UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 0-21810 GENTHERM INCORPORATED (Exact name of registrant as specified in its charter) Michigan 95-4318554 (State or other jurisdict ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 0-21810 GENTHERM INCORPORATED (Exact name of registrant as specified in its charter) Michigan 95-4318554 (State or other jurisdic ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2019 or ☐ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to . Commission file number 0-21810 GENTHERM INCORPORATED (Exact name of registrant as specified in its charter) Michigan 95-4318554 (State or other jurisdiction o ...

Revenue Performance - Product revenues for Q3 2019 were $240.1 million, a decrease of $21.4 million or 8.2% compared to Q3 2018 revenues of $261.5 million[125]. - Automotive segment revenues decreased by $10.6 million or 4.4% to $228.2 million, primarily due to unfavorable foreign currency and automotive volumes[125][126]. - The industrial segment product revenues decreased by $10.8 million or 47.9% to $11.8 million, largely due to the absence of revenue from the sold CSZ-IC business[125][127]. - For the nine months ended September 30, 2019, total product revenues were $741.3 million, a decrease of $51.2 million or 6.5% compared to $792.5 million in the same period of 2018[137]. - Battery Thermal Management product revenues decreased by $51.2 million, or 6.5%, to $741.3 million in YTD 2019 compared to $792.5 million in YTD 2018[138]. - Automotive segment revenues fell by $24.1 million, or 3.3%, to $700.3 million, primarily due to unfavorable foreign currency impacts of $16.7 million[139]. Cost and Expenses - Cost of sales decreased by $20.4 million or 11.0% to $165.4 million in Q3 2019, attributed to the sale of CSZ-IC and operational performance improvements[128]. - Cost of sales decreased by $39.9 million, or 7.1%, to $518.6 million in YTD 2019, attributed to the sale of CSZ-IC and operational improvements[141]. - Net research and development expenses were $18.8 million in Q3 2019, a slight decrease of $0.3 million or 1.1% from $19.1 million in Q3 2018[130]. - Net research and development expenses were $57.0 million in YTD 2019, a decrease of $6.4 million, or 10.1%, from $63.4 million in YTD 2018[143]. - Selling, general and administrative expenses decreased by $8.2 million or 23.4% to $26.9 million in Q3 2019, primarily due to the sale of CSZ-IC and lower incentive compensation costs[132]. - Selling, general and administrative expenses decreased by $14.1 million, or 13.3%, to $91.7 million in YTD 2019[144]. Restructuring and Impairment - The company recognized $8.7 million in restructuring expenses during Q3 2019, mainly related to the Manufacturing Footprint Rationalization program[133]. - Total expected costs for the Manufacturing Footprint Rationalization plan are estimated between $20.0 million and $24.0 million, with cash expenditures expected between $17.0 million and $21.0 million[122]. - The company recorded an impairment loss of $21.2 million related to plans to divest GPT, which is not expected to be tax-deductible[148]. Cash Flow and Financing - Cash provided by operating activities increased by $13.5 million to $84.0 million in YTD 2019 from $70.5 million in YTD 2018[153]. - Cash used in financing activities totaled $86.2 million in YTD 2019, including $69.0 million in principal payments on loans and $58.0 million for common stock repurchases[157]. - Working capital decreased to $214.3 million as of September 30, 2019, down from $267.7 million at the end of 2018[155]. Foreign Currency and Market Risks - The company is exposed to foreign currency exchange risks from sales and purchases not denominated in the functional currency, with significant exposure to currencies such as the Euro, Mexican Peso, and Japanese Yen[161]. - The company had foreign currency derivative contracts with a notional value of $25.2 million as of September 30, 2019, compared to $33.3 million at December 31, 2018, reflecting a reduction in hedging activity[162]. - The average contract rate for forward exchange agreements to receive Mexican Pesos and pay U.S. Dollars is approximately 20.83 as of September 30, 2019, with a total contract amount of $25.21 million[171]. - The company does not engage in derivative financial instruments for speculative purposes, focusing instead on hedging to manage financial and operational risks[164]. - The maximum duration for hedging foreign currency exchange risks is one year, while for commodity price fluctuations, it is two years[163]. - The company’s exposure to market risks includes changes in interest rates and price fluctuations of commodities like copper[161]. Debt and Taxation - The company’s long-term debt includes variable rate debt of $70 million at an interest rate of 3.29% and fixed rate debt of $10 million at an interest rate of 5.21%[168]. - The effective tax rate for Q3 2019 was 28.8%, higher than the Federal statutory rate of 21%, primarily due to higher statutory rates for subsidiaries operating in foreign jurisdictions[135].

