Gentherm completes Modine business combination
After the closing, former Modine shareholders held approximately 43.62% of Gentherm’s outstanding shares, while prior Gentherm shareholders held approximately 56.38%.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Gentherm completed its combination with Modine Manufacturing’s Performance Technologies business on October 1, 2026. Modine distributed SpinCo shares pro rata; each SpinCo share converted into 0.44619 Gentherm common shares, and Gentherm issued 23,735,961 shares. Former Modine shareholders held approximately 43.62% of Gentherm’s outstanding shares after closing, while prior Gentherm shareholders held approximately 56.38%, excluding overlapping ownership.
SpinCo borrowed $250 million under a delayed draw term loan facility and distributed $156 million to Modine, which used it to repay debt. Gentherm declared a special cash dividend of $2.07 per share, totaling $63,500,492, payable October 7, 2026, to holders of record September 28, 2026. Gentherm and certain domestic subsidiaries guaranteed the loan.
Unaudited carve-out results for Performance Technologies for the quarter ended June 30, 2026 showed net sales of $277.8 million versus $285.5 million and net earnings attributable to the Company of $15.6 million versus $11.8 million. Net cash provided by operating activities was $6.5 million versus $27.7 million. Gentherm increased authorized common shares from 55 million to 110 million and appointed Paul Mascarenas to its board, expanding it from nine to 10 members.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointPerformance Technologies net earnings attributable to the Company: $15.6 million, versus $11.8 million.
Negative
- Moderate pointPerformance Technologies net cash provided by operating activities fell to $6.5 million from $27.7 million.
Filing Explained
Lenders have security over assets across Gentherm and its subsidiaries, alongside financial tests that apply to Gentherm.
With the combination closed, the credit agreement requires Gentherm to maintain minimum consolidated interest coverage and maximum consolidated net leverage ratios, adding ongoing financial tests at the combined-company level.
The
The loan’s interest can be term SOFR plus a margin of
Gentherm says it will file the required pro forma financial information by amendment no later than 71 calendar days after the date this 8-K is required to be filed.
8-K Event Classification
Key Figures
Key Terms
Reverse Morris Trust financial
delayed draw term loan facility financial
term SOFR financial
carve-out basis financial
consolidated net leverage ratio financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
When is THRM’s special dividend payable, and how much is it?
What interest rates apply to the SpinCo term loan?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
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Indicate by check mark whether the registrant is an emerging growth company 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. ☐
Introductory Note
On October 1, 2026 (the “Closing Date”), Gentherm Incorporated, a Michigan corporation (“Gentherm”), and Modine Manufacturing Company, a Wisconsin corporation (“Modine”), announced that they consummated the previously announced spin-off of Modine’s Performance Technologies business (the “SpinCo Business”) and the combination of the SpinCo Business with Gentherm. In accordance with the terms and conditions of the Agreement and Plan of Merger, dated as of January 29, 2026 (the “Merger Agreement”), by and among Gentherm, Modine, Platinum SpinCo Inc., a Delaware corporation and a wholly owned subsidiary of Modine (“SpinCo”), and Platinum Gold Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Gentherm (“Merger Sub”), and the Separation Agreement, dated as of January 29, 2026 (the “Separation Agreement”), by and among Gentherm, Modine and SpinCo, (1) Modine transferred, and SpinCo accepted and assumed, all of the rights, titles and interests to and under certain assets and liabilities relating to the SpinCo Business such that the SpinCo Business was separated from the remainder of Modine’s businesses (the “Separation”), (2) following the Separation, Modine distributed, on a pro rata basis (the “Distribution”), one share of SpinCo common stock, par value $0.001 per share (“SpinCo Common Stock”) for each share of Modine common stock, par value $0.625 per share (“Modine Common Stock”), held by Modine shareholders as of the close of business on September 28, 2026 (the “Record Date”, and such holders of Modine Common Stock as of the Record Date, the “Record Date Modine Shareholders”), and (3) following the Distribution, Merger Sub merged with and into SpinCo, with SpinCo surviving the Merger as a wholly owned subsidiary of Gentherm under the name “Modine Global, Incorporated” (the “Merger”), and each share of SpinCo Common Stock (except for any such shares held as treasury stock, or held by Modine, SpinCo or any subsidiary of Modine, if any, which shares were canceled) was converted into the right to receive 0.44619 shares of common stock, no par value, of Gentherm (“Gentherm Common Stock”) together with cash in lieu of any fractional share of Gentherm Common Stock (collectively, the “Transactions”).
Pursuant to the terms of the Separation Agreement, prior to the Distribution and the Merger, SpinCo made a cash distribution to Modine of $156 million. In connection with the Transactions, Gentherm also declared a special cash dividend (the “Cash Dividend”) in an aggregate amount equal to $63,500,492, or $2.07 per share of Gentherm Common Stock. The Cash Dividend will be payable in cash on October 7, 2026, to Gentherm shareholders of record as of the close of business on September 28, 2026. As such, Record Date Modine Shareholders who received shares of Gentherm Common Stock in the Merger will not be entitled to the Cash Dividend with respect to shares of Gentherm Common Stock issued on October 1, 2026.
Upon completion of the Transactions, Gentherm issued 23,735,961 shares of Gentherm Common Stock to the Record Date Modine Shareholders. As a result, the Record Date Modine Shareholders owned approximately 43.62% of the outstanding shares of Gentherm Common Stock (without taking into account any overlapping shareholder ownership), and continuing Gentherm shareholders owned approximately 56.38% of the outstanding shares of Gentherm Common Stock (without taking into account any overlapping shareholder ownership). As a result of the Merger, Merger Sub ceased to exist as a separate legal entity, and SpinCo became a wholly owned subsidiary of Gentherm.
| Item 1.01 | Entry into a Material Definitive Agreement. |
Transaction Agreements
On the Closing Date, in connection with the consummation of the Transactions and in accordance with the Merger Agreement and the Separation Agreement, Gentherm, Modine and SpinCo, entered into certain additional agreements, including:
| • | a Tax Matters Agreement (the “Tax Matters Agreement”), which governs the parties’ respective rights, responsibilities and obligations with respect to taxes, tax benefits and attributes, the preparation and filing of tax returns, responsibility for and preservation of the intended tax treatment of the transactions contemplated by the Separation Agreement and certain other tax matters, including imposition of restrictions on the parties with respect to actions that could cause the Separation and the Distribution to fail to qualify for their intended tax treatment and allocation of responsibility among the parties for taxes that may arise if the Transactions fail to qualify for their intended tax treatment; |
| • | an Employee Matters Agreement (the “Employee Matters Agreement”), which governs the parties’ obligations with respect to the transfer of the employment of certain employees of Modine and of the SpinCo Business and other employee-related matters, including allocation among the parties of assets, |
| liabilities and responsibilities related to employee benefit plan and compensation arrangements and with respect to terms of employment, benefit plan transition and coverage and other compensation and labor matters, as well as responsibility for employee and benefit plan liabilities for certain employees of Modine and of the SpinCo Business; |
| • | an Intellectual Property Matters Agreement (the “Intellectual Property Matters Agreement”), which allocates rights and interests in certain intellectual property rights used in the respective businesses of SpinCo and Modine, including a worldwide, fully paid-up, royalty-free, irrevocable, non-exclusive license under the intellectual property (other than trademarks, Internet domain names and social media accounts) owned by the licensor and used in the operation of the licensee’s business to use, make, have made, sell and otherwise exploit the licensee’s products or services in the licensee’s field of business and the improvements, enhancements and natural evolutions and extensions thereof (but excluding the field of the licensor’s business as of the Separation); |
| • | a Transition Services Agreement (the “Transition Services Agreement”), which governs, among other things, the parties’ respective rights and obligations with respect to the provision of certain transition services on a transitional basis following the Closing to facilitate the transition of the SpinCo Business to Gentherm and the operation of Modine’s remaining businesses following the Separation, including Modine’s provision to SpinCo of various services (which may include HR, legal, supply chain, administrative, finance and accounting and IT) for durations anticipated to range from one to three months up to 12 months and SpinCo’s provision to Modine of certain IT-related services for durations anticipated to range up to 12 months; and |
| • | a Trademark Matters Agreement (the “Trademark Matters Agreement”), which grants to Modine a royalty-free license to use the “Modine” trademark to advertise, market, distribute and sell certain products and services for Modine’s commercial, industrial, and building heating, ventilation, air conditioning, and refrigeration (“HVAC&R”) and heat transfer products businesses, with the license in the field of Modine’s HVAC&R business to be exclusive for the first four years, then non-exclusive thereafter, and the license with respect to Modine’s heat transfer business to be non-exclusive. In addition, SpinCo granted Modine a royalty-free, non-exclusive transitional license to use the “Modine” trademark as otherwise used in Modine’s business as of the Separation: (a) for up to two years after the Distribution, with three months thereafter to sell off inventory manufactured or labeled with the trademarks; and (b) for up to two years after the Distribution to exhaust existing stock of signs, advertising, promotional and other materials bearing the “Modine” trademark. The initial term of the license is four years for the HVAC&R business, renewing thereafter for successive two-year periods unless Modine notifies SpinCo of non-renewal, provided that Modine is not in material breach of the agreement. The term of the license is two years for the heat transfer business. |
A summary of the material terms of each of the Tax Matters Agreement, the Employee Matters Agreement, the Intellectual Property Matters Agreement, the Transition Services Agreement and the Trademark Matters Agreement described above is also contained in the section entitled “Additional Agreements Related to the Separation, the Distribution and the Merger” in Gentherm’s Registration Statement on Form S-4 (Registration No. 333-297224), as amended, which was declared effective by the Securities and Exchange Commission on August 12, 2026 (the “Gentherm Registration Statement”), which description is incorporated herein by reference. Each of the foregoing descriptions and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of each of the Tax Matters Agreement, the Employee Matters Agreement, the Intellectual Property Matters Agreement, the Transition Services Agreement and the Trademark Matters Agreement, as applicable, copies of which are filed herewith as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, and incorporated herein by reference.
