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  4. [8-K] Gates Industrial Corp Ltd. Reports Material Event

Gates Industrial sets 2026 adjusted EPS at $1.66–$1.72

Updated full-year 2026 guidance lists adjusted EBITDA of $809 million to $823 million and adjusted EPS of $1.66 to $1.72.

Filing Impact
(High)
Filing Sentiment

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Form Type
8-K

Rhea-AI Filing Summary

Gates Industrial Corp Ltd. (GTES) reported third-quarter 2026 net sales of $903.6 million, up 5.6% from a year earlier, with core sales growth of 5.5%. Net income attributable to shareholders was $86.5 million, compared with $81.6 million, and diluted earnings per share were $0.34, versus $0.31. Net income from continuing operations was $91.6 million, a 10.1% margin. Adjusted EBITDA was $215.4 million, a 23.8% margin, compared with $195.8 million and 22.9% a year earlier.

Updated full-year 2026 guidance sets adjusted EBITDA at $809 million to $823 million, with a stated $1 million increase at midpoint, and adjusted EPS at $1.66 to $1.72, with a $0.03 midpoint increase. Core sales growth guidance is 3.2% to 3.8%; capital expenditures are approximately $120 million and free cash flow conversion is 90% or higher, both unchanged. For the nine months ended September 26, 2026, operating cash flow was $170.0 million, compared with $208.3 million in the prior-year period.

2 points · 0 major

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Positive

  • Moderate pointThird-quarter net sales increased 5.6% to $903.6 million year over year.
  • Moderate pointThird-quarter adjusted EBITDA rose from $195.8 million to $215.4 million.

Negative

  • Moderate pointNine-month operating cash flow fell to $170.0 million from $208.3 million.

Filing Explained

At September 26, 2026, Gates had fewer shares outstanding than at year-end, while its 2026 non-GAAP guidance has no GAAP reconciliation.

At September 26, 2026, Gates reported 251,130,549 shares outstanding, versus 253,543,540 at December 31, 2025; for an unchanged holding, a lower total share count means a larger ownership percentage, all else equal.

For the nine months ended September 26, 2026, the cash-flow statement lists share repurchases and share issuance.

The company says it has not reconciled its 2026 forward-looking non-GAAP guidance to GAAP because GAAP measures are not accessible and reconciliation information is unavailable without unreasonable effort; it also says it cannot address the probable significance of that information, which could be material.

Item 2.02 Results of Operations and Financial Condition Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Net sales $903.6 million Third quarter 2026 ended September 26, 2026
Net sales growth 5.6% Third quarter 2026 compared with the prior-year period
Net income attributable to shareholders $86.5 million Third quarter 2026; $81.6 million in the prior-year period
Diluted earnings per share $0.34 Third quarter 2026; $0.31 in the prior-year period
Adjusted EBITDA $215.4 million Third quarter 2026; $195.8 million in the prior-year period
Operating cash flow $170.0 million Nine months ended September 26, 2026; $208.3 million in the prior-year period
2026 adjusted EBITDA guidance $809 million to $823 million Updated full-year guidance; stated midpoint change of +$1 million
2026 adjusted EPS guidance $1.66 to $1.72 Updated full-year guidance; stated midpoint change of +$0.03
Adjusted EBITDA financial
"Adjusted EBITDA as its key profitability measure"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Core sales financial
"Core sales is a non-GAAP measure"
Core sales are the revenue generated by a company's main, ongoing business activities after removing one-time or unusual items such as proceeds from asset sales, discontinued operations, or temporary boosts. Investors care because core sales show the steady, repeatable demand for a company’s products or services—like judging a store by its regular weekly receipts rather than a single big clearance sale—to better assess growth trends and future earnings potential.
Free Cash Flow Conversion financial
"Free Cash Flow Conversion is a measure of Free Cash Flow"
Free cash flow conversion measures how effectively a company turns its reported profits into actual cash that can be used for growth, debt repayment, or dividends. It compares the cash generated after expenses to the company's net income, similar to how a person might compare their savings to their paycheck. High conversion indicates the company is efficient at translating profits into cash, which is important for investors assessing its financial health and flexibility.
LIFO financial
"Last-in-First-out (“LIFO”) basis"
An accounting method that assumes the most recently acquired inventory items are sold first, so the newest costs flow into cost of goods sold while older costs stay on the balance sheet. Imagine a stack of boxes where you take from the top; when prices are rising, that top-first approach produces higher reported costs and lower reported profits, which can reduce taxes and change profit margins. Investors watch LIFO because it affects reported earnings, tax liabilities, and how comparable a company’s performance is to peers.
Net sales $903.6 million +5.6% year over year
Net income attributable to shareholders $86.5 million Compared with $81.6 million in the prior-year period
Diluted earnings per share $0.34 Compared with $0.31 in the prior-year period
Adjusted EBITDA $215.4 million Compared with $195.8 million in the prior-year period
Adjusted EBITDA margin 23.8% Compared with 22.9% in the prior-year period
Guidance

