Gentherm Inc (THRM) 2014 Q4 法說會逐字稿

Greetings and welcome to the Gentherm Inc. 2014 quarter and year end results conference call. At this time all participants are in a listen-only mode. A question and answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Mike Mason. Thank you. Sir, you may begin.

Thank you. Good morning, and thank you for joining us for the Gentherm Incorporated 2014 fourth quarter and year-end results conference call. Before we start today's call, there are a few items I would like to cover. In addition to disseminating through PR Newswire this morning's news release announcing Gentherm's results, an email copy of the release was also sent to a number of conference call participants. If you need a copy of the release, you may download a copy from either the Gentherm website at Gentherm.com, or the Allen & Caron website at Allen&Caron.com. Additionally a replay of the call will be available via a link on the Events page of the Investor section of Gentherm's website.

During this conference call, representatives of the Company may make forward-looking statements within the meaning of Federal Securities laws. These statements reflect current views with respect to future events and financial performance, and actual results may materially differ. Please see the Company's SEC filings including the latest 10-K and subsequent reports, for a discussion of various risks and uncertainties underlying such forward look looking statements.

During the call the Company may discuss non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are included in the Company's earnings release. On the call today from Gentherm we have President and Chief Executive Officer, Dan Coker, Chief Financial Officer, Barry Steele, and Chairman, Bud Marx. Management will provide a review of the results, after which there will be a question and answer period. I would now like to turn the call over to Dan. Good morning, Dan.

Good morning Mike. Appreciate your introduction. And we would very much like to thank everyone for joining us on our call today to discuss our fourth quarter and full year 2014 results. For the second year in a row we have been lucky enough to attain record results on both the top line and the bottom line, and we would like to thank all of our employees worldwide, all 9,300 of us, and all of our partners and vendors for this outstanding record of success that the Company has enjoyed. In 2014 we broke $800 million in revenue for the first time, turning in an $811 million top line result, which is up about 23% over 2013's $662 million.

This was a very strong performance by our team, and has been repeated several years since the merger of the two companies in 2011. So we're very pleased with the results. We're going to try to give you a broad overview. Barry will, as usual, give some very precise technical details, and then we'll be opening the floor for full discussion. And Barry, if you're ready, let's lead us through the details of the results of the fourth quarter.

Thank you very much, Dan. Welcome everybody. Our earnings for the 2014 fourth quarter were $0.55 a share on a fully diluted basis. This represents an increase of $0.24, or 77% over the fourth quarter of 2013. This improvement is the result of a favorable conversion of significantly higher revenue to net profit. Our product revenues for the third quarter were $205.2 million, which represented an increase of $22.9 million, or 13% over the fourth quarter 2013 product revenue. We achieved this despite significant foreign currency translation headwinds. Had the fourth quarter Euro/US dollar exchange rate been the same as the prior year fourth quarter, our revenue for the fourth quarter of 2014 would have been $4.6 million higher, and would have represented an increase of 15% over the prior year period. Similarly, had this exchange rate been the same as the 2014 third quarter, our product revenues would have been $3 million higher.

Our gross margin of 30.3% for the fourth quarter was higher on a year-over-year basis as compared to the third quarter of this year. This amount included a one-time benefit associated with our warranty reserves totaling $3.7 million, offset partially by some one-time expenses totaling approximately $2.2 million. Had these one-time items not occurred our gross margin would have been 29.6%, which is higher than the gross margin percent during the fourth quarter of 2013 which was 27.2%. A number of favorable factors contributed to this increase, including improved coverage of fixed costs by the significantly higher product revenue, the shifting mix in our products favoring climate control seats, a favorable exchange rate on production costs that we incurred in foreign currencies, and continually improving contribution coming from our electronics manufacturing facilities, which continue to increase production volumes.

