Item 2.05 Costs Associated with Exit or Disposal Activities.
On December 31, 2022, the Board of Directors (the "Board") of Gentherm
Incorporated (the "Company") approved the Company's plan to exit its
non-automotive electronics business (the "Business") to strengthen the Company's
core business and focus its resources and equipment with businesses and
investments that are more strategic and profitable. The Company will continue to
sell certain Business products until the exit is complete. The Board's
determination will have no impact on the Company's automotive electronics
business.
For the twelve months ended December 31, 2022, the Company's product revenues
from the Business are expected to be approximately $17 million. The Company is
evaluating a potential sale of the Business or substantially all of its assets.
If such sale is not pursued or is unsuccessful, the Company intends to wind-down
the operations of the Business over approximately 8-12 months, subject to
discussions with customers and suppliers of the Business. In the event of a
wind-down of the Business, certain property, plant and equipment will be
utilized by other operations of the Company.
In connection with approval of the plan to exit the Business, the Company is
expected to incur total non-cash expenses of between $13 million and
$18 million, including impairment of inventory of between $7 million and
$12 million, impairment of intangible assets of approximately $5 million, and
impairment of a portion of property, plant and equipment of approximately
$1 million. These expenses will be excluded in calculating the Company's
non-GAAP financial performance measures to be reported for 2022. In the event of
a wind-down of the Business, the Company also expects to incur other transition
costs of approximately $500 thousand, including advisor fees.
Item 8.01 Other Events.
Deadline for Shareholder Nominations under the Universal Proxy Rules
In accordance with Securities and Exchange Commission ("SEC") guidance regarding
Rule 14a-19 of the Securities Exchange Act of 1934, as amended, the Company is
providing an updated notice period for shareholders who intend to solicit
proxies in support of director nominees other than the Company's nominees. The
information disclosed in the Company's 2022 proxy statement under "Additional
Information-Requirements for Submission of Shareholder Proposals and Nominations
for 2023 Annual Meeting" is hereby replaced in its entirety with the following
solely to revise the disclosure regarding the requirements for shareholders who
intend to solicit proxies in support of director nominees other than the
Company's nominees:
REQUIREMENTS FOR SUBMISSION OF SHAREHOLDER PROPOSALS AND NOMINATIONS FOR 2023
ANNUAL MEETING
Under SEC rules, if a shareholder wants us to include a proposal in our proxy
statement and form of proxy for presentation at our 2023 annual meeting of
shareholders (pursuant to Rule 14a-8 of the Exchange Act), we must receive the
proposal at our principal executive offices (Corporate Secretary, Gentherm
Incorporated, 21680 Haggerty Road, Northville, MI 48167) by the close of
business on December 22, 2022. As the rules of the SEC make clear, simply
submitting a proposal does not guarantee that it will be included.
Any shareholder director nomination or proposal of other business intended to be
presented for consideration at the 2023 annual meeting, but not intended to be
considered for inclusion in our proxy statement and form of proxy relating to
such meeting (i.e., not pursuant to Rule 14a-8 of the Exchange Act), must be
received by us at the address stated above not less than 90 days and not more
than 120 days before the first anniversary of the date of the 2022 annual
meeting. Therefore, such notice must be received between February 2, 2023 and
the close of business on March 4, 2023 to be considered timely. However, if our
2023 annual meeting occurs more than 30 days before or 60 days after June 2,
2023, we must receive
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nominations or proposals (A) not later than the close of business on the later
of the 90th day prior to the date of the 2023 annual meeting or the 10th day
following the day on which public announcement is made of the date of the 2023
annual meeting, and (B) not earlier than the 120th day prior to the 2023 annual
meeting.
The above-mentioned proposals must also comply with our Bylaws and the proxy
solicitation rules of the SEC and Nasdaq, including but not limited to the
information requirements set forth in our Bylaws. We reserve the right to
reject, rule out of order or take other appropriate action with respect to any
proposal that does not comply with the foregoing and other applicable
requirements.
Cautionary Note Regarding Forward-Looking Statements
Except for historical information contained herein, statements in this Current
Report on Form 8-K are forward-looking statements that are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements represent the Company's goals, beliefs, plans
and expectations about future events. The forward-looking statements included in
this Current Report on Form 8-K are made as of the date hereof or as of the date
specified herein and are based on management's reasonable expectations and
beliefs. Such statements are subject to a number of important assumptions,
risks, uncertainties and other factors that may cause actual results or
performance to differ materially from that described in or indicated by the
forward-looking statements, including that the Company may be unable sell the
Business or substantially all of its assets on a timely basis, for a reasonable
purchase price or at all, any wind-down of the Business may not occur on a
timely basis or require more of the Company's resources than anticipated, the
Company's incurred expense related to the exit from or wind-down of the Business
may exceed the Company's projections and there may be additional expense and
costs in future periods. The foregoing risks should be read in conjunction with
the Company's filings with the SEC, including "Risk Factors", in its most recent
Annual Report on Form 10-K and subsequent SEC filings, for a discussion of these
and other risks and uncertainties. Except as required by law, the Company
expressly disclaims any obligation or undertaking to update any forward-looking
statements to reflect any change in its expectations with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based.
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