Gentherm Inc (THRM) Business

ITEM 1. BUSINESS

Unless otherwise indicated, references to “Gentherm”, “the Company”, “we”, “our” and “us” in this Annual Report refer to Gentherm Incorporated and its consolidated subsidiaries.

Except to the extent expressly noted herein, the content of our website or the websites of other third parties noted herein are not incorporated by reference in this Annual Report.

Overview

Gentherm Incorporated is a global market leader of innovative thermal management and pneumatic comfort technologies. Our automotive products include Climate Control Seats (CCS®), Climate Control Interiors (CCI™), Lumbar and Massage Comfort Solutions, Valve Systems, and Climate and Comfort Electronics. We operate in locations aligned with our major customers’ product strategies to provide locally enhanced design, integration and production capabilities. Our medical products include patient

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temperature management systems that can be found in hospitals throughout the world.

On January 29, 2026, the Company entered into definitive agreements with Modine Manufacturing Company, a Wisconsin corporation (“Modine”), Platinum SpinCo Inc, a Delaware corporation and wholly owned subsidiary of Modine (“SpinCo”), and Platinum Gold Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”), with respect to a Reverse Morris Trust ("RMT") transaction (the "Modine Transaction"), and pursuant to and subject to the terms and conditions of such definitive agreements, (i) Modine will transfer (or cause to be transferred) and SpinCo will accept and assume (or cause to be accepted and assumed) all of the rights, titles and interests to and under certain assets and liabilities relating to Modine’s Performance Technologies business (“Performance Technologies”), (ii) Modine will distribute to its shareholders all of the issued and outstanding shares of common stock, $0.01 par value per share, of SpinCo (“SpinCo Common Stock”) held by Modine by way of a pro rata distribution (the “Spin-Off” and the disposition by Modine of 100% of the SpinCo Common Stock by way of the Spin-Off, the “Distribution”) and (iii) following the Distribution, Merger Sub will be merged with and into SpinCo, with SpinCo as the surviving entity (the “Merger”) and all SpinCo Common Stock will be converted into the right to receive shares of our common stock, no par value ("Common Stock"), as calculated and subject to adjustment as set forth in the Agreement and Plan of Merger, dated as of January 29, 2026, by and among the Company, Modine, Merger Sub and SpinCo (the “Merger Agreement”). Following consummation of the Merger, SpinCo will become a wholly owned subsidiary of the Company.

Closing of the Modine Transaction is subject to various closing conditions, including specified approvals by our shareholders, completion of financing for SpinCo, a customary IRS tax ruling, receipt of required regulatory approvals and the satisfaction of other customary closing conditions.

The Modine Transaction is described more fully under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview.”

Available Information

We are incorporated under the laws of the State of Michigan. Our website is www.gentherm.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are made available free of charge through our website, www.gentherm.com, as soon as reasonably practicable after we electronically file them with or furnish them to the SEC. These reports are also available on the SEC’s website, www.sec.gov.

Segments

The Company is organized under two reportable segments: Automotive and Medical.

The Automotive reporting segment is comprised of our global automotive businesses, including the design, development, manufacturing and sales of our Automotive Climate and Comfort Solutions (including Climate Control Seats, Climate Control Interiors, Lumbar and Massage Comfort Solutions and Climate and Comfort Electronics), Valve Systems and other automotive products.

The Medical reporting segment is comprised of our patient temperature management business in the medical industry. Patient temperature management includes temperature management systems across multiple product categories addressing the needs of hyper-hypothermia therapy in intensive care, normothermia in surgical procedures and additional warming/cooling therapies utilized in acute and chronic care departments and non-hospital facilities.

Research, Development and Partnerships

Our research, development and partnerships activities are an essential part of our efforts to develop new or improved innovative products, devise new ways to use our core technologies together to create value for consumers, and scale our products and core technologies into adjacent markets. Research and development is conducted globally at several sites to support our geographically diverse customers, allowing us to better meet their needs.

