NORTHVILLE — Gentherm Inc., the manufacturer of thermal management technology, reported net income of $20.2 million or 55 cents a share in the third quarter ended Sept. 30, down from $27.7 million or 76 cents a share a year earlier.
Revenue was $232.6 million, up from $223.8 million a year earlier.
The reason for the decline in profitability was higher expenses. Net research and development expense was $19.7 million in the quarter, up from $14.9 million a year earlier, while selling, general and administrative expenses were $29.5 million, up from $22.5 million a year earlier, mostly due to the acquisition of Cincinnati Sub-Zero.
“In the third quarter, we generated top line growth for the total company and the automotive business of 4 percent and 5 percent, respectively,” said Daniel R. Cokre, Gentherm president and CEO. “The automotive market growth was achieved despite vehicle production growth of less than 2 percent in North America where we generate more than 50 percent of our automotive revenue. We were also encouraged by the performance of other business lines that displayed particular strength, including double-digit growth in our seat heater and steering wheel heater businesses. Our automotive business continues to deliver strong margins and cash flow despite slower growth. We remain excited about our Cincinnati Sub-Zero acquisition which contributed strongly to our revenue in the third quarter and represents a large and attractive market opportunity to leverage our expertise in thermal management.”
The company posted $101 million in revneue for climate control seats, up from $99.1 million a year earlier. Seat heater sales were $75.4 million, up from $68.4 million. Steering wheel heater sales were $12.9 million, up from $10.9 million, Automotive cable sales were $21.8 million, up from $21.1 million a year earlier. There was a sharp decline in remote power generation component sales, to $5.1 million, from $21.1 million a year earlier.
The company said it expects full year 2016 revenue growth of 7 to 8 percent, and 2017 revenue growth between 5 to 10 percent.
To listen to a replay of a conference call discussing these results, visit the investor section of www.gentherm.com.
Gentherm (Nasdaq: THRM) produces heated and cooled seat systems and cup holders, heated and ventilated seat systems, thermal storage bins, heated automotive interior systems, battery thermal management systems, cable systems and other electronic devices for the auto industry. Non-automotive products include remote power generation systems, heated and cooled furniture, patient temperature management systems, industrial environmental test chambers and related product testing services and other consumer and industrial temperature control applications.
Gentherm has more than 11,500 employees in plants in the United States, Germany, Canada, China, Hungary, Japan, Korea, Macedonia, Malta, Mexico, Ukraine and Vietnam.