Release – CVG Reports First Quarter 2024

Research News and Market Data on CVGI

EPS of $0.09, Adjusted EBITDA of $12.7 million
Electrical Systems revenues up 1.9% year-over-year despite a softening in end markets
Reaffirming full-year Revenue and Adjusted EBITDA guidance ranges

NEW ALBANY, Ohio, May 06, 2024 (GLOBE NEWSWIRE) — CVG (NASDAQ: CVGI), a diversified industrial products and services company, today announced financial results for its first quarter ended March 31, 2024.

First Quarter 2024 Highlights (Compared with prior year, where comparisons are noted)

  • Revenues of $232.1 million, down 11.6% due primarily to a softening in customer demand, partially offset by an increase in Electrical Systems sales.
  • Operating income of $6.6 million, down 55.1%; adjusted operating income of $8.5 million, down 44.8%. The reduction in operating income was driven primarily by lower sales volumes, somewhat offset by reduced SG&A.
  • New business wins in the quarter of approximately $45 million when fully ramped; these wins were concentrated in our Electrical Systems segment, but also includes meaningful wins in Vehicle Solutions.
  • Net income of $2.9 million, or $0.09 per diluted share and adjusted net income of $4.4 million, or $0.13 per diluted share, compared to net income of $8.7 million, or $0.26 per diluted share and adjusted net income of $9.2 million, or $0.28 per diluted share.
  • Adjusted EBITDA of $12.7 million, down 35.9% with an adjusted EBITDA margin of 5.5%, down from 7.5%.

James Ray, President and Chief Executive Officer, said, “CVG’s transformation plan remains on track, despite our first quarter results declining relative to a strong quarter of comparison in the prior year. We made further progress procuring new business wins in the quarter, and we remain laser-focused on driving further operational efficiency improvements and growing our Electrical Systems segment to be our largest business. In line with the expected market softness contemplated in our outlook, we executed focused restructuring actions to address the lower demand environment. We are also taking additional steps to offset inflation and foreign exchange headwinds through customer recoveries and cost reductions. Collectively, we expect these actions to drive improved financial performance.”

Mr. Ray concluded, “I want to thank our talented global teams for their hard work to enable our transformation and drive us forward every day, and I am looking forward to our execution leading to improved financial results throughout fiscal 2024.”

Andy Cheung, Chief Financial Officer, added, “Our first quarter results improved sequentially as we recovered from items that impacted the prior quarter. However, softer market conditions, as well as record quarterly revenue in the prior year period, led to year-over-year declines in revenues and profits. While we are reaffirming our annual guidance ranges for fiscal year 2024, deterioration in construction and agricultural end markets is offsetting the improved Class 8 truck build forecast. In response to these market developments, we are taking proactive cost actions that help underpin our Adjusted EBITDA guidance range. Additionally, our balance sheet remains strong with 1.8x net leverage. Said differently, we are taking actions to proactively address current market conditions, and we expect improved profitability across our core business through the rest of the year.”

First Quarter Financial Results
(amounts in millions except per share data and percentages)

Consolidated Results

First Quarter 2024 Results

  • First quarter 2024 revenues were $232.1 million, compared to $262.7 million in the prior year period, a decrease of 11.6%. The overall decrease in revenues was due to a softening in customer demand, the wind down of certain programs in our Vehicle Solutions segment and a further decline in our Industrial Automation and Aftermarket segments, partially offset by increased sales in Electrical systems.
  • Operating income in the first quarter 2024 was $6.6 million compared to $14.6 million in the prior year period. The decrease in operating income was attributable to the impact of lower sales volumes and increased restructuring charges. First quarter 2024 adjusted operating income was $8.5 million, compared to $15.4 million in the prior year period.
  • Interest associated with debt and other expenses was $2.3 million and $2.9 million for the first quarter 2024 and 2023, respectively.
  • Net income was $2.9 million, or $0.09 per diluted share, for the first quarter 2024 compared to net income of $8.7 million, or $0.26 per diluted share, in the prior year period.

