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| (State or Other Jurisdiction of | (Commission File Number) | (IRS Employer | ||||||||||||
| Incorporation) | Identification No.) | |||||||||||||
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
| GATES INDUSTRIAL CORPORATION LTD. | ||||||||||||||
| By: | /s/ L. Brooks Mallard | |||||||||||||
| Name: | L. Brooks Mallard | |||||||||||||
| Title: | Chief Financial Officer | |||||||||||||
Gates Industrial Reports Second-Quarter 2026 Results |
 |
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| Three months ended | |||||||||||||||||||||||
| (USD in millions) | June 27, 2026 | June 28, 2025 | % Change | % Core Change | |||||||||||||||||||
| Net sales | $588.5 | $550.1 | 7.0% | 5.3% | |||||||||||||||||||
| Adjusted EBITDA | $134.8 | $122.8 | 9.8% | ||||||||||||||||||||
| Adjusted EBITDA margin | 22.9% | 22.3% | 60 bps | ||||||||||||||||||||
| Six months ended | |||||||||||||||||||||||
| (USD in millions) | June 27, 2026 | June 28, 2025 | % Change | % Core Change | |||||||||||||||||||
| Net sales | $1,121.7 | $1,077.3 | 4.1% | 1.5% | |||||||||||||||||||
| Adjusted EBITDA | $246.8 | $239.5 | 3.0% | ||||||||||||||||||||
| Adjusted EBITDA margin | 22.0% | 22.2% | (20 bps) | ||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||
| (USD in millions) | June 27, 2026 | June 28, 2025 | % Change | % Core Change | |||||||||||||||||||
| Net sales | $353.1 | $333.6 | 5.8% | 4.2% | |||||||||||||||||||
| Adjusted EBITDA | $76.6 | $76.4 | 0.3% | ||||||||||||||||||||
| Adjusted EBITDA margin | 21.7% | 22.9% | (120 bps) | ||||||||||||||||||||
| Six months ended | |||||||||||||||||||||||
| (USD in millions) | June 27, 2026 | June 28, 2025 | % Change | % Core Change | |||||||||||||||||||
| Net sales | $671.0 | $654.0 | 2.6% | 0.4% | |||||||||||||||||||
| Adjusted EBITDA | $142.0 | $147.0 | (3.4%) | ||||||||||||||||||||
| Adjusted EBITDA margin | 21.2% | 22.5% | (130 bps) | ||||||||||||||||||||
| Prior 2026 | Updated 2026 | Change (At Midpoint) | |||||||||
Core Sales Growth |
1% to 4% | 2.5% to 4.5% | + 100 bps | ||||||||
Adjusted EBITDA |
$775 to $835 Million | $800 to $830 Million | + $10 Million | ||||||||
Adjusted EPS |
$1.52 to $1.68 | $1.62 to $1.70 | + $0.06 | ||||||||
Capital Expenditures |
~$120 Million | ~$120 Million | No Change | ||||||||
Free Cash Flow Conversion |
90%+ | 90%+ | No Change | ||||||||
| Three months ended | Six months ended | ||||||||||||||||||||||
(USD in millions, except per share amounts) |
June 27, 2026 | June 28, 2025 | June 27, 2026 | June 28, 2025 | |||||||||||||||||||
| Net sales | $ | 941.6 | $ | 883.7 | $ | 1,792.7 | $ | 1,731.3 | |||||||||||||||
| Cost of sales | 555.5 | 523.5 | 1,068.6 | 1,026.5 | |||||||||||||||||||
| Gross profit | 386.1 | 360.2 | 724.1 | 704.8 | |||||||||||||||||||
| Selling, general and administrative expenses | 250.7 | 231.2 | 477.6 | 447.4 | |||||||||||||||||||
| Transaction-related expenses | 3.1 | — | 3.6 | 0.4 | |||||||||||||||||||
| Asset impairments | — | 0.2 | — | 0.8 | |||||||||||||||||||
| Restructuring expenses | 0.7 | 13.0 | 1.4 | 14.6 | |||||||||||||||||||
| Operating income from continuing operations | 131.6 | 115.8 | 241.5 | 241.6 | |||||||||||||||||||
| Interest expense | 30.0 | 28.8 | 59.9 | 58.4 | |||||||||||||||||||
| Other expense | 1.4 | 6.8 | 3.5 | 9.2 | |||||||||||||||||||
| Income from continuing operations before taxes | 100.2 | 80.2 | 178.1 | 174.0 | |||||||||||||||||||
| Income tax expense | (78.0) | 16.8 | (66.5) | 42.0 | |||||||||||||||||||
