Ladies and gentlemen, thank you for standing by. Welcome to the Gentherm Incorporated 2013 First Quarter Results Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator Instructions) I’d now like to turn the conference over to Jill Bertotti of Allen & Caron. Please go ahead.

Good morning, everyone, and thank you for joining us for the Gentherm Incorporated 2013 first quarter results conference call. Before we start this morning’s call, there are a few items I’d like to cover with you. First, in addition to disseminating through PR Newswire this morning’s news release announcing Gentherm’s results, an e-mail copy of the release was also sent to a number of conference call participants. If any of you need a copy of the news release, you may download a copy from either the Gentherm website at www.gentherm.com or the Allen & Caron website at www.allencaron.com. Additionally, a replay of this conference call will be available via a link provided on the Events page of the Investors section at Gentherm’s website. Finally, I’ve been asked to make the following statements. Certain matters discussed on this conference call are forward-looking statements that involve risks and uncertainties and actual results may be different. Important factors that could cause the company’s actual results to differ materially from its expectations on this call are risks that sales may not significantly increase; additional financing if necessary, may not be available; new competitors may arrive; and adverse conditions in the automotive industry may negatively affect its results. The liquidity and trading price of its common stock may be negatively affected by these and other factors. Please also refer to Gentherm’s Securities and Exchange Commission filings and reports including, but not limited to, its Form 10-Q for the period ended March 31, 2013, and its Form 10-K for the year ended December 31, 2012. On the call today from Gentherm, we have Dan Coker, President and Chief Executive Officer; Barry Steele, Chief Financial Officer; and Bud Marx, Chairman. Management will provide a review of these results, after which there’ll be a question-and-answer period. I’d now like to turn the call over to Dan. Good morning, Dan.

Good morning, Jill, and thank you from all Red Wings stands here in Detroit. We are here to discuss our first quarter results. We had a pretty good quarter. We are pleased with the results, the revenues were slightly stronger than we had originally anticipated, came in about 14% higher than the previous period in 2012, and our results were pretty strong up and down the line from all of our major business units. We’ll follow our normal prescribed procedure here and we will turn the call over to Barry Steele our CFO, who will provide some of the financial highlights and details before we open the floor for question. Mr. Steele, good morning.

Thank you, Dan. Good morning, to you. Everyone, our earnings per share for the first quarter was $0.24. There were a few unusual items that impacted these results that I’d like to describe for you. First in February, we acquired an additional stake in W.E.T. from the largest minority shareholder in conjunction with this acquisition we incurred approximately $1.2 million in acquisition transactions. Second, our tax provision reflects research and development tax credits and certain exemptions under U.S. non-income tax rules related to our 2012 tax year, because the U.S. Congress do not extend these provisions (inaudible) January 2, 2013. So that means as the quarter we do recorded a benefit totaling 1.3 million that would be unusual in a one-time event for us. The net impact of these items reduced the fourth quarter earnings per share by $0.02. So our normalized earnings per share would be $0.20. Our product revenues for the first quarter 2013 were $148.1 million, which represented an increase of $18.6 million or 14.3% over the first quarter 2012 product revenue. The increase is due to strong automotive production especially North America and Asia. Our European based revenues were only slightly higher than the prior year period due to the soft automotive market in Europe. We’re continuing to see additional penetration in our existing products that we get on our new program. Our gross margins for the first quarter were 26.4% representing an increase of 1.3% over the prior year first quarter. This was a result of improved fixed cost coverage and favorable product mix. Operating expenses, operating expenses were $29.3 million during the first quarter 2013, representing an increase of $5.2 million, but that included the acquisition transaction expenses I mentioned earlier. Taking these expenses out, our operating expenses increased by $4 million or 16.8%…

All right. Thank you very much, Barry. Again we’d like to open the floor for questions. And operator, if you are ready, we are ready.

(Operator Instructions) First question is from the line of Joe Bess with ROTH Capital Partners. Go ahead. Joseph Bess – Roth Capital Partners: Good morning, gentlemen.

