Tania Esquivel - Investor Relations Phil Eyler - President and Chief Executive Officer Barry Steele - Chief Financial Officer

Gary Prestopino - Barrington Research Steve Dyer - Craig-Hallum Matt Koranda - ROTH Capital Partners Chris Van Horn - FBR Anthony Deem - Longbow Research

Thank you, operator and good morning everyone and thank you for joining us today. Gentherm’s earnings results were released earlier this morning and a copy of the press 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, representatives of the company may make forward-looking statements within the meaning of federal security laws.

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 risk factors 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 with me today are Phil Eyler, President and Chief Executive Officer and Barry Steele, Chief Financial Officer. Please note that during the review of the results, Phil and Barry will be referring to presentations act that we have made available on our website at gentherm.com/events.

After the prepared remarks, we will be pleased to take your questions. Now, I’d like to turn the call over to Phil.

Phil?

Thank you, Tanya and thank you all for joining us today. Before we cover the results of the fourth quarter and the full year as well as our outlook for 2018, I wanted to share a few thoughts.

As most of you know, I joined Gentherm in early December having previously run the connected car division of Harman International, a $3 billion plus in the automotive industry. When I was presented with the opportunity to take on the leadership role at Gentherm by due diligence proved to me that in addition to an innovative company and a strong business, there is significant untapped potential in this organization.

Gentherm’s industry-leading position is a direct result of the unique thermal solutions that it brings to the market as well as its sustainable competitive advantages. The company has not only penetrated the auto market across numerous geographies, it’s also begun to leverage its unique technologies and hundreds of patents to bring that technology into the medical and industrial markets.

Over the past 4 years, Gentherm has acquired Global Thermoelectric, Cincinnati Sub-Zero and Etratech, strong R&D organization that continues to design and develop innovative new products as well as improvements to existing products across the company. Because of this, we see significant growth opportunities in our automotive segment driven by the combination of new content, more content per vehicle and more vehicle platforms.

This, along with growth in our industrial and medical businesses, gives us a powerful platform to drive revenue and earnings growth. Over the past 78 days, I have begun to deep dive into this organization meeting with leadership across the enterprise, visiting our key customers, our core production and R&D facilities, speaking with suppliers and a number of our largest shareholders on what I would describe as a listening and learning tour.

This has afforded me the opportunity to really did in, ask a lot of questions and solicit unvarnished input on what we as a company can be doing most effectively to capture the opportunities before us. And on that note, in the next few days, many of you will receive an invitation to participate in an investor perception study.

Gathering the feedback of all of our constituents is fundamental to helping us plot the next course for Gentherm. Over the next few months, our management team and Board of Directors will be finalizing our refined strategic growth plan.

After it’s been finalized in the late spring, we expect to share it with you shortly thereafter. You may rest assure that the primary goal is to drive shareholder value through accelerated revenue and earnings growth.

This strategic plan will address first, continued and accelerated revenue growth in the short and mid-term through our core product and expanding portfolio; second, developing an automotive product and technology solution strategy which will address the opportunities of the car in the future. Third, a diligent portfolio analysis of all businesses and product lines and fourth short-term and long-term operating margin expansion opportunities.

There will be no sacred cows. We will aggressively look to drive the company into the future through focused execution.

Now let’s turn to the results of the quarter and the year. Please turn to Slide #3 in our presentation deck.

As we announced earlier today, we achieved 8.7% top line growth in the quarter of which 4.1% was organic, excluding the impact of acquisitions and foreign exchange. That brought our revenue for the full year 2017 to $985.7 million or 7.4% above the prior year, of which 4.6% was organic growth.

These results reflect solid growth even as market conditions remain challenging and I will touch on this in just a moment. As you all know well the recent changes in tax laws introduced a lot of noise in the earnings numbers for the quarter and the year.

Barry is far more adept that walking through that with you than I, so I will defer that commentary to him, but if we tune the signal from the noise and look at adjusted EBITDA, we see a modest improvement year-over-year for both the quarter and full year periods, this is a start. But it’s clearly our intent to improve on those results as rapidly as possible.

Before Barry dives into the detail I would like to review some highlights from 2017, let’s begin with Slide 4. Over the course of the past year in the automotive business, we have significant growth in both seat heaters and steering wheel heaters as well as solid growth in cabling system and some early traction in battery thermal management.