Updated full-year 2026 guidance: Core sales growth 3.2% to 3.8%; adjusted EBITDA $809 million to $823 million, with a +$1 million midpoint change; adjusted EPS $1.66 to $1.72, with a +$0.03 midpoint change; capital expenditures approximately $120 million; free cash flow conversion 90%+.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were GTES's third-quarter 2026 sales and earnings?
GTES reported $903.6 million in net sales for the quarter ended September 26, 2026, up 5.6% from the prior-year quarter. Net income attributable to shareholders was $86.5 million, and diluted earnings per share were $0.34.

What is GTES's updated 2026 guidance?
Updated full-year 2026 guidance lists adjusted EBITDA of $809 million to $823 million and adjusted EPS of $1.66 to $1.72. The stated midpoint increases are $1 million and $0.03, respectively.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Available on EDGAR Accepted by SEC EDGAR
0001718512FALSE00017185122026-10-302026-10-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): October 30, 2026
Gates Industrial Corporation Ltd.
(Exact Name of Registrant as Specified in its Charter)
Bermuda001-3836698-1950337
(State or Other Jurisdiction of(Commission File Number)(IRS Employer
Incorporation)Identification No.)
1144 Fifteenth Street, Denver, Colorado 80202
(Address of Principal Executive Offices) (Zip Code)
(303) 744-1911
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐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))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares, $0.01 par value per shareGTESNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨



Item 2.02    Results of Operations and Financial Condition
On October 30, 2026, Gates Industrial Corporation Ltd. announced its financial results for the third quarter of 2026 ended September 26, 2026. A copy of the press release is furnished as Exhibit 99.1 to this report.
The information furnished under this Item 2.02, including Exhibit 99.1, will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be set forth by specific reference in that filing.

Item 9.01    Financial Statements and Exhibits

Exhibits
Exhibit No.Description
99.1
Press release dated October 30, 2026
104Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

GATES INDUSTRIAL CORPORATION LTD.
By:/s/ L. Brooks Mallard
Name:L. Brooks Mallard
Title:Chief Financial Officer
Date: October 30, 2026



Gates Industrial Reports Third-Quarter 2026 Results
gatescorpimagea05.jpg
Denver, CO, October 30, 2026
Third-Quarter 2026 Financial Summary
◦Third-quarter net sales of $903.6 million, up 5.6% compared to the prior-year period, including a core sales increase of 5.5%.
◦Net income attributable to shareholders of $86.5 million, or $0.34 per diluted share.
◦Adjusted Net Income per diluted share of $0.47.
◦Net income from continuing operations of $91.6 million, or a margin of 10.1%.
◦Adjusted EBITDA of $215.4 million, or a margin of 23.8%.
◦Increasing 2026 guidance.
Gates Industrial Corporation Ltd. (NYSE:GTES), a leading global provider of application-specific fluid power and power transmission solutions, today reported results for the third quarter ended September 26, 2026.

Ivo Jurek, Gates Industrial’s Chief Executive Officer, commented, “Our team executed well during the third quarter, resulting in mid-single digit sales growth and a significant gross profit margin increase compared to the prior year period. Sales in our Industrial OEM channel increased high-teens and year-over-year growth in our Industrial Aftermarket channel accelerated relative to last quarter.”

