SEC Form 10-Q filed by Gates Industrial Corporation plc

5/1/26 4:19:57 PM ET

$GTES

Industrial Machinery/Components

Industrials

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gtes-20260328

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 28, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission file number 001-38366

Gates Industrial Corporation plc

(Exact Name of Registrant as Specified in its Charter)


England and Wales						98-1395184
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1144 Fifteenth Street, Denver, Colorado 80202



(Address of principal executive offices)						(Zip Code)

(303) 744-1911

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary Shares, $0.01 par value per share	GTES	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 29, 2026, there were 253,875,680 ordinary shares of $0.01 par value outstanding.

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TABLE OF CONTENTS


Part I – Financial Information

Item 1.	Financial Statements (unaudited)	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	35
Item 4.	Controls and Procedures	36

Part II – Other Information

Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37

Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		39

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Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “quarterly report” or “report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,” “intends,” “trends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those expressed in or implied by our forward-looking statements, including but not limited to the factors described in Item 1A. “Risk Factors” in Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “annual report”), as filed with the Securities and Exchange Commission (the “SEC”), which include the following: U.S. policies, actions or legislation (including the imposition of tariffs); economic, political and other risks associated with international operations (including as a result of the ongoing conflicts in the Middle East and their impact on supply chains, such as reduced availability of certain of our production materials and increased supply costs, and economic conditions); availability of raw materials or other manufacturing inputs at favorable prices in sufficient quantities, or at a given time; changes in our relationships with, or the financial condition, performance, purchasing power or inventory levels of, key channel partners; dependence on the continued operation of our manufacturing facilities, supply chains, distribution systems and information technology systems; our ability to forecast demand or meet significant increases in demand; market acceptance of new product introductions and innovations; longer lives of parts used in our end markets may affect demand for some of our aftermarket products; increasing competition; pursuit of strategic transactions, including acquisitions, divestitures, joint ventures, strategic alliances or investments, which could create risks and present unforeseen integration obstacles or costs; our investments in joint ventures; loss or financial instability of any significant customer; our cost reduction actions; societal responses to sustainability issues, including those related to climate change; the ability to maintain and enhance our strong brand; cyber-security vulnerabilities, threats, and more sophisticated and targeted computer crimes; failure of information systems; highly complex and rapidly evolving global privacy, data protection and data security requirements; existing or new laws and regulations, including but not limited to those relating to health, safety, and environmental concerns, and the sale of aftermarket products; recalls, product liability claims or product warranties claims; failure to develop, obtain, enforce and protect our intellectual property rights in all jurisdictions throughout the world; failure to comply with anti-corruption laws and other laws governing our international operations; litigation, legal and regulatory proceedings and obligations, and the availability and coverage of insurance; loss of senior management or key personnel; work stoppages and other labor matters; potential requirement to make additional cash contributions to our defined benefit pension plans; change in our effective tax rates or additional tax liabilities; change in tax laws; tax authorities may no longer treat us as being exclusively a resident of the U.K. for tax purposes; and our substantial indebtedness, including interest rate risk, as such factors may be updated from time to time in the Company’s periodic filings with the SEC. Investors are urged to consider carefully the disclosure in this report and our other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. Gates undertakes no obligation to update or supplement any forward-looking statements as a result of new information, future events or otherwise, except as required by law.

Website Disclosure

We use our website (www.gates.com) as a channel of distribution of company information. The information we post through this channel may be deemed material. Accordingly, investors should monitor this channel, in addition to following our press releases, SEC filings and public conference calls, and webcasts. In addition, you may automatically receive email alerts and other information about Gates Industrial Corporation when you enroll your email address by visiting the “Investor Resources—Email Alerts” section of our website at https://investors.gates.com. The contents of our website and any alerts are not, however, a part of this report.

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ABOUT THIS QUARTERLY REPORT

Financial Statement Presentation

Gates Industrial Corporation plc is a public limited company that was incorporated under the Companies Act 2006 on September 25, 2017 and is registered in England and Wales.

Certain monetary amounts, percentages and other figures included elsewhere in this quarterly report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables or charts may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

All amounts in this quarterly report are expressed in United States of America (the “U.S.”) dollars, unless indicated otherwise.

Certain Definitions

As used in this quarterly report, unless otherwise noted or the context requires otherwise:

•“Gates,” the “Company,” “we,” “us” and “our” refer to Gates Industrial Corporation plc and its consolidated subsidiaries; and

• “Board” refers to the board of directors of Gates Industrial Corporation plc.

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PART I — FINANCIAL INFORMATION

Item 1: Financial Statements (unaudited)

Gates Industrial Corporation plc

Unaudited Condensed Consolidated Statements of Operations


	Three months ended
(dollars in millions, except per share amounts)		March 28, 2026		March 29, 2025
Net sales		$	851.1	$	847.6
Cost of sales		513.1		503.0
Gross profit		338.0		344.6
Selling, general and administrative expenses		226.9		216.2
Transaction-related expenses		0.5		0.4
Asset impairments		—		0.6
Restructuring expenses		0.7		1.6

Operating income from continuing operations		109.9		125.8
Interest expense		29.9		29.6

Other expense		2.1		2.4
Income from continuing operations before taxes		77.9		93.8
Income tax expense		11.5		25.2
Net income from continuing operations		66.4		68.6
Loss on disposal of discontinued operations, net of tax, respectively, of $0 and $0		0.2		0.3
Net income		66.2		68.3
Less: non-controlling interests		6.5		6.3
Net income attributable to shareholders		$	59.7	$	62.0

Earnings per share
Basic
Earnings per share from continuing operations		$	0.24	$	0.24
Earnings per share from discontinued operations		—		—
Earnings per share		$	0.24	$	0.24

Diluted
Earnings per share from continuing operations		$	0.23	$	0.24
Earnings per share from discontinued operations		—		—
Earnings per share		$	0.23	$	0.24

The accompanying notes form an integral part of these condensed consolidated financial statements.

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Gates Industrial Corporation plc

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)


	Three months ended
(dollars in millions)		March 28, 2026		March 29, 2025
Net income		$	66.2	$	68.3
Other comprehensive income (loss)
Foreign currency translation:
—Net translation (loss) gain on foreign operations, net of tax (expense) benefit, respectively, of $(0.3) and $0.0		(45.2)		81.0
—Gain (loss) on net investment hedges, net of tax (expense) benefit, respectively, of $1.9 and $(2.0)		17.3		(36.6)
Total foreign currency translation movements		(27.9)		44.4
Cash flow hedges (interest rate and currency forward derivatives):
— Gain (loss) arising in the period, net of tax benefit (expense), respectively, of $1.1 and $0.9		13.1		(2.7)
—Reclassification to net income, net of tax benefit, respectively, of $0.0 and $1.7		—		(5.1)
Total cash flow hedges movements		13.1		(7.8)
Post-retirement benefits:

—Reclassification of prior year actuarial movements to net income, net of tax benefit, respectively, of $0.6 and $0.1		5.7		(0.2)
Total post-retirement benefits movements		5.7		(0.2)
Other comprehensive income (loss)		(9.1)		36.4
Comprehensive income for the period		$	57.1	$	104.7

Comprehensive (loss) income attributable to shareholders:
—Income arising from continuing operations		$	51.6	$	93.8
—Loss arising from discontinued operations		(0.2)		(0.3)
		51.4		93.5
Comprehensive income attributable to non-controlling interests		5.7		11.2
		$	57.1	$	104.7

The accompanying notes form an integral part of these condensed consolidated financial statements.

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Gates Industrial Corporation plc

Unaudited Condensed Consolidated Balance Sheets


(dollars in millions, except share numbers and per share amounts)	As of March 28, 2026		As of December 31, 2025
Assets
Current assets
Cash and cash equivalents	$	785.3	$	812.1
Trade accounts receivable, net	799.6		744.2
Inventories	685.7		700.0
Taxes receivable	37.9		43.4
Prepaid expenses and other assets	180.9		181.8
Total current assets	2,489.4		2,481.5
Non-current assets
Property, plant and equipment, net	599.5		609.0
Goodwill	2,020.6		2,035.2
Pension surplus	7.6		7.6
Intangible assets, net	1,158.7		1,192.4
Right-of-use assets	152.0		137.1
Taxes receivable	1.1		5.4
Deferred income taxes	636.3		640.0
Other non-current assets	49.8		43.2
Total assets	$	7,115.0	$	7,151.4
Liabilities and equity
Current liabilities
Debt, current portion	$	30.9	$	36.2
Trade accounts payable	396.9		433.7
Taxes payable	18.6		27.0
Accrued expenses and other current liabilities	232.1		238.5
Total current liabilities	678.5		735.4
Non-current liabilities
Debt, less current portion	2,197.6		2,196.3
Post-retirement benefit obligations	63.1		68.8
Lease liabilities	135.5		124.5
Taxes payable	63.2		62.1
Deferred income taxes	43.8		49.3
Other non-current liabilities	205.5		225.8
Total liabilities	3,387.2		3,462.2
Commitments and contingencies (Note 18)
Shareholders’ equity
—Shares, par value of $0.01 each - authorized shares: 3,000,000,000; outstanding shares: 253,862,978 (December 31, 2025: authorized shares: 3,000,000,000; outstanding shares: 253,543,540)	2.5		2.6
—Additional paid-in capital	2,631.4		2,633.3
—Accumulated other comprehensive loss	(925.4)		(917.1)
—Treasury shares	(16.5)		(37.5)
—Retained earnings	1,674.9		1,652.7
Total shareholders’ equity	3,366.9		3,334.0
Non-controlling interests	360.9		355.2
Total equity	3,727.8		3,689.2
Total liabilities and equity	$	7,115.0	$	7,151.4

The accompanying notes form an integral part of these condensed consolidated financial statements

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Gates Industrial Corporation plc

Unaudited Condensed Consolidated Statements of Cash Flows


	Three months ended
(dollars in millions)	March 28, 2026		March 29, 2025
Cash flows from operating activities
Net income	$	66.2	$	68.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	55.7		52.2
Foreign exchange and other non-cash financing income	(8.9)		(8.2)


Share-based compensation expense	6.3		6.1
Decrease in post-employment benefit obligations, net	(0.2)		(3.0)
Deferred income taxes	(9.3)		(3.1)
Asset impairments	—		0.6


Other operating activities	0.8		2.6
Changes in operating assets and liabilities:
—Accounts receivable	(59.2)		(47.3)
—Inventories	9.3		(15.4)
—Accounts payable	(34.1)		3.1
—Prepaid expenses and other assets	8.3		(22.3)
—Taxes payable	7.2		8.5
—Other liabilities	(11.9)		(34.8)
Net cash provided by operating activities	30.2		7.3
Cash flows from investing activities
Purchases of property, plant and equipment	(16.7)		(17.5)
Purchases of intangible assets	(4.8)		(8.7)

Cash paid under company-owned life insurance policies	(10.6)		(7.0)
Cash received under company-owned life insurance policies	3.7		0.5
Proceeds from the sale of property, plant and equipment	1.3		2.0


Other investing activities	(0.1)		(0.3)
Net cash used in investing activities	(27.2)		(31.0)
Cash flows from financing activities
Issuance of shares	0.5		1.8

Repurchase of shares	(16.6)		(13.0)

Payments of long-term debt	—		(4.7)


Employee taxes paid from shares withheld	(8.6)		(11.5)
Dividends paid to non-controlling interests	—		(2.3)
Other financing activities	(0.4)		5.1
Net cash used in financing activities	(25.1)		(24.6)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(4.7)		6.6
Net decrease in cash and cash equivalents and restricted cash	(26.8)		(41.7)
Cash and cash equivalents and restricted cash at the beginning of the period	815.0		684.8
Cash and cash equivalents and restricted cash at the end of the period	$	788.2	$	643.1
Supplemental schedule of cash flow information
Interest paid	$	32.0	$	36.5
Income taxes paid	$	13.7	$	19.7
Accrued capital expenditures	$	2.6	$	1.1

The accompanying notes form an integral part of these condensed consolidated financial statements

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Gates Industrial Corporation plc

