THRM

Interested in Modine Manufacturing Company? Here are five stocks we like better. Modine reported strong first-quarter growth, with sales up 28% and adjusted EPS up 44%, while maintaining its fiscal 2027 outlook for 20%–35% revenue growth and $650 million–$680 million in adjusted EBITDA. Data Center revenue surged 90% year over year, but component shortages reduced production and pressured margins to 14.8%. Management expects margins to recover to 19%–20% in the second quarter as supply and capacity improve. Commercial HVAC delivered 22% revenue growth but faced integration and product-mix pressure, while Performance Technologies remained weak. The planned Performance Technologies spin-off and merger with Gentherm remains on track for completion by year-end, subject to approvals. Modine’s $4B AI Coup Freezes Out the Competition Modine Manufacturing (NYSE:MOD) reported first-quarter fiscal 2027 sales growth of 28% and adjusted earnings per share growth of 44%, while reiterating its full-year revenue and adjusted EBITDA outlook. The company said supply-chain shortages in its Data Center segment constrained production and pressured margins during the quarter, but management expects conditions and profitability to improve sequentially. The quarter marked Modine’s first reporting period under a new three-segment structure consisting of Data Centers, Commercial HVAC and Performance Technologies. President and Chief Executive Officer Neil Brinker said the company continues to see exceptional underlying demand for data-center cooling products, logging its third consecutive quarter of record order intake and another significant increase in backlog. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Ride the Rally: 3 Earnings Winners With More Upside Ahead Data Center segment revenue increased 90% from the prior-year period, including 112% growth in the Americas and 18% growth in EMEA. Revenue declined sequentially from the preceding quarter, as management had expected, but supply shortages of certain key components lasted longer than initially anticipated and further limited production volumes. Brinker said the shortages prompted Modine to resequence capacity rollouts, shift available components toward its highest-producing lines and temporarily carry labor and overhead costs while some expansion sites operated below planned utilization. The company is negotiating supply commitments for fiscal 2027 and beyond, while existing suppliers expand capacity. → Microsoft Just Flipped the AI Spending Narrative Overnight 3 Summer Stocks With Insider Buying and Analyst Support Data Center adjusted EBITDA rose 27%, but the adjusted EBITDA margin declined to 14.8%. Chief Financial Officer Mick Lucareli said the margin was affected by a 150-basis-point year-over-year warranty variance related to a large prior-year settlement, as well as a 450- to 550-basis-point impact from excess labor and unfavorable overhead absorption tied to lower production volumes. Modine expects Data Center margins to recover to a range between 19% and 20% in the second quarter, supported by an expected roughly $100 million sequential increase in revenue. Lucareli said the company expects further margin improvement in the second half as capacity comes online and throughput rises. For the full fiscal year, Modine expects Data Center earnings growth in excess of 85%. → Carrier Earnings Could Send the Stock to a New All-Time High The company said it has secured supply for the remainder of the fiscal year, assuming suppliers meet agreed commitments. Brinker added that Modine is pursuing longer-term supply arrangements with critical vendors and is considering vertical integration in one instance as part of its supply-risk mitigation efforts. Commercial HVAC revenue increased 22% during the first quarter. HVAC Technologies revenue rose $24 million, or 45%, with acquisitions contributing $20 million. Heat Transfer Solutions revenue increased $11 million, or 7%, led by North American coil sales supporting data-center customers. Adjusted EBITDA in Commercial HVAC increased 7%, while margin declined 220 basis points year over year. Lucareli cited the mix effect from recently acquired businesses, manufacturing inefficiencies during integration work, and a greater proportion of lower-margin coil revenue relative to higher-margin heating and cooler products. Modine recently named Michael Mahan president of Commercial HVAC. Brinker said Mahan will lead the segment’s next phase of 80/20 initiatives, including vertical segmentation, acquisition integration and operating improvements. The company is consolidating certain product lines into its Owatonna, Minnesota, facility and consolidating coils production in Grenada and Juarez. Management also said it is taking pricing actions to offset material inflation and tariffs. Lucareli said Commercial HVAC is expected to deliver double-digit earnings growth for the year, with adjusted EBITDA margin improving each quarter. He said the business could finish fiscal 2027 with an EBITDA margin between 18% and 20%, compared with approximately 16.7% in the prior year. Performance Technologies revenue remained affected by weaker end-market demand. Heavy-duty equipment sales rose 1%, helped by genset product sales, while on-highway application sales fell 5% because of lower automotive and commercial-vehicle demand. Segment adjusted EBITDA declined 3%, and margin slipped 10 basis points to 13%. Management said cost-savings initiatives reduced segment SG&A by $2 million during the quarter. The company expects commodity metals trends to become more favorable in future quarters and remains focused on improving Performance Technologies margins and earnings for the year. Modine continues to prepare for the planned spin-off and merger of Performance Technologies with Gentherm. Brinker said Gentherm has submitted its S-4 filing to the Securities and Exchange Commission, while Modine has completed the filing required for an IRS determination letter regarding the Reverse Morris Trust transaction. The company expects a favorable ruling before closing and continues to target completion before the end of the calendar year, subject to shareholder approval and other closing conditions. At the consolidated level, first-quarter adjusted EBITDA rose 5% to produce a 12.2% margin, down 270 basis points from the prior year. Gross margin declined 340 basis points to 20.8%. Lucareli said the lower margin reflected the Data Center supply-chain disruption, unfavorable Commercial HVAC mix, and lower market volumes and higher costs in Performance Technologies. Adjusted EPS was $1.53, including a favorable tax benefit related to stock-based incentive compensation awards. The company said the benefit is expected to be largely offset by other items during the rest of the year, with its full-year effective tax rate generally in line with prior expectations. Free cash flow was slightly negative in the first quarter, reflecting higher capital expenditures and more than $60 million of other cash-flow items, including contract assets, cash taxes and incentive compensation. Net debt was $433 million, and the company reported a leverage ratio of 0.9. Total fiscal 2027 sales growth outlook: 20% to 35%. Data Center sales growth outlook: 60% to 80%. Commercial HVAC sales growth outlook: 5% to 10%. Performance Technologies sales outlook: flat to up 5%. Adjusted EBITDA outlook: $650 million to $680 million, representing growth exceeding 40%. Expected full-year free cash flow as a percentage of sales: 4% to 6%. Management said the outlook includes Performance Technologies for the full fiscal year and will be updated once the timing of the proposed transaction is known. Modine expects margins and earnings to increase sequentially through fiscal 2027 and said achieving its targets would represent a fifth consecutive year of record results. Modine Manufacturing Company (NYSE:MOD) is a global provider of thermal management solutions serving automotive, commercial transportation, heavy-duty off-highway, industrial, HVAC and refrigeration markets. The company designs, manufactures, tests and markets a broad array of heat-transfer products that manage temperature and energy efficiency for engines, power electronics and building climate control systems. Its product portfolio includes heat exchangers, condensers, radiators, evaporators, charge air coolers, fan systems and associated controls. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Modine Manufacturing Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. Gentherm (THRM) is in focus after releasing second quarter results that showed higher net income and earnings per share compared with a year earlier, along with new authorization for a multiyear share repurchase program. See our latest analysis for Gentherm. The earnings release and fresh multiyear buyback authorization appear to have reset sentiment around Gentherm. The stock’s 1 day share price return of 26.52% has contributed to a 30 day share price return of 30.09% and a 1 year total shareholder return of 38.76%, even though the 5 year total shareholder return has declined 44.02%. If Gentherm’s move has you rethinking where the next opportunity might come from in industrial tech and automation, it could be worth scanning 34 robotics and automation stocks Bulls see Gentherm’s stronger earnings and large new buyback plan as support for a higher valuation, while bears point to weak multi year returns and a rich recent rebound. Which case does the current pricing lean toward? Analysts following Gentherm see fair value at $40.57, which sits below the last close of $45.61, so the current price is ahead of that narrative. Read the complete narrative. Want to see what financial story sits behind that fair value cut? The narrative focuses on steadier revenue growth, rebuilding margins and a lower future earnings multiple than many peers. Result: Fair Value of $40.57 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Gentherm’s story could look different if Asian momentum remains soft or if high customer concentration leads to contract losses or tougher pricing. Find out about the key risks to this Gentherm narrative. While the analyst narrative points to Gentherm trading around 12.4% above its $40.57 fair value, our DCF model presents a different picture. On this view, the stock at $45.61 sits about 39.1% below an estimated fair value of $74.89, which raises a clear question for investors about which story to lean on. For a closer look at how the cash flow assumptions compare with the market price, and where the gaps might matter most for risk, Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Gentherm for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 38 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. With mixed signals around Gentherm’s valuation and outlook, it can be useful to act promptly and review the numbers yourself using the 2 key rewards and 2 important warning signs Gentherm’s latest move is a reminder that opportunities keep emerging, so do not stop at one stock when you can scan the wider market for potential standouts. Target steadier compounders that balance quality and value by running the 38 high quality undervalued stocks before the crowd rushes in. Prioritize resilience by checking companies with strong finances through the solid balance sheet and fundamentals stocks screener (48 results) so sudden shocks do not catch you off guard. Get early to potential future leaders using the screener containing 20 high quality undiscovered gems and avoid missing stocks that are still off most investors’ radar. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include THRM. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, July 23, 2026 at 8:00 a.m. ET Senior Director of Investor Relations - Gregory Blanchette President and Chief Executive Officer - William Presley Chief Financial Officer - Jonathan Douyard Operator: Greetings, and welcome to Gentherm's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I'll now turn the conference over to Gregory Blanchette, Senior Director of Investor Relations. Thank you. You may begin. Gregory Blanchette: Thank you, and good morning, everyone, and thanks for joining us today. Gentherm's earnings results were released earlier this morning, and a copy of the release is available at gentherm.com. Additionally, a webcast replay of today's call will be available later today on the Investor Relations section of Gentherm's website. During this call, we will make forward-looking statements within the meaning of federal securities laws. These statements reflect our current views with respect to future events and financial performance, and actual results may differ materially. We undertake no obligation to update them, except as required by law. Please see Gentherm's earnings release and its SEC filings, including the latest 10-K and subsequent reports for discussions of our risk factors and other significant assumptions, risks and uncertainties underlying such forward-looking statements. During the call, we will also discuss non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures are included in our earnings release and investor presentation. On the call with me today are Bill Presley, President and Chief Executive Officer; and Jon Douyard, Chief Financial Officer. During their comments, they will be referring to a presentation deck that we made available on the Investors section of Gentherm's website. After the prepared remarks, we'll be pleased to take your questions. Now I'd like to turn the call over to Bill. William Presley: Thank you, Greg, and good morning, everyone. Let's begin on Slide 3 for an update on our business and the market. Strong commercial execution where we continue to significantly outperform the market, combined with operational discipline, resulted in an excellent first half, positioning Gentherm to deliver a solid year. Based on this performance, we are raising our full year 2026 guidance. We continue to monitor the macroeconomic and geopolitical environment, and at the same time, we are proactively managing inflationary pressures through disciplined commercial actions and operational execution. As we look ahead, our priorities remain clear. We are focused on executing our strategy, capitalizing on the opportunities within our control and driving sustainable profitable growth for our shareholders. Strategic profitable growth is a cornerstone of our strategy, and we continue to achieve critical milestones that position us for long-term success. We have confidence that Gentherm's automotive business will grow over market, while we continue to build momentum beyond the light vehicle market. During the quarter, Gentherm products were selected by 2 leading North American-based furniture brands in the home and office market. In less than a year, we have successfully deployed our core technologies with 5 new customers and have visibility to $50 million to $100 million of revenue in this market by 2028. A strong proof point that our technology platforms are readily transferable beyond automotive and that we are moving with speed to capture these opportunities. In the medical market, we remain focused on refreshing the product portfolio and expanding our customer commercial channels. I am pleased to announce that we have received FDA 510(k) clearance for ThermAffyx, an innovative new solution developed by leveraging our proven automotive technology and intellectual property. This is another powerful example of our ability to transfer differentiated automotive innovations into new markets where they solve meaningful customer challenges. Our patented solutions combine conductive air-free patient warming with securement technology to help prevent both hypothermia and patient movement during robotic surgical procedures. We are actively commercializing ThermAffyx and expect initial sales in the third quarter. We are encouraged by the strong market interest and as adoption grows, we believe ThermAffyx has the potential to establish a new standard of care, while further validating the scalability of our technology platforms. In addition, on July 1, we completed the strategic acquisition of Innovative Medical Equipment. IME is the provider of the ThermaZone therapy device, which is a non-opioid thermal therapy solution designed to support pain management and recovery through controlled hot and cold therapy utilizing thermoelectric devices. It is a great example of a strategic, disciplined bolt-on acquisition that accelerates our strategy. This acquisition builds upon our market-leading capabilities in thermal management, while expanding our patient product portfolio. IME has a strong growth trajectory and broad reach into Veterans Administration hospitals and clinics, enabling attractive cross-selling opportunities of our combined thermal management portfolio. Please turn to Slide 4, where I will discuss some of our second quarter highlights. The Gentherm team delivered a solid second quarter, reflecting the consistent execution of our strategy and reinforcing our confidence in the path we are on. We secured approximately $690 million in Automotive New Business Awards during the quarter, bringing our year-to-date total to more than $1 billion. These awards were in line with our expectations and reflect continued customer demand for our differentiated technologies. Just as important, our pursuit pipeline remains healthy, giving us confidence that 2026 will be another robust year for new business awards. Product revenue reached a quarterly record of $416 million, driven by Automotive Climate and Comfort Solutions growth that continued to outpace underlying light vehicle production. This performance exceeded our expectations and demonstrates the value we continue to create through differentiated technologies and disciplined commercial execution. Operationally, we continued to build momentum in the second quarter. Our initiatives to improve labor efficiency, equipment utilization and inventory management are delivering measurable results, while the operating system we are implementing is driving greater rigor, consistency and accountability across the organization. These improvements are strengthening our foundation to expand margins, positioning us to deliver higher cash flow conversion over time. Overall, we are executing well across the business. We are winning with customers, improving the quality of our operations and investing in the capabilities that will support profitable growth. Moving to Slide 5. As we approach the close of our combination with Modine Performance Technologies, I am increasingly confident in the strategic value this transaction will create. Together, we are building a fundamentally stronger company, one with greater scale, broader capabilities and a more diversified portfolio positioned to deliver sustainable long-term growth. This combination transforms Gentherm into a global leader in thermal and precision flow management solutions. By bringing together 2 highly complementary businesses, we significantly expand our product portfolio of mission-critical technologies, strengthen our innovation capabilities and create a platform with greater opportunities to serve our customers across a broader range of applications. Equally important, this transaction meaningfully diversifies our end market exposure. Our light vehicle mix will decrease from approximately 97% today to roughly 63%, while expanding our presence in attractive growing markets such as commercial vehicle, off-highway and power generation. This creates a more balanced business with multiple growth engines. The combined company will have a clear path to exceed $3.5 billion in revenue by 2030 with an attractive financial profile, supported by margin expansion, robust cash flow generation and disciplined capital allocation. Together, these strengths position us to invest in future growth, realize the benefits of the combination and create long-term value for our shareholders. I am excited about what lies ahead. The strategic rationale for this combination is compelling. Our integration planning is progressing well, and we believe the combined company will be better positioned than ever to deliver differentiated solutions for customers and superior returns for shareholders. I will now hand it over to Jon to discuss an update on our integration activities and highlights for the quarter. Jonathan Douyard: Thanks, Bill. Now turning to Slide 6. Since our last update, we have continued to work closely with the Modine team and have made significant progress towards the closing of the merger. Our primary focus is to ensure Performance Technologies can operate as a stand-alone division of Gentherm on day 1 and that we are positioned to deliver on value creation opportunities. Based on progress to date, we expect closing of the transaction to occur early in the fourth quarter, as we have completed many key sign-to-close deliverables and expect to close out the remaining items in the coming months. As Bill noted, we remain excited about the combined business, and we'll keep you -- we'll continue to keep you updated as we approach closing. Please turn to Slide 7 for a review of the second quarter financials. Revenue of $416 million was up 11% compared to the same period last year. Revenues, excluding foreign currency translation, increased 9.5%, exceeding our expectations, driven by higher automotive volumes. Automotive Climate and Comfort Solutions revenue increased 14.1% year-over-year or 12.7% ex-FX and included strong outperformance across all regions and product categories. From a product perspective, Lumbar and Massage Comfort Solutions delivered another strong quarter of revenue growth at 38% year-over-year. Geographically, China