What changed in Gentherm Inc's 10-K — 2023 vs 2024
vs
Paragraph-level year-over-year comparison of Gentherm Inc's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.
+129 added−151 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-21)
Top changes in Gentherm Inc's 2024 10-K
129 paragraphs added · 151 removed · 105 edited across 1 sections
- Item 1C. Cybersecurity+129 / −151 · 105 edited
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
105 edited+24 added−46 removed96 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
105 edited+24 added−46 removed96 unchanged
2023 filing
2024 filing
Biggest changeThe results of operations for the years ended December 31, 2023 and 2022, in thousands, were as follows: Year Ended December 31, 2023 2022 Favorable / (Unfavorable) Product revenues $ 1,469,076 $ 1,204,656 $ 264,420 Cost of sales 1,117,452 931,006 (186,446 ) Gross margin 351,624 273,650 77,974 Operating expenses: Net research and development expenses 94,358 85,722 (8,636 ) Selling, general and administrative expenses 155,579 132,693 (22,886 ) Impairment of goodwill 19,509 — (19,509 ) Impairment of intangible assets and property and equipment 4,739 637 (4,102 ) Restructuring expenses — 6,291 6,291 Total operating expenses 274,185 225,343 (48,842 ) Operating income 77,439 48,307 29,132 Interest expense, net (14,641 ) (4,294 ) (10,347 ) Foreign currency loss (5,918 ) (6,778 ) 860 Other (loss) income (1,926 ) 1,147 (3,073 ) Earnings before income tax 54,954 38,382 16,572 Income tax expense 14,611 13,941 (670 ) Net income $ 40,343 $ 24,441 $ 15,902 Product revenues by product category, in thousands, for the years ended December 31, 2023 and 2022 were as follows: Year Ended December 31, 2023 2022 % Change Climate Control Seat $ 482,665 $ 426,046 13.3 % Seat Heaters 308,588 283,970 8.7 % Steering Wheel Heaters 153,943 120,949 27.3 % Lumbar and Massage Comfort Solutions (a) 144,923 56,980 154.3 % Valve Systems (a) 106,262 41,980 153.1 % Automotive Cables 79,993 76,962 3.9 % Battery Performance Solutions 75,484 71,907 5.0 % Electronics 40,387 44,106 (8.4 )% Other Automotive 30,707 38,716 (20.7 )% Subtotal Automotive segment 1,422,952 1,161,616 22.5 % Medical segment (a) 46,124 43,040 7.2 % Total Company $ 1,469,076 $ 1,204,656 21.9 % (a) Includes product revenues from acquisitions since their respective acquisition dates (see Note 4).
Biggest changeThe results of operations for the years ended December 31, 2024 and 2023, in thousands, were as follows: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Product revenues $ 1,456,124 $ 1,469,076 $ (12,952 ) Cost of sales 1,089,693 1,117,452 27,759 Gross margin 366,431 351,624 14,807 Operating expenses: Net research and development expenses 88,697 94,358 5,661 Selling, general and administrative expenses 155,108 155,579 471 Restructuring expenses, net 13,110 4,739 (8,371 ) Impairment of intangible assets and property and equipment 2,501 — (2,501 ) Impairment of goodwill — 19,509 19,509 Total operating expenses 259,416 274,185 14,769 Operating income 107,015 77,439 29,576 Interest expense, net (15,300 ) (14,641 ) (659 ) Foreign currency gain (loss) 9,599 (5,918 ) 15,517 Other income (loss) 951 (1,926 ) 2,877 Earnings before income tax 102,265 54,954 47,311 Income tax expense 37,318 14,611 (22,707 ) Net income $ 64,947 $ 40,343 $ 24,604 39 Product revenues by product category, in thousands, for the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, 2024 2023 % Change Climate Control Seat $ 468,820 $ 482,665 (2.9 )% Seat Heaters 297,866 308,588 (3.5 )% Lumbar and Massage Comfort Solutions 178,584 144,923 23.2 % Steering Wheel Heaters 169,763 153,943 10.3 % Valve Systems 105,056 106,262 (1.1 )% Automotive Cables 73,091 79,993 (8.6 )% Battery Performance Solutions 58,183 75,484 (22.9 )% Electronics 33,065 40,387 (18.1 )% Other Automotive 21,850 30,707 (28.8 )% Subtotal Automotive segment 1,406,278 1,422,952 (1.2 )% Medical segment 49,846 46,124 8.1 % Total Company $ 1,456,124 $ 1,469,076 (0.9 )% Product Revenues Below is a summary of our product revenues, in thousands, for the years ended December 31, 2024 and 2023: Year Ended December 31, Variance Due To: 2024 2023 Favorable / (Unfavorable) Automotive Volume FX Pricing/ Other Total Product revenues $ 1,456,124 $ 1,469,076 $ (12,952 ) $ 3,931 $ (7,129 ) $ (9,754 ) $ (12,952 ) Product revenues for the year ended December 31, 2024 decreased 0.9% as compared to the year ended December 31, 2023.
Information regarding our other significant accounting estimates and policies are disclosed in Note 2, "Summary of Significant Accounting Policies", of the notes to the consolidated financial statements. Impairments of Goodwill Critical estimates: Goodwill is tested for impairment at least annually as of December 31 and whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
Information regarding our other significant accounting estimates and policies are disclosed in Note 2, "Summary of Significant Accounting Policies", of the notes to the consolidated financial statements. Goodwill Critical estimates: Goodwill is tested for impairment at least annually as of December 31 and whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
To hedge the Company's exposure to interest payment fluctuations on a portion of the borrowings, we entered into a floating-to-fixed interest rate swap agreement with a notional amount of $100.0 million. Exchange Rate Sensitivity The table below provides information about the Company’s foreign currency forward exchange rate agreements that are sensitive to changes in foreign currency exchange rates.
