NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Description of Business and Basis of Presentation
Commercial Vehicle Group, Inc. and its subsidiaries is a global provider of components and assemblies into two primary end markets – the global vehicle market and the U.S. technology integrator markets. The company provides components and assemblies to global vehicle companies to build original equipment and provides aftermarket products for fleet owners. The company also provides mechanical assemblies to warehouse automation integrators and to U.S. military technology integrators. References herein to the "Company", "CVG", "we", "our", or "us" refer to Commercial Vehicle Group, Inc. and its subsidiaries.
The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America and the rules and regulations of the Securities and Exchange Commission and include the accounts of the Company and its subsidiaries. Except as disclosed within these condensed notes to unaudited quarterly consolidated financial statements, the adjustments made were of a normal, recurring nature. Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted.
The preparation of financial statements in conformity with GAAP in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.
These condensed notes to unaudited quarterly consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020 (the "2020 Form 10-K"), which includes a complete set of footnote disclosures, including the Company's significant accounting policies.
2. Recently Issued Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting". The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. Also, in January 2021, the FASB issued ASU No. 2021-01 "Reference Rate Reform (Topic 848): Scope", to clarify that certain provisions in Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. ASU 2020-04 and ASU 2021-01 are effective beginning on March 12, 2020 and the amendments will be applied prospectively through December 31, 2022. We are evaluating the effect these ASUs will have on the Company.
Accounting Pronouncements Implemented in the three months ended March 31, 2021
In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes". The ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and otherwise clarifies and amends existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. The Company implemented ASU 2019-12 as of January 1, 2021 and the ASU did not have a material impact on the Company's condensed consolidated financial statements and related disclosures.
In October 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-10, "Codification Improvements". The ASU updates various codification topics by clarifying and improving disclosure requirements to align with the SEC's regulations. The Company implemented ASU 2020-10 as of January 1, 2021 and the ASU did not have a material impact on the Company's condensed consolidated financial statements and related disclosures.
3. Revenue Recognition
We had outstanding customer accounts receivable, net of allowances, of $186.0 million as of March 31, 2021 and $151.1 million as of December 31, 2020. We generally do not have other assets or liabilities associated with customer arrangements.
Revenue Disaggregation - The following is the composition, by product category, of our revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2021
|
|
Electrical Systems
|
|
Global Seating
|
|
Elimination/
Other
|
|
Total
|
Seats
|
$
|
2,442
|
|
|
$
|
86,992
|
|
|
$
|
(7,288)
|
|
|
$
|
82,146
|
|
Electrical wire harnesses, panels and assemblies
|
90,852
|
|
|
3,880
|
|
|
(375)
|
|
|
94,357
|
|
Trim
|
37,386
|
|
|
72
|
|
|
(421)
|
|
|
37,037
|
|
Cab structures and sleeper boxes
|
20,657
|
|
|
—
|
|
|
—
|
|
|
20,657
|
|
Mirrors, wipers and controls
|
10,903
|
|
|
150
|
|
|
(128)
|
|
|
10,925
|
|
Total
|
$
|
162,240
|
|
|
$
|
91,094
|
|
|
$
|
(8,212)
|
|
|
$
|
245,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2020
|
|
Electrical Systems
|
|
Global Seating
|
|
Elimination/
Other
|
|
Total
|
Seats
|
$
|
367
|
|
|
$
|
72,864
|
|
|
$
|
(62)
|
|
|
$
|
73,169
|
|
Electrical wire harnesses, panels and assemblies
|
54,276
|
|
|
408
|
|
|
(56)
|
|
|
54,628
|
|
Trim
|
30,509
|
|
|
1,919
|
|
|
(516)
|
|
|
31,912
|
|
Cab structures and sleeper boxes
|
14,700
|
|
|
—
|
|
|
—
|
|
|
14,700
|
|
Mirrors, wipers and controls
|
12,246
|
|
|
790
|
|
|
(340)
|
|
|
12,696
|
|
Total
|
$
|
112,098
|
|
|
$
|
75,981
|
|
|
$
|
(974)
|
|
|
$
|
187,105
|
|
4. Debt
Debt consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
|
December 31, 2020
|
Term loan and security agreement due 2023
|
$
|
151,561
|
|
|
$
|
150,950
|
|
Revolving credit facility due 2026
|
6,800
|
|
|
—
|
|
Unamortized discount and issuance costs
|
(3,896)
|
|
|
(4,374)
|
|
|
$
|
154,465
|
|
|
$
|
146,576
|
|
Less: current portion, net of unamortized discount and issuance costs of $1.9 million and $1.9 million, respectively
|
(2,430)
|
|
|
(2,429)
|
|
Total long-term debt, net of current portion
|
$
|
152,035
|
|
|
$
|
144,147
|
|
On April 30, 2021, the Company refinanced its outstanding debt. See Note 18, Subsequent Event in this Form 10-Q.
Term Loan and Security Agreement
On April 12, 2017, the Company entered into a $175.0 million senior secured term loan credit facility (the "Term Loan Facility"), maturing on April 12, 2023, pursuant to a term loan and security agreement (the “TLS Agreement”), the terms of which are described in Note 3, Debt in our 2020 Form 10-K.
The TLS Agreement contains customary restrictive, financial maintenance and reporting covenants that are described in Note 3, Debt in our 2020 Form 10-K. We were in compliance with the covenants as of March 31, 2021.
Revolving Credit Facility
On September 18, 2019, the Company entered into an amendment of the Third Amended and Restated Loan and Security Agreement (the “Third ARLS Agreement”), dated as of April 12, 2017, the terms of which are described in Note 3, Debt in our 2020 10-K and which governs the Company’s asset based revolving credit facility (the “Revolving Credit Facility”).
The Amendment amends the terms of the Revolving Credit Facility to entitle the Company and the other named borrowers thereunder (subject to the terms and conditions described therein) to request loans and other financial accommodations in an amount equal to the lesser of $90.0 million and a borrowing base composed of accounts receivable and inventory (such facility, the “Tranche A Facility”). Of the $90.0 million, $7.0 million shall be available as a first-in, last-out facility (the “Tranche B Facility”) at a 100 basis points premium, as reflected in the table below.
