Gentherm Inc
For the period ended Jun 30, 2026. Filed Jul 23, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 23, 2026
THRM$29.47-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-04-23.
0001193125-26-173920
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-23.
0001193125-26-314184
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 103 previous paragraphs and 127 current paragraphs.
56 unchanged; 44 reworded; 13 added; 3 removed; 0 previous and 14 current paragraphs rearranged.
Tables are not compared: 15 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
IME Acquisition
Current report
On July 1, 2026, the Company completed its acquisition of Innovative Medical Equipment, LLC (“IME”). IME, headquartered in Beachwood, Ohio, is a provider of the ThermaZone® thermal therapy device. ThermaZone is a non-opioid thermal therapy solution designed to support pain management and recovery through controlled hot-and-cold therapy. The Company acquired all of the membership interests in IME for $34.0 million, net of cash and debt, and subject to customary adjustments related to IME’s net working capital as of the closing date. The purchase price may be increased after closing by up to $1.0 million upon the achievement of a specified performance milestone. The transaction was funded through a combination of the Company’s existing cash balances and borrowings under the Revolving Credit Facility, as defined below.
Current report
Cost of sales for the six months ended June 30, 2026 increased 11.5% as compared to the six months ended June 30, 2025. The increase in cost of sales is primarily due to higher automotive volumes, unfavorable foreign currency impacts primarily attributable to the Mexican Peso, Euro, Chinese Renminbi and the Czech Koruna, specific-cause warranty provisions related to products shipped in prior periods and higher labor costs, partially offset by material purchasing savings.
Current report
Net research and development expenses for the six months ended June 30, 2026 increased 2.7% as compared to the six months ended June 30, 2025. The increase in net research and development expenses is primarily related to unfavorable foreign currency impacts primarily attributable to the Euro and the Chinese Renminbi.
Current report
During the three months ended June 30, 2026, the Company recognized expenses of $4.4 million for employee separation costs and $1.6 million for other costs.
Current report
During the three months ended June 30, 2025, the Company recognized expenses of $1.5 million for employee separation costs and $0.7 million for other costs.
Current report
During the six months ended June 30, 2026, the Company recognized expenses of $9.9 million for employee separation costs and $2.8 million for other costs.
Current report
During the six months ended June 30, 2025, the Company recognized expenses of $5.7 million for employee separation costs and $1.0 million for other costs.
Current report
Interest expense, net for the six months ended June 30, 2026 decreased 22.0% as compared to the six months ended June 30, 2025. The decrease in interest expense, net is primarily related to a lower interest rate on the Revolving Credit Facility during the six-month period and the impact of a change in fair value of interest rate swap in the prior year period.
Current report
Foreign currency loss for the three months ended June 30, 2025 included net realized foreign currency gain of $1.4 million and net unrealized foreign currency loss of $18.9 million. The unrealized foreign currency loss is primarily related to a non-current intercompany U.S. dollar receivable at one of our foreign subsidiaries.
Current report
Foreign currency loss for the six months ended June 30, 2026 included net realized foreign currency loss of $1.1 million and net unrealized foreign currency loss of $0.2 million.
Current report
Income tax expense was $2.9 million for the three months ended June 30, 2026 on earnings before income tax of $7.3 million, representing an effective tax rate of 39.7%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate and the unfavorable impact of transactions costs incurred in connection with the Modine Transaction.
Current report
Income tax expense was $6.3 million for the six months ended June 30, 2026 on earnings before income tax of $14.9 million, representing an effective tax rate of 42.2%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate and the unfavorable impact of transactions costs incurred in connection with the Modine Transaction.
Removed paragraphs (3)
Previous report
During the three months ended March 31, 2026, the Company recognized expenses of $5.5 million for employee separation costs and $1.2 million for other costs.
Previous report
During the three months ended March 31, 2025, the Company recognized expenses of $4.2 million for employee separation costs and $0.3 million for other costs.
Previous report
On February 24, 2026, the Company entered into the First Amendment to the Second Amended and Restated Credit Agreement (the “First Amendment”). The First Amendment amends the Second Amended and Restated Credit Agreement to i) permit the Modine Transaction, ii) permit the incurrence, issuance or assumption of up to $400 million of additional term indebtedness in connection with the Modine Transaction, iii) release and/or remove certain borrower and guarantor entities that no longer exist or will be liquidated and iv) remove the credit spread adjustments related to the SOFR and Sterling Overnight Index Average rates.
