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Greetings and welcome to the Gentherm’s Second Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Greg Blanchette, Senior Director, Investor Relations. Thank you, Mr. Blanchette. You may begin.

Thank you. Good morning, everyone and thanks for joining us today. Gentherm's earnings results were released earlier this morning, a copy of the release is available at gentherm.com. Additionally, a webcast replay of today's call will be available later today on the Investor Relations section of Gentherm's website. During this call, we will make forward-looking statements within the meaning of federal securities laws. These statements reflect our current views with respect to future events and financial performance, and actual results may differ materially. We undertake no obligation to update them, except as required by law. Please see Gentherm's earnings release and its SEC filings, including the latest 10-K and subsequent reports, for discussions of our risk factors and other risks and uncertainties underlying such forward-looking statements. During this call, we will also 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 our earnings release and investor presentation. On the call with me today are Phil Eyler, President and Chief Executive Officer; and Matteo Anversa, Chief Financial Officer. During their comments, Phil and Matteo will be referring to a presentation deck that we have made available on our website at gentherm.com/events. After their prepared remarks, we will be pleased to take your questions. Now I'd like to turn the call over to Phil.

Thank you, Greg, and good morning, everyone. Thank you for joining our second quarter 2024 earnings call. While the global automotive environment continues to be challenging, the Gentherm team delivered another strong quarter of automotive new business awards, above market revenue growth and continued profitability improvement. With $660 million of automotive new business awards in the second quarter, this brings us to $1.2 billion year-to-date. In addition to our continued strong thermal awards progress, we continue to see an acceleration in new business awards for our lumbar and massage solutions. In the almost 2 years since Alfmeier became part of Gentherm, we've won Pneumatic Conquest Awards with 9 OEMs globally. We continue to gain traction with our customers and are winning new business awards that have substantially exceeded our original expectations. Most recently, we won our very first Pneumatic Lumbar and Massage Award with Hyundai on a next generation Genesis SUV. This breakthrough award includes for the first time, our proprietary Pulse A Massage Technology, which I will discuss in detail a bit later. This conquest award was enabled by Gentherm's strong relationship with Hyundai combined with our industry leading pneumatic technologies. Hyundai has been a great longstanding partner for Gentherm and we're thrilled to bring this new innovative technology to market. For the second quarter, we achieved record quarterly revenue of $376 million and outpaced the growth of light vehicle production in our key markets. Adjusting for the impact from foreign exchange and one time recoveries, our Automotive Climate and Comfort Solutions revenues outperformed the light vehicle production in our key markets by 500 basis points in the second quarter. This revenue growth was led by our pneumatic lumbar and massage solutions. When we announced the Alfmeier acquisition, we said that we expected to be able to expand Alfmeier's market share by capitalizing on Gentherm's market leading customer relationships. Our second quarter revenue growth is proving out that thesis. We expect this trend to continue as our record awards over the last few years convert into revenue. Turning to profitability, we achieved our highest quarterly operating income in 3 years. Our adjusted EBITDA margin rate for the quarter 13.3%, nearly 200 basis points improvement versus the prior year. The improvement was largely driven by operating performance and acceleration of our Fit for Growth program initiatives. Turning to Slide 4 for our second quarter automotive highlights. We launched our automotive solutions on 22 different vehicles across 11 OEMs, including Ford, General Motors, Hyundai, Mercedes and Toyota. Our CCS solutions were launched on the Buick Enclaves, Chevrolet Equinox and Kia's all new all electric SUV, the EV9. Of special note, I want to announce our second quarter launch on the Toyota Camry. This is our 1st CCS launch on the Toyota Camry, one of the best selling vehicles in the United States. And this comes after announcing our first CCS launch on the Toyota Tacoma in the Q4 of last year. These conquest launches of CCS with Toyota demonstrate the strong momentum of our CCS technology and the result of our effort to further strengthen our business with Japanese OEMs. We're launching content across vehicles irrespective of powertrain covering the full range from ICE to plugin hybrid to full battery electric vehicles. We previously announced, and I want to highlight here that Gentherm was recently recognized by Honda as one of their top North American suppliers receiving their excellence in value award, which recognizes and honors Gentherm for our commitment to improving efficiency and cost. This is just one example, demonstrating that our customers recognize Gentherm as a key trusted partner. I'm proud of the team for this recognition, and we remain dedicated to delivering value to our customers. Now on to Slide 5. We secured $660 million of automotive new business awards. These new business awards were balanced across regions and product categories, and once again, we won more than 80% of our quoted business pursuits in the quarter. A proof point that customers value our partnership model. We work with 50 plus car manufacturers and 30 plus seat makers