Michael Mason – Investor Relations Dan Coker – President and Chief Executive Officer Barry Steele – Vice President, Chief Financial Officer and Treasurer.

Matt Koranda – ROTH Capital Partners Steve Dyer – Craig-Hallum Capital Group Gary Prestopino – Barrington Research Brett Hoselton – KeyBanc Good day and welcome to the Gentherm 2016 First Quarter Results Conference Call. Today’s conference is being recorded.

At this time, I would like to turn the conference over to Michael Mason of Dresner Allen Caron. Please go ahead, sir. .

Thanks, Kim. Good morning and thank you for joining for the Gentherm Incorporated 2016 first quarter results conference call. Before we start today’s call, there are a couple of items I’d like to cover.

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 you need a copy of the release, you may download a copy from the Gentherm website at www.gentherm.com.

Additionally, a replay of the conference call will be available via a link provided on the Events page of the Investor Relations section at Gentherm’s website. During this 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 discussions of various risks and uncertainties underlying such forward-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, we have Mr. Bud Marx, Chairman of the Board; Mr.

Dan Coker, President and Chief Executive Officer; and Mr. Barry Steele, Chief Financial Officer. Management will provide a review of the results, after which there’ll be a question-and-answer period. I would now like to turn the call over to Dan. Good morning, Dan. .

Good morning, Michael and good morning, everyone. Thank you for joining us. I hope Mr. Marx has been able to join us, we didn’t hear him dial in, but I believe he will be on the call with us in time. The first quarter of 2016 was a very exciting period.

For those of you who have read our earnings release this morning, you see that it was a lot of activity – a lot of activity has been announced, but this is the result of a lot of preparation, a lot of hard work by a lot of people as we continue to try to press our business into new and exciting opportunities.

We announced at the end of the first quarter, the acquisition of a company called Cincinnati Sub-Zero Products, CSZ as we refer to them internally. This is a very exciting business opportunity for us and we welcome all of our new partners and associates at Cincinnati Sub-Zero to the Gentherm family.

This business is a collection of three opportunities for us. They have a very strong business, they have a good reputation in the marketplace and a good line of products and opportunities for us to be able to expand into some new areas. They have – their traditional and historical product is a environmental test chamber business which is very solid.

We actually have several of their products in all of our test labs around the world and we found that to be a very interesting business that involves thermal management technologies. They have a second business that is related to that, in that they do industrial testing services for outside companies as well.

This is a new venture for them and they are doing very well at that and we see a lot of opportunity for growth there as well.

And another exciting piece of this business is that they have a medical products group that has a lot of the types of products that we imagine can be expanded in a global set, typically involved in patient warning and patient temperature management, they have a 510(K) compliant facility and they a full team of people ready to start looking at new opportunities to use some of Gentherm’s exciting thermal management technologies and apply them to the medical marketplace.

So, in one acquisition, we were able to find an opportunity to get into three new verticals as Barry likes to refer to them, three new market opportunities where we believe that the combination of their people, their product line today and our financial strengths and our global footprint will allow us to grow these businesses dramatically in the future.

This is a very exciting time for us and we are very thrilled to have Cincinnati Sub-Zero be a part of our team.

We also are very excited about an announcement we made just yesterday about a new electronic control module that will be sold to a major auto company and this is the result of a lot of work being done by our electronics business unit that has been organized first, to take care of our own internal controls and secondly, to go after external business where we can provide an innovative approach to some of the normal challenges that everyone sees.

This happens to be an automotive application, but there could be others outside the automotive business. This is a very significant step for us.

It’s something that will generate over the full-year life of the contract close to $50 million in revenue and will give us an opportunity to further expand this same type of product in other brands within the same company. So, it’s something that will be the first step in our electronics business. We’ve talked about this for a couple of years.

We’ve told you that when we see the first signs of this, we would let you know and the first signs of this actually manifested in the first quarter of 2016. In addition to that, we’ve also acquired assets and talent of a team based in California that will add to our strings and understanding of energy management storage systems.

This adds a great deal of capacity to our kind of burgeoning battery thermal management business and we become much more significant player in energy storage.

So, we are very excited about that opportunity and we also welcome a new team of scientists and engineers to help us fill out our team to be able to go after new opportunities in this market as well.

We saw some good growth in our automotive business, not as much as we would like, and we also some impact from some financial things around the world, some currency exchange remeasurement issues that still continue to pester us a little bit in terms of units.

