Gates Industrial Corp plc

Previous wording

During the six months ended June 28, 2025, sales into replacement channels accounted for approximately 68% of our total net sales. Our replacement sales cover a very broad range of applications and industries and, accordingly, are highly correlated with industrial activity and utilization and not a single end market. Replacement products are principally sold through distribution partners that may carry a very broad line of products or may specialize in products associated with a smaller set of end market applications.

Current wording

During the nine months ended September 27, 2025, sales into replacement channels accounted for approximately 68% of our total net sales. Our replacement sales cover a very broad range of applications and industries and, accordingly, are highly correlated with industrial activity and utilization and not a single end market. Replacement products are principally sold through distribution partners that may carry a very broad line of products or may specialize in products associated with a smaller set of end market applications.

Previous wording

During the six months ended June 28, 2025, sales into first-fit channels accounted for approximately 32% of our total net sales. First-fit sales are to a variety of industrial and automotive customers. Our industrial first-fit customers cover a diverse range of industries and applications and many of our largest first-fit customers manufacture construction and agricultural equipment.

Current wording

During the nine months ended September 27, 2025, sales into first-fit channels accounted for approximately 32% of our total net sales. First-fit sales are to a variety of industrial and automotive customers. Our industrial first-fit customers cover a diverse range of industries and applications and many of our largest first-fit customers manufacture construction and agricultural equipment.

Previous wording

During the six months ended June 28, 2025, sales in the personal mobility end market continued to experience strong growth, and our replacement channel sales grew modestly, including positive core growth in the industrial replacement channel. We continue to focus on managing our business through current economic uncertainties, improving our gross margins through our efforts of material cost savings, footprint optimization and productivity. We anticipate our investments and product development in personal mobility and data center opportunities will position us to long term growth.

Current wording

During the nine months ended September 27, 2025, sales in the personal mobility end market continued to experience strong growth, and our replacement channel sales grew modestly, including positive core growth in the industrial replacement channel. We continue to focus on managing our business through current economic uncertainties, improving our gross margins through our efforts of material cost savings, footprint optimization and productivity. In the first half of 2026, we expect certain one-time footprint optimization, restructuring, and system implementation costs. We anticipate these and other investments and product development in personal mobility and data center opportunities will position us to drive long term growth and margin expansion.

Previous wording

Our global operating footprint and worldwide sales reach expose us to risks associated with trade conflicts between the U.S. and its trading partners. Escalating global trade conflicts due to recent U.S. and retaliatory tariffs and geopolitical tensions have led to, and may continue to lead to, inflationary pressures, uncertainty, and volatility in the market and, therefore, could impact our operations, supply chain and financial performance. While we have not experienced a meaningful change in customer demand or significant disruptions to our supply chain, we have begun to experience cost increases and may incur additional costs, primarily for our businesses in North America. The global tariff regime continues to evolve and we could have additional exposures in the future. We are taking actions to mitigate the impact of tariffs through price increases and adjustments to our supply chain and operations, and intend to offset any incremental tariff impacts for the remainder of the year. Whether these strategies or other effects of the tariffs will impact customer behaviors, including future demand for our products, remains uncertain. We will continue to monitor and evaluate risks related to the tariffs and any resulting impact on macroeconomic conditions and our business.

Current wording

Our global operating footprint and worldwide sales reach expose us to risks associated with trade conflicts between the U.S. and its trading partners. Escalating global trade conflicts due to recent U.S. and retaliatory tariffs and geopolitical tensions have led to, and may continue to lead to, inflationary pressures, uncertainty, and volatility in the market and, therefore, could impact our operations, supply chain and financial performance. While we have not experienced significant disruptions to our supply chain, we have begun to experience some slower than expected demand recovery, cost increases and may incur additional costs, primarily for our businesses in North America. The global tariff regime continues to evolve and we could have additional exposures in the future. We are taking actions to mitigate the impact of tariffs through price increases and adjustments to our supply chain and operations, and intend to continue to offset any incremental tariff impacts for the remainder of the year. Whether these strategies or other effects of the tariffs will further impact customer behaviors, including future demand for our products, remains uncertain. We will continue to monitor and evaluate risks related to the tariffs and any resulting impact on macroeconomic conditions and our business.