across the globe. Our position as the largest independent provider of thermal and pneumatic solutions is a key differentiator with both our OEM and Tier 1 customers. For thermal solutions we won several CCS awards in the second quarter. Of note, we won the Kia Telluride, multiple Audi awards and the new Porsche Cayenne EV. Specifically in China, we won the new Lee Auto M 6, the new Great Wall Aura Compact SUV, three Honda Awards, and two new awards for a brand new customer, Huawei. In addition, we received seven steering wheel heater awards across four OEMs, and importantly, we won hands-on detection enabled steering wheel heater awards with Lee Auto and Volvo. We continue to see momentum, particularly in lumbar and massage, new business awards in the quarter include awards with General Motors, BMW, Audi, one of the largest global EV manufacturers, and the previously announced Hyundai Genesis full-size SUV, which includes our innovative Pulse A technology. Further on lumbar and massage I would like to highlight our tremendous success with BMW. We previously announced winning the pneumatic awards for ICE and EV versions of the large X Series SUVs, the X 5, X 6, and X 7, and the smaller X series SUVs, including the X 3 and the X 4. And today we're excited to announce that we've expanded our pneumatic awards with BMW by securing pneumatic lumbar and massage on the popular three and four series platforms in both North America and Europe. And with this, Gentherm has secured the pneumatic production awards for the majority of future BMW vehicles. Additionally, I'm pleased to announce that we have secured an award for an integrated product, which combines foam, seat heat and seat belt reminder on the EV version of the three and four series vehicles. Due to our strong capabilities in integrating multiple functionalities within our products, we see opportunities to provide similar integrated solutions across our customer base. Strong customer relationships like ours with BMW is one of the driving forces behind our awards momentum and increasing content per vehicle. Moving to Slide 6. We continue to win with our innovative technologies and I'm excited to share two examples. As I previously mentioned, we won our very first pneumatic award with Hyundai on their Genesis full size SUV, which will include our innovative Pulse A technology. Our proprietary Pulse A massage solution is the world's 1st pneumatic system that uses precision micro air pressure burst to deliver a deep pulsating massage. This technology can stimulate muscles, help alleviate pain and tension, and counteract poor posture. As Gentherm wins Pulse A Awards, we will be in a position to implement the full suite of well sense experiences through over the air delivery of our science based algorithms. On the right side of the page, I want to highlight some of the innovative work the team is doing to continue winning CCS awards. Gentherm has designed the CCS compact vent, a proprietary modular system combining a quieter, more compact blower with a novel air distribution module making it ideal for compact spaces, a perfect solution for in demand slim seats for EVs and rear seat applications. It reduces weight, the number of components, and importantly, the assembly complexity required for our customers. This drives meaningful cost savings for them. At the same time, the product provides improved airflow with less noise. It's our quietest blower ever. Further, our customers can use this standardized product across various vehicle platforms and across multiple seat makers. We are excited to announce that we have won awards this year for this new CCS innovation, compactvent with Hyundai and Great Wall. These are just a few of the many new innovative technologies that differentiate Gentherm from our competition. Now on to Slide 7. We continue to make significant strides in the development of many of our next generation technologies including Climate Sense, our unique microclimate solution Well Sense, our software driven comfort, health and wellness solution and Comfort Scale, our next generation integrated thermal, lumbar and massage hardware system. On Climate Sense, we are substantially complete with our development for the Cadillac Celestiq and the Escalade IQ and the feedback from our customer is incredibly positive. As we have demonstrated well sense to customers around the world, we are excited that they have confirmed that this software based solution could have a meaningful impact on software defined vehicles of the future. In fact, we expect continued content growth of our thermal and pneumatic hardware in anticipation of future well sense software feature implementation. On Comfort Scale, our fully qualified integrated solution is in advanced commercial discussions with several customers and we expect awards in the very near future. There's strong interest from a growing number of OEM customers for these innovative solutions and we expect this will significantly increase Gentherm's content per vehicle over time. Moving to the next page for a discussion of our medical business. Approximately 1 year ago, we announced the decision to modify our go to market business model to drive accelerated revenue growth. And this strategy is working as demonstrated by the improved financial results. In the second quarter, the medical team delivered revenue growth of 9% year-over-year ex-FX and the highest profitability since the second quarter of 2020. The revenue increase was largely driven by our flagship Blanketrol product and our recent partnership with U.S. Medequip. Additionally, we added 25 new hospital customers in China in the quarter. Our focus remains on leveraging partnerships, distribution channels and white label opportunities to drive organic revenue growth and improve profitability. Now with that, I'll turn the call over to Matteo for a little more color on the financial results.