Jurek continued, “We have raised our 2026 guidance for profitability and adjusted earnings per share. We are on pace to achieve our previously communicated adjusted EBITDA margin target for the second half of 2026 and our balance sheet provides us with significant capital deployment optionality. I appreciate the effort and commitment of the global Gates teams to achieving new records for the company.”
Power Transmission Segment Results
Three months ended
(USD in millions)September 26, 2026September 27, 2025% Change% Core Change
Net sales$560.1$533.35.0%5.2%
Adjusted EBITDA$137.1$122.112.3%
Adjusted EBITDA margin24.5%22.9%160 bps
Nine months ended
(USD in millions)September 26, 2026September 27, 2025% Change% Core Change
Net sales$1,681.8$1,610.64.4%2.7%
Adjusted EBITDA$383.9$361.66.2%
Adjusted EBITDA margin22.8%22.5%30 bps
1

Fluid Power Segment Results
Three months ended
(USD in millions)September 26, 2026September 27, 2025% Change% Core Change
Net sales$343.5$322.46.5%6.1%
Adjusted EBITDA$78.3$73.76.2%
Adjusted EBITDA margin22.8%22.9%(10 bps)
Nine months ended
(USD in millions)September 26, 2026September 27, 2025% Change% Core Change
Net sales$1,014.5$976.43.9%2.3%
Adjusted EBITDA$220.3$220.7(0.2%)
Adjusted EBITDA margin21.7%22.6%(90 bps)
2026 Guidance
The Company is raising its full year 2026 financial guidance. The table below reflects our updated full year 2026 financial guidance.
Prior 2026Updated 2026Change (At Midpoint)
Core Sales Growth
2.5% to 4.5%3.2% to 3.8%No Change
Adjusted EBITDA
$800 to $830 Million$809 to $823 Million + $1 Million
Adjusted EPS
$1.62 to $1.70$1.66 to $1.72+ $0.03
Capital Expenditures
~$120 Million~$120 MillionNo Change
Free Cash Flow Conversion
90%+90%+No Change
Share-based metrics in the Company’s guidance do not include the effect of any potential share repurchases.
Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures, including expected Core Sales Growth, Adjusted EBITDA, Adjusted Earnings per Share and Free Cash Flow conversion for 2026. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.
Conference Call and Webcast
Gates Industrial Corporation Ltd. will host a conference call today at 10:00 a.m. Eastern Time to discuss the Company’s financial results. The live webcast of the conference call and accompanying presentation materials can be accessed through Gates Industrial’s website at investors.gates.com. For those unable to access the webcast, the conference call can be accessed by dialing (888) 414-4601 (domestic) or +1 (646) 960-0313 (international) and requesting the Gates Industrial Corporation Third-Quarter 2026 Earnings Conference Call or providing the Conference ID of 5772067. An audio replay of the conference call can be accessed by dialing (800) 770-2030 (domestic) or +1 (647) 362-9199 (international), and providing the passcode 5772067, or by accessing Gates Industrial’s website at investors.gates.com.
2

About Gates Industrial Corporation Ltd.
Gates is a global manufacturer of innovative, highly engineered power transmission and fluid power solutions. Gates offers a broad portfolio of products to diverse aftermarket channel customers, and to original equipment manufacturers as specified components. Gates participates in many sectors of the industrial and consumer markets. Our products play essential roles in a diverse range of applications across a wide variety of end markets ranging from harsh and hazardous industries such as agriculture, construction, manufacturing and energy, to everyday consumer applications such as printers, power washers, automatic doors and vacuum cleaners and virtually every form of transportation. Our products are sold in more than 130 countries across our three commercial regions: the Americas; Europe, Middle East & Africa; and Asia Pacific.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,” “intends,” “trends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. These statements include, but are not limited to, statements related to expectations regarding the performance of the Company’s business and financial results, our ability to capitalize on demand, anticipated sales and margin growth, our capital allocation optionality and statements regarding our outlook for 2026. Such forward-looking statements are subject to various risks and uncertainties, including, among others, U.S. policies, actions or legislation (including the imposition of tariffs), economic, political and other risks associated with international operations (including as a result of the ongoing conflicts in the Middle East and their impact on supply chains, such as reduced availability of certain of our production materials and increased supply costs, and economic conditions), availability of raw materials or other manufacturing inputs at favorable prices in sufficient quantities, or at a given time, changes in our relationships with, or the financial condition, performance, purchasing power or inventory levels of, key channel partners, dependence on the continued operation of our manufacturing facilities, supply chains, distribution systems and information technology systems, our ability to forecast demand or meet significant increases in demand and market acceptance of new product introductions and innovations. Additional factors that could cause the Company’s results to differ materially from those described in the forward-looking statements can be found under the section entitled “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and Quarterly Report on Form 10-Q for the quarter ended June 27, 2026, each as filed with the Securities and Exchange Commission (the “SEC”), as such factors may be updated from time to time in the Company’s periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in the Company’s filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