Reworded paragraphs (44)
Previous wording
This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events, such as: the expected light vehicle production in the Company’s key markets; the impact of macroeconomic and geopolitical conditions, the components of and our execution of our strategic plan, product and technology development and manufacturing footprint optimization restructuring plans; our operating performance; long-term consumer and technological trends in the automotive industry and our related market opportunity for our existing and new products and technologies; the competitive landscape; the impact of global tax reform legislation and other regulatory matters; the sufficiency of our cash balances and cash generated from operating, investing and financing activities for our future liquidity and capital resource needs; our ability to finance sufficient working capital; and significant matters related to the Modine Transaction, including the expected closing timing and structure thereof, the ability of the parties to complete such transaction and planned actions to satisfy the closing conditions, the expected benefits thereof, the tax consequences thereof, the terms and scope of the expected financing in connection with such transaction, and the combined company’s plans, objectives, expectations and intentions, including integration activities. Reference is made in particular to forward-looking statements included in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Such statements may be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “anticipate”, “intend”, “continue”, or similar terms, variations of such terms or the negative of such terms.
Current wording
This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events, such as: the expected light vehicle production in the Company’s key markets; the impact of macroeconomic and geopolitical conditions, the components of and our execution of our strategic plan, product and technology development and manufacturing footprint optimization restructuring plans; our operating performance; long-term consumer and technological trends in the automotive industry and our related market opportunity for our existing and new products and technologies; the competitive landscape; the impact of global tax reform legislation and other regulatory matters; the sufficiency of our cash balances and cash generated from operating, investing and financing activities for our future liquidity and capital resource needs; capital allocation strategies; our ability to finance sufficient working capital; and significant matters related to the Modine Transaction, including the expected closing timing and structure thereof, the ability of the parties to complete such transaction and planned actions to satisfy the closing conditions, the expected benefits thereof, the tax consequences thereof and the combined company’s plans, objectives, expectations and intentions, including integration activities. Reference is made in particular to forward-looking statements included in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Such statements may be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “anticipate”, “intend”, “continue”, or similar terms, variations of such terms or the negative of such terms.
Previous wording
Prior to and as a condition of, the Distribution, Modine will receive a cash distribution from SpinCo of $210.0 million subject to adjustment for cash, working capital and indebtedness of SpinCo, and subject to decrease if additional shares of Common Stock will be issued to Modine shareholders to support the intended tax-free treatment of the Distribution to Modine shareholders for U.S. federal income tax purposes.
Current wording
Prior to and as a condition of, the Distribution, Modine will receive a cash distribution from SpinCo of $210.0 million subject to adjustment for cash, working capital and indebtedness of SpinCo, and subject to decrease if additional shares of Common Stock will be issued to Modine shareholders to support the intended tax-free treatment of the Distribution to Modine shareholders for U.S. federal income tax purposes (the “SpinCo Cash Distribution”).
Previous wording
The transaction is expected to close in the fourth quarter of 2026, subject to various closing conditions, including specified approvals by the Company’s shareholders, completion of financing for SpinCo, a customary IRS tax ruling, receipt of required regulatory approvals and the satisfaction of other customary closing conditions.
Current wording
The transaction is expected to close by early fourth quarter of 2026, subject to various closing conditions, including specified approvals by the Company’s shareholders, a customary IRS tax ruling and the satisfaction of other customary closing conditions.
Previous wording
The Merger Agreement also contains specified termination rights for the Company and Modine, including a right allowing the Company or Modine to terminate the Merger Agreement if the Merger has not been consummated on or prior to March 31, 2027 (which date may be extended to June 30, 2027 in the event that required regulatory approvals have not been received). Additionally, the Merger Agreement requires the Company to pay Modine a termination fee of $45.0 million if the Merger Agreement is terminated under certain circumstances.
Current wording
The Merger Agreement contains specified termination rights for the Company and Modine, including a right allowing the Company or Modine to terminate the Merger Agreement if the Merger has not been consummated on or prior to March 31, 2027 (which date may be extended to June 30, 2027 in the event that required regulatory approvals have not been received). Additionally, the Merger Agreement requires the Company to pay Modine a termination fee of $45.0 million if the Merger Agreement is terminated under certain circumstances.
Previous wording
In connection with the Merger Agreement, the Company, SpinCo and a financial institution executed a 364-day bridge loan facility commitment letter, pursuant to which such financial institution committed (i) to provide bridge financing of $290.0 million to fund dividends, fees and expenses related to the transactions contemplated by the Merger Agreement (“Bridge Facility”) and (ii) to the Company a backstop of the Second Amended and Restated Credit Agreement (as defined below) (“Backstop Commitment”).
Current wording
In connection with the Merger Agreement, the Company, SpinCo and a financial institution executed a 364-day bridge loan facility commitment letter, pursuant to which such financial institution committed (i) to provide bridge financing of $290.0 million to fund dividends, fees and expenses related to the transactions contemplated by the Merger Agreement (“Bridge Facility”) and (ii) to the Company a backstop of the Company’s credit agreement (“Backstop Commitment”).
Previous wording
On February 24, 2026, the Company amended the Second Amended and Restated Credit Agreement to permit the Modine Transaction, which terminated the Backstop Commitment. The Bridge Facility remains available but is expected to be replaced with permanent financing.