performed well once again with trends from recent quarters continuing, including production increases from domestic Chinese OEM program launches and higher take rates from global OEM customers. Turning to profitability. We delivered $48.8 million of adjusted EBITDA or 11.7% of sales compared to 12.2% in the second quarter of last year. Strong operating leverage and benefits from operational excellence initiatives were offset by anticipated headwinds related to inflation recovery timing and planned footprint-related inventory reductions as well as warranty accruals in both our automotive and medical businesses. On a reported GAAP basis, diluted earnings per share were $0.14 in the quarter. This was impacted by approximately $0.55 per share related to merger and restructuring expenses. Adjusted diluted earnings per share were $0.75, up 39% compared to $0.54 per share in the second quarter of last year. Adjusted free cash flow was approximately $16 million year-to-date, in line with our expectations and historical seasonality, while CapEx was $14 million, down $9.5 million compared to the prior year as we continue to scrutinize spend. Moving to the balance sheet. We ended Q2 with net leverage of 0.3 turns, and we had liquidity of $502 million. Please turn to Slide 8, where I will discuss our 2026 guidance, which excludes any impact related to our planned combination with Modine Performance Technologies. Given our strong first half performance and second half revenue visibility, we are raising our 2026 full year guidance for revenue, adjusted EBITDA and adjusted free cash flow. At the midpoint, we expect revenue of $1.6 billion, representing roughly 5% growth for the year compared with a decline in light vehicle production forecast of approximately 3%, positioning us to deliver mid- to high single-digit revenue growth over market. We expect adjusted EBITDA to be in the range of $185 million to $200 million, implying a midpoint margin of approximately 12%. As previously discussed, we expect margins to remain lower in the third quarter before rebounding in Q4. Turning to cash. We estimate adjusted free cash flow between $85 million and $100 million, with CapEx in the range of $45 million to $55 million or approximately 3% of sales. Overall, we delivered strong first half results and are pleased to raise guidance for the full year. Our recent trends indicate that Gentherm is at an inflection point for growth. We will continue to execute with discipline, while remaining focused on strategic actions to drive long-term value. Now let's turn to Slide 9. Before turning it back to Bill, I'd like to reinforce our financial flexibility and strength, which supports a disciplined and balanced approach to capital deployment. In the quarter, we secured $800 million of committed financing through the combination of a $550 million 5-year revolving credit facility and a $250 million term loan that supports the Modine transaction. Upon closing, we expect our net leverage ratio to be approximately 1 turn, providing ample liquidity to deliver on our strategy. Our target is to maintain a net leverage ratio of 1x to 1.5x over time. In addition, we expect that the combined Gentherm and Modine business will generate significant cash flow in the coming years. Based on the forecast supporting our 2030 financial targets, we would expect to generate over $1 billion of cumulative unlevered free cash flow through 2030. We believe we have the necessary capacity to execute the Modine merger, support the combined business and efficiently deploy capital to drive shareholder returns. As we think about priorities, first, we will invest organically with a focus on return-driven investments that will drive profitable growth or expand margins. We recently demonstrated this capability through our successful entry into the home and office market as well as the upcoming launch of ThermAffyx. Second, we remain committed to returning capital to shareholders through repurchases, particularly in times of value dislocation. Earlier today, we announced a new stock repurchase authorization of up to $400 million over 3 years. This authorization, which is nearly 3x our previous program, reflects our confidence in the cash generation of the combined company and provides additional capacity to opportunistically return capital to shareholders. It is our current expectation that we will be repurchasing shares upon the closing of the Modine transaction. Lastly, we believe that M&A will serve an important role for the company in achieving our strategic growth priorities. We continue cultivating a wide range of opportunities that are aligned with our core technology platforms and attractive growth markets outside of light vehicle. While at the low end of our targeted range, our recent acquisition of IME is a great example. From a strategic perspective, IME brings highly complementary products, technology and commercial channels as well as needed scale to Gentherm's medical business. IME also brings an attractive financial profile with projected 2026 full year revenue of approximately $17 million and 20% EBITDA margins. As part of Gentherm, we believe that IME can double its revenue and reach at least high teens ROIC by 2030 with returns covering cost of capital by year 2. Moving forward, we will continue to target M&A opportunities that are strategically and financially compelling as a lever to accelerate our strategy and enhance returns. In summary, the combination of a strong balance sheet, significant free cash flow generation and a disciplined approach to capital deployment positions Gentherm to simultaneously invest for growth and return capital to shareholders, all while continuing to operate in a comfortable leverage framework. We believe this ultimately results in substantial long-term value creation for our shareholders. I'll now hand it back to Bill for some closing remarks. William Presley: Thanks, Jon. I am pleased with the progress we have made in the first half of the year and even more excited about the opportunities that lie ahead. We are executing our strategic priorities, improving the performance of our operations and continuing to strengthen the foundation of the business. Every quarter, we make tangible progress that reinforces our confidence in the strategy we have in place. Looking forward, we remain focused on disciplined execution, profitable growth and creating long-term value for our shareholders. With the momentum in our core business, the expansion of our technology into new markets and the transformational combination with Modine Performance Technologies, we are building a fundamentally stronger company, one that is more diversified, more resilient and better positioned to deliver growth, margin expansion and increased cash flow. I am confident that we have the right strategy, the right team and the right capabilities to capitalize on the opportunities ahead and deliver value for our customers, our employees and our shareholders. With that, I will turn the call back to the operator to begin the Q&A session. Operator: [Operator Instructions] And our first question comes from the line of Ryan Sigdahl from Craig-Hallum Capital Group. Ryan Sigdahl: Nice job. Good to see the company stacking good quarters and execution on top of each other here. I want to start with the core auto business. Really nice auto awards in the quarter and outperformance. Curious if there are any key programs or product categories to call out within those auto awards and then how you feel about the RFP and kind of active pipeline that you guys are bidding on right now? William Presley: Yes. I would say, Ryan, the awards were pretty well distributed. I wouldn't call any specific region, program or customer that really drove it. So I think the commercial team on the auto side did a really nice job of texturing some broad wins there. And actually, it was exactly what we expected. If you remember when we talked, there was some conversation around Q1, was that too light? And we told you, don't worry, we have a good pipeline. And we remain confident in the second half. So it still looks like another robust year for awards. Ryan Sigdahl: That's great. Switching to medical IME acquisition. I don't believe I saw or heard what were the -- what was the purchase price of that or terms around that? And then, Jon, just to be clear, the 2026, that's a full year $17 million, 20%, right? So assume half of that for back half? Jonathan Douyard: Yes. So -- the purchase price is $34 million. So as we look at the transaction, it's a $17 million growth business today, obviously, pro forma for the year. We expect significant growth as we talked about the business doubling here over the next couple of years. So we really like the growth profile of the business and how it fits internally. Profitability, 20% EBITDA with opportunity to expand from that perspective as well. So we will contribute in the second half of the year contemplated in what we put out from a guidance perspective, but really think it's a good fit for where the medical business is and what it needs to scale and grow here. Ryan Sigdahl: And then as it relates to ThermAffyx, the commercial launch underway, any early demand metrics, indications, anything you can share kind of what you've seen thus far from the market for that product? And then I know you mentioned complementary sales channel distribution, but does IME add anything from a revenue synergy potential just from whether it's sales distribution or customers or anything that kind of accelerates potentially what you're previously expecting from ThermAffyx and your core medical business? William Presley: Yes. So on the ThermAffyx side, as said before, the 510(k) clearance, all good. We are now producing. We are in the clinical trial period. So we are in the process of getting ready to ship to hospitals over 50, as we talked about before with the clinical trials. So we're excited. Demand looks strong. Everybody is excited about the product. They like the problems that it solves that they currently have in that space. So we're very optimistic on that one. I think the great thing about IME to put it in perspective, so IME does hot-cold therapy utilizing thermoelectric devices, which is kind of the core of how our business was born, if you remember. But IME is largely in the Veterans Administration hospitals and clinics. So IME serves over 200 Veterans Administration hospitals and clinics, and they have almost 0 channel access to where we are today. Conversely, we serve hospitals through select partnerships, distributors and GPOs, and we have 0 access to the Veterans Administration today. So there's a very, very strong cross-selling opportunity between those markets. Ryan Sigdahl: That's great. Nice work, guys. And it appears like the PT business keeps getting stronger by the day, and that acquisition