Although we saw a decline in climate control seating revenue in the period, we did see growth in CCS vehicle shipments of 2.5%. The pricing mix from the ship to heat event is near stabilization and we expect to move to growth within the next year.

Given the declining North American automotive market over the past year, our overall growth is not an insignificant achievement. Now let me touch upon a few highlights from the past year.

First, our team executed strongly with launches of systems on 141 different nameplate models across 22 customers. A few examples, the Audi A6, A7, Range Rover and Range Rover Sport, Mercedes E-Class, Jeep Cherokee, Infiniti QX50, Mazda 6, Jaguar XE, Tesla Model S, Chevy Cruze, Lexus GS and the Hyundai Genesis.

In addition, we launched 28 steering wheel heater solutions over the course of the year, a record number for us, upholding our position as the clear market leader of this feature. During 2017, we saw a positive trend for increased vehicle content by more often supplying the electronic controlling devices along with the climate delivery element for certain programs.

In battery thermal management, we launched our thermoelectric based product with a German OEM and we are in the ramp-up phase of our second launch with another customer in North America. We have already won follow-on awards with these existing customers which we expect will contribute $216 million in lifetime revenue for battery thermal management.

But this is just the beginning. We fully intend to expand our customer base well beyond these first two customers.

The transition of electric vehicles over the coming years will provide significant opportunities for our company. For instance, the anticipated application of 48-volt mild hybrid systems which one third-party source expects to account for 14% of global new vehicle sales in 2025, will create significant opportunities in the battery thermal management and other battery related technologies for Gentherm.

And as the market moves more towards fully electric as well as autonomous vehicles, the number of applications of our climate control and electric – electronic systems technology will expand rapidly. Simply put, we have only just begun to penetrate this large and expanding market.

Also we won two global supplier of the year awards with Honda and Bosch, a true testament of our operational excellence. Another notable achievement during the quarter was the acquisition of Etratech, which significantly expands our capabilities and advanced electronic controls and control systems.

With the acquisition of Etratech and expansion of our electronic product capabilities, we are creating integrated intelligent solutions that will allow us to increase our value content as well as extending into other automotive applications. In addition, we are working on a number of very exciting opportunities which I look forward to reporting back to you over the next few quarters.

Next, I would like to share some news with you on the platform awards we have received over the past year. As you can see on Slide 5 during 2017 we received more than $1.2 billion lifetime revenue in new program awards across 21 different customers, including several high volume platform awards for CCS, including GM Trucks, Ford F-series trucks, RAM Truck, Hyundai Santa Fe, and Acura MDX to name just a few.

As OEMs look to increase climate personalization and preconditioning into vehicles, we are seeing continued interest and awards in our active cooling and heating product. We also expanded our portfolio of Japanese OEM business with Subaru and Mazda, both small customers for us now, but with significant upside.

We won our first CCS program with a major German luxury brand and this is on the Mercedes S-Class. And finally, we are awarded our first major Chinese domestic OEM, CCS and thermal convenience awards with [indiscernible] two of the strongest players in China.

As you can see from these accomplishments, our core automotive business is strong and OEMs as well as Tier 1 suppliers recognized the superior technology that we offer and they are awarding significant business to us across vehicle classes, including luxury and across numerous geographies. Now, let’s turn to Slide 6 for a discussion of our industrial segment.

At the CSZ, Cincinnati Sub-Zero, we achieved 10% organic growth and 44% growth overall in 2017, which benefited from a full year of revenue versus 9 months in the prior year. The year-over-year growth was propelled by sales of environmental chamber products due to strong demand for both standard and customized chamber applications.

On the medical side of the business, the strength we saw in 2016 for our Hemotherm product, a blood heater and cooler used in hospital operating rooms during open heart surgery continued into 2017. Allow me to share a few additional highlights from this business.

We delivered a custom thermal test chamber for a NASA space project, a true testament to our thermal capabilities. We lost our new filter flow pediatric underbody blanket, a product that completes our portfolio of offerings.

CSZ is a 9/10 of the top children’s hospitals in the United States and having this full breadth of products strengthens our dominant position in this market. We successfully passed the critical design review gate on the development program for a non-invasive warming and cooling device product for the U.S.

Air Force. We launched the 100-volt normative blanket warming solution providing a unique solution for the Japanese normothermia market, which is a fast growing untapped market for CSZ.