| Net income from continuing operations | 178.2 | 63.4 | 244.6 | 132.0 | |||||||||||||||||||
| Loss on disposal of discontinued operations | 0.2 | 0.3 | 0.4 | 0.6 | |||||||||||||||||||
| Net income | 178.0 | 63.1 | 244.2 | 131.4 | |||||||||||||||||||
| Less: non-controlling interests | 7.1 | 6.6 | 13.6 | 12.9 | |||||||||||||||||||
| Net income attributable to shareholders | $ | 170.9 | $ | 56.5 | $ | 230.6 | $ | 118.5 | |||||||||||||||
| Earnings per share | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Earnings per share from continuing operations | $ | 0.67 | $ | 0.22 | $ | 0.91 | $ | 0.46 | |||||||||||||||
| Earnings per share from discontinued operations | — | — | — | — | |||||||||||||||||||
| Earnings per share | $ | 0.67 | $ | 0.22 | $ | 0.91 | $ | 0.46 | |||||||||||||||
| Diluted | |||||||||||||||||||||||
| Earnings per share from continuing operations | $ | 0.67 | $ | 0.22 | $ | 0.90 | $ | 0.45 | |||||||||||||||
| Earnings per share from discontinued operations | — | — | — | — | |||||||||||||||||||
| Earnings per share | $ | 0.67 | $ | 0.22 | $ | 0.90 | $ | 0.45 | |||||||||||||||
(USD in millions, except share numbers and per share amounts)
|
As of June 27, 2026 |
As of December 31, 2025 |
|||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 823.5 | $ | 812.1 | |||||||
| Trade accounts receivable, net | 900.3 | 744.2 | |||||||||
| Inventories | 740.6 | 700.0 | |||||||||
| Taxes receivable | 40.5 | 43.4 | |||||||||
| Prepaid expenses and other assets | 204.4 | 181.8 | |||||||||
| Total current assets | 2,709.3 | 2,481.5 | |||||||||
| Non-current assets | |||||||||||
| Property, plant and equipment, net | 599.4 | 609.0 | |||||||||
| Goodwill | 2,022.4 | 2,035.2 | |||||||||
| Pension surplus | 6.7 | 7.6 | |||||||||
| Intangible assets, net | 1,122.9 | 1,192.4 | |||||||||
| Right-of-use assets | 146.2 | 137.1 | |||||||||
| Taxes receivable | 2.6 | 5.4 | |||||||||
| Deferred income taxes | 729.4 | 640.0 | |||||||||
| Other non-current assets | 53.9 | 43.2 | |||||||||
| Total assets | $ | 7,392.8 | $ | 7,151.4 | |||||||
| Liabilities and equity | |||||||||||
| Current liabilities | |||||||||||
| Debt, current portion | $ | 39.2 | $ | 36.2 | |||||||
| Trade accounts payable | 482.4 | 433.7 | |||||||||
| Taxes payable | 31.2 | 27.0 | |||||||||
| Accrued expenses and other current liabilities | 282.3 | 238.5 | |||||||||
| Total current liabilities | 835.1 | 735.4 | |||||||||
| Non-current liabilities | |||||||||||
| Debt, less current portion | 2,194.3 | 2,196.3 | |||||||||
| Post-retirement benefit obligations | 60.9 | 68.8 | |||||||||
| Lease liabilities | 129.3 | 124.5 | |||||||||
| Taxes payable | 56.3 | 62.1 | |||||||||
| Deferred income taxes | 40.5 | 49.3 | |||||||||
| Other non-current liabilities | 182.2 | 225.8 | |||||||||
| Total liabilities | 3,498.6 | 3,462.2 | |||||||||
| Shareholders’ equity | |||||||||||
—Shares, par value of $0.01 each - authorized shares: 3,000,000,000; outstanding shares: 253,151,170 (December 31, 2025: authorized shares: 3,000,000,000; outstanding shares: 253,543,540) |
2.5 | 2.6 | |||||||||
| —Additional paid-in capital | 2,641.3 | 2,633.3 | |||||||||
| —Accumulated other comprehensive loss | (929.2) | (917.1) | |||||||||
| —Treasury shares | — | (37.5) | |||||||||
| —Retained earnings | 1,807.3 | 1,652.7 | |||||||||
| Total shareholders’ equity | 3,521.9 | 3,334.0 | |||||||||
| Non-controlling interests | 372.3 | 355.2 | |||||||||
| Total equity | 3,894.2 | 3,689.2 | |||||||||
| Total liabilities and equity | $ | 7,392.8 | $ | 7,151.4 | |||||||
