier this morning, and a copy of the release is available at gentherm.com. Additionally, a webcast replay of today's call will be available later today on the Investor page of the Investor Relations section of Gentherm's website.

(Forward-Looking Cautionary Statements)

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

On the call, we have Dan Coker, President and CEO; and Barry Steele, CFO. Management will provide a review of the results, after which there will be a Q&A period.

I would now like to turn the call over to Dan. Dan?

Executive
Dan Coker

Yes, good morning, and thank you very much. And good morning to everyone, and thank you for joining us for our year-end and fourth quarter 2016 review. We're going to stick with our format, and I'm going to give a very brief introduction. Barry will give you all of the details of the activities of our fourth quarter and our summary for 2016, and we will open the floor and address questions.

In general, though, the company performed very well during 2016. We achieved about a $918 million revenue run rate, which was a very strong year. We generated about 32% gross profit, which, for us, is right on target for us, and our year-end earnings per share was about $2.10 (Technical Difficulty) of being a growth company. 2016 was a hard year in some of our areas, particularly our global power thermoelectric unit. That had a very, very difficult year, and it was driven by a very hard year in the oil and gas industry. But in general, the company is very pleased with the performance, and we're excited about what's happening in 2017, '18 and '19 and beyond.

So with all of that said, we're going to turn the phone over to Mr. Barry Steele, our CFO, for his normal copious, detailed analysis. Barry?

Executive
Barry Steele

Thank you, Dan. Thanks, everybody, for joining us today. Our net earnings of $26 million, which made this the strongest quarter of 2016, included a couple unusual effects in addition to the purchase accounting impacts related to our strategic acquisition. This included unrealized foreign currency gain of $6.3 million and a onetime expense related to a management reorganization of $2 million.

The currency benefit was mainly the result of the stronger U.S. dollar in the quarter. We hold a significant amount of our cash in U.S. dollars at our foreign subsidiaries. We also have a significant intercompany current account between our U.S. subsidiaries