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To offer our customers cutting-edge products and technologies, our strategy includes partnering with key technology leaders. These activities are critical to optimize energy utilization and production efficiencies, improve effectiveness in our products and minimize the cost to integrate our products with those of our customers.

Core Technologies

Gentherm's core technologies align well with near-term and long-term consumer and technological trends. We believe increased consumer demand for personalized comfort in a vehicle is driving increased adoption of our thermal and pneumatic Lumbar and Massage Comfort Solutions. We believe there is also demand for similar occupant experiences in other end markets, including power-sports, commercial vehicles, agriculture and home and office. We are committed to developing innovative products and technologies that fulfill this demand. Additionally, our core technologies have broad market applications which will allow us to scale across new end markets.

Gentherm's core technologies are:

Thermal Management

Gentherm's heating technologies use all three primary forms of heat transfer: conductive, convective, and radiant. Resistive heater technologies are comprised of wire, carbon fiber or positive thermal coefficient (“PTC”) heating elements that quickly and effectively deliver heat to people and objects. Wire heating elements are designed from stainless steel, copper, or our proprietary carbon fiber woven lattice technology called Carbotex® based on the specifications for a particular product application. Resistive heaters have multiple applications, including seat heating, steering wheel heating, interior panel heating and battery heating in the automotive segment and patient warming within the medical segment.

Air Moving Devices

Gentherm's air moving devices offer a broad range of scalable blower solutions developed for next-generation thermal systems. Our product families include compact, slim, quiet, high-power and special application series backed by engineering in motor design, aerodynamics, mechanical systems and electronics.

Pneumatic Solutions

Gentherm's pneumatic Lumbar and Massage Comfort Solutions are differentiated because our underlying valve technology for regulating air flow is based on shape memory alloy ("SMA") valves. Our products operate by inflation and deflation of lifting elements (air bladders) to achieve desired comfort effect. Our innovative control elements produce precise mechanical forces and movements using wires made of memory metals, without the labor-intensive use of additional sensors.

Valves

Gentherm's valves are designed and developed with our extensive expertise in advanced injection molding. Our passive valves manage flow in fluid-carrying circuits through spring-loaded actuation. Our active valves provide precise electronic flow regulation in liquid and air or gas circuits using solenoid and SMA actuation.

Products

The Gentherm core technologies are essential in building our strong product portfolio:

Automotive Climate and Comfort Solutions – Climate Control Seats (CCS®)

Gentherm offers a range of CCS products utilizing proprietary technologies for regulating temperature and enhancing the comfort of vehicle passengers. Heated seats, based on our resistive heater core technology, are seamlessly integrated into automotive seat designs, and are constructed using materials that offer the best capacity, installation characteristics and durability. Our design and manufacturing capabilities allow customers to choose from a variety of resistive heater materials based on their individual vehicle specifications.

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Our CCS Vent products move air through the seat to provide conditioning. Our CCS Active products utilize thermoelectric devices to heat and cool air used to condition the seat. The conditioned air circulates by one of our specially designed air moving devices through an air distribution system installed in the seat cushion and seat back, so that the seat surface can be heated, ventilated or cooled. Each seat has individual electronic controls to adjust the level of heating, ventilating or cooling. Our CCS products improve comfort compared with conventional vehicle cabin air conditioners by focusing heating and cooling directly on the passenger through the seat.

Intelligent neck conditioning systems ventilate warm or cabin temperature air directly onto the passenger’s neck and shoulder area. The system combines electronics, air moving device technologies and a PTC heating element into a compact, integrated headrest design that can be adjusted to suit the body size of the passenger.

Automotive Climate and Comfort Solutions – Climate Control Interiors (CCI™)

Gentherm offers heated steering wheels and products for other thermally conductive or radiative surfaces such as door panels and center console armrests. Heated steering wheels deliver heating comfort to automobile drivers through resistive elements. Heated door panels and armrests complement our climate-controlled seat and steering wheel products and provide a superior level of thermal comfort to the driving experience.