feels even better as you progress towards close there. William Presley: Thank you. Jonathan Douyard: Thanks, Ryan. Operator: And our next question comes from the line of Nathan Jones with Stifel. Nathan Jones: I'll start with questions on the auto business. Obviously, you've outperformed your own outperformance targets relative to auto production here with close to double-digit above-market performance in the quarter. And I think you talked about mid- to high-single digit for the full year outperformance, whereas you've been talking about mid-single digits. So just looking for some more color on where in the world that outperformance came from, how sustainable you view that outperformance? And just any other information you can give us on where you're beating your -- even your own targets in those markets? Jonathan Douyard: Yes, Nathan, I think -- I mean, if you look at growth, as we talked about, it's relatively broad-based across both products as well as regions from an outperformance perspective. We point to China being really strong based on launches, based on increased take rates, but it's really, I would say, broad-based. I think as we get to the second half of the year, you do run into some tougher comps that are impacting year-over-year growth rates. But we've consistently said that this business can grow mid-single digit over market over time, and we're very confident in the ability to do that based on the visibility that we have as well as just the industry dynamics in terms of penetration and take rates so -- or adoption. And so we would expect that mid-single digits. It might not be linear every single year. Some might be a little higher or lower, but very confident in the trajectory of the automotive business and the opportunity to grow there. Nathan Jones: Okay. I guess a second question on the home and office business and the new customer wins there. I think you said these ones are in sort of North America. I think previous wins have been at least with manufacturers in China. So it's nice to see it broadening out there. Can you just talk about the materiality of it, how much it might add to revenue and what the trajectory is there? Any changes in targets by 2028 or estimates of what the TAM is here? William Presley: Yes, Nathan, I would say that the -- so yes, you're right. The first awards that we announced and we were public with were KUKA, and they're a Chinese-based manufacturer, one of the largest in the world. The other 2 that we've now added in North America are very large. They'll name publicly before we can name. So announcements will come out that they are, but they are quite large. What I would say is the wins with them were more sizable than what we had won with KUKA, but that's a result of them pulling more content quicker. KUKA's strategy was to be first to market with Gentherm. So we anticipate that, that will continue to expand. Overall, we're excited about the home and office market. Latest data that we have in talking to the manufacturers, as you know, the TAM in that market for us is over $500 million. The TAM is over $500 million. So we're still confident in that number that we put out there, $50 million to $100 million by 2028, but see no possibility of not being at least at $50 million. Operator: And our next question comes from the line of Rajat Gupta with JPMorgan Chase. Rajat Gupta: Congrats on the good execution here. It looks like the full year guide raise was primarily driven by the second quarter performance. I'm curious -- is there some conservatism baked in, in the second half yet? Or are there any reasons that would suggest a slowdown in the organic growth cadence? Anything you can elaborate on that would be helpful. And then just given the strong start to '26, the strong bookings in the first half, would you be willing to update your original '27 revenue guide at all? And I have a follow-up. Jonathan Douyard: Thanks, Rajat. I think the -- in terms of the '27 number, we're not in a position to update that at this point. I think we feel highly confident that we'll be at the $1.7 billion or higher as we head into 2027. I think as you look at the second half of the year, you probably wouldn't be the first person to call us conservative. But we're looking at -- there's certainly a level of uncertainty that's out there. We do have some of our runoff businesses, which has more of an impact in the second half of the year than the first half in terms of end of program on some of those product lines. So that's a bit of a headwind. But based on the visibility we have, we're comfortable with where the midpoint guidance is at this point. Rajat Gupta: Understood. That's helpful. And then just on like the -- obviously, the acquisition is due to close pretty soon. I'm curious, as you've done more work and learn more about the business behind the scenes, any update to what the cross-sell opportunities might be, the synergy opportunities might be on the commercial side that you may have learned or has come up in recent months? Just curious if that pipeline has grown as you've learned more about the opportunity. William Presley: Yes. I would say we've become very much very confident in our ability to capture the $100 million plus that we talked about by 2030 in cross-selling. It goes back really to the 3 pillars we talked about, right, cross-selling into the other markets, opening up the India region for us, which we currently are not in today as well as product development and integration between the 2 companies. So very confident in the $100 million-plus number. And as you and I have talked before, over half of that will come from the valves business, which is a business that we find very attractive. Operator: And our next question comes from the line of Glenn Chin with Seaport Research Partners. Glenn Chin: So yes, congrats on the IME acquisition. Interesting that it's thermoelectric based. And as you mentioned, what the technology that Gentherm was born from. Is that to say it's -- and pardon me for asking because I'm not an engineer, but I guess it's predicated upon the Peltier effect that's basically the use of electric current to create cooling and heating. William Presley: That is correct, Glenn. It is based on the Peltier effect and the thermoelectric device either heats or cools the fluid that is flowed through the ThermaZone device. I get my thermos mixed up. Glenn Chin: Okay. And so is that to say could this have been developed in-house then, Bill? William Presley: I mean, certainly, the core technology is there to develop it in-house. We still have thermoelectric devices that we have, right, and that we use for active heating and cooling. So IME is a super strong fit for our core technology, super strong fit for our patient thermal management, which is based on thermoelectric devices. And we're super excited about the cross-selling and our access now to the Veterans Administration and providing IME with access to our channels. Glenn Chin: Yes, it certainly sounds promising. And then I mean just searching for the device. And again, pardon me, I'm not a medical professional either, but it seems like there are a lot of competitor type devices, and I say that somewhat loosely. Are these competitor type devices competitive? William Presley: Certainly, they're competitive. Just by the nature of that, they're competitive type devices. I would say that IME has shown a strong growth trajectory and very strong market adoption. So what's really interesting about this technology is it's pain management without opioids, right? And that's really the magic of the device, as it provides that. So we see a lot of potential in the market. We see a strong growth trajectory. And again, we're excited about taking this into our existing channels. Glenn Chin: Okay. Very good. And then just a question on the margin performance. You guys cite higher warranty accruals in both automotive and medical. Is that due to higher incident rates? And is it something we need to be baking in going forward? William Presley: Yes, I'll run right at that one. And the reason we called that out and put that in there was because we didn't want it to really -- we don't want anything to mask the operational progress that we're making in the discipline. We had an instance on the auto side last year, when we started setting up our key performance indicators to really started tracking things as a percentage of sales and driving numbers into the operations, we observed some trends in our KPIs that made us look at a product and make some mechanical robustness improvements in that product late last year. It's a very specific product with a specific customer. In the first half, we saw increased claims. And you'll see that this actually goes back to 2020. So we made the decision based on the robustness improvements we've made last year, plus the trends that we saw to get this out in front of us and take the accrual. So we don't view this as something that continues in the run rate. Operator: Thank you. And with that, this does conclude our question-and-answer session as well as today's teleconference. We thank you for your participation, and you may disconnect your lines at this time, and have a wonderful rest of your day. Before you buy stock in Gentherm, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Gentherm wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $371,519!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,281,302!* Now, it’s worth noting Stock Advisor’s total average return is 892% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of July 24, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Gentherm (THRM) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Product Revenue: $416 million, up 11% year-over-year. Automotive Climate and Comfort Solutions Revenue: Increased 14.1% year-over-year. Adjusted EBITDA: $48.8 million, representing 11.7% of sales. Adjusted Diluted Earnings Per Share: $0.75, up 39% from the previous year. Adjusted Free Cash Flow: Approximately $16 million year-to-date. Capital Expenditures (CapEx): $14 million, down $9.5 million from the prior year. Net Leverage: 0.3 times, with liquidity of $502 million. 2026 Full-Year Revenue Guidance: Raised to $1.6 billion, representing roughly 5% growth. 2026 Adjusted EBITDA Guidance: $185 million to $200 million, with a midpoint margin of approximately 12%. 