Current wording
On February 24, 2026, the Company amended its credit agreement to permit the Modine Transaction, which terminated the Backstop Commitment. On June 29, 2026, SpinCo replaced the Bridge Facility with permanent financing by entering into a credit agreement, providing for a delayed-draw term loan facility with aggregate commitments of up to $250.0 million (the "Senior Credit Facility"). Borrowings under the Senior Credit Facility are expected to be funded on the closing date of the Modine Transaction and used to fund the SpinCo Cash Distribution and to pay certain other amounts required under the Merger Agreement.
Previous wording
During the three months ended March 31, 2026, the Company incurred $3.0 million of fees associated with the Bridge Financing and Backstop Commitment. Such fees are recorded in Selling, general and administrative expenses.
Current wording
During the three and six months ended June 30, 2026, the Company incurred $2.1 million and $5.1 million, respectively, of fees associated with the Bridge Facility, Backstop Commitment and Senior Credit Facility. Such fees are recorded in Selling, general and administrative expenses.
Previous wording
Since March 2025, the U.S. government has periodically announced additional significant tariffs on various goods imported to the U.S. and other countries have periodically announced reciprocal tariffs on goods imported to such countries, including goods used by or manufactured by us. There has been significant uncertainty resulting from the implementation, termination and/or conditional pause of these additional tariffs. In February 2026, the Supreme Court of the U.S. issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act. The ultimate availability, timing, and amount of any potential refunds of such tariffs remain uncertain and are subject to further legal, regulatory, and administrative developments. The U.S. presidential administration subsequently invoked additional tariffs under other laws resulting in a rapidly changing tariff environment. At this time we cannot reasonably estimate the total financial impact of this ruling. Further, it is reasonably possible that new or additional tariffs will be periodically announced in the future given the current global trade environment. We continue to monitor and evaluate the direct and indirect impacts of these tariffs and heightened global trade disputes. Our business model of manufacturing by regions for the regions limit the global impact of certain trade restrictions and tariffs. Further, the majority of our supply components are not currently subject to the additional tariffs or are compliant with exceptions, and we believe that we can generally mitigate the direct impact of any such tariffs currently in effect by directly or indirectly passing the additional costs through to customers. We are taking and will continue to take additional actions to mitigate any direct and indirect impacts.
Current wording
Since March 2025, the U.S. government has periodically announced additional significant tariffs on various goods imported to the U.S. and other countries have periodically announced reciprocal tariffs on goods imported to such countries, including goods used by or manufactured by us. There has been significant uncertainty resulting from the implementation, termination and/or conditional pause of these additional tariffs. In February 2026, the Supreme Court of the U.S. issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). During the second quarter of 2026, we submitted claims for refunds of IEEPA tariffs previously paid. Refunds received through June 30, 2026 were not material. The U.S. presidential administration subsequently invoked additional tariffs under other laws resulting in a rapidly changing tariff environment. At this time we cannot reasonably estimate the total financial impact of this ruling. Further, it is reasonably possible that new or additional tariffs will be periodically announced in the future given the current global trade environment. We continue to monitor and evaluate the direct and indirect impacts of these tariffs and heightened global trade disputes. Our business model of manufacturing by regions for the regions limit the global impact of certain trade restrictions and tariffs. Further, the majority of our supply components are not currently subject to the additional tariffs or are compliant with exceptions, and we believe that we can generally mitigate the direct impact of any such tariffs currently in effect by directly or indirectly passing the additional costs through to customers. We are taking and will continue to take additional actions to mitigate any direct and indirect impacts.
Previous wording
For the three months ended March 31, 2026, the additional tariffs did not have a material impact on our results of operations, financial position, and cash flows.
Current wording
For the six months ended June 30, 2026, the additional tariffs did not have a material impact on our results of operations, financial position, and cash flows.
Previous wording
We have a global manufacturing footprint that enables us to serve our customers in the regions they operate and shift production between regions to remain competitive. There have been various ongoing geopolitical conflicts, such as the current conflicts between Russia and Ukraine and in the Middle East and heightened tensions in the Red Sea and in the South China Sea. These conflicts have interrupted ocean freight shipping and if prolonged or intensified, could have a substantial adverse effect on our financial results. Further, it is reasonably possible that certain political pressures, such as changes to international trade agreements, increases in tariffs, import quotas or other trade restrictions or actions, including export controls and other retaliatory responses to such actions, could continue to affect the operations of our OEM customers, resulting in reduced automotive production in certain regions or shifts in the mix of production to higher cost regions. See “—Tariffs and Global Trade Environment” above for further information on the impact of tariffs and the global trade environment. We, like other manufacturers, have a high proportion of fixed structural costs, and therefore relatively small changes in industry vehicle production can have a substantial effect on our financial results.
