Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
A Tough Start. While the year-over-year comparison was expected to be difficult given the record top-line performance in 1Q23 and the expected decline in Class 8 truck production, first quarter 2024 results missed our and consensus estimates. However, 1Q24 results did improve sequentially. The one bright spot remains the Electrical Systems business, which posted top-line improvement y-o-y, although operating segment operating income declined, partly due to restructuring costs.
1Q24. Revenue declined 11.6% y-o-y to $232.1 million, below our $244 million estimate and the consensus $241 million estimate. Adjusted EBITDA totaled $12.7 million, down 35.9% y-o-y. We had forecast $15.5 million, and consensus was at $16.1 million. CVG reported adjusted net income of $4.4 million, or EPS of $0.13, versus adjusted net income of $9.2 million, or $0.28/sh in 1Q23. We were at $6.7 million and $0.20/sh, with consensus also at $0.20/sh.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Impact of UAW Strike on 4Q. Fourth quarter results were negatively impacted by a work stoppage at a customer facility due to the UAW strike. Management estimated the strike reduced revenue by about $12 million and had a $0.05/sh negative impact on EPS. We expect that eventually the revenue will come back, it is just a question of timing.
New Wins. CVG recorded in excess of $150 million of new wins in 2023 on a fully ramped basis, continuing the Company’s strong track record of success. The wins continue to be focused within the Electrical Systems segment and support the product ramp-up at the new plants in Mexico and Morocco, which are focused on meeting the demand growth in electrical systems. CVG is currently expanding its Morocco footprint with an additional new plant under construction.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
4Q23 Results. Driven by a number of factors, including a strike at a customer plant, revenue was down 5.0% y-o-y to $223.1 million. We had estimated $230 million. Adjusted EBITDA came in at $10.3 million, down $2.9 million y-o-y and below our $13 million forecast. Impacted by a favorable tax benefit, 4Q23 GAAP net income was $23.3 million, or $0.70/sh, compared to GAAP net loss of $32 million, or a loss of $0.98/sh. Adjusted 4Q23 net income was $2.9 million, or $0.09/sh, compared to $1.4 million, or $0.04/sh last year. We had forecast net income of $4.4 million, or $0.13/sh.
Segments. Electrical Systems remained the star performer with revenue increasing 19.4% to $56.2 million and adjusted operating income up 25% to $6.7 million. Vehicle Solutions revenue down 10.1% to $128.4 million, with adjusted operating income down 3.9% to $4 million. Aftermarket revenue of $31.4 million was off 8.1%, while adjusted operating income declined 6.4% to $3.4 million. Industrial Automation revenue of $7.1 million declined 35%, while adjusted operating income was $0.3 million.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
NEW ALBANY, Ohio, Feb. 01, 2024 (GLOBE NEWSWIRE) — Commercial Vehicle Group (CVG) (NASDAQ: CVGI), a global leader in the design and manufacturing of electrical systems, vehicle components and accessories, plastic products and robotic assemblies, today announced that it has sold its FinishTEK business to Rowmark LLC, effective January 31, 2024.
Based in Dalton, Ga., FinishTEK, is a hydrographic and paint decorator with 95,000 square feet of specialized manufacturing and warehouse space and 30 employees. FinishTEK was part of CVG’s Vehicle Solutions segment serving Tier 1 suppliers and OEM manufacturers in a wide variety of industries, including powersports, heavy-duty truck, appliance, automotive, turf, construction, and agriculture. Rowmark, based in Findlay, Ohio, is a leading manufacturer of engravable sheet plastic for the awards, engraving and signage markets.
James Ray, President and CEO of CVG, stated, “As part of our strategy to drive revenue growth, primarily in our electrical systems business and improve our margins, we continually evaluate our portfolio of businesses and product lines for strategic fit and continued investment. This is a positive transaction for both companies and continues to optimize CVG’s portfolio toward its core growth businesses.”
CVG and Rowmark are committed to a smooth transition for our customers, suppliers, and the employees. The terms of the agreement were not disclosed.
About FinishTEK
FinishTEK was founded in 1993 as Daltek Inc. It was acquired by Commercial Vehicle Group in 2012 and renamed FinishTEK. FinishTEK is a hydrographic and paint decorator specializing in plastics decorating and finishing. It offers customers a wide variety of cost-effective finishes in hydrographics, paint, and UV hard coating.
About CVG
At CVG, we deliver real solutions to complex design, engineering and manufacturing problems while creating positive change for our customers, industries, and communities we serve. Information about CVG and its products is available at www.cvgrp.com.
Investor Relations Contact: Ross Collins or Stephen Poe Alpha IR Group CVGI@alpha-ir.com
NEW ALBANY, Ohio, Dec. 14, 2023 (GLOBE NEWSWIRE) — Commercial Vehicle Group (the “Company” or “CVG”) (NASDAQ: CVGI), a global leader in the design and manufacturing of electrical systems, vehicle components and accessories, plastic products and robotic assemblies, today announced that its Board of Directors (the “Board”) has elected William C. Johnson as an independent director to the Board, effective December 8, 2023. Mr. Johnson will serve on the Compensation Committee and the Nominating, Governance and Sustainability Committee of the Board. He will stand for re-election at the Company’s 2024 Annual Meeting of Stockholders.