| Six months ended | |||||||||||
(dollars in millions) |
June 27, 2026 |
June 28, 2025 |
|||||||||
| Cash flows from operating activities | |||||||||||
| Net income | $ | 244.2 | $ | 131.4 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 112.8 | 105.5 | |||||||||
| Foreign exchange and other non-cash financing income | (13.0) | (12.6) | |||||||||
| Share-based compensation expense | 15.7 | 15.7 | |||||||||
| Decrease in post-employment benefit obligations, net | (1.7) | (4.4) | |||||||||
| Deferred income taxes | (113.8) | (11.0) | |||||||||
| Asset impairments | — | 0.8 | |||||||||
| Other operating activities | 2.8 | 5.8 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| —Accounts receivable | (161.6) | (63.5) | |||||||||
| —Inventories | (46.3) | (16.4) | |||||||||
| —Accounts payable | 50.9 | (16.7) | |||||||||
| —Prepaid expenses and other assets | (11.4) | (13.0) | |||||||||
| —Taxes payable | 4.5 | (1.6) | |||||||||
| —Other liabilities | 25.7 | (9.7) | |||||||||
| Net cash provided by operating activities | 108.8 | 110.3 | |||||||||
| Cash flows from investing activities | |||||||||||
| Purchases of property, plant and equipment | (35.0) | (36.9) | |||||||||
| Purchases of intangible assets | (5.2) | (18.7) | |||||||||
| Cash paid under company-owned life insurance policies | (10.8) | (10.4) | |||||||||
| Cash received under company-owned life insurance policies | 8.1 | 2.4 | |||||||||
| Proceeds from the sale of property, plant and equipment | 1.5 | 2.1 | |||||||||
| Other investing activities | (0.4) | (0.5) | |||||||||
| Net cash used in investing activities | (41.8) | (62.0) | |||||||||
| Cash flows from financing activities | |||||||||||
| Issuance of shares | 2.5 | 4.7 | |||||||||
| Repurchase of shares | (38.7) | (13.0) | |||||||||
| Payments of long-term debt | (4.7) | (9.4) | |||||||||
| Employee taxes paid from shares withheld | (8.7) | (16.9) | |||||||||
| Dividends paid to non-controlling interests | — | (3.5) | |||||||||
| Other financing activities | (1.2) | 4.7 | |||||||||
| Net cash used in financing activities | (50.8) | (33.4) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | (4.7) | 23.1 | |||||||||
| Net increase in cash and cash equivalents and restricted cash | 11.5 | 38.0 | |||||||||
| Cash and cash equivalents and restricted cash at the beginning of the period | 815.0 | 684.8 | |||||||||
| Cash and cash equivalents and restricted cash at the end of the period | $ | 826.5 | $ | 722.8 | |||||||
| Supplemental schedule of cash flow information | |||||||||||
| Interest paid | $ | 52.0 | $ | 56.8 | |||||||
| Income taxes paid | $ | 39.3 | $ | 54.7 | |||||||
| Accrued capital expenditures | $ | 1.8 | $ | 0.9 | |||||||
| Three months ended | Six months ended | ||||||||||||||||||||||
(USD in millions) |
June 27, 2026 | June 28, 2025 | June 27, 2026 | June 28, 2025 | |||||||||||||||||||
| Net income from continuing operations before taxes | $ | 178.2 | $ | 63.4 | $ | 244.6 | $ | 132.0 | |||||||||||||||
| Adjusted for: | |||||||||||||||||||||||
| Income tax (benefit) expense | (78.0) | 16.8 | (66.5) | 42.0 | |||||||||||||||||||
| Interest expense | 30.0 | 28.8 | 59.9 | 58.4 | |||||||||||||||||||
| Depreciation and amortization | 57.1 | 53.3 | 112.8 | 105.5 | |||||||||||||||||||
Transaction-related expenses (1)
|
3.1 | — | 3.6 | 0.4 | |||||||||||||||||||
| Asset impairments | — | 0.2 | — | 0.8 | |||||||||||||||||||
| Restructuring expenses | 0.7 | 13.0 | 1.4 | 14.6 | |||||||||||||||||||
| Share-based compensation expense | 9.4 | 9.6 | 15.7 | 15.7 | |||||||||||||||||||
