Gentherm Inc (NASDAQ:THRM) Q1 2018 Earnings Conference Call - Final Transcript
Apr 26, 2018 • 08:00 am ET
Greetings, and welcome to Gentherm Inc. First Quarter 2018 Earnings Conference Call. [Operator Instructions]
I would now like to turn the conference over to your host, Yijing Brentano, Senior Vice President, Investor Relations and Corporate Communications.
Thank you, Brock, and good morning, everyone. 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 Relations section of Gentherm's website.
During this call, we may make forward-looking statements within the meaning of federal security laws. Statements reflect our current views with respect to future events and financial performance, and actual results may differ materially. Please see Gentherm's SEC filings, including the latest 10-K and subsequent reports for discussion of various risk factors and uncertainties underlying such forward-looking statements.
During the call, we 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 our earnings release.
On the call with me, today are Phil Eyler, President and Chief Executive Officer; and Barry Steele, Chief Financial Officer. Please note that during their review of the results, Phil and Barry will be referring to a presentation deck that we have made available on our website at www.gentherm.com/events. After their prepared remarks, we will be pleased to take your questions.
Now, I'd like to turn over the call to Phil.
Thank you, Yijing. Good morning, everyone, and thank you all for joining us today.
I've now been with Gentherm for five months. I continue to believe in the untapped potential in this organization. I personally met with all of our top customers in the last few months and found a lot of existing support for Gentherm as a thermal technology partner. Every one of these customers are extremely excited about our efforts around customer focus and continued innovation. I'm now an even stronger believer in the growth opportunities ahead in delivering technology solutions in today's vehicles and even more importantly, the rapidly evolving car of the future.
Now, let's move on to the quarter. Our first quarter results reflect challenging market conditions, especially in the North America automotive market. Nonetheless, I'm pleased to see that many areas of growth, and we are gaining momentum on market launches. This morning, we reported product revenues of $261.9 million in the first quarter, an increase of 5.1% from the same period in 2017. In our automotive segment, we had a growth of 8.2%. This included the acquisition of Etratech and favorable currency translation, both of which were expected. However, on an organic basis, the automotive segment declined by 2.2%.
The continued decline in North America vehicle production and the greater than market decline for two of our most important customers meant a slower than expected recovery in our CCS business. However, we're already seeing the CCS trend reverse in the second quarter, as we have