This product differentiates us as the sole warming-only device in the market creating flexibility for hospital operations. We were awarded the CSZ Warm Air system with St.

Joseph’s Health integrated healthcare system, a 17 hospital network and an important market on the West Coast. And finally, we secured a 3-year supply contract extension with the University of Pittsburgh Medical Center with CSZ’s largest customer.

During the past year, we made a significant investment in expansion of the sales force in this business. As the new personnel come up to speed and improve productivity, we expect further improvement in performance in this business over the coming year.

Medical is another application where I believe we are just getting started at penetrating the sizable patient thermal management market. Now, let’s turn to our Global Power Technologies on Slide 7.

Our remote power generation business benefited from a strong rebound in orders versus the prior year. As you maybe aware, our primary customers for this business are gas producers utilizing our technology in remote often harsh locations.

These producers are also generally involved in the oil business, which was under pressure in recent years having a residual effect on orders for our equipment. That cycle has moderated and we shipped numerous custom orders across 2017.

As a result, remote power generation revenue rose 71% in 2017 versus 2016. While the 2018 outlook is more flat, we are developing new opportunities to penetrate new geographic region for our existing products and developing new products to open up additional markets.

Let me also share a few highlights from this business. Methane reduction is a new market driver for us that has arisen in the past year driven by more stringent government environment regulations.

We have an immediate opportunity due to the cleanliness of our thermoelectric generator technology to sell our products for methane reduction applications. In 2017, we sold over 400 TEGs generating $2.5 million of revenue in this market.

Because of our market and technology position, we also received $1.8 million grant for an emissions reduction program sponsored by the Alberta government. This is to develop more advanced products to address a broader range of methane reduction applications.

We are spending these funds, along with our own research dollars in developing new and proprietary products for this market. In addition to broadening our product offerings, we continue to find success penetrating new markets geographically.

Two examples include the expansion of our offshore platform success in Southeast Asia to places like the Caribbean and India. 2017 marked the first success with the shipment of one of our offshore platform systems to de novo energy in the Caribbean.

Finally, demand for our products has recently been growing in Australia as a number of new LNG facilities have been constructed for purposes of export to Asia. As this trend continues, the demand for gas transportation across the continent to feed these facilities has grown, along with the need for lower operating costs, if this lower cost that creates a need for GPT’s product.

Now, that I have shared the highlights of the business, I will ask Barry to give you a little more color commentary on the results of the quarter and then we will be pleased to take your questions. Barry?

Thanks, Phil. Good morning, everyone.

Phil has provided excellent color in our growth during the quarter and the year. I will focus my comments on some of the material items that impacted our financial results for the period.

During the quarter, we reported high revenue in both our operating segments and in every product line, except CCS and CSZ. In the case of CCS, we continue to experience a headwind on active cool seat technology due to both the transition by some OEMs to heat vent systems as well as a 4% decline in vehicle production in North America for our Climate Control Seat business as concentrated.

This technology headwind is expected to continue through 2018 due to the application changes that were implemented during on certain vehicles last year. However, higher volume from new product launches for both active cooling systems and heat vent systems as well as expected increased North American production rate will begin to offset the impact from the lower price on vehicles that have switched.

Both our heat cool and heat vent technologies have unique and sustainable competitive advantages and both have largely un-penetrated end market. We are working closely with our customers to provide cost effective solutions across their platforms and we believe that both of these technologies remain core to our automotive business.

The lower CSZ sales are mainly due to last year’s unusually high sales of the Hemotherm blood heater cooler product in our medical business, which benefited from a windfall of sales related to a regulatory action taken against an important competitor. As we see on Slide 8, the quarter resulted in a net loss per share of $0.14.

As Phil pointed out, this included several unusual items, which I will more fully discuss in a moment. The most significant of these include the tax charge and the CEO transition expenses.

After adjusting for these, we show earnings per share of $0.61 for the quarter and $2.31 for the full year. This compares to a similarly adjusted $0.68 for the prior year fourth quarter and $2.59 for the full year of 2015.

As expected, we incurred the final expenses related to the transition of our CEO, which amounted to $3.8 million during the quarter. As is the case with nearly every other U.S.

based multinational enterprise, we recorded a significant expense during the fourth quarter related to the U.S. Tax Cut and Jobs Act signed into law just before the end of the year.

