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Red Flags Detected

  • Warranty Accrual Surge (worsened) — Warranty reserves jumped 149% YoY to $13.6M, with $5.0M in prior-period adjustments signaling higher-than-expected failure rates or recall exposure.
  • VW Recall Insurance Non-coverage (worsened) — Insurance policies now deemed inapplicable to VW fuel-pump recall as production period falls outside coverage, eliminating potential cost recovery if liability is established.
NASDAQ: THRM Gentherm Inc 10-Q

revenue $416.2M, net income $4.4M. Gentherm revenue +11% but operating income -55% on Modine M&A costs; warranty accrual triples

Filed July 23, 2026 · Period ending June 30, 2026 · Compared to 10-Q Jul 24, 2025 · ~2 min read

Key Changes

  • high

    Operating income fell 55% to $10.7M despite 11% revenue growth, driven by $416.2M in Modine transaction expenses, $12.7M restructuring costs, and gross margin compression from warranty provisions and unfavorable FX.

    MD&A: Operating Results verify on EDGAR →
  • high

    Announced ~$1B Reverse Morris Trust with Modine's Performance Technologies; Gentherm shareholders to own ~60% post-close. SpinCo will distribute $210M cash to Modine, funded by new up to $250M term loan becoming Gentherm's debt.

    MD&A: Modine Transaction verify on EDGAR →
  • high

    Warranty accrual nearly tripled to $13.6M from $5.5M, driven by $5.0M in prior-period adjustments. VW fuel-pump recall insurance now deemed non-applicable as production period falls outside coverage; commercial discussions ongoing.

    Legal Proceedings verify on EDGAR →

2 more material changes behind this preview — plus the full narrative summary, section-by-section diffs against the prior filing, and verbatim quotes with EDGAR citations.

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View original filing on SEC.gov View full financials on EDGAR ↗

Figures/quotes linked to EDGAR · Narrative written by AI · Jul 24, 2026 · How we verify