3

Gates Industrial Corporation Ltd.
Condensed Consolidated Statements of Operations
(Unaudited)
Three months endedNine months ended
(USD in millions, except per share amounts)
September 26, 2026September 27, 2025September 26, 2026September 27, 2025
Net sales$903.6 $855.7 $2,696.3 $2,587.0 
Cost of sales520.3 514.1 1,588.9 1,540.6 
Gross profit383.3 341.6 1,107.4 1,046.4 
Selling, general and administrative expenses247.4 219.2 725.0 666.6 
Transaction-related expenses4.0 0.1 7.6 0.5 
Asset impairments— 0.4 — 1.2 
Restructuring expenses0.6 6.5 2.0 21.1 
Operating income from continuing operations131.3 115.4 372.8 357.0 
Interest expense30.5 34.9 90.4 93.3 
Other income(7.5)(14.3)(4.0)(5.1)
Income from continuing operations before taxes108.3 94.8 286.4 268.8 
Income tax expense (benefit)16.7 6.1 (49.8)48.1 
Net income from continuing operations91.6 88.7 336.2 220.7 
Loss on disposal of discontinued operations0.2 0.1 0.6 0.7 
Net income91.4 88.6 335.6 220.0 
Less: non-controlling interests4.9 7.0 18.5 19.9 
Net income attributable to shareholders$86.5 $81.6 $317.1 $200.1 
Earnings per share
Basic
Earnings per share from continuing operations$0.34 $0.32 $1.25 $0.78 
Earnings per share from discontinued operations— — — — 
Earnings per share$0.34 $0.32 $1.25 $0.78 
Diluted
Earnings per share from continuing operations$0.34 $0.31 $1.24 $0.77 
Earnings per share from discontinued operations— — — — 
Earnings per share$0.34 $0.31 $1.24 $0.77 

4

Gates Industrial Corporation Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)
(USD in millions, except share numbers and per share amounts)
As of
September 26, 2026		As of
December 31, 2025
Assets
Current assets
Cash and cash equivalents$830.8 $812.1 
Trade accounts receivable, net 885.8 744.2 
Inventories812.9 700.0 
Taxes receivable40.0 43.4 
Prepaid expenses and other assets190.7 181.8 
Total current assets2,760.2 2,481.5 
Non-current assets
Property, plant and equipment, net597.6 609.0 
Goodwill2,025.6 2,035.2 
Pension surplus6.8 7.6 
Intangible assets, net1,092.7 1,192.4 
Right-of-use assets140.6 137.1 
Taxes receivable31.1 5.4 
Deferred income taxes728.6 640.0 
Other non-current assets51.3 43.2 
Total assets$7,434.5 $7,151.4 
Liabilities and equity
Current liabilities
Debt, current portion$30.0 $36.2 
Trade accounts payable441.9 433.7 
Taxes payable33.7 27.0 
Accrued expenses and other current liabilities304.3 238.5 
Total current liabilities809.9 735.4 
Non-current liabilities
Debt, less current portion2,190.9 2,196.3 
Post-retirement benefit obligations58.4 68.8 
Lease liabilities125.0 124.5 
Taxes payable72.2 62.1 
Deferred income taxes40.9 49.3 
Other non-current liabilities196.3 225.8 
Total liabilities3,493.6 3,462.2 
Shareholders’ equity
—Shares, par value of $0.01 each - authorized shares: 3,000,000,000; outstanding shares: 251,130,549 (December 31, 2025: authorized shares: 3,000,000,000; outstanding shares: 253,543,540)
2.5 2.6 
—Additional paid-in capital2,651.9 2,633.3 
—Accumulated other comprehensive loss(932.0)(917.1)
—Treasury shares— (37.5)
—Retained earnings1,836.4 1,652.7 
Total shareholders’ equity3,558.8 3,334.0 
Non-controlling interests382.1 355.2 
Total equity3,940.9 3,689.2 
Total liabilities and equity$7,434.5 $7,151.4 
5