Previous wording

Results for the three and six months ended June 28, 2025 compared to the results for the three and six months ended June 29, 2024

Current wording

Results for the three and nine months ended September 27, 2025 compared to the results for the three and nine months ended September 28, 2024

Previous wording

Net sales during the three months ended June 28, 2025 were $883.7 million, compared to $885.5 million during the prior year period, a decrease of 0.2%, or $1.8 million. The following table lists the primary drivers behind the change in net sales (amounts in millions):

Current wording

Net sales during the three months ended September 27, 2025 were $855.7 million, compared to $830.7 million during the prior year period, an increase of 3.0%, or $25.0 million. The following table lists the primary drivers behind the change in net sales (amounts in millions):

Previous wording

Net sales during the six months ended June 28, 2025 were $1,731.3 million, compared to $1,748.1 million during the prior year period, a decrease of 1.0%, or $16.8 million. The following table lists the primary drivers behind the change in net sales (amounts in millions):

Current wording

Net sales during the nine months ended September 27, 2025 were $2,587.0 million, compared to $2,578.8 million during the prior year period, an increase of 0.3%, or $8.2 million. The following table lists the primary drivers behind the change in net sales (amounts in millions):

Previous wording

Cost of sales for the six months ended June 28, 2025 was $1,026.5 million, compared to $1,060.7 million for the prior year period, a decrease of 3.2%, or $34.2 million. The following table lists the primary drivers behind the change in cost of sales (amounts in millions):

Current wording

Cost of sales for the three months ended September 27, 2025 was $514.1 million, compared to $494.9 million for the prior year period, an increase of 3.9%, or $19.2 million. The following table lists the primary drivers behind the change in cost of sales (amounts in millions):

Previous wording

Cost of sales for the three months ended June 28, 2025 was $523.5 million, compared to $528.1 million for the prior year period, a decrease of 0.9%, or $4.6 million. The following table lists the primary drivers behind the change in cost of sales (amounts in millions):

Current wording

Cost of sales for the nine months ended September 27, 2025 was $1,540.6 million, compared to $1,555.6 million for the prior year period, a decrease of 1.0%, or $15.0 million. The following table lists the primary drivers behind the change in cost of sales (amounts in millions):

Previous wording

Selling, general and administrative (“SG&A”) expenses for the three months ended June 28, 2025 were $231.2 million compared to $221.2 million for the prior year period. This increase of $10.0 million was driven primarily by the $6.6 million gain from disposal of property, plant and equipment that occurred during the prior year period and higher restructuring-related severance expenses of $3.1 million.

Current wording

Selling, general and administrative (“SG&A”) expenses for the three months ended September 27, 2025 were $219.2 million compared to $217.2 million for the prior year period. This increase of $2.0 million was driven primarily by higher restructuring-related severance expense of $2.3 million and higher labor and benefits expense of $2.0 million, partially offset by lower warranty expense of $1.8 million and lower outbound freight costs of $1.5 million.

Previous wording

SG&A expenses for the six months ended June 28, 2025 were $447.4 million compared to $436.3 million for the prior year period. This increase of $11.1 million was primarily attributable to the $7.2 million gain from disposal of property, plant and equipment that occurred during the prior year period and $8.1 million of higher corporate-owned life insurance related expenses, partially offset by decreased labor and benefit costs.

Current wording

SG&A expenses for the nine months ended September 27, 2025 were $666.6 million compared to $653.5 million for the prior year period. This increase of $13.1 million was primarily attributable to the $7.3 million of higher corporate-owned life insurance related expenses and $7.2 million gain from disposal of property, plant and equipment that occurred during the prior year partially offset by lower labor and benefits expense of $2.0 million.

Previous wording

Transaction-related expenses of $0.0 million and $0.4 million were incurred during the three and six months ended June 28, 2025, respectively, primarily related to certain non-recurring debt related costs. Transaction-related expenses of $1.2 million and $1.6 million were incurred during the prior year three and six months ended June 29, 2024, respectively, primarily related to the debt refinancing that occurred in June 2024 and certain other corporate transactions.

Current wording

Transaction-related expenses of $0.1 million and $0.5 million were incurred during the three and nine months ended September 27, 2025, respectively. Transaction expenses for the three months September 27, 2025 were primarily related to certain corporate transactions. Transaction expenses for the nine months ended September 27, 2025 were primarily related to certain non-recurring debt related costs and certain other corporate transactions. Transaction-related expenses of $0.5 million and $2.1 million were incurred during the prior year three and nine months ended September 28, 2024, respectively. Transaction expenses for the three months ended September 28, 2024 were primarily related to the secondary offering completed during August 2024. Transaction expenses for the nine months ended September 28, 2024 were primarily related to the debt refinancing that occurred in June 2024, the secondary offerings completed in both February and August 2024, and certain other corporate transactions.