Our operating expenses were $37.6 million during the fourth quarter, representing an increase of $4.9 million. Over half of this increase represents the regular operating expenses of Gentherm Global Power Technologies, the new company acquired this year, totaling $2.5 million. Not including Gentherm Global Power Technologies, the increase in operating expenses would have been $2.5 million, or 7.5%. Much of this remaining increase reflects increased resources that are being directed to development of existing and new products and the (inaudible-background noise) for those new products which we expect will continue to support our product revenue growth targets in the future. Our fourth quarter adjusted EBITDA was $35.7 million, which was $10 million, or 39% higher than that of the prior year period. Again, the significant increase resulted from a very favorable conversion of the much higher product revenue. Income taxes, during the fourth quarter, we recorded an effective tax rate of 18.3% of our pre-tax earnings. This rate is lower than our average tax rate, due to shifting amounts of our taxable income to lower tax jurisdictions, benefits from a more efficient legal structure which was reorganized during the fourth quarter, and a benefit from the valuation of favorable tax app attributes of Global Power Technologies that were adjusted during the fourth quarter. We estimate that our 2015 tax rate will likely be 25% to 27%. A quick note on the balance sheet, our cash now totals $85.7 million at the end of the quarter. This increase over the full year was $30.8 million, and our total debt now is at $90.8 million. Additionally we have approximately $85 million in available and borrowing capacity on our revolving line of credit. So we have plenty of liquidity to operate the Company. Dan, that's all I had, and I'll turn it back over to you.

Thank you very much for that very positive report, Barry. And I think as you can all see from every measure, the Company has strengthened and been able to exploit our market position as the leader in thermal devices in the automotive and industrial markets. At this point we would like to go ahead and follow with our normal trends and open the floor for questions. Jesse, if you are ready, we'll take any questions we have from the floor.

Thank you. (Operator Instructions). One moment please while we poll for questions. Thank you. Our first question is from the line of Samik Chatterjee with JPMorgan. Please proceed with your question.

Congratulations on the quarter, guys. Really good quarter. I first wanted to touch on the gross margins which came in pretty strong, even when excluding the one-time warranty accrual. Can you quantify the currency benefit that might have been there in the 4Q gross margins. And in a broader sense, can you reflect the factor that drove the gross-margin expansion in 2014, and how those factors play out in 2015, so as to give us a sense of where gross margins can go to in 2015?

I'm going to leave the technical analysis, Barry has studied this quite detailed on the impact of the currencies on the gross margins. He's done a great job of helping us understand that. But in a broad sense we have been focusing our attention since the merger of the companies on trying to target a 28% standard gross profit. We felt very confident going into 2014 that these numbers were well within reach. We had several programs that we were instituting internally to try to make sure that gross margins were achieving our target of 28% minimum, including and I think a big contributor has been our efforts at internalizing our electronics consumption. We're now well over 85% self-sufficient in all electronic control modules and components that we use.

We've also been putting a big effort on trying to get more balance in our product line mix. Barry mentioned earlier that our sales of CCS heated and cooled and heated and vent products continues to grow at a very good rate, indicating that the consumers in the marketplace see very good value in the Climate Control Seat systems that we're offering to the market. In 2014 we saw near parity between our basic heating seat elements, which are our entry level product, and the higher content product of heat cooled and heat vent. And that has been very good for our gross margins. And those programs of course are continuing into 2015 and 2016, with new products coming into the mix like the heated steering wheels, heated and cooled cup holders, and other products that we are very much pleased with in terms of the performance of the market. Barry, if you would give a brief comment on how the currencies have impacted margins, that might be helpful.

Sure. So during the fourth quarter, the most important currency relationship that impacted us is the decline in the Euro. And as I mentioned there was a significant impact on our top line. From a gross margin standpoint, it's decreased our gross margin dollars, but doesn't really shift the gross margin percentage to a large degree because we have significant Euro-related costs as well as Euro-related revenue. Other currency movements that have happened during the quarter, but more towards the end of the quarter, include Mexican pesos weakening, Canadian dollar weakening, and a further weakening in the Ukraine hryvnia. Those impacts should be beneficial to us on a margin percentage basis, but really only impact us in the future, as they start to take effect in the first quarter. Thank you very much.

Great. Thanks for that. Maybe just to then touch on the revenue growth that you had in 2014. I mean, you had 23% year-on-year revenue growth which marked a 20% performance of the industry. And I was just wondering, obviously they're strong growth numbers, which you'll have to comp against in 2015, but are there any other hide winds to keep in mind, as your guidance currently implies more like a 15% outperformance versus the industry in 2015. Are there any headwinds we need to keep in mind?

Well, the headwinds, of course, are the economic activity of the world, particularly in the auto sectors. We do have some current uncertainty about what's happening with the balance between the foreign currency exchanges, that has impacted us in the fourth quarter and will impact us in the first quarter. But in the long-term sense, we're still quite comfortable with our guidance of 10% to 15% over 2014's rather remarkable results.

Okay. Just lastly, can you give us an update on the GPT business, and when you talk about your readiness to go after business in different markets, can you just give us a sense of what the typical size, and the duration of all of those businesses and the type of customers you're targeting?