To hedge the Company's exposure to interest payment fluctuations on a portion of the borrowings, we entered into a floating-to-fixed interest rate swap agreement with a notional amount of $100.0 million. 51 Exchange Rate Sensitivity The table below provides information about the Company’s foreign currency forward exchange rate agreements that are sensitive to changes in foreign currency exchange rates.
Although the Company has developed and implemented strategies to mitigate the impact of higher material component costs and transportation costs through sourcing and manufacturing efficiencies where possible, these strategies together with commercial negotiations with Gentherm's customers and suppliers have not fully offset to date and may not 47 fully offset our future cost increases.
Although the Company has developed and implemented strategies to mitigate the impact of higher material component costs and transportation costs through sourcing and manufacturing efficiencies where possible, these strategies together with commercial negotiations with Gentherm's customers and suppliers have not fully offset to date and may not fully offset our future cost increases.
Economic volatility or weakness in North America, Europe or Asia, as well as global geopolitical factors, have had and could result in a significant reduction in automotive sales and production by our customers, which have had and would have an adverse effect on our business, results of operations and financial condition.
Economic volatility or weakness in North America, Europe or Asia, as well as global geopolitical factors, have and could result in a significant reduction in automotive sales and production by our customers, which have and would have an adverse effect on our business, results of operations and financial condition.
The determination as to whether a deferred tax asset will be realized is based on the evaluation of positive and negative evidence, which includes historical profitability, future market growth, future taxable income, the expected timing of the reversals of 49 existing temporary differences and tax planning strategies.
The determination as to whether a deferred tax asset will be realized is based on the evaluation of positive and negative evidence, which includes historical profitability, future market growth, future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies.
Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. I TEM 9B.
Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. 53 I TEM 9B.
We continue 36 to employ measures to mitigate the impact of cost increases through identification of sourcing and manufacturing efficiencies where possible. However, we have been unable to fully mitigate or pass through the increases in our operating costs, which may continue in the future.
We continue to employ measures to mitigate the impact of cost increases through identification of sourcing and manufacturing efficiencies where possible. However, we have been unable to fully mitigate or pass through the increases in our operating costs, which may continue in the future.
The Company records the ineffective portion of foreign currency and copper commodity hedging 50 instruments, if any, to cost of sales, and the ineffective portion of interest rate swaps, if any, to interest expense in the consolidated statements of income.
The Company records the ineffective portion of foreign currency and copper commodity hedging instruments, if any, to cost of sales, and the ineffective portion of interest rate swaps, if any, to interest expense in the consolidated statements of income.
Our IT Security Committee includes members of our IT security function and executive management of our legal, finance and internal audit/risk, human resources and corporate communications and technology functions. I TEM 2. PROPERTIES As of December 31, 2023, we operate in more than 30 locations across 13 countries, which are primarily for manufacturing, assembly, distribution, warehousing, engineering and testing.
Our IT Security Committee includes members of our IT security function and executive management of our legal, finance and internal audit/risk, human resources and corporate communications and technology functions. I TEM 2. PROPERTIES As of December 31, 2024, we operate in more than 30 locations across 13 countries, which are primarily for manufacturing, assembly, distribution, warehousing, engineering and testing.
In preparing these consolidated financial statements, management was required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.
In preparing these consolidated financial statements, management was required to make 47 estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.
Under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control-Integrated Framework (2013).” Based on that evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2023.
Under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control-Integrated Framework (2013).” Based on that evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024.
In December 2021, the Company committed to make a $5 million investment in Autotech Fund III, L.P., pursuant to a limited partnership agreement. As a limited partner, the Company will periodically make capital contributions toward this total commitment amount over the expected ten year life of the fund.
Other Commitments In December 2021, the Company committed to make a $5 million investment in Autotech Fund III, L.P., pursuant to a limited partnership agreement. As a limited partner, the Company will periodically make capital contributions toward this total commitment amount over the expected ten year life of the fund.
The Company's reporting units in its Automotive segment each have a fair value that is substantially in excess of its respective carrying value as of December 31, 2023. Income Taxes Critical estimates: The Company is subject to income taxes in the United States and numerous international jurisdictions.
The Company's reporting units in its Automotive segment each have a fair value that is substantially in excess of its respective carrying value as of December 31, 2024. Income Taxes Critical estimates: The Company is subject to income taxes in the United States and numerous international jurisdictions.
Stock Repurchase Program In December 2020, the Board of Directors authorized a stock repurchase program (the “2020 Stock Repurchase Program”). pursuant to which the Company is authorized to repurchase up to $150 million of its issued and outstanding Common Stock over a three-year period, expiring December 15, 2023.
Stock Repurchase Program In December 2020, the Board of Directors authorized a stock repurchase program (the “2020 Stock Repurchase Program”). pursuant to which the Company was authorized to repurchase up to $150 million of its issued and outstanding Common Stock over a three-year period, expiring December 15, 2023.
Repurchases under the 2020 Stock Repurchase Program may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations.
Repurchases under the 2024 Stock Repurchase Program may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations.
Although automotive new business awards are not firm customer orders, we believe that new business awards are an indicator of future revenue. New business awards are not projections of revenue or future business as of December 31, 2023, the date of this Annual Report or any other date.
Although automotive new business awards are not firm customer orders, we believe that new business awards are an indicator of future revenue. New business awards are not projections of revenue or future business as of December 31, 2024, the date of this Annual Report or any other date.
CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Management of the Company, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2023.
CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Management of the Company, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2024.
Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Debt The following table summarizes the Company’s debt at December 31, 2023 and 2022 (dollars in thousands): December 31, 2023 2022 Interest Rate Principal Balance Interest Rate Principal Balance Credit Agreement: U.S. Revolving Note (U.S.
Debt The following table summarizes the Company’s debt at December 31, 2024 and 2023 (dollars in thousands): December 31, 2024 2023 Interest Rate Principal Balance Interest Rate Principal Balance Credit Agreement: U.S. Revolving Note (U.S.
Customer projections regularly change over time, and we do not update our calculation of any new business award after the date initially communicated. Automotive new business awards in 2023 also do not reflect, in particular, the impact of macroeconomic and geopolitical challenges on future business.
Customer projections regularly change over time, and we do not update our calculation of any new business award after the date initially communicated. Automotive new business awards in 2024 also do not reflect, in particular, the impact of macroeconomic and 38 geopolitical challenges on future business.
We currently believe that our cash and cash equivalents and borrowings available under our Second Amended and Restated Credit Agreement, receivables factoring arrangements, and cash flows from operations will be adequate to meet anticipated cash requirements for at least the next twelve months and the foreseeable future.
We currently believe that our cash and cash equivalents and borrowings available under our Second Amended and Restated Credit Agreement and cash flows from operations will be adequate to meet anticipated cash requirements for at least the next twelve months and the foreseeable future.
Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2023.
Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2024.
I TEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to various market risks including, but not limited to, changes in foreign currency exchange rates, changes in interest rates and price fluctuations of certain material commodities such as copper.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to various market risks including, but not limited to, changes in foreign currency exchange rates, changes in interest rates and price fluctuations of certain material commodities such as copper.
I TEM 3. LEGAL PROCEEDINGS We are subject to litigation from time to time in the ordinary course of our business, however, there is no current material pending litigation to which we are a party and no material legal proceedings were terminated, settled or otherwise resolved during the fourth quarter of the fiscal year ended December 31, 2023.
LEGAL PROCEEDINGS We are subject to litigation from time to time in the ordinary course of our business, however, there is no current material pending litigation to which we are a party and no material legal proceedings were terminated, settled or otherwise resolved during the fourth quarter of the fiscal year ended December 31, 2024. I TEM 4.
Cash flows associated with derivatives are reported in net cash provided by operating activities in the Company’s consolidated statements of cash flows. Information related to the fair values of all derivative instruments in our consolidated balance sheet as of December 31, 2023 is set forth in Note 13, “Financial Instruments” in the consolidated financial statements included in this Annual Report.
Cash flows associated with derivatives are reported in net cash provided by operating activities in the Company’s consolidated statements of cash flows. Information related to the fair values of all derivative instruments in our consolidated balance sheet as of December 31, 2024 is set forth in Note 14, “Financial Instruments” in the consolidated financial statements included in this Annual Report.
Automotive products include variable temperature Climate Control Seats® (“CCS”), heated automotive interior systems (including heated seats, steering wheels, armrests and other components), battery performance solutions, cable systems, lumbar and massage comfort solutions, fuel management valves and other valves for brake and engine systems, and other electronic devices.
Automotive products include variable temperature Climate Control Seats, heated interior systems (including heated seats, steering wheels, armrests and other components), battery performance solutions, cable systems, lumbar and massage comfort solutions, fuel management valve systems and other valve systems for brake and engine systems, and other electronic devices.
If we experience higher costs than assumed in our forecast or if we experience other deviations from forecasted results and/or external factors (e.g., continued increasing of interest rates), it could result in a material impairment.
If we experience higher costs than assumed in our forecast or if we experience other deviations from forecasted results and/or external factors (e.g., increase of interest rates), it could result in a material impairment.
Although supply chain conditions have steadily improved and certain inflationary pressures have moderated throughout fiscal year 2023, rising costs of materials, labor, equipment and other inputs used to manufacture and sell our products, including freight and logistics costs, have impacted, and may in the future impact, operating costs and operating results.
Although supply chain conditions have steadily improved and certain inflationary pressures have moderated, rising costs of materials, labor, equipment and other inputs used to manufacture and sell our products, including freight and logistics costs, have impacted, and may in the future impact, operating costs and operating results.
Any such repurchases may be executed using open market purchases, privately negotiated agreements or other transactions (including Rule 10b5-1 trading plans), and may be funded from cash on hand, available borrowings or proceeds from potential debt or other capital markets sources.
Any such repurchases may be executed using open market purchases, accelerated share repurchase programs, privately negotiated agreements or other transactions (including Rule 10b5-1 trading plans), and may be funded from cash on hand, available borrowings or proceeds from potential debt or other capital markets sources.
Throughout the year there have been various ongoing geopolitical conflicts, such as the current conflicts between Russia and Ukraine, and between Israel and Hamas, heightened tensions in the Red Sea, and potential tensions in the South China Sea. These conflicts have interrupted ocean freight shipping and if prolonged or intensified, could have a substantial adverse effect on our financial results.
Throughout the year there have been various ongoing geopolitical conflicts, such as the current conflicts between Russia and Ukraine, and in the Middle East, heightened tensions in the Red Sea and the South China Sea. These conflicts have interrupted ocean freight shipping and if prolonged or intensified, could have a substantial adverse effect on our financial results.
For a detailed discussion of our consolidated results of operations for the years ended December 31, 2022 compared to the year ended December 31, 2021, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operation” under “Results of Operations Year Ended December 31, 2022 Compared to December 31, 2021” in our annual report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 24, 2023.
For a detailed discussion of our consolidated results of operations for the years ended December 31, 2023 compared to the year ended December 31, 2022, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operation” under “Results of Operations Year Ended December 31, 2023 Compared to December 31, 2022” in our annual report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 21, 2024.
