NEW ALBANY, Ohio, Sept. 22, 2020 /PRNewswire/ -- Commercial
Vehicle Group, Inc. ("CVG", the "Company") (Nasdaq: CVGI), a
diversified industrial company, reported progress against its
objectives in the areas of leadership, growth, cost and cash
actions taken during 2020.
- Debt Paydown – The Company has generated and
sustained sufficient cashflow to immediately pay down $20 million of its debt. After the $20 million repayment, the Company will have
$156 million of Term Loan B debt,
$0 of revolver debt, and $55 million of global cash. This will result in a
net debt balance of $101 million, and
the Company will continue to have over $100
million of liquidity. We expect to be able to continue to
invest in targeted areas for growth expansion, new products,
capability enhancement, cost optimization, quality improvement, and
digital business processes.
- Compensation Restoration – The Company implemented
a set of temporary cost actions in 2020 which included compensation
reductions by its employees and members of its Board of Directors.
The Company is announcing that it has begun to reinstate
compensation to target levels.
- Core Market Recovery – The global commercial
vehicle markets show signs of recovery from the covid induced
downturn, although demand remains below pre-covid levels overall.
However, ACT Research, a publisher of industry market research, has
increased its North American production outlooks for 2020, 2021 and
2022. The Company is re-staffing in certain areas and continues to
invest in operations in its core markets.
- Organic Growth Progress – As previously reported,
the Company is implementing actions to enable growth in its markets
that are expanding and growing rapidly, specifically e-commerce and
e-tailing driven warehouse infrastructure subsystems, and new
electric vehicle platforms. E-commerce and e-tailing continue to
grow at a rapid pace and the supply industry infrastructure needed
for sorting and shipping products is expanding globally.
Additionally, the Company previously announced a new business
relationship with a new customer that is a last-mile electric
vehicle maker. The Company has begun its investment and ramp-up
activities for this foundational new business area.
- Business Development Restart – The Company has
implemented actions to integrate business operations and achieve
the desired business expansion and portfolio diversification
enabled by the acquisition of First Source Electronics in 2019. The
Company is in the early stages of restarting a focused M&A
program with goals of portfolio expansion, dampening commercial
vehicle cyclicality on the Company's results, and enhancing the
Company's value propositions.
"The Company has made progress so far in 2020, but is at the
beginning of a bold repositioning and business expansion. We have
multiple strategic actions underway to achieve this outcome – new
people, new customers, new products, new footprint, new business
processes, and re-focused M&A agenda. We are also at the
beginning of a sustained initiative to become an innovator and
best-in-class solutions provider in our markets. We are making
fundamental changes and adding new people to complement and
strengthen our team. We added a key new leader in Q3 and have
searches underway for multiple other new leaders. We also have
promoted and reassigned some of our strongest leaders to directly
lead the Company in new areas. We intend to profitably grow the
Company and pivot our center of mass to include other diversified
industrial end markets."
"The Company is implementing a set of business process
infrastructure actions in 2020 to advance its financial management
regimens, growth program tracking, cost management actions and cash
/ debt optimization. This has been a tremendous workload for our
headquarters team and global operations teams. Additionally, we
have supplemented our team with a few specialized consultants to
assist with these important actions. These efforts are improving
our ability to forecast and target growth, and be more proactive
with cost and cash management. This work is not completed and we
expect it will continue for a few more quarters."
"The combination of the covid-related slowdown in the heavy duty
vehicle markets and the rapid growth of e-commerce driven warehouse
infrastructure investment this year presented a very unique
entrepreneurial opportunity that we took advantage of with swift
actions. We pivoted quickly and used the temporary but large slow
down to initiate reconfiguration of four plants to better serve
warehouse equipment growth and initiated cost optimization at six
other plants, including three facility closures. The work to
complete these actions is still underway"
"E-commerce, e-tailing, last mile delivery, electric vehicles,
and sophisticated warehousing and distribution centers are global
macro-trends that we intend to firmly participate in. It is already
a big part of the new CVG and we are taking actions with the goal
of making them significantly larger," said Harold Bevis, President and CEO.
About CVG
CVG (through its subsidiaries) is a diversified industrial
company that provides seating systems, electro-mechanical
assemblies, wire harnesses, plastic parts, engineered structures,
panel assemblies, and warehouse automation subsystems for many
markets including the following: ecommerce, e-tailing, trucking,
last-mile delivery, electric vehicles, military equipment,
warehouse equipment, buses, construction equipment, agricultural
vehicles, specialty transportation vehicles, mining, industrial
equipment and off-road recreational markets. Information about CVG
and its products is available on the internet at www.cvgrp.com.
Forward-Looking Statements
This press release contains forward-looking statements that are
subject to risks and uncertainties. These statements often include
words such as "believe", "anticipate", "plan", "expect", "intend",
"will", "should", "could", "would", "project", "continue",
"likely", and similar expressions. In particular, this press
release may contain forward-looking statements about Company
expectations for future periods with respect to its plans to
improve financial results and enhance the Company, the future of
the Company's end markets, including the short-term and potential
longer-term impact of the COVID-19 pandemic on Class 8 and Class
5-7 North America truck build
rates and performance of the global construction equipment
business, expected cost savings, the Company's initiatives to
address customer needs, organic growth, the Company's plans to
focus on certain segments and markets and the Company's financial
position or other financial information. These statements are based
on certain assumptions that the Company has made in light of its
experience as well as its perspective on historical trends, current
conditions, expected future developments and other factors it
believes are appropriate under the circumstances. Actual results
may differ materially from the anticipated results because of
certain risks and uncertainties, including but not limited to: (i)
a material weakness in our internal control over financial
reporting which could, if not remediated, result in material
misstatements in our financial statements; (ii) future financial
restatements affecting the company; (iii) general economic or
business conditions affecting the markets in which the Company
serves; (iv) the Company's ability to develop or successfully
introduce new products; (v) risks associated with conducting
business in foreign countries and currencies; (vi) increased
competition in the medium- and heavy-duty truck markets,
construction, agriculture, aftermarket, military, bus and other
markets; (vii) the Company's failure to complete or successfully
integrate strategic acquisitions and the impact of such
acquisitions on business relationships; (viii) the Company's
ability to recognize synergies from the reorganization of the
segments; (ix) the Company's failure to successfully manage any
divestitures; (x) the impact of changes in governmental regulations
on the Company's customers or on its business; (xi) the loss of
business from a major customer, a collection of smaller customers
or the discontinuation of particular commercial vehicle platforms;
(xii) the Company's ability to obtain future financing due to
changes in the lending markets or its financial position; (xiii)
the Company's ability to comply with the financial covenants in its
debt facilities; (xiv) fluctuation in interest rates or change in
the reference interest rate relating to the Company's debt
facilities; (xv) the Company's ability to realize the benefits of
its cost reduction and strategic initiatives and address rising
labor and material costs; (xvi) volatility and cyclicality in the
commercial vehicle market adversely affecting us, including the
impact of the current COVID-19 pandemic; (xvii) the geographic
profile of our taxable income and changes in valuation of our
deferred tax assets and liabilities impacting our effective tax
rate; (xviii) changes to domestic manufacturing initiatives; (xix)
implementation of tax or other changes, by the United States or other international
jurisdictions, related to products manufactured in one or more
jurisdictions where the Company does business (xx) security
breaches and other disruptions that could compromise our
information systems; (xxi) the impact of disruptions in our
supply chain or delivery chains; (xxii) litigation against us;
(xxiii) the impact of health epidemics or widespread outbreak of
contagious disease; and (xxiv) various other risks as outlined
under the heading "Risk Factors" in the Company's Annual Report on
Form 10-K for fiscal year ending December 31, 2019 and other
filings with the Securities and Exchange Commission. There
can be no assurance that statements made in this press release
relating to future events will be achieved. The Company undertakes
no obligation to update or revise forward-looking statements to
reflect changed assumptions, the occurrence of unanticipated events
or changes to future operating results over time. All subsequent
written and oral forward-looking statements attributable to the
Company or persons acting on behalf of the Company are expressly
qualified in their entirety by such cautionary statements.
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SOURCE Commercial Vehicle Group, Inc.