Amerigon Incorporated (Amerigon) has reported product revenues of $63.61 million for the year-end 2008, compared with the product revenues of $63.63 million in the previous year-end. It has also reported a net income of $3.6 million, or $0.16 per diluted share, for the year-end 2008, compared with the net income of $7.4 million, or $0.33 per diluted share, in the previous year-end.

Higher sales of the company’s Climate Control Seat (CCS) system resulting from new model introductions and higher penetration on certain programs in 2008 were offset by declining overall automotive market volume due to slowing economic activity in North America, higher gas prices and decreasing availability of consumer credit, especially in the fourth quarter.

Gross margin as a percentage of revenue for 2008 was 29.1% compared with 33.5% for the prior year. The 2008 gross margin was impacted by a steep drop in the fourth quarter gross margin, reflecting higher raw material costs and a change in the mix of products sold during 2008 compared with 2007. The company continues to focus on reducing costs and as part of that ongoing program it is investing research and development (R&D) resources to offset material and other costs increases.

For 2008, net income was $3.6 million, or $0.16 per basic and diluted share, compared with $7.4 million, or $0.34 per basic and $0.33 per diluted share for 2007. Results in 2007 included a deferred R&D tax benefit of about $1.7 million following a study of its R&D activities and related expenses for 1999 through 2006. Excluding the tax benefit, net income for 2007 was $5.7 million, or $0.26 per basic and $0.25 per diluted share.

President and chief executive officer Daniel R. Coker said despite the dramatic downturn in the economy and the automotive market in particular, Amerigon had its share of successes in 2008.

We continued to increase our market penetration, reported a profit for 2008, including a modest profit in the fourth quarter, expanded the development of our advanced thermoelectric technology and secured a major contract with Sealy Corporation, the largest bedding manufacturer in the world, Coker said. That said, the problems that surfaced in the latter half of 2008, including the market’s instability and the lack of available credit to finance the purchase or lease of new vehicles, remain serious challenges going forward. We do, however, expect to continue to increase the market penetration of CCS during 2009 with several new vehicle model introductions.

Results for 2008 included year-over-year increases in R&D expenses of $1.7 million due to increased research activities associated with the company’s advanced TE program, the addition of CCS engineering resources to support the large number of new vehicle programs and continued development of new automotive and non-automotive TE-based products.

Revenues for the fourth quarter of 2008 were $12.8 million compared with $16.4 million in the same quarter of 2007. Gross margin as a percentage of revenue for the 2008 fourth quarter was 22.3% compared with 35.3% in the 2007 fourth quarter. Net income for the 2008 fourth quarter was $291,000, or $0.01 per share, compared with net income in the 2007 fourth quarter of $1.8 million, or $0.08 per share.

The company’s balance sheet as of December 31, 2008 remained strong with total cash and cash equivalents of $25.3 million, which included the cost of its fourth quarter share repurchases, total assets of $52.6 million, no bank debt and shareholders’ equity of $45.0 million.

During the fourth quarter of 2008, Amerigon repurchased 946,877 shares of common stock for an aggregate purchase price of $3.5 million.

Milestones achieved by Amerigon during 2008 include the launch of a heated and ventilated seat system designed especially for mid- to low-priced vehicle lines; agreement to develop a suite of heated and cooled bedding products with Sealy; the subsidiary BSST’s successful completion of the third phase of its Automotive Waste Heat Recovery Program and the award of a Phase 4 Program by the U.S. Department of Energy (DOE); and BSST’s win of a DOE program in partnership with Ford Motor Company and Visteon to develop a highly-efficient thermoelectric heating and cooling system for automobiles.

Coker added, Market interest in thermoelectric technology has grown dramatically over the past year as advances in materials promise to increase the efficiency of TE’s. We continue to be focused on demonstrating that there are substantial prospects for the design and development of innovative thermoelectric systems in applications beyond automotive seating, including other automotive applications, stationary temperature management, aerospace and defense, individual comfort, waste heat harvesting and primary power generation.

Unit shipments of CCS systems for 2008 were 931,000 compared with 939,000 units for the prior year. New vehicles equipped with CCS and launched since the end of 2007 included the Nissan Teana, Nissan Maxima, Jaguar XJ, Jaguar XF, Lincoln MKS, Infiniti FX, Ford F150 Pickup, Chevrolet Suburban, Chevrolet Tahoe, Chevrolet Avalanche, GMC Yukon, GMC Yukon XL, GMC Yukon Denali and the GMC Sierra Pickup. Two programs launched during 2007 had higher revenue in 2008 due to the impact of full year shipments: the Hyundai Genesis and Lexus LX 570. Two vehicles, beginning with the 2008 model year, began to install CCS as a standard feature; previously, CCS was installed on these vehicles at the option of the car buyer.

The trend towards a more balanced distribution of revenue between North American and international customers continued during 2008. Revenue from European and Asian customers in 2008 increased to 49% of total revenue, up from 42% in 2007, and revenue from North American customers in 2008 was 51% of total revenue compared to 58% in the prior year period.

The company expects that net research and development expenses will remain at current levels during 2009 as the company continues to invest in new automotive and non-automotive applications for its advanced TE technology.

We believe these investments in R&D will allow us to remain among the world leaders in thermoelectric technology, Coker said. We are continuing to build our automotive businesses, but, given the downturn in the world’s automotive industry, now, more than ever, it is important for us to expand and explore new growth opportunities in a variety of global markets. Thanks to our continued development of thermoelectrics, we believe we are very well positioned to do so.

Guidance:

Due to current worldwide economic conditions and the uncertainty in the global automotive market, the company expects to report a year-over-year decline in product revenues of about 50% and a net loss for the 2009 first quarter. This uncertainty and the resulting lack of visibility make it virtually impossible for the company to provide meaningful full-year financial guidance for 2009.