Our growth on a local currency basis and number of units expanded about 6% and we were very pleased to see that all businesses are continuing to grow, including our climate control seat systems, heat cooled and heat vent businesses have continued to hit our goals.

So, we are excited about this, but we are seeing a little bit slower that we preferred in the base business, and we are seeing lots of new opportunities for growth in all businesses. So, as normal, we are going to give a brief review of the financial structure.

We are going to ask Barry Steele, our CFO, to walk us through some of the facts and then we’ll open the floor for questions.

Barry, are you in?.

I am here now. Thank you. .

Thank you. .

Thanks to everybody for joining us today. Our earnings for the 2016 first quarter were $0.33 a share on fully diluted basis. This included a one-time $9.6 million tax expense associated with a reorganization of our North American legal footprint in the form of withholding taxes on our historical retained earnings in Canada.

Without this expense, our net income would have been $21.5 million and diluted earnings per share would have been $0.39. One might even say non-GAAP earnings per share. This represents an increase of $0.04 or 7% over the first quarter of 2015.

The improvement has come from our continued product revenue growth and favorable margin performance and in spite of currency translation pressures reducing our revenue growth. As in the recent quarterly period, the strong dollar reduced our revenue performance this time by $3.7 million or about 2%.

This quarter, our gross margin was 31.6%, which was slightly below the prior year amount of 32.2%, mainly due to our new overhead costs from the new production facility in Vietnam. Our operating expenses were $38.4 million during the fourth quarter which was $1.1 million lower in the prior year period.

This decrease was mainly due to our equity incentive plan, a part of which is accounted for on a mark-to-market basis of Gentherm common stock, offset partially higher expenses, much of which is supporting the many new business initiative we are working on here at the company, some Dan mentioned to you.

Our first quarter adjusted EBITDA was $40.4 million, which was $4.3 million or 12% higher than that of the prior-year period. After adjusting for the one-time tax expense I mentioned earlier, our first quarter effective tax rate was 23%. This compares to a tax rate of 24% for the prior year fourth quarter.

We estimate that our normalized tax rate will be 23% and 24% in the coming quarters. Now, turning to the balance sheet. Our cash is now totaling $210.6 million at the end of the quarter. This included a $75 million revolved borrowing used on April for the CSZ acquisition.

After the acquisition, we continue to have nearly $140 million in cash reserve and approximately $95 million in borrowing capacity on our revolving line of credit, giving us a total of approximately $235 million available liquidity. That’s all have, Dan..

Excellent results, Barry. Thank you for your usual comprehensive detailed analysis. Operator, if you would like, we would open the floor for questions and invite anybody who has any additional questions to chime in. .

Thank you. [Operator Instructions] And we will go first to Matt Koranda with ROTH Capital Partners. .

Good morning, guys. Thanks for taking the question. .

Good morning, Matt..

I just wanted to start off with the guidance that you guys provided in the release.

So, if we strip out CSZ and kind of assume that it contributes about $65 million on a annualized basis, I guess we get three quarters of that relatively evenly split between the quarters, that would sort of imply about 6% to 7% organic growth versus your prior 10% guidance.

Is that just a fair way to think about or is not?.

It’s a very exciting way to think about and it’s our usual conservative approach to things, and we see the automotive business being soft in the quarter and it’s going to be difficult for us to completely recover from that through a normal year.

So, we are saying that we believe that the combination of this was a little bit of softness in the auto sector and the addition of new revenue stream will result in somewhere between 10% and 15% total revenue growth for the year. So, yes that would imply would be a little bit less than the 10% that we talked about..

Okay. Got it.

And you called out auto being somewhat weaker than you guys had expected during the quarter and could you maybe delve into what’s driving that? Is it just – are you guys having – experiencing maybe just slightly slower launch rates with customers in terms of new platform introductions or take rates going down slightly? Just a little bit of color around that would be helpful.

.

Sure. It’s as we have everything, it’s a combination of a lot of things. The North American place, we are a seeing a little bit of a shift in the timing of how things are happening. Launch rates are a little bit different than we had hoped.

We see in Asia, there is a little bit continued stagnation in the marketplace and I would say the dynamics of what’s happening in the marketplace there is a little bit less than we had hoped.

The European market is performing strong, but being held back by some currency issues that we continue to see the first quarter, the euro was in line very nicely to the dollar, the dollar remained stable and then at very end of the first quarter, things shifted around again and at the end of the quarter, when we have to report the numbers, we are out of line again.

