Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Gentherm Incorporated 2013 Second Quarter and Six Months Results Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions) This conference is being recorded today, August 1, 2013. I would now like to turn the conference over to Ms. Jill Bertotti of Allen & Caron. Please go ahead, ma’am.

Good morning and thank you for joining us for the Gentherm 2013 second quarter and six months results conference call. Before we start today’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. Except for historical information contained herein, statements on this call are forward-looking statements that are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. These statements include statements regarding future sales, products, opportunities, markets, expenses and profits. Forward-looking statements involve known and unknown risks and uncertainties, which may cause company's actual results in future periods to differ materially from forecasted results. Those risks include, but are not limited to, risks that sales may not significantly increase, additional financing requirements may not be available, new competitors may arise and adverse conditions in the industry in which the company operates may negatively affect its results. Those and other risks are described in the company's Annual Report on Form 10-K for the year ended December 31, 2012 and subsequent reports filed with the Securities and Exchange Commission, copies of which are available from the SEC or may be obtained from the company. Except as required by law, the company assumes no obligation to update the forward-looking statements, which are made as of the date hereof, even if new information becomes available in the future. On the call today from Gentherm, we have President and Chief Executive Officer Dan Coker; Chief Financial Officer, Barry Steele; and Chairman, Bud Marx. Management will provide a review of the results, after which there’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 for the fine introduction and good morning to everyone. Thank you for joining us on our second quarter 2013 results call. We were quite pleased with the results of the revenues. We broke $160 million for the second quarter, which is an all-time record for the company on revenue. It involves a lot of good successes in all of our major business units. All units are continuing to show good strength over and above the traditional automotive markets. So we are quite pleased with that. We were challenged by a few things and in the gross margin line, we had some impact. We’re going to talk about those a little bit more in detail, and we also had a few special one-time items that effected our quarter and we will talk about those as well. For us, we saw some disappointing things. I was not pleased with the results of our bed revenue for our new product the heat and cool bed. We continued to suffer from lingering effects of the problem that we saw at the end of the first quarter in terms of a bed design change. So we had very little revenue, and I think, actually Barry will tell you that we had roughly $100,000 with the revenue in the second quarter, compared to roughly $650,000 in the first quarter. So we will talk about all of these things. Barry is going to review with you the details of the financial results, including some commentary and then we will open the floor for questions. Mr. Barry Steele, CFO.

Thanks, Dan. Hello, everybody. Thanks for joining us today. Our earrings for the second quarter were $0.15 per share, which included $422,000 in continued acquisition transaction expenses related to our increased ownership stake in W.E.T. You may recall that in February, we acquired an additional stake in W.E.T. from the largest minority shareholder. The expense initiated a process to acquire the remaining 1.5% of these shares to exceed our procedure. This result also included approximately $1.8 million in the severance and other costs associated with the management reorganization. Together, these items reduced our earnings by $0.07 per share. Our product revenues for the second quarter 2013 were $160.5 million as Dan mentioned, which represented an increase of $24.4 million or 18% over the second quarter of 2012 product revenue. The increase is due to strong automotive production especially in North America and Asia. Our European based revenues were also higher than the prior year period despite the soft automotive market in Europe. This is in part due to strong performance in our specialty cable business. Our gross margin for the second quarter as Dan mentioned, we’re a little bit down, it was 25%, which actually was nearly the same as the prior year second quarter, but also represented a decrease in the gross margin from this year’s first quarter of 26.4%. Our gross margin varies from quarter-to-quarter for a number of reasons, including shipping mix in our underlying product, timing of customer pricing as compared with cost savings initiatives, and special items both positive and negative that occurs from time to the time. We believe that the current quarter’s performance would represent the lower end of our gross margin range and includes some one-time events and effects that total approximately $1.5 million to $2 million. For example, we are continuing…

All right. Thanks, Barry. Operator, we would like to open the floor for questions from our dial-in.

Thank you, sir. (Operator Instructions) Our first question is from the line of Steve Dyer with Craig-Hallum. Please go ahead. Steve L. Dyer – Craig-Hallum Capital Group LLC: Thank you. Good morning, guys.