Financing Matters
SpinCo Credit Agreement
On June 29, 2026, SpinCo entered into that certain Credit Agreement with the guarantors and lenders from time to time party thereto and Bank of America, N.A., as administrative agent (the “Administrative Agent”) (as amended, the “Credit Agreement”), which provided for a senior secured delayed draw term loan facility in an aggregate committed principal amount of $250.0 million (the “DDTL Facility”). On the Closing Date, SpinCo borrowed $250.0 million of term loans under the DDTL Facility (the “Term Loans”), the proceeds of which were used by SpinCo on the Closing Date to pay the SpinCo Cash Distribution, the Cash Transfer and for general corporate purposes.
Upon consummation of the Transactions and pursuant to the Merger, SpinCo became a wholly owned subsidiary of Gentherm. Thereafter on the Closing Date, Gentherm entered into (i) that certain Mirror Transactions Funding Date Company Joinder, dated as of the Closing Date, with SpinCo and the Administrative Agent, pursuant to which Gentherm has guaranteed the obligations of SpinCo under the Credit Agreement, and (ii) that certain Supplement to Pledge and Security Agreement, dated as of the Closing Date (the “Security Agreement Supplement”), with the other parties thereto, in favor of the Administrative Agent, pursuant to which Gentherm has granted a security interest in substantially all of its assets to secure the obligations under the Credit Agreement, subject to customary exceptions. The domestic subsidiaries of Gentherm that are borrowers or guarantors under that certain Third Amended and Restated Credit Agreement, dated as of June 29, 2026 (as amended, the “Gentherm Credit Agreement”), by and among Gentherm, as a borrower, the other borrowers from time to time party thereto, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent (in such capacity, the “RCF Agent”), swing line lender and L/C issuer, entered into (i) that certain Subsidiary Guaranty, dated as of the Closing Date, in favor of the Administrative Agent, pursuant to which such domestic subsidiaries have guaranteed the obligations of SpinCo under the Credit Agreement, and (ii) the Security Agreement Supplement, pursuant to which such domestic subsidiaries have granted a security interest in substantially all of their assets to secure the obligations under the Credit Agreement, subject to customary exceptions.
The obligations under the Credit Agreement are unconditionally guaranteed by Gentherm and certain of Gentherm’s wholly-owned domestic subsidiaries, subject to customary exceptions, and are secured by substantially all of the assets of SpinCo, Gentherm and the other guarantors, subject to customary exceptions.
The Term Loans bear interest, at SpinCo’s option, at either (i) term SOFR plus a margin in a range of 1.125% to 2.000% per annum (based on the consolidated net leverage ratio of Gentherm and its subsidiaries from time to time) or (ii) the base rate plus a margin in a range of 0.125% to 1.000% per annum (based on the consolidated net leverage ratio of Gentherm and its subsidiaries from time to time). SpinCo also paid a ticking fee with respect to the DDTL Facility that accrued during the period from June 29, 2026 to the Funding Date at a rate equal to 0.175% per annum on the unfunded commitments thereunder.
The Credit Agreement contains customary affirmative and negative covenants, including restrictions on liens, investments, indebtedness, fundamental changes, dispositions, restricted payments, changes in nature of business, transactions with affiliates, burdensome agreements, use of proceeds, amendments of organizational documents, material IP rights, accounting changes, prepayments of junior indebtedness, sanctions and anti-corruption laws. The Credit Agreement also requires that Gentherm maintain a minimum consolidated interest coverage ratio and a maximum consolidated net leverage ratio. The Credit Agreement additionally contains customary events of default.
The foregoing description of the Credit Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Credit Agreement, which is filed herewith as Exhibit 10.6 and incorporated herein by reference.
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
The information set forth in the Introductory Note and Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth in Item 1.01 of this Current Report on Form 8-K with respect to the Credit Agreement is incorporated herein by reference.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of New Director
In connection with the closing of the Transactions, the parties agreed that the board of directors of Gentherm (the “Board”) would appoint one director selected by Modine after consultation in good faith with Gentherm. Modine
waived its right to designate a second director under the Merger Agreement. Accordingly, effective October 1, 2026, the Board increased the size of the Board from 9 to 10 members and appointed Paul Mascarenas to the Board to fill the vacancy so created. Mr. Mascarenas will serve for a term expiring at Gentherm’s 2027 annual meeting of shareholders (the “2027 annual meeting”) and until a successor has been duly elected and qualified, or until his earlier resignation, retirement or other termination of service. Pursuant to the Merger Agreement, Mr. Mascarenas will also be nominated for election as a director nominee at the 2027 annual meeting. The Board also appointed Mr. Mascarenas to the Technology Committee of the Board.
Since October 2014, Mr. Mascarenas has served as a venture partner and member of the general partnership of Fontinalis Partners, a strategic investment firm focused on growing start-ups and early stage companies in next-generation mobility and enabling technologies. From 1982 to 2014, Mr. Mascarenas held varying positions of increasing responsibility at Ford Motor Company (NYSE: F), including serving as Corporate Vice President and Chief Technical Officer from 2011 to 2014, leading Ford’s worldwide research and advanced engineering activities and overseeing the development and implementation of Ford’s technology strategy. He also served as Ford’s Vice President Global Engineering, Vice President North American, Vehicle Programs and Engineering, and Executive Director, Product Development.
Mr. Mascarenas currently serves on the board of directors of: ON Semiconductor Corporation (Nasdaq: ON) since November 2014, including currently as a member of the Executive Committee and the Governance and Sustainability Committee and as the Chair of the Human Capital and Compensation Committee; and Neo Performance Materials Inc. (TSX: NEO) since June 2025, including currently as a member of the Audit Committee and the Corporate Governance and Nominating Committee. Mr. Mascarenas previously served on the board of directors of numerous companies, including: Aebi-Schmidt Group (Nasdaq: AEBI; formerly known as the Shyft Group prior to its merger with Aebi-Schmidt Holdings) from June 2018 to May 2026; United States Steel Corporation (NYSE: X) from March 2016 until its merger with Nippon Steel Corporation (TYO: 5401) in June 2025; BorgWarner Inc. (NYSE: BWA) from July 2018 to December 2022 and Mentor Graphics Corporation (Nasdaq: MENT) from March 2015 to March 2017. Mr. Mascarenas also has served on the boards of various non-profit organizations, including SAE (Society of Automotive Engineers) International, BABC (British American Business Council) Michigan and FISITA (The International Federation of Automotive Engineering Societies). Further, he has held numerous advisory roles, including for the British American Business Council, Magna International, Oak Ridge National Laboratory and SAE China-International Advisory Committee.
Mr. Mascarenas has a B.Sc degree in Mechanical Engineering from King’s College University of London in England and an honorary doctorate degree from Chongqing University in China. He also was awarded an OBE (Officer of the Order of the British Empire) by Her Majesty Queen Elizabeth II, in recognition of his services to the automotive industry.
Mr. Mascarenas is an independent director, and he will be compensated in accordance with Gentherm’s non-employee director compensation program. Mr. Mascarenas has no family relationships with any director or executive officer of Gentherm, and there are no transactions in which Mr. Mascarenas has a material interest requiring disclosure under Item 404(a) of Regulation S-K.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
Amendment to Articles of Incorporation
On September 29, 2026, in connection with the Transactions and as approved by Gentherm’s shareholders at a special meeting held on September 10, 2026, Gentherm amended its Second Amended and Restated Articles of Incorporation (the “Charter Amendment”) to increase the number of authorized shares of Gentherm Common Stock from 55,000,000 shares of Gentherm Common Stock to 110,000,000 shares of Gentherm Common Stock.
The foregoing description of the Charter Amendment does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Charter Amendment, which is filed herewith as Exhibit 3.1 and is incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
On October 1, 2026, Gentherm issued a press release announcing the closing of the Transactions and related matters. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
The information in Item 7.01 herein and the attached Exhibit 99.1 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly stated by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
| (a) | Financial Statements of the SpinCo Business |
The audited combined financial statements of the SpinCo Business as of March 31, 2026 and 2025, and for each of the three years in the period ended March 31, 2026, and the notes related thereto, were included in the Gentherm Registration Statement, and are incorporated herein by reference.