So, it is a combination of all things. There is not really any loss of market share. We continue to grow in all markets. But we are growing at a slightly lighter rate than we had hoped. .

Okay. That’s helpful.

And then just in particular, it did seem like GPT was a bit below expectations, is that also driving some of the lower organic guidance, I was assuming just given what’s happened over the last couple of quarters in the energy markets and kind of the run rate the GPT has been at for the last couple of quarters that that also one of the culprits of the slightly your lower guidance?.

It is – actually the oil and gas business is under tremendous pressures for the past nearly two years and that’s beginning to catch upon us a little bit. We did see some significant shifts in some projects that they’ve been working on.

One project in particular, it’s very significant to us that pushed out some delivery in stages this year completely out to next year. And that was big move, can result in, actually it’s millions of dollars of revenue that we move from 2016 to 2017.

It’s important to note that the project wasn’t cancelled, it was just deferred and we are seeing that same type of pressure on almost all aspects of the business as North American oil and gas business continues to be under some pretty fierce stress and strain. So, yes a piece of that is directly related to GPT..

Okay, got it.

So maybe just to close the loop on all of this, it seems like if you were to attribute in terms of mix the culprits to the lower guidance, I mean, would GPT be like 60% to 70% of it and then slightly soft out of the rest of it, or how would you kind of think about marketing that?.

It’s certainly not that significant, but GPT is a contributing factor for sure. I haven’t actually done the math exactly what a contribution it is, but GPT could be off anywhere from $8 million to $10 million in revenue from what we expected and that’s a big contributor to the overall. .

Just about 1% of what our growth target was. .

Okay. All right. That’s really helpful guys.

Last one for me, just in terms of CSZ, just wondered maybe if you could help us understand how you think about accretion from that deal, maybe if you could just talk about kind of what margin profiles look like at that business relative to your base business, anything to help us kind of understand how to calculate accretion from that deal for the year here?.

Yes, sure. Their business is profitable, it’s a very strong business, it’s been run very well, has got a good management team. They have achieved strong profitability over the years and we expect that to continue, if not improve.

In general, we believe that the acquisition of their business operations will be directly accretive to our bottom line, I don’t what to say exactly what it could be, but it could be somewhere in the range of $0.08 to $0.10 a share.

We are very excited about having their business join us, their margins are in excess of our corporate goals and so we like that. It’s one of the things we like to see.

It also helps us compete in several non-auto sectors which has been on one of our strategic objectives, is to increase our business outside of the normal automotive business segment that we have which is our dominant business and always will be, but it allows us to look at industrial, medical and the services business, all three of which are keen for us and of course, it has to do with thermal management as well.

.

Got it. Very clear. Thanks again, guys, also, thank you. .

And we will take our next question from Steve Dyer with Craig-Hallum Capital Group. .

Good morning, Gentlemen. .

Good morning, sir..

Just following up on Matt’s question, the accretion, Dan, is that $0.08 to $0.10, just to be clear, I get more than that, on the back of the envelope, I know you are conservatives and so forth, are you thinking of that in terms of full year, or in the nine months you have remaining. .

Over a full year. I mean, sorry, Barry wants to answer that more directly. .

Yes, that would be for a full year’s – of the result. One thing that we do not know today is how much amortization other purchase accounting impacts will be recorded in conjunction with acquisition. So we are going through that analysis, it’ll take some time.

So, we can’t give you a definitive answer about the GAAP accretion, Dan, as we are going more to what we could call the cash or non-cash accretion. .

Yes. .

Got it, Okay..

Good clarification, Barry. .

CSZ, that segment grew, I guess slower than it has in recent memory and I’m just wondering because I look at some of the big kind of underlying program, that series was up a ton year over year, because they weren’t producing any last year Q1 over Q2, it’s actually remained strong, some of the jeep business remains really strong.

Maybe could you give a little bit of color as to what more specifically I guess is causing the slowdown there that has been a big growing piece of the business?.

It’s a big growth piece of business and continues to be. We continue to see people adapting both heat cool and heat vent businesses. The North America marketplace has seen some shift in demand in some of the products that we offer. I think you’ll the results of that continue to be solid growth in the – what we call climate control seat segment. .

Steve, I would add to that.