Although supply chain conditions have steadily improved and certain inflationary pressures have moderated throughout fiscal year 2023, rising costs of materials, labor, equipment and other inputs used to manufacture and sell our products, including freight and logistics costs, have impacted, and may in the future impact, operating costs and operating results.
Although some supply chain conditions have steadily improved and certain inflationary pressures have moderated, rising costs of materials, labor, equipment and other inputs used to manufacture and sell our products, including freight and logistics costs, have impacted, and may in the future impact, operating costs and operating results.
Finance Leases As of December 31, 2023 and 2022, there was $0.6 million and $1.1 million of outstanding finance leases, respectively. 45 Other Sources of Liquidity Receivable Factoring The Company is party to receivable factoring agreements with unrelated third parties under which we can sell receivables for certain account debtors, on a revolving basis, subject to outstanding balances and concentration limits.
Finance Leases As of December 31, 2024 and 2023, there was $0.2 million and $0.6 million of outstanding finance leases, respectively. 45 Other Sources of Liquidity Receivable Factoring The Company was party to receivable factoring agreements with unrelated third parties under which we could sell receivables for certain account debtors, on a revolving basis, subject to outstanding balances and concentration limits.
OTHER INFORMATION Except as set forth below, during the three months ended December 31, 2023, none of the Company's directors or Section 16 officers adopted or terminated (i) any contract, instruction or written plan for the purchase or sale of Company securities that was 52 intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or (ii) any non-Rule 10b5-1 trading arrangement.
OTHER INFORMATION During the three months ended December 31, 2024 , none of the Company's directors or Section 16 officers adopted or terminated (i) any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or (ii) any non-Rule 10b5-1 trading arrangement .
Cash flow provided by operating activities for the year ended December 31, 2023 consisted primarily of net income of $40.3 million, increased by $66.2 million for non-cash charges for depreciation, amortization, stock based compensation, loss on disposition of property and equipment and other, $6.9 million for inventory provisions, and $19.5 million of goodwill impairment, partially offset by non-cash charges of $13.1 million for deferred income taxes and $0.6 million related to changes in assets and liabilities.
Cash flow provided by operating activities for the year ended December 31, 2023 consisted primarily of net income of $40.3 million, increased by $66.2 million for non-cash charges for depreciation, amortization, stock based compensation, loss on disposition of property and equipment and other, $6.9 million for inventory provisions, and $19.5 million of goodwill impairment, partially offset by non-cash charges of $13.1 million for deferred income taxes and $0.6 million related to changes in assets and liabilities. 44 Cash Flows From Investing Activities Net cash used in investing activities totaled $53.5 million and $24.1 million for the years ended December 31, 2024 and 2023, respectively.
We have not included amounts for other material and component purchase obligations related to standard recurring purchases of materials for use in our manufacturing operations as these amounts are generally consistent from year to year, closely reflect our levels of production, and are not long-term in nature. (4) Capital commitments is comprised of commitments for capital expenditures.
We have not included amounts for material and component purchase obligations related to standard recurring purchases of materials for use in our manufacturing operations as these amounts are generally consistent from year to year, closely reflect our levels of production, and are not long-term in nature.
Federal statutory rate of 21% primarily due to the unfavorable impact of the global intangible low-tax income ("GILTI"), withholding taxes, other non-deductible expenses, the impact of income taxes on foreign earnings at tax rates varying from the U.S statutory tax rate and the tax effect of a goodwill impairment, partially offset by research development credits and prior year adjustments in various jurisdictions.
Federal statutory rate of 21% primarily due to the unfavorable impact of the global intangible low-tax income ("GILTI"), withholding taxes, other non-deductible expenses, and the settlement of a prior period tax audit, partially offset by the impact of income taxes on foreign earnings at tax rates varying from the U.S. statutory tax rate, research and development credits and incentive tax rates in various jurisdictions.
According to the forecasting firm S&P Global Mobility (February 2024 release), global light vehicle production in 2023 in the Company’s key markets of North America, Europe, China, Japan and Korea, as compared to 2022, are shown below (in millions of units): 2023 2022 % Change North America 15.7 14.3 9.7 % Europe 17.9 15.8 12.9 % Greater China 29.0 26.4 10.0 % Japan / South Korea 12.8 11.1 14.6 % Total light vehicle production volume in key markets 75.4 67.7 11.4 % 38 The S&P Global Mobility report (February 2024 release) forecasted light vehicle production volume in the Company’s key markets for full year 2024 to decrease to 75.0 million units, a 0.5% decrease from full year 2023 light vehicle production volumes.
According to the forecasting firm S&P Global Mobility (February 2025 release), global light vehicle production in 2024 in the Company’s key markets of North America, Europe, China, Japan and South Korea, as compared to 2023, are shown below (in millions of units): 2024 2023 % Change North America 15.4 15.7 (1.5 )% Europe 17.2 18.0 (4.3 )% Greater China 30.1 29.0 3.6 % Japan / South Korea 12.0 12.8 (6.3 )% Total light vehicle production volume in key markets 74.7 75.5 (1.0 )% The S&P Global Mobility report (February 2025 release) forecasted light vehicle production volume in the Company’s key markets for full year 2025 to decrease to 74.2 million units, a 0.6% decrease from full year 2024 light vehicle production volumes.
Repurchases may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations. Any such repurchases may be executed using open market purchases, privately negotiated agreements or other transactions.
Repurchases under the 2024 Stock Repurchase Program may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations. Any such repurchases may be executed using open market purchases, accelerated share repurchase programs, privately negotiated agreements or other transactions.