On May 11, 2020, the Company and certain of its subsidiaries, as guarantors or co-borrowers, as applicable, entered into an Amendment No. 2 (the “Revolving Amendment”), which amends the terms of the Third ARLS Agreement to align certain of the restrictive covenants with the restrictive covenants set forth in the TLS Agreement, as amended.
At March 31, 2021 we had $6.8 million of borrowings under the revolving credit facility, outstanding letters of credit were $1.4 million and we had availability of $81.9 million. The unamortized deferred financing fees associated with the revolving credit facility were $0.5 million and $0.4 million as of March 31, 2021 and December 31, 2020, respectively, are being amortized over the remaining life of the agreement. At December 31, 2020, we did not have borrowings under the revolving credit facility; and we had outstanding letters of credit of $1.6 million.
The Third ARLS Agreement contains customary restrictive, financial maintenance and reporting covenants that are described in Note 3, Debt in our 2020 Form 10-K and as described below. The Company was in compliance with all applicable covenants as of March 31, 2021.
Revolving Credit Amendment
On March 1, 2021, the Commercial Vehicle Group, Inc. and certain of its subsidiaries entered into Amendment No. 3 (the “Revolving Amendment”), which amends the terms of the Third ARLS Agreement, among other things, to extend the maturity date of the Revolving Credit Facility to March 1, 2026 and to remove the condition that the first $7.0 million of the $90.0 million Revolver Commitments are available as a first-in, last-out facility.
The Third ARLS Agreement, as amended, also allows the Company to increase the size of the Revolving Credit Facility by up to $50.0 million with the consent of Lenders providing the increase in the Revolving Credit Facility.
The Third ARLS Agreement, provides that loans outstanding under the Revolving Credit Facility accrue interest at a per annum rate based on (at the Company’s election) the base rate or the LIBOR rate plus a margin determined by reference to availability under the Revolving Credit Facility as follows, subject to a LIBOR floor of 0.25%:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level
|
|
Average Daily Availability
|
|
Base
Rate Loans
|
|
LIBOR Loans
|
III
|
|
≥ $30,000,000
|
|
0.50%
|
|
1.50%
|
II
|
|
> $15,000,000 but < $30,000,000
|
|
0.75%
|
|
1.75%
|
I
|
|
≤ $15,000,000
|
|
1.00%
|
|
2.00%
|
The Third ARLS Agreement, provides for an unused line fee of 0.20% on undrawn amounts under the Revolving Credit Facility if Revolver Usage is equal to or greater than 50% of the Revolver Commitment and a fee of 0.25% if Revolver Usage is less than 50% of the Revolver Commitment.
The Third ARLS Agreement, requires maintenance of a minimum fixed charge coverage ratio if availability under the Revolving Credit Facility is less than the greater of (i) $5.0 million, and (ii) 10% of the lesser of the Revolver Commitment and the Borrowing Base. The minimum fixed charge coverage ratio must be maintained until availability under the Revolving Credit Facility has been greater than or equal to the greater of (i) $5.0 million, and (ii) 10% of the lesser of the Revolver Commitment and the Borrowing Base for 60 consecutive days.
Cash Paid for Interest
For the three months ended March 31, 2021 and 2020, cash payments for interest were $3.0 million and $3.2 million, respectively.
5. Goodwill and Intangible Assets
Goodwill represents the excess of acquisition purchase price over the fair value of net assets acquired. During the first quarter of 2020, as a result of the Company’s market capitalization value being less than the carrying value of its equity for a duration
of time, the Company determined it had an impairment indicator. Accordingly, the Company estimated the fair value of each of the reporting units with goodwill by discounting the estimated cash flows of each reporting unit. The estimated fair values of the reporting units were then compared to their net carrying values as of March 31, 2020 and, as a result, the Company recognized $27.1 million impairment of goodwill, which represented the carrying amount of goodwill prior to the impairment charge. The impairment charge is presented in Goodwill and other impairment in the Condensed Consolidated Statements of Operations.
The changes in the carrying amounts of goodwill are as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical Systems
|
|
Global Seating
|
|
Total
|
Balance - December 31, 2019
|
$
|
22,802
|
|
|
$
|
5,014
|
|
|
$
|
27,816
|
|
Finalization of FSE Purchase Accounting
|
(537)
|
|
|
—
|
|
|
(537)
|
|
Goodwill impairment
|
(22,265)
|
|
|
(4,809)
|
|
|
(27,074)
|
|
Currency translation adjustment
|
—
|
|
|
(205)
|
|
|
(205)
|
|
Balance - December 31, 2020
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Our definite-lived intangible assets were comprised of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
|
December 31, 2020
|
|
Weighted-
Average
Amortization
Period
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
Trademarks/tradenames
|
22 years
|
|
$
|
11,622
|
|
|
$
|
(4,773)
|
|
|
$
|
6,849
|
|
|
$
|
11,634
|
|
|
$
|
(4,681)
|
|
|
$
|
6,953
|
|
Customer relationships
|
15 years
|
|
14,857
|
|
|
(7,780)
|
|
|
7,077
|
|
|
14,881
|
|
|
(7,536)
|
|
|
7,345
|
|
Technical know-how
|
5 years
|
|
9,790
|
|
|
(3,018)
|
|
|
6,772
|
|
|
9,790
|
|
|
(2,529)
|
|
|
7,261
|
|
Covenant not to compete
|
5 years
|
|
330
|
|
|
(102)
|
|
|
228
|
|
|
330
|
|
|
(85)
|
|
|
245
|
|
|
|
|
$
|
36,599
|
|
|
$
|
(15,673)
|
|
|
$
|
20,926
|
|
|
$
|
36,635
|
|
|
$
|
(14,831)
|
|
|
$
|
21,804
|
|
The aggregate intangible asset amortization expense was $0.9 million for the three months ended March 31, 2021 and 2020 respectively.