Yes. Our Global Power Systems Group has been kind of acclimating to the new Gentherm programs. We spent quite of a bit of time and effort preparing the team to get ready for growth. We have had some work to do in the factories to try to get the capacities ready to expand. We've also added capacities in the North American market in particular, to focus on the customers. We've added field engineers and sales teams to be able to help us engage with the existing oil and gas field customers, as well as engaging our advanced development teams on the old Gentherm side, as well as the rather capable teams at Global, to be able to help identify product improvements and additional new products that will be needed to help us reach our goals of dramatic growth for the Global systems group.

Great. If I just can follow up, can you just help us with the revenue number in the fourth quarter from the business?

Barry, you want to give him the Global's fourth quarter results?

I believe it was about $7 million.

Okay. Great. Thanks for taking my questions. Thank you.

Thank you, sir.

Thank you. Our next question is coming from the line of Matt Koranda, with ROTH Capital. Please proceed with your question.

Good morning guys. Thanks for taking my questions. Just wanted to start with your outlook for 2015. It seems like you guys have highlighted well in the prepared remarks about headwinds from the Euro. If you adjust for these on a constant currency basis, what would the revenue outlook imply?

The revenue outlook, if adjusted for the current currency, would be well within our guidance of 10% to 15%. We give a range. We don't give a specific dollar amount, because of these unusual impacts on the world economies, including the currency exchanges. We are a global business. We have lots of exposures to different markets, different customers, and in this day and time, different currency reactions. So when we give our guidance, we have given some thought to how all of the current conditions would impact our operations. So given what we know today, we're still very comfortable with our 10% to 15% guidance over 2014's 23% growth.

Okay, great. That's helpful. And then could you help us understand how GPT factors into the outlook. Would we expect it to grow in line with that 10% to 15% top line guidance? Or maybe a bit better than that?

We actually think that Global has a lot of room for growth, and we're expecting better than the 10% to 15% out of our partners at Global.

Okay. Great. And then just touching on supply chain for a moment. I know a lot of people have been kind of curious about this, but is there any impact to your supply chain or shipments to customers, given the west coast port closure? Assuming, just given your manufacturing footprint, there shouldn't be much of an impact. But can you just help us understand that?

Actually, we do have impact from the west coast dock strikes. We do import a lot of goods in the form of components, and in some cases finished materials from our partners in Asia, including our own factories. And when they get hung up on the coast and aren't allowed to come in, there is a ripple impact, not only from us, with our own vendor base and supply chain, but also our customers' other supply chains. A lot of our automotive customers are dependent upon Asian sources for many of the components and subassemblies that they use to assemble cars, and we have seen some adjustments to schedules based upon the long-delayed dock strike out on the west coast. So there has been some very minor impact so far, and it will take a little bit of time for that kind of ripple to follow all the way through the marketplace. So it's not been significant for us so far, but it has been an irritant, and there will be some maneuvers to be able to avoid any detrimental impact to us, to our customers, and from our customers to their end customers as well.

Okay. And then just a brief follow-up. Is it fair to say that the majority of the minor impact that you see will probably be contained in Q1 of 2015, or would you see some maybe leaking into Q2?

I think it's going to be mostly impacted in Q1. There are a lot bigger fish in this pond than us. So I think that some of our larger customers may have more of a problem with this than we.

Okay. That's helpful, I'll jump back in queue, guys. Thank you.

Thank you. Our next question is coming from the line of Steve Dwyer with Craig-Hallum. Please proceed with your question.

Thanks. Good morning. Barry, could you let us know if revenue derived from the bed business as well as cups and bins, was that material in the quarter? And then how do you expect that to grow in 2015?

For bed, absolutely not, it was not material. For cup holders, it was basically the same as it has been, that $5 million to $8 million annual range, we do have new book business coming but I don't believe it starts until 2016.

Okay, with respect to beds, you've obviously opened an office in Houston, and hired some new folks. How should we think about that business throughout 2015?

Barry, I'll go ahead and take that. Yes, we did open an office in Houston to help our partnership with our Mattress Firm retail partner. We have hired some people who are bed experts and understand the industry, to be able to work with Matt Firm's well over 2,000 stores nationwide in the US. And we do expect that move, and our newly designed at most brand to be quite helpful, and we believe to see impact on our revenues in 2015. We still believe there's a strong market for high end heated and cooled beds. We continue to see very strong consumer research results, and we are trying now to tailor our delivery networks to channel to make sure that we are providing the product, and the information of the product to the public, so we can begin getting some good sales. And I think Matt Firm agrees with that and is very much in line and supportive of these efforts.