Cash flows used in financing activities for the year ended December 31, 2023 primarily included $91.1 million of cash paid for the repurchase of Common Stock, $72.3 million of debt repayments and $2.9 million paid for employee taxes related to the net settlement of restricted stock units that vested during the year, partially offset by $60.0 million of debt borrowings.
Cash flows used in financing activities for the year ended December 31, 2023 primarily included $91.1 million of cash paid for the repurchase of Common Stock, $12.3 million of net debt activity and $2.9 million paid for employee taxes related to the net settlement of restricted stock units that vested during the year, partially offset by $0.2 million of proceeds from the exercise of Common Stock options.
The Company’s estimated future cash flow projections for the Medical Reporting Unit for the period of 2024 through 2028 assume a compound annual growth rate for revenue of approximately 18.3%, which we deem to be a critical assumption in the fair value determination as of December 31, 2023.
The Company’s 48 estimated future cash flow projections for the Medical reporting unit for the period of 2025 through 2029 assume a compound annual growth rate for revenue of approximately 13.1%, which we deem to be a critical assumption in the fair value determination as of December 31, 2024.
Expected Maturity Date 2024 2025 2026 2027 Total Fair Value Liabilities Long-Term Debt: Variable rate $ — $ — $ — $ 222,000 $ 222,000 $ 222,000 Variable interest rate as of December 31, 2023 6.58 % 6.58 % Fixed rate $ 233 $ — $ — $ — $ 233 $ 233 Fixed interest rate 3.90 % 3.90 % Based on the amounts outstanding as of December 31, 2023, a hypothetical 100 basis point change (increase or decrease) in interest rates would impact annual interest expense by $2.2 million.
Expected Maturity Date 2025 2026 2027 2028 Total Fair Value Liabilities Long-Term Debt: Variable rate $ — $ — $ 220,000 $ — $ 220,000 $ 220,000 Variable interest rate as of December 31, 2024 5.86 % 5.86 % Based on the amounts outstanding as of December 31, 2024, a hypothetical 100 basis point change (increase or decrease) in interest rates would impact annual interest expense by $2.2 million.
Also, the market valuation approach is highly subjective as it requires the selection of comparable companies and valuation multiples. 48 Impact if actual results differ from assumptions: As of December 31, 2023, our goodwill balance included $76.7 million related to our Automotive segment and $27.4 million related to our Medical segment.
Also, the market valuation approach is highly subjective as it requires the selection of comparable companies and valuation multiples. Impact if actual results differ from assumptions: As of December 31, 2024, our goodwill balance included $72.8 million related to our Automotive segment and $26.8 million related to our Medical segment.
Federal statutory rate of 21% primarily due to the unfavorable impact of the GILTI, withholding taxes, other non-deductible expenses and acquisition costs and uncertain tax positions, partially offset by certain favorable tax effects on equity vesting, research and development credits in various jurisdictions and the impact of income taxes on foreign earnings taxed at rates varying from the U.S. statutory rate. 43 Liquidity and Capital Resources Overview Our primary sources of liquidity and capital resources are cash flows from operations and borrowings available under our Second Amended and Restated Credit Agreement.
Federal statutory rate of 21% primarily due to the unfavorable impact of the GILTI, withholding taxes, other non-deductible expenses, the impact of income taxes on foreign earnings at tax rates varying from the U.S. statutory tax rate and the tax effect of a goodwill impairment, partially offset by research and development credits and prior year adjustments in various jurisdictions. 43 Liquidity and Capital Resources Overview Our primary sources of liquidity and capital resources are cash flows from operations and borrowings available under our Second Amended and Restated Credit Agreement.
During the year ended December 31, 2022, the Company recorded non-cash impairment charges of $9.4 million, $5.6 million and $0.7 million for write downs of inventory, intangible assets and property and equipment, respectively, within the Automotive segment.
This charge is recorded in cost of sales. During the year ended December 31, 2022, the Company recorded non-cash impairment charges of $9.4 million, $5.6 million and $0.7 million for write downs of inventory, intangible assets and property and equipment, respectively.
Under the terms of the ASR Agreement, on November 2, 2023, the Company paid $60 million to Bank of America for an initial purchase of approximately 1.22 million shares of Common Stock, representing 80% of ASR Repurchase Amount.
Under the terms of the ASR Agreement, on November 2, 2023, the Company paid $60.0 million to Bank of America for an initial purchase of approximately 1.22 million shares of Common Stock, representing 80% of ASR Repurchase Amount. The final settlement date occurred in the second quarter of 2024.
Restructuring Expenses Below is a summary of our Restructuring expenses, in thousands, for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Favorable / (Unfavorable) Restructuring expenses $ — $ 6,291 $ 6,291 Restructuring expenses primarily relate to the 2023 Plan and other discrete restructuring activities focused on optimizing our manufacturing and engineering footprint and the reduction of global overhead expenses.
Restructuring Expenses, net Below is a summary of our restructuring expenses, net, in thousands, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Restructuring expenses, net $ 13,110 $ 4,739 $ (8,371 ) Restructuring expenses, net primarily relate to the 2023 Plan and other discrete restructuring activities focused on optimizing our manufacturing and engineering footprint and the reduction of global overhead expenses.
Our Automotive sales are driven by the number of vehicles produced by the OEMs, which is ultimately dependent on consumer demand for automotive vehicles, our product content per vehicle, and other factors that may limit or otherwise impact production by us, our supply chain and our customers.
Our Automotive sales are driven by the number of light vehicles produced by the OEMs primarily in our key markets of North America, Europe, China, Japan and South Korea, which is ultimately dependent on consumer demand for automotive light vehicles, our product content per vehicle, and other factors that may limit or otherwise impact production by us, our supply chain and our customers.