Gates Industrial Corporation Ltd.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine months ended
(dollars in millions)
September 26,
2026		September 27,
2025
Cash flows from operating activities
Net income$335.6 $220.0 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization169.2 159.1 
Foreign exchange and other non-cash financing income(26.0)(20.3)
Share-based compensation expense24.3 22.4 
Decrease in post-employment benefit obligations, net(4.4)(13.1)
Deferred income taxes(115.9)(6.3)
Asset impairments— 1.2 
Gain on disposal of property, plant and equipment0.1 0.2 
Other operating activities5.2 4.7 
Changes in operating assets and liabilities:
—Accounts receivable(144.5)(71.4)
—Inventories(118.0)(6.7)
—Accounts payable8.1 (40.9)
—Prepaid expenses and other assets9.5 0.9 
—Taxes payable(1.0)(30.7)
—Other liabilities27.8 (10.8)
Net cash provided by operating activities170.0 208.3 
Cash flows from investing activities
Purchases of property, plant and equipment(53.8)(54.4)
Purchases of intangible assets(8.6)(26.0)
Cash paid under company-owned life insurance policies(11.0)(10.4)
Cash received under company-owned life insurance policies9.4 2.4 
Proceeds from the sale of property, plant and equipment1.0 2.2 
Settlement of net investment hedges15.9 — 
Other investing activities— (0.7)
Net cash used in investing activities(47.1)(86.9)
Cash flows from financing activities
Issuance of shares 3.5 9.8 
Repurchase of shares(96.1)(13.0)
Payments of long-term debt(9.4)(114.1)
Employee taxes paid from shares withheld(8.7)(20.1)
Dividends paid to non-controlling interests(2.5)(6.5)
Other financing activities7.8 9.0 
Net cash used in financing activities(105.4)(134.9)
Effect of exchange rate changes on cash and cash equivalents and restricted cash1.3 21.0 
Net increase in cash and cash equivalents and restricted cash18.8 7.5 
Cash and cash equivalents and restricted cash at the beginning of the period815.0 684.8 
Cash and cash equivalents and restricted cash at the end of the period$833.8 $692.3 
Supplemental schedule of cash flow information
Interest paid$90.4 $95.9 
Income taxes paid$65.0 $84.4 
Accrued capital expenditures$2.5 $2.2 
6

Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures, which management believes are useful to investors, securities analysts and other interested parties. Management uses Adjusted EBITDA as its key profitability measure. This is a non-GAAP measure that represents EBITDA before certain items that impact comparison of the performance of our business either period-over-period or with other businesses. We use Adjusted EBITDA as our measure of segment profitability to assess the performance of our businesses, and it is used for consolidated Gates as well because we believe it is important to consider our total profitability on a basis that is consistent with that of our operating segments. Adjusted EBITDA margin is Adjusted EBITDA for a particular period expressed as a percentage of net sales for that period.
Management uses Adjusted Net Income as an additional measure of profitability. Adjusted Net Income is a non-GAAP measure that represents net income attributable to shareholders before certain items that impact comparison of the performance of our business, either period-over-period or with other businesses. Beginning with the three months ended June 29, 2024, we revised our definition of Adjusted Net Income to adjust for discrete tax items, which are significant, unusual or infrequently occurring tax items. We have revised the prior period amounts to conform to our current period presentation.
Management uses Adjusted Gross Profit as an additional measure of operating performance. Adjusted Gross Profit is a non-GAAP measure that represents gross profit before certain items that impact the comparability of our results, such as restructuring costs and inventory adjustments, specific to the remeasurement of certain inventories on a Last-in-First-out (“LIFO”) basis. Adjusted Gross Profit margin is Adjusted Gross Profit expressed as a percentage of net sales. We use Adjusted Gross Profit and Adjusted Gross Profit margin because they provide insight into the underlying profitability of our core operations by excluding items that are not indicative of ongoing business performance.
Core sales is a non-GAAP measure that represents net sales for the period excluding the impacts of movements in average currency exchange rates and the first-year impacts of acquisitions and disposals, when applicable. Core sales growth is the change in core sales expressed as a percentage of prior period net sales. We present core sales growth because it allows for a meaningful comparison of year-over-year performance without the volatility caused by foreign currency gains or losses, or the incomparability that would be caused by the impact of an acquisition or disposal.
Management uses Free Cash Flow to measure cash generation. Free Cash Flow is a non-GAAP measure that represents net cash provided by operations less capital expenditures. Free Cash Flow Conversion is a measure of Free Cash Flow expressed as a percentage of Adjusted Net Income. We use this metric as a measure of the success of our business in converting Adjusted Net Income into cash.
These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP. Please see below for a reconciliation of historical non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP.
7

Gates Industrial Corporation Ltd.
Reconciliation of Net Income from Continuing Operations to Adjusted EBITDA
(Unaudited)
Three months endedNine months ended
(USD in millions)
September 26, 2026September 27, 2025September 26, 2026September 27, 2025
Net income from continuing operations before taxes$91.6 $88.7 $336.2 $220.7 
Adjusted for:
Income tax expense (benefit) 16.7 6.1 (49.8)48.1 
Interest expense30.5 34.9 90.4 93.3 
Depreciation and amortization56.4 53.6 169.2 159.1 
Transaction-related expenses (1)
4.0 0.1 7.6 0.5 
Asset impairments— 0.4 — 1.2 
Restructuring expenses 0.6 6.5 2.0 21.1 
Share-based compensation expense8.6 6.7 24.3 22.4 
Inventory adjustments (2) (included in cost of sales)
1.8 2.6 9.4 5.6 
Restructuring related expenses (included in cost of sales)5.5 2.1 12.0 4.5 
Restructuring related expenses (included in SG&A)8.2 3.7 14.8 8.3 
Cybersecurity incident insurance recovery (3)
— (5.2)— (5.2)
Other (income) expenses, excluding foreign currency transaction gain or loss and insurance recoveries(4)
(8.5)(4.4)(11.9)2.7 
Adjusted EBITDA$215.4 $195.8 $604.2 $582.3 
Net Sales$903.6 $855.7 $2,696.3 $2,587.0 
Net income from continuing operations margin10.1 %10.4 %12.5 %8.5 %
Adjusted EBITDA margin23.8 %22.9 %22.4 %22.5 %
(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)
In July 2025, we received insurance recoveries related to a previously disclosed cybersecurity incident that occurred in February 2023 for which we previously excluded $5.2 million of expenses from Adjusted EBITDA.
(4)
Other (income) expenses excludes foreign currency transaction (gains) losses of $(1.1) million and $3.2 million and insurance losses of $2.2 million and $4.7 million during the three and nine months ended September 26, 2026, respectively, and foreign currency transaction losses and insurance recoveries of $9.9 million and $7.8 million during the three and nine months ended September 27, 2025, respectively.