Part I. Financial Information This section presents the company's financial performance, condition, and cash flows, along with management's analysis, market risk exposures, and internal control effectiveness [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ending June 30, 2019, show a decrease in total assets and shareholders' equity compared to year-end 2018, with net income significantly decreasing due to impairment losses and lower product revenues, while cash flow from operations increased [Consolidated Condensed Balance Sheets](index=3&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) | Account | June 30, 2019 (in millions) | December 31, 2018 (in millions) | | :--- | :--- | :--- | | **Total Assets** | **$751.9** | **$803.0** | | Total current assets | $378.4 | $443.1 | | Assets held for sale | $6.7 | $69.7 | | Goodwill | $65.1 | $55.3 | | **Total Liabilities** | **$286.6** | **$323.3** | | Total current liabilities | $161.4 | $175.4 | | Long-term debt, less current maturities | $104.4 | $136.5 | | **Total Shareholders' Equity** | **$465.3** | **$479.7** | - Total assets decreased from **$803.0 million** at year-end 2018 to **$751.9 million**, largely due to a reduction in assets held for sale. Total liabilities also decreased, primarily from a reduction in long-term debt[10](index=10&type=chunk) [Consolidated Condensed Statements of Income](index=4&type=section&id=Consolidated%20Condensed%20Statements%20of%20Income) | Metric | Q2 2019 (in millions) | Q2 2018 (in millions) | YTD 2019 (in millions) | YTD 2018 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Product revenues | $243.3 | $266.4 | $501.2 | $531.0 | | Gross margin | $72.7 | $77.1 | $148.0 | $158.3 | | Operating income | $20.1 | $15.6 | $41.9 | $36.2 | | Impairment loss | ($9.9) | $0 | ($20.4) | $0 | | **Net income** | **$2.8** | **$16.7** | **$11.2** | **$29.6** | | **Diluted EPS** | **$0.08** | **$0.45** | **$0.33** | **$0.81** | - Net income for Q2 2019 was **$2.8 million**, a sharp decline from **$16.7 million** in Q2 2018. This was primarily driven by a **$9.9 million** impairment loss and lower product revenues. For the six months ended June 30, net income also fell significantly to **$11.2 million** from **$29.6 million** year-over-year, impacted by a **$20.4 million** impairment loss, though partially offset by a **$5.0 million** gain on the sale of a business[12](index=12&type=chunk) [Consolidated Condensed Statements of Cash Flows](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) | Activity | 2019 (in millions) | 2018 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $40.4 | $32.5 | | Net cash provided by (used in) investing activities | $19.1 | ($21.5) | | Net cash used in financing activities | ($63.2) | ($47.9) | | **Net decrease in cash** | **($3.4)** | **($37.8)** | - For the first six months of 2019, cash from operations increased to **$40.4 million** from **$32.5 million** in the prior year. Investing activities provided **$19.1 million** in cash, mainly from the **$47.5 million** sale of a business, which was partially offset by a **$15.5 million** acquisition and **$13.0 million** in capital expenditures. Financing activities used **$63.2 million**, primarily for debt repayments (**$61.1 million**) and stock repurchases (**$33.0 million**)[19](index=19&type=chunk) [Notes to Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Condensed%20Financial%20Statements) - On February 1, 2019, the company completed the sale of its Cincinnati Sub-Zero industrial chamber business (CSZ-IC) for **$47.5 million** in cash, recognizing a pre-tax gain of **$5.0 million**[27](index=27&type=chunk) - On April 1, 2019, Gentherm acquired Stihler Electronic GmbH, a manufacturer of patient and blood temperature management systems, for a purchase price of **$15.5 million**, net of cash acquired[53](index=53&type=chunk) - The company adopted the new lease accounting standard (ASU 2016-02) on January 1, 2019, resulting in the recognition of **$17.1 million** in new operating lease right-of-use assets and **$16.7 million** in lease liabilities on the balance sheet[108](index=108&type=chunk) - The company recorded impairment losses of **$9.9 million** and **$20.4 million** for the three and six months ended June 30, 2019, respectively, related to its GPT disposal group and an equity investment, both of which are classified as held for sale[121](index=121&type=chunk)[153](index=153&type=chunk) [Management's Discussion and Analysis (MD&A)](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **8.7%** decrease in Q2 2019 revenue to declines in both the Automotive