Good morning. Joseph Bess – Roth Capital Partners: Dan, as we start afresh the middle of the year, are you still expecting the back half recovery in Europe or what’s the timing unlike you guys are thinking that there’s going to be a recovery in that market?

Yeah, we haven’t quite got to a part where we feel we’re at the mid part of the year yet. But in looking forward, we still think that there is some strength beginning in the European market place, it’s certainly not true we haven’t seen strength yet as you’ve heard from Barry’s comment. But we are believing at the moment that we’re kind of getting near the bottom. So we do believe that the second half of the year in Europe should be better. We think there’s going to be a consistent strong North American market and we think that Chinese market will also improve in the second half. We had quite a bit of softness in the Asian markets but we think all of those will follow through with our projections for the year. Joseph Bess – Roth Capital Partners: Okay.

It’s also fair to observe that, the main European impact has been on the French and Italian and mass market producers. There has been some slowing for Mercedes and BMW, and Volkswagen. But they have been sustained by their export sales and by their stronger position. So in a sense we haven’t had a significant decline in Europe. And therefore it’s unlikely there will be significant rebound for us, but we think it will be stronger. Joseph Bess – Roth Capital Partners: Great. Thank you for that. Okay. And then transitioning to – thinking about what a little bit more and as you guys internally evaluate, can you give us a sense sort of operational savings opportunities relating to the integration for the two businesses that you’ve had a bit more time to really dive in?

Well, we have indicated in the past that we saw a stronger in excess of $10 million worth of synergistic opportunities for the few companies being pulled together. I think it should be pointed out that we never really made the acquisition under the assumption that we’re going to have massive cost savings by the merger of the two companies, but rather that we would see significant opportunities created by the combination of our two teams skill and market strength. And so we do see significant opportunity. We’re beginning to lay those out. We have actually quite a few teams of people working around the world right now to draw up a better plan, hard concrete plans to be able to institute these plans over the next two to three years as we’ve also indicated in the past. So we are feeling very good about how things are looking. In terms of long-term strength and opportunity for the combination of the two companies. So everything we found so far has validated what we thought as our premise for the thesis for the acquisition. Joseph Bess – Roth Capital Partners: Okay. And then speaking about the press release, as you guys start to bring your exposure to new markets, i.e. the medical market. Can you talk a little bit more about that opportunity and when you guys think that a commercial product might be hitting the market?

Well, we see lots of opportunities in lots of different markets, and the thermoelectric applications, there is a couple of really key things that we like, that we’ve been working with some customers on. As you know we have a bed product that is in the market now and is beginning to show some pretty good strength. Obviously a bed market for the consumer, I would leave one to think about a long-term care facility in a medical hospital or some applications such as that. So those are the types of medical products. We’re not talking about creating a new medical device. We’re talking about some adaptation of our skills towards medical applications. Another prominent example of that would be we’re looking into how we would be able to heat and cool office chairs and other furniture items. And of course in the medical industry they are on a significant needs for regulating body temperature and reducing moisture on the body for people who are confined to wheel chairs. So there are several different opportunities and applications that we see is potentially quite appealing in the medical market. Joseph Bess – Roth Capital Partners: Okay. And then thinking about the medical market a bit more. What might the cost be to bring a product to market?

That’s another area we’re investigating. There is many different avenues to get into the medical business in terms of how you distribute your product of what types of levels of products and components we offer and introduce to the market. The cost are obviously a little bit higher in the medical industry than they are in the automotive industry. And we are examining all of our options in terms of the packed market and the distribution methods that we’ll choose. So we’re not quite ready to commit to how we’re going to approach the market yet. Joseph Bess – Roth Capital Partners: Okay. Good. And then just one last one, where do you expect our NDA to go as you pursue these new opportunities that you guys had just discussed?

I think we’ve got a pretty good base for our R&D team right now globally. We’re going to be focusing this team of engineers and scientists toward specific projects and goals. So I don’t really see us having any dramatic uptick in R&D. Hopefully, we’ll be able to maintain our current levels of spending and our revenues will continue to accelerate hopefully in the mode that we’ve seen lately in the 10%, 12%, 15% growth per year with a flat R&D budget, so that would be ideal for us. Joseph Bess – Roth Capital Partners: Alright. Thank you for your time.