Unaudited Condensed Consolidated Statements of Shareholders’ Equity


	Three months ended March 28, 2026

(dollars in millions)	Share capital		Additional paid-in capital		Treasury Shares		Accumulated other comprehensive loss		Retained earnings		Total shareholders’ equity		Non- controlling interests		Total equity
As of December 31, 2025	$	2.6	$	2,633.3	$	(37.5)	$	(917.1)	$	1,652.7	$	3,334.0	$	355.2	$	3,689.2

Net income	—		—		—		—		59.7		59.7		6.5		66.2
Other comprehensive loss	—		—		—		(8.3)		—		(8.3)		(0.8)		(9.1)
Total comprehensive (loss) income	—		—		—		(8.3)		59.7		51.4		5.7		57.1
Other changes in equity:
—Issuance of shares	—		0.5		—		—		—		0.5		—		0.5
—Shares withheld for employee taxes	—		(8.6)		—		—		—		(8.6)		—		(8.6)
—Repurchase of shares	(0.1)		—		(16.5)		—		—		(16.6)		—		(16.6)
—Cancellation of treasury shares	—		—		37.5		—		(37.5)		—		—		—
—Share-based compensation	—		6.2		—		—		—		6.2		—		6.2




As of March 28, 2026	$	2.5	$	2,631.4	$	(16.5)	$	(925.4)	$	1,674.9	$	3,366.9	$	360.9	$	3,727.8


	Three months ended March 29, 2025

(dollars in millions)	Share capital		Additional paid-in capital		Treasury Shares		Accumulated other comprehensive loss		Retained earnings		Total shareholders’ equity		Non- controlling interests		Total equity
As of December 28, 2024	$	2.6	$	2,618.6	$	—	$	(1,077.2)	$	1,479.6	$	3,023.6	$	316.7	$	3,340.3

Net income	—		—		—		—		62.0		62.0		6.3		68.3
Other comprehensive (loss) income	—		—		—		31.5		—		31.5		4.9		36.4
Total comprehensive (loss) income	—		—		—		31.5		62.0		93.5		11.2		104.7
Other changes in equity:
—Issuance of shares	—		1.8		—		—		—		1.8		—		1.8
—Shares withheld for employee taxes	—		(11.5)		—		—		—		(11.5)		—		(11.5)
—Repurchase and cancellation of shares	—		—		(12.7)		—		—		(12.7)		—		(12.7)
—Share-based compensation	—		7.6		—		—		—		7.6		—		7.6


—Dividends paid to non-controlling interests	—		—		—		—		—		—		(2.3)		(2.3)

As of March 29, 2025	$	2.6	$	2,616.5	$	(12.7)	$	(1,045.7)	$	1,541.6	$	3,102.3	$	325.6	$	3,427.9

The accompanying notes form an integral part of these condensed consolidated financial statements.

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Gates Industrial Corporation plc

Notes to the Unaudited Condensed Consolidated Financial Statements

1. Introduction

A. Background

Gates Industrial Corporation plc (the “Company”) is a public limited company that was registered in England and Wales on September 25, 2017.

In these condensed consolidated financial statements and related notes, all references to “Gates,” “we,” “us,” and “our” refer, unless the context requires otherwise, to the Company and its consolidated subsidiaries.

B. Accounting periods

Our fiscal quarters end on the Saturday closest to the end of March, June and September for the first three fiscal quarters of each year, and on December 31 for our fourth fiscal quarter. Accordingly, the condensed consolidated balance sheets as of March 28, 2026 and December 31, 2025, and the related condensed consolidated statements of operations, comprehensive income, cash flows, and shareholders’ equity are presented, where relevant, for the 88 day period from December 31, 2025 to March 28, 2026, with comparative information for the 92 day period from December 28, 2024 to March 29, 2025.

C. Basis of preparation

The condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are presented in U.S. dollars unless otherwise indicated. The condensed consolidated financial statements and related notes contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Company’s financial position as of March 28, 2026 and the results of its operations and cash flows for the periods ended March 28, 2026 and March 29, 2025. Interim period results are not necessarily indicative of the results to be expected for the full fiscal year.

The preparation of consolidated financial statements under U.S. GAAP requires us to make assumptions and estimates concerning the future that affect the reported amounts of assets, liabilities, revenue and expenses. Estimates and assumptions are particularly important in accounting for items such as revenue, rebates, impairment of long-lived assets, intangible assets and goodwill, inventory valuation, financial instruments, expected credit losses, product warranties, income taxes and post-retirement benefits. Estimates and assumptions used are based on factors such as historical experience, observance of trends in the industries in which we operate and information available from our customers and other outside sources.

These condensed consolidated financial statements are unaudited and have been prepared on substantially the same basis as Gates’ audited annual consolidated financial statements and related notes for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K and should be read in conjunction therewith. The condensed consolidated balance sheet as of December 31, 2025 has been derived from those audited financial statements.

During 2021, the Company implemented a program with an unrelated third party under which we may periodically sell trade accounts receivable from one of our aftermarket customers with whom we have extended payment terms as part of a commercial agreement. The purpose of using this program is to generally offset the working capital impact resulting from this terms extension. All eligible accounts receivable from this customer are covered by the program, and any factoring is solely at our option. Following the factoring of a qualifying receivable, because we maintain no continuing involvement in the underlying receivable, and collectability risk is fully transferred to the unrelated third party, we account for these transactions as a sale of a financial asset and derecognize the asset. Cash received under the program is classified as operating cash inflows in the consolidated statement of cash flows. As of March 28, 2026, the collection of $46.3 million of our trade accounts receivable had been accelerated under this program, compared to the accelerated collection of $165.9 million as of December 31, 2025. During the three months ended March 28, 2026, we incurred costs in respect of this program of $2.2 million. During the three months ended March 29, 2025, we incurred costs in respect of this program of $1.9 million.

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The accounting policies used in preparing these condensed consolidated financial statements are the same as those applied in the prior year. We have reclassified amounts relating to prior period results to conform to current period presentation. The results of these reclassifications did not impact net income and are not considered material.

2. Recent accounting pronouncements not yet adopted

The following accounting pronouncements are relevant to Gates’ operations but have not yet been adopted.

•Accounting Standards Update (“ASU”) 2025-6 “Intangibles - Goodwill and Other Internal-Use Software (Subtopic 350-40)”

In September 2025, the Financial Accounting Standards Board (“FASB”) issued an ASU to modernize the accounting for software costs. The amendment removes all references to prescriptive and sequential software development stages (referred to as “project stages”) for capitalization throughout Subtopic 350-40 and introduces a principles-based capitalization model. Under the new guidance, an entity is required to start capitalizing software costs when both of the following occur: (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The amendment also introduces the concept of significant development uncertainty, which precludes capitalization until such uncertainty is resolved. The updated standard is effective for our annual periods beginning in fiscal year 2028 and interim periods beginning in the first quarter of fiscal year 2028, with early adoption permitted. We are currently evaluating the impact the updated standard will have on our consolidated financial statements and disclosures.

•ASU 2024-03 “Income Statement - Reporting Comprehensive Income: Expense Disaggregation Disclosures”

In November 2024, the FASB issued an ASU to require disclosure of specified information about certain expense amounts comprising of Cost of sales, and Selling, general and administrative expenses, as well as qualitative description of the remaining expense amounts. The amendments in this update are intended to provide investors with additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods. The updated standard is effective for our annual periods beginning in fiscal year 2027 and interim periods beginning in the first quarter of fiscal year 2028, with early adoption permitted. We are currently evaluating the impact the updated standard will have on our consolidated financial statements and disclosures.

•ASU 2023-06 “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative”

In October 2023, the FASB issued an ASU to amend certain disclosure and presentation requirements for a variety of topics within the Accounting Standards Codification (“ASC”). These amendments align the requirements in the ASC to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K as promulgated by the Securities and Exchange Commission (“SEC”). The effective date for each amended topic in the ASC is either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited. We do not expect the application of this standard to have a material impact on our consolidated financial statements and disclosures.

3. Segment information

A. Background

The segment information provided in these condensed consolidated financial statements reflects the information that is used by the chief operating decision maker for the purposes of making decisions about allocating resources and in assessing the performance of each segment. The chief executive officer (“CEO”) of Gates serves as the chief operating decision maker. These decisions are based principally on net sales and Adjusted EBITDA (defined below).

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B. Operating segments and segment assets

Gates manufactures a wide range of power transmission and fluid power products and components for a large variety of industrial and automotive applications, both in the aftermarket and first-fit channels, throughout the world.

Our reportable segments are identified on the basis of our primary product lines, as this is the basis on which information is provided to the CEO for the purposes of allocating resources and assessing the performance of Gates’ businesses. Our operating and reporting segments are therefore Power Transmission and Fluid Power.

Segment asset information is not provided to the chief operating decision maker and therefore segment asset information has not been presented. Due to the nature of Gates’ operations, cash generation and profitability are viewed as the key measures rather than an asset-based measure.

C. Segment net sales and disaggregated net sales

Sales between reporting segments and the impact of such sales on Adjusted EBITDA for each segment are not included in internal reports presented to the CEO and have therefore not been included below.


	Three months ended
(dollars in millions)	March 28, 2026		March 29, 2025
Power Transmission	$	533.2	$	527.2
Fluid Power	317.9		320.4
Net sales	$	851.1	$	847.6

Our commercial function is organized by region and therefore, in addition to reviewing net sales by our reporting segments, the CEO also reviews net sales information disaggregated by region, including between emerging and developed markets.

The following table summarizes our net sales by key geographic region of origin:


	Three months ended March 28, 2026			Three months ended March 29, 2025
(dollars in millions)		Power Transmission		Fluid Power		Power Transmission		Fluid Power
U.S.		$	152.6	$	168.5	$	154.3	$	168.0
Americas, excluding the U.S.		76.4		54.4		76.3		54.3
United Kingdom ("U.K.")		16.7		11.9		10.3		15.4
Luxembourg		56.6		20.7		62.8		22.8
EMEA(1), excluding the U.K. and Luxembourg		88.6		25.8		85.2		27.7
APAC (2), excluding China		69.5		22.8		70.8		20.5
China		72.8		13.8		67.5		11.7
Net sales		$	533.2	$	317.9	$	527.2	$	320.4

(1) Europe, Middle East and Africa (“EMEA”).

(2) Asia-Pacific (“APAC”).

The following tables summarize our segment net sales into OEM and Aftermarket channels:


	For the three months ended
	March 28, 2026				March 29, 2025
(dollars in millions)	Power Transmission		Fluid Power		Power Transmission		Fluid Power
Aftermarket	$	353.0	$	226.7	$	349.9	$	226.1
OEM	180.2		91.2		177.3		94.3
Net sales	$	533.2	$	317.9	$	527.2	$	320.4

D. Measure of segment profit or loss

The CEO uses Adjusted EBITDA, as defined below, to measure the profitability of each segment. Adjusted EBITDA is, therefore, the measure of segment profit or loss presented in Gates’ segment disclosures.

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“EBITDA” represents net income from continuing operations for the period before net interest and other expense, income taxes, depreciation and amortization.

“Adjusted EBITDA” represents EBITDA before certain items that are considered to hinder comparison of the performance of our businesses on a period-over-period basis or with other businesses. During the periods presented, the items excluded from EBITDA in computing Adjusted EBITDA primarily included:

•transaction-related expenses incurred in relation to major corporate transactions, including the acquisition of businesses and related integration activities, and equity and debt transactions;

•non-cash charges in relation to share-based compensation;

•inventory adjustments related to certain inventories accounted for on a LIFO basis;

•asset impairments;

•restructuring expenses, including severance and restructuring-related expenses; and

•other expenses (income), excluding foreign currency transaction gain or loss and insurance recoveries.