Thank you, Phil. Let me turn to Slide 9 and focus on the most significant items in our quarterly results. For the quarter product revenues increased by 1% compared to the same period of last year. And if we adjust for the impact of foreign exchange, our overall product revenue increased by 2%. Starting with the automotive segment, automotive revenues were 364 million up approximately 1% compared to the prior year period. And adjusting for negative foreign currency translation, the phasing out of the non-automotive electronics business as well as one-time benefits from recoveries in both periods, automotive revenues increased by approximately 3%. Actual light vehicle production in our key market of North America, Europe, China, Japan and Korea decreased slightly year-over-year. As Phil mentioned earlier, revenues from our automotive, climate and comfort solutions outperformed actual light vehicle production in our key markets by 500 basis points. Now for a discussion of year-over-year revenue by product line as outlined in the table in the press release. Excluding the impact of foreign exchange, we saw growth in several of our product lines and more specifically, revenues from lumbar and massage increased by 23% due to the ramp up of the VW NQB platform and higher volumes and take rates on several models with Ford. Steering wheel heaters revenue increased by 10% compared to the prior year period due to the start of production of Li Auto L6 and a battery electric vehicle in Asia with one of the largest global EV manufacturers. Valve systems revenue increased by 7% due to higher sales with VW, CCS revenues increased by 2% due to higher volumes with a global EV manufacturer, ramp up on Li Auto L9 in Asia and BMW 5 series in Europe. And these were partially offset by lower volume on several Stellantis models. CTT revenue were relatively flat year-over-year and revenues from our smaller product lines decreased year-over-year ex FX, specifically automotive cables revenue decreased by 1 million or 6% due to lower volumes in North America with Bosch and JSS. VPS revenues decreased by 3 million or 17% due to the end of production of the Jeep Wrangler 48 volt BTM and BMW E Mini Cell Connecting Board, as well as the volume ramp down for Mercedes 48 volt BTM. And as a reminder, we previously announced that we are phasing out certain battery performance solution products. Electronics revenue decreased by 2 million or 23% due to the phase out of non-automotive electronics, partially offset by higher volumes on our multifunction ECU with Ford. And excluding the impact of non-automotive and contra manufacturing electronics, electronics revenue increased by 2 million. Other automotive revenue decreased by 3 million or 35%, primarily due to onetime material inflation recoveries that we received in prior year period. Turning to medical, medical revenues increased 9% ex-FX, primarily as a result of higher blanket row sales in the U.S. The medical team delivered positive operating income during the quarter, as we continue to focus on improving returns in this business in the near term. Moving to adjusted EBITDA. Adjusted EBITDA in the quarter was $50 million up nearly 18% from $42 million in the prior year period. The adjusted EBITDA margin rate for the second quarter was 13.3%, and this compares to 11.4% in the second quarter of last year and represents the 6th consecutive quarter of year-over-year improvement. The 190 basis points margin expansion was driven by Fit for Growth initiatives, including supplier cost reductions and value engineering activities and net productivity at the factories, and these were partially offset by annual price reductions and start up costs from our new plants in Morocco and Mexico. The new plants are ahead of schedule and will play a significant role in our Fit-for-Growth margin expansion over time. Operating expenses were $64 million in the quarter compared to $84 million in the prior year period. If we adjust for acquisition, integration and restructuring costs as well as non cash stock compensation expenses in both periods and the $19 million goodwill impairment recorded in the prior year period, operating expenses were $58 million down from $59 million in the second quarter of last year. And the year-over-year improvement was driven by higher R&D reimbursement and lower R&D expenses as a result of cost reductions related to battery performance solutions, partially offset by higher compensation expenses. Finally adjusted diluted earnings per share in the quarter were $0.66 per share, compared to $0.58 per share in the second quarter of last year, and the year-to-date effective tax rate was 28%, in line with our guided range of 26% to 29%. Now moving to the balance sheet on Slide 10. Our cash position at the end of the quarter was approximately $123 million and our net debt stood at $99 million in line with the prior quarter. We generated $37 million of cash flow from operating activities, which was offset by $19 million of capital expenditures and $20 million of share repurchases. Of note, in the last 12 months, we have returned more than $90 million to shareholders through share repurchases. And our Board of Directors authorized a new stock repurchase program of $150 million over 3 years, which took effect as of the end of second quarter. Our net leverage ratio was 0.5 at the end of the second quarter, well below our target of 1.5 times and in line with the prior quarter. Based on the trailing 12 month consolidated adjusted EBITDA ended June 30, we had $278 million of remaining availability on our line of credit and the total available liquidity as of June 30 was $401 million. Now let me turn to Slide 11 for our 2024 guidance. Based on our performance year-to-date and the latest information we currently have from our customers, we're expecting revenue to be at the lower end of our previously provided range, assuming a Euro to U.S. dollar exchange rate of 1.08 for the remainder of the year and light vehicle production in our relevant markets decreasing at a low single digit rate in 2024 versus 2023. Adjusting for approximately 60 basis points of FX headwind year-over-year, this implies an organic revenue growth rate of approximately 3%. Revenue for the second quarter and for the remainder of the year is lower than we originally expected, as our customers continue to adjust production schedules. These headwinds are a result of delayed new vehicle launches, lower than projected EV volumes and increasing customer inventory on dealer lots. That said, we continue to expect higher revenue in the second half compared to the first half, primarily as a result of new program launches. Despite the challenging production environment and revenue headwinds, we continue to execute on our Fit-for-Growth initiatives, which we expect will help us deliver an adjusted EBITDA margin rate above the midpoint of our previously provided range. This continues to assume a onetime 50 basis point expense associated with the startup cost at our new plans in Morocco and Mexico and product engineering and launch cost associated with our record new awards. We expect third quarter revenue to be similar to the second quarter and adjusted EBITDA margin rate slightly below the second quarter due to the timing of the ramp up cost of the new plans. Our full year effective tax rate and capital expenditures guidance remains unchanged. I would like to thank the global Gentherm team for continuing to deliver exceptional results despite a very challenging environment. And with that I'll turn the call back to the operator to begin the Q&A session.