The combination of the laws, mandatory repatriation tax on our overseas earnings and revaluation of our net deferred tax assets resulted in a one-time non-cash charge of $20.2 million or $0.55 per share. The purchase accounting effects which are comprised of acquisition-related amortization of intangible assets and other expenses totaled $0.09 during the fourth quarter and now include amounts associated with our acquisition of Etratech.

Also despite the net loss and as you can see on Slide 9, only interest, depreciation and taxes as well as foreign exchange in the final transition expenses, adjusted EBITDA for the quarter came in at $38.9 million or 15% of product revenue during the quarter as compared to $37.1 million or 15.7% of product revenues in the prior year period. This was a 5% increase despite the lower margin rate.

The lower adjusted EBITDA was a result – excuse me the lower adjusted EBITDA margin was a result of a dip in our gross margin rate and higher operating spending. The gross margin during the fourth quarter was 30.1%, down from 33.2% in the prior year period.

As we noted in the press release, we incurred higher class to expand capacity at our new manufacturing facilities in Mexico and Macedonia and for expansion in electronics and battery thermal management production. Those investments were planned.

However, gross margin was also impacted by approximately $1 million in cost overruns at CSZ, which were quickly resolving. It should be noted that the higher rate in the prior year stands out as being among the highest gross margin quarters ever for Gentherm as it was significantly buoyed by the unusually high sales of the Hemotherm blood heater cooler product that I mentioned a moment ago.

Next, let’s take a look at the balance sheet, as you can see on Slide 10. With respect to the balance sheet, our cash balance of $103 million decreased in the quarter mainly due to the acquisition of Etratech.

On December 31, our outstanding debt was $144.7 million, which is a decrease of $1.2 million for the quarter. Available borrowing capacity under our revolving credit facility is now $221 million, which brings our total available liquidity along with the cash to $324 million.

Now, let’s discuss our guidance. Please turn to Slide 11.

As you saw today’s press release, we have significantly expanded the number of metrics for which we are providing guidance. We have done this for a number of reasons.

First, we are actively striving to improve transparency and to help investors have a clearer view of our progress. Second, as we transition to a new strategic growth plan in 2018, we expect that there will be some changes in our revenue and earnings growth over the course of the 3-year planning.

As Phil mentioned, we expect to present that planned later in the year. In the interim period, however, between now and then we wanted to provide some expected ranges on our revenue and expenses in 2018.

As you can see on the slide, we are guiding to 8% to 10% revenue growth in 2018. This is comprised of 3% to 5% organic growth augmented by the full year benefit of Etratech.

Gross margin is expected to be flat to slightly above the rate we achieved in the fourth quarter of 2017. Adjusted EBITDA is expected to come in at a healthy 15% of product revenue and we expect our CapEx to be approximately $50 million.

One significant factor, which you should be aware of affecting our earnings, is our effective tax rate. The recently enacted tax rules lowered the U.S.

tax rate to 21% from 34%. Our effective tax rate already approaching 20% will not benefit from this due to our geographic footprint and waiting up earnings overseas.

The one benefit that we will have is greater flexibility of the use of our cash reserves to pay down debt in the U.S. Additionally due to the adoption of a new accounting standard we expected our effective tax rate will include an increase of approximately 400 basis points to 24% in 2018.

So in summary, our initial look is for solid top line growth in 2018, crossing over the $1 dollar threshold by $60 million to $80 million. Our gross margin and operating margin rates are expected be about flat versus 2017.

As we invest in the expansion of our platforms and technologies, develop new products and to begin to bring out additional synergies and other costs, we look forward to keeping you apprised of our progress as year unfolds. With that, let’s turn the call back over to Phil for some closing remarks.

Thanks, Barry. I am sure it’s become clear that my management team and I are enthusiastic and optimistic about this company and our future.

We have unique technology, we produced innovative solutions for our customers and we have sustainable competitive advantages. In addition, it’s clear to me that the markets we serve as well as adjacent markets that we have only begun to penetrate are large and in many cases expanding.

We fully intend to accelerate our growth to outpace the market and capture additional market share. We look forward to sharing our strategic growth plan with you very soon.

Now, let’s turn the call over to the operator to start our Q&A session. Operator?

Hi, good morning everyone. Couple of things.