Adjusted EBITDA by segment was as follows:


	Three months ended
(dollars in millions)	March 28, 2026		March 29, 2025
Power Transmission	$	112.0	$	116.7
Fluid Power	65.4		70.6
Adjusted EBITDA	$	177.4	$	187.3

The table below represents the segment profit or loss provided to the CEO on a quarterly basis:


	Three months ended
	March 28, 2026						March 29, 2025
	Power Transmission		Fluid Power		Total		Power Transmission		Fluid Power		Total
Net sales	$	533.2	$	317.9	$	851.1	$	527.2	$	320.4	$	847.6
Adjusted cost of sales (1)	(312.6)		(194.1)		(506.7)		(308.8)		(194.0)		(502.8)
Adjusted selling, general and administrative expenses ("SG&A") (2)	(120.9)		(68.7)		(189.6)		(113.7)		(66.2)		(179.9)
Depreciation and software amortization	14.0		11.4		25.4		12.7		10.8		23.5
Other adjustments (3)	(1.7)		(1.1)		(2.8)		(0.7)		(0.4)		(1.1)
Adjusted EBITDA	$	112.0	$	65.4	$	177.4	$	116.7	$	70.6	$	187.3

(1) Adjusted cost of sales excluded inventory impairments and adjustments primarily related to the reversal of the adjustment to remeasure certain inventories on a LIFO basis, and restructuring related expenses (included in cost of sales).

(2) Adjusted selling, general and administrative expenses excluded acquired intangible assets amortization, share-based compensation expense, and restructuring related expenses (included in SG&A).

(3) Other adjustments primarily relates to net foreign currency transaction (loss) gain.

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Reconciliation of net income from continuing operations to Adjusted EBITDA:


	Three months ended
(dollars in millions)	March 28, 2026		March 29, 2025


Income from continuing operations before taxes	77.9		93.8
Interest expense	29.9		29.6
Depreciation and amortization	55.7		52.2
Transaction-related expenses (1)	0.5		0.4
Asset impairments	—		0.6
Restructuring expenses	0.7		1.6
Share-based compensation expense	6.3		6.1
Inventory adjustments (included in cost of sales)(2)	4.0		(1.0)



Restructuring related expenses (included in cost of sales)	2.5		1.2
Restructuring related expenses (included in SG&A)	1.3		1.5

Other expenses (income), excluding foreign currency transaction gain or loss(3)	(1.4)		1.3


Adjusted EBITDA	$	177.4	$	187.3

(1) Transaction-related expenses relate primarily to advisory fees and other costs recognized in respect of major corporate transactions, including the acquisition of businesses, and equity and debt transactions.

(2) Inventory adjustments includes the reversal of the adjustment to remeasure certain inventories on a LIFO basis.

(3) Other expenses (income) excludes foreign currency transaction losses of $3.5 million for the three months ended March 28, 2026; and foreign currency transaction losses of $1.1 million for the three months ended March 29, 2025.

4. Restructuring, asset impairments, and restructuring related expenses

Gates continues to undertake various restructuring and restructuring related initiatives to drive increased productivity in all aspects of our operations. These actions include efforts to consolidate our manufacturing and distribution footprint, scale operations to current demand levels, streamline our SG&A back-office functions and relocate certain operations to lower cost locations.

Restructuring expenses by expense type and asset impairments are included in the table below:


	Three months ended
(dollars in millions)		March 28, 2026		March 29, 2025
Restructuring expenses:


—Severance and related benefit expense		0.3		0.1
—Professional service fees		—		1.3
—Other net restructuring expenses		0.4		0.2
Total restructuring expenses		0.7		1.6

—Asset impairments related to restructuring		—		0.6





Total restructuring expenses and asset impairments		$	0.7	$	2.2

Restructuring expenses during the three months ended March 28, 2026 included $0.7 million of costs related to a global cost reduction effort and reorganization of our operations in Mexico.

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Restructuring expenses and asset impairments by segment were as follows:


	Three months ended
(dollars in millions)		March 28, 2026		March 29, 2025
Power Transmission		$	0.1	$	1.2
Fluid Power		0.6		1.0
Total restructuring expenses and asset impairments		$	0.7	$	2.2

The following summarizes the reserve for restructuring expenses for the three months ended March 28, 2026 and March 29, 2025, respectively:


	Three months ended
(dollars in millions)	March 28, 2026		March 29, 2025
Balance as of the beginning of the period	$	16.3	$	2.8
Utilized during the period	(4.2)		(1.6)
Charge for the period	0.9		1.7
Released during the period	(0.2)		(0.1)
Foreign currency translation	(0.1)		0.1
Balance as of the end of the period	$	12.7	$	2.9

Restructuring reserves are included in the condensed consolidated balance sheet within the accrued expenses and other current liabilities line.

Certain expenses related to strategic initiatives, not qualified as restructuring under U.S. GAAP, have been provided in the table below:


	Three months ended
(dollars in millions)		March 28, 2026		0	March 29, 2025
Other restructuring related expenses:
—Severance and restructuring related expenses included in cost of sales		$	2.5		$	1.2
—Severance and restructuring related expenses included in SG&A		1.3			1.5

Total restructuring related expenses		$	3.8		$	2.7

Restructuring related expenses during the three months ended March 28, 2026 included $2.4 million of costs related to the relocation of certain production activities and reorganization of our operations in Mexico and $1.4 million of costs related to professional service fees and general severance.

Restructuring related expenses during the three months ended March 29, 2025 primarily included $1.0 million of costs related to the relocation of certain production activities and reorganization of our operations in Mexico, as well as severance and professional service fees.

5. Income taxes

We compute the year-to-date income tax provision by applying our estimated annual effective tax rate to our year-to-date pre-tax income and adjust for discrete tax items in the period in which they occur.

For the three months ended March 28, 2026, we had an income tax expense of $11.5 million on pre-tax income of $77.9 million, which resulted in an effective tax rate of 14.8%, compared to an income tax expense of $25.2 million on pre-tax income of $93.8 million, which resulted in an effective tax rate of 26.9%, for the three months ended March 29, 2025.

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For the three months ended March 28, 2026, the effective tax rate was driven primarily by net discrete tax benefits of $6.4 million, comprised of a discrete tax benefit of $4.2 million related to the expected refund of research and development credits from prior years, $1.9 million related to changes in realizability of certain deferred tax assets primarily in Türkiye, $1.1 million related to excess tax benefits on stock option exercises, and $0.5 million related to other net discrete tax benefits, offset by $1.3 million related to prior year adjustments, primarily in Türkiye, reflecting tax returns that were filed. For the three months ended March 29, 2025, the effective tax rate was driven primarily by the jurisdictional mix of earnings and by net discrete tax expense of $0.1 million, comprised of a discrete tax benefit of $6.0 million related to excess tax benefits on stock option exercises, and $0.1 million related to other net discrete benefits, offset by discrete expenses of $5.2 million primarily related to changes in the realizability of certain deferred tax assets and $1.0 million related to net unrecognized tax benefits.

Deferred Tax Assets and Liabilities

We recognize deferred tax assets and liabilities for future tax consequences arising from differences between the carrying amounts of existing assets and liabilities under U.S. GAAP and their respective tax bases, and for net operating loss carryforwards and tax credit carryforwards. We evaluate the recoverability of our deferred tax assets, weighing all positive and negative evidence, and are required to establish or maintain a valuation allowance for these assets if we determine that it is more likely than not that some or all of the deferred tax assets will not be realized.

As of each reporting date, we consider new evidence, both positive and negative, that could impact our view with regard to the future realization of deferred tax assets. We will maintain our positions with regard to future realization of deferred tax assets, including those with respect to which we continue maintaining valuation allowances, until there is sufficient new evidence to support a change in expectations. Such a change in expectations could arise due to many factors, including those impacting our forecasts of future earnings, as well as changes in the international tax laws under which we operate and tax planning. It is not reasonably possible to forecast any such changes at the present time, but it is possible that, should they arise, our view of their effect on the future realization of deferred tax assets may materially impact our financial statements.

6. Earnings per share

Basic earnings per share represents net income attributable to shareholders divided by the weighted average number of shares outstanding during the period. Diluted earnings per share considers the dilutive effect of potential shares, unless the inclusion of the potential shares would have an anti-dilutive effect. The treasury stock method is used to determine the potential dilutive shares resulting from assumed exercises of equity-related instruments.

The computation of earnings per share is presented below:


	Three months ended
(dollars in millions, except share numbers and per share amounts)		March 28, 2026		March 29, 2025
Net income attributable to shareholders		$	59.7	$	62.0

Weighted average number of shares outstanding		253,821,067		255,790,177
Dilutive effect of share-based awards		3,051,357		5,777,729
Diluted weighted average number of shares outstanding		256,872,424		261,567,906

Number of anti-dilutive shares excluded from the diluted earnings per share calculation		2,211,009		1,258,485

Basic earnings per share		$	0.24	$	0.24
Diluted earnings per share		$	0.23	$	0.24

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7. Inventories


(dollars in millions)	As of March 28, 2026		As of December 31, 2025
Raw materials and supplies	$	205.0	$	207.4
Work in progress	49.5		40.2
Finished goods	431.2		452.4
Total inventories	$	685.7	$	700.0

8. Goodwill


(dollars in millions)	Power Transmission		Fluid Power		Total
Cost and carrying amount
As of December 31, 2025	$	1,343.1	$	692.1	$	2,035.2

Foreign currency translation	(10.9)		(3.7)		(14.6)
As of March 28, 2026	$	1,332.2	$	688.4	$	2,020.6

9. Intangible assets


	As of March 28, 2026						As of December 31, 2025
(dollars in millions)	Cost		Accumulated amortization and impairment		Net		Cost		Accumulated amortization and impairment		Net
Finite-lived:
—Customer relationships	$	1,994.4	$	(1,389.6)	$	604.8	$	2,004.3	$	(1,366.7)	$	637.6
—Technology	90.7		(90.7)		—		90.8		(90.8)		—
—Capitalized software	187.7		(103.2)		84.5		184.2		(98.8)		85.4
	2,272.8		(1,583.5)		689.3		2,279.3		(1,556.3)		723.0
Indefinite-lived:
—Brands and trade names	513.4		(44.0)		469.4		513.4		(44.0)		469.4
Total intangible assets	$	2,786.2	$	(1,627.5)	$	1,158.7	$	2,792.7	$	(1,600.3)	$	1,192.4

During the three months ended March 28, 2026, the amortization expense recognized in respect of intangible assets was $34.6 million, compared to $31.4 million for the three months ended March 29, 2025. In addition, movements in foreign currency exchange rates resulted in a decrease in the net carrying value of total intangible assets of $3.8 million for the three months ended March 28, 2026, compared to an increase of $7.2 million for the three months ended March 29, 2025.

10. Derivative financial instruments

We are exposed to certain financial risks relating to our ongoing business operations. From time to time, we use derivative financial instruments, principally foreign currency swaps, forward foreign currency contracts, interest rate caps (options) and interest rate swaps, to reduce our exposure to foreign currency risk and interest rate risk. We do not hold or issue derivatives for speculative purposes and monitor closely the credit quality of the institutions with which we transact.

We recognize derivative instruments as either assets or liabilities in the condensed consolidated balance sheets. We designate certain of our currency swaps as net investment hedges and designate our interest rate swaps as cash flow hedges. The gain or loss on the designated derivative instrument is recognized in other comprehensive income (“OCI”) and reclassified into net income in the same period or periods during which the hedged transaction affects earnings.

Derivative instruments that have not been designated in an effective hedging relationship are considered economic hedges, and their change in fair value is recognized in net income in each period.

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The period end fair values of derivative financial instruments were as follows:


			As of March 28, 2026
(dollars in millions)	Gross Notional Amount		Prepaid expenses and other assets		Other non- current assets		Accrued expenses and other current liabilities		Other non- current liabilities		Net
Derivative instruments designated as net investment hedges:
—Currency swaps and currency forward contract	$	1,890.0	$	12.4	$	16.5	$	—	$	(175.8)	$	(146.9)
Derivative instruments designated as cash flow hedges:
—Interest rate swaps	1,085.0		2.0		5.2		(1.1)		(1.0)		$	5.1
—Currency forward contracts	120.4		0.9		—		(0.6)		—		$	0.3

Derivatives not designated as hedging instruments:
—Currency forward contracts	0.2		—		—		—		—		$	—
			$	15.3	$	21.7	$	(1.7)	$	(176.8)	$	(141.5)

			As of December 31, 2025
(dollars in millions)	Gross Notional Amount		Prepaid expenses and other assets		Other non- current assets		Accrued expenses and other current liabilities		Other non- current liabilities		Net
Derivative instruments designated as net investment hedges:
—Currency swaps and currency forward contract	$	1,890.0	$	15.3	$	14.5	$	—	$	(193.0)	$	(163.2)
Derivative instruments designated as cash flow hedges:
—Interest rate swaps	1,085.0		0.3		1.1		(3.1)		(4.3)		$	(6.0)
—Currency forward contracts	122.7		1.0		—		(1.3)		—		$	(0.3)

Derivatives not designated as hedging instruments:
—Currency forward contracts	0.1		—		—		—		—		$	—
			$	16.6	$	15.6	$	(4.4)	$	(197.3)	$	(169.5)

A. Instruments designated as net investment hedges

We hold cross currency swaps that have been designated as net investment hedges of certain of our foreign subsidiaries. During the second quarter of 2025, we expanded our net investment hedge activity by entering into cross currency swaps and foreign exchange forward contracts with a gross notional value at inception of $820.0 million and terms between three to five years, designated in hedges of portions of our net investment in Canadian, Chinese, and Japanese subsidiaries.