Thanks, Joe.

Our next question is from the line of with Steve Dyer with Craig-Hallum. Please go ahead. Steven L. Dyer – Craig-Hallum: Good morning, and thanks for taking my questions. Question for you, you mentioned the new programs in the quarter driving a lot of the growth, what is sort of the cadence of the new programs that you won this year, how should we think about the particular quarters that are strong, is it spread relatively ratably throughout the year?

Hi, Steve. It’s not as it was in the past, where we were greatly impacted by the New Year model launches that were all dramatically schedule beginning in July of each year. We’re seeing a lot more people roll new model introductions out as through they are available. So, it’s become kind of a broader applications so the typical spike have been smoothed of a little bit, plus we have a lot more global exposure with the addition of the traditional W.E.T. business model. As an example, our cable business has been quite aggressive and it’s had very strong successes in the past months and we’re seeing a very strong increase in revenue from our cable business, steering wheel businesses are doing well. So, we’ve got a lot more of a phase to draw from. So, you don’t see I think the traditional historical spike that you saw in the past. Steven L. Dyer – Craig-Hallum: Okay. That’s helpful. Could you let us know maybe what bed revenues and cup holder revenues were in the quarter? Just trying to get a sense for how that’s scaling.

Bed revenues were about $500,000, cup holder revenues were about $1.8 million, close to $2 million. Steven L. Dyer – Craig-Hallum: Okay. How should we think about those numbers overall this year?

The bed revenues were artificially lower. We had a little bit of a problem with one of our bed partners, the bed manufacturing supply partners as a matter of fact towards the end of the first quarter and we think that those issues have been resolved and that product is flowing back into the market now here in the second quarter. I think you will see the cup holder revenues for the current period will continue consistent with what you’ve seen in the past. And you won’t see any of our new hopeful platforms that we are working with until ‘14 and ‘15. Steven L. Dyer – Craig-Hallum: Okay. And then just relating to, I guess, guidance, the 14% grow year-over-year in Q1 and what should be sort of a softest quarter certainly in Europe from a production standpoint, the [8 to 10] seems conservative, which I know you are. But any color as to your thoughts on potential upside to that. If Europe does stabilize in the near-term, we’ve certainly gotten some good data points out of the UK and Germany recently, but just thoughts, I guess, overall, on the direction of the year?

Well, we are feeling really good about the 10% right now. And if everything falls into place, as we hope it will, we are going to be on the high side of our guidance. Again, we have only gotten the first quarter behind us and it is traditionally one of our more volatile quarters. So we are very pleased to have gotten that quarter behind us, but I would caution us to think that the third and fourth quarter of 2012 were pretty strong performances for the companies, and so our comparables are going to be a little bit more difficult in the second half of the year even with a little bit of a bounce back out of the European and the Chinese markets. So as we always do, we will reassess this at mid-year and we’ll provide any adjustments we see necessary to our guidance of 8% to 10%. But right now, for the first quarter, we feel pretty damn good about 10%. Steven L. Dyer – Craig-Hallum: Okay.

So Barry, I would just add that, the currency impact was pretty much nil for the first quarter. We don’t know, we can’t predict where currencies will move. But if the euro strengthens or weakens it could impact the results clearly. Steven L. Dyer – Craig-Hallum: Yes, understood. Barry, R&D was up a little bit relative to where it’s been running and SG&A was down a bit. Are these good levels to think about going forward or was there anything kind of one-time that would have bumped either one up or down?

They’re probably pretty good run rates. We mentioned when we had the fourth quarter call that we would expect the first quarter SG&A to go down. We may see higher fourth quarter again as we get to the end of this year. But these are probably good – pretty good run rates in the interim orders, maybe a little number for the fourth quarter. Steven L. Dyer – Craig-Hallum: Okay, helpful. And then, just real quickly, could you give us maybe an update on the progress of the remaining, I guess, less than 1%, where is that, are there any costs that you’re carrying and trying to chase that down that may go away once you get it resolved and where are we with that?