Current wording
We have a global manufacturing footprint that enables us to serve our customers in the regions they operate and shift production between regions to remain competitive. There have been various ongoing geopolitical conflicts, such as the current conflicts between Russia and Ukraine and in the Middle East and heightened tensions in the Red Sea and in the South China Sea. These conflicts have interrupted ocean freight shipping and if prolonged or intensified, could have a substantial adverse effect on our financial results. Further, it is reasonably possible that certain political pressures, such as changes to international trade agreements, increases in tariffs, import quotas or other trade restrictions or actions, including export controls and other retaliatory responses to such actions, could continue to affect the operations of our suppliers and OEM customers, resulting in reduced automotive production in certain regions or shifts in the mix of production to higher cost regions. See “—Tariffs and Global Trade Environment” above for further information on the impact of tariffs and the global trade environment. We, like other manufacturers, have a high proportion of fixed structural costs, and therefore relatively small changes in industry vehicle production can have a substantial effect on our financial results.
Previous wording
Our sales are driven by the number of vehicles produced by the automotive manufacturers, which is ultimately dependent on consumer demand for automotive vehicles, our content per vehicle, and other factors that may limit or otherwise impact production by us, our supply chain and our customers. According to the forecasting firm S&P Global Mobility (April 2026 release), global light vehicle production in the three months ended March 31, 2026, in the Company’s key markets of North America, Europe, China, Japan and South Korea, as compared to the three months ended March 31, 2025, are shown below (in millions of units):
Current wording
Our sales are driven by the number of vehicles produced by the automotive manufacturers, which is ultimately dependent on consumer demand for automotive vehicles, our content per vehicle, and other factors that may limit or otherwise impact production by us, our supply chain and our customers. According to the forecasting firm S&P Global Mobility (July 2026 release), global light vehicle production in the three and six months ended June 30, 2026, in the Company’s key markets of North America, Europe, China, Japan and South Korea, as compared to the three and six months ended June 30, 2025, are shown below (in millions of units):
Previous wording
The S&P Global Mobility (April 2026 release) forecasted light vehicle production volume in the Company’s key markets for full year 2026 to decrease to 75.9 million units, a 2.1% decrease from full year 2025 light vehicle production volumes. Forecasted light vehicle production volumes are a component of the data we use in forecasting future business. However, these forecasts generally are updated monthly, and future forecasts have been and may continue to be significantly different from period to period due to changes in macroeconomic and geopolitical conditions or matters specific to the automotive industry. Further, due to differences in regional product mix at our manufacturing facilities, as well as material production schedules from our customers for our products on specific vehicle programs, our future forecasted results do not directly correlate with the global and/or regional light vehicle production forecasts of S&P Global Mobility or other third-party sources.
Current wording
The S&P Global Mobility (July 2026 release) forecasted light vehicle production volume in the Company’s key markets for full year 2026 to decrease to 75.5 million units, a 2.6% decrease from full year 2025 light vehicle production volumes. Forecasted light vehicle production volumes are a component of the data we use in forecasting future business. However, these forecasts generally are updated monthly, and future forecasts have been and may continue to be significantly different from period to period due to changes in macroeconomic and geopolitical conditions or matters specific to the automotive industry. Further, due to differences in regional product mix at our manufacturing facilities, as well as material production schedules from our customers for our products on specific vehicle programs, our future forecasted results do not directly correlate with the global and/or regional light vehicle production forecasts of S&P Global Mobility or other third-party sources.
Previous wording
We believe that innovation is an important element to gaining market acceptance of our products and strengthening our market position. During the first quarter of 2026, we secured automotive new business awards totaling $395 million. Automotive new business awards represent the aggregate projected lifetime revenue of new awards provided by our customers to Gentherm in the applicable period, with the value based on the price and volume projections received from each customer as of the award date. Although automotive new business awards are not firm customer orders, we believe that automotive new business awards are an indicator of future revenue. Automotive new business awards are not projections of revenue or future business as of March 31, 2026, the date of this Report or any other date. Customer projections regularly change over time, and we do not update our calculation of any automotive new business award after the date initially communicated. Automotive new business awards in the first quarter of 2026 also do not reflect, in particular, the impact of macroeconomic and geopolitical challenges on future business. Revenues resulting from automotive new business awards also are subject to additional risks and uncertainties that are included in this Report or incorporated by reference in “Forward-Looking Statements” above.
Current wording
We believe that innovation is an important element to gaining market acceptance of our products and strengthening our market position. During the second quarter of 2026, we secured automotive new business awards totaling $690 million. Automotive new business awards represent the aggregate projected lifetime revenue of new awards provided by our customers to Gentherm in the applicable period, with the value based on the price and volume projections received from each customer as of the award date. Although automotive new business awards are not firm customer orders, we believe that automotive new business awards are an indicator of future revenue. Automotive new business awards are not projections of revenue or future business as of June 30, 2026, the date of this Report or any other date. Customer projections regularly change over time, and we do not update our calculation of any automotive new business award after the date initially communicated. Automotive new business awards in the second quarter of 2026 also do not reflect, in particular, the impact of macroeconomic and geopolitical challenges on future business. Revenues resulting from automotive new business awards also are subject to additional risks and uncertainties that are included in this Report or incorporated by reference in “Forward-Looking Statements” above.