On March 31, 2024, the Company had $17.5 million of outstanding borrowings on its U.S. revolving credit facility and no outstanding borrowings on its China credit facility, $46.8 million of cash and $142.5 million of availability from the credit facilities, resulting in total liquidity of $189.3 million.

First Quarter 2024 Segment Results

Vehicle Solutions Segment

  • Revenues were $137.9 million compared to $160.6 million for the prior year period, a decrease of 14.1%, due to lower customer demand and the wind-down of certain programs.
  • Operating income was $10.4 million, compared to $13.4 million in the prior year period, a decrease of 22.7%, primarily attributable to lower customer demand and increased freight, somewhat offset by lower SG&A. First quarter 2024 adjusted operating income was $10.9 million compared to $13.5 million in the prior year period.

Electrical Systems Segment

  • Revenues were $55.8 million compared to $54.7 million in the prior year period, an increase of 1.9%, primarily as a result of increased pricing.
  • Operating income was $2.0 million compared to $6.1 million in the prior year period, a decrease of 66.9%. The decrease in operating income was primarily attributable to restructuring costs, labor inflation, and unfavorable foreign exchange impacts. First quarter 2024 adjusted operating income was $3.1 million compared to $6.1 million in the prior year period.

Aftermarket & Accessories Segment

  • Revenues were $34.1 million compared to $37.6 million in the prior year period, a decrease of 9.5%, primarily as a result of lower sales volume due to decreased customer demand.
  • Operating income was $4.5 million compared to $5.6 million in the prior year period, a decrease of 18.7%. The decrease in operating income was primarily attributable to lower sales volumes. First quarter 2024 adjusted operating income was $4.6 million compared to $5.6 million in the prior year period.

Industrial Automation Segment

  • Revenues were $4.3 million compared to $9.7 million in the prior year period, a decrease of 55.9%, resulted from lower sales volume due to decreased customer demand.
  • Operating loss was $2.0 million compared to $0.9 million in the prior year period. The increase in operating loss was primarily attributable to lower sales volumes and higher SG&A. First quarter 2024 adjusted operating loss was $1.9 million compared to a loss of $0.2 million in the prior year period.

Outlook

CVG reaffirmed the following outlook for the full year 2024:

Metric2024 Outlook ($ millions)
Net Sales$915 – $1,015
Adjusted EBITDA$60 – $73


This outlook reflects among others, current industry forecasts for North America Class 8 truck builds. According to ACT Research, 2024 North American Class 8 truck production levels are expected to be at 305,000 units. The 2023 actual Class 8 truck builds according to the ACT Research was 340,247 units.

Agriculture and construction market conditions have deteriorated relative to our prior update in March 2024. Based on industry data, we now project segments within global agriculture and construction market demand to be flat to down 10% in 2024.

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 Tuesday, May 7, 2024, at 10:00 a.m. ET. Management intends to reference the Q1 2024 Earnings Call Presentation during the conference call. To participate, dial (800) 549-8228 using conference code 16332. International participants dial (646) 564-2877 using conference code 16332.

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 (888) 660-6264 using access code 16332 and international callers can dial (646) 517-3975 using access code 16332.

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.

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Commercial Vehicle Group (CVGI) – A Tough Start to 2024


Tuesday, May 07, 2024

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. 

Commercial Vehicle Group (CVGI) – Fourth Quarter Post Call Commentary


Thursday, March 07, 2024

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.


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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.

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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. 

Commercial Vehicle Group (CVGI) – First Look: Fourth Quarter Results


Tuesday, March 05, 2024

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.


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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.

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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. 

Commercial Vehicle Group (CVGI) – NobleCon19 Presentation Notes


Tuesday, December 12, 2023

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.

NobleCon19. Commercial Vehicle Group CFO Andy Cheung presented at NobleCon19. Highlights included are the expansion of its Electrical Systems segment, optimizing costs, and the outlook for truck builds. A rebroadcast is available at https://www.channelchek.com/videos/commercial-vehicle-group-noblecon19-replay.

Electrical Systems. Management highlighted the focus on growth for its higher margin Electrical Systems segment through new business wins, volume growth, and market diversification. The Company expects the segment to become its biggest in a few years. Today, the segment is about 25% of total revenue. It is also strategically adding new plant locations, with two new plants in Morocco and Mexico.