Automotive Climate and Comfort Solutions – Lumbar and Massage Comfort Solutions

Gentherm offers a seat ergonomics system that consists primarily of pneumatic lifting elements (air bladders) which are mounted under the surface of seat cushion and seat back. In addition, our Puls.A® solution uses precision micro air pressure bursts to deliver a soothing, pulsating massage that lets drivers and passengers enjoy deep, personal relaxation on every trip. All of our Lumbar and Massage Comfort Solutions utilize Gentherm's Valve Systems.

Automotive Climate and Comfort Solutions – Climate and Comfort Electronics

Gentherm offers electronic control modules used to control certain electrical motors in a vehicle. Our Intelligent Positioning System (IPS®) product suite utilizes proprietary software to determine the position of a power seat and control the memory seat module. Our PilotSenseTM Hands-on Detection Electronic Control Module is a sensor integrated into the steering wheel that monitors whether the driver’s hands are maintaining contact with the steering wheel. This product is available for both heated and non-heated steering wheels.

Valve Systems

Gentherm offers a variety of valve system solutions for applications in engine systems, brake systems and fuel management such as actuators, thermal management valves, pneumatic lumbar and massage valves, crank case ventilation valves, non-return valves, mechanical switching valves, servo assistance valves, fuel limit vent valves, roll over valves and drain valves.

Other Automotive

Gentherm's other automotive products include battery thermal management, battery cell connection systems and cable systems.

Medical - Patient Temperature Management Systems

Gentherm provides healthcare professionals with superior temperature management solutions and clinical expertise that improve patient outcomes, increase the standard of care and enhance patient satisfaction. We provide a full portfolio of patient temperature management systems that utilize air, water and resistive technologies across multiple product categories addressing the needs of hyper-hypothermia therapy in intensive care, normothermia in surgical procedures and additional warming/cooling therapies utilized in acute and chronic care departments and non-hospital facilities. Our core brands include Blanketrol®, a hyper-hypothermia system, and Astotherm®, a fluid and blood warming system.

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Business Strategy

Gentherm is creating a resilient future for our customers, employees and communities by building a portfolio of essential technology solutions. Our revised strategy centers around a framework focusing on Profitable Growth, Operational Excellence and Financial Performance, all supported by leveraging our world-class talent and culture to deliver superior total shareholder return:

Drive Strategic Profitable Growth

We believe our four core technologies create a path for profitable growth in end market applications within the light-vehicle automotive industry and medical industry and also translate and scale to multiple new applications and end markets.

In automotive, we have a market leading global position for climate and comfort solutions with a commercial model built around direct OEM engagement. Our engineering expertise and strong technical competencies enable us to develop innovative, value-add solutions for our customers. We will continue to seek opportunities to secure new business awards that protect and expand our existing programs, capture incremental market share through conquest wins, increase content per vehicle, and expand our presence in targeted geographic regions.

In medical, we will continue to bring together our automotive and medical engineers to identify medical use cases in patient and physician thermal management to develop innovative new products.

In addition to our continued market leadership in the automotive light-vehicle and medical industries, we believe our four core technologies provide us with the opportunity to scale our existing technologies across new applications and end markets. We will leverage our existing intellectual property, manufacturing assets, and engineering capabilities to scale addressable markets without significant incremental capital investment. We have identified and secured business in new end markets including home and office, power-sports, and commercial vehicles. We will continue to explore opportunities within those markets and other markets that we believe will provide an opportunity to grow profitably, without significant incremental investment.

Build Operational Excellence

We have accelerated our focus on operational excellence with the rollout of a formalized company operating system. Our enhanced focus on production and inventory control, standardized key performance indicators, and disciplined financial management, will enable more effective benchmarking of our facilities and replication of best-in-class practices globally. This approach will drive greater standardization across the business, improve asset utilization, lower capital expenditures and reinforce a culture of continuous improvement across the organization.