First, Barry, just in terms of some of the line items in 2018, what would be the rate of depreciation, amortization on a run-rate that you are looking at this year?

It will be very similar to what you saw in the fourth quarter.

Okay, okay. And then the customer relation amortization, will that be similar as well?

Yes, it should be. It should have a full effect of Etratech in there in the fourth quarter.

Maybe one comment is that rate in the fourth quarter is a bit higher for two reasons. One is currency is a little heavier and as we have lot of assets oversees that will be depreciated and two, as we brought on some of the capital expenditures from the current year, including expansions in some of the facilities we mentioned.

Those are now being depreciated. So it is bit higher.

Okay. And then question for Phil, I mean you have been there for couple of months now.

I mean, what are like some of the major puts and takes that you are seeing with the company at this point? And it just strikes me is that quite possibly there is great product set, great growth potential there, but maybe not operating at a level of expense ratios that you want?

Thanks, Gary. Yes, I think first of all, I couldn’t be more excited about what I found so far in the company, great talent, a great portfolio of technologies and absolutely strong R&D organization, I mean we are continuing to develop a wide range of products and advanced technologies across not just automotive, but other industries.

I think those technologies give us a great platform for revenue and earnings growth. Of course, as we go through our analysis of the operating strategy going forward, we will certainly be looking at how do we expand margins and I expect that over the course of 2018, we’ll find some nice opportunities to do that in the short run as well as set ourselves up to create more leverage as time goes on.

But I am really excited about growth. I think that’s the element that has been the most exciting for me, especially with the rapid rising opportunities and car of the future technologies.

I think that’s an area that we are really just starting to see huge interest by the OEM customers and applying our technologies in microclimates that will become extremely important as cars move to especially electrification. So, I think there is lot of opportunities and you will start to hear more and more about those as we refine our strategy.

And you are going to get – you are going to give us the strategy sometime late spring, early summer?

We are going to finalize it in late spring and at that – around that time we will announce when we will roll that out, but it should be in that timeframe you just mentioned.

Okay, thank you.

Thank you, Gary.

Good morning. Welcome, Phil and thanks for all the added disclosures.

Very helpful. I guess more specifics of your plan on the months coming, but overarching what are sort of the themes you are looking for.

Are you inclined to be more of a pure-play auto technology company or are you trying to grow at faster margins? I guess just generally speaking, what are sort of the overarching themes that – are you looking to kind of leverage all the thermal dynamic technology that’s been accumulated or sort of what are the themes or what are the underlying factors you are going to be focused on?

Well, first of all, I think that’s – those are the kind of the answers we will come to you with in the late spring, early summer. As we roll this out, I don’t want to give too much too early and give ourselves a good chance to flush it out, but I would say in general, as I mentioned earlier, everything is under review, there isn’t – there are no sacred cows, I think that’s a very fundamental point.

We will certainly continue to accelerate revenue growth through our core product and expanding portfolio. I think that’s one thing I can definitely tell you we will really more aggressively go after.

I think there is a very significant untapped market still, especially in automotive for our product lines. There is less than 10% of vehicles in North America and around about 5% of vehicles globally are currently using climate control seating technology.

So I think that provides us significant opportunities especially over the coming years as more and more vehicles get really serious about emissions regulations and transitioning to electrification. So that’s an area you will see a lot of focus on.

Certainly this, as I mentioned before, developing products and technology around the advancements of the car in the future and I will just use electrification as one example and there are more examples of that. But there is certainly a transition of 48-volt hybrids that will be happening over the next let’s call 5 years to 10 years and that creates strong opportunities for one our battery thermal management technologies which is – and those applications are very essential in the operating of electrification.

But also secondly, comfort becomes much more important as we migrate to semi-autonomous vehicles longer term towards autonomous. I think there is – we see having visited customers already I am seeing a lot of interest in our products as they develop the architecture for these vehicles in the future.

So that transition also creates a lot of challenges for the traditional HVAC system and I see our microclimate technology is playing a very significant role in that space. So but as you mentioned we will do a diligent portfolio analysis across all the businesses and then of course as I mentioned earlier looking for ways to expand operating margin in the short-term and mid-term.

Thanks. That’s super helpful.

And then Barry obviously new repatriation tax laws you guys have a stash overseas, any sort of immediate plans to do anything with that?