and Industrial segments, driven by unfavorable foreign currency, lower volumes, and the sale of the CSZ-IC business. Despite lower revenue, cost of sales decreased more significantly due to the CSZ-IC sale and operational improvements. The company's liquidity remains sufficient, supported by cash from operations, proceeds from the CSZ-IC sale, and available credit, which funded capital expenditures, an acquisition, and significant stock repurchases [Results of Operations: Q2 2019 vs. Q2 2018](index=31&type=section&id=Results%20of%20Operations%20Second%20Quarter%202019%20Compared%20with%20Second%20Quarter%202018) | Category | Q2 2019 (in millions) | Q2 2018 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Subtotal Automotive | $229.7 | $243.2 | (5.5)% | | Subtotal Industrial | $13.6 | $23.3 | (41.4)% | | **Total Company** | **$243.3** | **$266.4** | **(8.7)%** | - Automotive segment revenue decreased by **$13.5 million (5.5%)** due to unfavorable foreign currency (**$6.1 million**), lower volumes (**$4.5 million**), and customer pricing pressures (**$2.9 million**)[133](index=133&type=chunk)[134](index=134&type=chunk) - Industrial segment revenue fell by **$9.6 million (41.4%)**, primarily due to the absence of revenue from the CSZ-IC business, which was sold on February 1, 2019[133](index=133&type=chunk)[135](index=135&type=chunk) - Cost of sales decreased by **9.8%** to **$170.6 million**, driven by the sale of CSZ-IC (**$8.1 million**), operational performance improvements (**$8.4 million**), and favorable currency effects (**$3.4 million**)[136](index=136&type=chunk)[137](index=137&type=chunk) - An impairment loss of **$9.9 million** was recorded in Q2 2019 related to the planned divestiture of the GPT business[141](index=141&type=chunk) [Results of Operations: H1 2019 vs. H1 2018](index=32&type=section&id=Results%20of%20Operations%20First%20Half%202019%20Compared%20with%20First%20Half%202018) | Category | H1 2019 (in millions) | H1 2018 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Subtotal Automotive | $472.1 | $485.6 | (2.8)% | | Subtotal Industrial | $29.2 | $45.4 | (35.7)% | | **Total Company** | **$501.2** | **$531.0** | **(5.6)%** | - For the first half of 2019, total revenue decreased by **5.6%** to **$501.2 million**. The Automotive segment saw strong growth in Battery Thermal Management (BTM) revenue, up **72.3%** YoY, and Other Automotive, up **60.4%** YoY[144](index=144&type=chunk)[145](index=145&type=chunk) - A pre-tax gain of **$5.0 million** was recognized on the sale of the CSZ-IC business during the first half of 2019[152](index=152&type=chunk) - An impairment loss of **$20.4 million** was recorded in H1 2019 associated with the planned divestiture of the GPT business[153](index=153&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) - The company believes its cash on hand, cash from operations, and available borrowings are sufficient to meet its needs for at least the next 12 months[155](index=155&type=chunk) - The Board of Directors increased the stock repurchase authorization to **$300 million**, with **$113.6 million** remaining available as of June 30, 2019. The program expires in December 2020[155](index=155&type=chunk) - Cash provided by operating activities increased to **$40.4 million** in H1 2019 from **$32.5 million** in H1 2018, primarily due to favorable changes in working capital, including accounts receivable and prepaid expenses[158](index=158&type=chunk)[159](index=159&type=chunk) - Investing activities in H1 2019 included **$47.5 million** in proceeds from the sale of CSZ-IC, offset by a **$15.5 million** acquisition of Stihler and **$13.0 million** in capital expenditures[161](index=161&type=chunk) [Market Risk Disclosures](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from changes in foreign currency exchange rates, short-term interest rates on its variable-rate debt, and commodity price fluctuations. To manage these risks, Gentherm regularly uses derivative contracts, such as foreign currency forward agreements, for hedging purposes and not for speculation. As of June 30, 2019, the company had foreign currency derivative contracts with a notional value of **$23.5 million** - Primary market risks include foreign currency exchange rates (Euro, Mexican Peso, Chinese Renminbi, etc.), interest rates on debt under the Amended Credit Agreement, and commodity prices like copper[165](index=165&type=chunk) - The company uses derivative contracts to manage financial and operational exposure, with foreign currency hedges extending up to one year. As of June 30, 2019, outstanding foreign currency