Segment Reporting

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segment Reporting

Note 5 – Segment Reporting

As part of the initiative to integrate the operations of historical Gentherm and W.E.T. Automotive Systems AG, now known as Gentherm GmbH (“Gentherm GmbH”), changes were made during the first quarter of 2014 to Gentherm’s structure of internal organization.  Gentherm no longer treats the operations of historical Gentherm and Gentherm GmbH as separate segments. The integration initiative also changed the scope of research and development activities which changed our reporting of segment information.

As discussed in Note 3 – Gentherm Global Power Technologies, Gentherm acquired GPT on April 1, 2014.  The acquisition enhances key elements of the Company’s business strategy by expanding the breadth of products derived from core thermal technologies as well as the markets in which they are applied.   The chief operating decision maker analyzes the operational results of GPT separate from the automotive segment.  The Company evaluated the significance of the GPT acquisition and determined it did not meet the thresholds to be presented in a separate and distinct segment.  The operating results of GPT and the advanced research and product development division, formally known as the Advanced Technology segment, are presented together as a reporting segment for the Company due to the high concentration of thermoelectric technologies and power generating programs being researched by Gentherm and due to technical synergies that exist between GPT and the advanced research and product development division.  The changes to the internal organization structure are reflected in the financial information used by our chief operating decision maker to allocate Company resources and assess operating performance.

Corporate reconciling items include certain selling, general and administrative costs previously reflected in the Gentherm GmbH segment.  

Management evaluates the performance of the Company’s segments based primarily on operating income or loss.

The Company’s reportable segments are as follows:

— Automotive  – the aggregated operating results from Gentherm’s three geographic operating segments: North America, Europe and Asia.  

— Industrial – the combined operating results of GPT and Gentherm’s advanced research and development division.  Advanced research and development includes efforts focused on improving the efficiency of thermoelectric devices and advanced heating wire technology as well as other applications. The segment includes government sponsored research projects, including those sponsored by the U.S. Department of Energy, the German Ministry of Economics and Technology and the European Union.  

— Reconciling Items – include corporate selling, general and administrative costs and acquisition transaction costs. For the three and nine month periods ended September 30, 2014 and 2013, Gentherm allocated certain computer technology costs across all three reporting segments that had previously been reported in Reconciling Items.  The total amount of computer technology costs allocated to the Automotive and Industrial segments and previously reported in Reconciling items was $2,800 and $2,600 for the six month periods ended June 30, 2014 and 2013, respectively.    

Note 5 – Segment Reporting – Continued

The following table presents segment information about the reported product revenues, depreciation and amortization and operating income (loss) of the Company for the three and nine month periods ended September 30, 2014 and 2013. Information presented for 2013 has been restated to conform with our new segment reporting structure, including the allocation of computer technology costs across all segments.  With the exception of goodwill, asset information by segment is not reported since the Company does not manage assets at a segment level at this time. As of September 30, 2014, goodwill assigned to our Automotive and Industrial segments were $23,663 and $6,601, respectively. Goodwill as of December 31, 2013 pertained entirely to our Automotive segment. 

Three Months Ended September 30,	Automotive		Industrial			Reconciling Items			Consolidated Total
2014:
Product revenues	$	197,480	$	8,532		$	—		$	206,012
Depreciation and amortization		7,062		700			872			8,634
Operating income (loss)		29,534		(1,832	)		(3,702	)		24,000
2013:
Product revenues	$	171,182	$	—		$	—		$	171,182
Depreciation and amortization		6,477		118			1,142			7,737
Operating income (loss)		20,428		(150	)		(5,724	)		14,554

Nine Months Ended September 30,	Automotive		Industrial			Reconciling Items			Consolidated Total
2014:
Product revenues	$	589,426	$	16,706		$	—		$	606,132
Depreciation and amortization		20,790		1,650			2,125			24,565
Operating income (loss)		105,550		(5,689	)		(26,810	)		73,051
2013:
Product revenues	$	479,792	$	—		$	—		$	479,792
Depreciation and amortization		21,231		343			1,893			23,467
Operating income (loss)		64,114		(4,781	)		(26,569	)		32,764

Total product revenues information by geographic area is as follows:

	Three Months Ended September 30,
	2014				2013
United States	$	96,680	47	%	$	76,543	45	%
Germany		22,529	11	%		20,847	12	%
South Korea		21,339	10	%		13,546	8	%
China		17,557	9	%		18,285	11	%
Japan		11,970	6	%		10,281	6	%
Czech Republic		6,457	3	%		4,114	2	%
United Kingdom		5,363	3	%		5,180	3	%
Mexico		4,991	2	%		4,230	2	%
Canada		4,811	2	%		3,432	2	%
Other		14,315	7	%		14,724	9	%
Total Non U.S.		109,332	53	%		94,639	55	%
	$	206,012	100	%	$	171,182	100	%

Note 5 – Segment Reporting – Continued

	Nine Months Ended September 30,
	2014				2013
United States	$	270,597	45	%	$	211,462	44	%
Germany		70,491	12	%		61,332	13	%
South Korea		67,293	11	%		39,069	8	%
China		50,850	8	%		47,972	10	%
Japan		34,291	6	%		28,591	6	%
Czech Republic		19,398	3	%		11,893	3	%
United Kingdom		18,162	3	%		13,319	3	%
Mexico		14,752	2	%		11,696	2	%
Canada		12,542	2	%		10,533	2	%
Other		47,756	8	%		43,925	9	%
Total Non U.S.		335,535	55	%		268,330	56	%
	$	606,132	100	%	$	479,792	100	%