The unaudited interim combined financial statements of the SpinCo Business as of June 30, 2026 and for the three months ended June 30, 2026 and June 30, 2025, and the related notes thereto, are filed as Exhibit 99.3 to this Current Report on Form 8-K and are incorporated herein by reference
| (b) | Pro Forma Information |
The Company intends to file the pro forma financial information required to be filed pursuant to Item 9.01(b) of Form 8-K by amendment to this Current Report on Form 8-K not later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.
| (c) | Not Applicable |
| (d) | Exhibits |
| Exhibit No. |
Description | |
| 2.1† | Separation Agreement, dated as of January 29, 2026, by and among Modine Manufacturing Company, Gentherm Incorporated, and the other parties named therein (incorporated by reference to Exhibit 2.1 to Gentherm Incorporated’s Current Report on Form 8-K filed on January 29, 2026) (File No. 001-14010)). | |
| 2.2† | Agreement and Plan of Merger, dated as of January 29, 2026, by and among Gentherm Incorporated, Modine Manufacturing Company, and the other parties named therein (incorporated by reference to Exhibit 2.2 to Gentherm Incorporated’s Current Report on Form 8-K filed on January 29, 2026) (File No. 001-14010)). | |
| 3.1 | Certificate of Amendment to the Second Amended and Restated Articles of Incorporation of Gentherm Incorporated. | |
| 10.1† | Tax Matters Agreement, dated as of October 1, 2026, by and among Modine Manufacturing Company, Platinum SpinCo Inc. and Gentherm Incorporated. | |
| 10.2† | Employee Matters Agreement, dated as of October 1, 2026, by and among Modine Manufacturing Company, Platinum SpinCo Inc. and Gentherm Incorporated. | |
| 10.3† | Intellectual Property Matters Agreement, dated as of October 1, 2026, by and among Modine Manufacturing Company, Platinum SpinCo Inc. and Gentherm Incorporated. | |
| 10.4† | Transition Services Agreement, dated as of October 1, 2026, by and among Modine Manufacturing Company and Platinum SpinCo Inc. | |
| 10.5† | Trademark Matters Agreement, dated as of October 1, 2026, by and among Modine Manufacturing Company and Platinum SpinCo Inc. | |
| 10.6† | Credit Agreement, dated as of June 29, 2026, by and among Platinum SpinCo Inc., the guarantors and lenders from time to time party thereto and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.6 to Gentherm Incorporated’s Registration Statement on Form S-4 filed on July 2, 2026) (File No. 333-297224). | |
| 99.1 | Press release, dated as of October 1, 2026. | |
| 99.2 | Audited combined financial statements of the SpinCo Business as of March 31, 2026 and 2025 and for the fiscal years ended March 31, 2026, 2025 and 2024 (incorporated by reference to the Performance Technologies Business Combined Financial Statements included starting on page F-4 of Gentherm’s Registration Statement on Form S-4 (Registration Statement No. 333-297224), filed with the SEC on August 5, 2026). | |
| 99.3 | Unaudited interim combined financial statements of the SpinCo Business as of June 30, 2026 and for the three months ended June 30, 2026 and June 30, 2025. | |
| 104 | Cover page Interactive Data File (embedded within the Inline XBRL document). | |
| † | Schedules (or similar attachments) to this Exhibit have been omitted in accordance with Item 601(a)(5) and/or Item 601(b)(2) of Regulation S-K. Gentherm agrees to furnish supplementally a copy of all omitted schedules to the Securities and Exchange Commission on a confidential basis upon request. |
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.
Date: October 1, 2026
| GENTHERM INCORPORATED | ||
| By: | /s/ Wayne Kauffman | |
| Wayne Kauffman | ||
| Senior Vice President, General Counsel and Secretary | ||
Exhibit 99.1
Gentherm Completes Combination with Modine’s Performance Technologies Business
Combination Creates Global Market Leader of Thermal and Precision Flow Management Technologies
Announces Appointment of Paul Mascarenas to its Board of Directors
NOVI, Michigan, October 1, 2026 — Gentherm (NASDAQ:THRM) (the “Company” or “Gentherm”), a global market leader of thermal and precision flow management technologies, today announced it has completed the previously announced combination with Modine’s Performance Technologies business (the “Business”). The transaction was first announced on January 29, 2026.
“Today marks the start of the next phase for Gentherm. Together, we have created a global leader in thermal and precision flow management solutions serving multiple end markets, combining complementary technologies, deep expertise and strong customer relationships,” said Bill Presley, the Company’s President and CEO. “We are proud to continue the Modine legacy of innovation as part of Gentherm while building an even stronger future for our employees, customers and shareholders and welcome the Modine Performance Technologies team to Gentherm.”
As part of the transaction, Gentherm acquired the Modine brand, domains, and trademarks and will continue to go to market as Modine. Modine (NYSE: MOD) intends to operate as Modexus Solutions (following shareholder approval of the proposed name change) and will continue using the Modine brand in certain businesses (the Heat Transfer Solutions and HVAC Technologies businesses in its Commercial HVAC segment) under a license with Gentherm. The arrangement preserves customer continuity after the separation and allows customers to continue to access Modine products, solutions, and resources through Modine-branded channels.
Transaction information
The transaction was structured as a Reverse Morris Trust transaction (the “Transaction”), pursuant to which the Business was spun off as a separate subsidiary entity of Modine (“SpinCo”) and then merged with a wholly owned subsidiary of Gentherm. The Transaction is intended to be tax-free to Modine and its shareholders for U.S. federal income tax purposes, except that Modine shareholders will generally recognize gain or loss on any cash received in lieu of fractional shares of Gentherm common stock.
In the Transaction, Modine shareholders received 0.44619 shares of Gentherm common stock for each share of Modine common stock they held as of the close of business on September 28, 2026, the record date for the spin-off, with cash in lieu of any fractional shares of Gentherm common stock. As of the closing of the Transaction, Modine’s shareholders owned shares of Gentherm common stock representing approximately 43.62% of the outstanding shares of the combined company, and Gentherm shareholders prior to the closing of the Transaction owned shares of Gentherm common stock representing approximately 56.38% of the outstanding shares of the combined company, without taking into account any overlapping shareholder ownership. In addition to their shares of Gentherm common stock, Modine shareholders continue to hold the same number of shares of Modine common stock they held prior to the transaction.
Modine received a cash distribution from SpinCo of approximately $156 million in the Transaction that was used to repay outstanding indebtedness. In addition, following adjustment to the exchange ratio, the Gentherm Board of Directors declared a special dividend of $2.07 per share to be paid on October 7, 2026 to Gentherm shareholders as of September 28, 2026, the record date for the special dividend, in accordance with the Merger Agreement.
Leadership Update
Bill Presley and Jon Douyard will continue leading the combined Company as CEO and CFO, respectively. Katrin Schatz will serve as the Interim President of Modine Performance Technologies, which will operate as a division of Gentherm. Ms. Schatz has more than 25 years’ experience spanning finance, engineering, and operations at Modine, most recently serving as the Vice President and General Manager of the Global Automotive Business.
“Since we first began discussions with Modine, I have been impressed with the team’s strategic vision and operational discipline. They are highly skilled and bring a relentless focus on quality and execution,” said Bill Presley, the Company’s President and CEO. “I look forward to spending more time with Performance Technologies’ highly capable and long-tenured segment leaders.”
Board of Directors
Pursuant to the terms of the Merger Agreement, Paul Mascarenas has been appointed to the Gentherm Board of Directors effective upon the closing of the Transaction. The result is an increase in the size of the Gentherm Board to a total of 10 members.
Mr. Mascarenas is the former Chief Technical Officer of Ford Motor Company, where he led worldwide research and advanced engineering activities and oversaw the development and implementation of Ford’s technology strategy. During his tenure with Ford, which began in 1982, Mr. Mascarenas held various development and engineering positions both in the U.S. and Europe. He is currently a Venture Partner with Fontinalis Partners and serves on the Board of Directors of ON Semiconductor Corporation (Nasdaq: ON) and Neo Performance Materials Inc. (TSX: NEO). He has previously served on the Board of Directors at several public companies including Mentor Graphics (n/k/a Siemens EDA), BorgWarner, United States Steel Corporation, and Aebi Schmidt Group (formerly Shyft Group and Spartan Motors). He also served as President and Chair of the board of SAE International. Mr. Mascarenas holds a Bachelor of Science degree in Mechanical Engineering from the University of London, King’s College and an honorary doctorate degree from Chongqing University.
“We are pleased to welcome Paul to Gentherm’s Board of Directors,” said Ronald Hundzinski, Chair of the Board of Gentherm. “Paul is an accomplished executive with many years of deep board experience. He has served across a wide range of committees for companies in various industries that will be a valuable asset as we execute Gentherm’s strategy and deliver shareholder value.”
Investor Contact
Gregory Blanchette
investors@gentherm.com
248.308.1702
Media Contact
Haley Baur
media@gentherm.com
248.289.9711
About Gentherm
Gentherm (NASDAQ: THRM) is a global leader of innovative thermal and precision flow management technologies. The Company brings together industry leading products from Gentherm’s climate, comfort and valves businesses serving the light vehicle, medical, and home and office markets, with Modine’s highly engineered, mission-critical thermal solutions serving commercial vehicle, off-highway equipment, light vehicle and power generation markets. Gentherm has more than 18,000 employees in facilities across 17 countries. For more information, go to www.gentherm.com.