There were a couple of program where they are – due to sort of transition in the model, maybe a little bit of a lag, or a low on timing from one program to the next, so I would sort of view the – if you looked at, if your focus is myopically on the quarter, you wouldn’t necessarily really see the full long-term benefit or improvements that we’ll see as we go through time in that product line..

That’s helpful. Thanks, Barry.

Is there any change, sort of in take rates, or is it just more heat vent is growing quicker and take rates are inherently lower there, I guess I am just trying to get as granular as I can?.

I guess it’s more driven by sort of timing of different launches and change over from model to the next model. Certainly, as we see more penetration heat vent, we are talking about a product that has a lower price point. So, it’s not take rate issue as much as just the price dollars per seat. .

Got it. That makes sense. Last question for me and I’ll hop back in queue.

I noticed the Ukrainian Hryvnia kind of spiked in for a quarter and I’m wondering if that impact is noted in your gross margin line or if that’s below the line, $1.8 million FX hit?.

No, the FX that we mentioned, the $3.7 million was completely on the revenue line. The number that you saw in the currency gains and losses line below operating income was driven by us having US dollars on a non-US ledger.

A significant amount of our cash, all of our cash now is in US dollars, not any other currency, but it’s not all here in the US, but a little bit here in the US. So, that’s more driven by that relationship. .

So the movement of Hryvnia was – gross margin would have been better had that been sort of at more historical levels, right?.

I don’t think that Hryvnia had any real impact on this quarter’s results at all. Really, wasn’t – really not a lot of currency driving the margins at all. Again, you did have that adjustment on the currency line, if you will. .

Yes. Okay. Thanks, guys..

[Operator Instructions] And we’ll go next to Gary Prestopino with Barrington Research..

Hi, good morning, everyone.

A lot of question have been answered, but still some that need to be, in terms of GPT with the 29% decline in revenue for this quarter, is that kind of what the expectations would be going throughout this year, given some of the narrative you put around larger projects being pushed off to next year?.

No. I think you are still going to see very different amounts of revenue each quarter as they – I think that‘s happened to this business, it’s a sort of regular boxed product, if you will.

It’s has been more hit by the recession in oil, in the oil, energy markets where as they’ve been offset significantly by these custom projects that are much larger and much more sort of incremental to individual quarter.

So, I don’t think you can ever take any individual quarter results for GPT and translate it or extrapolate, I think, to a larger period. You really got to kind of look at the trailing 12 months if you will.

We expect some much higher revenue, quarterly revenue amounts in the future quarters, although we still think we are going to fall shy of where we expected for the current year. .

Okay.

A lot of narrative around the climate control seat in terms of the sluggish growth, you said it was – a lot of it just due to the timing of different product launches, is this the first time that you’ve experienced this happening where possibly product launches get pushed out, is that an understanding of what’s going on?.

It’s not the first time this happened. Keep in mind, we have 2000 programs in all of our different automotive applications, where as not of lot of those are in climate control seat, they are still in only handful of the different projects that we work on, because the product line – the product is in many vehicles as they see heaters.

So, in a vehicle that has a changeover from an old model to the new model, can have kind of a impact in the quarter that looks larger than – or the growth rate that’s underlying. .

Right. Okay.

So basically, do you catch this – do you make this up as you through the year, I mean they are already starting to get the 2017 modeled out, kind of help us out there, does this become – you catch this up in the next couple of quarters, or is this business not something you can recoup?.

I think we do catch it up, yes. .

Typically, what happens is these anomalies are absorbed over a period of time. We are looking at a 90-day window of a year, and we had some anomalies here that causes us to see some change. There is also, as Barry mentioned earlier, we are getting more and more heat vent applications which have a lower ASP, and so that has some impact to it.

But over the year, if you look at the full 12-months, the impact of this quarter will be bit of an anomaly when we go through the full year, but as we’ve already said, this first quarter has enough impact on us that we are seeing less than 10% growth that we thought we would see last fall when we gave the 10% guidance for this year. .

Okay, and I understand. That’s helpful.

Then a couple of other questions, can you give us what the historical top line growth has been at CSZ?.

The growth at CSZ has been relatively stable. Again, it’s been a privately held company. They’ve focused on doing everything very well. They have not been focusing on heavy growth. They focus on designing and building the best products in their segments.

So, we now see an opportunity to come in and take these excellent products and this strong management team and push that into larger areas, more global markets and maybe, even some new sectors within their own segment.