Previous wording
In June 2024, the Board of Directors authorized a stock repurchase program (the “2024 Stock Repurchase Program”) to commence upon expiration of the Company’s prior stock repurchase program on June 30, 2024. Under the 2024 Stock Repurchase Program, the Company is authorized to repurchase up to $150.0 million of its issued and outstanding Common Stock over a three-year period, expiring June 30, 2027. Repurchases may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations.
Current wording
In June 2024, the Board of Directors (the “Board”) authorized a stock repurchase program (the “2024 Stock Repurchase Program”) to commence upon expiration of the Company’s prior stock repurchase program on June 30, 2024. Under the 2024 Stock Repurchase Program, the Company was authorized to repurchase up to $150.0 million of its issued and outstanding Common Stock over a three-year period, expiring June 30, 2027.
Previous wording
During the three months ended March 31, 2026 and 2025, the Company did not repurchase any shares. The 2024 Stock Repurchase Program had $110.1 million of repurchase authorization remaining as of March 31, 2026.
Current wording
During the three and six months ended June 30, 2026, the Company did not repurchase any shares. During the three and six months ended June 30, 2025, the Company repurchased $10.0 million under the 2024 Stock Repurchase Program with an average price paid per share of $26.24.
Previous wording
The results of operations for the three months ended March 31, 2026 and 2025, in thousands, were as follows:
Current wording
The results of operations for the three and six months ended June 30, 2026 and 2025, in thousands, were as follows:
Previous wording
Product revenues by product category, in thousands, for the three months ended March 31, 2026 and 2025, were as follows:
Current wording
Product revenues by product category, in thousands, for the three and six months ended June 30, 2026 and 2025, were as follows:
Previous wording
Product revenues for the three months ended March 31, 2026 increased 11.3% as compared to the three months ended March 31, 2025. The increase in product revenues is due to favorable automotive volumes and favorable foreign currency impacts primarily attributable to the Euro and the Chinese Renminbi, partially offset by unfavorable pricing and unfavorable currency impacts primarily attributable to the Korean Won.
Current wording
Product revenues for the three months ended June 30, 2026 increased 11.0% as compared to the three months ended June 30, 2025. The increase in product revenues is due to favorable automotive volumes and favorable foreign currency impacts primarily attributable to the Chinese Renminbi and the Euro, partially offset by unfavorable pricing and unfavorable currency impacts primarily attributable to the Korean Won.
Previous wording
Cost of sales for the three months ended March 31, 2026 increased 10.9% as compared to the three months ended March 31, 2025. The increase in cost of sales is primarily due to higher automotive volumes, unfavorable foreign currency impacts primarily attributable to the Euro, Mexican Peso, Czech Koruna and the Chinese Renminbi, higher quality costs and higher labor costs, partially offset by material purchasing savings and lower freight costs.
Current wording
Cost of sales for the three months ended June 30, 2026 increased 12.1% as compared to the three months ended June 30, 2025. The increase in cost of sales is primarily due to higher automotive volumes, unfavorable foreign currency impacts primarily attributable to the Chinese Renminbi, Mexican Peso, Czech Koruna and the Euro, specific-cause warranty provisions related to products shipped in prior periods and higher labor costs, partially offset by material purchasing savings.
Previous wording
Net research and development expenses for the three months ended March 31, 2026 decreased 1.1% as compared to the three months ended March 31, 2025. The decrease in net research and development expenses is primarily related to higher customer reimbursements in the current year, partially offset by higher employee compensation.
Current wording
Net research and development expenses for the three months ended June 30, 2026 increased 6.7% as compared to the three months ended June 30, 2025. The increase in net research and development expenses is primarily related to unfavorable foreign currency impacts primarily attributable to the Chinese Renminbi and the Euro and lower customer reimbursements.
Previous wording
Selling, general and administrative expenses for the three months ended March 31, 2026 increased 43.7% as compared to the three months ended March 31, 2025. Merger and acquisition expenses, primarily related to the Modine Transaction, were $14.8 million for the three months ended March 31, 2026. The remaining increase in selling, general and administrative expenses is primarily related to higher expenses for information technology and utilities and unfavorable foreign currency impacts primarily attributable to the Euro.
Current wording
Selling, general and administrative expenses for the three months ended June 30, 2026 increased 35.6% as compared to the three months ended June 30, 2025. Merger and acquisition expenses, primarily related to the Modine Transaction, were $12.9 million for the three months ended June 30, 2026. The remaining increase in selling, general and administrative expenses is primarily related to higher expenses for information technology and unfavorable foreign currency impacts primarily attributable to the Mexican Peso, Euro and the Chinese Renminbi.
Previous wording
Below is a summary of our loss on sale of land and building, net, in thousands, for the three months ended March 31, 2026 and 2025:
Current wording
Below is a summary of our loss on sale of land and building, net, in thousands, for the six months ended June 30, 2026 and 2025:
Previous wording
Loss on sale of land and building, net for the three months ended March 31, 2025 is primarily related to the sale of our former headquarters building in Northville, Michigan in January 2025.