6. Fair Value Measurement
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities.
Level 2 - Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
Level 3 - Significant unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.
Our financial instruments consisted of cash, accounts receivable, accounts payable, accrued liabilities, pension assets and liabilities and our revolving credit facility. The carrying value of these instruments approximates fair value as a result of the short duration of such instruments or due to the variability of the interest cost associated with such instruments.
Recurring Measurements
Foreign Currency Forward Exchange Contracts. Our derivative assets and liabilities represent foreign exchange contracts that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk and counterparty credit risk. Based on the utilization of these inputs, the derivative assets and liabilities are classified as Level 2. To manage our risk for transactions denominated in Mexican Pesos and in Ukrainian Hryvnia, we have entered into forward exchange contracts that are designated as cash flow hedge instruments, which are recorded in the Condensed Consolidated
Balance Sheets at fair value. The gains and losses as a result of the changes in fair value of the hedge contract for transactions denominated in Mexican Pesos are deferred in accumulated other comprehensive loss and recognized in cost of revenues in the period the related hedge transactions are settled. As of March 31, 2021, the hedge contract for transactions denominated in Ukrainian Hryvnia was not designated as a hedging instrument; therefore, it is marked-to-market and the fair value of the agreement is recorded in the Condensed Consolidated Balance Sheets with the offsetting gains and losses recognized in other (income) expense and recognized in cost of revenues in the period the related hedge transactions are settled in the Condensed Consolidated Statements of Operations.
Interest Rate Swap Agreement. To manage our exposure to variable interest rates, we have entered into an agreement (the “Interest Rate Swap Agreement”) with Bank of America, N.A. whereby the Company has agreed to exchange, at a specified interval, the difference between fixed and variable interest amounts calculated by reference to an agreed upon notional principal amount. The Interest Rate Swap Agreement is intended to mitigate the impact of rising interest rates on the Company and covers $80 million of outstanding debt under the senior secured term loan facility. As of March 31, 2021, the Interest Rate Swap Agreement was not designated as a hedging instrument; therefore, it is marked-to-market and the fair value of the agreement recorded in the Condensed Consolidated Balance Sheets with the offsetting gain or loss recorded in interest and other expense in the Condensed Consolidated Statements of Operations.
Contingent Consideration. As a result of the acquisition of the First Source Electronics, LLC (“FSE”) on September 17, 2019, the Company agreed to pay up to $10.8 million in contingent milestone payments (“Contingent consideration”). The Contingent consideration is payable based on achieving certain earnings before interest, taxes, depreciation and amortization ("EBITDA") thresholds over the periods from (a) September 18, 2019 through September 17, 2020, (b) September 18, 2019 through March 17, 2021, (c) September 18, 2019 through September 17, 2022 and (d) March 18, 2021 through September 17, 2022. The payment amount will be determined on a sliding scale for reaching between 90% and 100% of the respective EBITDA targets. The fair value for the milestone payments is based on a Monte Carlo simulation utilizing forecasted EBITDA through September 17, 2022. The estimate of $4.7 million was recorded within other long-term liabilities in the Condensed Consolidated Balance Sheet as of September 30, 2019. The total undiscounted Contingent consideration payment is estimated at $10.8 million and the fair value is $9.0 million as of March 31, 2021, and is presented in the Condensed Consolidated Balance Sheets in accrued liabilities and other long term liabilities.
The fair values of our derivative assets and liabilities and contingent consideration measured on a recurring basis are categorized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
|
December 31, 2020
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contract
|
|
$
|
1,510
|
|
|
$
|
—
|
|
|
$
|
1,510
|
|
|
$
|
—
|
|
|
$
|
1,882
|
|
|
$
|
—
|
|
|
$
|
1,882
|
|
|
$
|
—
|
|
Interest rate swap agreement
|
|
$
|
756
|
|
|
$
|
—
|
|
|
$
|
756
|
|
|
$
|
—
|
|
|
$
|
936
|
|
|
$
|
—
|
|
|
$
|
936
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap agreement
|
|
$
|
1,687
|
|
|
$
|
—
|
|
|
$
|
1,687
|
|
|
$
|
—
|
|
|
$
|
2,080
|
|
|
$
|
—
|
|
|
$
|
2,080
|
|
|
$
|
—
|
|
Contingent consideration
|
|
$
|
9,048
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,048
|
|
|
$
|
8,800
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,800
|
|
Details of the changes in value for the Contingent consideration that is measured using significant unobservable inputs (Level 3) are as follows:
|
|
|
|
|
|
|
|
|
|
|
Amount
|
Contingent consideration liability balance at December 31, 2020
|
|
$
|
8,800
|
|
Change in fair value
|
|
248
|
|
Contingent consideration liability balance at March 31, 2021
|
|
$
|
9,048
|
|
The following table summarizes the notional amount of our open foreign exchange contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
|
December 31, 2020
|
|
U.S. $
Equivalent
|
|
U.S.
Equivalent
Fair Value
|
|
U.S. $
Equivalent
|
|
U.S.
Equivalent
Fair Value
|
Commitments to buy or sell currencies
|
$
|
18,698
|
|
|
$
|
18,955
|
|
|
$
|
14,675
|
|
|
$
|
16,558
|
|
The following table summarizes the fair value and presentation of derivatives in the Condensed Consolidated Balance Sheets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Asset
|
|
Balance Sheet
Location
|
|
Fair Value
|
|
|
March 31, 2021
|
|
December 31, 2020
|
|
|
|
|
|
|
Foreign exchange contracts
|
Other current assets
|
|
$
|
1,510
|
|
|
$
|
1,882
|
|
|
|
|
|
|
|
Interest rate swap agreement
|
Accrued liabilities and other
|
|
$
|
756
|
|
|
$
|
936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Liability
|
|
Balance Sheet
Location
|
|
Fair Value
|
|
|
March 31, 2021
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap agreement
|
Accrued liabilities and other
|
|
$
|
1,687
|
|
|
$
|
2,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Equity
|
|
Balance Sheet
Location
|
|
Fair Value
|
|
|
March 31, 2021
|
|
December 31, 2020
|
Foreign exchange contracts
|
Accumulated other comprehensive loss
|
|
$
|
1,015
|
|
|
$
|
1,441
|
|
The following table summarizes the effect of derivative instruments on the Condensed Consolidated Statements of Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
Location of Gain (Loss) on Derivatives
Recognized in Income
|
|
Amount of Gain (Loss) on Derivatives
Recognized in Income
|
|
|
Foreign exchange contracts
|
Cost of revenues
|
|
$
|
(307)
|
|
|
$
|
—
|
|
|
|
|
|
Interest rate swap agreement
|
Interest and other expense
|
|
$
|
2
|
|
|
$
|
(996)
|
|
|
|
|
|
Foreign exchange contracts
|
Other (income) expense
|
|
$
|
(182)
|
|
|
$
|
—
|
|
|
|
|
|
We consider the impact of our credit risk on the fair value of the contracts, as well as our ability to honor obligations under the contract.
Other Fair Value Measurements
The fair value of long-term debt obligations is based on a fair value model utilizing observable inputs. Based on these inputs, our long-term debt fair value as disclosed is classified as Level 2. The carrying amounts and fair values of our long-term debt obligations are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
|
December 31, 2020
|
|
Carrying
Amount
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
|
|
|
|
|
|
|
|
Term loan and security agreement 1
|
$
|
147,665
|
|
|
$
|
145,960
|
|
|
$
|
146,576
|
|
|
$
|
144,878
|
|
Revolving credit facility
|
$
|
6,800
|
|
|
$
|
6,800
|
|
|
$
|
—
|
|
|
$
|
—
|
|
1.Presented in the Condensed Consolidated Balance Sheets as the current portion of long-term debt of $2.4 million and long-term debt of $145.2 million as of March 31, 2021, and current portion of long-term debt of $2.4 million and long-term debt of $144.1 million as of December 31, 2020.
7. Leases
The components of lease expense are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2021
|
|
2020
|
|
|
|
|
Operating lease cost
|
$
|
2,500
|
|
|
$
|
2,466
|
|
|
|
|
|
Finance lease cost
|
|
|
|
|
|
|
|
Amortization of right-of-use assets
|
92
|
|
|
89
|
|
|
|
|
|
Interest on lease liabilities
|
8
|
|
|
12
|
|
|
|
|
|
Total finance lease cost
|
100
|
|
|
101
|
|
|
|
|
|
Short-term lease cost
|
1,370
|
|
|
1,029
|
|
|
|
|
|
Total lease expense
|
$
|
3,970
|
|
|
$
|
3,596
|
|
|
|
|
|
Supplemental balance sheet information related to leases is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Location
|
March 31, 2021
|
|
December 31, 2020
|
Operating Leases
|
|
|
|
|
Right-of-use assets, net
|
Other assets, net
|
$
|
28,218
|
|
|
$
|
30,047
|
|
|
|
|
|
|
Current liabilities
|
Accrued liabilities and other
|
8,639
|
|
|
9,236
|
|
Non-current liabilities
|
Other long-term liabilities
|
22,002
|
|
|
23,932
|
|
Total operating lease liabilities
|
|
$
|
30,641
|
|
|
$
|
33,168
|
|
|
|
|
|
|
Finance Leases
|
|
|
|
|
Right-of-use assets
|
|
$
|
1,314
|
|
|
$
|
1,410
|
|
Accumulated depreciation
|
|
(651)
|
|
|
(643)
|
|
Right-of-use assets, net
|
Other assets, net
|
663
|
|
|
767
|
|
|
|
|
|
|
Current liabilities
|
Accrued liabilities and other
|
267
|
|
|
293
|
|
Non-current liabilities
|
Other long-term liabilities
|
367
|
|
|
434
|
|
Total finance lease liabilities
|
|
$
|
634
|
|
|
$
|
727
|
|
For the three months ended March 31, 2021 and 2020, cash payments on operating leases were $2.2 million and $2.6 million, respectively.
Right-of-use Assets Impairment. The impairment of an operating lease right-of-use asset of $0.4 million was recorded for the first quarter ended March 31, 2020. The impairment charge is presented in Goodwill and other impairment in the Condensed Consolidated Statements of Operations.
Anticipated future lease costs, which are based in part on certain assumptions to approximate minimum annual rental commitments under non-cancelable leases, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
|
Financing
|
|
Total
|
Remainder of 2021
|
|
$
|
8,002
|
|
|
$
|
224
|
|
|
$
|
8,226
|
|
2022
|
|
9,640
|
|
|
197
|
|
|
9,837
|
|
2023
|
|
5,831
|
|
|
128
|
|
|
5,959
|
|
2024
|
|
4,594
|
|
|
79
|
|
|
4,673
|
|
2025
|
|
3,983
|
|
|
42
|
|
|
4,025
|
|
Thereafter
|
|
3,949
|
|
|
—
|
|
|
3,949
|
|
Total lease payments
|
|
$
|
35,999
|
|
|
$
|
670
|
|
|
$
|
36,669
|
|
Less: Imputed interest
|
|
(5,358)
|
|
|
(36)
|
|
|
(5,394)
|
|
Present value of lease liabilities
|
|
$
|
30,641
|
|
|
$
|
634
|
|
|
$
|
31,275
|
|
8. Income Taxes
For the three months ended March 31, 2021 we recorded a $2.5 million tax provision, or 23% effective tax rate for the period, compared to a $7.3 million tax benefit for the three months ended March 31, 2020. The effective tax rate in the current three month period is higher than the U.S. federal income tax rate primarily as a result of U.S. state and non-U.S. income taxes. The Company’s prior year tax benefit was primarily a result of pre-tax net loss for the three months ended March 31, 2020.
For the three months ended March 31, 2021 and 2020, cash paid for taxes, net of refunds received were $1.0 million and $0.8 million, respectively.
9. Pension and Other Post-Retirement Benefit Plans
The components of net periodic (benefit) cost related to pension and other post-retirement benefit plans is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Pension and Other Post-Retirement Benefit Plans
|
|
Non-U.S. Pension Plan
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Three Months Ended March 31,
|
|
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest cost
|
208
|
|
|
281
|
|
|
161
|
|
|
204
|
|
|
|
|
|
|
|
|
|
Expected return on plan assets
|
(553)
|
|
|
(519)
|
|
|
(250)
|
|
|
(263)
|
|
|
|
|
|
|
|
|
|
Amortization of prior service cost
|
2
|
|
|
74
|
|
|
14
|
|
|
11
|
|
|
|
|
|
|
|
|
|
Recognized actuarial loss
|
74
|
|
|
2
|
|
|
239
|
|
|
143
|
|
|
|
|
|
|
|
|
|
Net (benefit) cost
|
$
|
(269)
|
|
|
$
|
(162)
|
|
|
$
|
164
|
|
|
$
|
95
|
|
|
|
|
|
|
|
|
|
Net periodic (benefit) cost components, not inclusive of service costs, are recognized in other expense (income) within the Condensed Consolidated Statements of Operations.
10. Performance Awards
In 2020, the Company made awards, defined as cash, shares or other awards, to employees under the Commercial Vehicle Group, Inc. 2014 Equity Incentive Plan (the “2014 EIP”) and the Commercial Vehicle Group, Inc. 2020 Equity Incentive Plan (the “2020 EIP”). Effective June 15, 2020, as part of the Company’s stockholders’ approval of the 2020 EIP, the Company agreed that no more awards will be made under the 2014 Plan. The cash award is earned and payable based upon the Company’s relative total shareholder return in terms of ranking as compared to the peer group over a three-year period (the “Performance Period”). Total shareholder return is determined by the percentage change in value (positive or negative) over the applicable measurement period as measured by dividing (A) the sum of the cumulative value of dividends and other distributions paid on the Common Stock for the applicable measurement period and the difference (positive or negative) between each such company’s starting stock price and ending stock price, by (B) the starting stock price. The award is payable at the end of the Performance Period in cash if the employee is employed through the end of the Performance Period. If the employee is not employed during the entire Performance Period, the award is forfeited. These grants are accounted for as cash settlement awards for which the fair value of the award fluctuates based on the change in total shareholder return in relation to the peer group.
The following table summarizes performance awards granted in the form of cash awards under the equity incentive plans:
|
|
|
|
|
|
|
|
|
|
|
Amount
|
Adjusted Award Value at December 31, 2020
|
|
$
|
976
|
|
|
|
|
|
|
|
Adjustments
|
|
179
|
|
Payments
|
|
(300)
|
|
Adjusted Award Value at March 31, 2021
|
|
$
|
855
|
|
Unrecognized compensation expense was $3.0 million and $0.6 million as of March 31, 2021 and 2020, respectively.
11. Share-Based Compensation
The company's outstanding share-based compensation is comprised solely of restricted stock awards.
Restricted Stock Awards – Restricted stock is a grant of shares of common stock that may not be sold, encumbered or disposed of and that may be forfeited in the event of certain terminations of employment or in the case of the board of directors, a separation for cause, prior to the end of a restricted period set by the compensation committee of the board of directors. Forfeitures are recorded as they occur. A participant granted restricted stock generally has all of the rights of a stockholder, unless the compensation committee determines otherwise. Time-based restricted stock awards generally vest over the three-year period following the date of grant, unless forfeited, and will be paid out in the form of stock at the end of the vesting period. Performance-based stock awards vest over the specified period following the date of grant, unless forfeited, and will be paid out in the form of stock at the end of the vesting period at the Company’s discretion if the Company meets the performance targets set at the time of the award was granted.
As of March 31, 2021, there was approximately $6.2 million of unrecognized compensation expense related to non-vested share-based compensation arrangements granted under our equity incentive plans. This expense is subject to future adjustments and forfeitures and will be recognized on a straight-line basis over the remaining period listed above for each grant.
A summary of the status of our restricted stock awards as of March 31, and changes during the Three Months Ended March 31, are presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
Shares
(in thousands)
|
|
Weighted-
Average
Grant-Date
Fair Value
|
Nonvested - December 31, 2020
|
1,263
|
|
|
$
|
3.48
|
|
Granted
|
371
|
|
|
6.58
|
|
Vested
|
(139)
|
|
|
3.24
|
|
Forfeited
|
(4)
|
|
|
6.35
|
|
Nonvested - March 31, 2021
|
1,491
|
|
|
$
|
4.46
|
|
As of March 31, 2021, a total of 2.9 million shares were available for future grants from the shares authorized for award under our 2020 EIP, including cumulative forfeitures.
12. Stockholders’ Equity
Common Stock — Our authorized capital stock consists of 60,000,000 shares of common stock with a par value of $0.01 per share; of which, 31,381,845 and 31,249,811 shares were issued and outstanding as of March 31, 2021 and December 31, 2020, respectively.
Preferred Stock — Our authorized capital stock also consists of 5,000,000 shares of preferred stock with a par value of $0.01 per share, with no preferred shares were outstanding as of March 31, 2021 and December 31, 2020.
Diluted earnings per share for the three and three months ended March 31, 2021 and 2020 includes the effect of potential common shares issuable when dilutive, and is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
Net income (loss)
|
|
$
|
8,490
|
|
|
$
|
(24,594)
|
|
|
|
|
|
Weighted average number of common shares outstanding (in '000s)
|
|
31,264
|
|
|
30,806
|
|
|
|
|
|
Dilutive effect of restricted stock grants after application of the Treasury Stock Method (in '000s)
|
|
1,043
|
|
|
—
|
|
|
|
|
|
Dilutive shares outstanding
|
|
32,307
|
|
|
30,806
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
$
|
0.27
|
|
|
$
|
(0.80)
|
|
|
|
|
|
Diluted earnings (loss) per share
|
|
$
|
0.26
|
|
|
$
|
(0.80)
|
|
|
|
|
|
There were no outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per shares for the three months ended March 31, 2021 and 2020.
Shareholder Rights Plan
On June 23, 2020, the Company’s Board of Directors adopted a limited duration rights plan and declared a dividend distribution of one right (each, a “Right” and together with all other such rights distributed or issued pursuant thereto, the “Rights”) for each outstanding share of common stock, par value $0.01, of the Company, as of July 5, 2020, the record date for such dividend. Each holder of common stock as of the record date will receive a dividend of one Right per share of common stock. The Rights will become exercisable only if a person or persons acquires beneficial ownership of 10% or more of the Company's outstanding common stock, or 15% in the case of certain passive investors. In the event that the Rights become exercisable, each holder of Rights (other than the person or group triggering the rights plan) will be entitled to purchase, at the Right’s exercise price, a number of shares of our common stock having a market value of twice the Right’s exercise price.
On April 15, 2021, the Company, and Computershare Trust Company, N.A., a federally chartered trust company, as rights agent (“Rights Agent”), entered into an amendment (the “Amendment”) to the Rights Agreement, dated as of June 25, 2020, by and between the Company and Rights Agent (the “Rights Agreement”). Pursuant to the Amendment, the Final Expiration Date of the Rights (each as defined in the Rights Agreement) was advanced from June 24, 2021 to April 15, 2021. As a result of the Amendment, the Rights are no longer outstanding.
13. Other Comprehensive Loss
The after-tax changes in accumulated other comprehensive loss are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustment
|
|
Derivative instruments
|
|
Pension and
post-retirement
benefits plans
|
|
Accumulated other
comprehensive
loss
|
Balance - December 31, 2020
|
$
|
(19,024)
|
|
|
1,441
|
|
|
$
|
(27,423)
|
|
|
$
|
(45,006)
|
|
Net current period change
|
(2,072)
|
|
|
—
|
|
|
—
|
|
|
(2,072)
|
|
Derivative instruments
|
—
|
|
|
(426)
|
|
|
—
|
|
|
(426)
|
|
Amortization of actuarial gains
|
—
|
|
|
—
|
|
|
286
|
|
|
286
|
|
Balance - March 31, 2021
|
$
|
(21,096)
|
|
|
$
|
1,015
|
|
|
$
|
(27,137)
|
|
|
$
|
(47,218)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustment
|
|
Derivative instruments
|
|
Pension and
post-retirement
benefit plans
|
|
Accumulated other
comprehensive
loss
|
Balance - December 31, 2019
|
$
|
(24,032)
|
|
|
$
|
464
|
|
|
$
|
(22,382)
|
|
|
$
|
(45,950)
|
|
Net current period change
|
(4,805)
|
|
|
—
|
|
|
—
|
|
|
(4,805)
|
|
Derivative instruments
|
—
|
|
|
(2,778)
|
|
|
—
|
|
|
(2,778)
|
|
Amortization of actuarial losses
|
—
|
|
|
—
|
|
|
(447)
|
|
|
(447)
|
|
Balance - March 31, 2020
|
$
|
(28,837)
|
|
|
$
|
(2,314)
|
|
|
$
|
(22,829)
|
|
|
$
|
(53,980)
|
|
The related tax effects allocated to each component of other comprehensive loss are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2021
|
|
|
|
Before Tax
Amount
|
|
Tax Expense
|
|
After Tax Amount
|
|
|
|
|
|
|
Amortization of actuarial gains
|
$
|
399
|
|
|
$
|
(113)
|
|
|
$
|
286
|
|
|
|
|
|
|
|
Derivative instruments
|
(556)
|
|
|
130
|
|
|
(426)
|
|
|
|
|
|
|
|
Cumulative translation adjustment
|
(2,072)
|
|
|
—
|
|
|
(2,072)
|
|
|
|
|
|
|
|
Total other comprehensive loss
|
$
|
(2,229)
|
|
|
$
|
17
|
|
|
$
|
(2,212)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2020
|
|
|
|
Before Tax
Amount
|
|
Tax Expense
|
|
After Tax
Amount
|
|
|
|
|
|
|
Amortization of actuarial losses
|
$
|
(554)
|
|
|
$
|
107
|
|
|
$
|
(447)
|
|
|
|
|
|
|
|
Derivative instruments
|
(3,488)
|
|
|
710
|
|
|
(2,778)
|
|
|
|
|
|
|
|
Cumulative translation adjustment
|
(4,805)
|
|
|
—
|
|
|
(4,805)
|
|
|
|
|
|
|
|
Total other comprehensive loss
|
$
|
(8,847)
|
|
|
$
|
817
|
|
|
$
|
(8,030)
|
|
|
|
|
|
|
|
14. Cost Reduction and Manufacturing Capacity Rationalization
During 2019, the Company began implementing cost reduction and manufacturing capacity rationalization initiatives (the "Restructuring Initiatives") in response to declines in end market volumes. Furthermore, in 2020 the Company began implementing additional cost reduction initiatives and further manufacturing capacity rationalization initiatives in response to the COVID-19 pandemic ("the 2020 Initiatives"). The Restructuring Initiatives and 2020 Initiatives consist primarily of headcount reductions in each segment and at corporate, as well as other costs associated with transfer of production and subsequent closure of facilities, and expansion of production footprint to manufacture warehouse automation subsystems.
The changes in accrued restructuring balances are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical Systems
|
|
Global
Seating
|
|
Corporate/
Other
|
|
Total
|
December 31, 2020
|
$
|
463
|
|
|
$
|
40
|
|
|
$
|
176
|
|
|
$
|
679
|
|
|
|
|
|
|
|
|
|
Payments and other adjustments
|
(186)
|
|
|
(40)
|
|
|
(36)
|
|
|
(262)
|
|
March 31, 2021
|
$
|
277
|
|
|
$
|
—
|
|
|
$
|
140
|
|
|
$
|
417
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical Systems
|
|
Global
Seating
|
|
Corporate/
Other
|
|
Total
|
December 31, 2019
|
$
|
1,276
|
|
|
$
|
102
|
|
|
$
|
947
|
|
|
$
|
2,325
|
|
New charges
|
—
|
|
|
131
|
|
|
40
|
|
|
171
|
|
Payments and other adjustments
|
(848)
|
|
|
(196)
|
|
|
(248)
|
|
|
(1,292)
|
|
March 31, 2020
|
$
|
428
|
|
|
$
|
37
|
|
|
$
|
739
|
|
|
$
|
1,204
|
|
Approximately $0.1 million in employee costs were incurred in the three months ended March 31, 2020 in the Global Seating Segment and is included in cost of revenues.
15. Commitments and Contingencies
Leases - As disclosed in Note 7, Leases, we lease office, warehouse and manufacturing space and equipment under non-cancelable operating lease agreements that generally require us to pay maintenance, insurance, taxes and other expenses in addition to annual rental fees. As of March 31, 2021, our equipment leases did not provide for any material guarantee of a specified portion of residual values.
Guarantees - Costs associated with guarantees are accrued when it is probable that a liability has been incurred and the amount can be reasonably estimated. The most likely cost to be incurred is accrued based on an evaluation of available facts; where no
amount within a range of estimates is more likely, the minimum is accrued. As of March 31, 2021 and 2020, we had no such guarantees.
Litigation - We are subject to various legal proceedings and claims arising in the ordinary course of business, including but not limited to workers' compensation claims, OSHA investigations, employment disputes, unfair labor practice charges, customer and supplier disputes, service provider disputes, product liability claims, intellectual property disputes, environmental claims arising out of the conduct of our businesses and examinations by the Internal Revenue Service.
Management believes that the Company maintains adequate insurance and that we have established reserves for issues that are probable and estimable in amounts that are adequate to cover reasonable adverse judgments not covered by insurance. Based upon the information available to management and discussions with legal counsel, it is the opinion of management that the ultimate outcome of the various legal actions and claims that are incidental to our business are not expected to have a material adverse impact on the consolidated financial position, results of operations, equity or cash flows; however, such matters are subject to many uncertainties and the outcomes of individual matters are not predictable with any degree of assurance.
Warranty - We are subject to warranty claims for products that fail to perform as expected due to design or manufacturing deficiencies. Depending on the terms under which we supply products to our customers, a customer may hold us responsible for some or all of the repair or replacement costs of defective products when the product supplied did not perform as represented. Our policy is to record provisions for estimated future customer warranty costs based on historical trends and for specific claims. These amounts, as they relate to the periods ended March 31, 2021 and 2020, are included within accrued liabilities and other in the accompanying Condensed Consolidated Balance Sheets.
The following presents a summary of the warranty provision for the three months ended March 31, 2021:
|
|
|
|
|
|
Balance - December 31, 2020
|
$
|
2,041
|
|
Provision for warranty claims
|
108
|
|
Deduction for payments made and other adjustments
|
(354)
|
|
Balance - March 31, 2021
|
$
|
1,795
|
|
Debt Payments - As disclosed in Note 4, Debt, the TLS Agreement requires the Company to repay a fixed amount of principal on a quarterly basis, make mandatory prepayments of excess cash flows and voluntary prepayments that coincide with certain events.
The following table provides future minimum principal payments due on long-term debt for the next five years (see also Note 18, Subsequent Event):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term Loan
|
|
Revolving credit facility
|
|
Total
|
Remainder of 2021
|
$
|
3,281
|
|
|
$
|
—
|
|
|
$
|
3,281
|
|
2022
|
$
|
4,375
|
|
|
$
|
—
|
|
|
$
|
4,375
|
|
2023
|
$
|
143,905
|
|
|
$
|
—
|
|
|
$
|
143,905
|
|
2024
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2025
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Thereafter
|
$
|
—
|
|
|
$
|
6,800
|
|
|
$
|
6,800
|
|
16. Segment Reporting
Operating segments are defined as components of an enterprise that are evaluated regularly by the Company’s chief operating decision maker (“CODM”), which is our President and Chief Executive Officer. Each of these segments consists of a number of manufacturing facilities. Certain of our facilities manufacture and sell products through both of our segments. Each manufacturing facility that sells products through both segments is reflected in the financial results of the segment that has the greatest amount of revenues from that manufacturing facility. Our segments are more specifically described below.
The Electrical Systems segment designs, manufactures and sells the following products:
•Electrical systems, electrical wire harnesses, electro-mechanical assemblies for warehouses, electro-mechanical cable assemblies for the construction, agricultural, industrial, automotive, truck, mining, rail and military industries in North America, Europe and Asia-Pacific. This segment includes a portion of the company’s activities in the emerging electric vehicle market;
•Plastic components ("Trim") primarily for the North America commercial vehicle market and recreational vehicle markets;
•Warehouse automation subsystems primarily for the North American e-commerce markets and include electro-mechanical assemblies and panels;
•Commercial vehicle accessories including wipers, mirrors, floormats and sensors; and
•Cab structures for the North American MD/HD truck market.
The Global Seating segment designs, manufactures and sells the following products:
•Commercial vehicle seats for the global commercial vehicle markets including heavy duty trucks, medium duty trucks, last mile trucks, construction equipment, material handling equipment and agriculture equipment in North America, Europe and Asia-Pacific. This segment includes a portion of the company’s activities in the emerging electric vehicle market;
•Office seats primarily in Europe and Asia-Pacific; and
•Aftermarket seats and components in North America, Europe and Asia-Pacific.
Corporate expenses consist of certain overhead and shared costs that are not directly attributable to the operations of a segment. For purposes of business segment performance measurement, some of these costs that are for the benefit of the operations are allocated based on a combination of methodologies. The costs that are not allocated to a segment are considered stewardship costs and remain at corporate in our segment reporting.
The following table presents segment revenues, gross profit, selling, general and administrative expenses, amortization expense, operating income, capital expenditures, depreciation expense and other items for the three months ended March 31, 2021 and 2020. The table does not include assets as the CODM does not review assets by segment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2021
|
|
Electrical
Systems
|
|
Global
Seating
|
|
Corporate/
Other
|
|
Total
|
Revenues
|
|
|
|
|
|
|
|
External revenues
|
$
|
159,687
|
|
|
$
|
85,435
|
|
|
$
|
—
|
|
|
$
|
245,122
|
|
Intersegment revenues
|
2,553
|
|
|
5,659
|
|
|
(8,212)
|
|
|
—
|
|
Total revenues
|
$
|
162,240
|
|
|
$
|
91,094
|
|
|
$
|
(8,212)
|
|
|
$
|
245,122
|
|
Gross profit
|
$
|
20,270
|
|
|
$
|
10,888
|
|
|
$
|
(37)
|
|
|
$
|
31,121
|
|
Selling, general & administrative expenses
|
5,403
|
|
|
5,344
|
|
|
4,971
|
|
|
15,718
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
$
|
14,867
|
|
|
$
|
5,544
|
|
|
$
|
(5,008)
|
|
|
$
|
15,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2020
|
|
Electrical Systems
|
|
Global
Seating
|
|
Corporate/
Other
|
|
Total
|
Revenues
|
|
|
|
|
|
|
|
External revenues
|
$
|
111,167
|
|
|
$
|
75,938
|
|
|
$
|
—
|
|
|
$
|
187,105
|
|
Intersegment revenues
|
931
|
|
|
43
|
|
|
(974)
|
|
|
—
|
|
Total revenues
|
$
|
112,098
|
|
|
$
|
75,981
|
|
|
$
|
(974)
|
|
|
$
|
187,105
|
|
Gross profit
|
$
|
10,946
|
|
|
$
|
9,371
|
|
|
$
|
(14)
|
|
|
$
|
20,303
|
|
Selling, general & administrative expenses
|
4,679
|
|
|
4,923
|
|
|
8,357
|
|
|
17,959
|
|
Goodwill and other impairment
|
23,415
|
|
|
4,809
|
|
|
643
|
|
|
28,867
|
|
Operating loss
|
$
|
(17,148)
|
|
|
$
|
(361)
|
|
|
$
|
(9,014)
|
|
|
$
|
(26,523)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17. Other Financial Information
Items reported in inventories consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
|
December 31, 2020
|
Raw materials
|
$
|
80,990
|
|
|
$
|
65,334
|
|
Work in process
|
14,711
|
|
|
13,373
|
|
Finished goods
|
13,307
|
|
|
12,540
|
|
|
$
|
109,008
|
|
|
$
|
91,247
|
|
Items reported in property, plant, and equipment, net consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
|
December 31, 2020
|
Land and buildings
|
$
|
30,335
|
|
|
$
|
30,305
|
|
Machinery and equipment
|
189,364
|
|
|
189,939
|
|
Construction in progress
|
2,107
|
|
|
1,558
|
|
Property, plant, and equipment, gross
|
221,806
|
|
|
221,802
|
|
Less accumulated depreciation
|
(161,924)
|
|
|
(159,026)
|
|
Property, plant and equipment, net
|
$
|
59,882
|
|
|
$
|
62,776
|
|
Items reported in accrued expenses and other liabilities consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
|
December 31, 2020
|
Compensation and benefits
|
$
|
15,745
|
|
|
$
|
13,172
|
|
Operating lease liabilities
|
8,639
|
|
|
9,236
|
|
Contingent consideration
|
5,000
|
|
|
4,870
|
|
Taxes payable
|
4,274
|
|
|
4,057
|
|
Accrued freight
|
3,996
|
|
|
2,556
|
|
Insurance
|
2,408
|
|
|
2,705
|
|
Other
|
11,619
|
|
|
13,460
|
|
|
$
|
51,681
|
|
|
$
|
50,056
|
|
18. Subsequent Event
On April 30, 2021, Commercial Vehicle Group, Inc. (the “Company”) and certain of its subsidiaries entered into a credit agreement (the “Credit Agreement”) between, among others, Bank of America, N.A. as administrative agent (the “Administrative Agent”) and other lenders party thereto (the “Lenders”) pursuant to which the Lenders made available a $150 million Term Loan Facility (the “Term Loan Facility”) and a $125 million Revolving Credit Facility (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Credit Facilities”). Subject to the terms of the Credit Agreement, the Revolving Credit Facility includes a $10 million swing line sublimit and a $10 million letter of credit sublimit. The Credit Agreement provides for an incremental term facility agreement and/or an increase of the Revolving Credit Facility (together, the “Incremental Facilities”), in a maximum aggregate amount of (a) up to the date of receipt of financial statements for the fiscal quarter ending June 30, 2022, $75 million, and (b) thereafter, (i) $75 million less the aggregate principal amount of Incremental Facilities incurred before such date, plus (ii) an unlimited amount if the pro forma consolidated total leverage ratio (assuming the Incremental Facilities are fully drawn) is less than 2.50:1.0. The Credit Facilities mature on April 30, 2026 (the “Maturity Date”).
The proceeds of the Credit Facilities will be used, together with cash on hand of the Company, to (a) fund the redemption, satisfaction and discharge of all of the Company’s outstanding secured credit facility due 2023 (the “2023 Term Loan Facility”) issued pursuant to a term facility agreement (the “Term Facility Agreement”) between, among others, Bank of America, N.A. as administrative agent and other lender parties thereto, (b) fund the redemption, satisfaction and discharge of all of the Company’s asset-based revolving credit facility (the “ABL Revolving Credit Facility”) issued pursuant to a facility agreement (the “ABL Facility Agreement”) between, among others, Bank of America, N.A. as agent and certain financial institutions as lenders, (c) pay transaction costs, fees and expenses incurred in connection therewith and in connection with the Credit Agreement, and (d) for working capital and other lawful corporate purposes of the Company and its subsidiaries. The Company expects to recognize a loss on extinguishment of debt of approximately $7.2 million, including non-cash write off relating to
deferred financing costs and unamortized discount of the 2023 Term Loan Facility and a voluntary repayment premium during the financial quarter ending June 30, 2021.