derivative contracts had a notional value of **$23.5 million**[166](index=166&type=chunk) - The company does not enter into derivative financial instruments for speculative or trading purposes[168](index=168&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2019, management concluded that the company's disclosure controls and procedures were not effective due to a previously disclosed material weakness in Information Technology General Controls (ITGC) at its subsidiary, Gentherm Medical, LLC, with a remediation plan underway expected to be completed before the end of 2019 - Management concluded that disclosure controls and procedures were not effective as of June 30, 2019[176](index=176&type=chunk) - The ineffectiveness is due to a material weakness in IT General Controls at the Gentherm Medical, LLC subsidiary, related to restricting elevated access and segregation of duties[176](index=176&type=chunk) - A remediation plan is in progress and is expected to be completed prior to the end of 2019[177](index=177&type=chunk) Part II. Other Information This section provides updates on legal proceedings, risk factors, equity security purchases, and a list of exhibits filed with the report [Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not a party to any material pending litigation and no material legal proceedings were resolved during the six-month period ended June 30, 2019 - There is no current material pending litigation to which the company is a party[181](index=181&type=chunk) [Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2018 - No material changes in risk factors were reported from the company's 2018 Form 10-K[182](index=182&type=chunk) [Issuer Purchases of Equity Securities](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the second quarter of 2019, the company repurchased a total of **629,559** shares of its common stock for approximately **$25.0 million**. As of June 30, 2019, approximately **$113.6 million** remained available for future repurchases under the existing program, which expires in December 2020 Share Repurchases in Q2 2019 | Period | Total Shares Purchased | Average Price Paid per Share | Value of Shares Remaining for Purchase (in millions) | | :--- | :--- | :--- | :--- | | May 2019 | 286,539 | $39.45 | $127.3 | | June 2019 | 343,020 | $39.93 | $113.6 | - The Stock Repurchase Program authorizes up to **$300 million** in repurchases and expires on December 16, 2020[184](index=184&type=chunk) [Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Amended and Restated Credit Agreement, CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, and XBRL data files - Key exhibits filed include the Amended and Restated Credit Agreement dated June 27, 2019, and CEO/CFO certifications[186](index=186&type=chunk)

Part I. Financial Information [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Gentherm's Q1 2019 financial statements reflect decreased revenues and net income, impacted by an impairment loss and a business sale, with new lease accounting standards adopted [Consolidated Condensed Balance Sheets](index=3&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) Total assets decreased to **$763.0 million** from **$803.0 million**, primarily due to reduced assets held for sale and long-term debt, with new operating lease assets recognized Consolidated Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Total current assets** | $401,881 | $443,075 | | Assets held for sale | $17,009 | $69,699 | | **Total assets** | **$763,046** | **$803,047** | | **Total current liabilities** | $166,354 | $175,396 | | Long-term debt, less current maturities | $97,604 | $136,477 | | **Total liabilities** | **$284,559** | **$323,348** | | **Total shareholders' equity** | $478,487 | $479,699 | - The company adopted a new lease accounting standard (ASU 2016-02), resulting in the recognition of **$14.1 million** in operating lease right-of-use assets and corresponding current (**$4.2 million**) and non-current (**$9.3 million**) lease liabilities[9](index=9&type=chunk)[87](index=87&type=chunk) [Consolidated Condensed Statements of Income](index=4&type=section&id=Consolidated%20Condensed%20Statements%20of%20Income) Q1 2019 product revenues decreased **2.5%** year-over-year to **$257.9 million**, with net income falling to **$8.4 million** due to an impairment loss, despite higher operating income Q1 2019 vs Q1 2018 Income Statement (in thousands, except per share data) | Metric | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Product revenues | $257,921 | $264,586 | | Gross margin | $75,307 | $81,242 | | Operating income | $21,845 | $20,649 | | Gain on sale of business | $4,970 | $0 | | Impairment loss | ($10,484) | $0 | | Net income | $8,414 | $12,966 | | Diluted earnings per share | $0.25 | $0.35 | [Consolidated Condensed Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Condensed%20Statements%20of%20Comprehensive%20Income) Q1 2019 comprehensive income significantly decreased to **$4.8 million**, primarily due to a **$4.1 million** foreign currency translation loss compared to a prior-year gain Q1 2019 vs Q1 2018 Comprehensive Income (in thousands) | Metric | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Net income | $8,414 | $12,966 | | Other comprehensive (loss) income, net of tax | ($3,652) | $12,893 | | **Comprehensive income** | **$4,762** | **$25,859** | [Consolidated Condensed Statements of Cash Flows](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) Q1 2019 operating cash flow increased to **$6.9 million**, with investing activities providing **$42.4 million** from a business sale, while financing used **$47.4 million** for debt and repurchases Q1 2019 vs Q1 2018 Cash Flows (in thousands) | Activity | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,881 | $5,590 | | Net cash provided by (used in) investing activities | $42,378 | ($8,393) | | Net cash used in financing activities | ($47,401) | ($35,400) | | **Net increase (decrease) in cash** | **$1,649** | **($32,690)** | - Key investing and financing activities in Q1 2019 included **$47.5 million** in proceeds from the sale of a business, **$49.6 million** in debt repayments, and **$8.0 million** in common stock repurchases[18](index=18&type=chunk) [Consolidated Condensed Statements of Changes in Shareholders' Equity](index=7&type=section&id=Consolidated%20Condensed%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity slightly decreased to **$478.5 million**, primarily due to stock repurchases and other comprehensive loss, partially offset by net income Reconciliation of Shareholders' Equity for Q1 2019 (in thousands) | Description | Amount | | :--- | :--- | | Balance at December 31, 2018 | $479,699 | | Stock repurchase | ($8,040) | | Net income | $8,414 | | Other comprehensive loss, net | ($3,652) | | Other changes | $1,966 | | **Balance at March 31, 2019** | **$478,487** | [Notes to Unaudited Consolidated Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Condensed%20Financial%20Statements) Notes detail the **$47.5 million** CSZ-IC business sale, **$15 million** Stihler Electronic acquisition, new lease accounting adoption, and a **$10.5 million** GPT impairment loss - On February 1, 2019, the company completed the sale of its Cincinnati Sub-Zero industrial chamber business (CSZ-IC) for **$47.5 million** in cash, recognizing a **$5.0 million** pre-tax gain[23](index=23&type=chunk)[120](index=120&type=chunk) - On April 1, 2019, the company acquired Stihler Electronic GmbH, a manufacturer of patient and blood temperature systems, for approximately **$15 million** in cash[28](index=28&type=chunk) - The company adopted the new lease accounting standard ASU 2016-02 on January 1, 2019, recognizing **$17.1 million** in new operating lease right-of-use assets and **$16.7 million** in lease liabilities[87](index=87&type=chunk) - During Q1 2019, the company recognized a **$10.5 million** impairment loss related to assets held for sale, primarily the GPT business[99](index=99&type=chunk)[121](index=121&type=chunk) Q1 2019 Revenue by Product Category (in thousands) | Product Category | Q1 2019 Revenue | % Change YoY | | :--- | :--- | :--- | | Climate Control Seats (CCS) | $94,354 | 7.0% | | Seat Heaters | $73,920 | (12.2)% | | Battery Thermal Management (BTM) | $10,745 | 158.2% | | Subtotal Automotive | $242,357 | 0.0% | | Subtotal Industrial | $15,564 | (29.8)% | | **Total Company** | **$257,921** | **(2.5)%** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q1 2019 product revenues decreased **2.5%** to **$257.9 million**, driven by the CSZ-IC sale and currency effects, though the automotive segment showed constant currency growth and cost reductions improved operating income - Total product revenues decreased **2.5%** YoY. Automotive segment revenue was flat, but after adjusting for foreign currency translation, it would have been **$249.1 million**, a **2.8%** increase over Q1 2018[110](index=110&type=chunk) - The Automotive segment's performance outpaced the market, with its revenue growth contrasting a **6.7%** decrease in light vehicle production in the company's key markets[111](index=111&type=chunk) - Strong growth in Battery Thermal Management (BTM) revenues, which