Are you able or willing to quantify kind of what you think that number could look like in 2015, or too early to say?

It's a little early to say right now. The bed market really kind of begins with President's Day, gets rolling in kind of the mid-year, 4th of July. They apparently only sell beds during national holidays. So we haven't seen enough national holidays to see how it's going.

Got it. You talked a lot about kind of the different levers involved in gross margin. You guys have kind of grown that very nicely throughout the year, to kind of the top end of that 28% to 30% range that you have talked about. Are we to the point where we can start thinking about, more like a 29% to 31% range, or do you feel like there's some extraordinary events that kind of got it to 30%, and 28% to 30% is still the right way to think about it?

We like to see kind of a long-term trend, and we have had four really good quarters where we were between 28% and 30%. But we're comfortably between 28% and 30%. So we still haven't seen enough evidence that we want to try to raise our current guidance on gross margin to anything beyond the 28% to 30% right now. If we start seeing some solid results that bump up and over 3%, we will reassess our situation and reassess the targets. But right now we're very comfortable with a 28% to 30% number. And it is true we're bumping a little bit on the high side of that range right now, but we're not consistently above 30%. So we're very happy where we're at.

And you referred to the port strike. Would that, if there's an impact there, however small, would that manifest itself in the gross margin line, whether it be through expedited shipping, et cetera? Or would that be somewhere else?

Well, it hits top line, of course, when our customers don't order, because they haven't got the other components necessarily to assemble cars and trucks. And for us, there has been a very minor impact in terms of expedited freight, to get products from the dock to our customers. But it's been so far very, very small.

Got it. Last one, and I'll hop back in the queue; You're doing some building out of some new manufacturing facilities this year. Is that going to be a negative impact on margins at all throughout the year, whether it be just dilution of your gross margin added capacity? Or is that going to be confined, do you think, to primarily CapEx?

Well, there's going to be some CapEx and some operating expense as well, as we man up to get these teams up and rolling. Our facility in the Vietnam will be open in the second half of the year and will begin to contribute. We already have a local management team in place. They're finishing the construction process. In the second quarter we'll start rigging the equipment and the gear on the factory floor. In the third quarter we'll begin bringing in teams and starting the training process. Fourth quarter we should start very limited production runs. So there will be some costs that are incurred as all of this preparation work is undertaken. Most of the capital expense will be completed by the end of this year for Vietnam. And then as we turn our attention to our new facility in Macedonia, the construction of that facility will start later this year, and we will be doing, repeating the same process in terms of manning up, training and getting the facilities up to our very high standards of manufacturing excellence before we open the plants and start shipping and generating revenue.

Great. I guess while we're on manufacturing, can you talk a little bit about your Ukraine facility, how it's running? I don't think historically you have thought there to be much risk there, but the extent to which you may have created redundancy for that facility, et cetera? That's it for me, thanks.

Certainly. Well, our Ukrainian manufacturing continues to be one of our premiere facilities throughout the world. Some of our best people, our best engineers, and our best technicians operate on a daily basis, providing Europe with some of the highest quality products available in the industry. We are on the far western side of Ukraine, very close to the Hungarian border. The Hungarian border is where we bring product across to distribute into the EU customer base for Europe for us. So we're quite pleased with the results. We remain concerned about the conditions overall in Ukraine. We have had some positive impact from a crash in the Ukrainian currency.

But that also leads to instability in the general region, and there is a war going on in the far eastern part of the country. So we have to remain alert and vigilant. We have taken steps where they are possible. We have done things in terms of redundancy in equipment in some of our other facilities around the world, including adding some capacities where possible. We've also taken steps to protect things like uninterrupted power supply systems for the factory, and to try to make sure that there are no external forces that are put forth on our factories and our ability to output and serve our customers. But in general, the conditions in Ukraine remain positive and upbeat in our area, and in our facilities. And everyone, of course, is hoping that Vladimir Putin goes home, and everything settles back down to normal, and the Ukrainian people get to determine their own results and forceful will. Next question.

Great. Thank you.

Thank you. Our next question is coming from the line of Bill Selesky with Argus Research. Please proceed with your question.

Bill?

Mr. Selesky, your line is live. You may proceed with your questions.

Bill is uncharacteristically quiet this morning.