Current wording
Loss on sale of land and building, net for the six months ended June 30, 2025 is primarily related to the sale of our former headquarters building in Northville, Michigan in January 2025.
Previous wording
Interest expense, net for the three months ended March 31, 2026 decreased 25.9% as compared to the three months ended March 31, 2025. The decrease in interest expense, net is primarily related to a lower balance and lower interest rate on the Revolving Credit Facility.
Current wording
Interest expense, net for the three months ended June 30, 2026 decreased 18.6% as compared to the three months ended June 30, 2025. The decrease in interest expense, net is primarily related to a lower interest rate on the Revolving Credit Facility during the three-month period and the impact of a change in fair value of interest rate swap in the prior year period.
Previous wording
Foreign currency loss for the three months ended March 31, 2026 included net realized foreign currency loss of $0.3 million and net unrealized foreign currency loss of $0.8 million.
Current wording
Foreign currency loss for the three months ended June 30, 2026 included net realized foreign currency loss of $0.8 million and net unrealized foreign currency gain of $0.6 million.
Previous wording
Foreign currency loss for the three months ended March 31, 2025 included net realized foreign currency loss of $0.7 million and net unrealized foreign currency loss of $9.6 million.
Current wording
Foreign currency loss for the six months ended June 30, 2025 included net realized foreign currency gain of $0.7 million and net unrealized foreign currency loss of $28.5 million. The unrealized foreign currency loss is primarily related to a non-current intercompany U.S. dollar receivable at one of our foreign subsidiaries.
Previous wording
Below is a summary of our other income (loss), in thousands, for the three months ended March 31, 2026 and 2025:
Current wording
Below is a summary of our other income, in thousands, for the three months ended June 30, 2026 and 2025:
Previous wording
Other income for the three months ended March 31, 2026 increased as compared to other loss for the three months ended March 31, 2025, primarily due to a write-down of an equity investment in the prior year period.
Current wording
Other income for the six months ended June 30, 2026 increased as compared to other loss for the six months ended June 30, 2025, primarily due to a fair value adjustment of an equity investment in the prior year period.
Previous wording
Income tax expense was $3.4 million for the three months ended March 31, 2026 on earnings before income tax of $7.6 million, representing an effective tax rate of 44.6%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate, unfavorable tax effects of the vesting of stock based compensation awards and the unfavorable impact of global intangible low-tax income.
Current wording
Income tax expense was $2.1 million for the three months ended June 30, 2025 on earnings before income tax of $2.5 million, representing an effective tax rate of 81.2%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate and the unfavorable impact of global intangible low-tax income (“GILTI”).
Previous wording
Income tax expense was $2.2 million for the three months ended March 31, 2025 on earnings before income tax of $2.1 million, representing an effective tax rate of 106.1%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to unfavorable tax effects of the vesting of stock based compensation awards and a valuation allowance established in the U.S. related to a capital loss carryforward.
Current wording
Income tax expense was $4.3 million for the six months ended June 30, 2025 on earnings before income tax of $4.6 million, representing an effective tax rate of 92.4%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the unfavorable impact of GILTI, unfavorable tax effects of equity vesting and a valuation allowance established in the U.S. related to a capital loss carryforward.
Previous wording
Our primary sources of liquidity and capital resources are cash flows from operations and borrowings available under our Second Amended and Restated Credit Agreement (defined below). Our cash requirements consist principally of working capital, capital expenditures, research and development, operating lease payments, income tax payments and general corporate purposes. We generally reinvest available cash flows from operations into our business, while opportunistically utilizing our authorized stock repurchase program. Further, we continuously evaluate acquisition and investment opportunities that will enhance our business strategies.
Current wording
Our primary sources of liquidity and capital resources are cash flows from operations and borrowings available under our Credit Agreement (defined below). Our cash requirements consist principally of working capital, capital expenditures, research and development, operating lease payments, income tax payments and general corporate purposes. We generally reinvest available cash flows from operations into our business, while opportunistically utilizing our authorized stock repurchase program. Further, we continuously evaluate acquisition and investment opportunities that will enhance our business strategies.
Previous wording
As of March 31, 2026, the Company had $177.4 million of cash and cash equivalents and $278.1 million of availability under our Second Amended and Restated Credit Agreement. We may issue debt or equity securities, which may provide an additional source of liquidity. However, there can be no assurance equity or debt financing will be available to us when we need it or, if available, the terms will be satisfactory to us and not dilutive to our then-current shareholders.
Current wording
As of June 30, 2026, the Company had $213.2 million of cash and cash equivalents and $289.1 million of availability under our Credit Agreement. We may issue debt or equity securities, which may provide an additional source of liquidity. However, there can be no assurance equity or debt financing will be available to us when we need it or, if available, the terms will be satisfactory to us and not dilutive to our then-current shareholders.
