Company: THRM
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000950170-25-023344
Chunk: 169

Company: Gentherm Inc
Filing Date: 2025-02-19
Form: 10-K
Item: Item 1B
Chunk 169
---
19,270
        )

        —

        164

        Software development

        1,007

        —

        —

        1,007

        Indefinite-lived:

        Tradenames

        7,039

        —

        —

        7,039

        Balance as of December 31, 2023
         
        $
        188,806

        $
        (116,485
        )
         
        $
        (5,839
        )
         
        $
        66,482

      During the first quarter of 2024, we recorded a non-cash impairment charge of $530 for one of our Medical tradenames. As of December 31, 2022, the estimated fair value of the Medical reporting unit exceeded its carrying value by less than 10%. During the second quarter of 2023, the Company’s Medical reporting unit did not perform in-line with forecasted results primarily driven by slower than anticipated revenue growth. As a result, an indicator of impairment was identified and the Company performed an interim quantitative assessment as of June 30, 2023. The results of this quantitative analysis indicated the carrying value of the reporting unit exceeded the fair value of the reporting unit, and accordingly an impairment expense was recorded for $19,509. The Company performed its annual assessment of the Medical reporting unit goodwill as of December 31, 2024 and 2023 utilizing quantitative approaches and determined the fair value of the Medical reporting unit exceeded its carrying value at each date.

 F-22

GENTHERM INCORPORATED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)  

The Company utilized an income approach to estimate the fair value of the reporting unit and a market valuation approach to further support this analysis (level 3). The income approach was based on projected debt-free cash flow that was discounted to the present value using discount factors that considered the timing and risk of cash flows. Fair value was estimated using internally developed forecasts, as well as commercial and discount rate assumptions. The discount rate used was the value-weighted average of our estimated cost of equity and of debt (“cost of capital”) derived using both known and estimated customary market metrics. Our weighted average cost of capital includes a company specific risk premium to address the risks associated with achieving the projected revenue and profitability growth rates. Other significant assumptions included terminal value growth rates and terminal value margin rates. Our ability to realize the