Foreign currency gain for the year ended December 31, 2022 included net realized foreign currency loss of $2.1 million and unrealized net foreign currency loss of $4.7 million.
Foreign currency loss for the year ended December 31, 2023 included net realized foreign currency gain of $3.2 million and unrealized net foreign currency loss of $9.1 million.
We may issue debt or equity securities, which may provide an additional source of liquidity. However, there can be no assurance equity or debt financing will be available to us when we need it or, if available, the terms will be satisfactory to us and not dilutive to our then-current shareholders.
However, there can be no assurance equity or debt financing will be available to us when we need it or, if available, the terms will be satisfactory to us and not dilutive to our then-current shareholders.
No further impairment was recorded as of December 31, 2023. As of December 31, 2023, the estimated fair value of the Medical Reporting Unit exceeded it's carrying value by less than 15%. The Medical Reporting Unit is at risk of failing future impairment tests, as the estimate of fair value does not substantially exceed its carrying value.
The estimated fair value of the Medical reporting unit exceeded its carrying value by approximately 15% as of December 31, 2024. The Medical reporting unit is at risk of failing future impairment tests, as the estimate of fair value does not substantially exceed its carrying value.
Governance Our Board of Directors holds oversight responsibility for the Company’s strategy and risk management, including material risks related to cybersecurity threats. This oversight is executed directly by the Board of Directors and through its committees.
Risk factors” in this annual report on Form 10-K for additional discussion about cybersecurity-related risks. Governance Our Board of Directors holds oversight responsibility for the Company’s strategy and risk management, including material risks related to cybersecurity threats. This oversight is executed directly by the Board of Directors and through its committees.
The majority of our Automotive facilities located outside of the U.S. are principally used in manufacturing and distribution and are located in China, Hungary, Mexico, North Macedonia, South Korea, Ukraine, Czech Republic, Germany, and Vietnam. Our global headquarters is located in Northville, Michigan, our European headquarters is located in Odelzhausen, Germany and our Asia-Pacific headquarters is located in Shanghai, China.
The majority of our Automotive facilities located outside of the U.S. are principally used in manufacturing and distribution and are located in China, Hungary, Mexico, Morocco, North Macedonia, South Korea, Ukraine, Czech Republic, Germany, and Vietnam.
Cash and Cash Flows The table below summarizes our cash activity for each of the last two fiscal years (in thousands): Year Ended December 31, 2023 2022 Cash and cash equivalents at beginning of period $ 153,891 $ 190,606 Net cash provided by operating activities 119,265 14,947 Net cash used in investing activities (24,123 ) (239,899 ) Net cash (used in) provided by financing activities (106,051 ) 189,927 Foreign currency effect on cash and cash equivalents 6,691 (1,690 ) Cash and cash equivalents at end of period $ 149,673 $ 153,891 Cash Flows From Operating Activities Net cash provided by operating activities totaled $119.3 million and $14.9 million for the years ended December 31, 2023 and 2022, respectively.
Cash and Cash Flows The table below summarizes our cash activity for each of the last two fiscal years (in thousands): Year Ended December 31, 2024 2023 Cash and cash equivalents at beginning of period $ 149,673 $ 153,891 Net cash provided by operating activities 109,646 119,265 Net cash used in investing activities (53,531 ) (24,123 ) Net cash used in financing activities (51,705 ) (106,051 ) Foreign currency effect on cash and cash equivalents (19,949 ) 6,691 Cash and cash equivalents at end of period $ 134,134 $ 149,673 Cash Flows From Operating Activities Net cash provided by operating activities totaled $109.6 million and $119.3 million for the years ended December 31, 2024 and 2023, respectively.
As of December 31, 2023, the Company’s cash and cash equivalents held by our non-U.S. subsidiaries totaled approximately $125.3 million.
As of December 31, 2024, the Company’s cash and cash equivalents held by our non-U.S. subsidiaries totaled $106.9 million.
Foreign Currency Loss Below is a summary of our Foreign currency loss, in thousands, for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Favorable / (Unfavorable) Foreign currency loss $ (5,918 ) $ (6,778 ) $ 860 42 Foreign currency loss for the year ended December 31, 2023 included net realized foreign currency gain of $3.2 million and unrealized net foreign currency loss of $9.1 million.
Foreign Currency Gain (Loss) Below is a summary of our foreign currency gain (loss), in thousands, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Foreign currency gain (loss) $ 9,599 $ (5,918 ) $ 15,517 Foreign currency gain for the year ended December 31, 2024 included net realized foreign currency loss of $1.1 million and unrealized net foreign currency gain of $10.7 million.
Selling, General and Administrative Expenses Below is a summary of our Selling, general and administrative expenses, in thousands, for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Favorable / (Unfavorable) Selling, general and administrative expenses $ 155,579 $ 132,693 $ (22,886 ) Percentage of product revenues 10.6 % 11.0 % Selling, general and administrative expenses for the year ended December 31, 2023 increased 17% as compared to the year ended December 31, 2022.
Selling, General and Administrative Expenses Below is a summary of our selling, general and administrative expenses, in thousands, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Selling, general and administrative expenses $ 155,108 $ 155,579 $ 471 Percentage of product revenues 10.7 % 10.6 % Selling, general and administrative expenses for the year ended December 31, 2024 decreased 0.3% as compared to the year ended December 31, 2023.
The Company has made contributions of approximately $0.8 million to the Autotech Fund III, LP as of December 31, 2023. Timing of the capital contributions is unknown and therefore amounts have been excluded from the Material Cash Requirements table above. Capital Expenditures We anticipate capital expenditures in fiscal year 2024 of approximately $65 million to $75 million.