Mr. Selesky, your line is now live. We'll move along to our next question which is coming from Chris Van Horn with FBR Capital Markets.

Good morning. Thanks for taking my call. I just had a question on the 25% long-term goal of non-automotive-related markets. Could you just give me some color on kind of how we get there and where we are today? And is it going to be organic, or is it going to be acquisitions or some kind of mix of both? Any color would be appreciated.

Good morning. Certainly. Well, as any rational people would look at the world, you see a business that has an awful lot of its future vested in a single market segment that for us, as great conservative business people, we see some element of risk there. Risk exposure to the trends in that market. The auto market is notoriously cyclical. And as a part of our long-term goal, we would like to try to reduce our exposure to the variations in the auto demand worldwide. We have begun already to try to venture out into some new areas. You see our actions in power generation through our acquisition of Global Thermoelectric, that group already generates about $30 million in revenue. We expect that to grow quite nicely over the next five years.

And that leads us into a foray into some other industrial applications where thermal management or power generation systems are considered to be of expressed value. We also have been looking at other areas including the consumer markets, like the bed business. The bed and furniture business has not panned out as well as we would hope, as fast as we would hope. But we are seeing tremendous support in the market research for the concept. And we believe, if we figure out our supply chain tactics and strategies, that we'll be able to see very good solid growth from that. The 25% number is just something that we picked and said as a long-term goal, that we see a business that has some strengths in other new growing and expansion markets, as to be a very healthy business. That's really where we came up with the target to try to pinpoint other markets other than the exclusive automotive world.

Okay. And so is it safe for me to infer that kind of the increases in the R&D spend that you guys highlighted in the press release, that part of that is going to be in kind of the non-automotive markets as well?

Yes, a good portion of that is the development of, product development process, technology development process, market identification and market study process, to be able to find some new markets where the customer puts a good and appropriate value on thermal management systems.

Great. Then just one follow-up, if you don't mind. Are you seeing any challenges, given the volatility in price of oil and gas?

The challenges? Oil and gas prices don't necessarily affect our main business in the auto industry. In fact, to be honest with you, what's happening we think worldwide, is with the current depression in the price of gasoline at the pump, we're seeing a lot more people buy larger SUVs, pickup trucks and such, which we have a very high-value content on. So that's been a very good, positive tailwind for us. In general, the oil and gas exploration and distribution business has seen some small impact on our Global thermal business where we service the oil and gas industry. Some future projects have been delayed, or some shipments may have been slightly delayed based upon the financial and economic realities of some of these oil fields.

Okay. Great. Thanks again for taking my call.

Yes, sir, thank you.

Thank you. Our next question is coming from the line of Gary Prestopino with Barrington Research. Please proceed with your question.

Hi. Good morning. I'm at an airport, so I hope you can hear me. The facilities that you're putting up in Vietnam and Macedonia, they're component facilities as well?

I'm sorry, I couldn't quite hear your question. Could you repeat?

Sure. The manufacturing facilities that you're putting up in Vietnam and Macedonia, are they for components as well?

Yes, the facilities that we're adding capacities in our Asian and European business will be for all of our normal product lines, component and subassemblies that will be shipped to our end customers.

So did I hear you right that you said you were 85% self-sufficient in modules for electronics and components right now, without these facilities? Or did I hear that wrong?

You heard that correctly.

Okay. Thank you. And then in terms of the mix shift in the CCS business between heat vent and heat cool, can you give us those percentages at this point? I know that's something that you always put in your slide. What was the mix shift between those two items annually between 2014 and 2013? Can you do that for us right now?

I can do it for 2014 very quickly. We were slightly above 50% of our revenues in 2014 came from what we call our Climate Control Seat systems. That's a combination of our heat cooled and heat vent business. In 2013, I don't know the exact percentages, but if I had to guess, I would definitely guess that our sales of heated seat elements, a more commodity type entry level product for us, were certainly the larger share. My guess would be somewhere in the 55% to 60% range in 2013. We have seen a considerable push on increasing the customer awareness and the customer participation in our Climate Control Seat systems, again where we have more content and value add, and that has had a very positive impact on our margin lines.

Okay. All right. That's it. Thanks a lot.

Thank you. And good luck on your trip.

Thank you. (Operator Instructions). Our next is coming from the line of Josh Goldberg with G2 Investment Partners. Please proceed with your question.

Dan and Barry, how is everything going today?

It's a wonderful day.