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:
| • | uncertainty of the expected financial performance of the combined company following completion of the acquisition of the Modine Performance Technologies business (the “Transaction”); |
| • | failure to realize the anticipated benefits of the Transaction, including as a result of delay in or integrating the businesses of Gentherm and Modine’s Performance Technologies 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; |
| • | 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 of greater than expected difficulty in separating the business of the Performance Technologies business from the other businesses of Modine; and |
| • | risks related to the effects of the pendency of the Transaction on the relationship of any of the parties to the Transaction with their employees, customers, suppliers, or other counterparties. |
| • | 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. |
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.
Exhibit 99.3
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
COMBINED STATEMENTS OF OPERATIONS
For the three months ended June 30, 2026 and 2025
(In millions)
(Unaudited)
| Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net sales |
$ | 277.8 | $ | 285.5 | ||||
| Cost of sales |
229.2 | 232.8 | ||||||
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| Gross profit |
48.6 | 52.7 | ||||||
| Selling, general and administrative expenses |
27.5 | 28.8 | ||||||
| Restructuring expenses |
1.7 | 3.5 | ||||||
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| Operating income |
19.4 | 20.4 | ||||||
| Related party interest expense |
(0.8 | ) | (0.8 | ) | ||||
| Other income - net |
1.6 | 0.6 | ||||||
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| Earnings before income taxes |
20.2 | 20.2 | ||||||
| Provision for income taxes |
(4.2 | ) | (7.9 | ) | ||||
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| Net earnings |
16.0 | 12.3 | ||||||
| Net earnings attributable to noncontrolling interest |
(0.4 | ) | (0.5 | ) | ||||
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| Net earnings attributable to the Company |
$ | 15.6 | $ | 11.8 | ||||
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The notes to condensed combined financial statements are an integral part of these statements.
1
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
COMBINED STATEMENTS OF COMPREHENSIVE INCOME
For the three months ended June 30, 2026 and 2025
(In millions)
(Unaudited)
| Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net earnings |
$ | 16.0 | $ | 12.3 | ||||
| Other comprehensive income (loss), net of income taxes: |
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| Foreign currency translation |
(2.2 | ) | 11.2 | |||||
| Defined benefit plans |
— | (0.1 | ) | |||||
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| Total other comprehensive income (loss) |
(2.2 | ) | 11.1 | |||||
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| Comprehensive income |
13.8 | 23.4 | ||||||
| Comprehensive income attributable to noncontrolling interest |
(0.3 | ) | (1.0 | ) | ||||
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| Comprehensive income attributable to the Company |
$ | 13.5 | $ | 22.4 | ||||
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The notes to condensed combined financial statements are an integral part of these statements.
2
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
COMBINED BALANCE SHEETS
June 30, 2026 and March 31, 2026
(In millions)
(Unaudited)
| June 30, 2026 | March 31, 2026 | |||||||
| ASSETS |
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| Cash and cash equivalents |
$ | 41.2 | $ | 33.8 | ||||
| Trade accounts receivable - net |
227.3 | 238.4 | ||||||
| Due from related party |
7.8 | 8.1 | ||||||
| Related party notes receivable |
3.8 | 46.4 | ||||||
| Inventories |
170.1 | 164.4 | ||||||
| Other current assets |
35.5 | 20.1 | ||||||
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| Total current assets |
485.7 | 511.2 | ||||||
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| Property, plant and equipment - net |
182.6 | 187.2 | ||||||
| Deferred income taxes |
22.4 | 22.7 | ||||||
| Noncurrent related party notes receivable |
— | 69.4 | ||||||
| Other noncurrent assets |
23.8 | 25.3 | ||||||
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| Total assets |
$ | 714.5 | $ | 815.8 | ||||
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| LIABILITIES AND SHAREHOLDERS’ EQUITY |
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| Short-term debt |
$ | 8.1 | $ | — | ||||
| Related party notes payable |
10.5 | 91.1 | ||||||
| Accounts payable |
153.0 | 156.5 | ||||||
| Due to related party |
2.9 | 2.8 | ||||||
| Accrued compensation and employee benefits |
27.7 | 29.3 | ||||||
| Other current liabilities |
22.6 | 21.1 | ||||||
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| Total current liabilities |
224.8 | 300.8 | ||||||
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| Pensions |
6.6 | 6.6 | ||||||
| Other noncurrent liabilities |
20.6 | 21.9 | ||||||
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| Total liabilities |
252.0 | 329.3 | ||||||
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| Commitments and contingencies (see Note 16) |
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| Equity: |
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| Accumulated other comprehensive loss |
(76.1 | ) | (74.0 | ) | ||||
| Noncontrolling interest |
8.3 | 8.3 | ||||||
| Net parent investment |
530.3 | 552.2 | ||||||
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| Total equity |
462.5 | 486.5 | ||||||
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| Total liabilities and equity |
$ | 714.5 | $ | 815.8 | ||||
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The notes to condensed combined financial statements are an integral part of these statements.
3
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
CONDENSED COMBINED STATEMENTS OF CASH FLOWS
For the three months ended June 30, 2026 and 2025
(In millions)
(Unaudited)
| Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: |
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| Net earnings |
$ | 16.0 | $ | 12.3 | ||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: |
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| Depreciation |
7.0 | 7.7 | ||||||
| Stock-based compensation expense (benefit) |
0.5 | (0.5 | ) | |||||
| Deferred income taxes |
0.3 | 2.5 | ||||||
| Other - net |
0.5 | 1.4 | ||||||
| Changes in operating assets and liabilities: |
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| Trade accounts receivable |
6.8 | 11.4 | ||||||
| Due from related party |
0.3 | (2.6 | ) | |||||
| Inventories |
(15.7 | ) | 1.5 | |||||
| Accounts payable |
6.6 | 0.9 | ||||||
| Due to related party |
(0.2 | ) | 0.3 | |||||
| Other assets and liabilities |
(15.6 | ) | (7.2 | ) | ||||
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| Net cash provided by operating activities |
6.5 | 27.7 | ||||||
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| Cash flows from investing activities: |
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| Expenditures for property, plant and equipment |
(8.6 | ) | (7.3 | ) | ||||
| Net decrease (increase) in related party notes receivable from cash pooling activities |
42.6 | (2.6 | ) | |||||
| Issuances of related party notes receivable |
(15.1 | ) | (5.7 | ) | ||||
| Collections of related party notes receivable |
84.8 | 2.4 | ||||||
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| Net cash provided by (used for) investing activities |
103.7 | (13.2 | ) | |||||
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| Cash flows from financing activities: |
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| Borrowings (repayments) on bank overdraft facilities - net |
8.1 | (8.6 | ) | |||||
| Dividends paid to noncontrolling interest |
— | (0.7 | ) | |||||
| Net transfers to parent |
(28.5 | ) | (16.2 | ) | ||||
| Net (decrease) increase in related party notes payable from cash pooling activities |
(80.6 | ) | 17.6 | |||||
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| Net cash used for financing activities |
(101.0 | ) | (7.9 | ) | ||||
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| Effect of exchange rate changes on cash |
(1.9 | ) | (5.7 | ) | ||||
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| Net increase in cash, cash equivalents and restricted cash |
7.3 | 0.9 | ||||||
| Cash, cash equivalents and restricted cash - beginning of period |
33.9 | 34.3 | ||||||
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| Cash, cash equivalents and restricted cash - end of period |
$ | 41.2 | $ | 35.2 | ||||
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The notes to condensed combined financial statements are an integral part of these statements.
4
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
COMBINED STATEMENTS OF EQUITY
For the three months ended June 30, 2026
(In millions)
(Unaudited)
| Net parent investment |
Accumulated other comprehensive loss |
Non controlling interest |
Total | |||||||||||||
| Balance, March 31, 2026 |
$ | 552.2 | $ | (74.0 | ) | $ | 8.3 | $ | 486.5 | |||||||
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| Net earnings |
15.6 | — | 0.4 | 16.0 | ||||||||||||
| Other comprehensive loss |
— | (2.1 | ) | (0.1 | ) | (2.2 | ) | |||||||||
| Dividend declared to noncontrolling interest |
— | — | (0.3 | ) | (0.3 | ) | ||||||||||
| Net transfers to parent |
(37.5 | ) | — | — | (37.5 | ) | ||||||||||
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| Balance, June 30, 2026 |
$ | 530.3 | $ | (76.1 | ) | $ | 8.3 | $ | 462.5 | |||||||
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The notes to condensed combined financial statements are an integral part of these statements.