The Company has made contributions of approximately $1.8 million to the Autotech Fund III, LP as of December 31, 2024. Timing of the remaining $3.2 million of capital contributions is unknown and therefore amounts have been excluded from the Material Cash Requirements table above.
New Business Awards We believe that innovation is an important element to gaining market acceptance of our products and strengthening our market position. During 2023, we secured an estimated $2,630 million of automotive new business awards, which set a new record of annual new business awards for the Company.
New Business Awards We believe that innovation is an important element to gaining market acceptance of our products and strengthening our market position. During 2024, we secured an estimated $2,400 million of automotive new business awards.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. 53 P ART III
ITE M 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. 54 P ART III
Dollar denominations) 6.58 % $ 222,000 5.80 % $ 232,000 Other loans 3.90 % 233 3.89% - 5.21% 2,011 Finance leases 3.53 % 605 3.57 % 1,085 Total debt 222,838 235,096 Current maturities (621 ) (2,443 ) Long-term debt, less current maturities $ 222,217 $ 232,653 Credit Agreement Gentherm, together with certain of its subsidiaries, maintain a revolving credit note (“U.S.
Dollar denominations) 5.86 % $ 220,000 6.58 % $ 222,000 Other loans — — 3.90 % 233 Finance leases 3.46 % 201 3.53 % 605 Total debt 220,201 222,838 Current maturities (137 ) (621 ) Long-term debt, less current maturities $ 220,064 $ 222,217 Credit Agreement Gentherm, together with certain of its subsidiaries, maintain a revolving credit note (“U.S.
We, like other manufacturers, have a high proportion of fixed structural costs, and therefore relatively small changes in industry vehicle production can have a substantial effect on our financial results.
We are monitoring and evaluating the impacts of recently announced potential tariffs and reciprocal tariffs on our supply chain and results of operations. We, like other manufacturers, have a high proportion of fixed structural costs, and therefore relatively small changes in industry vehicle production can have a substantial effect on our financial results.
Our Medical business is principally comprised of our headquarters and manufacturing site located in Cincinnati, Ohio and our manufacturing sites in Germany and China. We also have sales offices, warehouses and engineering centers, strategically located throughout the world. Nearly all of our manufacturing and distribution sites in Mexico and Asia are leased, while most of our European sites are owned.
We also have sales offices, warehouses and engineering centers, strategically located throughout the world. Nearly all of our manufacturing and distribution sites in Mexico and Asia are leased, while most of our European sites are owned. I TEM 3.
Recent Accounting Pronouncements For a complete description of recent accounting standards which we have not yet been required to implement which may be applicable to our operations, as well as significant accounting standards that have been adopted during the year ended December 31, 2023, see Note 3, “New Accounting Pronouncements,” to the consolidated financial statements included in this Annual Report.
For the year ended December 31, 2024, each change of the effective tax rate by one percentage point would impact income tax expense by $1.0 million. 49 Recent Accounting Pronouncements For a complete description of recent accounting standards which we have not yet been required to implement which may be applicable to our operations, as well as significant accounting standards that have been adopted during the year ended December 31, 2024, see Note 3, “New Accounting Pronouncements,” to the consolidated financial statements included in this Annual Report. 50 I TEM 7A.
The increase in product revenues is due to favorable volumes in several product lines within the Automotive segment, favorable 40 foreign currency impacts primarily attributable to the Euro, and the inclusion of sales from Alfmeier and Dacheng since the acquisitions, partially offset by lower cost recoveries from customers and unfavorable foreign currency impacts primarily attributable to the Chinese Renminbi, the Korean Won and the Japanese Yen.
The decrease in product revenues is due to unfavorable pricing and foreign currency impacts primarily attributable to the Chinese Renminbi, the Korean Won and the Japanese Yen, partially offset by favorable volumes in several product lines within the Automotive segment and favorable foreign currency impacts primarily attributable to the Euro.
MARKET FOR THE REGISTRANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Stock trades on the Nasdaq Global Select Market under the symbol “THRM.” Holders As of February 15, 2024, our Common Stock was held by 39 shareholders of record.
MINE SAFETY DISCLOSURES. Not applicable. 32 P ART II I TEM 5. MARKET FOR THE REGISTRANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Stock trades on the Nasdaq Global Select Market under the symbol “THRM.” Holders As of February 13, 2025, our Common Stock was held by 37 shareholders of record.
See Note 19, “Segment Reporting,” to the consolidated financial statements included in this Annual Report for a description of our reportable segments as well as their proportional contribution to the Company’s reported product revenues and operating income. 39 Results of Operations Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 This section discusses our consolidated results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
See Note 20, “Segment Reporting,” to the consolidated financial statements included in this Annual Report for a description of our reportable segments as well as their proportional contribution to the Company’s reported product revenues, operating income (loss) and significant segment expenses.
Stock Repurchase Program On December 11, 2020, the Board of Directors authorized the 2020 Stock Repurchase Program, pursuant to which the Company is authorized to repurchase up to $150 million of its issued and outstanding Common Stock over a three-year period, expiring December 15, 2023.
Under the 2020 Stock Repurchase Program, the Company was authorized to repurchase up to $150.0 million of its issued and outstanding Common Stock over a three-year period, expiring December 15, 2023. On November 1, 2023, the Board of Directors extended the maturity date of the program from December 15, 2023 to June 30, 2024.
Cash flows provided by financing activities for the year ended December 31, 2022 primarily included $207.0 million of debt borrowings to fund acquisitions and $1.7 million of proceeds from the exercise of common stock options, partially offset by $13.1 million of debt repayments and $5.5 million paid for employee taxes related to the net settlement of restricted stock units that vested during the year.
