Segment Reporting

9 Months Ended

Sep. 30, 2019

Note 7 – Segment Reporting

Segment information is used by management for making strategic operating decisions for the Company. Management evaluates the performance of the Company’s segments based primarily on operating income or loss.

The Company’s reportable segments are as follows:

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Automotive – this segment represents the design, development, manufacturing and sales of automotive climate control seat (CCS) products, seat heaters, steering wheel heaters, automotive cables, battery thermal management (BTM), electronics and other automotive products.

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Industrial – the combined operating results of GPT, Gentherm Medical and Gentherm’s advanced research and development division. We perform advanced research and development on thermal management systems, including those that utilize new proprietary comfort software algorithms, to enhance the efficiency and functionality of our automotive heating and cooling products. Unlike research and development that relates to a specific product application for a customer, advanced research and development activities affect products and technologies that are not currently generating product revenues. The segment includes government sponsored research projects.

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Reconciling Items – include corporate selling, general and administrative costs and acquisition transaction costs.

The tables below present segment information about the reported product revenues, depreciation and amortization and operating income (loss) of the Company for three and nine months ended September 30, 2019 and 2018. With the exception of goodwill, asset information by segment is not reported since the Company does not manage assets at a segment level.

Three Months Ended September 30,	Automotive		Industrial⁽¹⁾			Reconciling Items			Consolidated Total
2019:
Product revenues	$	228,243	$	11,813		$	—		$	240,056
Depreciation and amortization		10,170		480			414			11,064
Operating income (loss)		36,629		(3,496	)		(12,804	)		20,329
2018:
Product revenues⁽¹⁾	$	238,849	$	22,655		$	—		$	261,504
Depreciation and amortization		11,060		1,170			668			12,898
Operating income (loss)		37,908		(4,335	)		(17,860	)		15,713

Nine Months Ended September 30,	Automotive		Industrial⁽¹⁾			Reconciling Items			Consolidated Total
2019:
Product revenues	$	700,300	$	41,003		$	—		$	741,303
Depreciation and amortization		30,660		1,319			1,302			33,281
Operating income (loss)		114,456		(12,131	)		(40,094	)		62,231
2018:
Product revenues⁽¹⁾	$	724,420	$	68,070		$	—		$	792,490
Depreciation and amortization		32,839		3,822			2,060		$	38,721
Operating income (loss)		116,312		(18,896	)		(45,461	)		51,955

(1)	Industrial segment includes $3,418 and $30,460 in product revenues, $0 and $1,894 in depreciation and amortization, and $206 and $659 in operating income from CSZ-IC for the nine months ended September 30, 2019 and 2018, respectively.

Automotive and Industrial segment product revenues by product category for the three and nine months ended September 30, 2019 and 2018 are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Climate Control Seats (CCS)	$	88,133	$	97,578	$	270,924	$	276,191
Seat Heaters		71,030		70,768		218,578		235,164
Steering Wheel Heaters		16,621		18,095		49,620		53,192
Automotive Cables		20,361		24,961		66,316		77,471
Battery Thermal Management (BTM)^(a)		11,890		7,461		31,531		18,863
Electronics		11,729		12,590		36,035		44,409
Other Automotive		8,479		7,396		27,296		19,130
Subtotal Automotive	$	228,243	$	238,849	$	700,300	$	724,420
Remote Power Generation (GPT)		3,477		4,378		11,181		14,310
Industrial Chambers		—		9,829		3,418		30,460
Gentherm Medical		8,336		8,448		26,404		23,300
Subtotal Industrial	$	11,813	$	22,655	$	41,003	$	68,070
Total Company	$	240,056	$	261,504	$	741,303	$	792,490

a)	Battery Thermal Management or BTM product revenues include Gentherm’s automotive grade, low cost, heat resistant fans and blowers used by customer for battery cooling through ventilation and production level shipments of the advanced TED based active cool system.

Total product revenues information by geographic area is as follows (based on shipment destination):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
United States	$	111,570	$	125,936	$	340,656	$	369,798
Germany		20,379		22,681		63,889		68,670
Japan		20,508		16,672		59,102		43,520
China		17,591		22,756		49,598		71,887
South Korea		14,543		12,814		45,098		42,419
Czech Republic		8,805		10,742		30,956		33,563
Canada		8,833		7,778		29,226		33,482
United Kingdom		8,315		9,037		23,980		28,349
Other		29,512		33,088		98,798		100,802
Total Non-U.S.	$	128,486	$	135,568	$	400,647	$	422,692
	$	240,056	$	261,504	$	741,303	$	792,490