Gentherm Global Power Technologies

12 Months Ended

Dec. 31, 2014

Business Combinations [Abstract]

Gentherm Global Power Technologies

Note 3 — Gentherm Global Power Technologies

GPT develops, manufactures and sells thermoelectric and non-thermoelectric power generation systems and related products. The principal application for these technologies include natural gas well and pipeline protection systems and remote power generation for instrumentation, automation and telecommunication systems.

Results of operations for GPT are included in the Company’s consolidated financial statements beginning April 1, 2014. GPT contributed $24,235 in product revenues and $776 in operating income for the year ended December 31, 2014.

Purchase Price Allocation

The purchase price of approximately $30,759, net of cash acquired of $3,061, has been allocated to the values of assets acquired and liabilities assumed as of April 1, 2014. An appraisal was completed to assist management in determining the fair value of acquired assets and assumed liabilities, including identifiable intangible assets. The final purchase price allocation is as follows:

Accounts receivable	$	10,200
Inventory		6,487
Deferred income tax assets, net		3,499
Order backlog		815
Prepaid expenses and other assets		258
Property and equipment		716
Customer relationships		5,524
Technology		2,807
Trade name		725
Goodwill		6,258
Assumed liabilities		(6,530	)
Net assets acquired		30,759
Cash acquired		3,061
Purchase price	$	33,820

Note 3 — Gentherm Global Power Technologies (Continued)

Supplemental Pro Forma Information

The unaudited pro forma combined historical results for the amounts of GPT’s revenue and earnings that would have been included in the Company’s consolidated statements of income had the acquisition occurred on January 1, 2014 and January 1, 2013 are as follows:

	Year Ended December 31,
	2014		2013
Product revenues	$	824,311	$	694,697
Net income		71,997		35,348

The pro forma information includes adjustments for the effect of the amortization of intangible assets recognized in the acquisition. This pro forma information is not necessarily indicative of future operating results.

Goodwill

We recorded goodwill of approximately $6,258 arising from the acquisition. It is estimated that none of the goodwill recognized will be deductible for income tax purposes. Goodwill represents intangible assets that do not qualify for separate recognition.

Intangible Assets

In conjunction with the acquisition, intangible assets of $9,871 were recorded. The Company’s estimate of the fair value of these assets at the time of the acquisition was determined with the assistance of an independent third-party valuation firm. As part of the estimated valuation, an estimated useful life for the assets was determined.

Intangible assets, net of accumulated amortization, consisted of the following (balances are lower as of December 31, 2014 than as of April 1, 2014, the acquisition date, due to fluctuations in foreign currency exchange rates totaling $465):

	December 31, 2014
	Gross Value		AccumulatedAmortization			Net Value		Useful Life
Customer relationships	$	5,264	$	(334	)	$	4,930	12 yrs
Order backlog		777		(777	)		—	0.5 yrs
Technology		2,675		(204	)		2,471	10 yrs
Trade name		690		(150	)		540	3.5 yrs
Total	$	9,406	$	(1,465	)	$	7,941

Amortization expense of $1,962 for the year ended December 31, 2014 was recorded as follows:

	Year EndedDecember 31, 2014
Product revenues	$	(350	)
Selling, general and administrative expense		1,612

Amortization expense for the prospective five years is estimated to be as follows:

2015	$	903
2016		903
2017		854
2018		706
2019		706

Note 3 — Gentherm Global Power Technologies (Continued)

Property and Equipment

Property and equipment consist of the following:

Asset Category	Useful Life	Amount
Land	Indefinite	$	15
Buildings	20 yrs		81
Leasehold improvements	5-7 yrs		28
Machinery and equipment	2-5 yrs		423
Computer hardware and software	3-5 yrs		169
		$	716