Previous wording

Restructuring and other restructuring-related expenses during each of the three and six months ended June 28, 2025 primarily included $12.6 million of severance and other labor and benefits expense related to a global cost reduction effort. Other restructuring and restructuring-related costs incurred during the three and six months ended June 28, 2025 included costs related to general severance, other labor and benefits, professional service fees, and costs related to relocation of production activities and reorganization of our operations in Mexico.

Current wording

Restructuring expenses during the three and nine months ended September 27, 2025 included $0.3 million and $12.9 million, respectively, of severance and related benefits expense related to a global cost reduction effort. In addition, during the three and nine months ended September 27, 2025, we incurred restructuring expenses of $4.7 million related to a manufacturing reduction in force in the Americas. Other restructuring expenses incurred during the three and nine months ended September 27, 2025 were related to professional service fees, severance and related benefit costs for the relocation of production activities to Mexico. Other restructuring-related expenses incurred during the three and nine months ended September 27, 2025 were primarily costs related to general severance and related benefits, and professional service fees.

Previous wording

Restructuring and restructuring-related expenses during the three and six months ended June 29, 2024 included $0.8 million and $1.6 million, respectively, of costs related to the relocation of certain production activities in Mexico. Other restructuring costs incurred during the three and six months ended June 29, 2024 included professional service fees, and costs associated with prior period facility closures or relocations in several countries.

Current wording

Restructuring and other restructuring-related expenses during the three and nine months ended September 28, 2024 included $1.0 million and $2.5 million, respectively, of costs related to the relocation of certain production activities in Mexico. During the three months ended September 28, 2024, we also incurred severance costs of $1.0 million related to the consolidation of production activities across certain North American plants. Other restructuring costs incurred during the three and nine months ended September 28, 2024 included legal and consulting expenses, and costs associated with prior period facility closures or relocations in several countries.

Previous wording

Details of our long-term debt are presented in Note 12 to the condensed consolidated financial statements included elsewhere in this report. Interest expense decreased by $20.3 million and $28.2 million during the three and six months ended June 28, 2025, respectively, when compared to the equivalent prior year period, primarily due to the $14.8 million accelerated amortization of deferred issuance costs related to the debt refinancing that occurred in June 2024, partially offset by the unfavorable impact of derivatives. Additionally, interest on debt decreased by $7.5 million and $15.6 million during the three and six months ended June 28, 2025, respectively, when compared to the equivalent prior year period, primarily due to lower interest rates as a result of the refinancing activities executed in 2024.

Current wording

Details of our long-term debt are presented in Note 12 to the condensed consolidated financial statements included elsewhere in this report. Interest expense decreased by $0.2 million and $28.4 million during the three and nine months ended September 27, 2025, respectively, when compared to the equivalent prior year period, primarily due to the $14.8 million accelerated amortization of deferred issuance costs related to the debt refinancing that occurred in June 2024, partially offset by the unfavorable impact of derivatives. Additionally, interest on debt decreased by $2.7 million and $18.3 million during the three and nine months ended September 27, 2025, respectively, when compared to the equivalent prior year period, primarily due to lower interest rates as a result of the refinancing activities executed in 2024.

Previous wording

For the three months ended June 28, 2025, we had an income tax expense of $16.8 million on pre-tax income of $80.2 million, which resulted in an effective tax rate of 20.9%, compared to an income tax expense of $12.3 million on pre-tax income of $90.2 million, which resulted in an effective tax rate of 13.6% for the three months ended June 29, 2024.

Current wording

For the three months ended September 27, 2025, we had an income tax expense of $6.1 million on pre-tax income of $94.8 million, which resulted in an effective tax rate of 6.4%, compared to an income tax expense of $14.0 million on pre-tax income of $69.2 million, which resulted in an effective tax rate of 20.2%, for the three months ended September 28, 2024.

Previous wording

For the three months ended June 28, 2025, the effective tax rate was driven primarily by net discrete tax benefits of $7.2 million, of which $3.2 million related to prior year adjustments primarily from various foreign jurisdictions in which returns were filed, $2.6 million related to excess tax benefits on stock option exercises, and $2.0 million related to changes in the realizability of certain deferred tax assets, offset by $0.6 million of other net discrete tax expenses. For the three months ended June 29, 2024, the effective tax rate was driven primarily by discrete tax benefits of $12.2 million, of which $13.8 million related to unrecognized tax benefits due to audit closures offset by $1.6 million of discrete expenses related to changes in the realizability of certain deferred tax assets.