Cash flows used in financing activities for the year ended December 31, 2024 primarily included $2.6 million of net debt activity, $51.6 million of cash paid for the repurchase of Common Stock and $3.3 million paid for employee taxes related to the net settlement of restricted stock units that vested during the year, partially offset by $5.8 million of proceeds from the exercise of Common Stock options.
We believe cash on hand, cash generated from operations, and the borrowing capacity available under our Second Amended and Restated Credit Agreement will be sufficient to support our capital expenditures.
We believe cash on hand, 46 cash generated from operations, and the borrowing capacity available under our Second Amended and Restated Credit Agreement will be sufficient to support our capital expenditures. Stock Repurchase Program In December 2020, the Board of Directors of Gentherm Incorporated (the “Board of Directors”) authorized the 2020 Stock Repurchase Program.
Income tax expense was $13.9 million for the year ended December 31, 2022, on earnings before income tax of $38.4 million, representing an effective tax rate of 36.3%. The effective tax rate differed from the U.S.
Income tax expense was $14.6 million for the year ended December 31, 2023, on earnings before income tax of $55.0 million, representing an effective tax rate of 26.6%. The effective tax rate differed from the U.S.
See Note 4, “Acquisitions” of the consolidated financial statements included in this Annual Report for additional information. 37 Impairments – Non-Automotive Electronics Business On December 31, 2022, the Company approved a plan to exit its non-automotive electronics business to strengthen the Company’s core business and focus its resources and equipment with businesses and investments that are more strategic and profitable.
Exit of Non-Automotive Electronics Business On December 31, 2022, the Company approved a plan to exit its non-automotive electronics business to strengthen the Company’s core business and focus its resources and equipment with businesses and investments that are more strategic and profitable. The Company has substantially completed the exit of this business.
Cash Flows From Financing Activities Net cash used in financing activities totaled $106.1 million for the year ended December 31, 2023 and net cash provided by financing activities totaled $189.9 million for the year ended December 31, 2022.
Cash Flows From Financing Activities Net cash used in financing activities totaled $51.7 million and $106.1 million for the years ended December 31, 2024 and 2023, respectively.
Other (Loss) Income Below is a summary of our Other (loss) income, in thousands, for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Favorable / (Unfavorable) Other (loss) income $ (1,926 ) $ 1,147 $ (3,073 ) The decrease in other income primarily is driven by an impairment in our investment in Carrar Ltd.
Other Income (Loss) Below is a summary of our other income (loss), in thousands, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Other income (loss) $ 951 $ (1,926 ) $ 2,877 The increase in other income is primarily driven by the increase in fair value of our investment in Carrar Ltd., due to observable transactions during the year ended December 31, 2024, as well as an impairment in our investment in Carrar Ltd. during the year ended December 31, 2023.
Recent Trends Global Conditions Since 2020, the global economy has experienced significant volatility and supply chain disruption, which has had a widespread adverse effect on the global automotive industry. These macroeconomic conditions have resulted in fluctuating demand and production disruptions, facility closures, labor shortages and work stoppages. In addition, global inflation has increased significantly beginning in 2021.
At times in recent years, the global economy has experienced significant volatility, inflationary pressures and supply chain disruptions, which have a widespread adverse effect on the global automotive industry. These macroeconomic conditions have 36 resulted in fluctuating demand and production disruptions, facility closures, labor shortages, work stoppages, and increased prices of inputs to our products.
See Note 9, “Debt,” to the consolidated financial statements included in this Annual Report for additional information. (2) See Note 8, “Leases,” to the consolidated financial statements included in this Annual Report for additional information. (3) Purchase obligations are comprised of commitments to secure the supply of certain semiconductor chips.
See Note 9, “Debt,” to the consolidated financial statements included in this Annual Report for additional information. (2) See Note 8, “Leases,” to the consolidated financial statements included in this Annual Report for additional information. (3) Capital commitments is comprised of commitments for capital expenditures. Such commitments are typically less than one year.
As of December 31, 2023, the Company has substantially completed the exit of this business. During the year ended December 31, 2023, the Company recorded non-cash impairment charges of $6.1 million for the write down of inventory within the Automotive segment. This charge is recorded in Cost of sales.
During the year ended December 31, 2024, the Company recorded a benefit of $4.6 million for the sale of previously reserved inventory. This benefit is recorded in product revenues. During the year ended December 31, 2023, the Company recorded non-cash impairment charges of $6.1 million for the write down of inventory within the Automotive segment.
This forecasted revenue growth, which is significantly higher than historical periods, is primarily driven by our anticipated participation in China's high-growth market for patient warming devices and anticipated product launches that are expected to increase volume and price due to new features and product capabilities.
This forecasted revenue growth, which is significantly higher than historical periods, is primarily driven by our anticipated product launches that are expected to increase volume and price due to new features and product capabilities. Realization of this assumed revenue growth is dependent on the successful launch of these new products and product features and the acceptance of customers.
Fit-for-Growth 2.0 is expected to deliver significant cost reductions through sourcing excellence, value engineering, manufacturing productivity, manufacturing footprint optimization, product profitability and cost synergies from the Alfmeier acquisition. Additionally, the program is intended to drive operating expense efficiency to leverage scale. Acquisitions On July 13, 2022, the Company completed the acquisition of Jiangmen Dacheng Medical Equipment Co.
Fit-for-Growth 2.0 has delivered significant cost reductions through sourcing excellence, value engineering, manufacturing productivity, manufacturing footprint optimization, and product profitability. Additionally, the program has driven and is expected to continue to drive operating expense efficiency to leverage scale.
… 95 more changes not shown on this page.