Well, the process that we’re offered by the German regulations are that we can make a decision to go for a squeeze-out play, which involves the legal court process and is rather weakly thing that we are conducting our evaluations on right now. For us, that’s not a terribly significant item, to be honest with you. We’re not keenly interested in shaking down that 0.6% or 0.7% that are remaining out there. Something like 22,000 shares, I think, are outstanding in the group. So we’re pretty happy about where we stand. We’ve gotten the domination profit and loss agreement in place. We have been able to acquire large block of the remaining open shares or our minority interest numbers are extremely small, the teams both be alike we are now a merged company. There are some costs that we will have to continue to carry on the books in terms of remaining to be an open company. And in Germany we’ll have some filings and some legal expenses that we will have to continue will incur, but it is nothing really significant that modest us. We are planning to pursue and examine the opportunities that would squeeze out and will make our decision as to how far we want to push that or how much value there is there, but I think it’s not a lot of expense and there is very little gain for us. So we are happy where we are at. Steven L. Dyer – Craig-Hallum: Alright. Thanks nice quarter.

Alright. Thanks Steve.

Thank you. Our next question is coming from the line of Anthony Deem with KeyBanc Capital Markets. Go ahead. Anthony Deem – KeyBanc Capital Markets: Hi good morning gentlemen.

Good morning. Anthony Deem – KeyBanc Capital Markets: Few questions here, your organic growth opportunities continue to impress, my question is how sustainable do you believe this high single digit, low double digit growth is over the long term and I’m talking the next two to three years, I mean CCS penetration clearly is a big driver, so I’m just wondering if you can share some details on your adjustable market where we’re at today, where do you see it going and how much does the Gentherm backlog benefit?

Well actually Anthony if you look at where we’ve been in the last five or six years, our growth rate targets have not been by accident. We actually focused very hard on trying to find new opportunities for our technologies and now that we have a slightly larger company it is a little bit more difficult than we had when we had when we were smaller, and more technology start up type of company. But our goals are very clear. We’re trying to grow the business at a steady, healthy rate that allows us to take advantage of the market experience that we have and the technologies that we offer to these markets. We assess that a 10% growth is kind of a minimum acceptable number for us. And we have now a lot more products in our quiver then just the heated and cooled seat and we are trying to drive more products and technologies to market to continue this path. But when we look forward for the next three to five years, we see this as being a key driver in the financial health of our companies, being able to expand our base and we need new products and new market opportunities to be able to do that. So, we are pretty happy with where we are heading and we are pretty happy with our last actually 10 years of success of being able to deliver predictable growth. Anthony Deem – KeyBanc Capital Markets: And then what those accelerating organic growth opportunities, what’s the new products and applications you just referenced. And is there any chance Gentherm might provide bookings in the future whether it be growth in that new business growth to help us out and – you know is there any color you can provide with respect to your backlogs over the next few years as it stands today?

There is a very little chance of that actually. We are quite happy with how we are guiding the market. We provide as much information as we have, that’s definitely reliable and predictable for us. We could provide an annual topline guidance number on where we think revenues are going to go. You have a lot of historical data to look back and see how our financial performance has been and given where we go, we give guidance on a quarterly basis as to how we think the impact of the business are and how we are doing on a year-to-date basis, especially with regards to our projections. We are not intending to get into the line by line projections and forecasts that some companies get into, we are not that kind of a company. So we are not going to give you a whole lot more detail than what you get out of the document. Anthony Deem – KeyBanc Capital Markets: Okay. And then just lastly you had some margin expansion this quarter despite R&D and SG&A representing a larger percentage of revenue and it appears as though your expanding capacity in China investing more in product developments and the integration might be a slight near term headwind. So, I’m just wondering can you give us an indication on the margin outlook for your company over the next 2013, maybe 2014. Do you see yourself in this 12% to 13% EBITDA range, is that sustainable or potentially a step function increase of some sorts to the 14% to 15% range obviously some good revenue growth you can leverage some potential integration opportunities. So can you give us a flavor on the margin outlook?