Mr. Johnson, 60, brings tremendous leadership experience to the CVG Board. Since October 2022, Mr. Johnson has served as CEO and a member of the Board of Directors of Avail Infrastructure Solutions. From October 2018 to July 2022, Mr. Johnson served as the President and CEO of Welbilt, Inc. (WBT), and from July 2016 to June 2018, he served President and CEO and COO of Chart Industries, Inc. Prior to that he held multiple roles of increasing responsibility at Dover Refrigeration and Food Equipment, Hillphoenix, ABB and ESAB. Mr. Johnson holds a Bachelor of Science degree in Ceramic engineering from Alfred University and a Master of Business Administration from Rollins College. He started his professional career as a Nuclear engineer in the US Navy aboard the submarine USS Stonewall Jackson.
“We welcome Bill to the CVG Board as the company executes its strategy to grow shareholder value,” said Robert Griffin, Chairman of the Board. “CVG will greatly benefit from his proven leadership experience. His record of success across various executive roles speaks to his exceptional capabilities that will serve us well in the Board room.”
“Being elected to the CVG Board of Directors is a tremendous honor,” said Mr. Johnson. “I am excited to work alongside the Board’s distinguished leaders to help guide the Company’s strategy into 2024 and beyond.”
About CVG
At CVG, we deliver real solutions to complex design, engineering and manufacturing problems while creating positive change for our customers, industries, and communities we serve. Information about the Company and its products is available on the internet at www.cvgrp.com.
Investor Relations Contact: Ross Collins or Stephen Poe Alpha IR Group CVGI@alpha-ir.com
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Moving Forward, but Cyclicality Still Here. CVG is making progress on the business transformation to a less cyclical, higher margin, faster growing business, as evidenced by the 17% y-o-y growth in the Electrical Systems business. But the cyclicality of the Vehicle Solutions business remains, and will be a headwind in 2024.
Continuing to Add New Business. CVG recorded approximately $15 million of new business wins in the quarter, increasing the YTD number to $140 million, almost to the 2023 goal of $150 million of new business wins. The majority of new business wins continue to be within the Electrical Systems segment.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
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EPS of $0.22, up 100% year-over-year Adjusted EBITDA of $16.6 million, up 16.1% year-over-year Our strategy continues to favorably impact our results as Electrical Systems revenues were up 16.8% year-over-year
NEW ALBANY, Ohio, Nov. 01, 2023 (GLOBE NEWSWIRE) — CVG (NASDAQ: CVGI), a diversified industrial products and services company, today announced financial results for its third quarter ended September 30, 2023.
Third Quarter 2023Highlights(Compared with prior year, where comparisons are noted)
Revenues of $246.7 million, down 1.9% due primarily to higher revenue in the prior year as a result of a COVID backlog in Asia-Pacific which offset an increase in revenue in Electrical Systems in 2023.
Operating income of $12.4 million, up 30.5%; adjusted operating income of $12.5 million, up 17.9%. Improved operating income was driven primarily by improved pricing and cost management, partially offset by volume decreases.
Net income and adjusted net income were both $7.3 million, or $0.22 per diluted share, compared to net income of $3.6 million, or $0.11 per diluted share and adjusted net income of $5.1 million, or $0.15 per diluted share.
Adjusted EBITDA of $16.6 million, up 16.1% with an adjusted EBITDA margin of 6.7%, up from 5.7%.
New business wins year-to-date are expected to be approximately $140 million when fully ramped. The majority of the new business awards continue to be in the Electrical Systems segment.
Strong free cash flow and debt pay down reduced our leverage ratio down to 1.5x from 2.7x.
Robert Griffin, Chairman of the Board and Interim President and Chief Executive Officer, said, “CVG continues to execute on its strategic long-term plan, which again delivered year-over-year bottom line improvements in the quarter. Electrical Systems remains a key growth area for the Company, as evidenced by the strong revenue growth compared to last year and the successful start-up at our new Electrical Systems facilities in Aldama, Mexico, and Tangier, Morocco, which has gone very well. As always, I would like to thank our global CVG teams for their hard work, dedication, and commitment as we continue to execute our strategic goals.”
Andy Cheung, Chief Financial Officer, added, “CVG continued executing on our strategy, delivering strong year-over-year improvements in profitability during the quarter. Despite the strong performance, revenues declined slightly year-over-year against a tough comparable base year in 2022, when our Asia-Pacific business benefited from a post-COVID increase in backlogged sales orders. We also had improved earnings and generated strong free cash flow of $12.5 million during the quarter, further strengthening our financial foundation, and reduced our leverage to 1.5x from 2.7x in the third quarter last year.”
“Going forward, we remain committed to driving strong free cash flow, paying down debt, and investing to support our growing, diverse portfolio of businesses.”