Current wording

For the three months ended September 27, 2025, the effective tax rate was driven primarily by net discrete tax benefits of $13.5 million, of which $12.6 million related to uncertain tax benefits primarily due to audit settlements, $5.0 million primarily related to prior year adjustments in the U.S. and Luxembourg in which returns were filed, and $2.2 million related to changes in undistributed foreign earnings primarily in Türkiye, offset by $2.1 million related to insurance recovery, $2.0 million related to tax law changes in the U.S. and Germany, and $2.2 million of other net discrete tax expenses. For the three months ended September 28, 2024, the effective tax rate was driven primarily by discrete tax benefits of $7.8 million, of which $6.5 million related to the changes in the realizability of certain deferred tax assets, primarily related to U.S. foreign tax credit carryforwards, $3.2 million related to the loss on the deconsolidation of Russian subsidiary, offset by $1.9 million of other net discrete tax expenses.

Previous wording

For the six months ended June 28, 2025, we had an income tax expense of $42.0 million on pre-tax income of $174.0 million, which resulted in an effective tax rate of 24.1%, compared to an income tax expense of $46.8 million on pre-tax income of $170.9 million, which resulted in an effective tax rate of 27.4% for the six months ended June 29, 2024.

Current wording

For the nine months ended September 27, 2025, we had an income tax expense of $48.1 million on pre-tax income of $268.8 million, which resulted in an effective tax rate of 17.9%, compared to an income tax expense of $60.8 million on pre-tax income of $240.1 million, which resulted in an effective tax rate of 25.3%, for the nine months ended September 28, 2024.

Previous wording

For the six months ended June 28, 2025, the effective tax rate was driven primarily by net discrete tax benefits of $7.1 million of which $8.6 million related to excess tax benefits on stock option exercises, $3.2 million related to prior year adjustments primarily from various foreign jurisdictions in which returns were filed and $0.6 million other discrete tax benefits, offset by $3.2 million related to changes in the realizability of certain deferred tax assets and $2.1 million related to net unrecognized tax benefits. For the six months ended June 29, 2024, the net impact of discrete items was nominal, and the effective tax rate was driven primarily by jurisdictional mix of earnings.

Current wording

For the nine months ended September 27, 2025, the effective tax rate was driven primarily by net discrete tax benefits of $20.6 million, of which $10.5 million related to uncertain tax benefits primarily due to audit settlements, $9.2 million related to excess tax benefits on stock option exercises, $8.2 million related to prior year adjustments primarily from the U.S. and various foreign jurisdictions in which returns were filed, and $2.3 million related to changes in undistributed foreign earnings, offset by $5.8 million related to changes in the realizability of certain deferred tax assets, $2.1 million related to insurance recovery, and $1.7 million related to tax law changes primarily in the U.S., Germany and Italy. For the nine months ended September 28, 2024, the net impact of discrete items was nominal, and the effective tax rate was driven primarily by jurisdictional mix of earnings.

Previous wording

Power Transmission (62.2% and 62.2%, respectively, of Gates’ net sales for the three and six months ended June 28, 2025)

Current wording

Power Transmission (62.3% and 62.3%, respectively, of Gates’ net sales for the three and nine months ended September 27, 2025)

Previous wording

Net sales in Power Transmission for the three months ended June 28, 2025 increased by 1.5%, or $8.2 million, compared to the prior year period, driven primarily by benefits from pricing of $9.5 million, partially offset by lower volumes. Our net sales for the three months ended June 28, 2025 were favorably impacted by movements in average currency exchange rates of $5.2 million. As such, core sales increased by 0.6%, or $3.0 million, compared to the prior year period.

Current wording

Net sales in Power Transmission for the three months ended September 27, 2025 increased by 3.9%, or $19.9 million, compared to the prior year period, driven primarily by benefits from pricing of $12.6 million, partially offset by lower volumes. Our net sales for the three months ended September 27, 2025 were favorably impacted by movements in average currency exchange rates of $8.3 million. As such, core sales increased by 2.3%, or $11.6 million, compared to the prior year period.

Previous wording

Net sales in Power Transmission for the six months ended June 28, 2025 increased by 0.2%, or $2.6 million, compared to the prior year period, driven primarily by benefits from pricing of $12.0 million, and a moderate increase in volume. Our net sales for the six months ended June 28, 2025 were adversely impacted by movements in average currency exchange rates of $11.7 million. As such, core sales increased by 1.3%, or $14.3 million, compared to the prior year period.

Current wording

Net sales in Power Transmission for the nine months ended September 27, 2025 increased by 1.4%, or $22.5 million, compared to the prior year period, driven primarily by benefits from pricing of $23.0 million, and an increase in volume. Our net sales for the nine months ended September 27, 2025 were adversely impacted by movements in average currency exchange rates of $3.4 million. As such, core sales increased by 1.6%, or $25.9 million, compared to the prior year period.