Thank you. [Operator Instructions] The first question comes from the line of Matt Koranda with Roth Capital Partners LLC. Please go ahead.

So just wanted to maybe discuss the bookings environment briefly if we could. So the $660 million sounds like a relatively healthy run rate, I guess it is down a touch from last year. So maybe just, if you could discuss sort of the dynamics at play with the slight decrease year-over-year. And also just curious about the conquest wins you have with Toyota and, and some of the Japanese OEMs. It sounds like that may be picking up steam. And so just curious if to get your take if there's additional opportunity that you see out there. Did Alt Meyer help in any way? Sort of why are we seeing that opportunity come to pass?

Yes, thanks Luke. Matt, sorry. No we're really happy about the awards progress in the quarter. If you look at the environment going on and the dynamics this is very healthy and we like the mix of the awards across all of our product lines. It was actually very strong in our pneumatics business. We continue to see significant demand for our technologies, and you can hear that in the specific customers that we announce awards with. So, all in all, I think we're feeling pretty good about the awards rate for the year so far and the momentum still looks good heading into the second half. Keep in mind, last year was quite exceptional year at $2.6 billion. So that will be that's a hard comp for us to go against, but we're still feeling pretty good about two handle in front of the awards number for the year. Talking about Toyota, we're very excited. It's taken years to get our CCS launched with high volume vehicles at Toyota. The first launch with the Tacoma has gone quite well and we're learning a lot through the process, we're really proud to launch on the Toyota Camry and a lot of discussions are active within the Toyota network on how to continue that growth. It's all been on thermal so far. Obviously, we're presenting our pneumatic solutions to customers around the world, including multiple customers in Japan. And so far, we don't have any awards with pneumatic in Japan. So I think that's a really nice opportunity going forward.