2026 Adjusted Free Cash Flow Guidance: $85 million to $100 million. Warning! GuruFocus has detected 5 Warning Signs with THRM. Is THRM fairly valued? Test your thesis with our free DCF calculator. Release Date: July 23, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Gentherm Inc (NASDAQ:THRM) raised its full-year 2026 guidance due to strong commercial execution and operational discipline. The company secured approximately $690 million in automotive new business awards during the quarter, bringing the year-to-date total to over $1 billion. Product revenue reached a quarterly record of $416 million, driven by growth in automotive climate and comfort solutions. Gentherm Inc (NASDAQ:THRM) completed the strategic acquisition of Innovative Medical Equipment, expanding its patient product portfolio. The company received FDA 510(k) clearance for ThermaFix, an innovative solution for the medical market, showcasing its ability to transfer automotive innovations into new markets. Adjusted EBITDA margin decreased to 11.7% from 12.2% in the same quarter last year due to inflation recovery timing and planned inventory reductions. The company faced higher warranty accruals in both automotive and medical businesses, impacting profitability. Despite strong performance, there is uncertainty in the second half of the year due to potential headwinds from runoff businesses. The merger and restructuring expenses impacted reported GAAP diluted earnings per share, which was $0.14 in the quarter. Gentherm Inc (NASDAQ:THRM) anticipates lower margins in the third quarter before rebounding in the fourth quarter. Q: Can you provide details on the key programs or product categories within the recent automotive awards and the current RFP pipeline? A: The awards were well-distributed across regions, programs, and customers, reflecting a strong performance by the commercial team. The pipeline remains robust, and we expect continued success in securing awards throughout the year. - Bill Presley, CEO Q: What was the purchase price for the IME acquisition, and can you confirm the expected revenue and EBITDA for 2026? A: The purchase price was $34 million. IME is expected to generate $17 million in revenue for 2026 with a 20% EBITDA margin. We anticipate significant growth and profitability improvements. - Jon Douyard, CFO Q: Can you share any early demand metrics for ThermaFix and potential revenue synergies from the IME acquisition? A: ThermaFix has received strong market interest, and we are in the clinical trial phase with hospitals. IME provides access to over 200 Veterans Administration hospitals, offering significant cross-selling opportunities with our existing channels. - Bill Presley, CEO Q: How sustainable is the outperformance in the automotive sector, and what regions or products are driving this growth? A: The growth is broad-based across products and regions, with China showing strong performance. We expect mid-single-digit growth over the market, supported by industry dynamics and adoption rates. - Jon Douyard, CFO Q: Can you provide more details on the home and office market expansion and its potential impact on revenue? A: We have secured significant wins with large North American brands, expanding beyond our initial Chinese partnerships. The total addressable market is over $500 billion, and we aim for $50 million to $100 million in revenue by 2028. - Bill Presley, CEO For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved significant automotive market outperformance with 12.7% organic growth against a 3% decline in global light vehicle production, driven by high take rates in China and strong demand for Lumbar and Massage solutions. Successfully validated technology transferability by securing two major North American furniture brands, providing visibility to $50 million to $100 million in home and office revenue by 2028. Advanced medical market strategy through the FDA 510(k) clearance of ThermAffyx, a patient-warming solution derived from core automotive intellectual property. Acquired Innovative Medical Equipment (IME) to gain immediate access to the Veterans Administration channel, creating a cross-selling platform for the broader thermal management portfolio. Implemented a new operating system focused on labor efficiency and equipment utilization to drive margin expansion and higher cash flow conversion. Maintained robust commercial momentum with over $1 billion in year-to-date automotive awards, reflecting sustained demand for differentiated climate and comfort technologies. Anticipates closing the Modine Performance Technologies merger in early Q4 2026, transforming the company into a global leader in thermal and precision flow management. Projects a significant shift in revenue mix post-merger, reducing light vehicle exposure from 97% to approximately 63% while expanding into commercial vehicle and power generation markets. Targets over $3.5 billion in revenue by 2030, supported by an estimated $1 billion in cumulative unlevered free cash flow generation through the same period. Expects margins to remain lower in the third quarter due to inflation recovery timing and footprint-related inventory reductions before rebounding in the fourth quarter. Assumes mid- to high single-digit revenue growth over market for the full year 2026, despite anticipated headwinds from end-of-program runoffs in the second half. Recorded a $0.55 per share impact from merger and restructuring expenses related to the pending Modine transaction. Recognized non-recurring warranty accruals in the automotive segment following mechanical robustness improvements on a specific product line identified through new KPI tracking. Announced a new $400 million stock repurchase authorization over three years, nearly triple the previous program, to be utilized opportunistically post-merger. Secured $800 million in committed financing, including a $550 million revolving credit facility, to support the Modine acquisition and maintain a target net leverage of 1x to 1.5x. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management emphasized that IME provides non-opioid pain management solutions using core thermoelectric technology, fitting perfectly with Gentherm's historical expertise. The acquisition provides immediate access to over 200 Veterans Administration hospitals, a channel where Gentherm previously had zero presence. Expects the IME business to double its revenue by 2030 through cross-selling into Gentherm's existing hospital and GPO channels. Management expressed high confidence in reaching the $1.7 billion revenue target for 2027, citing a healthy pursuit pipeline and consistent adoption of comfort solutions. While second-half growth faces tougher year-over-year comparisons and program runoffs, the long-term trajectory remains mid-single digits above market production. Confirmed that new North American furniture wins involve higher content per unit and faster deployment than initial Chinese partnerships. Reiterated a total addressable market (TAM) exceeding $500 million, with a high degree of certainty in reaching at least the $50 million revenue floor by 2028.

Revenue Growth of 9.5% (ex-FX) Year-over-Year Delivered Record Quarterly Revenue of $416 Million 2026 Full Year Guidance Raised Board Authorized New Stock Repurchase Program of up to $400 Million Strategic Medical Acquisition Broadens Product Portfolio and Expands Channel Access NOVI, Mich., July 23, 2026 (GLOBE NEWSWIRE) -- Gentherm (NASDAQ:THRM), a global market leader of innovative thermal management and pneumatic comfort technologies, today announced its financial results for the second quarter ended June 30, 2026. “The Gentherm team demonstrated strong commercial performance with record quarterly revenue, while also scaling our core technologies into new markets. Our growth initiatives in both home and office, and medical markets continued to accelerate.” said Bill Presley, the Company's President and CEO. “In addition, I was pleased with our execution during the quarter. The operating systems and key performance indicators we have put in place to drive more rigor and standardization throughout the business are yielding positive results.” Second Quarter Highlights Secured Automotive New Business Awards totaling $690 million in the quarter. Selected by two leading North American based furniture brands to supply climate and comfort solutions; fourth consecutive quarter securing new home and office customers. Product revenues of $416.2 million increased 11.0% from $375.1 million in the prior year. Excluding the impact of foreign currency translation, product revenues increased 9.5%, with Automotive increasing 9.8% and Medical decreasing 0.2%. Automotive Climate and Comfort Solutions revenue increased 14.1% year over year, or 12.7% excluding the impact of foreign currency translation, outperforming S&P Global’s mid-July light vehicle production report in our relevant markets by 14 percentage points. Gross margin was 23.2%, compared to 23.9% in the prior year. The decrease was primarily driven by higher material costs, including higher warranty accruals in Automotive and Medical, partially offset by strong operating leverage. Net income was $4.4 million, compared to $0.5 million in the prior year. Adjusted EBITDA was $48.8 million, or 11.7% of revenue, compared to $45.9 million, or 12.2% of revenue, in the prior year. GAAP diluted earnings per share was $0.14, compared to $0.02 in the prior year. Adjusted diluted earnings per share was $0.75, compared to $0.54 in the prior year. Cash flow from operations was $2.3 million, compared to $31.7 million in the prior year. The decrease was primarily driven by restructuring and merger and acquisition expenses. Second quarter ended with net leverage of ~0.3x and liquidity of $502.3 million. The Company provides various non-GAAP financial measures in this release. See “Use of Non-GAAP Measures” below for additional information, including definitions, usefulness for investors and limitations, as well as reconciliations below to the most directly comparable GAAP financial measures. Guidance The Company raised its guidance for full year 2026 which is provided below1: 12026 guidance based on tariffs currently in effect as of today, our current forecast of customer orders and expectations of near-term conditions, light vehicle production in our relevant markets decreasing at a low single digit rate for full year 2026 versus 2025, and a EUR to USD exchange rate of $1.16/Euro. Assumes an effective tax rate of ~30%. Does not reflect any impact from the planned combination with Modine Performance Technologies. Presley concluded, “Our strong first half performance puts us on track to deliver a solid year and gives us confidence in raising our 2026 guidance. We continue to transform the Company for profitable growth, margin expansion, and driving shareholder returns.” M&A Updates Completed key sign-to-close deliverables related to planned combination with Modine Performance Technologies. The transaction remains on track to close by early fourth quarter 2026. Acquired Innovative Medical Equipment, LLC, provider of the ThermaZone® thermal therapy device, expanding thermal management product portfolio and providing strong cross-selling opportunities by leveraging complementary customer bases across additional healthcare channels. New Stock Repurchase Authorization The Board of Directors authorized a new stock