Third Quarter Financial Results (amounts in millions except per share data and percentages)
ThirdQuarter
2023
2022
$ Change
% Change
Revenues
$
246.7
$
251.4
$
(4.7
)
(1.9)%
Gross profit
$
33.9
$
26.8
$
7.1
26.5%
Gross margin
13.7
%
10.7
%
Adjusted gross profit 1
$
34.0
$
27.4
$
6.6
24.1%
Adjusted gross margin 1
13.8
%
10.9
%
Operating income
$
12.4
$
9.5
$
2.9
30.5%
Operating margin
5.0
%
3.8
%
Adjusted operating income 1
$
12.5
$
10.6
$
1.9
17.9%
Adjusted operating margin 1
5.1
%
4.2
%
Net income
$
7.3
$
3.6
$
3.7
102.8%
Adjusted net income 1
$
7.3
$
5.1
$
2.2
43.1%
Earnings per share, diluted
$
0.22
$
0.11
$
0.11
100.0%
Adjusted earnings per share, diluted 1
$
0.22
$
0.15
$
0.07
46.7%
Adjusted EBITDA 1
$
16.6
$
14.3
$
2.3
16.1%
Adjusted EBITDA margin 1
6.7
%
5.7
%
1 See Appendix A for GAAP to Non-GAAP reconciliation
Consolidated Results
Third Quarter 2023 Results
Third quarter 2023 revenues were $246.7 million, compared to $251.4 million in the prior year period, a decrease of 1.9%. The overall decrease in revenues was due to higher revenue in the prior year as a result of a COVID backlog in Asia-Pacific. Foreign currency translation also favorably impacted third quarter 2023 revenues by $2.0 million, or 0.8%.
Operating income in the third quarter 2023 was $12.4 million compared to $9.5 million in the prior year period. The increase in operating income was attributable to improved pricing and cost management, partially offset by volume decreases. Third quarter 2023 adjusted operating income was $12.5 million, excluding special charges.
Interest associated with debt and other expenses was $2.6 million and $2.8 million for the third quarter 2023 and 2022, respectively.
Net income was $7.3 million, or $0.22 per diluted share, for the third quarter 2023 compared to net income of $3.6 million, or $0.11 per diluted share, in the prior year period.
On September 30, 2023, the Company had $5.0 million of outstanding borrowings on its U.S. revolving credit facility and $4.1 million outstanding on its China credit facility, $46.3 million of cash and $152.0 million of availability from the credit facilities, resulting in total liquidity of $198.3 million.
Third Quarter 2023 Segment Results
Vehicle Solutions Segment
Revenues were $145.4 million compared to $154.0 million for the prior year period, a decrease of 5.6%, due to higher revenue in the prior year as a result of a COVID backlog in Asia-Pacific.
Operating income was $10.9 million, compared to $9.6 million in the prior year period, an increase of 14.0%, primarily attributable to price increases, material and freight cost reduction improvements, partially offset by volume decreases.
Electrical Systems Segment
Revenues were $53.9 million compared to $46.1 million in the prior year period, an increase of 16.8%, primarily resulting from increased sales volume, pricing and favorable foreign exchange.
Operating income was $5.9 million compared to $5.2 million in the prior year period, an increase of 13.7%. The increase in operating income was primarily attributable to increased sales volume and pricing, partially offset by startup costs related to new facilities.
Aftermarket & Accessories Segment
Revenues were $34.4 million compared to $37.1 million in the prior year period, a decrease of 7.4%, primarily resulting from decreased sales volume.
Operating income was $4.5 million compared to $5.0 million in the prior year period, a decrease of 9.1%. The decrease in operating income was primarily attributable to cost inflation, partially offset by increased pricing.
Industrial Automation Segment
Revenues were $13.0 million compared to $14.1 million in the prior year period, a decrease of 7.8%, primarily due to lower sales volume due to decreased customer demand.
Operating income was $0.7 million compared to an operating loss of $1.0 million in the prior year period. The increase in operating income was primarily attributable to profit reported from the liquidation of certain excess inventories. Adjusted operating income was $0.8 million.
2023 Demand Outlook
According to ACT Research, the 2023 North American Class 8 truck production levels are expected to be at 336,000 units, compared to approximately 315,000 units in 2022. Class 8 estimates from FTR for 2023 are 327,000 units, slightly lower than ACT Research for Class 8 truck builds. Class 5-7 production levels are expected to be at 266,000 units in 2023. The 2024 forecast Class 8 truck builds according to ACT Research is approximately 274,000 units.
According to Transparency Market Research Inc, the global commercial and automotive vehicle wire harness market is growing at approximately 5% per year.
According to Interact Analysis, the Global Off-Highway vehicle market is expected to increase approximately 5% in 2023. Beyond 2023, the Off-Highway vehicle market is expected to grow in the 4-5% range.
According to MacKay and Company, North American aftermarket truck parts are expected to see at least 4% growth in 2023. Compounded annual growth of at least 4% is forecasted for 2023-2027.
GAAP to Non-GAAP Reconciliation
A reconciliation of GAAP to non-GAAP financial measures referenced in this release is included as Appendix A to this release.
Conference Call
A conference call to discuss this press release is scheduled for Thursday, November 2, 2023, at 10:00 a.m. ET. Management intends to reference the Q3 2023 Earnings Call Presentation during the conference call. To participate, dial (888) 259-6580 using conference code 93330617. International participants dial (416) 764-8624 using conference code 93330617.
This call is being webcast and can be accessed through the “Investors” section of CVG’s website at ir.cvgrp.com, where it will be archived for one year.