5
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
COMBINED STATEMENTS OF EQUITY
For the three months ended June 30, 2025
(In millions)
(Unaudited)
| Net parent investment |
Accumulated other comprehensive loss |
Non controlling interest |
Total | |||||||||||||
| Balance, March 31, 2025 |
$ | 522.1 | $ | (90.0 | ) | $ | 8.0 | $ | 440.1 | |||||||
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| Net earnings |
11.8 | — | 0.5 | 12.3 | ||||||||||||
| Other comprehensive income |
— | 10.6 | 0.5 | 11.1 | ||||||||||||
| Dividend declared or paid to noncontrolling interest |
— | — | (1.8 | ) | (1.8 | ) | ||||||||||
| Net transfers to parent |
(16.7 | ) | — | — | (16.7 | ) | ||||||||||
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| Balance, June 30, 2025 |
$ | 517.2 | $ | (79.4 | ) | $ | 7.2 | $ | 445.0 | |||||||
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The notes to condensed combined financial statements are an integral part of these statements.
6
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(In millions)
(unaudited)
Note 1: Organization and Basis of Presentation
Organization
On January 29, 2026, Modine Manufacturing Company (“Modine” or “Parent”) entered into definitive agreements with Gentherm Incorporated (“Gentherm”) whereby Modine will spin-off and simultaneously combine its Performance Technologies business (referred to as “Performance Technologies”, the “Company”, or “SpinCo”), with Gentherm in a Reverse Morris Trust (“RMT”) transaction. The RMT transaction is structured to be generally tax-free for Modine and Modine shareholders for U.S. federal income tax purposes. Modine will retain its Data Centers and Commercial HVAC segment businesses (“RemainCo”). Modine anticipates this transaction will close by the end of calendar year 2026, subject to approval by Gentherm’s shareholders and other customary closing conditions.
The spin-off transaction (the “Spin-Off”) will consist of Modine making a pro-rata distribution of shares in the Company, which will hold the Performance Technologies business prior to the Spin-Off, to its shareholders in a transaction that will be accounted for as a forward spin. The RMT transaction, occurring concurrently with the Spin-Off, consists of SpinCo merging with Gentherm. Following the Spin-Off, Modine shareholders will own approximately 40% of the combined company and Gentherm shareholders will own approximately 60% of the combined company. The approval of the shareholders of Gentherm is required to consummate the transaction. A vote by Modine shareholders is not required.
Performance Technologies provides products and solutions that enhance the performance of customer applications and develops solutions that provide mission-critical energy for a variety of end market applications, including solutions that increase fuel economy, reduce harmful emissions and maximize range in zero emission applications. Performance Technologies designs and manufactures products and solutions for vehicular, stationary power, and industrial applications. In addition, Performance Technologies provides advanced thermal solutions to zero-emission and hybrid commercial vehicle, bus and specialty vehicle customers.
Basis of Presentation
The unaudited condensed combined financial statements have been prepared on a “carve-out” basis. For the three months ended June 30, 2026 and 2025, the Company operated as part of the Parent, and consisted of several entities for which separate financial statements have not historically been prepared. As such, the periods presented have been derived from the consolidated financial statements and accounting records of the Parent, including the historical cost basis of assets and liabilities comprising the Company, as well as the historical revenues, direct costs, and allocations of indirect costs attributable to the operations of the Company, using the historical accounting policies applied by the Parent. The condensed combined financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC.
The condensed combined financial statements include all revenues and costs directly attributable to Performance Technologies, along with a portion of Modine’s corporate costs. These expenses are comprised of an allocation to Performance Technologies based on direct usage or benefit where specifically identifiable, along with a portion of the corporate expenses applied on a pro rata basis. Performance Technologies considers these allocations to be a reasonable reflection of the utilization of services or the benefit received. However, the allocations may not be indicative of the actual expense that would have been incurred had Performance Technologies operated as an independent, standalone entity, nor are they indicative of Performance Technologies future expenses. Actual costs that may have been incurred if Performance Technologies had been a standalone company would depend on a number of factors, including the chosen organization structure and strategic decisions made in various areas, including information technology (“IT”), infrastructure and outsourcing of corporate functions. Refer to Note 15 for further information.
7
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(In millions)
(unaudited)
The condensed combined financial statements include $1.3 million of transaction costs in the three months ended June 30, 2026 that were specifically identified and allocated to the Company, primarily consisting of audit-related fees and certain employee retention costs related to the RMT transaction with Gentherm. The Parent has incurred additional transaction costs related to the transaction; however, only those costs determined to be directly attributable to or otherwise for the benefit of the Company have been reflected in these condensed combined financial statements.
The condensed combined financial statements include assets and liabilities specifically attributable to Performance Technologies and certain assets and liabilities that are held by Modine that are specifically identifiable or otherwise attributable to Performance Technologies. The historical results of operations, financial position and cash flows of Performance Technologies presented in these condensed combined financial statements may not be indicative of what they would have been had Performance Technologies been an independent standalone entity, nor are they necessarily indicative of Performance Technologies’ future results of operations, financial position and cash flows.
As the separate legal entities of Performance Technologies were not historically held by a single legal entity, net parent investment is shown in lieu of shareholders’ equity in the condensed combined financial statements. Net parent investment represents Modine’s interest in the net assets of Performance Technologies and represents the cumulative investment by Modine in Performance Technologies through the dates presented, inclusive of operating results.
Modine uses a centralized approach to cash management and financing of its operations. These arrangements are not reflective of the manner in which the Company would have financed its operations had it been a standalone business separate from Modine during the periods presented. Accordingly, cash and cash equivalents held by the Parent at the corporate level were not attributable to the Company for any of the periods presented. Only cash amounts legally owned by entities dedicated to the Company are reflected in the combined balance sheets. Transfers of cash, both to and from the Parent’s treasury program, are reflected as a component of net parent investment in the combined balance sheets and as a financing activity in the accompanying combined statements of cash flows.
Modine’s long-term debt and related interest expense have not been attributed to Performance Technologies for any of the periods presented because Performance Technologies is not the legal obligor of such borrowings.
All intercompany transactions and balances within Performance Technologies have been eliminated. Transactions between Performance Technologies and Modine that will not be cash settled are included within net parent investment. Transactions between Performance Technologies and Modine that have been or will be effectively settled for cash at the time the transaction is recorded through Modine’s centralized cash management system have been included in these condensed combined financial statements. The total net effect of the settlement of these intercompany transactions is reflected in the combined statements of cash flows as a financing activity and in the combined balance sheets as net parent investment. Transactions between Performance Technologies and other businesses of Modine are considered related party transactions. See Note 15 for more information.
In the opinion of management, the unaudited condensed combined financial statements include all adjustments necessary for a fair presentation of the results of operations for the interim periods. Results for the first three months of fiscal 2027 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the Performance Technologies combined financial statements and related notes for the year ended March 31, 2026, included in Exhibit 99.1 to the Form 10.
8
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(In millions)
(unaudited)
Supplier finance programs
The Company facilitates a voluntary supplier finance program through a financial institution that allows certain suppliers in the U.S. to request early payment for invoices, at a discount, from the financial institution. The Parent or the financial institution may terminate the supplier finance program upon 90 days notice. The Company’s obligations to its suppliers, including amounts due and payment terms, are consistent, irrespective of whether a supplier participates in the program. The Company is not party to the arrangements between the participating suppliers and the financial institution. Under this program, the Company confirms the validity of supplier invoices to the financial institution and remits payments to it based on the original payment terms, which typically range from 60 to 120 days. The outstanding obligations under this program, included within accounts payable in the combined balance sheets, totaled $1.7 million and $1.8 million at June 30, 2026 and March 31, 2026, respectively.
New accounting guidance: Disaggregation of income statement expenses
In November 2024, the FASB issued new guidance that will require additional disclosure regarding the nature of expenses presented within expense captions on the combined statements of operations and selling expenses. The new disclosure requirements will become effective for the Company’s fiscal 2028 annual financial statements. The Company is currently evaluating the new disclosures, but does not expect the guidance will have a material impact on its condensed combined financial statements.
Note 2: Revenue Recognition
The Company sells thermal management systems and engineered heat transfer components for vehicular, stationary power, and industrial applications. The Company’s products are primarily used in heavy-duty equipment, commercial vehicle, automotive, and advanced thermal applications, including solutions that support fuel efficiency, emissions reduction, and zero-emission technologies.
Disaggregation of revenue
The tables below present revenue for each of the Company’s operating segments; Heavy-Duty Equipment, Commercial Vehicle, and Automotive. Each segment’s revenue is disaggregated by geographic location.
See Note 19 for additional segment financial information.
| Three months ended June 30, 2026 | ||||||||||||||||
| Heavy-Duty | Commercial | |||||||||||||||
| Equipment | Vehicle | Automotive | Total | |||||||||||||
| Geographic location: |
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| Americas |
$ | 77.9 | $ | 46.2 | $ | 14.3 | $ | 138.4 | ||||||||
| Europe |
12.5 | 28.4 | 44.7 | 85.6 | ||||||||||||
| Asia |
42.3 | 6.4 | 5.1 | 53.8 | ||||||||||||
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| Net sales |
$ | 132.7 | $ | 81.0 | $ | 64.1 | $ | 277.8 | ||||||||
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| Three months ended June 30, 2025 | ||||||||||||||||
| Heavy-Duty | Commercial | |||||||||||||||
| Equipment | Vehicle | Automotive | Total | |||||||||||||
| Geographic location: |
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| Americas |
$ | 84.9 | $ | 52.9 | $ | 15.1 | $ | 152.9 | ||||||||
| Europe |
11.1 | 27.8 | 45.1 | 84.0 | ||||||||||||
| Asia |
36.7 | 6.2 | 5.7 | 48.6 | ||||||||||||
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| Net sales |
$ | 132.7 | $ | 86.9 | $ | 65.9 | $ | 285.5 | ||||||||
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9
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(In millions)
(unaudited)
Contract balances
Contract assets and contract liabilities from contracts with customers were as follows:
| June 30, 2026 | March 31, 2026 | |||||||
| Contract assets |
$ | 5.0 | $ | 4.6 | ||||
| Contract liabilities |
3.2 | 3.3 | ||||||
Contract assets, included within other current assets in the combined balance sheets, primarily consist of capitalized costs related to customer-owned tooling contracts, wherein the customer has guaranteed reimbursement. The $0.4 million increase in contract assets during the first three months of fiscal 2027 primarily resulted from an increase in capitalized costs related to customer-owned tooling contracts.