Previous wording

Power Transmission’s core sales to industrial customers increased by 3.4% and 3.8% during the three and six months ended June 28, 2025, respectively, compared to the prior year periods. Industrial OEM sales increased by 8.5% and 10.2%, respectively, during the three and six months ended June 28, 2025 compared to the prior year periods, particularly in EMEA. The growth in industrial sales were across multiple end markets, led by personal mobility which grew 21.2% and 30.1% during the three and six months ended June 28, 2025, respectively. The increase of sales to our industrial customers was partially offset by a slight decrease in our automotive channel of 1.1% for the three months ended June 28, 2025. The automotive channel remained relatively flat for the six months ended June 28, 2025.

Current wording

Power Transmission’s core sales to industrial customers increased by 4.7% and 4.1% during the three and nine months ended September 27, 2025, respectively, compared to the prior year periods. Industrial OEM sales increased by 8.4% and 9.6%, respectively, during the three and nine months ended September 27, 2025 compared to the prior year periods, particularly in EMEA. The growth in industrial sales were across multiple end markets, led by personal mobility, which grew 22.1% and 27.2% during the three and nine months ended September 27, 2025, respectively, primarily focused in EMEA. The automotive channel remained relatively flat for the three and nine months ended September 27, 2025, with automotive replacement growth partially offset by decreasing demands from automotive OEM.

Previous wording

Power Transmission Adjusted EBITDA for the three months ended June 28, 2025 decreased by 0.8%, or $1.0 million, compared to the prior year period, driven primarily by a combination of lower volumes, absorption of fixed costs and unfavorable impact of foreign currency transaction loss, partially offset by pricing. As a result, Adjusted EBITDA margin was 22.3%, a 50 basis point decline from the prior year period.

Current wording

Power Transmission Adjusted EBITDA for the three months ended September 27, 2025 increased by 8.1%, or $9.1 million, compared to the prior year period, driven primarily by benefits from pricing and favorable impacts in average currency exchange rates, partially offset by lower absorption of fixed costs. As a result, Adjusted EBITDA margin was 22.9%, a 90 basis point improvement from the prior year period.

Previous wording

Fluid Power (37.8% and 37.8%, respectively, of Gates’ net sales for the three and six months ended June 28, 2025)

Current wording

Fluid Power (37.7% and 37.7%, respectively, of Gates’ net sales for the three and nine months ended September 27, 2025)

Previous wording

Net sales in Fluid Power for the six months ended June 28, 2025 decreased by 2.9%, or $19.4 million, compared to the prior year period, driven primarily by a decrease in volume, partially offset by an $9.0 million benefit from pricing. Our net sales were adversely impacted by movements in average currency exchange rates of $11.2 million. As such, core sales decreased by 1.2%, or $8.2 million, compared to the prior year period.

Current wording

Net sales in Fluid Power for the three months ended September 27, 2025 increased by 1.6%, or $5.1 million, compared to the prior year period, driven primarily by benefits from pricing of$10.5 million, partially offset by lower volumes. Our net sales were favorably impacted by movements in average currency exchange rates of $2.9 million. As such, core sales increased by 0.7%, or $2.2 million, compared to the prior year period.

Previous wording

Net sales in Fluid Power for the three months ended June 28, 2025 decreased by 2.9%, or $10.0 million, compared to the prior year period, driven primarily by a decrease in volume, partially offset by a$5.8 million benefit from pricing. Our net sales were adversely impacted by movements in average currency exchange rates of $1.5 million. As such, core sales decreased by 2.5%, or $8.5 million, compared to the prior year period.

Current wording

Net sales in Fluid Power for the nine months ended September 27, 2025 decreased by 1.4%, or $14.3 million, compared to the prior year period, driven primarily by a decrease in volume, partially offset by a $19.4 million benefit from pricing. Our net sales were adversely impacted by movements in average currency exchange rates of $8.3 million. As such, core sales decreased by 0.6%, or $6.0 million, compared to the prior year period.

Previous wording

Fluid Power’s core sales to our industrial channel declined by 3.8%, while sales to our automotive channel increased by 1.3% during the three months ended June 28, 2025 compared to the prior year period. The decline in the industrial channel was primarily attributed to North America and EMEA. During the six months ended June 28, 2025, the decline of Fluid Power’s core sales of 1.2% was primarily attributable to a 4.1% decrease in the industrial channel sales compared to the prior year period, primarily driven by construction, on-highway and energy end markets. The decline in industrial sales was partially offset by a 7.5% increase in sales to our automotive customers for the six months ended June 28, 2025, primarily from North America and EMEA.