8

Gates Industrial Corporation Ltd.
Reconciliation of Net Income Attributable to Shareholders to Adjusted Net Income
(Unaudited)
Three months endedNine months ended
(USD in millions, except share numbers and per share amounts)
September 26, 2026September 27, 2025September 26, 2026September 27, 2025
Net income attributable to shareholders$86.5 $81.6 $317.1 $200.1 
Adjusted for:
Loss on disposal of discontinued operations0.2 0.1 0.6 0.7 
Amortization of intangible assets arising from the 2014 acquisition of Gates29.5 29.2 88.4 86.5 
Transaction-related expenses (1)
4.0 0.1 7.6 0.5 
Asset impairments— 0.4 — 1.2 
Restructuring expenses0.6 6.5 2.0 21.1 
Restructuring related expenses (included in cost of sales)5.5 2.1 12.0 4.5 
Restructuring related expenses (included in SG&A)8.2 3.7 14.8 8.3 
Share-based compensation expense8.6 6.7 24.3 22.4 
Inventory adjustments (2) (included in cost of sales)
1.8 2.6 9.4 5.6 
Adjustments relating to post-retirement benefits0.2 0.4 5.7 1.3 
Financing and other FX related losses(6.4)(2.7)(9.7)8.3 
Cybersecurity incident insurance recovery (3)
— (5.2)— (5.2)
Discrete tax items (4)
(6.5)(13.5)(113.5)(20.6)
Other adjustments(1.1)(1.8)(4.2)(4.6)
Estimated tax effect of the above adjustments(11.6)(9.5)(33.8)(34.4)
Adjusted Net Income$119.5 $100.7 $320.7 $295.7 
Diluted weighted-average number of shares outstanding255.6 261.6 256.0 261.1 
Adjusted Net Income per diluted share$0.47 $0.39 $1.25 $1.13 
(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)In July 2025, we received insurance recoveries related to a previously disclosed cybersecurity incident that occurred in February 2023 for which we previously excluded $5.2 million of expenses from Adjusted Net Income.
(4)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.

9

Gates Industrial Corporation Ltd.
Reconciliation of Gross Profit to Adjusted Gross Profit
(Unaudited)

Three months endedNine months ended
(USD in millions)
September 26, 2026September 27, 2025September 26, 2026September 27, 2025
Net sales$903.6 $855.7 $2,696.3 $2,587.0 
Cost of sales520.3 514.1 1,588.9 1,540.6 
Gross Profit383.3 341.6 1,107.4 1,046.4 
Inventory adjustments (1) (included in cost of sales)
1.8 2.6 9.4 5.6 
Restructuring related expenses (included in cost of sales)5.5 2.1 12.0 4.5 
Adjusted Gross Profit$390.6 $346.3 $1,128.8 $1,056.5 
Gross Profit margin 42.4%39.9%41.1%40.4%
Adjusted Gross Profit margin43.2%40.5%41.9%40.8%

(1)Inventory adjustments include the reversal of the adjustment to remeasure certain inventories on a Last-in-First-out (“LIFO”) basis.
10

Gates Industrial Corporation Ltd.
Reconciliation of Net Sales to Core Sales Growth
(Unaudited)
Three months ended September 26, 2026
(dollars in millions)
Power TransmissionFluid PowerTotal
Net sales for the three months ended September 26, 2026$560.1 $343.5 $903.6 
Impact on net sales of movements in currency rates0.8 (1.4)(0.6)
Core sales for the three months ended September 26, 2026$560.9 $342.1 $903.0 
Net sales for the three months ended September 27, 2025533.3 322.4 855.7 
Increase in net sales$26.8 $21.1 $47.9 
Increase in net sales on a core basis (core sales)$27.6 $19.7 $47.3 
Net sales increase5.0%6.5%5.6%
Core sales increase 5.2%6.1%5.5%

Nine months ended September 26, 2026
(dollars in millions)
Power TransmissionFluid PowerTotal
Net sales for the nine months ended September 26, 2026$1,681.8 $1,014.5 $2,696.3 
Impact on net sales of movements in currency rates(27.9)(15.6)(43.5)
Core sales for the nine months ended September 26, 2026$1,653.9 $998.9 $2,652.8 
Net sales for the nine months ended September 27, 2025$1,610.6 $976.4 $2,587.0 
Increase in net sales$71.2 $38.1 $109.3 
Increase in net sales on a core basis (core sales)$43.3 $22.5 $65.8 
Net sales increase 4.4%3.9%4.2%
Core sales increase2.7%2.3%2.5%









Contact
Gates Investor Relations
Rich Kwas
(303) 744-4887
investorrelations@gates.com

11

Source: View Original Filing on SEC EDGAR

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