repurchase program of up to $400 million of the Company’s issued and outstanding common stock. The new program will replace the Company's existing stock repurchase program effective July 27, 2026, and will remain in effect for a three-year period. As of June 30, 2026, the prior program had approximately $110 million of stock repurchase authorization remaining. “During the quarter, we secured financing that provides additional flexibility to support the long-term capital needs of the business. With a strong balance sheet and access to capital, we are well positioned to execute our strategic priorities while maintaining a disciplined approach to capital allocation.” said Jon Douyard, the Company’s Chief Financial Officer. “The Board's authorization of a new stock repurchase program underscores our confidence in the business's long-term cash flow generation and our commitment to creating value for shareholders.” Conference Call As previously announced, Gentherm will conduct a conference call today at 8:00 am Eastern Time to review these results. The dial-in number for the call is 1-877-407-4018 (callers in the U.S.) or +1-201-689-8471 (callers outside the U.S.). The passcode for the live call is 13761564. A live webcast and one-year archived replay of the call, as well as a copy of the supplemental materials that will be used during the conference call, can be accessed on the Events page of the Investor section of Gentherm's website at www.gentherm.com. A telephonic replay will be available approximately two hours after the call until 11:59 pm Eastern Time on August 6, 2026. The replay can be accessed by dialing 1-844-512-2921 (callers in the U.S.), or +1-412-317-6671 (callers outside the U.S.). The passcode for the replay is 13761564. Investor Contact Gregory [email protected]  248.308.1702 Media Contact Haley Baur [email protected]  248.289.9711 About GenthermGentherm (NASDAQ: THRM) is a global market leader of innovative thermal management and pneumatic comfort technologies. Automotive products include Climate Control Seats (CCS®), Climate Control Interiors (CCI™), Lumbar and Massage Comfort Solutions, and Valve Systems. Medical products include patient temperature management systems. The Company is also developing a number of new technologies and products that will help enable improvements to existing products and to create new product applications for existing and new markets. Gentherm has more than 14,000 employees in facilities across 13 countries. In 2025, the company recorded annual sales of approximately $1.5 billion and secured $2.2 billion in automotive new business awards. For more information, go to www.gentherm.com. NO OFFER OR SOLICITATIONThis release is not intended to and does not constitute an offer to sell or the solicitation of an offer to buy or exchange any securities or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. It does not constitute a prospectus or prospectus equivalent document. No offering or sale of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, and otherwise in accordance with applicable law. Additional Information and Where to Find It In connection with the proposed transaction (the “Proposed Transaction”) among Gentherm, Modine Manufacturing Company (“Modine”) and Modine’s Performance Technologies business (“SpinCo”), the parties have filed relevant materials with the SEC, including, among other filings, a registration statement on Form S-4 filed by Gentherm on July 2, 2026 (the “Form S-4”) that includes a preliminary proxy statement/prospectus of Gentherm, and a registration statement on Form 10 filed by SpinCo that incorporates by reference certain portions of the Form S-4 and serves as an information statement/prospectus in connection with the spin-off of SpinCo from Modine. Neither the Form S-4 nor the Form 10 have yet become effective. After the Form S-4 is declared effective by the SEC, a definitive proxy statement/prospectus will be mailed to shareholders of Gentherm. INVESTORS AND SECURITY HOLDERS OF GENTHERM AND MODINE ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS, THE INFORMATION STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS THAT ARE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT GENTHERM, MODINE, SPINCO, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders are able to obtain free copies of the Form S-4 and the proxy statement/prospectus (when available) and other documents filed with the SEC by Gentherm, Modine or SpinCo through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by Gentherm are available free of charge on Gentherm’s website at ir.Gentherm.com under the tab “Financial Info” and under the heading “SEC Filings.” Copies of the documents filed with the SEC by Modine and SpinCo are available free of charge on Modine’s website at investors.Modine.com under the tab “Financials” and under the heading “SEC Filings.” Participants in the Solicitation Gentherm and Modine and their respective directors and executive officers and other members of management and employees may be considered participants in the solicitation of proxies from Gentherm’s shareholders in connection with the Proposed Transaction under the rules of the SEC. Information about the directors and executive officers of Gentherm is set forth in its Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 19, 2026, and its proxy statement for its 2026 annual meeting of shareholders, which was filed with the SEC on April 1, 2026 and supplemented on April 10, 2026. To the extent holdings of Gentherm’s securities by its directors or executive officers have changed since the amounts set forth in such filings, such changes have been or will be reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Beneficial Ownership on Form 4 filed with the SEC. Information about the directors and executive officers of Gentherm and other information regarding the potential participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, are contained in the proxy statement/prospectus and other relevant materials filed with the SEC regarding the Proposed Transaction. Information about the directors and executive officers of Modine is set forth in its Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 27, 2026, and its proxy statement for its 2026 annual meeting of shareholders, which was filed with the SEC on July 10, 2026. To the extent holdings of Modine’s securities by its directors or executive officers have changed since the amounts set forth in such filings, such changes have been or will be reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Beneficial Ownership on Form 4 filed with the SEC. You may obtain these documents (when they become available) free of charge through the website maintained by the SEC at www.sec.gov and from Gentherm’s website and Modine’s website as described above. Forward-Looking Statements Except for historical information contained herein, statements in this release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Gentherm Incorporated's goals, beliefs, plans and expectations about its prospects for the future and other future events. The forward-looking statements included in this release are made as of the date hereof or as of the date specified herein and are based on management's reasonable expectations and beliefs. In making these statements we rely on assumptions and analysis based on our experience and perception of historical trends, current conditions and expected future developments, third party information and projections from sources that management believes to be reputable, as well as other factors we consider appropriate under the circumstances. Such statements are subject to a number of important assumptions, significant risks and uncertainties (some of which are beyond our control) and other factors that may cause actual results or performance to differ materially from that described in or indicated by the forward-looking statements, including but not limited to: macroeconomic, geopolitical and similar global factors in the cyclical Automotive industry; the impact of, and our ability to mitigate the effects of, global economic and trade policies, including increases in duties, tariffs and taxation on the import or export of our products related to U.S. trade disputes; increasing U.S. and global competition, including with non-traditional entrants; our ability to effectively manage new product launches and research and development, and the market acceptance of such products and technologies; the evolution and challenges of the automotive industry towards electric vehicles, autonomous vehicles and mobility on demand services, and related consumer behaviors and preferences; our ability to convert automotive new business awards into product revenues; the constraints in the supply chain environment, and inflationary and other cost pressures; the production levels of our major customers and OEMs in our relevant markets and sudden fluctuations in such production levels; our business in China, which is subject to unique operational, competitive, geopolitical, regulatory and economic risks; the impact of our global operations, including our cost structure and global manufacturing footprint, operations within Ukraine, and foreign currency and exchange risk; our product quality and safety and impact of product safety recalls and alleged defects in products; our ability to attract and retain highly skilled employees and wage inflation; a tightening labor market, labor shortages or work stoppages impacting us, our customers or our suppliers, such as recent labor strikes among certain OEMs and suppliers; our achievement of product cost reductions to offset customer-imposed price reductions or other pricing pressures; our ability to execute efforts to optimize our global supply chain and manufacturing footprint, including opening new facilities and transferring production; our ability to source, consummate, integrate and achieve planned benefits of strategic acquisitions, investments and, as applicable, exits; any security breaches and other disruptions to our information technology networks and systems, as well as privacy, data security and data protection risks, including risks associated with use of artificial intelligence capabilities in our business operations; any loss or insolvency of our key customers and OEMs, or key suppliers; our ability to project future sales volume based on third-party information, based on which we manage our business; the protection of our intellectual property in certain jurisdictions; our compliance with global anti-corruption laws and regulations; legal and regulatory proceedings and claims involving us or one of our major customers; the extensive regulation of our patient temperature management business; risks associated with our manufacturing processes; the effects of climate change and regulatory and stakeholder-imposed requirements to