Yes. The first opportunity is to pay the revolver balances which will help us on our interest line, but beyond that I think there will be an element of the strategic plan to give you some of the further ideas about how to spend our cash.

Good, okay. Thanks very much.

Thank you.

Hi, guys. Thanks.

Maybe just one high level one for Phil first, welcome first of all.

Thank you, Matt.

Phil, I was wondering if you just – maybe just speak a little bit about the competitive landscape especially as it pertains to your automotive products, so on the one hand you guys have obviously had great book of business from a number of OEMs and there is some ramping business in battery thermal management electronics that should provide some tailwinds for you going forward. On the other hand, I guess do you have some customers they are at least attempting to introduce competing solutions with of course CCS product line, maybe if you just talk a little bit about once joining Gentherm how you are going to look at that and how you would view the opportunities compressed within the auto business specifically?

Sure, great question. Thank you.

I think the first and foremost we do have a very strong suite of technologies to compete in that space. Having deeply studied our technologies and our R&D roadmap, I feel very good that we are in a good position to be competing for several of the next generation pieces of the business.

But clearly coming from the role I held at Harman, I am no stranger to competition and that’s – there was hypercompetitive calling a scratching for all awards. So I certainly embrace it.

I think it helps the business grow faster and move faster in technology. And I am certainly challenging the R&D team to continue to develop and win with best in class especially active heating and cooling technologies.

And I am – the progress we have made just a few months of developing that to the next level is very encouraging. So I am feeling really good about that and of course you mentioned the customers and having spent time with both Tier 1 customers and OEM customers, I think there is a deep appreciation for our capabilities.

And we are seeing our future technologies aligned very well with their roadmaps. So I think that’s – that’s giving me a lot of confidence.

Of course we are paranoid and we need to act fast in developing competitive solutions both to support our Tier 1 customers and our OEM customers. I think it’s important to note that our job is to collaborate and create solutions with both Tier 1 customers and with OEM customers, they are both extremely critical to us.

We are about 80% directed by OEM customers at the moment, but we also know that in order to deliver the best solutions we have to be working very close with both Tier 1s and the OEMs.

That’s helpful, Phil. Maybe one follow-up to that, do you see any change in the mix in terms of directed sales by OEM customers, I mean the 80% mix, so does that track relatively stable over time?

At the moment, it’s pretty stable.

Got it, okay. Maybe just one or two for Barry here, Barry in Q4, I guess I think there was like an implied at least small sequential ramp that you guys discussed last quarter on battery thermal management, didn’t really see that this quarter, maybe could you talk a little bit about launch activity on the program that’s ramping and sort of how it fared and then any changes with the expectations for 2018?

Sure. As you may recall, although we had said in the past about the launch of the battery thermal management as that would occur very much at the end of the fourth quarter.

So that is actually how it worked out. We have hundreds of thousands in additional revenue associated with the thermal interface systems.

You will start to see that ramp up much quicker as we get into 2018. It will be somewhat even as we go through the course of the year.

There is two customers, one is basically shipping the first vehicles now, the second one comes online with probably the larger size vehicle that is going to start shipping in the second part of the year, so it will start to accelerate as we get through the end part of the year, but you see some nice increase, not to the full rate until 2019.

Okay, got it. That’s helpful.

And then just for the outlook, I just wondered if you guys might be able to help spread and how the awards that you shared that slide that was in with the $1.2 billion of new awards, how that spreads into the 2018 outlook if at all, I guess that maybe longer term given the typical sales cycles in automotive, but could you help us understand how that fits into the 2018 outlook? And then also is that all essentially net new business or is there some replacement businesses on existing programs within those bookings?

I will take that one. The revenue is certainly as it was awarded in 2017 you are not going to see much of any of that in 2018.

The development cycle in automotive as you know is in the neighborhood of 2 years, 18 months to 2 years. So, we will see the first revenue of that book of business roll on in late 2019, early 2020 more likely and it’s the combination of all awarded business, including follow-on business and new acquisition business.

Got it. Okay, guys.

I will leave it there. Thanks.

Good morning and let me echo the welcome, Phil. So, just a question on seat heater business was significantly strong this quarter, I just want to get some additional commentary if you don’t mind about what’s going on there, is it taking share additional content and what does the penetration of the rear seat look like and the outlook for that going forward?