Good morning, Steve. Steve L. Dyer – Craig-Hallum Capital Group LLC: You talked a little bit about the new electronics facility. Barry, can you kind of quantify the costs that went in to that, again, I was writing, but I didn’t catch it all?

Yeah, for the quarter, it was about $1 million. Its better out in the P&L. The portion of it in gross margin was around $400,000. So this is a fact that you see just the cost right now or we might characterize it as investment. Steve L. Dyer – Craig-Hallum Capital Group LLC: I’d say investment.

Yeah, but will benefit us in the future as we vertically integrate and as we expand to offering products direct with our customers. Steve L. Dyer – Craig-Hallum Capital Group LLC: And would you ramp up production?

Later in the year, we’ll see some benefits from that. Steve L. Dyer – Craig-Hallum Capital Group LLC: And when would you anticipate that will actually start generating revenue or will it be sort of transfer revenues, I guess?

Yeah, in the second quarter, it was a very small amount. I think it was like $50,000. Prices are ramping up a little bit more in the second quarter, Steve, in the third and fourth quarter. I don’t have a figure to tell you where ultimately it will be, but it will be ramping up fairly significantly over this next couple of quarters.

Steve, you are also correct that the initial production will be consumed internally and it will be driven, for us, it will be a cost reduction on the early stages. And as Barry has pointed out, that will be – begin happening in the second half of this year, and then we’ll continue to ramp up to full production in 2014.

And it will affect the gross margin line particularly. Steve L. Dyer – Craig-Hallum Capital Group LLC: Do you have a magnitude at the top of your head?

We have not talked about it, but obviously, we’ve invested a lot of money and we are expecting a pretty significant contributing factor for our ongoing business plus it also raised the ground works for us to get into the independent electronics business as well. So our initial for us is to try to incorporate more of our own in-house manufacturing for our electronic modules, controllers and electronics components that we need for our own internal consumption and then as we get a little bit more ground under our feet, we’ll turn our attention to trying to pick up some additional outside business that will add margin to the bottom line as well.

Steve, I would add, that this should be margin neutral I believe by the end of the year as we benefit from the margin as we go from there. Steve L. Dyer – Craig-Hallum Capital Group LLC: Okay. That’s helpful. Aside from kind of that, and the severance and the couple of the other one-time things, operating expenses kind of continue to creep up. Is there anything kind of specifically you can pin that on and maybe kind of going forward how should we think about that number?

I think that’s specifically dependent on we try to characterize it as a number of different initiatives that are going on. About integration initiatives and other things, actually the way…

Barry, it’s fair to say that we set up like six months ago, a separate organization to attack markets beyond the automotive seats and we did that consciously, but it added to our selling and general and will add a little bit to our development costs, but we see that as having a payoff over the next two to three years without a doubt.

Yes. Steve L. Dyer – Craig-Hallum Capital Group LLC: Okay.

Let me add one thing to that, Steve, is one thing I did mention, there is some currency impact here. The euro was a little stronger in this period, so that and there is a significant amount of euro denominated expense.

But if you step way back, Steve, we recognize now that we have full control in the ability to implement the strategic opportunities that we had already identified that we need to take pay particular attention to our cost structure. That’s the last thing we want to do is deliver empty sales at the top line. Steve L. Dyer – Craig-Hallum Capital Group LLC: Got it. That’s helpful. Thanks, but with all that said, as you kind of think about gross margin, you’ve kind of always talked about sort of a range of 25% in the quarter like this one, where mix is unfavorable et cetera, and 28%, call it at the top line. Do any of the things kind of in the back half of the year change your mind on that, whether it be the internal purchasing of electronics or I guess maybe just how does the mix look, how should we think about positioning the number within that range?