Current wording

Fluid Power’s core sales to our automotive channel increased by 10.5%, while sales in our industrial channel declined by 2.8% during the three months ended September 27, 2025. Fluid Power’s core sales growth in the automotive channel was focused in North America, which experienced a 9.0% increase during the three months ended September 27, 2025. The decline in the industrial channel was primarily attributed to North America, partially offset by growth from East Asia and India. During the nine months ended September 27, 2025, the decline of Fluid Power’s core sales of 0.6% was primarily attributable to a 3.7% decrease in the industrial channel sales compared to the prior year period, primarily driven by the on-highway end market. The decline in industrial sales was partially offset by an 8.5% increase in sales to our automotive customers for the nine months ended September 27, 2025, primarily from North America and EMEA, whose sales increased by 6.2% and 16.3%, respectively.

Previous wording

Fluid Power Adjusted EBITDA for the three months ended June 28, 2025 decreased by 2.6%, or $2.0 million, compared to the prior year period, driven primarily by a combination of lower volumes and absorption of fixed costs, partially offset by pricing and favorable mix of replacement channel sales to OEM channel sales. As a result, the Adjusted EBITDA margin was 22.9%, a 10 basis point improvement from the prior year period.

Current wording

Fluid Power Adjusted EBITDA for the three months ended September 27, 2025 increased by 6.0%, or $4.2 million, compared to the prior year period, driven primarily by benefits from pricing and lower SG&A expense, partially offset by lower absorption of fixed costs. As a result, the Adjusted EBITDA margin was 22.9%, a 100 basis point improvement from the prior year period.

Previous wording

Fluid Power Adjusted EBITDA for the six months ended June 28, 2025 decreased by 5.2%, or $8.0 million, compared to the prior year period. This decrease was driven primarily by a combination of lower volumes, absorption of fixed costs and unfavorable impact of foreign currency transaction loss, partially offset by pricing and favorable mix of replacement channel sales to OEM channel sales. As a result, the Adjusted EBITDA margin was 22.5%, a 50 basis points decline compared to the prior year period.

Current wording

Fluid Power Adjusted EBITDA for the nine months ended September 27, 2025 decreased by 1.7%, or $3.8 million, compared to the prior year period. This decrease was driven primarily by a combination of lower absorption of fixed costs and volumes, partially offset by pricing. As a result, the Adjusted EBITDA margin was 22.6%, a 10 basis points decline compared to the prior year period.

Previous wording

Cash provided by operating activities was $110.3 million during the six months ended June 28, 2025 compared to cash provided by operating activities of $72.8 million during the prior year period, primarily driven by a $15.2 million movement of operating assets and liabilities and a decrease of $29.2 million in cash interest paid compared to the prior year period.

Current wording

Cash provided by operating activities was $208.3 million during the nine months ended September 27, 2025 compared to cash provided by operating activities of $188.7 million during the prior year period, primarily driven by a $41.2 million increase in net income and an $18.8 million decrease in deferred income taxes compared to the prior year period. This was partially offset by a $40.3 million unfavorable movement in operating assets and liabilities.

Previous wording

Net cash used in investing activities during the six months ended June 28, 2025 was $62.0 million, compared to $40.1 million in the prior year period. The increase of cash used in investing activities was primarily driven by a $13.9 million increase in net cash paid under company-owned life insurance policies, $8.4 million lower proceeds from the sale of property, plant and equipment that occurred in the prior year period, and increased capital expenditures of $10.3 million, partially offset by investment purchases of $11.2 million made in the prior year period.

Current wording

Net cash used in investing activities during the nine months ended September 27, 2025 was $86.9 million, compared to $80.3 million in the prior year period. The increase of cash used in investing activities was primarily driven by a $13.8 million increase in net cash paid under company-owned life insurance policies, increased capital expenditures of $7.1 million, and $8.8 million fewer proceeds from the sale of property, plant and equipment compared to the prior year period. The increase in cash used in investing activities was partially offset by a $12.5 million cash derecognition from the deconsolidation of our Russian subsidiary and $11.3 million of investment purchases made during the prior year period.

Previous wording

Net cash used in financing activities was $33.4 million during the six months ended June 28, 2025, compared to $157.6 million in the prior year period. Current year outflows were primarily related to the $9.4 million debt repayment, $13.0 million paid to acquire shares under our share repurchase program and $16.9 million of employee taxes paid from shares withheld.

Current wording

Net cash used in financing activities was $134.9 million during the nine months ended September 27, 2025, compared to $253.5 million in the prior year period. Current year outflows were primarily related to $114.1 million of debt repayment, $20.1 million of employee taxes paid from shares withheld and $13.0 million paid to acquire shares under our share repurchase program. This was partially offset by $9.8 million from issuance of shares and $9.0 million from other financing activities.

Previous wording

For the twelve months ended June 28, 2025, before intercompany eliminations, our non-guarantor subsidiaries represented approximately 71% of our net sales and 62% of our EBITDA as defined in the financial covenants attaching to the senior secured credit facilities. As of June 28, 2025, before intercompany eliminations, our non-guarantor subsidiaries represented approximately 68% of our total assets and approximately 29% of our total liabilities.

Current wording

For the twelve months ended September 27, 2025, before intercompany eliminations, our non-guarantor subsidiaries represented approximately 70% of our net sales and 50% of our EBITDA as defined in the financial covenants attaching to the senior secured credit facilities. As of September 27, 2025, before intercompany eliminations, our non-guarantor subsidiaries represented approximately 69% of our total assets and approximately 28% of our total liabilities.

Previous wording

On June 4, 2024, we extinguished our asset-backed revolving credit facility as discussed further in Note 12 to the condensed consolidated financial statements included elsewhere in this quarterly report. As part of an amendment to our credit agreement, we increased borrowing capacity under our secured revolving credit facility that provides for multi-currency revolving loans from $250.0 million to $500.0 million and extended the maturity from November 18, 2026 to the date that is the earliest of (x) June 4, 2029 and (y) April 1, 2029, if greater than $500.0 million in aggregate principal amount of the Dollar Senior Notes due 2029 are outstanding. As of June 28, 2025, there were letters of credit outstanding against the facility amounting to $29.7 million. As of June 28, 2025, our total committed borrowing headroom was $470.3 million, in addition to cash and cash equivalents balances of $719.7 million.

Current wording

On June 4, 2024, we extinguished our asset-backed revolving credit facility as discussed further in Note 12 to the condensed consolidated financial statements included elsewhere in this quarterly report. As part of an amendment to our credit agreement, we increased borrowing capacity under our secured revolving credit facility that provides for multi-currency revolving loans from $250.0 million to $500.0 million and extended the maturity from November 18, 2026 to the date that is the earliest of (x) June 4, 2029 and (y) April 1, 2029, if greater than $500.0 million in aggregate principal amount of the Dollar Senior Notes due 2029 are outstanding. As of September 27, 2025, there were letters of credit outstanding against the facility amounting to $29.7 million. As of September 27, 2025, our total committed borrowing headroom was $470.3 million, in addition to cash and cash equivalents balances of $689.4 million.

Previous wording

•other expenses (income), excluding foreign currency transaction gain or loss.

Current wording

•other expenses (income), excluding foreign currency transaction gain or loss and insurance recoveries.

Previous wording

Adjusted EBITDA exclude items that can have a significant effect on our profit or loss and should, therefore, be used in conjunction with, not as substitutes for, profit or loss for the period. Management compensates for these limitations by separately monitoring net income from continuing operations for the period.

Current wording

Adjusted EBITDA excludes items that can have a significant effect on our profit or loss and should, therefore, be used in conjunction with, not as substitutes for, profit or loss for the period. Management compensates for these limitations by separately monitoring net income from continuing operations for the period.

Previous wording

(1)Transaction-related expenses relate primarily to advisory fees and other costs recognized in respect of major corporate transactions, including the acquisition of businesses, and equity and debt transactions.

Current wording

(2)Transaction-related expenses relate primarily to advisory fees and other costs recognized in respect of major corporate transactions, including the acquisition of businesses, and equity and debt transactions.

Previous wording

The financial maintenance ratio in our credit agreement and other ratios related to incurrence-based covenants (measured only upon the taking of certain actions, including the incurrence of additional indebtedness) under our credit agreement governing our revolving credit facility and our term loan facility and the indenture governing our outstanding notes are calculated in part based on financial measures similar to Adjusted EBITDA as presented elsewhere in this report, which financial measures are determined at the Gates Industrial Holdco Limited level and adjust for certain additional items such as severance costs, the pro forma impacts of acquisitions and the pro forma impacts of cost-saving initiatives. These additional adjustments during the twelve months ended June 28, 2025, as calculated pursuant to such agreements, resulted in a net benefit to Adjusted EBITDA for ratio calculation purposes of $6.9 million. Pursuant to the terms of the credit agreement governing our revolving credit facility and term loans, the Company may not, subject to certain exceptions, permit its Consolidated First Lien Net Leverage Ratio (as defined in the credit agreement) to exceed 4.50 to 1.00 as of the end of the test period if borrowings under the revolving credit facility exceed a certain threshold. Pursuant to the credit agreement, this ratio is defined as Consolidated First Lien Net Debt (as defined in the credit agreement) divided by Consolidated EBITDA (as defined in the credit agreement). For a description of the other material terms related to our debt agreements, please refer to Note 12 to the condensed consolidated financial statements included elsewhere in this report, and for a discussion of risks related to the compliance or non-compliance with the covenants described herein on the Company’s financial condition and liquidity, please refer to the factors described in Item 1A. “Risk Factors—Risks Related to Our Indebtedness” in Part I of the annual report. During the periods covered by the condensed consolidated financial statements included in this report, we were in compliance with the financial covenant and had no borrowing on the revolving credit facility.