The fair value gains (losses) before tax recognized in OCI in relation to the instruments designated as net investment hedging instruments were as follows:


	Three months ended
(dollars in millions)		March 28, 2026		March 29, 2025
Net fair value gains (losses) recognized in OCI in relation to:
—Designated cross currency swaps & currency forwards		$	15.4	$	(34.6)
Total net fair value gains (losses)		$	15.4	$	(34.6)

During the three months ended March 28, 2026, a net gain of $5.4 million was recognized in interest expense in relation to our cross currency swaps and foreign exchange forward contracts that have been designated as net investment hedges, compared to a net gain of $4.8 million, during the three months ended March 29, 2025.

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B. Instruments designated as cash flow hedges

We use interest rate swaps as part of our interest rate risk management strategy to add stability to interest expense and to manage our exposure to interest rate movements. These instruments are all designated as cash flow hedges. In April 2025, we entered into an agreement to execute two additional pay-fixed, receive floating interest rate swaps to hedge the cash flow risk on a portion of our floating-rate debt, effective starting June 30, 2025 upon expiration of the previous interest rate swaps. The notional amount of these interest rate swaps are $470.0 million and $230.0 million with five-year terms.

During the second quarter of 2025, we hedged portions of our forecasted sales and purchases which occur within the next twelve months that are denominated in non-functional currencies, with currency forward contracts designated as cash flow hedges. These currency forward contracts are primarily used in respect of hedging our operational currency exposures in Europe to exchange currencies, principally between Euro and U.S. Dollar, Pound Sterling, Polish Zloty, and Czech Koruna.

The movements before tax recognized in OCI in relation to our cash flow hedges were as follows:


	Three months ended
(dollars in millions)		March 28, 2026		March 29, 2025
Movement recognized in OCI in relation to:
—Fair value gain (loss) on cash flow hedges		$	12.0	$	(3.6)

—Deferred OCI reclassified to net income		—		(6.8)
Total movement		$	12.0	$	(10.4)

C. Derivative instruments not designated as hedging instruments

Prior to second quarter of 2025, we did not designate our currency forward contracts that are primarily used in respect of hedging our operational currency exposures in Europe as discussed above. As of March 28, 2026, the notional amount of outstanding currency forward contracts that are not designated as hedging instruments was $0.2 million related to other foreign currencies, compared to $0.1 million as of December 31, 2025. The fair value gains recognized in net income in relation to derivative instruments that have not been designated as hedging instruments were as follows:


	Three months ended
(dollars in millions)		March 28, 2026		March 29, 2025
Fair value gains recognized in relation to:
—Currency forward contracts recognized in other expense (income)		$	—	$	1.4

Total		$	—	$	1.4

11. Fair value measurement

A. Fair value hierarchy

We account for certain assets and liabilities at fair value. Topic 820 “Fair Value Measurements and Disclosures” establishes the following hierarchy for the inputs that are used in fair value measurement:

•“Level 1” inputs are unadjusted quoted prices in active markets for identical assets or liabilities;

•“Level 2” inputs are those other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

•“Level 3” inputs are not based on observable market data (unobservable inputs).

Assets and liabilities that are measured at fair value are categorized in one of the three levels on the basis of the lowest-level input that is significant to its valuation.

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B. Financial instruments not held at fair value

Certain financial assets and liabilities are not measured at fair value; however, items such as cash and cash equivalents, restricted cash, drawings under revolving credit facilities and bank overdrafts generally attract interest at floating rates and accordingly their carrying amounts are considered to approximate fair value. Due to their short maturities, the carrying amounts of accounts receivable and accounts payable are also considered to approximate their fair values.

The carrying amount and fair value of our debt are set out below:


	As of March 28, 2026				As of December 31, 2025
(dollars in millions)	Carrying amount		Fair value		Carrying amount		Fair value
Current	$	30.9	$	30.8	$	36.2	$	36.0
Non-current	2,197.6		2,224.3		2,196.3		2,230.2
	$	2,228.5	$	2,255.1	$	2,232.5	$	2,266.2

Debt is comprised principally of borrowings under the secured credit facility and the unsecured senior notes. The dollar term loans under the secured credit facilities pay interest at floating rates, subject to a 0.50% Term SOFR floor as further described in Note 12. The fair values of the term loans are derived from a market price, discounted for illiquidity. The unsecured senior notes have fixed interest rates, are traded by “Qualified Institutional Buyers” and certain other eligible investors, and their fair value is derived from their quoted market price.

C. Assets and liabilities measured at fair value on a recurring basis

The following table categorizes the assets and liabilities that are measured at fair value on a recurring basis:


(dollars in millions)	Significant observable inputs (Level 2)		Total
As of March 28, 2026

Derivative assets	$	37.0	$	37.0
Derivative liabilities	$	(178.5)	$	(178.5)
Cash equivalents	$	30.6	$	30.6


As of December 31, 2025

Derivative assets	$	32.2	$	32.2
Derivative liabilities	$	(201.7)	$	(201.7)
Cash equivalents	$	23.1	$	23.1

Derivative assets and liabilities included in Level 2 represent foreign currency exchange forward and swap contracts, and interest rate derivative contracts. Cash equivalents included in Level 2 represent certificates of deposit and commercial paper.

We value our foreign currency exchange derivatives using models consistent with those used by a market participant that maximize the use of market observable inputs including forward prices for currencies.

We value our interest rate derivative contracts using a widely accepted discounted cash flow valuation methodology that reflects the contractual terms of each derivative, including the period to maturity. The methodology derives the fair values of the derivatives using the market standard methodology of netting the discounted future cash payments and the discounted expected receipts. The inputs used in the calculation are based on observable market-based inputs, including interest rate curves, implied volatilities and credit spreads.

We incorporate credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements.

Transfers between levels of the fair value hierarchy

During the periods presented, there were no transfers between Levels 1 and 2, and Gates had no assets or liabilities measured at fair value on a recurring basis using Level 1 or Level 3 inputs.

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D. Assets measured at fair value on a non-recurring basis

Gates has non-recurring fair value measurements related to certain assets, including goodwill, intangible assets, and property, plant, and equipment. During April 2024, Gates made a $5.0 million equity investment in a privately held company. Gates does not have the ability to exercise significant influence over the investee and the investment does not have a readily determinable fair value. We elected to recognize the investment at its cost in accordance with ASC 321 “Investments – Equity Securities” and will adjust the fair value of the investment if we identify any observable price changes in orderly transactions.

12. Debt


(dollars in millions)	As of March 28, 2026			As of December 31, 2025
Secured debt:
—2024 Dollar Term Loans due June 4, 2031	$	1,283.8		$	1,283.8
—2022 Dollar Term Loans due November 16, 2029	456.3			456.3

Unsecured debt:
—6.875% Dollar Senior Notes due July 1, 2029	500.0			500.0

Total principal of debt	2,240.1			2,240.1
Deferred issuance costs	(23.7)			(25.0)
Accrued interest	12.1			17.4
Total carrying value of debt	2,228.5			2,232.5
Debt, current portion	30.9			36.2
Debt, less current portion	$	2,197.6		$	2,196.3

Weighted average interest rate	5.74		%	5.78		%

Gates’ secured debt is jointly and severally, irrevocably and fully and unconditionally guaranteed by certain of its subsidiaries and is secured by liens on substantially all of their assets.

Gates is subject to covenants, representations and warranties under certain of its debt facilities. During the periods covered by these condensed consolidated financial statements, we were in compliance with the applicable financial covenants. Also under the agreements governing our debt facilities, our ability to engage in activities such as incurring certain additional indebtedness, making certain investments and paying certain dividends is dependent, in part, on our ability to satisfy tests based on measures determined under those agreements.

Dollar Term Loans

Our outstanding secured credit facilities consist of two loans, which include a tranche of $1,300.0 million dollar-denominated term loans issued on June 4, 2024 (the “2024 Dollar Term Loans”) and a tranche of $575.0 million of dollar-denominated term loans issued on November 16, 2022 (the “2022 Dollar Term Loans”). These term loan facilities bear interest at a floating rate, at our option, at either a base rate as defined in the credit agreement plus an applicable margin, or Term SOFR plus an applicable margin.

As of March 28, 2026, the 2024 Dollar Term Loans’ interest rate was Term SOFR, subject to a floor of 0.50%, plus a margin of 1.75%, and borrowings under this facility bore interest at a rate of 5.42% per annum. The interest rate is currently re-set on the last business day of each month based on the election of one month interest periods. The 2024 Dollar Term Loans mature on June 4, 2031.

As of March 28, 2026, the 2022 Dollar Term Loans’ interest rate was Term SOFR, subject to a floor of 0.50%, plus a margin of 1.75%, and borrowings under this facility bore interest at a rate of 5.42% per annum. The interest rate is currently re-set on the last business day of each month based on the election of one month interest periods. The 2022 Dollar Term Loans mature on November 16, 2029.

The 2024 Dollar Term Loans and 2022 Dollar Term Loans are subject to quarterly amortization payments of 0.25%, based on the original principal amount less certain repayments with the balance payable on maturity. During the three months ended March 28, 2026, we made no amortization payments against the 2024 Dollar Term Loans and the 2022 Dollar Term Loans.

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Under the terms of the credit agreement, we are obliged to offer annually to the term loan lenders an “excess cash flow” amount as defined under the agreement, based on the preceding year’s final results. Based on our 2025 results, the leverage ratio as defined under the credit agreement was below the threshold above which payments are required, and therefore no excess cash flow payment is required to be made in 2026.

Gates Corporation, a wholly-owned U.S. subsidiary of Gates Industrial Holdco Limited (the parent guarantor and direct subsidiary of Gates Industrial Corporation plc), is the principal obligor under the term loans for U.S. federal income tax purposes and makes the payments due on the term loans. As a result, interest received by lenders of this tranche of debt is U.S. source income.

Unsecured Senior Notes

As of March 28, 2026, we had $500.0 million of Dollar Senior Notes due 2029 outstanding that were issued on June 4, 2024. The Dollar Senior Notes due 2029 are scheduled to mature on July 1, 2029 and bear interest at an annual fixed rate of 6.875% with semi-annual interest payments.

Prior to July 1, 2026, we may redeem the Dollar Senior Notes due 2029, at our option, in whole at any time or in part from time to time, at a “make-whole” redemption price. In addition, on or subsequent to July 1, 2026, we may redeem the Dollar Senior Notes due 2029, at our option, in whole at any time or in part from time to time, at the following redemption prices (expressed as a percentage of the principal amount), plus accrued and unpaid interest to the redemption date:


	Redemption price
On or subsequent to:
—July 1, 2026	103.438	%
—July 1, 2027	101.719	%
—July 1, 2028 and thereafter	100.000	%

Additionally, net cash proceeds from an equity offering can be utilized at any time prior to July 1, 2026, to redeem up to 40% of the Dollar Senior Notes due 2029 at a redemption price equal to 106.875% of the principal amount thereof, plus accrued and unpaid interest through to the redemption date.

Upon the occurrence of specified types of change of control or of certain qualifying asset sales, the holders of the Dollar Senior Notes due 2029 will have the right to require us to make an offer to repurchase each holder's notes at a price equal to 101% (in the case of a change of control offer) or 100% (in the case of an asset sale offer) of their principal amount, plus accrued and unpaid interest.