A telephonic replay of the conference call will be available for a period of two weeks following the call. To access the replay, dial (877) 674-7070 using access code 051647 and international callers can dial (416) 764-8692 using access code 051647.
Company Contact Andy Cheung Chief Financial Officer CVG IR@cvgrp.com
Investor Relations Contact Ross Collins or Stephen Poe Alpha IR Group CVGI@alpha-ir.com
About CVG
At CVG, we deliver real solutions to complex design, engineering and manufacturing problems while creating positive change for our customers, industries and communities we serve. Information about the Company 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 the Company’s expectations for future periods with respect to its plans to improve financial results, the future of the Company’s end markets, changes in the Class 8 and Class 5-7 North America truck build rates, performance of the global construction equipment business, the Company’s prospects in the wire harness, warehouse automation and electric vehicle markets, the Company’s initiatives to address customer needs, organic growth, the Company’s strategic plans and plans to focus on certain segments, competition faced by the Company, volatility in and disruption to the global economic environment 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 those included in the Company’s filings with the SEC. 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.
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months and Nine Months Ended September 30, 2023 and 2022 (Unaudited) (Amounts in thousands, except per share amounts)
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Revenues
$
246,687
$
251,412
$
771,590
$
746,635
Cost of revenues
212,763
224,570
664,056
672,531
Gross profit
33,924
26,842
107,534
74,104
Selling, general and administrative expenses
21,476
17,304
64,498
49,955
Operating income
12,448
9,538
43,036
24,149
Other expense
383
1,924
488
2,798
Interest expense
2,614
2,813
8,308
6,892
Loss on extinguishment of debt
—
—
—
921
Income before provision for income taxes
9,451
4,801
34,240
13,538
Provision for income taxes
2,161
1,250
8,110
3,520
Net income
$
7,290
$
3,551
$
26,130
$
10,018
Earnings per Common Share:
Basic
$
0.22
$
0.11
$
0.79
$
0.30
Diluted
$
0.22
$
0.11
$
0.78
$
0.30
Weighted average shares outstanding:
Basic
33,100
32,460
33,010
32,950
Diluted
33,350
32,922
33,408
33,645
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Amounts in thousands, except per share amounts)
ASSETS
September 30, 2023
December 31, 2022
Current assets:
Cash
$
46,293
$
31,825
Accounts receivable, net
159,863
152,626
Inventories
128,192
142,542
Other current assets
29,892
12,582
Total current assets
364,240
339,575
Property, plant and equipment, net
71,554
67,805
Intangible assets, net
12,041
14,620
Deferred income taxes
11,181
12,275
Other assets, net
37,026
35,993
Total assets
$
496,042
$
470,268
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
105,110
$
122,091
Accrued liabilities and other
52,999
42,809
Current portion of long-term debt and short-term debt
18,331
10,938
Total current liabilities
176,440
175,838
Long-term debt
135,573
141,499
Pension and other post-retirement benefits
9,325
8,428
Other long-term liabilities
28,150
24,463
Total liabilities
$
349,488
$
350,228
Stockholders’ equity:
Preferred stock
$
—
$
—
Common stock
330
328
Treasury stock
(15,322
)
(14,514
)
Additional paid-in capital
263,641
261,371
Retained deficit
(69,465
)
(95,595
)
Accumulated other comprehensive loss
(32,630
)
(31,550
)
Total stockholders’ equity
146,554
120,040
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
496,042
$
470,268
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES BUSINESS SEGMENT FINANCIAL INFORMATION (Unaudited) (Amounts in thousands)
Three Months Ended September 30,
Vehicle Solutions
Electrical Systems
Aftermarket and Accessories
Industrial Automation
Corporate/Other
Total
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Revenues
$
145,393
$
154,024
$
53,862
$
46,129
$
34,412
$
37,143
$
13,020
$
14,116
$
—
$
—
$
246,687
$
251,412
Gross profit
17,661
13,839
7,881
6,210
6,605
6,389
1,777
404
—
—
33,924
26,842
Selling, general & administrative expenses
6,761
4,279
2,018
1,055
2,104
1,436
1,087
1,371
9,506
9,163
21,476
17,304
Operating income (loss)
$
10,900
$
9,560
$
5,863
$
5,155
$
4,501
$
4,953
$
690
$
(967
)
$
(9,506
)
$
(9,163
)
$
12,448
$
9,538
Nine Months Ended September 30,
Vehicle Solutions
Electrical Systems
Aftermarket and Accessories
Industrial Automation
Corporate/Other
Total
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Revenues
$
458,707
$
436,966
$
172,236
$
133,350
$
108,870
$
99,530
$
31,777
$
76,789
$
—
$
—
$
771,590
$
746,635
Gross profit
58,035
35,657
26,524
16,857
21,620
13,341
1,355
8,249
—
—
107,534
74,104
Selling, general & administrative expenses
19,609
18,269
6,932
3,998
6,017
4,636
3,588
4,242
28,352