Achieve Superior Financial Performance

We will achieve superior financial performance by delivering on profitable growth opportunities, expanding margins through operational excellence, and maintaining a disciplined approach to capital allocation. We have built a performance-driven culture focused on high-return growth opportunities across several end markets. By strengthening operational excellence, we are positioning the business for margin expansion and stronger cash flow generation. We are continuing to invest in our manufacturing footprint to ensure we have an optimal cost structure and produce in the right locations to best serve our global customers. In addition, we regularly evaluate opportunities, including mergers, acquisitions or joint ventures, which could enhance our product portfolio, expand our access to new end markets, customers, and geographic regions, and or complement our current capabilities.

Leverage World Class Talent and Culture

We have built a talented global team by fostering leaders who think strategically, execute with discipline, and work together to unlock the full potential of our people. Guided by accountability, collaboration, transparency, and urgency, we cultivate a culture rooted in trust, resilience, and continuous learning. Together, this foundation positions us to deliver results today while driving sustainable growth for the future.

Automotive Customers

Our automotive products can be found on light vehicles manufactured by nearly all the major OEMs operating in North America and Europe, and several major OEMs in Asia. As such, our customers primarily include light vehicle OEMs and Tier 1s.

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In many cases, the OEMs direct us to work with their suppliers, primarily their Tier 1s, to integrate our products into the vehicle’s seat or interior design. As an independent supplier we can work with any OEM and any seat manufacturer to create innovative and unique configurations for their applications. Once the integration work is complete, prototypes are sent to the OEMs for evaluation and testing. If an OEM awards us the business to include our products in a vehicle model, it normally takes one to three years from the time an OEM awards us the business to actual production for that vehicle model. During this rollout process, we derive minimal funding from prototype sales but do not earn significant revenue until mass production begins. Upon commencement of mass production, our products are sold by Tier 1s to the OEMs. Inherent to the automotive supplier market are costs and commitments that are incurred well in advance of the receipt of orders and resulting revenues from customers.

The volume of products we sell is significantly affected by global and regional automotive production levels and the general business conditions in the automotive industry. Our industry broadly utilizes a “just-in-time” manufacturing process, and our production volumes established in a new business award frequently change in amount and timing based on updated production schedules from the OEMs and Tier 1s. Our product revenues are generally based upon purchase orders issued by our customers, which occur close to production and delivery of our products. As such, we typically do not have a backlog of firm orders at any point in time. Once we are selected to supply products for a particular vehicle model, we typically supply those products for the platform life, which is normally five to ten years (or shorter for China OEMs). In addition, when we are the incumbent supplier to a given platform, we believe we have a competitive advantage in winning the redesign or replacement platform.

For 2025, our revenues from sales to our two largest customers, Lear Corporation (“Lear”) and Adient plc (“Adient”) were $234 million and $164 million, respectively, representing 16% and 11% of our product revenues, respectively. Revenues from Lear and Adient represent sales of our climate and comfort solutions.

As noted above, in many cases automotive OEMs direct their suppliers to work with us. Therefore, it is relevant to understand how our revenues are divided among the OEMs, as shown below.

Product revenues by OEM, as a percentage of total Product revenues, for each of the past three years were as follows:

Suppliers

We procure our raw materials from a variety of suppliers around the world. These suppliers are generally located near our manufacturing facilities, however, logistics costs may be impacted due to geopolitical factors. Some of our products contain key components such as semi-conductor chips and copper which cannot be substituted and are affected by market conditions. In the normal course of business, we do not carry substantial inventories of these raw materials in excess of levels reasonably required to meet our near-term production requirements.

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Proprietary Rights and Patents

The development or acquisition of new or improved technologies is critical to the execution of our business strategy. Currently owned patents and patents obtained for new or improved technologies underpin the success of our research and development efforts and business. We have a policy of obtaining, where practical, the exclusive rights to use technology related to our products and their relevant applications through patents or licenses for proprietary technologies or processes. We adapt and commercialize such technologies in products for mass production. We also have developed technologies or furthered the development of acquired technologies through internal research and development efforts.