Well, it’s – as you think about the market first, the market is about 25% penetrated as we know it right now, so there is significant movement to add this technology to more and more platforms and expand take rates in existing platforms. So, certainly the combination of expanding that is a big part of it.

We have also taken over some pretty exciting business in that space. I think we are – our product both effectiveness and cost efficiency has been well appreciated.

Another interesting factor as you just mentioned is that we are seeing more and more second row key conditions being made. And just a simple example of that is the Jeep Cherokee is extending into the second row heating and of course that’s a mainstream product.

I have one more thing as well that we are seeing a lot more customers purchase the electronics control unit for our seat heater business. So on top of adding just pure growth to it, we are seeing more content in a lot of the new acquisitions that we went.

Okay, great. And then looking at the CSZ business and I apologize if I missed it, but did you provide an outlook for sales growth for 2018 for that business.

And then additionally do you think the cost overruns that you saw during the quarter are behind you and any more detail on that?

Yes. We didn’t give specific guidance on any of this – on the segment.

It’s safe to say that we are seeing growth in all of the segments. I think you mentioned the medical product is that – what’s the second part of your question Matt?

Just on the cost overruns, was there a one-time thing or is there something that you have visibility into it into the next year?

As you may recall we have had some of the larger custom systems on our chamber business that have the cost overruns, basically in the last couple of quarters. We do believe that that is largely behind us, most of those chambers are shipped and so we expect that the margin in that part of the business will recover a bit.

Okay, great. And then finally for me just, it looks like you are guiding flattish CapEx year-over-year for 2018 and I just was wondering you is that you obviously have visibility about the new programs coming online, do you feel we are well capacitized in terms of if you see additional award wins and any sort of – based on what you see in the pipeline, do you see an up-tick in investment should award wins coming higher than expected?

I think we are in good shape right now. We have – with the combination of – a few new plants over the last couple of years and then also with the acquisition of after-tax we acquired of Etratech we acquired some manufacturing capacity in that as well.

So I think you we are – at least with what we see right now, we are looking pretty good for the next couple of years.

Okay, great. Thanks for the color guys.

Thank you.

Hi, good morning everybody.

Hi Anthony.

I have a few questions, so thanks for the new automotive award numbers. So the $1.2 billion, are you able to help us appreciate how that might compared to prior years higher or lower, about the same.

And then also as a follow-on, are you able to breakout what CCS is as a percentage of $1.2 billion?

No, I don’t have the – I will answer your second one first. We are not going to breakout the specific product lines of that at the moment.

But I will tell you that based on the data that I have seen so far the $1.2 billion is record for the company. And we see it is doing pretty strong growth in the upcoming years.

Great. So then as it related to the out years looking out longer term, is it safe to say perhaps the longer term expectation for the organic growth for the business is around 3% to 5% like this year or perhaps go with the new strategic plan to write on, are there new opportunities to accelerate that revenue growth?

The 3% to 5% is only for ‘18 at the moment. And absolutely I am looking at options to accelerate that organically.

As I mentioned earlier I think there are some just very basic ways to look at the market that we need to feel pretty bullish about our growth even if you only look at the core technologies. And as you know we have got – we have got also got a hopper of products that will expand across other areas both in automotive and within our industrial segment.

So, I am feeling really very strong about the potential of organic growth in the future.

Great. On the 2018 revenue guidance, share any updates for the Etratech growth outlook and also if there is any currency benefit of 2018 revenue?

Barry Steele is run on plan with where we had disclosed that would be and we bought it in the 70-ish million range. That’s why the overall growth is higher than the organic growth and factored in that total growth is about 1% due to currency benefits.

And then just one more if I may, is there a specific quarter you can pinpoint when you guess revenue might inflect positive and is the expectation for CCS to grow for the full year below, in line or above 3% to 5% organic growth? And thank you very much for taking.

Sure. So CCS we expect to be relatively stable this year.

So I would say in general – the general answer is we have seen what’s called the flattening of the overall revenue situation for the company and we will start seeing some growth towards the end of the year. And as I said, I expect to see increasing growth curve in 2019 and beyond.

Anthony, just to add to that one of the drivers for CCS is just the year-over-year impact of some of the switching from last year. That will be a little bit tougher comp in the first part of the year and little easier in the second part of the year.

So Barry, thank you very much.

Sure. Thank you.