Sure. First, we have been working very hard in the last 18 months. We try to expand our production capabilities and capacities. We have doubled the size of our Chinese facility. In addition to that we’ve also opened a process of validating a new Chinese based electronics facility which will come online in the second half. We’re also engaged in expanding our capacities in our North American manufacturing site in Acuña, Mexico. At this moment in time we don’t see a current need to expand our facilities in the European market because of the conditions in the short-term we see in the marketplace. But we do see an opportunity to be able to continue to constantly put some upward pressure on our gross margins. We would like to see that over a two or three year period, reach somewhere between a 28%, 30% range. We’re currently making some progress. It's very steady measured progress. There is no significant, nuclear even that’s going to cause us to kick up to 28%, but we feel we’re on the right path. We feel we have programs and projects in place to allow us to continue to improve our gross margins over time. Anthony Deem – KeyBanc Capital Markets: Thank you.

(Operator Instructions) Our next question is from the line of Adam Brooks with Sidoti & Company. Please go ahead. Adam Brooks – Sidoti & Company: Yes. Good morning or maybe good afternoon, guys at this point. Just a few quick questions here, you touched a little bit about the cost synergies, but I was – with W.E.T., but I was little more curious and maybe your updated thoughts on revenue synergies, maybe you could talk about some of the content up-sell opportunities and maybe what the outlook is for the next three to five years as far as the combined growth rate?

Sure. Adam, that’s actually one of the things that got us most excited about you know, merging the two teams together is to be able to help each other in markets. Again, W.E.T. had very strong position, particularly in Germany and the European market we had always struggled trying to get into that marketplace. Now we see with the combined teams and the full product line opportunities, we’re seeing real tangible program result that we feel are going to contribute to the bottom line over the next three years in a significant way. We’re excited about that. Our partners at W.E.T. are very excited about that, and frankly I think our customers in Europe are excited to see some of these new technologies. In North America, we are pretty much square on, we were both I think in very good position and we’re introducing new products to the markets there and the combination of the two teams again I think are working quite well. In Asia, we have lots of future opportunity. Asia is a growing market in the auto world. It also is growing as a consumer market and they are very keen and interested in new technologies and new technical approaches to solutions to consumer related problem. So, we see this as a – as one of the big key factor. The combination of things like being able to sell heated in cool cup holders, heated in cool storage bins, steering wheel heaters, heated in cool beds, heating cool storage spaces. These are all opportunities that were generated are now being enhance by our combined capability. So, for us this is a – really the exciting part of a side of the business that we really wanted to get our teams together on, as the old Amerigon, the existing Gentherm was really a little limited in being able to push this new technologies globally without some of the serious additional resources. And as the old historical W.E.T., we offer some new technologies and some technical base products that will allow them to expand their product offerings as well. So, combined we think there is going to be a very, very successful technology driven company. Adam Brooks – Sidoti & Company: If we look at once again that same timeframe, let’s call three to five years, do you have a target as far as revenue derived from adjacent markets exceeding or just maybe something that you think you like to hit maybe as a peer number or as a percentage of revenue?

Yes. I think, we’ve indicated, we’d like to see something between 10% and 15% revenue growth per year over the next three to five years, and that’s really the only targets that we have set for ourselves publicly. Adam Brooks – Sidoti & Company: Okay. And also have you seen any delays in platform launches, there have been a few suppliers I’ve talk about, just maybe a quarter or two delays, I guess, particularly over in Europe. Have you seen anything of the sort?

We have seen a few, I’d say minor program delays and launch delays, but nothing out of the normal and nothing that is specific to us or our participation in the market. Adam Brooks – Sidoti & Company: All right. Thank you.

Thank you, sir.

Our next question is a follow-up from the line of Steve Dyer with Craig-Hallum. Please go ahead. Steve Dyer – Craig-Hallum Capital Group LLC: Me again, two quick ones. I’m wondering where you’re seeing in the growth of the business, the new platforms you’re winning you used to put out obviously press releases on every win when you were a standalone company. Are you seeing, is the bulk of the growth coming from heated cooled, heat vent or some other area of the company. Or should we just think about, I guess, the distribution of growth?