Contract liabilities, included within other current liabilities in the combined balance sheets, consist of payments received in advance of satisfying performance obligations under customer contracts, including contracts for customer-owned tooling. The $0.1 million decrease in contract liabilities during the first three months of fiscal 2027 primarily resulted from the Company’s satisfaction of performance obligations under contracts that had required advanced payments.
Note 3: Fair Value Measurements
Fair value is defined as the price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Fair value measurements are classified under the following hierarchy:
| • | Level 1 - Quoted prices for identical instruments in active markets. |
| • | Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. |
| • | Level 3 - Model-derived valuations in which one or more significant inputs are not observable. |
When available, the Company uses quoted market prices to determine fair value and classifies such measurements as Level 1. In some cases, where market prices are not available, the Company uses observable market-based inputs to calculate fair value, in which case the measurements are classified as Level 2. If quoted or observable market prices are not available, the Company determines fair value based upon valuation models that use, where possible, market-based data such as interest rates, yield curves or currency rates. These measurements are classified as Level 3.
The carrying values of cash, cash equivalents, restricted cash, trade accounts receivable, due from related party, accounts payable, due to related party, and short-term debt approximate fair value due to the short-term nature of these instruments.
Note 4: Pensions
Certain U.S. employees of the Company participate in a defined benefit pension plan sponsored by Modine that covers employees across multiple Modine businesses. For purposes of these condensed combined financial statements, participation in this plan has been reported under the multiemployer approach. During fiscal 2026, Modine completed the termination of this pension plan. The Company’s net periodic benefit cost associated with this plan was based on participation of Performance Technologies employees and is included within other expense in the combined statements of operations. The allocated expense was $0.7 million for the three months ended June 30, 2025.
10
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(In millions)
(unaudited)
Certain non-U.S. subsidiaries of the Company have legacy defined benefit plans which cover a smaller number of active employees and are substantially unfunded. The primary non-U.S. plans are maintained in Germany and are closed to new participants. Pension cost related to these plans consisted of $0.1 million of interest cost for both the three months ended June 30, 2026 and 2025.
Note 5: Stock-Based Compensation
The Company does not maintain its own stock-based incentive plans. Certain employees of the Company participate in Modine’s stock-based incentive programs, which consist of the following: (i) a long-term incentive plan (“LTIP”) for officers and other executives that authorizes grants of stock awards, stock options, and performance-based awards granted for retention and to incentivize performance, (ii) a discretionary equity program for other management and key employees, and (iii) stock awards for non-employee directors. The Parent’s Board of Directors and the Human Capital and Compensation Committee, as applicable, have discretionary authority to set the terms of the stock-based awards.
The Company calculates compensation expense based upon the fair value of the awards at the time of grant and subsequently recognizes expense ratably over the respective vesting periods of the stock-based awards. The Company recorded stock-based compensation expense of $2.6 million and $1.2 million for the three months ended June 30, 2026 and 2025, respectively.
The Company’s condensed combined financial statements include stock-based compensation expense directly attributable to employees of the Company, as well as an allocation of stock-based compensation expense. Stock-based compensation expense directly attributable to Company employees was specifically identified based on awards granted to those employees. Stock-based compensation expense associated with corporate and shared employees was allocated to the Company in an amount that management believes reflects the benefit received by the Company. For the combined statements of cash flows, stock-based compensation expense directly attributable to Company employees is reported as stock-based compensation expense.
Stock-based compensation expense was as follows:
| Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Restricted stock |
||||||||
| Direct |
$ | 0.1 | $ | — | ||||
| Allocated |
0.6 | 0.4 | ||||||
| Restricted stock - performance based |
||||||||
| Direct (a) |
0.4 | (0.5 | ) | |||||
| Allocated |
1.5 | 1.3 | ||||||
|
|
|
|
|
|||||
| Total stock-based compensation expense |
$ | 2.6 | $ | 1.2 | ||||
|
|
|
|
|
|||||
| (a) | For the three months ended June 30, 2025, the $0.5 million benefit includes the impact of employee forfeitures of non-vested performance-based stock awards. |
11
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(In millions)
(unaudited)
As of June 30, 2026, unrecognized compensation expense related to non-vested stock-based compensation awards, which will be recognized as expense over the remaining service periods, was as follows:
| Unrecognized Compensation Expense |
Weighted- Average Remaining Service Period in Years |
|||||||
| Performance stock awards |
$ | 3.4 | 2.2 | |||||
| Restricted stock awards |
1.1 | 2.0 | ||||||
|
|
|
|
|
|||||
| Total |
$ | 4.5 | 2.2 | |||||
|
|
|
|
|
|||||
Note 6: Restructuring Activities
Restructuring and repositioning expenses were as follows:
| Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Employee severance and related benefits |
$ | 0.5 | $ | 3.5 | ||||
| Other restructuring and repositioning expenses |
1.2 | — | ||||||
|
|
|
|
|
|||||
| Total |
$ | 1.7 | $ | 3.5 | ||||
|
|
|
|
|
|||||
During the first three months of fiscal 2027, restructuring and repositioning expenses primarily consisted of costs associated with transferring product lines among its facilities and severance expenses. As part of Modine’s transformational initiatives supported by 80/20 principles, the Company is taking steps to optimize its supply chain and manufacturing footprint. The severance expenses were primarily recorded in Europe and North America and include severance related to targeted headcount reductions intended to reduce selling, general and administrative (“SG&A”) and operational expenses.
During the first three months of fiscal 2026, restructuring and repositioning expenses primarily consisted of severance expenses in Europe and North America and included targeted headcount reductions.
The Company accrues severance in accordance with its written plans, procedures, and relevant statutory requirements. Changes in accrued severance were as follows:
| Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Beginning balance |
$ | 3.3 | $ | 4.5 | ||||
| Additions (a) |
0.5 | 4.0 | ||||||
| Payments |
(1.9 | ) | (2.4 | ) | ||||
| Effect of exchange rate changes |
— | 0.2 | ||||||
|
|
|
|
|
|||||
| Ending balance |
$ | 1.9 | $ | 6.3 | ||||
|
|
|
|
|
|||||
| (a) | The fiscal 2026 amount excludes $0.5 million of non-cash stock-based compensation forfeiture benefits in connection with restructuring actions. |
12
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(In millions)
(unaudited)
Note 7: Other Income and Expense
Other income and expense consisted of the following:
| Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Interest income (a) |
$ | 1.8 | $ | 1.5 | ||||
| Foreign currency transactions (b) |
(0.3 | ) | 0.2 | |||||
| Net periodic benefit cost (c) |
(0.1 | ) | (0.8 | ) | ||||
| Other, net |
0.2 | (0.3 | ) | |||||
|
|
|
|
|
|||||
| Total other income - net |
$ | 1.6 | $ | 0.6 | ||||
|
|
|
|
|
|||||
| (a) | Interest income includes interest income on related party borrowings. See Note 15 for more information. |
| (b) | Foreign currency transactions primarily consist of foreign currency transaction gains and losses on the re-measurement or settlement of foreign currency-denominated assets and liabilities, including transactions denominated in a foreign currency and intercompany loans, along with gains and losses on foreign currency exchange contracts. |
| (c) | Net periodic benefit cost for the Company’s pension and postretirement plans is exclusive of service cost. |
Note 8: Income Taxes
The Company’s domestic operations have historically been included in the consolidated U.S. federal, certain state and local tax returns filed by the Parent. Additionally, through its foreign subsidiaries, the Company’s foreign operations have historically been filed as separate foreign income tax returns. The Company has calculated its provision for income taxes using a separate return method as if the Company was a separate group of companies under common ownership. Under this method, for jurisdictions in which it did not already have an actual separate tax filing, the Company is assumed to file hypothetical separate returns with the tax authorities. The Company has recorded tax expense or benefit based on taxable income or loss for these hypothetical returns, although the liability for any current tax has been deemed to be settled by the Parent. Deferred tax items, including carryforward attributes computed under the separate return method, may not be available for the Company in future periods as they may remain with the Parent.
The Company’s effective tax rate for the three months ended June 30, 2026 and 2025 was 20.8 percent and 39.1 percent, respectively. The effective tax rate for the first quarter of fiscal 2027 is lower than the first quarter of the prior year, primarily due to changes in the mix and amount of foreign and U.S. earnings.