I think that you’ll see that the second quarter was abnormally soft on margin for us, and I think if you’ll see a return to a more normal average, we target, as you know we’re targeting something to the higher side of our range, and you saw a 25% was the lower than expected and lower than we would like to see. So going forward, I think you’ll see better results, but not spectacular results, we’re not going to go above 28% next quarter. We are going to see variations in our gross margins quarter-by-quarter. Another thing if you don’t mind, I’d like to point out to the group, I didn’t quite get a chance to jump in there before you pitched off on a subject, but we did spend quite a bit of time working on the acquisition of W.E.T. We finally did get control of the W.E.T. organization in March of this year. We have gone through a full organizational structural review and we’ve now implemented a new management structure team and we’re beginning to develop our budgeting process for 2014, 2015 and 2016. So I know that some of the costs that we see on the paper here in terms of R&D and SG&A are higher than we would all like and we’re beginning to develop plans to try to adjust ourselves to these numbers. So in the first quarter that we had the ability to impact the expenses for the company, we felt like we were in fairly reasonable control. but we do promise that we will keep working on getting that number more in line as we go forward. So this is something that it’s just beginning, we’ve got some time to work on this, and it’s going to take a little time, but we do believe we’ll be able to impact the spending as we continue to evolve is one Gentherm company. Steve L. Dyer – Craig-Hallum Capital Group LLC: Sure, okay. two more quick ones, and that was all very helpful, one, just as you think about the squeeze-out process, is there any sort of timeframe we should think about as that being resulted. and then the second part of that would be what costs do you feel like will go away with that, in other words, W.E.T. won’t be listed publicly anymore and et cetera, the costs associated with that, how should we think about that process?

Well, as you know, as you all know, I’m not very good at estimating the German court process. But our current indications are that following the normal guidelines of the German court, we should be able to get an understanding of how the squeeze-out process is going to turn out early next year and sometime in the early first quarter of next year. If we are successful with that squeeze-out procedure and W.E.T. will no longer be a publicly listed company, will not have the reporting requirement and the separate independent accounting rules, regulations that we have to follow as a public company in Germany. We estimate that would stay in somewhere between €300,000 to €400,000 per year in any cost, that number is going down as W.E.T. is going to be obviously a less significant entity and itself, and we are thinking to change the status of W.E.T. from an AG Corporation to GmbH, so over time that should ease out somewhere between €300,000 and €400,000 year-over-year. Steve L. Dyer – Craig-Hallum Capital Group LLC: Okay. And then lastly, on the more fun stuff, as you think about the new programs with your sort of stand-alone Amerigon, you would report them all as you got them or at least as they went into production, how should we kind of think about the cadence of that this year in terms of, if you don’t want to share a number, more new programs, fewer new programs than you’ve sort of seen over the last several years?

Well, I think what’s happened to us now with the addition of the W.E.T. program product lines and the other new products that we’re introducing; it would be a burdensome task for us to sit here and list all of the new programs we get in each quarter. So what we’re really trying to get you guys to focus on is, to listen to our top line guidance. So we’re going to give you indications as to how we think the overall success of our efforts to get new products and new markets is going, and we believe it’s going quite well right now. And as you saw in our note, we’re increasing our guidance to the certainly over the high side of our range, based upon the first half, it’s very strong results. But we’re not going to come out and say we’re getting seven new heater programs and three new heat and cool programs on a quarterly basis, because it’s really just not practical anymore. Steve L. Dyer – Craig-Hallum Capital Group LLC: Got it.

In the Bakken our base is now large enough, but each of those programs individually has much lesser significant impact. So it’s a dual thing, there are too many of them to talk about and in the Bakken, the base is larger. Steve L. Dyer – Craig-Hallum Capital Group LLC: Yeah. And I understand, I was thinking back there was really robust years and then there was years where just there was not a lot of new programs up for bid et cetera. And so just trying to get a sense for how that’s been implying. But I’ll hop back n the queue? Thanks guys.

Thank you.

Our next question is from the line of (inaudible) with Roth Capital Partners. Please go ahead.

Good morning, everyone. Thank you for taking my questions.

Hi, (inaudible).

I like to start with your expected perhaps change in revenue mix. Can you talk about how the revenue mix by OEMs might be changing? In 2012, we saw an OEM mix of GM and BW with 50% mix each and before it was 14% down the line. How do you expect that change in 2013 and moving beyond, given the integration of W.E.T. now and your ability to cross-sell products into new opportunities that historically were not available?