Previous wording
We continue to expect to be able to move funds between different countries to manage our global liquidity needs without material adverse tax implications, subject to current monetary policies and the terms of the Second Amended and Restated Credit Agreement. We utilize a combination of strategies, including dividends, cash pooling arrangements, intercompany loan repayments and other distributions and advances to provide the funds necessary to meet our global liquidity needs. There are no significant restrictions on the ability of our subsidiaries to pay dividends or make other distributions to Gentherm Incorporated. As of March 31, 2026, the Company’s cash and cash equivalents held by our non-U.S. subsidiaries totaled $118.3 million. If additional non-U.S. cash was needed for our U.S. operations, we may be required to accrue and pay withholding if we were to distribute such funds from non-U.S. subsidiaries to the U.S.; however, based on our current liquidity needs and strategies, we do not anticipate a need to accrue and pay such additional amounts.
Current wording
We continue to expect to be able to move funds between different countries to manage our global liquidity needs without material adverse tax implications, subject to current monetary policies and the terms of the Credit Agreement. We utilize a combination of strategies, including dividends, cash pooling arrangements, intercompany loan repayments and other distributions and advances to provide the funds necessary to meet our global liquidity needs. There are no significant restrictions on the ability of our subsidiaries to pay dividends or make other distributions to Gentherm Incorporated. As of June 30, 2026, the Company’s cash and cash equivalents held by our non-U.S. subsidiaries totaled $165.6 million. If additional non-U.S. cash was needed for our U.S. operations, we may be required to accrue and pay withholding if we were to distribute such funds from non-U.S. subsidiaries to the U.S.; however, based on our current liquidity needs and strategies, we do not anticipate a need to accrue and pay such additional amounts.
Previous wording
We currently believe that our cash and cash equivalents, borrowings available under the Second Amended and Restated Credit Agreement and cash flows from operations will be adequate to meet anticipated cash requirements for at least the next twelve months and the foreseeable future.
Current wording
We currently believe that our cash and cash equivalents, borrowings available under the Credit Agreement and cash flows from operations will be adequate to meet anticipated cash requirements for at least the next twelve months and the foreseeable future.
Previous wording
Net cash used in operating activities totaled $5.0 million during the three months ended March 31, 2026 primarily reflecting $26.3 million related to changes in accounts receivable, net, $10.3 million related to changes in inventory, $5.1 million related to changes in net other assets and liabilities and $5.1 million for non-cash deferred income taxes, partially offset by net income of $4.2 million, $18.9 million for non-cash charges for depreciation, amortization, stock based compensation, loss on disposition of property, provisions for inventory and other non-cash items, including unrealized foreign currency loss, and $18.7 million related to changes in accounts payable.
Current wording
Net cash provided by operating activities totaled $2.3 million during the six months ended June 30, 2026 primarily reflecting net income of $8.6 million, $40.3 million for non-cash charges for depreciation, amortization, stock based compensation, loss on disposition of property and equipment, provisions for inventory and other non-cash items, including unrealized foreign currency (gain) loss, $16.2 million related to changes in accounts payable, and $8.3 million related to changes in net other assets and liabilities, partially offset by $58.1 million related to changes in accounts receivable, net, $8.6 million for non-cash deferred income taxes, and $4.4 million related to changes in inventory.
Previous wording
Net cash used in investing activities was $5.7 million during the three months ended March 31, 2026, primarily reflecting purchases of property and equipment of $5.7 million.
Current wording
Net cash used in investing activities was $14.4 million during the six months ended June 30, 2026, primarily reflecting purchases of property and equipment of $14.2 million and investments in technology companies of $0.2 million.
Previous wording
Net cash provided by financing activities was $28.1 million during the three months ended March 31, 2026, reflecting the borrowing of debt of $65.0 million partially offset by $35.0 million of debt repayments and $1.9 million paid for employee taxes related to the net settlement of restricted stock units that vested during the year.
Current wording
Net cash provided by financing activities was $65.9 million during the six months ended June 30, 2026, reflecting the borrowing of debt of $142.0 million partially offset by $71.1 million of debt repayments, $2.7 million paid for financing new loans and $2.3 million paid for employee taxes related to the net settlement of restricted stock units that vested during the year.
Previous wording
Gentherm, together with certain of its subsidiaries, maintain a revolving credit note (the “Revolving Credit Facility”) under its Second Amended and Restated Credit Agreement with a consortium of lenders and Bank of America, N.A. as administrative agent (as amended by the First Amendment described below, the “Second Amended and Restated Credit Agreement”). The Second Amended and Restated Credit Agreement was entered into on June 10, 2022 and amends and restates in its entirety the Amended and Restated Credit Agreement dated June 27, 2019, by and among Gentherm, certain of its direct and indirect subsidiaries, the lenders party thereto and the Agent. The Second Amended and Restated Credit Agreement has a maximum borrowing capacity of $500 million and matures on June 10, 2027. The Second Amended and Restated Credit Agreement contains covenants, that, among other things, (i) prohibit or limit the ability of the borrowers and any material subsidiary to incur additional indebtedness, create liens, pay dividends, make certain types of investments (including acquisitions), enter into certain types of transactions with affiliates, prepay other indebtedness, sell assets or enter into certain other transactions outside the ordinary course of business, and (ii) require that Gentherm maintain a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Net Leverage Ratio (based on consolidated EBITDA for the applicable trailing four fiscal quarters) as of the end of any fiscal quarter.