As of December 31, 2025, Gentherm held 382 issued patents, of which 181 were U.S. patents and 201 were non-U.S. patents. The Company continuously evaluates its patents and makes strategic decisions to reduce low-value patents and patents unrelated to current or planned business strategies, while still increasing patent use in-line with our current and planned business strategies.

Competition

Gentherm faces competition from other automotive suppliers and, with respect to certain products, from the OEMs and Tier 1s who manufacture or have the capability to manufacture certain products that Gentherm manufactures and supplies. The automotive supply industry competes on the basis of technology, quality, reliability of supply, design, engineering capability and competitive pricing. The automotive technology and components industry remains extremely competitive among existing and new market participants. We believe our technical expertise, flexibility integrating with specific OEM designs, global footprint and broad product offerings make us well positioned to compete against the traditional thermal management systems and pneumatic comfort suppliers, global Tier 1s and component specialists. The competitive landscape for patient temperature management systems includes patient temperature management medical device manufacturers.

Seasonality

Our principal operations are directly related to the automotive industry. Consequently, we have historically experienced seasonal fluctuations to the extent automotive vehicle production slows, such as in the summer months when many customer plants close for model year changeovers and in December when many customer plants close for the holidays.

Human Capital Management

At Gentherm, our people are the foundation of our success and we believe they provide us with a competitive advantage. Our human capital strategy is focused on creating the right working environment and developing the right skill sets to advance our performance culture and unlock our innovation and growth strategy. We also strive to promote a safe work environment and a culture that values engagement and belonging.

We attract, retain and motivate our employees, with oversight by our Board of Directors and its Committees, through a broad range of human capital management topics, including corporate culture, talent and succession planning, pay equity, health and safety, training and development, total rewards and engagement and belonging.

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People Demographics

Our global workforce operates in more than 30 locations across 13 countries. As of December 31, 2025, and 2024, Gentherm’s employment levels worldwide were as follows:

Environmental and Regulatory Compliance

Gentherm operates in a dynamic global regulatory environment and is subject to numerous regulatory requirements. Failure to comply with global and specific country regulations could subject us to civil penalties, production disruptions, or limitations on the sale of affected products. We believe we are materially in compliance with substantially all of these requirements in effect.

Chemical Regulation

There are numerous global laws and regulations that prohibit or restrict the selection and use of certain chemicals for product development and manufacturing and potentially impact an automobile manufacturer’s responsibility for vehicle components at the end of a vehicle’s life. New chemical regulations continue to be introduced and passed, such as the European requirements that suppliers of parts and vehicles to the European market disclose certain substances of concern in parts. Further, increases in the use of circuit boards and other electronics may require additional assessment under the directives related to certain hazardous substances and waste from electrical and electronic equipment.

Vehicle Safety

In the U.S., the National Traffic and Motor Vehicle Safety Act of 1966 (the “Safety Act”) regulates motor vehicle equipment that we manufacture and sell as well as vehicles. The Safety Act prohibits the sale in the United States of any new vehicle or equipment that does not conform to applicable federal motor vehicle safety standards established by the National Highway Traffic Safety Administration (“NHTSA”). The Safety Act further requires that if a vehicle manufacturer or NHTSA determine a vehicle or an item of vehicle equipment does not comply with a safety standard, or that vehicle or equipment contains a defect that poses an unreasonable safety risk, the vehicle manufacturer must conduct a safety recall to remedy that condition in the affected vehicles. Should a vehicle manufacturer or NHTSA determine a safety defect or noncompliance issue exists with respect to any of our products, the cost of such recall campaigns could be substantial and may not be covered by insurance. Further, many other countries have established vehicle and vehicle equipment safety standards and regulations. Meeting or exceeding the many safety standards is costly as global compliance and non-governmental assessment requirements lack harmonization globally and continue to evolve with greater complexity.