address climate change and other sustainability issues; our product quality and safety; our borrowing availability under our revolving credit facility, as well as the ability to access the capital markets, to support our planned growth; and our indebtedness and compliance with our debt covenants. Furthermore, important factors related to the Proposed Transaction could cause actual results to differ materially from those currently anticipated, including: that one or more closing conditions to the Proposed Transaction, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the Proposed Transaction, may require conditions, limitations or restrictions in connection with such approvals or that the required approval by the shareholders of Gentherm may not be obtained; the risk that the Proposed Transaction may not be completed on the terms or in the time frame expected by Gentherm, Modine and SpinCo, or at all; unexpected costs, charges or expenses resulting from the Proposed Transaction; uncertainty of the expected financial performance of the combined company following completion of the Proposed Transaction; failure to realize the anticipated benefits of the Proposed Transaction, including as a result of delay in completing the Proposed Transaction or integrating the businesses of Gentherm and SpinCo, on the expected timeframe or at all; the ability of the combined company to implement its business strategy; difficulties and delays in the combined company achieving revenue and cost synergies; inability of the combined company to retain and hire key personnel; the occurrence of any event that could give rise to termination of the Proposed Transaction; the risk that shareholder litigation in connection with the Proposed Transaction or other litigation, settlements or investigations may affect the timing or occurrence of the Proposed Transaction or result in significant costs of defense, indemnification and liability; evolving legal, regulatory and tax regimes; changes in general economic and/or industry specific conditions or any volatility resulting from the imposition of and changing policies, including those policies with respect to tariffs; actions by third parties, including government agencies; the risk that the anticipated tax treatment of the Proposed Transaction is not obtained; the risk of greater than expected difficulty in separating the business of SpinCo from the other businesses of Modine; and risks related to the disruption of management time from ongoing business operations due to the pendency of the Proposed Transaction, or other effects of the pendency of the Proposed Transaction on the relationship of any of the parties to the Proposed Transaction with their employees, customers, suppliers, or other counterparties. The foregoing risks should be read in conjunction with the Company's reports filed with or furnished to the Securities and Exchange Commission (the “SEC”), including “Risk Factors,” in its most recent Annual Report on Form 10-K and subsequent SEC filings, for a discussion of these and other risks and uncertainties. In addition, with reasonable frequency, we have entered into business combinations, acquisitions, divestitures, strategic investments and other significant transactions. Such forward-looking statements do not include the potential impact of any such transactions that may be completed after the date hereof (except the Proposed Transaction to the extent specified), each of which may present material risks to the Company’s future business and financial results. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. Except as required by law, the Company expressly disclaims any obligation or undertaking to update any forward-looking statements to reflect any change in its strategies or expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Use of Non-GAAP Financial Measures In addition to the results reported in accordance with GAAP throughout this release, the Company has provided here or elsewhere information regarding: adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”); Adjusted EBITDA margin; Adjusted net income; Adjusted earnings per share (“Adjusted earnings per share” or “Adjusted EPS”); Quarter-to-date Operating Cash Flow; Free Cash Flow; Adjusted Free Cash Flow; Adjusted Free Cash Flow Conversion rate; net capital expenditures (“net CAPEX”); Net Debt; Liquidity; Net Leverage Ratio (“Net Leverage”); revenue, segment revenue and product revenue excluding foreign currency translation and other specified gains and losses; Adjusted operating expenses; Pro Forma Revenue; Pro Forma Adjusted EBITDA; and Pro Forma Adjusted EBITDA Margin, each a non-GAAP financial measure. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, deferred financing cost amortization, non-cash stock based compensation expenses, restructuring expenses, net, unrealized currency gain or loss and other gains and losses not reflective of the Company’s ongoing operations and related tax effects. The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by product revenues. The Company defines Adjusted net income as earnings adjusted by restructuring expenses, net, unrealized currency gain or loss and other gains and losses not reflective of the Company’s ongoing operations and related tax effects. The Company defines Adjusted EPS as Adjusted net income divided by the Company’s weighted average shares outstanding. The Company defines Quarter-to-date Operating Cash Flow as Net cash provided by/(used in) operating activities for the current period, less that of the immediately preceding period. The Company defines Free Cash Flow as Net cash provided by/(used in) operating activities plus Proceeds from the sale of property and equipment less Purchases of property and equipment. The Company defines net CAPEX as Purchases of property and equipment less Proceeds from the sale of property and equipment. The Company defines Adjusted Free Cash Flow as Net cash provided by/(used in) operating activities, excluding cash restructuring expenses, net and other gains and losses not reflective of the Company’s ongoing operations, less net CAPEX. The Company defines Adjusted Free Cash Flow Conversion rate as Adjusted Free Cash Flow divided by Adjusted EBITDA. The Company defines Net Debt as the principal amount of all Consolidated Funded Indebtedness (as defined in the Credit Agreement) less cash and cash equivalents. The Company defines Liquidity as the sum of cash and cash equivalents and availability under the Company’s revolving line of credit. The Company defines Net Leverage as Net Debt divided by Adjusted EBITDA for the trailing four fiscal quarters. The Company defines revenue, segment revenue or product revenue excluding foreign currency translation and other specified gains and losses as such revenue, excluding the estimated effects of foreign currency exchange on revenue by translating actual revenue using the prior period foreign currency exchange rates and excluding the other items specified. The Company defines Adjusted operating expenses as operating expenses excluding related non-cash stock based compensation, restructuring expenses, net, and other gains and losses not reflective of the Company’s ongoing operations. The Company defines Pro Forma Revenue as Gentherm’s product revenues for the trailing four fiscal quarters (from the date specified), plus Modine Performance Technologies’ Net sales for the trailing four fiscal quarters (from the date specified), as reported by Modine Manufacturing Company, adjusted to reflect the latest business structure. The Company defines Pro Forma Adjusted EBITDA as Gentherm’s Adjusted EBITDA for the trailing four fiscal quarters (from the date specified), plus Modine Performance Technologies’ Adjusted EBITDA for the trailing four fiscal quarters (from the date specified), as reported by Modine Manufacturing Company, adjusted to reflect the latest business structure and go-forward operational alignment. The Company defines Pro Forma Adjusted EBITDA Margin as Pro Forma Adjusted EBITDA divided by Pro Forma Revenue. The Company’s reconciliations are included in this release or can be found in the supplemental materials for this reporting period on the Company’s website. In evaluating its business, the Company considers and uses Quarter-to-date Operating Cash Flow, Free Cash Flow, Adjusted Free Cash Flow, Adjusted Free Cash Flow Conversion rate, Net Debt, Net Leverage and Liquidity as supplemental measures of its liquidity and the other non-GAAP financial measures as supplemental measures of its operating performance. Management provides such non-GAAP financial measures so that investors will have the same financial information that management uses with the belief that it will assist investors in properly assessing the Company's performance on a period-over-period basis by excluding matters not indicative of the Company’s ongoing operating or liquidity results and therefore enhance the comparability of the Company's results and provide additional information for analyzing trends in the business. In evaluating our non-GAAP financial measures, you should be aware that in the future we may incur revenues, expenses, and cash and non-cash obligations that are the same as or similar to some of the adjustments in our presentation of non-GAAP financial measures. Our presentation of non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There also can be no assurance that we will not modify the presentation of our non-GAAP financial measures in the future, and any such modification may be material. Other companies in our industry may define and calculate these non-GAAP financial measures differently than we do and those calculations may not be comparable to our metrics. These non-GAAP measures have limitations as analytical tools, and when assessing the Company's operating performance or liquidity, investors should not consider these non-GAAP measures in isolation, or as a substitute for net income/(loss), revenue or other consolidated income/(loss) statement or cash flow statement data prepared in accordance with GAAP. Non-GAAP measures referenced in this release and other public communications may include estimates of future Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Free Cash Flow, Adjusted Free Cash Flow Conversion rate, Adjusted EPS, Pro Forma Revenue, Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA Margin. The Company has not reconciled the non-GAAP forward-looking guidance included in this release to the most directly comparable GAAP measures because this cannot be done without unreasonable effort due to the variability and low visibility with respect to taxes and non-recurring items, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.

Gentherm (THRM) came out with quarterly earnings of $0.75 per share, beating the Zacks Consensus Estimate of $0.59 per share. This compares to earnings of $0.54 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +27.12%. A quarter ago, it was expected that this maker of climate-controlled seats and other products would post earnings of $0.53 per share when it actually produced earnings of $0.84, delivering a surprise of +58.49%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Gentherm, which belongs to the Zacks Automotive - Original Equipment industry, posted revenues of $416.17 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 8.29%. This compares to year-ago revenues of $375.09 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Gentherm shares have lost about 0.9% since the beginning of the year versus the S&P 500's gain of 9.6%. While Gentherm has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Gentherm was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.67 on $393.34 million in revenues for the coming quarter and $2.75 on $1.56 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Automotive - Original Equipment is currently in the bottom 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Aeva Technologies, Inc. (AEVA), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This company is expected to post quarterly loss of $0.44 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 1.8% lower over the last 30 days to the current level. Aeva Technologies, Inc.'s revenues are expected to be $6.13 million, up 11.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Gentherm Inc (THRM) : Free Stock Analysis Report Aeva Technologies, Inc. (AEVA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Gentherm Inc? Here are five stocks we like better. Gentherm raised its full-year 2026 outlook after posting record quarterly product revenue, with Q2 revenue up 11% year over year to $416 million and adjusted diluted EPS of $0.75. The company now expects 2026 revenue of about $1.6 billion, adjusted EBITDA of $185 million to $200 million, and adjusted free cash flow of $85 million to $100 million. Automotive demand remained strong and broad-based, with about $690 million in new business awards in Q2 and more than $1 billion year to date. Management said growth outpaced light vehicle production, with especially strong performance in China and a 38% jump in lumbar and massage comfort solutions revenue. Gentherm is expanding beyond automotive through new wins in furniture and medical, while also advancing its planned combination with Modine Performance Technologies. The company said the deal should close early in Q4 and will help diversify its end markets, while it also authorized up to $400 million in share repurchases. Modine’s $4B AI Coup Freezes Out the Competition Gentherm (NASDAQ:THRM) raised its full-year 2026 outlook after reporting record quarterly product revenue and stronger-than-expected automotive demand in the second quarter, executives said on the company’s earnings call. President and Chief Executive Officer Bill Presley said the thermal management technology company delivered “an excellent first half” through commercial execution and operational discipline. He said the company continued to outperform light vehicle production while expanding its technology into markets beyond automotive, including furniture and medical products. → 3 Photonics Companies Making Quantum Tech Possible Chief Financial Officer Jon Douyard said second-quarter revenue rose 11% year over year to $416 million. Excluding foreign currency translation, revenue increased 9.5%, driven by higher automotive volumes. Automotive Climate and Comfort Solutions revenue increased 14.1%, or 12.7% excluding foreign exchange. Presley said Gentherm secured approximately $690 million in automotive new business awards during the second quarter, bringing year-to-date awards to more than $1 billion. He said the awards were in line with company expectations and reflected customer demand for Gentherm’s technologies. → Could Truth API Become Trump Media’s First Meaningful Revenue Driver? During the question-and-answer session, Presley said the awards were “pretty well distributed” and were not driven by a single region, program or customer. He said the company remains confident that 2026 will be another strong year for new business awards. Douyard said automotive growth was broad-based across regions and product categories. He highlighted strong performance in China, where the company benefited from domestic Chinese OEM program launches and higher take rates from global OEM customers. Lumbar and Massage Comfort Solutions revenue grew 38% year over year. → AeroVironment’s Stock Is Down, But Drone Demand Is Taking Off Responding to a question from Stifel analyst Nathan Jones, Douyard said Gentherm remains confident that its automotive business can grow at a mid-single-digit rate above the market over time, though he noted that performance may not be linear each year. Gentherm reported adjusted EBITDA of $48.8 million, equal to 11.7% of sales, compared with 12.2% in the prior-year quarter. Douyard said operating leverage and operational excellence initiatives were offset by expected headwinds from inflation recovery timing, planned footprint-related inventory reductions and warranty accruals in both the automotive and medical businesses. On a GAAP basis, diluted earnings per share were $0.14. Douyard said that figure was affected by approximately $0.55 per share of merger and restructuring expenses. Adjusted diluted earnings per share were $0.75, up from $0.54 a year earlier. In response to a question from Seaport Research Partners analyst Glenn Chin, Presley said the warranty accruals were tied in part to a specific automotive product with a specific customer. He said the company made mechanical robustness improvements late last year and decided to take an accrual after seeing increased claims in the first half. Presley said the company does not view the issue as part of the ongoing run rate. Gentherm raised its 2026 full-year guidance for revenue, adjusted EBITDA and adjusted free cash flow. Douyard said the updated guidance excludes any impact from the planned combination with Modine Performance Technologies. At the midpoint, Gentherm now expects 2026 revenue of $1.6 billion, representing roughly 5% growth for the year. Douyard said that compares with a forecasted decline in light vehicle production of approximately 3%, positioning the company for mid- to high-single-digit revenue growth over market. The company expects adjusted EBITDA of $185 million to $200 million, implying a midpoint margin of approximately 12%. Douyard said margins are expected to remain lower in the third quarter before rebounding in the fourth quarter. Gentherm also projected adjusted free cash flow of $85 million to $100 million, with capital expenditures of $45 million to $55 million. Douyard said adjusted free cash flow was approximately $16 million year to date, in line with expectations and historical seasonality, while capital expenditures were $14 million, down $9.5 million from the prior year. The company ended the quarter with net leverage of 0.3 times and liquidity of $502 million. Presley said Gentherm is making progress in applying its core technologies outside the light vehicle market. During the quarter, the company’s products were selected by two North American-based furniture brands in the home and office market. Presley said Gentherm has deployed its core technologies with five new customers in less than a year and has visibility to $50 million to $100 million of revenue in that market by 2028. In the Q&A session, Presley said the latest data and discussions with manufacturers indicate the total addressable market for Gentherm in home and office is more than $500 million. He said the company remains confident in its 2028 revenue target for that market. In medical products, Presley said Gentherm received FDA 510(k) clearance for ThermAffyx, a solution that combines conductive air-free patient warming with securement technology for robotic surgical procedures. He said the company is actively commercializing ThermAffyx and expects initial sales in the third quarter. Gentherm also completed the acquisition of Innovative Medical Equipment on July 1. Douyard said the purchase price was $34 million. IME provides the ThermaZone Therapy device, a non-opioid thermal therapy solution for pain management and recovery using controlled hot and cold therapy. Douyard said IME is projected to generate approximately $17 million of full-year 2026 revenue with 20% EBITDA margins. Presley said IME serves more than 200 Veterans Health Administration hospitals and clinics, while Gentherm has access to hospital channels through partnerships, distributors and group purchasing organizations. He said the two businesses create “a very, very strong cross-selling opportunity.” Gentherm continues to work toward completing its planned combination with Modine Performance Technologies. Douyard said the company expects the transaction to close early in the fourth quarter after completing many key sign-to-close deliverables. Presley said the combination would create a global leader in thermal and precision flow management solutions and diversify Gentherm’s end-market exposure. He said the company’s light vehicle mix would decline from approximately 97% today to roughly 63%, while expanding exposure to commercial vehicle, off-highway and power generation markets. Douyard said Gentherm secured $800 million of committed financing through a $550 million five-year revolving credit facility and a $250 million term loan to support the Modine transaction. Upon closing, the company expects net leverage of approximately one turn. The company also announced a new stock repurchase authorization of up to $400 million over three years. Douyard said Gentherm expects to repurchase shares after the Modine transaction closes and will continue to prioritize organic investment, share repurchases and strategic acquisitions aligned with its core technology platforms. Gentherm Incorporated (NASDAQ: THRM) is a global developer and supplier of advanced thermal management technologies for automotive, specialty vehicle, medical, consumer and industrial markets. The company's core focus lies in delivering integrated heating and cooling systems designed to enhance energy efficiency, comfort and safety across a wide range of applications. Gentherm's product portfolio includes seat thermal systems, heated and ventilated seating surfaces, steering wheel heaters, battery thermal management solutions, and climate systems for electric vehicles. In the automotive sector, Gentherm partners with leading original equipment manufacturers to engineer and manufacture high-performance thermal solutions that meet stringent industry demands for reduced weight, lower energy consumption and improved passenger comfort. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Gentherm Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.