The Company records valuation allowances against its net deferred tax assets to the extent it determines it is more likely than not that such assets will not be realized in the future. Each quarter, the Company evaluates the probability that its deferred tax assets will be realized and determines whether valuation allowances or adjustments thereto are needed. This determination involves judgment and the use of significant estimates and assumptions, including expectations of future taxable income and tax planning strategies. In addition, the Company considers the duration of statutory carryforward periods and historical financial results.
At June 30, 2026 valuation allowances against deferred tax assets in the U.S. and in certain foreign jurisdictions totaled $16.8 million and $26.0 million, respectively. The Company will maintain the valuation allowances in each applicable tax jurisdiction until it determines it is more likely than not the deferred tax assets will be realized, thereby eliminating the need for a valuation allowance. Future events or circumstances, such as lower taxable income or unfavorable changes in the financial outlook of the Company’s operations in the U.S. and certain foreign jurisdictions, could necessitate the establishment of further valuation allowances.
13
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(In millions)
(unaudited)
Accounting policies for interim reporting require the Company to adjust its effective tax rate each quarter to be consistent with its estimated annual effective tax rate. Under this methodology, the Company applies its estimated annual income tax rate to its year-to-date ordinary earnings to derive its income tax provision each quarter. The Company records the tax impacts of certain significant, unusual or infrequently occurring items in the period in which they occur. In addition, the Company excludes the impact of operations anticipated to generate net operating losses for the full fiscal year from the overall effective tax rate calculation and instead records them discretely based upon year-to-date results.
Note 9: Cash, Cash Equivalents, and Restricted Cash
Cash, cash equivalents and restricted cash consisted of the following:
| June 30, 2026 | March 31, 2026 | |||||||
| Cash and cash equivalents |
$ | 41.2 | $ | 33.8 | ||||
| Restricted cash |
— | 0.1 | ||||||
|
|
|
|
|
|||||
| Total cash, cash equivalents and restricted cash |
$ | 41.2 | $ | 33.9 | ||||
|
|
|
|
|
|||||
Restricted cash, which is reported within other current assets in the combined balance sheets, consists primarily of deposits for contractual guarantees or commitments required for rents, import and export duties, and commercial agreements.
Note 10: Inventories
Inventories consisted of the following:
| June 30, 2026 | March 31, 2026 | |||||||
| Raw materials |
$ | 115.6 | $ | 111.2 | ||||
| Work in process |
33.2 | 33.6 | ||||||
| Finished goods |
21.3 | 19.6 | ||||||
|
|
|
|
|
|||||
| Total inventories |
$ | 170.1 | $ | 164.4 | ||||
|
|
|
|
|
|||||
Note 11: Property, Plant, and Equipment
Property, plant and equipment, including depreciable lives, consisted of the following:
| June 30, 2026 | March 31, 2026 | |||||||
| Land |
$ | 5.4 | $ | 5.7 | ||||
| Buildings and improvements (10-40 years) |
158.2 | 165.4 | ||||||
| Machinery and equipment (3-15 years) |
629.3 | 638.8 | ||||||
| Office equipment (3-10 years) |
34.8 | 34.9 | ||||||
| Construction in progress |
23.5 | 24.0 | ||||||
|
|
|
|
|
|||||
| 851.2 | 868.8 | |||||||
| Less: accumulated depreciation |
(668.6 | ) | (681.6 | ) | ||||
|
|
|
|
|
|||||
| Net property, plant and equipment |
$ | 182.6 | $ | 187.2 | ||||
|
|
|
|
|
|||||
14
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(In millions)
(unaudited)
Note 12: Product Warranties
Changes in accrued warranty costs were as follows:
| Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Beginning balance |
$ | 3.2 | $ | 2.7 | ||||
| Warranties recorded at time of sale |
0.6 | 0.5 | ||||||
| Adjustments to pre-existing warranties |
0.2 | 0.3 | ||||||
| Settlements |
(0.6 | ) | (0.7 | ) | ||||
|
|
|
|
|
|||||
| Ending balance |
$ | 3.4 | $ | 2.8 | ||||
|
|
|
|
|
|||||
Note 13: Leases
Lease assets and liabilities
The following table provides a summary of leases recorded on the combined balance sheets.
| Balance Sheet Location |
June 30, 2026 | March 31, 2026 | ||||||||
| Lease Assets |
||||||||||
| Operating lease ROU assets |
Other noncurrent assets | $ | 20.2 | $ | 21.4 | |||||
| Finance lease ROU assets (a) |
Property, plant and equipment - net | 4.6 | 4.8 | |||||||
| Lease Liabilities |
||||||||||
| Operating lease liabilities |
Other current liabilities | $ | 6.3 | $ | 6.2 | |||||
| Operating lease liabilities |
Other noncurrent liabilities | 13.2 | 13.8 | |||||||
| Finance lease liabilities |
Other current liabilities | 0.5 | 0.5 | |||||||
| Finance lease liabilities |
Other noncurrent liabilities | 1.6 | 1.7 | |||||||
| (a) | Finance lease right of use (“ROU”) assets were recorded net of accumulated amortization of $2.4 million at both June 30, 2026 and March 31, 2026. |
Components of lease expense
The components of lease expense were as follows:
| Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Operating lease expense (a) |
$ | 2.5 | $ | 2.8 | ||||
| Finance lease expense: |
||||||||
| Depreciation of ROU assets |
0.1 | 0.1 | ||||||
| Interest on lease liabilities |
— | — | ||||||
|
|
|
|
|
|||||
| Total lease expense |
$ | 2.6 | $ | 2.9 | ||||
|
|
|
|
|
|||||
| (a) | For the three months ended June 30, 2026 and 2025, operating lease expense included short-term lease expense of $0.7 million and $0.9 million, respectively. |
15
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(In millions)
(unaudited)
Note 14: Indebtedness
As of June 30, 2026, the Company had bank overdrafts of $8.1 million recorded as short-term debt on the combined balance sheet. The overdrafts relate to short-term borrowings under foreign subsidiary credit agreements. There were no overdrafts related to these agreements at March 31, 2026.
In June 2026, the Company executed a credit agreement with a syndicate of banks that provides for a term loan of $250.0 million. Borrowings under this agreement are to occur in connection with, and substantially at the same time as, the Spin-Off.
Note 15: Related Party Transactions
Related-party transactions
Performance Technologies occasionally provides services to other Modine businesses. The nature of services provided is similar to the services that Performance Technologies provides to its third party customers.
All significant intercompany transactions between Performance Technologies and Modine have been included in the condensed combined financial statements and are considered to have been effectively settled at the time the transactions were recorded or are expected to be settled for cash. Sales to Modine and cost of sale for purchases from Modine during the three months ended June 30, 2026 and 2025 were each not significant. Selling, general and administrative expenses for services received from Modine were not significant during the three months ended June 30, 2026, and were $0.4 million during the three months ended June 30, 2025. Receivables and payables, between the Company and Parent are cash settled and have been presented on the combined balance sheets as due from related party and due to related party, respectively. In the combined statement of cash flows, this related party activity is reported within cash flows from operating activities. During the three months ended June 30, 2026, the Company transferred $9.5 million of net assets to the Parent in a non-cash transaction as part of an internal reorganization associated with the Spin-Off.
Cash pooling arrangements
Modine utilizes a centralized approach by region for the purposes of cash management and financing its operations. The Company participates in and manages certain of these cash pooling arrangements. Cash is swept daily to the cash pool owner who funds the businesses’ operating and investing activities as needed. This mechanism optimizes cash management and is used to ensure all of the Parent’s businesses have the working capital needed to run their day-to-day activities.
Amounts due from or to Modine under this arrangement are presented as related party notes receivable or related party notes payable, respectively, on the combined balance sheets. Interest income and interest expense associated with these balances are reflected within the combined statements of operations. As of June 30, 2026 and March 31, 2026, related party notes receivable included $3.8 million and $46.4 million, respectively, classified as current assets because the related amounts are either due on demand or within one year of the balance sheet date. As of March 31, 2026, related party notes receivable of $69.4 million was classified as noncurrent assets. There were no related party notes receivable classified as noncurrent as of June 30, 2026. Related party notes payable totaled $10.5 million and $91.1 million as of June 30, 2026 and March 31, 2026, respectively. The $112.0 million decrease in related party notes receivable and the $80.6 million decrease in related party notes payable were primarily due to the settlement of intercompany financing arrangements between the Company and Modine, which have been recorded within net parent investment. The settlements were the result of pre-separation activities associated with the Spin-Off. For the combined statements of cash flows, related party notes receivable activity is presented within cash flows from investing activities and related party notes payable activity is presented within cash flows from financing activities.
For each of the three months ended June 30, 2026 and 2025, the Company incurred interest expense of $0.8 million on borrowings from the Parent’s centralized cash management and financing function. For the three months ended June 30, 2026 and 2025, the Company earned interest income of $1.6 million and $1.2 million, respectively, on amounts contributed to the cash pooling program.