So, we see the opportunity to grow a business that has been very well managed and very well run, but has not been focused on growing the business as one of their key [indiscernible]. .

Do you think you can double the growth or triple the growth, or – because – I mean, I understand you don’t want to give any particular number, so I’m just trying to get an idea of what this can do for you?.

Well, we see this business, all three segments of this business as being prime for growth we are not going to say we are going to double or triple the growth rates. What we are going to say is that over a period of time, we are going to double and triple the revenues of the business. This is why we buy companies.

We see this is a great opportunity Gentherm and for the CSZ management team to be able to expand what they do around the world and this one of the reasons that we see them as a very exciting opportunity. .

Okay. And then two more questions, and I’ll get off.

With this team that you’ve got in California, electrical systems architecture, does it open up new markets for the company beyond batteries, so could you maybe talk about what markets would open up?.

Well, primarily, it gives us greater depth and breadth of knowledge of energy storage and management systems, that’s something, it’s very key as the world looks to increasing electrification of vehicles of all types.

We got into the battery business, because people learned that if batteries are kept at the proper temperature, their service life is extended.

The next thing for us is the electronics that control these batteries, is very important part of the subsystem architecture, how these batteries are charged and discharged in the most efficient and effective way. So, the combination of temperature control management and then management of the battery systems itself are very important.

We like electronics, we like batteries. So, that’s a good combination for us to be able to focus more energy on as we go forward. .

And it takes to assume that these guys have already been working with the OEMs on the hybrid or electric cars?.

It’s safe to say that these people are expert at energy storage and management systems, yes. .

Right. And then just one last question, the electronic product that you announced yesterday –.

Yes..

Could you give us what’s that application – could you give us what that application is used in the automotive field?.

No..

Okay..

Not yet..

Not yet. It’s something that we were very excited about, but we have to very careful that we don’t reveal anything that our customers and our other partners would find premature. .

Okay. Thanks..

Yes, sir. Thank you. .

We’ll go next to Brett Hoselton with KeyBanc. .

Good morning, Dan, good morning, Barry..

Hi..

Hello, Brett. Where in the world have you been? We heard you’ve been kidnapped. .

That’s not true, although I have been looking for big bucks. So here you have it. .

All right. Welcome back. .

Thank you.

30,000 foot perspective, Dan, how do we think about and this obviously is a rough idea, but how do you think – how should we think about your revenue CAGR, kind of net new business, I mean light vehicle production is going to go up low single digits over the next few years, let’s say, so take that – put that aside, M&A, put that aside, as you think about your business as it currently exists, what would you say your net new business CAGR is going to look like? Is this a 5% business or 10% business, 15%? Does it accelerate?.

Well, what we see is as we described before, Brett, and thank you, it’s a very good question, what we see in the existing current few quarters is a combination of things that are causing our growth rates to be slightly lower than we want. Our corporate goal which we believe is sustainable in a long-term sense is to grow 10% to 15%.

We believe that automotive business is very capable of being able to deliver that type of growth rate.

We also think that our other non-auto businesses are capable of delivering even stronger growth rates over that because a, they are smaller base, of course, but b, there is a lot of opportunity there for us to pick up pieces that fit in with our strategy.

So, in the long-run sense, and when – and you are a very good judge of that, in a three to five-year sense, not a three quarter sense. This is a 10% to 15% growth opportunity for us. .

As you kind of look at the contracts that you have in hand, and you probably have a look of maybe one, two, maybe three years down the road, obviously take rates can vary so much, but as you look at the contracts on hand, are they already there to support that 10% to 15%, or are there incremental business wins that are going to be necessary to achieve level of revenue growth?.

Yes. We are going to have to win some new contracts and we are going to have to have some things fall our way. But you also have to remember that we have a group of new products that are coming in as well. When you and I last talked a few years ago, we were looking at a business that was very much seat dominated.

Today, we have lots of other new products that are coming into play and we have more new product applications coming in every day. Three years ago, we had no business at all in the battery business, today, we have somewhere between $50 million and a $100 million worth of business coming our way.

We had no steering wheel heater business three years ago. Today, we got $60 million, $70 million worth of steering wheel business. All of these types of things are going to allow us to push this business forward to those target tunes 10% to 15%..

As you think about the climate control, kind of switching gears slightly here, the climate control seat, where are you at in terms of penetrating the German luxury OEM, BMWs, Mercedes, Audis of the world?.

Well as you know –.