Current wording

The financial maintenance ratio in our credit agreement and other ratios related to incurrence-based covenants (measured only upon the taking of certain actions, including the incurrence of additional indebtedness) under our credit agreement governing our revolving credit facility and our term loan facility and the indenture governing our outstanding notes are calculated in part based on financial measures similar to Adjusted EBITDA as presented elsewhere in this report, which financial measures are determined at the Gates Industrial Holdco Limited level and adjust for certain additional items such as severance costs, the pro forma impacts of acquisitions and the pro forma impacts of cost-saving initiatives. These additional adjustments during the twelve months ended September 27, 2025, as calculated pursuant to such agreements, resulted in a net benefit to Adjusted EBITDA for ratio calculation purposes of $9.2 million. Pursuant to the terms of the credit agreement governing our revolving credit facility and term loans, the Company may not, subject to certain exceptions, permit its Consolidated First Lien Net Leverage Ratio (as defined in the credit agreement) to exceed 4.50 to 1.00 as of the end of the test period if borrowings under the revolving credit facility exceed a certain threshold. Pursuant to the credit agreement, this ratio is defined as Consolidated First Lien Net Debt (as defined in the credit agreement) divided by Consolidated EBITDA (as defined in the credit agreement). For a description of the other material terms related to our debt agreements, please refer to Note 12 to the condensed consolidated financial statements included elsewhere in this report, and for a discussion of risks related to the compliance or non-compliance with the covenants described herein on the Company’s financial condition and liquidity, please refer to the factors described in Item 1A. “Risk Factors—Risks Related to Our Indebtedness” in Part I of the annual report. During the periods covered by the condensed consolidated financial statements included in this report, we were in compliance with the financial covenant and had no borrowing on the revolving credit facility.

Previous wording

Gates Industrial Corporation plc is not an obligor under our revolving credit facility, our term loan facility or the indenture governing our outstanding notes. Gates Industrial Holdco Limited, a direct wholly-owned subsidiary of Gates Industrial Corporation plc, is the parent guarantor under our revolving credit facility, our term loan facility, and our outstanding notes. The only significant differences between the results of operations and net assets that would be shown in the consolidated financial statements of Gates Industrial Holdco Limited and those for the Company that are included elsewhere in this report are (i) an additional net intercompany loan receivable due to Gates Industrial Holdco and its subsidiaries from the Company, which was $234.4 million and $258.4 million as of June 28, 2025 and December 28, 2024, respectively, (ii) an additional intercompany receivable of $5.2 million as of June 28, 2025 and an intercompany payable of $6.6 million as of December 28, 2024, due to Gates Industrial Holdco Limited and its subsidiaries from the Company attributable to UK tax group relief, and (iii) an additional cash and cash equivalents held by the Company, which was $18.7 million and $10.6 million as of June 28, 2025 and December 28, 2024, respectively.

Current wording

Gates Industrial Corporation plc is not an obligor under our revolving credit facility, our term loan facility or the indenture governing our outstanding notes. Gates Industrial Holdco Limited, a direct wholly-owned subsidiary of Gates Industrial Corporation plc, is the parent guarantor under our revolving credit facility, our term loan facility, and our outstanding notes. The only significant differences between the results of operations and net assets that would be shown in the consolidated financial statements of Gates Industrial Holdco Limited and those for the Company that are included elsewhere in this report are (i) an additional net intercompany loan receivable due to Gates Industrial Holdco and its subsidiaries from the Company, which was $218.7 million and $258.4 million as of September 27, 2025 and December 28, 2024, respectively, (ii) an additional intercompany payable of $12.0 million as of September 27, 2025 and an intercompany payable of $6.6 million as of December 28, 2024, due to Gates Industrial Holdco Limited and its subsidiaries from the Company attributable to UK tax group relief, and (iii) an additional cash and cash equivalents held by the Company, which was $8.8 million and $10.6 million as of September 27, 2025 and December 28, 2024, respectively.