It’s coming very nicely from heat cool and heat vent as you pointed out. We’re quite happy on both sides of the churner there. We’re also seeing very steady good growth in contributing cable business. I think that the steering wheel business is going to be very solid force. I think you’re going to see a lot of penetration gains and I’d say technology gains across the board. So everybody is pulling their weight and everybody is contributing to the growth. Steve Dyer – Craig-Hallum Capital Group LLC: Got you. And then is a high 20s tax rate on a normalized basis Barry is still the right way to think about it.

I believe it is, yeah. Steve Dyer – Craig-Hallum Capital Group LLC: Okay. Thank you.

Thank you.

Next question is from the line of Ailon Grushkin with Nano-Cap New Millennium Growth Fund. Please go ahead. Ailon Grushkin – Nano-Cap New Millennium Growth Fund: Hi guys. Another, magnificent quarter. At this point, there is absolutely no reason why this stock shouldn’t garner $1 billion market cap. You’re doing a phenomenal job.

Thanks. Ailon Grushkin – Nano-Cap New Millennium Growth Fund: My question relates to the Chinese market. Since it’s a – 21 million cars a year, how does that breakdown, what’s the penetration in that market at this point?

Well, there’s two pieces of the Chinese market there is the transplant business that where the international car companies have set up chart and partnerships and are established very, very solidly on the upper middle and high end markets. And then there is the domestic Chinese manufacturing companies that have gone up on their own. The bulk of the volumes of the Chinese market are those local domestics they tend to be more of the entry level and mid range of vehicles. Our products tend to on the whole go towards the people who are focusing on comfort and convenience items. So that’s typically the upper middle and upper end luxury models. So our business there is growing quite nicely I think if you look at the numbers you will see that the even in what China considers to be a depressed state the auto industry is expanding at about a 10% rate per year right now. So we see that as a very big opportunity not only with the transplants, but also with the domestic as they become a more focused on increasing their product offering in the upper range product line. Ailon Grushkin – Nano-Cap New Millennium Growth Fund: So are these I guess like I think those smaller Chinese local brand represent about 32% of their market are they producing cars that are similar to like Akia that eventually set offer a low end heating and cooling device industry?

Yeah, that’s our kind of model that we see going forward is that all of these car companies in – actually all the developing world is not just China, but they introduce an entry level model then they move to mid range and then they moved to upper-mid range. And some of the features that these types of market drivers find appealing are things like heated and heated and ventilated seats on the – may be the entry level and then the heated and ventilated on the mid range and then we get up to the heated and cooled when they get to the luxury end of the market. So we again have said that we think that the heated and ventilated business for us will be expanding quite rapidly over the next five years as these developing automotive market suppliers start pushing their product lines upscale. Ailon Grushkin – Nano-Cap New Millennium Growth Fund: Great. Well, thank you so much and keep up the great work.

Thank you, sir.

At this time, there are no further questions in queue. I’d like to turn the call back to management for closing remarks.

All right. Thank you, operator. As we said, we had a pretty good year last year in 2012. We were all pleased with the successes. Our first quarter has shown to be a pretty good quarter. We got some nice revenue growth and we’ve got some pretty good performance and results by all business units and our bottom line reflects that. We were also able to gather up more of the independent shares. We now have a significant dominant controlling position of the W.E.T. division. We’re now in a position to begin the actual integration process. We’re in the midst of our planning. We’ll begin our execution process in the second half of this as we get into our integration actions. And we think that the business shows a pretty good 2013 on the horizon here. We believe very strongly that our 8% to 10% growth rate looks good. The first quarter is always one that we want to keep an eye on to see how the year is going to rollout. Our first quarter has been very good. So we’re expecting this year to continue. There are always the uncertainties of what’s going to happen in a very complex world. It looks to us right now that the European and Chinese markets will recover with little bit more strength in the second half, but again, we think the comparables in the second half are quite a bit more significant achievement to be able to keep up our 8% to 10% growth. But based on what we see today, we think we’re going to make it. So again, we thank you for your time. We think all of our partners the W.E.T. and the old Amerigon and all of our outside vendors and all of our stakeholders for joining us and we look forward to talking to you again next quarter. Thank you very much, Operator.