Current wording
Gentherm, together with certain of its subsidiaries, maintain a revolving credit note (the “Revolving Credit Facility”) under its Third Amended and Restated Credit Agreement with a consortium of lenders and Bank of America, N.A. as administrative agent (as amended by the Second Amendment described below, the “Credit Agreement”). The Credit Agreement was entered into on June 29, 2026 and amends and restates in its entirety the Second Amended and Restated Credit Agreement dated June 10, 2022, by and among Gentherm, certain of its direct and indirect subsidiaries, the lenders party thereto and the Agent. The Credit Agreement has a maximum borrowing capacity of $550 million and matures on June 29, 2031. The Credit Agreement contains covenants, that, among other things, (i) prohibit or limit the ability to incur additional indebtedness, create liens, pay dividends, make certain types of investments, enter into certain types of transactions with affiliates, prepay other indebtedness, sell assets or enter into certain other transactions outside the ordinary course of business, and (ii) require that Gentherm maintain a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Net Leverage Ratio (based on consolidated EBITDA for the applicable trailing four fiscal quarters) as of the end of any fiscal quarter. The Credit Agreement also contains customary events of default.
Previous wording
As of March 31, 2026, the Company was in compliance with the terms of the Second Amended and Restated Credit Agreement.
Current wording
As of June 30, 2026, the Company was in compliance with the terms of the Credit Agreement.
Previous wording
On February 24, 2026, the Company entered into the First Amendment, which terminated the Backstop Commitment. The Bridge Facility remains available but is expected to be replaced with permanent financing. If the Modine Transaction is consummated, any indebtedness incurred by SpinCo under the Bridge Facility or the permanent financing will become indebtedness of a wholly owned subsidiary of the Company.
Current wording
On February 24, 2026, the Company amended its credit agreement to permit the Modine Transaction, which terminated the Backstop Commitment. On June 29, 2026, SpinCo replaced the Bridge Facility with permanent financing by entering into a credit agreement, providing for a delayed-draw term loan facility with aggregate commitments of up to $250.0 million (the "Senior Credit Facility"). Borrowings under the Senior Credit Facility are expected to be funded on the closing date of the Modine Transaction and used to fund the SpinCo Cash Distribution and to pay certain other amounts required under the Merger Agreement. If the Modine Transaction is consummated, any indebtedness incurred by SpinCo will become indebtedness of a wholly owned subsidiary of the Company.
Showing the first 40 of 44 pairs. Open the source sections for the rest.
Rearranged current paragraphs (14)
Current report — wording carried from elsewhere
In July 2026, the Board terminated the 2024 Stock Repurchase Program and authorized a new stock repurchase program (the “2026 Stock Repurchase Program”), pursuant to which the Company is authorized to repurchase up to $400.0 million of its issued and outstanding Common Stock over a three-year period, expiring July 27, 2029. At the time of termination, the 2024 Stock Repurchase Program had $110.1 million of share repurchase authorization remaining.
Current report — wording carried from elsewhere
Repurchases may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other contractual restrictions and other considerations.
Current report — wording carried from elsewhere
Below is a summary of our product revenues, in thousands, for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
Product revenues for the six months ended June 30, 2026 increased 11.1% as compared to the six months ended June 30, 2025. The increase in product revenues is due to favorable automotive volumes and favorable foreign currency impacts primarily attributable to the Euro and the Chinese Renminbi, partially offset by unfavorable pricing and unfavorable currency impacts primarily attributable to the Korean Won.
Current report — wording carried from elsewhere
Below is a summary of our cost of sales and gross margin, in thousands, for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
Below is a summary of our net research and development expenses, in thousands, for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
Below is a summary of our selling, general and administrative expenses, in thousands, for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
Selling, general and administrative expenses for the six months ended June 30, 2026 increased 39.5% as compared to the six months ended June 30, 2025. Merger and acquisition expenses, primarily related to the Modine Transaction, were $27.7 million for the six months ended June 30, 2026. The remaining increase in selling, general and administrative expenses is primarily related to higher expenses for information technology and utilities and unfavorable foreign currency impacts primarily attributable to the Mexican Peso, Euro and the Chinese Renminbi.
Current report — wording carried from elsewhere
Below is a summary of our restructuring expenses, net, in thousands, for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
Below is a summary of our interest expense, net, in thousands, for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
Below is a summary of our foreign currency loss, in thousands, for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
Other income for the three months ended June 30, 2026 increased as compared to other income for the three months ended June 30, 2025, due to income from an equity investment.
Current report — wording carried from elsewhere
Below is a summary of our other income (loss), in thousands, for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
Below is a summary of our income tax expense, in thousands, for the six months ended June 30, 2026 and 2025: