What the changes say
- The Modine Transaction adds seven risks covering completion, dilution, integration, costs, restrictions and expected benefits.
- Automotive products generate 97% of product revenue, exposing Gentherm to vehicle production, geopolitical disruption and customer concentration.
- China-related competition now extends beyond China as lower-cost Chinese suppliers expand into Europe and North America.
- Cybersecurity disclosure now acknowledges nonmaterial 2025 incidents while emphasizing potential operational, data and delivery disruption.
What changed since the prior 10-K
New
- NewIndustry and Operational Risks
The automotive industry, our primary market, is cyclical and is significantly impacted by macroeconomic, geopolitical and similar global factors, and a decline in the production levels of our major customers and OEMs, could materially and adversely affect our business, results of operations and financial condition
Automotive demand depends on light-vehicle production across North America, Europe, China, Japan and Korea and exposure to wars, trade restrictions and other disruptions.
- NewIndustry and Operational Risks
As with most companies, we have experienced cybersecurity incidents, attempts to breach our systems and other similar incidents, none of which were material in 2025
Cyberattacks could disrupt operations, expose trade secrets or personal information, delay customer deliveries and compromise facility security.
- NewRisks Related to the Modine Transaction
The Modine Transaction may not be completed on the terms or timeline currently contemplated, or at all, and the failure to complete the Modine Transaction could adversely impact the market price of our Common Stock
The Modine Transaction could fail because of shareholder, regulatory, financing or tax conditions, potentially depressing Gentherm’s stock price.
- NewRisks Related to the Modine Transaction
If the Modine Transaction is completed, we may not realize the anticipated financial and other benefits, including growth opportunities, expected from the Modine Transaction
Gentherm may not achieve expected synergies, growth or other benefits from acquiring Performance Technologies, and integration costs could offset them.
- NewRisks Related to the Modine Transaction
The integration of Performance Technologies following the Modine Transaction may present significant challenges, and the failure to successfully integrate Performance Technologies could have a material adverse effect on the combined company’s business, financial condition or results of operations
Integrating Performance Technologies could disrupt operations and create internal-control, information-technology and regulatory-compliance challenges.
- NewRisks Related to the Modine Transaction
The pendency of the Modine Transaction could have an adverse effect on our stock price, business, financial condition, results of operations or business prospects
The pending transaction could cause customers or employees to leave or renegotiate relationships, weakening operations, prospects or the stock price.
- NewRisks Related to the Modine Transaction
We will incur significant costs related to the Modine Transaction that could have a material adverse effect on our liquidity, cash flows and operating results
Transaction fees, integration costs and a possible $45 million termination fee could reduce liquidity, cash flow and operating results.
- NewRisks Related to the Modine Transaction
We are required to abide by restrictions which could limit our ability to undertake certain corporate actions that otherwise could be advantageous
Merger Agreement and Tax Matters Agreement restrictions could limit acquisitions, investments, borrowing, capital expenditures, asset sales, contracts and personnel actions.
- NewRisks Related to the Modine Transaction
Current shareholders’ percentage ownership interest in us will be substantially diluted in the Merger
The Merger would leave pre-Merger shareholders owning approximately 60% collectively, substantially reducing their influence over Gentherm.
Dropped
- DroppedIndustry and Operational Risks
long-term competitiveness could be harmed significantly and our business, results of operations, financial condition and product growth could be materially and adversely impacted
- DroppedIndustry and Operational Risks
Inflationary pressures impacting our transportation companies and other third parties have increased and may continue to increase our costs to deliver our products, and therefore adversely impacted our margins and profitability
- DroppedIndustry and Operational Risks
Additionally, our primary manufacturing locations are in Mexico, China, Vietnam, North Macedonia, Czech Republic and Ukraine, all countries that have historically experienced a heightened degree of political, civil and labor uncertainty
- DroppedLegal, Regulatory and Compliance Risks
to vehicle safety through safety recall campaigns, and a manufacturer is obligated to recall vehicles if it determines that the vehicles do not comply with a safety standard
- DroppedLegal, Regulatory and Compliance Risks
We are required to comply with environmental laws and regulations that could cause us to incur significant costs
- DroppedFinancial Risks
We may be unable to realize the expected benefits of our restructuring actions, which could adversely affect our profitability and operations
Long-term competitiveness and product growth could suffer from lower automotive production and broader industry conditions.
Reworded
- 79% rewrittenIndustry and Operational Risks
Security breaches and other disruptions to our information technology networks and systems, including a disruption related to cybersecurity, could interfere with our operations and could compromise the confidentiality of our proprietary information or personal information
The heading now emphasizes cybersecurity disruptions, but the provided risk discussion is otherwise unchanged.
- 77% rewrittenIndustry and Operational Risks
Our ability to grow our product portfolio successfully depends on the sustained acceptance of new products and technologies that we invest in by existing and potential customers and consumers, as well as the success of our customers
The risk now emphasizes dependence on OEM dealer networks to market automotive products, including uncontrolled budgets, messaging and employee training.
- 72% rewrittenIndustry and Operational Risks
Our ongoing efforts to optimize our cost structure and our global manufacturing footprint could cause supply disruptions and be more costly, time-consuming and resource-intensive than expected
The discussion shifts from supplier discontinuations and supply obligations to restructuring expenses, asset moves and uncertainty over timing, costs and savings.
Was: Our ongoing efforts to optimize our global supply chain and our manufacturing footprint could cause supply disruptions and be more costly, time-consuming and resource-intensive than expected
- 71% rewrittenLegal, Regulatory and Compliance Risks
Defects or quality issues associated with our automotive and medical products, as well as a significant product liability lawsuit, warranty claim or product recall involving us or one of our major customers, or an investigation regarding vehicle safety generally, could adversely affect the results of our operations
The heading broadens the risk to medical products and general vehicle-safety investigations, while the provided discussion remains focused on automotive defects, liability and recalls.
- 70% rewrittenLegal, Regulatory and Compliance Risks
Our business may be negatively impacted by the effects of climate change and by regulatory and stakeholder-imposed requirements to address climate change and other sustainability issues
The provided climate-change discussion is unchanged, continuing to cover customer requirements for emissions reporting, waste reduction, sustainable materials and renewable energy.
- 64% rewrittenIndustry and Operational Risks
The material reduction in sales from any of our principal customers, due to their acquisition activity, insourcing, product quality and delivery or otherwise, could materially and adversely affect our business, results of operations, cash flows and financial condition
2025 customer figures replace 2024 figures; the risk removes 66% direct OEM sourcing and insolvency, while adding product quality and delivery.
Was: The material reduction in sales from any of our principal customers, due to acquisition activity, insolvency or otherwise, could materially and adversely affect our business, results of operations, cash flows and financial condition
- 64% rewrittenIndustry and Operational Risks
Our business in China may be subject to aggressive competition and is sensitive to economic, political, and market conditions
The risk now highlights lower-cost Chinese suppliers expanding into Europe and North America, rather than only competition and market conditions in China.
- 62% rewrittenIndustry and Operational Risks
We operate in a highly competitive industry and efforts by our competitors, as well as new entrants to the industry, could adversely affect our business, results of operations and financial condition
The risk adds Chinese-based suppliers expanding globally, while removing the specific statement that Lear became a direct competitor.
- 58% rewrittenIndustry and Operational Risks
Our global operations subject us to risks that may harm our operations and financial results
- 50% rewrittenIndustry and Operational Risks
Our operations within Ukraine subject us to risks that may harm our operations and financial results
- 46% rewrittenIndustry and Operational Risks
We own important intellectual property, including patents, trademarks, copyrights and trade secrets. Our intellectual property plays an important role in maintaining our competitive position in many of the markets that we serve
- 39% rewrittenCommon Stock Investment Risks
The price of our Common Stock may fluctuate significantly
- 35% rewrittenIndustry and Operational Risks
If we fail to manage our growth effectively or to integrate successfully any business ventures, acquisitions, investments or strategic alliance into our business, or realize the benefits from divestitures or business exits, our business and financial performance could be materially adversely harmed
- 30% rewrittenIndustry and Operational Risks
We manage our business based on projected future sales volume, which is highly dependent on information received from customers and general market data, and any inaccuracies or changes in such information could adversely affect our business, results of operations and financial condition
- 25% rewrittenIndustry and Operational Risks
Our inability to effectively manage the development, timing, quality and costs of new product launches could adversely affect our financial performance
- 21% rewrittenLegal, Regulatory and Compliance Risks
Tax matters, including changes in the corporate tax rates, disagreement with taxing authorities and imposition of new taxes could impact our results of operations and financial condition
All 37 risk factors
Headings as the filing states them, in filing order.
Industry and Operational Risks
- 01We operate in a highly competitive industry and efforts by our competitors, as well as new entrants to the industry, could adversely affect our business, results of operations and financial condition62% rewritten
- 02The material reduction in sales from any of our principal customers, due to their acquisition activity, insourcing, product quality and delivery or otherwise, could materially and adversely affect our business, results of operations, cash flows and financial condition64% rewritten
- 03Labor shortages, work stoppages and additional workforce disruptions impacting us, our suppliers or customers periodically have disrupted our operations and our growth strategies, and resulting increases in labor and related operating costs may adversely impact our financial performance
- 04Our inability to effectively manage the development, timing, quality and costs of new product launches could adversely affect our financial performance25% rewritten
- 05Our ability to grow our product portfolio successfully depends on the sustained acceptance of new products and technologies that we invest in by existing and potential customers and consumers, as well as the success of our customers77% rewritten
- 06The automotive industry, our primary market, is cyclical and is significantly impacted by macroeconomic, geopolitical and similar global factors, and a decline in the production levels of our major customers and OEMs, could materially and adversely affect our business, results of operations and financial conditionNew
- 07Our business in China may be subject to aggressive competition and is sensitive to economic, political, and market conditions64% rewritten
- 08Our operations within Ukraine subject us to risks that may harm our operations and financial results50% rewritten
- 09Our inability to achieve product cost reductions which offset customer-imposed price reductions could adversely affect our financial performance
- 10Security breaches and other disruptions to our information technology networks and systems, including a disruption related to cybersecurity, could interfere with our operations and could compromise the confidentiality of our proprietary information or personal information79% rewritten
- 11As with most companies, we have experienced cybersecurity incidents, attempts to breach our systems and other similar incidents, none of which were material in 2025New
- 12Our global operations subject us to risks that may harm our operations and financial results58% rewritten
- 13Our ongoing efforts to optimize our cost structure and our global manufacturing footprint could cause supply disruptions and be more costly, time-consuming and resource-intensive than expected72% rewritten
- 14We manage our business based on projected future sales volume, which is highly dependent on information received from customers and general market data, and any inaccuracies or changes in such information could adversely affect our business, results of operations and financial condition30% rewritten
- 15We own important intellectual property, including patents, trademarks, copyrights and trade secrets. Our intellectual property plays an important role in maintaining our competitive position in many of the markets that we serve46% rewritten
- 16If we fail to manage our growth effectively or to integrate successfully any business ventures, acquisitions, investments or strategic alliance into our business, or realize the benefits from divestitures or business exits, our business and financial performance could be materially adversely harmed35% rewritten
- 17Gentherm’s adoption of new technology such as artificial intelligence could adversely impact its business, operations and reputation
Legal, Regulatory and Compliance Risks
- 18Economic and trade policy, including tariffs and customs regulations, could have a material and adverse effect on our business
- 19We may face particular privacy, data security and data protection risks
- 20Defects or quality issues associated with our automotive and medical products, as well as a significant product liability lawsuit, warranty claim or product recall involving us or one of our major customers, or an investigation regarding vehicle safety generally, could adversely affect the results of our operations71% rewritten
- 21Tax matters, including changes in the corporate tax rates, disagreement with taxing authorities and imposition of new taxes could impact our results of operations and financial condition21% rewritten
- 22The value of our deferred tax assets may not be realized, which could materially and adversely affect our operating results
- 23Our patient temperature management business is subject to extensive industry regulation and failure to comply with all applicable rules and regulation may adversely impact us
- 24Any failure to comply with anti-corruption laws and regulations could have a material and adverse effect on our reputation, business and financial results
- 25Our business may be negatively impacted by the effects of climate change and by regulatory and stakeholder-imposed requirements to address climate change and other sustainability issues70% rewritten
- 26We are involved from time to time in various legal and regulatory proceedings and claims, which could adversely affect our financial performance
Financial Risks
- 27We are subject to significant foreign currency risk and foreign exchange exposure related to our global operations
- 28Our existing indebtedness and the inability to access capital markets could restrict our business activities or our ability to execute our strategic objectives or adversely affect our financial performance
- 29limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise
Common Stock Investment Risks
- 30The price of our Common Stock may fluctuate significantly39% rewritten
Risks Related to the Modine Transaction
- 31The Modine Transaction may not be completed on the terms or timeline currently contemplated, or at all, and the failure to complete the Modine Transaction could adversely impact the market price of our Common StockNew
- 32If the Modine Transaction is completed, we may not realize the anticipated financial and other benefits, including growth opportunities, expected from the Modine TransactionNew
- 33The integration of Performance Technologies following the Modine Transaction may present significant challenges, and the failure to successfully integrate Performance Technologies could have a material adverse effect on the combined company’s business, financial condition or results of operationsNew
- 34The pendency of the Modine Transaction could have an adverse effect on our stock price, business, financial condition, results of operations or business prospectsNew
- 35We will incur significant costs related to the Modine Transaction that could have a material adverse effect on our liquidity, cash flows and operating resultsNew
- 36We are required to abide by restrictions which could limit our ability to undertake certain corporate actions that otherwise could be advantageousNew
- 37Current shareholders’ percentage ownership interest in us will be substantially diluted in the MergerNew
Other Gentherm 10-Ks
- FY2024 10-K risk factors34 risks
Automotive supply concentration with Lear and Adient drives revenue exposure. Global manufacturing footprints span Mexico, China, Vietnam, and Ukraine. Total consolidated indebtedness reached $220.2 million in 2024. Net deferred tax assets totaled $54.2 million with a $25.3 million valuation allowance.
Filed Feb 19, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.