Revolving credit facility

We have a secured revolving credit facility that provides for multi-currency revolving loans. On June 4, 2024, we amended the credit agreement governing this facility to increase the size of the facility from $250.0 million to $500.0 million, and extended the maturity date from November 18, 2026 to the date that is the earliest of (x) June 4, 2029 and (y) April 1, 2029, if greater than $500.0 million in aggregate principal amount of the Dollar Senior Notes due 2029 are outstanding. This facility also includes a letter of credit sub-facility of $150.0 million. Debt under the revolving credit facility bears interest at a floating rate, at our option, at either a base rate as defined in the credit agreement plus an applicable margin or the reference rate plus an applicable margin.

On January 21, 2025, we amended our credit agreement to lower the margin with respect to the revolving loans by 50 basis points compared to the previous term. The revolving loans bear interest at our option either Term SOFR (subject to a floor of —%) plus a margin of 1.75% per annum or the base rate plus 0.75% per annum. The applicable margin for the revolving credit facility borrowings will be subject to one 25 basis point step down determined in accordance with Gates Industrial Holdco Limited achieving a certain consolidated first lien net leverage level.

As of both March 28, 2026 and December 31, 2025, there were no drawings for cash under the revolving credit facility.

The letters of credit outstanding under this facility were $28.8 million and $29.0 million as of March 28, 2026 and December 31, 2025, respectively. In addition, Gates had other outstanding performance bonds, letters of credit and bank guarantees amounting to $12.5 million as of March 28, 2026, compared to $12.6 million as of December 31, 2025.

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13. Post-retirement benefits

Gates provides defined benefit pension plans in certain of the countries in which it operates, in particular, in the U.S. and U.K. All of the defined benefit pension plans are closed to new entrants. In addition to the funded defined benefit pension plans, Gates has unfunded defined benefit obligations to certain current and former employees.

Gates also provides other post-retirement benefits, principally health and life insurance coverage, on an unfunded basis to certain of its employees in the U.S. and Canada.

Net periodic benefit cost (income)

The components of the net periodic benefit cost (income) for pensions and other post-retirement benefits were as follows:


	U.S. Pension Plans
(dollars in millions)	Three months ended March 28, 2026		Three months ended March 29, 2025
Net Periodic Benefit Cost:
Employer service cost	$	0.3	$	0.5

Interest cost	1.8		2.0
Expected return on plan assets	(2.2)		(2.0)

Total net periodic benefit cost (income)	$	(0.1)	$	0.5


	Non-U.S. Pension Plans
(dollars in millions)	Three months ended March 28, 2026		Three months ended March 29, 2025
Net Periodic Benefit Cost:
Employer service cost	$	0.6	$	0.5
Settlements and curtailments	5.2		—
Interest cost	4.3		4.1
Expected return on plan assets	(3.9)		(3.7)
Amortization of prior net actuarial (gain) loss	0.6		0.5

Total net periodic benefit cost (income)	$	6.8	$	1.4


	Other Postretirement Benefit Plans
(dollars in millions)	Three months ended March 28, 2026		Three months ended March 29, 2025
Net Periodic Benefit Cost:


Interest cost	$	0.3	$	0.3

Amortization of prior net actuarial (gain) loss	(0.7)		(0.8)

Total net periodic benefit cost (income)	$	(0.4)	$	(0.5)

The components of the above net periodic benefit cost (income) for pensions and other post-retirement benefits that are reported outside of operating income are all included in the other expense line in the condensed consolidated statement of operations.

In March 2026, we completed an annuity purchase for most of the retirees in the Canadian defined benefit pension plan. The $30.4 million purchase price, funded from plan assets, settled $30.4 million of the pension benefit obligation. We recognized a one-time, non-cash pension settlement loss of $5.2 million.

For 2026 as a whole, we expect to contribute approximately $12.6 million to our defined benefit pension plans and approximately $2.6 million to our other retirement plans.

14. Share-based compensation

The Company operates a share-based incentive plan over its shares to provide incentives to Gates’ senior executives and other eligible employees. During the three months ended March 28, 2026, we recognized a charge of $6.3 million compared to $6.1 million during the three months ended March 29, 2025.

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Awards issued under the 2014 Gates Industrial Corporation plc Stock Incentive Plan (the “2014 Plan”)

Gates has a number of share-based incentive awards issued under the 2014 Plan, which was assumed by the Company and renamed the Gates Industrial Corporation plc Stock Incentive Plan in connection with our initial public offering in January 2018 (our “IPO”). No new awards have been granted under this plan since 2017. The options granted prior to our IPO were split equally into four tiers, each with specific vesting conditions. Tier I, Tier II and IV options all vested, while the performance conditions associated with Tier III were not achieved and therefore expired during 2022. All the options expire ten years after the date of grant.

Due to Chinese regulatory restrictions on foreign stock ownership, awards granted under this plan to Chinese employees have been issued as stock appreciation rights (“SARs”). The terms of these SARs are identical to those of the options described above with the exception that no share is issued on exercise; instead, cash equivalent to the increase in the value of the shares from the date of grant to the date of exercise is paid to the employee. These awards are therefore treated as liability awards under Topic 718 “Compensation - Stock Compensation” and are revalued to their fair value at each period end. The SARs have the same vesting terms as the Tier II, III and IV option awards described above. All Tier III SARs expired during 2022 as the specific performance conditions were not achieved.

Changes in the awards granted under this plan are summarized in the tables below.

Awards issued under the Gates Industrial Corporation plc 2018 Omnibus Incentive Plan (the “2018 Plan”)

In conjunction with the initial public offering in January 2018, Gates adopted the 2018 Plan, which is a market-based long-term incentive program that allows for the issue of a variety of equity-based and cash-based awards, including stock options, SARs and restricted stock units (“RSUs”).

The SARs issued under this plan take the form of options, except that no share is issued on exercise; instead, cash equivalent to the increase in the value of the shares from the date of grant to the date of exercise is paid to the employee. These awards are therefore treated as liability awards under Topic 718 “Compensation - Stock Compensation” and are revalued to their fair value at each period end. The SARs and the majority of the share options issued under this plan vest evenly over either three years or four years from the grant date. Certain premium-priced options vested evenly over a three-year period, starting two years from the grant date. All options vest subject to the participant’s continued employment by Gates on the vesting date and expire ten years after the date of grant.

The RSUs issued under the plan consist of time-vesting RSUs and performance-based RSUs (“PRSUs”). The time-vesting RSUs vest evenly over either one or three years from the date of grant, subject to the participant’s continued provision of service to Gates on the vesting date. The number of PRSUs earned will range from 0% to 200% of the total award amount and is dependent upon the extent the Company achieves certain performance metric targets measured over a three-year performance period subject to the participant’s continued employment through the end of the performance period. Performance metrics include return on investments and relative total shareholder return (“Relative TSR”) or adjusted gross profit margin and data center revenue, each, as defined in the applicable award agreements.

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New awards and movements in existing awards granted under this plan are summarized in the tables below.

Summary of movements in options outstanding


		Three months ended March 28, 2026
	Plan	Number of options	Weighted average exercise price $
Outstanding at the beginning of the period:
—Tier I	2014 Plan	249,722	$	7.89
—Tier II	2014 Plan	324,311	$	7.99

—Tier IV	2014 Plan	274,963	$	12.09
—SARs	Both plans	210,644	$	15.51
—Share options	2018 Plan	1,243,613	$	14.56
—Premium-priced options	2018 Plan	835,469	$	18.88
		3,138,722	$	14.35
Granted during the period:




—SARs	2018 Plan	69,822	$	26.24


		69,822	$	26.24


















Exercised during the period:
—Tier I	2014 Plan	(18,600)	$	10.73
—Tier II	2014 Plan	(22,003)	$	10.28

—Tier IV	2014 Plan	(14,304)	$	17.37
—SARs	Both Plans	(13,763)	$	14.12
—Share options	2018 Plan	(58,728)	$	14.32

		(127,398)	$	13.42
Outstanding at the end of the period:
—Tier I	2014 Plan	231,122	$	7.66
—Tier II	2014 Plan	302,308	$	7.82

—Tier IV	2014 Plan	260,659	$	11.80
—SARs	Both plans	266,703	$	18.39
—Share options	2018 Plan	1,184,885	$	14.57
—Premium-priced options	2018 Plan	835,469	$	18.88
		3,081,146	$	14.65

Exercisable at the end of the period		2,980,195	$	14.33
Vested and expected to vest at the end of the period		3,081,146	$	14.64

As of March 28, 2026, the aggregate intrinsic value of options that were exercisable was $23.2 million, and these options had a weighted average remaining contractual term of 2.9 years. As of March 28, 2026, the aggregate intrinsic value of options that were vested or expected to vest was $23.3 million, and these options had a weighted average remaining contractual term of 3.1 years.

As of March 28, 2026, the unrecognized compensation charge relating to the nonvested options was $0.6 million, which is expected to be recognized over a weighted-average period of 2.5 years.

During the three months ended March 28, 2026, cash of $0.5 million was received in relation to the exercise of vested options, compared to $1.8 million during the three months ended March 29, 2025. The aggregate intrinsic value of options exercised during the three months ended March 28, 2026 was $1.1 million compared to $13.9 million during the three months ended March 29, 2025.

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Summary of movements in RSUs and PRSUs Nonvested


	Three months ended March 28, 2026
	Number of awards	Weighted average grant date fair value $
Nonvested at the beginning of the period:
—RSUs	1,666,000	$	18.01
—PRSUs	919,731	$	18.91
	2,585,731	$	18.33
Granted during the period:
—RSUs	1,020,669	$	26.20
—PRSUs	1,108,013	$	27.51
	2,128,682	$	26.88
Adjusted for performance during the period:
—PRSUs	193,854	$	15.88
	193,854	$	15.88

Forfeited during the period:
—RSUs	(35,598)	$	16.84
—PRSUs
	(35,598)	$	16.84




Vested during the period:
—RSUs	(797,527)	$	16.97
—PRSUs	(514,281)	15.88
	(1,311,808)	$	16.54
Nonvested at the end of the period:
—RSUs	1,853,544	$	22.99
—PRSUs	1,707,317	$	25.06
	3,560,861	$	23.98

As of March 28, 2026, the unrecognized compensation charge relating to unvested RSUs and PRSUs was $72.4 million, which is expected to be recognized over a weighted average period of 2.2 years, subject, where relevant, to the achievement of the performance conditions described above. The total fair value of RSUs and PRSUs vested during the three months ended March 28, 2026 was $21.7 million, compared to $20.5 million during the three months ended March 29, 2025, respectively.

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Valuation of awards granted during the period

The grant date fair value of the SARs are measured using a Black-Scholes valuation model. RSUs are valued at the share price on the date of grant. The Relative TSR component of the PRSUs were valued using Monte Carlo simulations. As Gates only has volatility data for its shares for the period since its IPO, this volatility has, where necessary, been weighted with the debt-levered volatility of a peer group of public companies in order to determine the expected volatility over the expected option life. The expected option life represents the period of time for which the options are expected to be outstanding and is based on consideration of the contractual life of the option, option vesting period, and historical exercise patterns. The weighted average fair values and relevant assumptions were as follows:


	Three months ended
	March 28, 2026			March 29, 2025
Weighted average grant date fair value:
—SARs	$	11.68		$	9.96


—RSUs	$	26.20		$	21.63
—PRSUs	$	27.51		$	23.55

Inputs to the model:
—Expected volatility — SARs	39.8		%	41.1		%


—Expected volatility — PRSUs	33.9		%	31.6		%

—Expected option life for SARs (years)	6.0			6.0





—Risk-free interest rate:
SARs	3.8		%	4.1		%


PRSUs	3.5		%	4.0		%

15. Equity

Movements in the Company’s number of shares in issue for the three months ended March 28, 2026 and March 29, 2025, respectively, were as follows:


	Three months ended
(number of shares)	March 28, 2026	March 29, 2025
Balance as of the beginning of the period	253,543,540	255,203,987

Exercise of share options	60,991	1,217,232
Vesting of restricted stock units, net of withholding taxes	968,505	1,039,360
Shares repurchased	(710,058)	—
Balance as of the end of the period	253,862,978	257,460,579

In October 2025, the Company’s Board cancelled the then existing share repurchase program and approved a new share repurchase program, providing for up to $300.0 million in share repurchases, which expires on December 31, 2026.