And then maybe one for Matteo, just on the margin guidance. I guess to be above the midpoint of the range that you provided, it sounds like at least in aggregate, we've got to be above 13% EBITDA margin in the back half of the year. And so I guess that does imply only a bit more modest pace of margin expansion. I'm just curious what's driving sort of the margin improvement? What are the bigger buckets of the margin improvement in the back half of the year? It sounds like there's still planned startup drag, which I think you said 50 bps, but if you could just clarify that one. And then also, I guess, between productivity and some of the supplier cost reductions that you've been implementing, maybe if you could just discuss sort of where we're seeing some sources of improvement or decelerate a little bit there for the back half of the year?

Yes, sure, Matt. So let me maybe start from the last portion of your question and unpack a little bit what happened in the quarter, because it's important to put the remainder of the year into perspective. So year-over-year, we expanded the adjusted EBITDA margin by about 200 basis points. Fit-for-Growth in the second quarter drove the majority of it about 160 bps. Net productivity at the factory was about 30 basis points expansion. Also we were able to manage as we continue to drive better productivity in our Mexican plants. Premium freight a little better than last year, which has also accounted to about 30 basis points of margin expansion. And so these were the positives and then we had the on the negative side the annual price reduction, which was only a drag of about 70 basis points, which is definitely lower than what we anticipated at the beginning of the year and even lower than our pre inflation historical average, which generally range between 100 basis points, 150 basis points. So very proud quite frankly of where the team has been so far. We are clearly as of the end of the first half at about 12.8% EBITDA rate, which is definitely ahead where we were last year and ahead of where we were planning to be, entering the year. So now moving to the second half, our guidance implies basically a second half EBITDA rate of about around 14%. I point back to some of the comments that I made in the prepared remarks, second quarter, sorry, third quarter is going to be sequentially a little lower, primarily due to the fact that we were able to defer some of the startup costs of the plans from the second quarter into the third. And then the fourth quarter will pick up an EBITDA rate above 14%, and that's driven by, I would pinpoint three, four factors. Number one, revenue in the fourth quarter will be higher than the third. And that's going to drive, further margin expansion. This is driven by program launches, just, Lincoln Navigator, the Jeep Wagoner, the continue increase in volume thanks to the VW MQB Pneumatics, just to name a couple. Then in the fourth quarter, we will have the full run rate of purchasing savings. This is pretty normal for us. All the volume rebates, so the majority of the volume rebates with suppliers tend to kick in in the fourth quarter. I talked about the timing of the start top cost of the plans and then in the fourth quarter we will start to see some of the benefits of moving the production out of Greenville into Monterey. And that's another key driver of the improvement of the EBITDA rate, later in the year. And then a little bit more productivity of the factories is always happens in the fourth quarter. So that's kind of the dynamic, and what's going to happen second half versus first half.

Thank you. Next question comes from the line of Luke Junk with Baird. Please go ahead.

Phil, just to start hoping you could discuss just some of the puts and takes on the updated sales guidance, both at an overall industry level and customer specific dynamics, especially in years of conservatism you may have built in, just given what's been obviously a choppy production backdrop and some variability on the customer basis.

Well, Luke, I think if you just look in general, I think it's well documented the volatility in the production environment and that really kicked in, even in the second quarter we saw some of our key customers drop off orders. If you look at that, it's also carried into the second half as well. For us, the way we break it down clearly just a general drop with some of our key customers around the world. Some in North America, for example, are carrying high inventory and are reducing production on vehicles that have high content for Gentherm. So that's certainly having an effect. And then, some other customers, EV only producers that are pretty large customers for us have also reduced and announced reduced volumes. So just in general, vehicle production and there are more, some European OEMs, et cetera. Also looking at the second half, even though as Matteo pointed out, we have significant new launches, we have seen some delays of a few of those launches and a little bit of a pullback of the volumes in the early ramp up stage. So that brings down the second half a little bit from where we expected even though we do all the launches are taking place and we will see an uplift, especially towards the end of the year. And then, finally, China. China definitely has brought us some headwinds. You've seen the global OEMs that are operating in China have seen significant reduction in their share in vehicle production in the market. That certainly had an effect on us. We actually ended up in the Q2 kind of flattish in China, which was pretty good performance given that shift, and that's because we've been launching with some EV manufacturers and other domestic manufacturers in China. Now that said, if we look at the back half of the year, both the global OEMs and some of the domestic customers we have are pulling back on some of their volumes, so also seeing some shifting. Obviously, it's really incredible some of the dynamics in market share that are happening on a month by month basis, shifting from one domestic maker to another domestic maker. So that's something we also are taking into consideration. Your last point on conservatism, I would say it's realistic what we've laid out there based on the information we have in front of us. Obviously, our approach is we look at the orders we get from our customers, evaluate those all carefully, ask questions, study what's happening with our customers externally, looking at inventory, examples like that. We then apply our own intelligence to it, make some adjustments if we deem them necessary to what our customers are telling us. And then finally, cross check that back with the external data from those like S&P Global. And then that's what leads us to the outlook. So, I would call it realistic. We're -- we've built in the volatility and dynamics that we see and we obviously will keep watching that closely as the year progresses. All those said, Luke, I want to add one more point that we continue to see, number one, the demand for Gentherm, thermal and pneumatic products to remain extremely high, which is driving more adoption in vehicles, continued content growth in those vehicles and higher take rates on vehicles as we progress. So that thesis has not changed. If you look at the launch schedule, not a single launch has been canceled on our schedule. And so we're pretty we're feeling pretty good about executing at on the areas we can control. And obviously, we're going to watch vehicle production. I think it's a dynamic time, but we do believe vehicle production is going to have to rebound at some point in not so distant future, and I think we'll be really ready to take advantage of that.