And the climate control seat specifically..

Yes. As you know, we acquired a very strong and very solid management team a couple of years ago when we acquired W.E.T. One of the key objectives of that was to try to gain footing in Europe, particularly in the German marketplace. The work there has been going on for a couple of years.

We are very pleased with the progress that we are making in the acceptance in the local marketplace. A lot of people around the world now recognize that seat system and the seat structure itself is a very good way, very efficient way to deliver thermal management. And this includes the German car companies.

A couple of them had their own designs, as you are aware. They came out with good ideas, but those ideas are not necessarily the catch now. There are things that we know how to do today and that we know how to do better than anybody in the world that we are working and building seats and doing demonstrations and doing evaluations every day.

We do expect to get business in the German market very soon. We already have one very small contract with the Porsche Panamera, has accepted and installed our heat vent systems there and it’s an opportunity for us to begin to develop broader relationships in the German market and [indiscernible] we’ll have a German contract here very, very soon..

Excellent.

The final question – the new product that you just announced yesterday, is that a new feature or is that basically a replacement, maybe a higher quality replacement of an existing feature?.

It’s a improvement of an existing module that adds heaters to the delivered device that allows our customer to enjoy an added benefit and us to enjoy added value. .

Excellent. Okay. Very good answer. Thank you very much, Dan. I appreciate it, Barry. Hello. .

You are welcome back, Brett. .

Thank you..

And we’ll go next to Steve Dyer with Craig-Hallum Capital Group..

[indiscernible] nobody asked about the bed, so’ll ask it. How is that launch going and sort of what do you expect throughout this year in that. .

That launch is actually very well. Our partner mattress firm continues to strengthen its position. We are on a rollout plan with them.

It takes a lot of time to get large group’s stores ready to be trained and ready to install and sell these high-end beds, but the progress we’ve seen in the first couple of quarters tells us that this year is going to be a much better year for us in the bed business and we are very excited about it.

It’s not only beds business these days, so it’s also office equipment. We are seeing very good and solid responses for our heated and cooled and heated and ventilated office chairs. You are going to see more about that as the year rolls on.

We’ll sell more than $1 million worth of heated and cooled office equipment, and heated and vented office equipment during this year. The beds are on track to have a very good, I would say, introductory year. So, we are very excited. .

Okay.

Last question for me, operating expenses have sort of – they are actually down year over year in the quarter and they’ve sort of stabilized in the $30 million, is that – do you expect that number to grow going forward or kind of the high-30s where you are going to be for a while?.

Well, we do expect our operating expenses to grow as expand our businesses. As you’ve seen from our press release, we are working on an awful lot of things.

Many of these things are not generating revenue today, but we are investing in our future and we are putting people to work, inventing and innovating new things that we were going to be selling in two three, four and five years. You saw us talk yesterday about a electronic control module. We’ve been talking about that for three years.

There has been a team of people here working like crazy to get this done. We are celebrating the fact that we got our first really significant external order in the electronics world. We’ve got 30 or 40 people who’ve been working like hectic to get that done and we are starting to see some of those results.

So, our operating expenses will continue to be strong and will continue to be probably in that $30 million, $35 million range. .

Okay. Yes, with $38 million and change this quarter.

I guess, what I am trying to figure out is, do you expect a lot of incremental add-on or is this kind of the S-plus revenue growth, or is this plus cost of living increases kind of a thing?.

It’s going to be more than cost of living. You are going to see us invest in these businesses we just bought. We just bought Cincinnati Sub-Zero, they are going to need some new resources. Our battery businesses are going to need new resources, the electronics businesses are growing.

So, all of these things are going to require us to make investments today to generate revenue in the future, and you’ll see that in excess of the unit volume growth in the auto industry or inflation. .

Got it. Okay, thanks. .

And as we have no further questions, I would like to turn the conference back over to Dan Coker for any additional or closing remarks..

All right, everyone. Thank you very much for joining us. And thank you for your patience. We’ve run a little bit overtime, but we’ve had a very good quarter. We’ve had a lot of good results. We’ve had a lot of things happen that really set the tone for our future.

We think that 2016 is going to be a very good year, but we think 2017, 2018 and 2019 are going to be fantastic. So, we appreciate your time. We appreciate your questions and we ask you to join us in 90-days to follow up and see how we are doing. Thank you very much..

And that does conclude today’s conference. Thank you for your participation. You may now disconnect..