16
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(In millions)
(unaudited)
Allocation of corporate expenses
Performance Technologies has historically operated as part of Modine and not as a standalone company. Accordingly, Modine has allocated certain shared costs to Performance Technologies that are reflected as expenses in these condensed combined financial statements including, but not limited to, general corporate expenses such as senior management, legal, human resources, finance, accounting, treasury, tax and IT support and services. It is not practicable to estimate actual costs that would have been incurred had Performance Technologies been an independent, standalone company during the periods presented. Actual costs that the Company may have incurred, had it been a standalone company, would depend on a number of factors, including the chosen organizational structure and strategic decisions made in areas such as manufacturing, selling and marketing, research and development, information technology and infrastructure. Management considers the allocations to be a reasonable reflection of the utilization of services by, or the benefits provided to, it. These allocations are made on a direct usage basis when identifiable, with the remainder allocated using a reasonable methodology based on revenue, headcount or other relevant measures. These allocated costs are reflected primarily within selling, general and administrative expenses in the combined statements of operations. Allocations for management costs and corporate support services provided by the Parent to Performance Technologies totaled $8.0 million and $5.9 million during the three months ended June 30, 2026, and 2025, respectively.
The financial information in these condensed combined financial statements does not necessarily include actual costs that would have been incurred by Performance Technologies had it operated as a separate, standalone entity. Such actual costs would depend on a number of factors, including the chosen organizational structure and strategic decisions made in various areas, including information technology infrastructure and corporate functions outsourced or performed by employees.
Note 16: Contingencies and Litigation
In the normal course of business, the Company is named as a defendant in various lawsuits and enforcement proceedings by private parties, governmental agencies and/or others in which claims are asserted against it. The Company believes that any additional loss in excess of amounts already accrued would not have a material effect on the Company’s combined balance sheet, results of operations, and cash flows. In addition, management expects that the liabilities which may ultimately result from such lawsuits or proceedings, if any, would not have a material adverse effect on the Company’s financial position.
Note 17: Net Parent Investment
Net parent investment in the combined balance sheets and combined statements of equity represents the Parent’s historical investment in the Company, the net effect of transactions with Modine and allocations from Modine, and the Company’s accumulated earnings. Net transfers to Parent are included within net parent investment.
The components of net transfers to Parent in the combined statements of cash flows and the reconciliation to the corresponding amounts presented within the combined statements of equity were as follows:
| Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net transfers to Parent as reflected in the combined statement of cash flows |
$ | (28.5 | ) | $ | (16.2 | ) | ||
| Non-cash direct stock-based compensation expense (benefit) |
0.5 | (0.5 | ) | |||||
| Non-cash transfer of net assets to Parent |
(9.5 | ) | — | |||||
|
|
|
|
|
|||||
| Net transfers to Parent as reflected in the combined statement of equity |
$ | (37.5 | ) | $ | (16.7 | ) | ||
|
|
|
|
|
|||||
17
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(In millions)
(unaudited)
Note 18: Accumulated Other Comprehensive Loss
Changes in accumulated other comprehensive loss were as follows:
| Three months ended June 30, 2026 | ||||||||||||
| Foreign Currency Translation |
Defined Benefit Plans |
Total | ||||||||||
| Beginning balance |
$ | (72.6 | ) | $ | (1.4 | ) | $ | (74.0 | ) | |||
| Other comprehensive income (loss) before reclassifications |
(2.1 | ) | — | (2.1 | ) | |||||||
| Income taxes |
— | — | — | |||||||||
|
|
|
|
|
|
|
|||||||
| Total other comprehensive income (loss) |
(2.1 | ) | — | (2.1 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Ending balance |
$ | (74.7 | ) | $ | (1.4 | ) | $ | (76.1 | ) | |||
|
|
|
|
|
|
|
|||||||
| Three months ended June 30, 2025 | ||||||||||||
| Foreign Currency Translation |
Defined Benefit Plans |
Total | ||||||||||
| Beginning balance |
$ | (88.5 | ) | $ | (1.5 | ) | $ | (90.0 | ) | |||
| Other comprehensive income (loss) before reclassifications |
10.7 | — | 10.7 | |||||||||
| Income taxes |
— | (0.1 | ) | (0.1 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Total other comprehensive income (loss) |
10.7 | (0.1 | ) | 10.6 | ||||||||
|
|
|
|
|
|
|
|||||||
| Ending balance |
$ | (77.8 | ) | $ | (1.6 | ) | $ | (79.4 | ) | |||
|
|
|
|
|
|
|
|||||||
Note 19: Segment Information
The Company operates as the Performance Technologies segment within Modine’s consolidated group. The President of Performance Technologies is the chief operating decision maker (“CODM”) of the Company. The Company has three operating segments: Heavy-Duty Equipment, Commercial Vehicle, and Automotive.
The Company’s CODM, its President, reviews the separate financial results for each of its operating segments. The CODM uses segment operating income as a measure of profit and loss to evaluate the financial performance of each segment and as the basis for allocating company resources. The tables below present net sales and significant expense categories for each of the Company’s segments that are regularly provided to the CODM. Inter-segment sales are accounted for based upon an established markup over production costs.
18
| Three months ended June 30, 2026 | ||||||||||||||||||||
| Heavy-Duty Equipment |
Commercial Vehicle |
Automotive | Inter-segment eliminations |
Total | ||||||||||||||||
| External sales |
$ | 132.7 | $ | 81.0 | $ | 64.1 | $ | — | $ | 277.8 | ||||||||||
| Inter-segment sales |
5.4 | 0.9 | 0.9 | (7.2 | ) | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net sales |
138.1 | 81.9 | 65.0 | (7.2 | ) | 277.8 | ||||||||||||||
| Cost of sales |
115.8 | 62.0 | 58.6 | (7.2 | ) | 229.2 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross profit |
22.3 | 19.9 | 6.4 | — | 48.6 | |||||||||||||||
| Selling, general and administrative expenses |
13.2 | 7.4 | 6.9 | — | 27.5 | |||||||||||||||
| Restructuring expenses |
1.2 | 0.5 | — | — | 1.7 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Operating income (loss) |
$ | 7.9 | $ | 12.0 | $ | (0.5 | ) | $ | — | $ | 19.4 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
19
THE PERFORMANCE TECHNOLOGIES BUSINESS OF MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
(In millions)
(unaudited)
| Three months ended June 30, 2025 | ||||||||||||||||||||
| Heavy-Duty Equipment |
Commercial Vehicle |
Automotive | Inter-segment eliminations |
Total | ||||||||||||||||
| External sales |
$ | 132.7 | $ | 86.9 | $ | 65.9 | $ | — | $ | 285.5 | ||||||||||
| Inter-segment sales |
3.2 | 2.8 | 0.6 | (6.6 | ) | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net sales |
135.9 | 89.7 | 66.5 | (6.6 | ) | 285.5 | ||||||||||||||
| Cost of sales |
109.7 | 72.4 | 57.3 | (6.6 | ) | 232.8 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross profit |
26.2 | 17.3 | 9.2 | — | 52.7 | |||||||||||||||
| Selling, general and administrative expenses |
12.4 | 9.7 | 6.7 | — | 28.8 | |||||||||||||||
| Restructuring expenses |
2.4 | 0.9 | 0.2 | — | 3.5 | |||||||||||||||
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| Operating income |
$ | 11.4 | $ | 6.7 | $ | 2.3 | $ | — | $ | 20.4 | ||||||||||
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The following is a summary of segment assets, comprised entirely of trade accounts receivable and inventories, and other assets:
| June 30, 2026 | March 31, 2026 | |||||||
| Assets: |
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| Heavy-Duty Equipment |
$ | 204.7 | $ | 215.0 | ||||
| Commercial Vehicle |
123.1 | 116.2 | ||||||
| Automotive |
69.6 | 71.6 | ||||||
| Other (a) |
317.1 | 413.0 | ||||||
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| Total assets |
$ | 714.5 | $ | 815.8 | ||||
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| (a) | Represents cash and cash equivalents, related party notes receivable, due from related party, other current assets, property plant and equipment, deferred income taxes, other noncurrent assets, and noncurrent related party notes receivable. |
The following is a summary of capital expenditures and depreciation expense by segment:
| Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Capital expenditures: |
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| Heavy-Duty Equipment |
$ | 5.2 | $ | 1.4 | ||||
| Commercial Vehicle |
2.0 | 3.2 | ||||||
| Automotive |
1.4 | 2.7 | ||||||
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| Total capital expenditures |
$ | 8.6 | $ | 7.3 | ||||
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| Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Depreciation expense: |
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| Heavy-Duty Equipment |
$ | 3.3 | $ | 3.5 | ||||
| Commercial Vehicle |
1.5 | 1.7 | ||||||
| Automotive |
2.2 | 2.5 | ||||||
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| Total depreciation expense |
$ | 7.0 | $ | 7.7 | ||||
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Note 20: Subsequent Events
These condensed combined financial statements are derived from the consolidated financial statements of Modine Manufacturing Company, which issued its interim financial statements for the three months ended June 30, 2026 and 2025 on July 30, 2026. Management has evaluated transactions or other events that occurred through August 26, 2026, the date these condensed combined financial statements were available to be issued, for purposes of disclosure of subsequent events.
21