I don’t really see any major shift in the revenue mix of in terms of the companies that we deal with there. We are seeing continued improvement in each of the major companies. We’re seeing very good growth right now in Hyundai. So I expect Hyundai to continue to grow. Hyundai is a very strong customer of ours globally and it continues to expand. I expect us to continue penetrating in GM, Ford, Chrysler and all of the other existing customer base. I don’t see one person becoming dominant or changing their position dramatically one way or the other.

Okay, thanks. And then going forward, can you spend on your relationship with Bosch. I think it’s focused primarily in cables. Is there an opportunity here, where you can kind of grow into more OEMs or models that buy Bosch and just can you comment on that relationship for us a little?

Our relationship with Bosch is very good. We have a very strong position as a preferred supplier of specialty cables and wiring harnesses to one of their key divisions. That relationship has been ongoing for quite a few years now and is generating a significant increase in revenues for us in the year when most of the European market has been relatively flat. How we leverage that into additional OEMs using Bosch as an intro, and that’s not really the purpose of our relationship with them. We are growing and they are growing in their market penetration in the steel delivery system businesses that they have worldwide. We’re seeing a need to establish more capacities in North America and the Asia, as the Bosch companies are successful in their venture to sell their fuel deliveries just in worldwide.

Great. And then in regards to your thermoelectric generator, can you give us an update on this and when do you expect the product size and comment on when this could be available?

We certainly expect your product size as soon as possible. We’re still three to five years away as the old joke goes, but we are making very good progress in terms of the design and we are now involving some of our new manufacturing partners at the form of W.E.T. to help us look at some of the design manufacturing requirements as we go forward. So we are definitely accelerating the program. We are continuing to invest and we’re continuing to see frankly quite encouraging results as to when we will see something come off of that line. Again, I’m going to predict that it will not be an automotive product; it will be an industrial application of some form of the thermal generators.

Initially, yeah.

Yes. And then we will continue to grow that business as we work our way up. We’ll probably do something like industrial, consumer; probably something in the trucking market will be a good target for us. Truck and bus is a very good opportunity. And then maybe, the early the stages of the automotive applications will be in something and either a electric or hybrid vehicle.

Great, thanks very much. I’ll jump back in queue.

Thank you, sir.

(Operator Instructions) Our next question is from the line of Anthony Deem with KeyBanc Capital Markets. Please go ahead. Anthony J. Deem – KeyBanc Capital Markets: Hi good morning gentlemen.

Good morning. Anthony J. Deem – KeyBanc Capital Markets: So, first on the revenue guidance, are you able to quantify the magnitude to which you expect to exceed the high-end of your higher 8% to 10% guidance?

No, we’re not actually going to quantify how far above it we are going to be. We believe that right now, the way we are sitting we’re going to exceed the 10% that we put out as the high side of our range. There are still quite a bit of open orders yet to resolve and look at before we get to a number where we’re going to be comfortable to say, we think the number is going to end at the end of this year. But I think it’s safe to say, it’s going to be above 10%. Anthony J. Deem – KeyBanc Capital Markets: And two are really kind of at top like above 8%, 10%, mainly driven by the strong results seen in the first half of the year or so. maybe, just for modeling purposes, should we keep the back half in line sort of with that 8% to 10% range, is that fair?

I think it’s definitely fair. We’ll probably be achieving the high side of the range in the second half as well, but in terms of modeling, yeah, I would definitely stay within the 8% to 10% range. Anthony J. Deem – KeyBanc Capital Markets: Okay, your cable business, a touch over 10% of your mix and growing here. Are you able to share whether that business is in line with corporate average margins above or below, I’m just kind of wondering maybe that business is potentially part of a mix issue that you cited in the press release?

Yeah, actually it is a contract that kind of built the print type of business. so the opportunities for gross margins are very limited, but it is a strong contributor to our manufacturing efficiencies and our plants worldwide. As you know, we make cables and wiring harnesses for our own internal consumption and having a very key customer like Bosch be a strong partner for us has been developing new processes and new systems and additional opportunities for revenue are quite handy, but the gross margins on the cable lines are not what we would like to see in the rest of our business, but it does contribute very strongly to the bottom line. Anthony J. Deem – KeyBanc Capital Markets: Okay. And the acquisition integration expenses you called out as one-time nature this quarter. Those are complete, right. We shouldn’t assume anything additional in the third quarter?

How it goes, if nobody I think to sue it again, that’s at top of there. We’re probably done in spending, if they do, which are likely too, there’s probably some more spending coming.

But I think the magnitude of the spending is going greatly diminish in the future coming quarters.

Yes, absolutely. Anthony J. Deem – KeyBanc Capital Markets: Okay, so here and then just two more. Can you talk to the higher material costs you cited in the press release? What raw materials are driving that? Is that expected to be a headwind in the back half as well potentially?

I think it’s just general material cost increases, cost of orders. One of our key items, tellurium, has been relatively stable. Another key item copper has been relatively stable, but there had been some increases that we are having to deal with in a normal quarter business. Anthony J. Deem – KeyBanc Capital Markets: Okay. And then just lastly here, any update on the potential to revenue synergies as you finally merged with W.E.T. and Gentherm teams together, and your European revenue growth is very solid in a flat market. So W.E.T. have a big presence in markets like Germany, could you attribute your outperformance this quarter there, to that integration potentially or just any update you can provide on that revenue synergies here in the near-term?

I don’t think our quarterly performance has been greatly enhanced by the fact that we’re together based upon the Europe and teams working together, what you’re going to see, the teams are working together and frankly, I think they’re working very well together. What you’re going to see in the, I’d say fairly near future are the combination of the W.E.T. technical people, sales and application engineering teams introducing the old Amerigon technologies into some new markets, and introducing it to new customers. I think we’ve indicated that we’re getting a very strong response to several of those products, particularly in the European and Asian markets. So I think you’re going to see some future dramatic increases in both of the traditional product lines, but I don’t think that we could say that just because we were working together for a year or so now, that the results of the second quarter were directly attributable to the impact of us working together for the time. Anthony J. Deem – KeyBanc Capital Markets: Great. Well, thank you very much.

Yes. You have to assume the normal automotive cycle for adaption of these kinds of products, but we’re very encouraged by the first steps. Anthony J. Deem – KeyBanc Capital Markets: Okay, thank you very much.

Our next question is a follow-up from the line of Steve Dyer. Please go ahead. Steve L. Dyer – Craig-Hallum Capital Group LLC: Thanks, Barry. Just two quick housekeeping items, tax rate still kind of thinking that 27% range something like that?

Yeah, we’re varying from time-to-time, but yes, it will be in the high cycle. Steve L. Dyer – Craig-Hallum Capital Group LLC: Okay. And then lastly, just what was the diluted share comp at the end of the quarter, that’s a blended rate but I just want to make sure I have all of the, kind of the outstanding stock issue, sort of a color for the model going forward?

That’s kind of tricky question. I can tell you what the share count was at the end of the quarter, but I can’t tell you what the diluted share count was in the quarter, because we don’t calculate it that way. Steve L. Dyer – Craig-Hallum Capital Group LLC: Is (inaudible) the quarter?

There’s $34 million in actual shares outstanding. Steve L. Dyer – Craig-Hallum Capital Group LLC: $34 million, okay.

Yeah. Steve L. Dyer – Craig-Hallum Capital Group LLC: Okay.

The diluted is $500,000 or $600,000 additional shares. Steve L. Dyer – Craig-Hallum Capital Group LLC: Okay, thank you.

I’m showing no further questions at this time, I’d now like to turn the call back over to management for closing remarks.

All right, thank you, operator and thank you, everyone for your questions. We again, we feel we had a good quarter. It wasn’t a fantastic quarter, but it was a very good quarter on the top line. It’s obvious to us we still have a lot of work yet to do on getting our cost under control and continuing to expand our business in all the major market areas that we play in. We are quite pleased with the results of our efforts to integrate the two teams together. We now have a solid management structure in place. We are beginning our planning processes for the future of our company and we see great opportunities not only for growth, but also cost efficiencies as well. So again, we thank you for your attention and we look forward to talking to you again in 90 days at the end of our third quarter. Thank you very much. Operator?

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.