18,810
64,498
49,955
Operating income (loss)
$
38,426
$
17,388
$
19,592
$
12,859
$
15,603
$
8,705
$
(2,233
)
$
4,007
$
(28,352
)
$
(18,810
)
$
43,036
$
24,149
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES Appendix A: Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) (Amounts in thousands, except per share amounts and percentages)
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Gross profit
$
33,924
$
26,842
$
107,534
$
74,104
Restructuring
70
607
1,443
2,958
Adjusted gross profit
$
33,994
$
27,449
$
108,977
$
77,062
% of revenues
13.8
%
10.9
%
14.1
%
10.3
%
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Operating income (loss)
$
12,448
$
9,538
$
43,036
$
24,149
Restructuring
70
647
1,501
3,387
Deferred consideration purchase accounting
—
103
—
341
Executive transition
—
329
—
329
Total operating income adjustments
70
1,079
1,501
4,057
Adjusted operating income
$
12,518
$
10,617
$
44,537
$
28,206
% of revenues
5.1
%
4.2
%
5.8
%
3.8
%
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Net income
$
7,290
$
3,551
$
26,130
$
10,018
Operating income adjustments
70
1,079
1,501
4,057
Pension settlement
—
1,116
—
1,116
Loss on extinguishment of debt
—
—
—
921
Hryvnia fair value adjustments on forward exchange contracts
—
(153
)
—
98
Adjusted provision for income taxes1
(18
)
(511
)
(375
)
(1,548
)
Adjusted net income
$
7,342
$
5,082
$
27,256
$
14,662
Diluted EPS
$
0.22
$
0.11
$
0.78
$
0.30
Adjustments to diluted EPS
$
—
$
0.04
$
0.04
$
0.14
Adjusted diluted EPS
$
0.22
$
0.15
$
0.82
$
0.44
Reported Tax Provision adjusted for tax effect of special charges at 25%
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Net income
$
7,290
$
3,551
$
26,130
$
10,018
Interest expense
2,614
2,813
8,308
6,892
Provision for income taxes
2,161
1,250
8,110
3,520
Depreciation expense
3,639
3,749
10,615
11,043
Amortization expense
847
851
2,544
2,563
EBITDA
$
16,551
$
12,214
$
55,707
$
34,036
% of revenues
6.7
%
4.9
%
7.2
%
4.6
%
EBITDA adjustments
Restructuring
$
70
$
647
$
1,501
$
3,387
Deferred consideration purchase accounting
—
103
—
341
Loss on extinguishment of debt
—
—
—
921
Hryvnia fair value adjustments on forward exchange contracts
—
(153
)
—
98
Executive transition
—
329
—
329
Pension settlement
—
1,116
—
1,116
Adjusted EBITDA
$
16,621
$
14,256
$
57,208
$
40,228
% of revenues
6.7
%
5.7
%
7.4
%
5.4
%
Three Months Ended September 30, 2023
Vehicle Solutions
Electrical Systems
Aftermarket and Accessories
Industrial Automation
Corporate/Other
Total
Operating income (loss)
$
10,900
$
5,863
$
4,501
$
690
$
(9,506
)
$
12,448
Restructuring
—
—
—
70
—
70
Adjusted operating income (loss)
$
10,900
$
5,863
$
4,501
$
760
$
(9,506
)
$
12,518
% of revenues
7.5
%
10.9
%
13.1
%
5.8
%
5.1
%
Nine Months Ended September 30, 2023
Vehicle Solutions
Electrical Systems
Aftermarket and Accessories
Industrial Automation
Corporate/Other
Total
Operating income (loss)
$
38,426
$
19,592
$
15,603
$
(2,233
)
$
(28,352
)
$
43,036
Restructuring
423
8
—
1,070
—
1,501
Adjusted operating income (loss)
$
38,849
$
19,600
$
15,603
$
(1,163
)
$
(28,352
)
$
44,537
% of revenues
8.5
%
11.4
%
14.3
%
(3.7
)%
5.8
%
Three Months Ended September 30, 2022
Vehicle Solutions
Electrical Systems
Aftermarket and Accessories
Industrial Automation
Corporate/Other
Total
Operating income (loss)
$
9,560
$
5,155
$
4,953
$
(967
)
$
(9,163
)
$
9,538
Restructuring
66
445
136
$
647
Deferred consideration purchase accounting
—
—
—
103
—
103
Executive transition
—
—
—
—
329
329
Adjusted operating income (loss)
$
9,626
$
5,155
$
5,398
$
(728
)
$
(8,834
)
$
10,617
% of revenues
6.2
%
11.2
%
14.5
%
(5.2
)%
4.2
%
Nine Months Ended September 30, 2022
Vehicle Solutions
Electrical Systems
Aftermarket and Accessories
Industrial Automation
Corporate/Other
Total
Operating income (loss)
$
17,388
$
12,859
$
8,705
$
4,007
$
(18,810
)
$
24,149
Restructuring
270
571
1,440
800
306
3,387
Deferred consideration purchase accounting
—
—
—
341
—
341
Executive transition
—
—
—
—
329
329
Adjusted operating income (loss)
$
17,658
$
13,430
$
10,145
$
5,148
$
(18,175
)
$
28,206
% of revenues
4.0
%
10.1
%
10.2
%
6.7
%
3.8
%
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Cash flows from operating activities
$
18,468
$
38,301
$
29,990
$
33,794
Purchases of property, plant and equipment
(6,017
)
(3,925
)
(15,196
)
(12,541
)
Free cash flow
$
12,451
$
34,376
$
14,794
$
21,253
Use of Non-GAAP Measures
This earnings release contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). In general, the non-GAAP measures exclude items that (i) management believes reflect the Company’s multi-year corporate activities; or (ii) relate to activities or actions that may have occurred over multiple or in prior periods without predictable trends. Management uses these non-GAAP financial measures internally to evaluate the Company’s performance, engage in financial and operational planning and to determine incentive compensation.