increased **158.2%** YoY to **$10.7 million**, and Climate Control Seats (CCS), which grew **7.0%** to **$94.4 million**[109](index=109&type=chunk) - Cost reduction from the 'Fit-for-Growth' initiative resulted in lower operating expenses, with Net R&D down **18.9%** and SG&A down **10.5%** compared to Q1 2018[115](index=115&type=chunk)[117](index=117&type=chunk) - The company recorded a **$10.5 million** impairment loss related to its plan to divest the GPT business, which is not expected to be tax-deductible[121](index=121&type=chunk) - Cash from operations was **$6.9 million**. The company received **$47.5 million** from the sale of CSZ-IC, used funds for **$49.6 million** in debt repayments, and repurchased **$8.0 million** of its common stock[128](index=128&type=chunk)[131](index=131&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risks from foreign currency, interest rates, and commodity prices using derivatives, with **$24.1 million** in foreign currency contracts as of March 31, 2019 - Key market risks include foreign currency exchange rates (Euro, Mexican Peso, etc.), short-term interest rates on debt, and price fluctuations of commodities like copper[134](index=134&type=chunk) - The company uses derivative contracts to manage financial exposure. As of March 31, 2019, it had foreign currency derivative contracts with a notional value of **$24.1 million**, down from **$33.3 million** at year-end 2018[135](index=135&type=chunk) Debt Obligations by Maturity (as of March 31, 2019, in thousands) | Type | 2019 | 2020 | 2021 | 2022 | 2023 | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Fixed Rate (€EUR) | $449 | - | - | - | - | $449 | | Variable Rate ($USD) | - | - | $88,854 | - | - | $88,854 | | Fixed Rate ($USD) | $2,500 | $2,500 | $2,500 | $2,500 | $1,250 | $11,250 | [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were deemed ineffective due to a material weakness in internal control over financial reporting, with a remediation plan underway and new lease accounting impacting controls - The CEO and CFO concluded that disclosure controls and procedures were not effective as of March 31, 2019, due to a previously disclosed material weakness in internal control over financial reporting[145](index=145&type=chunk) - A remediation plan to address the material weakness is underway and is expected to be completed before the end of 2019[146](index=146&type=chunk) - The implementation of new lease accounting processes in Q1 2019 constituted a material change in the company's internal control over financial reporting[147](index=147&type=chunk) Part II. Other Information [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material pending legal proceedings as of March 31, 2019, in the ordinary course of business - There were no material pending legal proceedings to which the company was a party during the three-month period ended March 31, 2019[151](index=151&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) No material changes were reported to the risk factors previously disclosed in the 2018 Annual Report on Form 10-K - No material changes were reported in the company's risk factors from those disclosed in the 2018 Form 10-K[152](index=152&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Gentherm repurchased **200,381 shares** for **$8.0 million** in Q1 2019 under its stock repurchase program, with **$138.6 million** remaining authorization Issuer Purchases of Equity Securities (Q1 2019) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2019 | 153,967 | $40.04 | | February 2019 | 46,414 | $40.42 | | March 2019 | 0 | $0.00 | - The stock repurchase program authorizes up to **$300 million** in repurchases and expires on December 16, 2020[154](index=154&type=chunk) [Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including CEO and CFO certifications and XBRL data files, as required by Sarbanes-Oxley - Exhibits filed include Section 302 and 906 certifications for the CEO and CFO, and various XBRL documents for interactive data[156](index=156&type=chunk) [Signatures](index=35&type=section&id=Signatures) The Form 10-Q was officially signed on May 1, 2019, by President and CEO Phillip Eyler and EVP and CFO Matteo Anversa - The Form 10-Q was signed on May 1, 2019, by Phillip Eyler (President and CEO) and Matteo Anversa (EVP, CFO)[159](index=159&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2018 or ☐ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to . Commission file number 0-21810 GENTHERM INCORPORATED (Exact name of registrant as specified in its charter) Michigan 95-4318554 (State or other jurisdiction o ...