During the three months ended March 28, 2026, the Company repurchased 710,058 shares under the existing share repurchase program in the open market at a total cost of approximately $16.5 million, plus costs paid directly related to the transaction of $0.1 million. All shares repurchased were pending cancellation and approximately $177.8 million remained available under the share repurchase program as of March 28, 2026.

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16. Analysis of accumulated other comprehensive (loss) income

Changes in accumulated other comprehensive (loss) income by component, net of tax, were as follows:


(dollars in millions)	Post- retirement benefits		Cumulative translation adjustment		Cash flow hedges		Accumulated OCI attributable to shareholders		Non-controlling interests		Accumulated OCI
As of December 31, 2025	$	(30.5)	$	(870.4)	$	(16.2)	$	(917.1)	$	(77.4)	$	(994.5)
Foreign currency translation	0.4		(27.3)		—		(26.9)		(1.0)		(27.9)
Cash flow hedges movements	—		—		12.9		12.9		0.2		13.1
Post-retirement benefit movements	5.7		—		—		5.7		—		5.7
Other comprehensive income (loss)	6.1		(27.3)		12.9		(8.3)		(0.8)		(9.1)
As of March 28, 2026	$	(24.4)	$	(897.7)	$	(3.3)	$	(925.4)	$	(78.2)	$	(1,003.6)


(dollars in millions)	Post- retirement benefits		Cumulative translation adjustment		Cash flow hedges		Accumulated OCI attributable to shareholders		Non-controlling interests		Accumulated OCI
As of December 28, 2024	$	(23.2)	$	(1,056.8)	$	2.8	$	(1,077.2)	$	(97.5)	$	(1,174.7)
Foreign currency translation	(1.4)		40.9		—		39.5		4.9		44.4
Cash flow hedges movements	—		—		(7.8)		(7.8)		—		(7.8)
Post-retirement benefit movements	(0.2)		—		—		(0.2)		—		(0.2)
Other comprehensive (loss) income	(1.6)		40.9		(7.8)		31.5		4.9		36.4
As of March 29, 2025	$	(24.8)	$	(1,015.9)	$	(5.0)	$	(1,045.7)	$	(92.6)	$	(1,138.3)

17. Related party transactions

A. Equity method investees

Purchases from equity method investees were as follows:


	Three months ended
(dollars in millions)	March 28, 2026		March 29, 2025

Purchases	$	(3.7)	$	(3.7)

Amounts outstanding in respect of these transactions were payables of $0.1 million as of both March 28, 2026 and December 31, 2025. No dividends were received from our equity method investees during the periods presented.

B. Non-Gates entities controlled by non-controlling shareholders

Sales to and purchases from non-Gates entities controlled by non-controlling shareholders were as follows:


	Three months ended
(dollars in millions)	March 28, 2026		March 29, 2025
Sales	$	10.5	$	10.5
Purchases	$	(3.7)	$	(3.9)

Amounts outstanding in respect of these transactions were as follows:


(dollars in millions)	As of March 28, 2026		As of December 31, 2025
Receivables	$	4.0	$	3.5
Payables	$	(3.1)	$	(2.9)

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18. Commitments and contingencies

A. Contingencies

Gates is, from time to time, party to general legal proceedings and claims, which arise in the ordinary course of business. Gates is also, from time to time, party to legal proceedings and claims in respect of environmental obligations, product liability, intellectual property, commercial and contractual disputes, employment matters and other matters which arise in the ordinary course of business and against which management believes Gates has meritorious defenses available. When appropriate, management consults with legal counsel and other appropriate experts to assess claims. If, in management’s opinion, we have incurred a probable loss as set forth by U.S. GAAP, an estimate is made of the loss and the appropriate accrual is reflected in our consolidated financial statements. Currently, there are no material amounts accrued.

While it is not possible to quantify the financial impact or predict the outcome of all pending claims and litigation, management does not anticipate that the outcome of any current proceedings or known claims, either individually or in aggregate, will materially affect Gates’ financial position, results of operations or cash flows.

B. Warranties

The following summarizes the movements in the warranty liability for the three months ended March 28, 2026 and March 29, 2025, respectively:


	Three months ended
(dollars in millions)	March 28, 2026		March 29, 2025
Balance as of the beginning of the period	$	15.5	$	16.4
Charge for the period	2.1		2.1
Payments made	(2.0)		(1.6)


Foreign currency translation	—		0.1
Balance as of the end of the period	$	15.6	$	17.0

19. Subsequent Event

On May 1, 2026, the Company announced that it entered into a definitive agreement to acquire the belts business from The Timken Company including select manufacturing assets. The transaction is expected to close in the third quarter of 2026.

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Item 2: Management’s Discussion and Analysis
of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and related notes thereto included elsewhere in this quarterly report. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in “Cautionary Note Regarding Forward-Looking Statements” above and Part I, Item 1A. “Risk Factors” in our annual report.

Our Company

We are a global manufacturer of innovative, highly engineered power transmission and fluid power solutions. We offer a broad portfolio of products to diverse aftermarket channel customers, and to original equipment manufacturers (“OEM”) as specified components, with the majority of our revenue coming from aftermarket channels. Our products are used in applications across numerous end markets, including: automotive aftermarket, automotive OEM, diversified industrial, industrial off-highway, industrial on-highway, energy and resources and personal mobility. Our net sales have historically been, and remain, highly correlated with industrial activity and utilization, and not with any single end market given the diversification of our business and high exposure to the aftermarket channel. We sell our products globally under the Gates brand, which is recognized by distributors, equipment manufacturers, installers and end users as a premium brand for quality and technological innovation; this reputation has been built over more than 110 years since Gates’ founding in 1911.

Within the diverse end markets we serve, our highly engineered products are often critical components in applications for which the cost of downtime is high relative to the cost of our products, resulting in the willingness of end users to pay a premium for superior performance and availability. These applications subject our products to normal wear and tear, resulting in natural, and often preventative, aftermarket cycles that drive high-margin, recurring revenue. Our product portfolio represents one of the broadest ranges of power transmission and fluid power products in the markets we serve, and we maintain long-standing relationships with a diversified group of well-known customers throughout the world. As a leading designer, manufacturer and marketer of highly engineered, mission-critical products, we have become an industry leader across most of our end markets and the regions in which we operate.

Business Trends

The diversification of our business limits our exposure to trends in any given end market. In addition, a majority of our sales are generated from customers in aftermarket channels, who serve primarily a large base of installed equipment that follows a natural maintenance cycle that is somewhat less susceptible to various trends that affect our end markets. Such trends include infrastructure investment and construction activity, agricultural production and related commodity prices, commercial and passenger vehicle production, miles driven and fleet age, evolving regulatory requirements related to emissions and fuel economy and oil and gas prices and production. Key indicators of our performance include industrial production, industrial sales and manufacturer shipments.

During the three months ended March 28, 2026, sales into aftermarket channels accounted for approximately 68% of our total net sales. Our aftermarket sales cover a very broad range of applications and industries and, accordingly, are highly correlated with industrial activity and utilization and not a single end market. Aftermarket products are principally sold through distribution partners that may carry a very broad line of products or may specialize in products associated with a smaller set of end market applications.

During the three months ended March 28, 2026, sales into OEM channels accounted for approximately 32% of our total net sales. First-fit sales are to a variety of industrial and automotive customers. Our industrial OEM customers cover a diverse range of industries and applications and many of our largest first-fit customers manufacture construction and agricultural equipment.

During the three months ended March 28, 2026, sales in the personal mobility end market continued to experience strong growth, and our aftermarket channel sales grew modestly, including positive core growth in the industrial aftermarket channel. We continue to focus on managing our business through current economic uncertainties, improving our gross margins through our efforts of material cost savings, footprint optimization and productivity. In the first half of 2026, we expect certain one-time footprint optimization, restructuring, and system implementation costs. We anticipate these and other investments and product development in personal mobility and data center opportunities will position us to drive long term growth and margin expansion.

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Our global operating footprint and worldwide sales reach expose us to risks associated with geopolitical tensions and trade conflicts. Global trade conflicts due to recent U.S. and retaliatory tariffs and geopolitical tensions, including the conflict in the Middle East, have led to, and may continue to lead to, inflationary pressures, supply chain disruptions, uncertainty, and volatility in the market and, therefore, could impact our operations and financial performance. As the geopolitical climate continues to evolve, we could have additional exposures in the future. We will continue to monitor and evaluate risks related to geopolitical tensions and trade conflicts and any resulting impact on macroeconomic conditions and our business.

Results for the three months ended March 28, 2026 compared to the results for the three months ended March 29, 2025

Summary Gates Performance


	Three months ended
(dollars in millions)	March 28, 2026		March 29, 2025
Net sales	$	851.1	$	847.6
Cost of sales	513.1		503.0
Gross profit	338.0		344.6
Selling, general and administrative expenses	226.9		216.2
Transaction-related expenses	0.5		0.4
Asset impairments	—		0.6
Restructuring expenses	0.7		1.6

Operating income from continuing operations	109.9		125.8
Interest expense	29.9		29.6

Other expense	2.1		2.4
Income from continuing operations before taxes	77.9		93.8
Income tax expense	11.5		25.2
Net income from continuing operations	$	66.4	$	68.6

Adjusted EBITDA(1)	$	177.4	$	187.3

(1) See “—Non-GAAP Measures” for a reconciliation of Adjusted EBITDA to net income, the closest comparable GAAP measure, for each of the periods presented.

Net sales

Net sales during the three months ended March 28, 2026 were $851.1 million, compared to $847.6 million during the prior year period, an increase of 0.4%, or $3.5 million. The following table lists the primary drivers behind the change in net sales (amounts in millions):


	Power Transmission		Fluid Power		Total Company
Three months ended March 29, 2025	$	527.2	$	320.4	$	847.6

Currency translation	19.2		8.7		27.9
Volume	(24.5)		(20.2)		(44.7)
Pricing	11.3		9.0		20.3
Three months ended March 28, 2026	$	533.2	$	317.9	$	851.1

Cost of sales for the three months ended March 28, 2026 was $513.1 million, compared to $503.0 million for the prior year period, an increase of 2.0%, or $10.1 million. The following table lists the primary drivers behind the change in cost of sales (amounts in millions):

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Three months ended March 29, 2025	$	503.0

Currency translation	15.0
Volume	(18.7)
Manufacturing performance	(0.6)
Mix	(1.8)
Inflation	7.3
Tariff	8.7
Inventory impairments and adjustments	5.0
Inbound Freight	(4.9)
Other	0.1
Three months ended March 28, 2026	$	513.1

Selling, general and administrative expenses

Selling, general and administrative (“SG&A”) expenses for the three months ended March 28, 2026 were $226.9 million compared to $216.2 million for the prior year period. This increase of $10.7 million was driven primarily by higher labor and benefits expense of $4.3 million, unfavorable impacts of exchange rates of $4.8 million, and higher consulting and professional fees of $2.5 million. This increase was partially offset by lower corporate owned life insurance expense of $2.2 million.

Transaction-related expenses

Transaction-related expenses for the three months ended March 28, 2026 were $0.5 million compared to $0.4 million for the prior year period. Transaction-related expenses incurred during the three months ended March 28, 2026 were primarily related to certain corporate transactions. Transaction-related expenses incurred during the three months ended March 29, 2025 were primarily related to certain non-recurring debt related costs.

Restructuring expenses

Restructuring expenses during the three months ended March 28, 2026 included $0.7 million of costs related to a global cost reduction effort and reorganization of our operations in Mexico. Restructuring related expenses during the three months ended March 28, 2026 included $2.4 million of costs related to the relocation of certain production activities and reorganization of our operations in Mexico and $1.4 million of costs related to professional service fees and general severance.

Restructuring expenses during the three months ended March 29, 2025 primarily included $1.3 million of costs related to the relocation of certain production activities and reorganization of our operations in Mexico, as well as severance and professional service fees. Restructuring related expenses during the three months ended March 29, 2025 primarily included $1.0 million of costs related to the relocation of certain production activities and reorganization of our operations in Mexico, as well as severance and professional service fees.