Management provides these non-GAAP financial measures to investors as supplemental metrics to assist readers in assessing the effects of items and events on the Company’s financial and operating results and in comparing the Company’s performance to that of its competitors and to comparable reporting periods. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. The financial results calculated in accordance with GAAP and reconciliations to those financial statements set forth above should be carefully evaluated.
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
3Q23 Results. Revenue of $246.7 million was down 1.9% y-o-y, and slightly below our $255 million estimate, mostly due to a COVID related backlog in Asia-Pacific last year that was not repeated this year. Adjusted EBITDA came in at $16.6 million, up 16.1% y-o-y, and in-line with our $17 million estimate. GAAP and adjusted net income was $7.3 million, or $0.22/sh, compared to GAAP $3.6 million, or $0.11/sh, and adjusted $5.1 million, or $0.15/sh, last year. We had forecast net income of $7.2 million, or $0.21/sh.
Segments. Vehicle Solutions revenue was $145.4 million compared to $154 million last year, while operating income was $10.9 million versus $9.6 million. Electrical Systems revenue was $53.9 million versus $46.1 million and operating income grew to $5.9 million from $5.2 million. Aftermarket revenue was $34.4 million, down from $37.1 million and operating income was $4.5 million compared to $5.0 million. Industrial Automation revenue was $13.0 million compared to $14.1 million and segment operating income was $0.7 million compared to an operating loss of $1.0 million last year.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
NEW ALBANY, Ohio, October 30, 2023 (Newswire.com) – Commercial Vehicle Group (CVG) (NASDAQ:CVGI), a global leader in the design and manufacturing of electrical systems, mechanical components, and vehicle accessories, announced today that Corinne Ross has been appointed President, Aftermarket & Accessories. Ross will oversee CVG’s global aftermarket and accessories business segment.
Ross comes to CVG after 16 years with German-based Freudenberg Sealing Technologies, a leading sealing technology company, where she served as Vice President, Corteco North America, Aftermarket Division. In that role, she led regional sales; marketing; supply chain management and operations; and product development and category
management. She began her career in human resources and served in a variety of HR roles of increasing responsibility in both corporate and manufacturing environments.
Ross will be responsible for both the strategic development and tactical execution of the annual and long-term business plans for Aftermarket & Accessories. She will lead the development and execution of commercial, operational, and product management strategies and action plans, and she will work closely with customers and focus on new business development. Ross will also have oversight of product innovation, design, development, and planning activities for the entire Aftermarket product portfolio.
“Corinne is a strong strategic leader who brings a unique blend of business and product aptitude, customer centricity, a big-picture vision and the ability to deliver results,” said Bob Griffin, Interim President and CEO and Chairman of the Board at CVG. “I am confident that she will be a strong strategic thought partner to our executive leadership team.”
“The Aftermarket business is poised for global growth with great potential for additional sales of existing and new products,” said Corinne. “I am excited to join CVG and accelerate growth in the Aftermarket segment.”
Ross holds a bachelor’s degree in business management and an MBA, both from the University of Findlay.
NEW ALBANY, Ohio, Oct. 02, 2023 (GLOBE NEWSWIRE) — Commercial Vehicle Group (the “Company” or “CVG”) (NASDAQ: CVGI) announced today that its Board of Directors (the “Board”) has elected Melanie K. Cook as an independent director to the Board, effective September 26, 2023. Ms. Cook will serve on the Audit and Compensation committees of the Board. Ms. Cook will stand for re-election at the Company’s 2024 Annual Meeting of Stockholders.
Ms. Cook, 51, brings tremendous operating experience and expertise in a multitude of business areas. Ms. Cook retired as Chief Operating Officer of GE Appliances (a global appliance manufacturer and a Haier Company). Her professional experience includes: Chief Operating Officer of GE Appliances from 2017 until retirement in 2021; previously Vice President Sourcing from 2014 to 2017. Prior to GE Appliances, she held multiple roles within General Electric including within the Corporate Audit Staff. Ms. Cook’s nearly 30 years of global experience includes business unit leadership roles with full profit and loss responsibility, product lifecycle management, digitization, end-to-end supply chain, global sourcing and finance/audit across multiple industries globally. Ms. Cook’s public company board experience includes serving as an independent Director of Badger Meter, Inc. (BMI: NYSE) since February 2022, where she serves on the Audit and Compliance Committee of the Board. Ms. Cook holds a Bachelor of Science in Business Administration, with a specialty in Decision and Information Sciences, from the University of Florida.
Ms. Cook stated, “It is an honor to join CVG’s Board and I look forward to adding my perspective to the Board room.”
Robert Griffin, Chairman of the Board, welcomed Director Cook to the Board. Mr. Griffin added, “We are very pleased to have Ms. Cook join the CVG Board, bringing tremendous skills and significant experience in areas of critical importance to the Company and enhancing our Board’s capabilities as we guide the Company through the execution of its strategy.”
About CVG
At CVG, we deliver real solutions to complex design, engineering and manufacturing problems while creating positive change for our customers, industries, and communities we serve. Information about the Company and its products is available on the internet at www.cvgrp.com.
Investor Relations Contact: Ross Collins or Stephen Poe Alpha IR Group CVGI@alpha-ir.com
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Management Call. We recently had an opportunity to chat with Commercial Vehicle Group management. While major trends continue, there has been some reduced overall industry expectations in truck builds. While management did not comment on any impact on Commercial Vehicle, to be on the conservative side we are modestly lowering our expectations for the quarter. This does not change our longer term outlook for the Company.
Heavy Duty Trucks. Between mid-August and mid-September, industry specialist ACT Research slightly lowered their forecast for Class 8 trucks for the quarter, lowering the forecast by nearly 5,000 to 84,779 units. We would note, however, the full year 2023 and 2024 forecasts remain very positive.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
The Strategy is Working. We would reiterate what we have previously noted: the strategy is working. Once again, CVG posted record quarterly revenue and improved margins for the quarter. We believe CVG is at an inflection point for improved growth and margins. The Company is well on its way to achieving its 2027 goal of $1.5 billion in revenue and 9% adjusted EBITDA margin, in our view.
Continue to Add New Business. CVG recorded approximately $40 million of new business wins in the quarter, increasing the YTD number to $125 million, rapidly approaching the already upward revised 2023 goal of $150 million of new business wins. The majority of new business wins continue to be within the Electrical Systems segment.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Strong quarterly revenues of $262 million, up 4.5% year-over-year EPS of $0.30, adjusted EBITDA of $20.8 million or 7.9% of revenue Continued strategy execution and operational excellence driving improved results
NEW ALBANY, Ohio, Aug. 01, 2023 (GLOBE NEWSWIRE) — CVG (NASDAQ: CVGI), a diversified industrial products and services company, today announced financial results for its second quarter ended June 30, 2023.
Second Quarter 2023Highlights(Compared with prior year, where comparisons are noted)
Revenues of $262.2 million, up 4.5% primarily driven by strong price realization.
Operating income of $15.9 million, up 156.0%; adjusted operating income of $16.7 million, up 106.2%. Improved operating income was driven primarily by improved pricing and cost management.
Net income of $10.1 million, or $0.30 per diluted share. Adjusted net income of $10.7 million, or $0.32 per diluted share.
Adjusted EBITDA of $20.8 million, up 67.7% with an adjusted EBITDA margin of 7.9%, tracking further towards the Company’s long-term profitability target.
Net new business wins year-to-date are $124 million. The majority of the new business awards continue to be in the Electrical Systems segment.
Our cost reduction program continues to deliver cost savings through process improvements, footprint changes and organizational streamlining.
Robert C. Griffin, Chairman of the Board and Interim President and Chief Executive Officer, said, “CVG delivered solid second quarter results and we continued to execute well on our long-term strategy. The team’s efforts to drive the Company’s strategic plan are delivering improved financial results, highlighted by strong improvements in revenue, operating income, adjusted EBITDA and free cash flow during the quarter. Additionally, I am pleased to report that our Electrical Systems plant expansions are on track and the Aldama, Mexico plant is open and ramping up production. We remain on track to deliver record revenues in 2023 and continue to expect our full year Adjusted EBITDA margins to show significant expansion versus last year, based on the current vehicle production outlook for the second half of the year. We also believe we continue to be on track to deliver our 2027 targets of $1.5 billion in revenue and 9% EBITDA margin.”
Mr. Griffin concluded, “I would like to thank our team of employees who helped us improve CVG this quarter and continue to execute our strategy of growing and diversifying our revenue, optimizing our cost structure through process automation and cost reduction, and increasing our margins to become a bigger, more profitable company.”
Andy Cheung, Chief Financial Officer, added, “The continued execution of our strategy is delivering improved financial results for CVG. Our focus on winning new business, improved price realization and cost reduction has allowed us to continue to improve our margins and profit. Additionally, we remain heavily focused on optimizing working capital, increasing cash flows, and paying down our debt.”
Consolidated Results
Second Quarter 2023 Results
Second quarter 2023 revenues were $262.2 million, compared to $250.8 million in the prior year period, an increase of 4.5%. The increase in revenues was primarily driven by increased pricing and volume from new Electrical Systems business, partially offset by lower volumes in the Industrial Automation segment. Foreign currency translation also favorably impacted second quarter 2023 revenues by $0.7 million, or 0.3%.
Operating income in the second quarter 2023 was $15.9 million compared to $6.2 million in the prior year period. The increase in operating income was attributable to higher margins, partially offset by higher SG&A. The second quarter 2023 adjusted operating income was $16.7 million, excluding special charges.
Interest associated with debt and other expenses was $2.8 million and $2.1 million for the second quarter 2023 and 2022, respectively.
Net income was $10.1 million, or $0.30 per diluted share, for the second quarter 2023 compared to net income of $2.5 million, or $0.08 per diluted share, in the prior year period.
At June 30, 2023, the Company had $9.0 million of outstanding borrowings on its U.S. revolving credit facility and $4.1 million outstanding on its China credit facility, $42.4 million of cash and $148.1 million of availability from the credit facilities, resulting in total liquidity of $190.5 million.
Second Quarter 2023 Segment Results
Vehicle Solutions Segment
Revenues were $152.7 million compared to $142.8 million for the prior year period, an increase of 7.0%, primarily resulting from increased pricing.
Operating income was $14.1 million, compared to $1.5 million in the prior year period, an increase of 836.7%, primarily attributable to price increases with customers and cost reduction initiatives. Adjusted operating income was $14.5 million.
Electrical Systems Segment
Revenues were $63.6 million compared to $47.3 million in the prior year period, an increase of 34.4%, primarily resulting from increased sales volume and pricing.
Operating income was $7.7 million compared to $5.9 million in the prior year period, an increase of 28.9%. The increase in operating income was primarily attributable to increased sales volume and pricing.
Aftermarket & Accessories Segment
Revenues were $36.8 million compared to $32.2 million in the prior year period, an increase 14.5%, primarily resulting from increased pricing.
Operating income was $5.5 million compared to $1.1 million in the prior year period, an increase of 388.2%. The increase in operating income was primarily attributable to increased pricing and cost reduction.
IndustrialAutomation Segment
Revenues were $9.0 million compared to $28.5 million in the prior year period, a decrease of 68.4%, primarily due to decreased customer demand which is expected to continue in the third quarter.
Operating loss was $2.1 million compared to operating income of $1.3 million in the prior year period. The decrease in operating income was primarily attributable to volume reduction and an inventory charge of $1.6 million. Adjusted operating loss was $1.7 million.
2023 Demand Outlook
According to ACT Research, 2023 North American Class 8 truck production levels are expected to be at 339,000 units and Class 5-7 production levels are expected to be at 258,000 units. Estimates from FTR for 2023 are 325,000 units, slightly lower than ACT Research for Class 8 truck builds. The 2022 actual Class 8 truck builds according to the ACT Research was 315,128 units.
The global commercial and automotive vehicle wire harness market is growing at approximately 4.5%. The global electric truck market expected to grow approximately 15% CAGR.
According to Interact Analysis, the Global Off-Highway vehicle market is expected to increase approximately 4% to 6.2 million units in 2023 from 5.9 million units in 2022. Beyond 2023, the Off-Highway vehicle market is expected to grow in the 4-5% range. We expect our legacy business growth rates to be in line with this outlook.
Industry forecasts are expecting at least 4% growth in 2023 for North American aftermarket truck parts. Compounded annual growth of at least 4% is forecasted for 2023-2027.
GAAP to Non-GAAP Reconciliation
A reconciliation of GAAP to non-GAAP financial measures referenced in this release is included as Appendix A to this release.
Conference Call
A conference call to discuss this press release is scheduled for Wednesday, August 2, 2023, at 10:00 a.m. ET. Management intends to reference the Q2 2023 Earnings Call Presentation during the conference call. To participate, dial (888) 259-6580 using conference code 34051647. International participants dial (416) 764-8624 using conference code 34051647.
This call is being webcast and can be accessed through the “Investors” section of CVG’s website at ir.cvgrp.com, where it will be archived for one year.
A telephonic replay of the conference call will be available for a period of two weeks following the call. To access the replay, dial (877) 674-7070 using access code 051647 and international callers can dial (416) 764-8692 using access code 051647.
Company Contact Andy Cheung Chief Financial Officer CVG IR@cvgrp.com
Investor Relations Contact Ross Collins or Stephen Poe Alpha IR Group CVGI@alpha-ir.com
About CVG
At CVG, we deliver real solutions to complex design, engineering and manufacturing problems while creating positive change for our customers, industries and communities we serve. Information about the Company 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 the Company’s expectations for future periods with respect to its plans to improve financial results, the future of the Company’s end markets, changes in the Class 8 and Class 5-7 North America truck build rates, performance of the global construction equipment business, the Company’s prospects in the wire harness, warehouse automation and electric vehicle markets, the Company’s initiatives to address customer needs, organic growth, the Company’s strategic plans and plans to focus on certain segments, competition faced by the Company, volatility in and disruption to the global economic environment 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 those included in the Company’s filings with the SEC. 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.
Use of Non-GAAP Measures
This earnings release contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). In general, the non-GAAP measures exclude items that (i) management believes reflect the Company’s multi-year corporate activities; or (ii) relate to activities or actions that may have occurred over multiple or in prior periods without predictable trends. Management uses these non-GAAP financial measures internally to evaluate the Company’s performance, engage in financial and operational planning and to determine incentive compensation.
Management provides these non-GAAP financial measures to investors as supplemental metrics to assist readers in assessing the effects of items and events on the Company’s financial and operating results and in comparing the Company’s performance to that of its competitors and to comparable reporting periods. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. The financial results calculated in accordance with GAAP and reconciliations to those financial statements set forth above should be carefully evaluated.
