Gentherm Inc (NASDAQ:THRM) Q1 2020 Earnings Conference Call - Final Transcript

May 07, 2020 • 08:00 am ET

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Gentherm Inc (NASDAQ:THRM) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings, and welcome to the Gentherm Inc. First Quarter 2020 Earnings Conference Call. [Operator Instructions] A question-and-answer session will follow the formal presentation. [Operator Instructions].

I would now like to turn the conference over to your host, Yijing Brentano with Investor Relations and Corporate Communications. Please go ahead.

Executive
Yijing Brentano

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 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. We undertake no obligation to update them, and actual results may differ materially. Please see Gentherm's SEC filings, including the latest 10-K and subsequent reports, for disclosures of our risk factors and other risks 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 or investor presentation.

On the call with me today are Phil Eyler, President and Chief Executive Officer; and Matteo Anversa, Chief Financial Officer. During their remarks, Phil and Matteo will be referring to a presentation deck that we have made available on our website at gentherm.com/events. After their prepared remarks, we will be pleased to take your questions.

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

Executive
Phillip Eyler

Thank you, Yijing. Good morning, everyone, and thank you for joining us today. As we're all well aware, the outbreak of the global pandemic has created a significant hardship and challenge worldwide. Our hearts go out to the communities and individuals deeply affected by the COVID-19 pandemic. We would like to express our gratitude for all of those on the front line, including healthcare workers, first responders, and other essential service providers. From the outset of the pandemic, our top priority has remained clear, the health, safety, and support of our global team members and the communities we serve.

Now, let me move to slide four. COVID-19 will have severe economic ramifications, the full extent of which are still to be determined. Since launching our focused growth strategy two years ago, we've built a strong foundation from a capital, liquidity, and balance sheet perspective. As no one can perfectly predict the severity or longevity of the virus's has impact on the global economy, we've moved quickly to take additional actions to further improve our financial flexibility and conserve cash.

Shown on slide four, these include, we drew down an additional $169 million under our revolving credit facility in March. We have re-prioritized capital expenditures and are reducing our planned capital spending. We're actively reducing operating expenses. We're deferring a portion of employee compensation beginning May 1, including a 30% to 40% deferral