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Interest expense

Our interest expense was as follows:


	Three months ended
(dollars in millions)	March 28, 2026		March 29, 2025
Debt:
Dollar Term Loans	$	17.3	$	16.7

Dollar Senior Notes	8.4		8.7


	25.7		25.4
Amortization of deferred issuance costs	1.5		1.5
Other interest expense	2.7		2.7
	$	29.9	$	29.6

Details of our long-term debt are presented in Note 12 to the condensed consolidated financial statements included elsewhere in this report. Interest expense increased by $0.3 million during the three months ended March 28, 2026, respectively, when compared to the equivalent prior year period, primarily due to a less favorable impact from derivatives, partially offset by lower applicable interest rates on the Dollar Term Loans.

Other expense

Our other expense was as follows:


	Three months ended
(dollars in millions)	March 28, 2026		March 29, 2025
Interest income on bank deposits	$	(2.2)	$	(2.2)
Foreign currency transaction loss (gain), net	2.8		1.1
Net adjustments related to post-retirement benefits	5.4		0.4
Foreign currency loss on hyperinflation remeasurement	0.2		1.0

Other	(4.1)		2.1
	$	2.1	$	2.4

Other expense for the three months ended March 28, 2026 was $2.1 million compared to $2.4 million of expense, for the three months ended March 29, 2025. These changes were primarily driven by a financing related gain primarily due to foreign currency exchange rate movement on intercompany loans and hedging instruments. This was partially offset by a pension settlement loss of $5.2 million in March 2026.

Income tax expense

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Deferred Tax Assets and Liabilities

Analysis by Operating Segment

Power Transmission (62.6% of Gates’ net sales for the three months ended March 28, 2026)


	Three months ended
(dollars in millions)	March 28, 2026			March 29, 2025			Period over period change
Net sales	$	533.2		$	527.2		1.1	%
Adjusted EBITDA	$	112.0		$	116.7		(4.0	%)
Adjusted EBITDA margin	21.0		%	22.1		%

Net sales in Power Transmission for the three months ended March 28, 2026, increased by 1.1%, or $6.0 million, compared to the prior year period, driven primarily by benefits from pricing of $11.3 million, partially offset by lower volumes. Our net sales for the three months ended March 28, 2026 were favorably impacted by movements in average currency exchange rates of $19.2 million. As such, core sales decreased by 2.5%, or $13.2 million, compared to the prior year period.

Power Transmission’s core sales decline was primarily driven by lower sales to customers in our aftermarket channel, where sales declined by 3.2% during the three months ended March 28, 2026, compared to the prior year period. Automotive aftermarket experienced a sales decline of 5.0% during March 28, 2026. OEM sales declined by 1.2%, with automotive OEM sales declining by 8.5% during the three months ended March 28, 2026. This was partially offset by Industrial OEM, with a sales increase of 7.1% during the three months ended March 28, 2026, compared to the prior year period, particularly in EMEA. From an end market perspective, construction and personal mobility sales increased by 20.6% and 7.1%, respectively, during the three months ended March 28, 2026, while automotive sales decreased by 5.6% compared to the prior year period.

Power Transmission Adjusted EBITDA for the three months ended March 28, 2026 decreased by 4.0%, or $4.7 million, compared to the prior year period, driven primarily by lower volume, partially offset by benefits from pricing and favorable impacts in average currency exchange rates. As a result, Adjusted EBITDA margin was 21.0%, a 110 basis point decline from the prior year period.

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Fluid Power (37.4% of Gates’ net sales for the three months ended March 28, 2026)


	Three months ended
(dollars in millions)	March 28, 2026			March 29, 2025			Period over period change
Net sales	$	317.9		$	320.4		(0.8	%)
Adjusted EBITDA	$	65.4		$	70.6		(7.4	%)
Adjusted EBITDA margin	20.6		%	22.0		%

Net sales in Fluid Power for the three months ended March 28, 2026 decreased by 0.8%, or $2.5 million, compared to the prior year period, driven primarily by a decrease in volume, partially offset by a $9.0 million benefit from pricing. Our net sales were favorably impacted by movements in average currency exchange rates of $8.7 million. As such, core sales decreased by 3.5%, or $11.2 million, compared to the prior year period.

Fluid Power’s core sales to our aftermarket channel decreased by 2.6%, while sales in our OEM channel declined by 5.6% during the three months ended March 28, 2026. Industrial aftermarket experienced a sales decline of 6.1%, during the three months ended March 28, 2026, partially offset by a 3.0% increase in automotive aftermarket sales, primarily driven from the Americas and APAC. From an end market perspective, the decline of Fluid Power’s core sales of 3.5% during the three months ended March 28, 2026, was primarily attributable to a decrease in construction and on highway, partially offset by an increase in automotive.

Fluid Power Adjusted EBITDA for the three months ended March 28, 2026 decreased by 7.4%, or $5.2 million, compared to the prior year period, driven primarily by lower volumes, partially offset by benefits from pricing. As a result, the Adjusted EBITDA margin was 20.6%, a 140 basis point decline from the prior year period.

Liquidity and Capital Resources

Treasury Responsibilities and Philosophy

Our primary liquidity and capital resource needs are for working capital, debt service requirements, capital expenditures, share repurchases, facility expansions and acquisitions. We expect to finance our future cash requirements with cash on hand, cash flows from operations and, where necessary, borrowings under our secured revolving credit facility. We have historically relied on our cash flow from operations and various debt and equity financings for liquidity.

From time to time, we enter into currency derivative contracts to manage currency transaction exposures. Similarly, from time to time, we may enter into interest rate derivatives to maintain the desired mix of floating and fixed rate debt.

As market conditions warrant, we may from time to time seek to repurchase securities that we have issued or loans that we have borrowed in privately negotiated or open market transactions, by tender offer or otherwise. Subject to any applicable limitations contained in the agreements governing our indebtedness, any such purchases of ordinary shares or other securities or loans may be funded by existing cash or by incurring new secured or unsecured debt, including borrowings under our credit facilities. The amounts involved in any such purchase transactions, individually or in the aggregate, may be material. Any such purchases of debt securities or loans may relate to a substantial amount of a particular tranche of debt, with a corresponding reduction, where relevant, in the trading liquidity of that debt. In addition, any such purchases of debt made at prices below the “adjusted issue price” (as defined for U.S. federal income tax purposes) may result in taxable cancellation of indebtedness income to us, which may be material, and result in related adverse tax consequences to us.

It is our policy to retain sufficient liquidity throughout the capital expenditure cycle to maintain our financial flexibility. We do not have any meaningful debt maturities until 2029; however, we regularly evaluate market conditions, our liquidity profile, and various financing alternatives for opportunities to enhance our capital structure, and may refinance all or a portion of our indebtedness on or before maturity. We do not anticipate any material long-term deterioration in our overall liquidity position in the foreseeable future, and believe that we have adequate liquidity and capital resources for the next twelve months.

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Cash Flow

Three months ended March 28, 2026 compared to the three months ended March 29, 2025

Cash provided by operating activities was $30.2 million during the three months ended March 28, 2026, compared to cash provided by operating activities of $7.3 million during the prior year period, primarily driven by a $27.8 million favorable movement in operating assets and liabilities, partially offset by a $2.1 million decrease in net income.

Net cash used in investing activities during the three months ended March 28, 2026, was $27.2 million, compared to $31.0 million in the prior year period. The decrease of cash used in investing activities was primarily driven by decreased capital expenditures of $4.7 million, partially offset by a $0.4 million increase in net cash paid under company-owned life insurance policies, and $0.7 million fewer proceeds from the sale of property, plant and equipment.

Net cash used in financing activities was $25.1 million during the three months ended March 28, 2026, compared to $24.6 million in the prior year period. Current year outflows were primarily related to $16.6 million paid to acquire shares under our share repurchase program and $8.6 million of employee taxes paid from shares withheld on exercised options. Prior year outflows were primarily related to $13.0 million paid to acquire shares under our share repurchase program, $4.7 million in debt repayment, and $11.5 million of employee taxes paid from shares withheld on exercised options.

Indebtedness

Our long-term debt, consisting principally of secured term loans and the U.S. dollar denominated unsecured senior notes, was as follows:


	Carrying amount				Principal amount
(dollars in millions)	As of March 28, 2026		As of December 31, 2025		As of March 28, 2026		As of December 31, 2025
Secured debt:
—2024 Dollar Term Loans due June 4, 2031	$	1,278.0	$	1,276.2	$	1,283.8	$	1,283.8
—2022 Dollar Term Loans due November 16, 2029	447.4		444.7		456.3		456.3

Unsecured debt:
—6.875% Dollar Senior Notes due July 1, 2029	503.1		511.6		500.0		500.0

	$	2,228.5	$	2,232.5	$	2,240.1	$	2,240.1

We refer to the term loans denominated in U.S. dollars as the “Dollar Term Loans” and the unsecured senior notes denominated in U.S. dollars as the “Dollar Senior Notes”. The Dollar Term Loans that were issued on February 24, 2021 are referred to as the “2021 Dollar Term Loans”, which were extinguished on June 4, 2024. The new tranche of dollar term loans that were issued on June 4, 2024 are referred to as the “2024 Dollar Term Loans”, and the Dollar Term Loans that were issued on November 16, 2022 and repriced on June 4, 2024 are referred to as the “2022 Dollar Term Loans.” Details of our long-term debt are presented in Note 12 to the condensed consolidated financial statements included elsewhere in this quarterly report.

Amendments to credit agreements

On January 21, 2025, we amended our credit agreement to lower the margin with respect to the Revolving Credit Loans by 50 basis points compared to the previous term. The Revolving Credit Loans bear interest at our option either Term SOFR (subject to a floor of —%) plus a margin of 1.75% per annum or the base rate plus 0.75% per annum. The applicable margin for the Revolving Credit Facility borrowings will be subject to one 25 basis point step down determined in accordance with Gates Industrial Holdco Limited achieving a certain consolidated first lien net leverage level.

Non-guarantor subsidiaries

The majority of the Company’s U.S. subsidiaries are guarantors of the senior secured credit facilities.

For the three months ended March 28, 2026, before intercompany eliminations, our non-guarantor subsidiaries represented approximately 74% of our net sales and 70% of our EBITDA as defined in the financial covenants attaching to the senior secured credit facilities. As of March 28, 2026, before intercompany eliminations, our non-guarantor subsidiaries represented approximately 69% of our total assets and approximately 27% of our total liabilities.

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Borrowing Headroom

Our secured revolving credit facility that provides for multi-currency revolving loans has a borrowing capacity of $500.0 million and matures on the date that is the earliest of (x) June 4, 2029 and (y) April 1, 2029, if greater than $500.0 million in aggregate principal amount of the Dollar Senior Notes due 2029 are outstanding. As of March 28, 2026, there were letters of credit outstanding against the facility amounting to $28.8 million. As of March 28, 2026, our total committed borrowing headroom was $471.2 million, in addition to cash and cash equivalents balances of $785.3 million.

Non-GAAP Measures

Adjusted EBITDA

Management uses “Adjusted EBITDA” as its key profitability measure. Adjusted EBITDA is a non-GAAP measure that represents Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”), adjusted for certain items that are considered to hinder comparison of the performance of our businesses on a period-over-period basis or with other businesses. We use Adjusted EBITDA as our measure of segment profitability to assess the performance of our businesses, and it is used for total Gates as well because we believe it is important to consider our profitability on a basis that is consistent with that of our operating segments, as well as that of certain of our peer companies. We believe that Adjusted EBITDA should, therefore, be made available to securities analysts, investors and other interested parties to assist in their assessment of the performance of our businesses.

Differences exist among our businesses and from period to period in the extent to which their respective employees receive share-based compensation or a charge for such compensation is recognized. We therefore exclude from Adjusted EBITDA the non-cash charges in relation to share-based compensation in order to assess the relative performance of our businesses.

We exclude from Adjusted EBITDA acquisition-related costs that are required to be expensed in accordance with U.S. GAAP. We also exclude costs associated with major corporate transactions because we do not believe that they relate to our performance. Other items are excluded from Adjusted EBITDA because they are individually or collectively significant items that are not considered to be representative of the underlying performance of our businesses. During the periods presented, the items excluded from EBITDA in computing Adjusted EBITDA primarily included:

•transaction-related expenses incurred in relation to major corporate transactions, including the acquisition of businesses and related integration activities, and equity and debt transactions;

•non-cash charges in relation to share-based compensation;

•inventory adjustments related to certain inventories accounted for on a LIFO basis;

•asset impairments;

•restructuring expenses, including severance and restructuring-related expenses; and

•other expenses (income), excluding foreign currency transaction gain or loss and insurance recoveries.