Inventory adjustments (2) (included in cost of sales)
|
3.6 | 4.0 | 7.6 | 3.0 | |||||||||||||||||||
| Restructuring related expenses (included in cost of sales) | 4.0 | 1.2 | 6.5 | 2.4 | |||||||||||||||||||
| Restructuring related expenses (included in SG&A) | 5.3 | 3.1 | 6.6 | 4.6 | |||||||||||||||||||
Other (income) expenses, excluding foreign currency transaction gain or loss and insurance recoveries(3)
|
(2.0) | 5.8 | (3.4) | 7.1 | |||||||||||||||||||
| Adjusted EBITDA | $ | 211.4 | $ | 199.2 | $ | 388.8 | $ | 386.5 | |||||||||||||||
| Net Sales | $ | 941.6 | $ | 883.7 | $ | 1,792.7 | $ | 1,731.3 | |||||||||||||||
| Net income from continuing operations margin | 18.9 | % | 7.2 | % | 13.6 | % | 7.6 | % | |||||||||||||||
| Adjusted EBITDA margin | 22.5 | % | 22.5 | % | 21.7 | % | 22.3 | % | |||||||||||||||
| (1) | Transaction-related expenses relate primarily to advisory fees and other costs recognized in respect of major corporate transactions, including the acquisition of businesses, and equity and debt transactions. | ||||
| (2) | Inventory adjustments include the reversal of the adjustment to remeasure certain inventories on a Last-in-First-out (“LIFO”) basis. | ||||
| (3) |
Other(income) expenses excludes foreign currency transaction losses of $1.5 million and $4.3 million and insurance losses of $1.8 million and $2.5 million during the three and six months ended June 27, 2026, respectively, and foreign currency transaction losses of $1.0 million and $2.1 million during the three and six months ended June 28, 2025, respectively.
|
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| Three months ended | Six months ended | ||||||||||||||||||||||
(USD in millions, except share numbers and per share amounts) |
June 27, 2026 | June 28, 2025 | June 27, 2026 | June 28, 2025 | |||||||||||||||||||
| Net income attributable to shareholders | $ | 170.9 | $ | 56.5 | $ | 230.6 | $ | 118.5 | |||||||||||||||
| Adjusted for: | |||||||||||||||||||||||
| Loss on disposal of discontinued operations | 0.2 | 0.3 | 0.4 | 0.6 | |||||||||||||||||||
| Amortization of intangible assets arising from the 2014 acquisition of Gates | 29.6 | 29.0 | 58.9 | 57.3 | |||||||||||||||||||
Transaction-related expenses (1)
|
3.1 | — | 3.6 | 0.4 | |||||||||||||||||||
| Asset impairments | — | 0.2 | — | 0.8 | |||||||||||||||||||
| Restructuring expenses | 0.7 | 13.0 | 1.4 | 14.6 | |||||||||||||||||||
| Restructuring related expenses (included in cost of sales) | 4.0 | 1.2 | 6.5 | 2.4 | |||||||||||||||||||
| Restructuring related expenses (included in SG&A) | 5.3 | 3.1 | 6.6 | 4.6 | |||||||||||||||||||
| Share-based compensation expense | 9.4 | 9.6 | 15.7 | 15.7 | |||||||||||||||||||
Inventory adjustments (2) (included in cost of sales)
|
3.6 | 4.0 | 7.6 | 3.0 | |||||||||||||||||||
| Adjustments relating to post-retirement benefits | 0.1 | 0.5 | 5.5 | 0.9 | |||||||||||||||||||
| Financing and other FX related losses | 1.3 | 7.8 | (3.3) | 11.0 | |||||||||||||||||||
Discrete tax items (3)
|
(100.7) | (7.2) | (107.0) | (7.1) | |||||||||||||||||||
| Other adjustments | (1.7) | (1.5) | (3.1) | (2.8) | |||||||||||||||||||
| Estimated tax effect of the above adjustments | (13.3) | (15.4) | (22.2) | (24.9) | |||||||||||||||||||
| Adjusted Net Income | $ | 112.5 | $ | 101.1 | $ | 201.2 | $ | 195.0 | |||||||||||||||
| Diluted weighted-average number of shares outstanding | 256,135,551 | 260,469,532 | 256,417,931 | 261,005,482 | |||||||||||||||||||
| Adjusted Net Income per diluted share | $ | 0.44 | $ | 0.39 | $ | 0.78 | $ | 0.75 | |||||||||||||||