So maybe if we could double click on the specific strength you're seeing in lumbar and massage right now, big uptick sequentially, really big year-on-year growth as those awards you've been talking about are now finally kicking in. Can we expect this kind of year-over-year growth sustaining into the back half? Is there any kind of pull forward we should be aware of here? And then similarly for 2025, you had given some indications that your Analyst Day last year on kind of a growth framework and it seems like you might be even tracking above those levels. Am I seeing that right now?

Yes. I mean, if we look at the back half of the year, we certainly expect to see continued strong double digit growth throughout the course of this year. And that's early launches and ramp ups of wins. So heading into 2025 and beyond, we still continue to see outstanding growth in that business. As you just pointed out, we've actually won awards at a faster clip than we expected with upon the acquisition closure. And we just really couldn't be more proud of what the team has done, in our team around the world certainly led by those Alt Meyer employees that are now part of our Gentherm team have done just a tremendous job and capitalizing on the Gentherm customer network. And so that, that gives us a lot of excitement around the future opportunities for this product. And, add to that adding more content with programs like Pulse A, that are coming in much faster than we expected, definitely we're excited about that growth rate.

And then if I could just sneak one more in for Matteo, just a more specific question on how you're thinking about R&D in the back half of the year. Recognize that there's a tailwind here from the lower BPS spend and there are also some recoveries that help the two key numbers. Just want to calibrate that correct. I think you'd been thinking six and a half percent of sales kind of coming into the year. It's running around 6% year to date. Should we see that up a bit in the back half?

Yes, Luke, the second quarter number were relatively low because of the not only the great work that the team has done in reallocating some of the cost of CCS, but also we had a elevated number of reimbursements, which tend to be a little lumpy. So I would expect in total, R&D cost as a percent of sales to be between, around 6%, 6.3% of revenue for the year. So that's what I would model.

Thank you. [Operator Instructions] Next question comes from the line of Ryan Sigdahl with Craig-Hallum. Please go ahead.

Hi guys, this is Matthew Rob on for Ryan. Just one question here, announced in Q1 a CCS award with a large global EV OEM, this quarter had the lumbar and massage award, from what I assume is the same OEM. Can you speak to how many models Gentherm will be supplying there and when those models will launch?

Thanks for the question, Matthew. We have with this large EV manufacturer, we have content whether thermal or pneumatics on virtually every model.

Thank you. [Operator Instructions] Ladies and gentlemen, we have reached the end of question and answer session. I would now like to turn the floor over to Phil Eyler for closing comments.

Great, thank you. While the operating environment certainly remains challenging, I want to thank the global Gentherm team and our partners and suppliers for the strong execution in delivering another solid quarter of financial and operating results. We continue to win awards at a record pace led by our strong customer relationships, innovative technology solutions and differentiated model as an independent supplier. We deliver the highest quarterly revenue in company history and improved year over year profitability. The margin expansion this quarter gives us confidence in our ability to reach high teens adjusted EBITDA margin rate over time, and we continue to execute against our long-term strategic plan and remain focused on delivering shareholder value. Thank you for your interest in Gentherm. We look forward to keeping you apprised of our progress.