We excluded changes in the LIFO inventory reserve recognized in cost of sales for certain inventories that are valued on a LIFO basis. During inflationary or deflationary pricing environments, LIFO adjustments can result in variability of the cost of sales recognized each period as the most recent costs are matched against current sales, while historical, typically lower, costs are retained in inventory. LIFO adjustments are determined based on published pricing indices, which often are not representative of the actual cost changes or timing of those changes as experienced by our business. Excluding the impact from the application of LIFO therefore improves the comparability of our financial performance from period to period and with the Company’s peers, and more closely represents the physical flow of our inventory and how we manage the business.

Adjusted EBITDA excludes items that can have a significant effect on our profit or loss and should, therefore, be used in conjunction with, not as substitutes for, profit or loss for the period. Management compensates for these limitations by separately monitoring net income from continuing operations for the period.

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The following table reconciles net income to Adjusted EBITDA:


	Three months ended
(dollars in millions)	March 28, 2026		March 29, 2025
Net income	$	66.2	$	68.3
Loss on disposal of discontinued operations	0.2		0.3


Income tax expense	11.5		25.2
Interest expenses	29.9		29.6
Depreciation and amortization	55.7		52.2

Share-based compensation expense	6.3		6.1
Transaction-related expenses (1)	0.5		0.4
Inventory adjustments (included in cost of sales) (2)	4.0		(1.0)
Restructuring expenses	0.7		1.6



Restructuring related expenses (included in cost of sales)	2.5		1.2
Restructuring related expenses (included in SG&A)	1.3		1.5
Asset impairments	—		0.6
Other expense, excluding foreign currency transaction gain or loss and insurance recoveries (3)	(1.5)		1.3
Adjusted EBITDA	$	177.3	$	187.3

(2) Inventory adjustments includes the reversal of the adjustment to remeasure certain inventories on a LIFO basis.

(3) Other expenses (income) excludes foreign currency transaction losses and insurance recoveries of $3.5 million for the three months ended March 28, 2026; foreign currency transaction loss of $1.1 million for the three months ended March 29, 2025.

Core sales growth reconciliations

Core sales is a non-GAAP measure that represents net sales for the period excluding the impacts of movements in average currency exchange rates and the first-year impacts of acquisitions and disposals, when applicable. Core sales growth is the change in core sales expressed as a percentage of prior period net sales. We present core sales growth because it allows for a meaningful comparison of year-over-year performance without the volatility caused by foreign currency gains or losses or the incomparability that would be caused by impacts of acquisitions or disposals. Management believes that this measure is therefore useful for securities analysts, investors and other interested parties to assist in their assessment of the operating performance of our businesses. The closest GAAP measure is net sales.


	Three months ended March 28, 2026
(dollars in millions)	Power Transmission			Fluid Power			Total
Net sales for the three months ended March 28, 2026	$	533.2		$	317.9		$	851.1
Impact on net sales of movements in currency rates	(19.2)			(8.7)			(27.9)

Core sales for the three months ended March 28, 2026	$	514.0		$	309.2		$	823.2


Net sales for the three months ended March 29, 2025	$	527.2		$	320.4		$	847.6
Increase (decrease) in net sales	6.0			(2.5)			3.5
Decrease in net sales on a core basis (core sales)	(13.2)			(11.2)			(24.4)

Net sales increase (decrease)	1.1		%	(0.8		%)	0.4		%
Core sales decrease	(2.5		%)	(3.5		%)	(2.9		%)

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Adjusted EBITDA adjustments for ratio calculation purposes

The financial maintenance ratio in our credit agreement and other ratios related to incurrence-based covenants (measured only upon the taking of certain actions, including the incurrence of additional indebtedness) under our credit agreement governing our revolving credit facility and our term loan facility and the indenture governing our outstanding notes are calculated in part based on financial measures similar to Adjusted EBITDA as presented elsewhere in this report, which financial measures are determined at the Gates Industrial Holdco Limited level and adjust for certain additional items such as severance costs, the pro forma impacts of acquisitions and the pro forma impacts of cost-saving initiatives. These additional adjustments during the twelve months ended March 28, 2026, as calculated pursuant to such agreements, resulted in a net benefit to Adjusted EBITDA for ratio calculation purposes of $4.3 million. Pursuant to the terms of the credit agreement governing our revolving credit facility and term loans, the Company may not, subject to certain exceptions, permit its Consolidated First Lien Net Leverage Ratio (as defined in the credit agreement) to exceed 4.50 to 1.00 as of the end of the test period if borrowings under the revolving credit facility exceed a certain threshold. Pursuant to the credit agreement, this ratio is defined as Consolidated First Lien Net Debt (as defined in the credit agreement) divided by Consolidated EBITDA (as defined in the credit agreement). For a description of the other material terms related to our debt agreements, please refer to Note 12 to the condensed consolidated financial statements included elsewhere in this report, and for a discussion of risks related to the compliance or non-compliance with the covenants described herein on the Company’s financial condition and liquidity, please refer to the factors described in Item 1A. “Risk Factors—Risks Related to Our Indebtedness” in Part I of the annual report. During the periods covered by the condensed consolidated financial statements included in this report, we were in compliance with the financial covenant and had no borrowing on the revolving credit facility.

Gates Industrial Corporation plc is not an obligor under our revolving credit facility, our term loan facility or the indenture governing our outstanding notes. Gates Industrial Holdco Limited, a direct wholly-owned subsidiary of Gates Industrial Corporation plc, is the parent guarantor under our revolving credit facility, our term loan facility, and our outstanding notes. The only significant differences between the results of operations and net assets that would be shown in the consolidated financial statements of Gates Industrial Holdco Limited and those for the Company that are included elsewhere in this report are (i) an additional net intercompany loan receivable due to Gates Industrial Holdco and its subsidiaries from the Company, which was $238.8 million and $226.4 million as of March 28, 2026 and December 31, 2025, respectively, (ii) an additional intercompany receivable of $3.7 million as of March 28, 2026 and an intercompany receivable of $7.5 million as of December 31, 2025, due to Gates Industrial Holdco Limited and its subsidiaries from the Company attributable to UK tax group relief, and (iii) an additional cash and cash equivalents held by the Company, which was $18.1 million and $10.6 million as of March 28, 2026 and December 31, 2025, respectively.

Critical Accounting Estimates and Judgments

Our management’s discussion and analysis of financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions concerning the future that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reported period.

Please refer to “Critical Accounting Estimates and Judgments” described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as filed with the SEC, from which there have been no material changes.

Item 3: Quantitative and Qualitative Disclosures about Market Risk

Our market risk includes the potential loss arising from adverse changes in foreign currency exchange rates, interest rates and commodity prices, and the credit risk of our customers and third-party depository institutions that hold our cash and short term deposits. From time to time, we use derivative financial instruments, principally foreign currency swaps, forward foreign currency contracts, interest rate caps (options), and interest rate swaps to reduce our exposure to foreign currency risk and interest rate risk. We do not hold or issue derivatives for speculative purposes and monitor closely the credit quality of the institutions with which we transact. Our objective in managing these risks is to reduce fluctuations in earnings and cash flows associated with changes in foreign currency exchange rates and interest rate movements. For a discussion of quantitative and qualitative disclosures about market risk, please refer to our annual report from which our exposure to market risk has not materially changed.

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Item 4: Controls and Procedures

Disclosure Controls and Procedures

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. The Company’s management, with the participation of the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, the Company’s Chief Executive Officer and the Company’s Chief Financial Officer concluded that, as of March 28, 2026, the Company’s disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1: Legal Proceedings

Information regarding legal proceedings is incorporated into this Part II, Item 1 from Note 18 of the notes to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 1A: Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Item 1A “Risk Factors” in Part I of the Company’s annual report, which could materially affect the Company’s business, financial condition, operating results or liquidity or future results. The risks described in the annual report are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that it currently deems to be immaterial also may materially adversely affect its results of operations, financial condition or liquidity. There have been no material changes to the risk factors disclosed in the annual report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth information regarding our purchases of our ordinary shares during the three months ended March 28, 2026:



Period	Total number of shares purchased	Average price paid per share (1)		Total number of shares purchased as part of publicly announced plans or programs(2)	Maximum dollar value of shares that may yet be purchased under the plans or programs ($ million)
1/1/2026 - 1/24/2026	—	$	—	—	$	194.3
1/25/2026 - 2/21/2026	—	$	—	—	$	194.3
2/22/2026 - 3/28/2026	710,058	$	23.2300	710,058	$	177.8
Total	710,058	$	23.2300	710,058	$	177.8

(1) Does not include commissions or other costs paid to repurchase shares.

(2) The share repurchase program was established in October 2025, allowing for up to $300 million in authorized share repurchases of our ordinary shares, exclusive of commissions, through December 2026. Under this publicly announced program, we were authorized to repurchase ordinary shares using a variety of methods, including but not limited to open market purchases and privately negotiated transactions, all in compliance with the rules and regulations of the SEC and other applicable legal requirements. In March 2026, we repurchased approximately $16.5 million of our ordinary shares under the share repurchase program pursuant to a share repurchase contract and $177.8 million remained available under the share repurchase program as of March 28, 2026.

Item 5. Other Information

Trading Arrangements

During the three months ended March 28, 2026, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Executive Office Departure

On April 27, 2026, Cristin C. Bracken, the Executive Vice President, Chief Legal Officer and Corporate Secretary of the Company, notified the Company of her intention to retire from her role with the Company effective as of June 5, 2026.

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Item 6: Exhibits


Exhibit No.			Description
3.1			Certificate of Incorporation of Gates Industrial Corporation plc (incorporated by reference from Exhibit 3.1 to the registrant’s Amendment No. 1 to its Registration Statement on Form S-1, filed on January 8, 2018 (File No. 333-222310))
3.2			Articles of Association of Gates Industrial Corporation plc, effective October 7, 2019 (incorporated by reference from Exhibit 3.2 to the registrant’s Quarterly Report on Form 10-Q, filed on November 6, 2019)



10.1			Form of Time-Based Restricted Stock Unit Agreement under the Gates Industrial Corporation plc 2018 Omnibus Incentive Plan (Non-Employee Director) (1 yr), effective February 27, 2026.*
10.2			Form of Time-Based Restricted Stock Unit Agreement under the Gates Industrial Corporation plc 2018 Omnibus Incentive Plan (Executive Officer), effective February 27, 2026.*
10.3			Form of Performance-Based Restricted Stock Unit Agreement under the Gates Industrial Corporation plc 2018 Omnibus Incentive Plan (U.S. Employee), effective February 27, 2026.*

31.1			Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2			Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1			Certification by the Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
101			The following financial information from Gates Industrial Corporation’s Quarterly Report on Form 10-Q for the three months ended March 28, 2026, formatted in inline Extensible Business Reporting Language (iXBRL): (i) Condensed Consolidated Statements of Operations for the three months ended March 28, 2026 and March 29, 2025, (ii) Condensed Consolidated Statements of Comprehensive Income for the three months ended March 28, 2026 and March 29, 2025, (iii) Condensed Consolidated Balance Sheets as of March 28, 2026 and December 31, 2025, (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 28, 2026 and March 29, 2025, (v) Condensed Consolidated Statements of Shareholders’ Equity for the three months ended March 28, 2026 and March 29, 2025, and (vi) Notes to the Condensed Consolidated Financial Statements*
104			Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101)

* Filed herewith.

** Furnished herewith.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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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 thereunto duly authorized.

GATES INDUSTRIAL CORPORATION PLC
(Registrant)

By:

/s/ L. Brooks Mallard

Name:

L. Brooks Mallard

Title:

Chief Financial Officer

(On behalf of the Registrant)

By:

/s/ John S. Patouhas

Name:

John S. Patouhas

Title:

Chief Accounting Officer

(Principal Accounting Officer)

Date: May 1, 2026

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