Just a couple of quick questions. First, on the Climate Control Seat business, it looks like you guys had a very good fourth quarter and obviously for the entire year. Could you talk a little bit about how much of that you think was pricing improvement versus units? Just on the Climate Control Seat side? And how much did currency hurt you on that specific area?

Well, the content is actually a bigger piece of it than the pricing structure for us. The ASPs for the heated cooled and heat vent business are significantly higher than the standard heat business, and with that we get a better play at the bottom line. I'm not really certain exactly how much impact the currencies have had on this. The majority of our heat cooled and heat vent business is in our North American market, with a very good solid push into the Asian business. So the biggest impact negatively we received from currency has been in our European theater, and we aren't really that strong yet in heat cooled heat vent in the European market. So I would say that the currency impact on that growing and important segment of our business was virtually nil. I would ask Barry to give any comment he might have on that as well.

And even where we have a significant part of our climate business in Europe is US-dollar priced. So what you said is absolutely true.

Okay. In terms of that, to that point, I mean, I know you talked also this year that you faced easier compares at the beginning of the year with the K2 XX platform launching and other things, which had you grow your climate controlled seats in the 40% range, and now that you have normalized more to a 22% growth in the climate controlled seats for the December quarter, and that currency is not really playing a role much one way or another, is it fair to say that embedded in your 10% to 15% growth rate for next year, that Climate Controlled Seats should stay at roughly 20% growth for the foreseeable future? It sounds like you're getting on more products, and obviously more sales of SUVs is going to be a positive, does 20% to 22%, is that part of your roll-up to get to your 10% to 15% for the year?

Yes, it certainly is. It continues to be a key strategic objective of the Company to increase our revenues in the higher value added content product lines. That's precisely what that means. We're going to continue to push hard to make sure that heat cooled and heat vent stays at the forefront of all of the customers' product portfolios. And I would also like to point out, I'm sure that Barry is itching to say this; As we convert customer, existing customers over from a heat only entry level position to a heat vent business, we don't book it as a sale of a seat heater, but each heat vent system has a seat heater as a component of its subassembly. So you'll see --

In some ways it cannibalizes your seat heater business a little bit, which is okay?

Right. In fact, we don't consider it cannibalization. We actually consider it an upgrade, an upsell of what we're offering. And it makes more sense for us to be able to package a basic entry level product with some additional technology, which adds to the ASP and the appeal of the product to their customers worldwide.

Okay. And for the Ford F150, can you talk a little bit about, I know they had a little bit of a delay in terms of getting that production rolling. Did that contribute much for you in December, or are you very optimistic for that going into the March quarter?

There was a little bit of delay in the introduction of that F-150 product to the marketplace, and there was a very small, I would say, pause in the production of the F-150s. But they continued to produce at pretty close to normal run rates even though they weren't releasing the product to the customer until they were ready to do their big reveal, which occurred at the Super Bowl ad week. So there wasn't really a lot of direct impact on us with the transition from the all-steel bodies to the aluminum bodies F-150. So very little impact for us.

Okay. Final question for me. Barry or Dan, if you could just sort of highlight, in terms of the growth of 10% to 15%, is it going to be skewed at all either to the front or the back half of the year, dependent on what you see in terms of models rolling on? And orders or productions that you have in hand, that gives you when those are going to start rolling on? And congratulations again.

Thanks a lot. I would generally say that traditionally in the auto business, the second half of a year is where we have the most likely opportunity to pick up new platforms, and to see business rev up as the new model years come out. So I would say in a general sense that we would expect to see the second half to be a little bit stronger than the first half in 2015. Barry, any comment?

Yes, I would agree that the 2014 cycle has been completely unusual, where we grew revenue very fast out of the gate. We will continue to grow in each quarter, but we won't have the same pattern of growth as you saw in 2014. We will be more normalized.

Jesse, any more questions?

We have no further questions at this time. I would like to turn the floor back over to management for additional comments.

Okay, thank you very much. Thank you everyone for joining us. I know the weather has been tough, and it's hard to sit and concentrate on random things like technology suppliers to the automotive industry. But we have had again, a second year of really extraordinary performance, and I can't underestimate for you guys the amount of effort that has been put forth by our entire team, to be able to generate these financial results that we are so proud and pleased to be able to present to you. We think that 2015 has a lot of challenges, but there are still tremendous opportunities for Gentherm, our products, our technologies and our people. We thank you for your support, and we ask you to join us in about 90 days when we get together and talk about hopefully a very happy first quarter 2015. Thank you everyone for joining us. And good day.