| (1) | Transaction-related expenses related primarily to advisory fees and other costs recognized in respect of major corporate transactions, including the acquisition of businesses, and equity and debt transactions. | ||||
| (2) | Inventory adjustments include the reversal of the adjustment to remeasure certain inventories on a Last-in-First-out (“LIFO”) basis. | ||||
| (3) | Discrete tax items include changes in uncertain tax positions relating to prior years, changes in tax laws or rates, changes in valuation allowances, excess tax benefits on stock option exercises, and prior year adjustments in various foreign jurisdictions in which returns were filed. | ||||
| Three months ended | Six months ended | |||||||||||||||||||||||||
(USD in millions) |
June 27, 2026 | June 28, 2025 | June 27, 2026 | June 28, 2025 | ||||||||||||||||||||||
| Net sales | $ | 941.6 | $ | 883.7 | $ | 1,792.7 | $ | 1,731.3 | ||||||||||||||||||
| Cost of sales | 555.5 | 523.5 | 1,068.6 | 1,026.5 | ||||||||||||||||||||||
| Gross Profit | 386.1 | 360.2 | 724.1 | 704.8 | ||||||||||||||||||||||
Inventory adjustments (1) (included in cost of sales)
|
||||||||||||||||||||||||||
| Restructuring related expenses (included in cost of sales) | 3.6 | 4.0 | 7.6 | 3.0 | ||||||||||||||||||||||
| Adjusted Gross Profit | 4.0 | 1.2 | 6.5 | 2.4 | ||||||||||||||||||||||
| $ | 393.7 | $ | 365.4 | $ | 738.2 | $ | 710.2 | |||||||||||||||||||
| Gross Profit margin | ||||||||||||||||||||||||||
| Adjusted Gross Profit margin | 41.0% | 40.8% | 40.4% | 40.7% | ||||||||||||||||||||||
| 41.8% | 41.3% | 41.2% | 41.0% | |||||||||||||||||||||||
| (1) | Inventory adjustments include the reversal of the adjustment to remeasure certain inventories on a Last-in-First-out (“LIFO”) basis. | ||||
| Three months ended June 27, 2026 | |||||||||||||||||
(dollars in millions) |
Power Transmission | Fluid Power | Total | ||||||||||||||
| Net sales for the three months ended June 27, 2026 | $ | 588.5 | $ | 353.1 | $ | 941.6 | |||||||||||
| Impact on net sales of movements in currency rates | (9.5) | (5.5) | (15.0) | ||||||||||||||
| Core sales for the three months ended June 27, 2026 | $ | 579.0 | $ | 347.6 | $ | 926.6 | |||||||||||
| Net sales for the three months ended June 28, 2025 | 550.1 | 333.6 | 883.7 | ||||||||||||||
| Increase in net sales | $ | 38.4 | $ | 19.5 | $ | 57.9 | |||||||||||
| Increase in net sales on a core basis (core sales) | $ | 28.9 | $ | 14.0 | $ | 42.9 | |||||||||||
| Net sales increase | 7.0 | % | 5.8 | % | 6.6 | % | |||||||||||
| Core sales increase | 5.3 | % | 4.2 | % | 4.9 | % | |||||||||||
| Six months ended June 27, 2026 | |||||||||||||||||
(dollars in millions) |
Power Transmission | Fluid Power | Total | ||||||||||||||
| Net sales for the six months ended June 27, 2026 | $ | 1,121.7 | $ | 671.0 | $ | 1,792.7 | |||||||||||
| Impact on net sales of movements in currency rates | (28.7) | (14.2) | (42.9) | ||||||||||||||
| Core sales for the six months ended June 27, 2026 | $ | 1,093.0 | $ | 656.8 | $ | 1,749.8 | |||||||||||
| Net sales for the nine months ended | |||||||||||||||||
| Net sales for the six months ended June 28, 2025 | 1,077.3 | 654.0 | 1,731.3 | ||||||||||||||
| Increase in net sales | $ | 44.4 | $ | 17.0 | $ | 61.4 | |||||||||||
| Increase in net sales on a core basis (core sales) | $ | 15.7 | $ | 2.8 | $ | 18.5 | |||||||||||
| Net sales increase | 4.1 | % | 2.6 | % | 3.5 | % | |||||||||||
| Core sales increase | 1.5 | % | 0.4 | % | 1.1 | % | |||||||||||