Finding an auto parts supplier that is doing well is a tough task in this market, particularly for the domestic auto producers–you are hard-pressed to find a supplier that is growing its revenues at an impressive pace.
There is one small company that is growing right now, and it manufacturers a unique seating system that can actually cool or heat the occupant. Heated seats have been around for years, particularly in Europe, but cooling seats are relatively new.
If you have a vehicle with heated seats, you quickly realize that it’s one of the best options you can have. Cooling seats are the same–the technology really does work and more and more automobile manufacturers are offering cooling seats as an option.
The company that’s doing well right now in this business is Amerigon Inc. (NASDAQ/SC/ARGN). This company trades on the small-cap section of the NASDAQ and has been around since 1991, based in Dearborn, Michigan.
Amerigon’s main product offering is called “Climate Control Seat” or CCS. The equipment uses a proprietary thermoelectric device which provides heating and cooling for automotive seat occupants. The company is also developing new applications based on this technology.
In its first quarter of 2006, the company’s revenues grew 16.5% to a record $10.4 million. Net income grew 66% to $768,000, or $0.03 per fully diluted share.
In the first quarter this year, the company reported that it shipped 144,000 CCS seat systems, bringing its total shipments of CCS since its launch to more than 2 million. The company’s CCS system is now offered in the new Lincoln Zephyr, Buick Lucerne, Cadillac Escalade, and Cadillac DTS sedan.
Even though domestic auto sales are flat, the company’s proliferation of the current market continues to expand. Amerigon now has its sights set on Europe and Asia, and hopes to apply its technology to other markets for industrial and aviation use.
So, just when you thought that there was no light in the domestic auto industry, a small company like Amerigon comes around and reinvents the seat. My guess is that this company won’t be very small for very long.