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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. 

Commercial Vehicle Group (CVGI) – Appoints New CEO


Tuesday, December 12, 2023

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.

New CEO. After an extensive search, Commercial Vehicle Group appointed James Ray as the Company’s next President and Chief Executive Officer. On December 20, 2023, he will replace Interim CEO Robert Griffin, who will continue in his role as Chairman of the Board of Directors for CVG.

Strong Background. Mr. Ray brings extensive global and broad-based experience in many of CVG’s key end markets, including electrical systems. Prior to joining CVG’s Board, Mr. Ray served as President, Engineered Fastening at Stanley Black & Decker, Inc. where he held various global industrial P&L and operational leadership roles from 2013 through 2020. Prior to Stanley Black & Decker, he spent more than 25 years in global P&L and engineering leadership roles at TE Connectivity, Delphi, and General Motors.


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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. 

Release – Commercial Vehicle Group Appoints James Ray as President and Chief Executive Officer

December 11, 2023

NEW ALBANY, Ohio, Dec. 11, 2023 (GLOBE NEWSWIRE) — Commercial Vehicle Group (“CVG” or the “Company”) (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 has appointed James Ray as the Company’s next President and Chief Executive Officer. On December 20, 2023, he will replace Interim CEO Robert Griffin, who will continue in his role as Chairman of the Board of Directors for CVG.

The appointment of Mr. Ray follows an extensive, global search process led by international, executive search firm Heidrick & Struggles. The Board thanked Mr. Griffin for leading the Company during the search for the permanent President and CEO.

Mr. Ray has served as an Independent Director on CVG’s Board since March 2020 and will remain on the Board as a non-independent director following his appointment as President and CEO. He also currently serves as an Independent Director on the Boards of Leslie’s, Inc. and Spirit AeroSystems, Inc. In addition to his Board roles, Mr. Ray has provided consulting services to Fortune 100 companies and private equity portfolio companies. He brings extensive global and broad-based experience in many of CVG’s key end markets, including electrical systems. Prior to joining CVG’s Board, Mr. Ray served as President, Engineered Fastening at Stanley Black & Decker, Inc. where he held various global industrial P&L and operational leadership roles from 2013 through 2020. Prior to Stanley Black & Decker, he spent more than 25 years in global P&L and engineering leadership roles at TE Connectivity, Delphi, and General Motors.

Mr. Ray earned a bachelor’s degree in electrical and electronics engineering from Howard University and a master’s degree in manufacturing management from Kettering University.

“We have selected a world-class executive with exceptional experience and leadership skills, and he is extraordinarily well-suited to advance our long-term strategy and accelerate growth,” said Mr. Griffin. “James is a trusted and growth-oriented leader with extensive management experience in global industries. He is the ideal candidate to lead CVG through its next stage of growth, and we expect a very smooth leadership transition.”

Mr. Ray said, “I am honored to be named President and CEO and appreciate the Board’s trust and support. I look forward to working with our approximately 8,000 outstanding employees as we execute our strategy to deliver value to our customers and shareholders. I am excited and energized to lead this diverse organization, a business with an impressive global footprint and diversified product portfolio. In my time on the Board, I have only become more convinced by the strength of CVG’s fundamentals, the transformative strategy and our clear growth potential.”

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

Media Contact:
Patrick Woolford
Director, Communications
Patrick.Woolford@cvgrp.com

Commercial Vehicle Group, Inc. (CVGI) – What One Hand Gives…


Monday, November 06, 2023

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.


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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. 

Commercial Vehicle Group, Inc. (CVGI) – 3Q23 First Look


Thursday, November 02, 2023

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.


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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. 

Release – CVG Announces Election of Melanie K. Cook to Board of Directors

Research News and Market Data on CVGI

October 2, 2023

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

Media Contact:
Patrick Woolford
Patrick.woolford@cvgrp.com

Source: Commercial Vehicle Group, Inc.

Release – CVG Announces Participation In The D.A. Davidson Annual Diversified Industrials & Services Conference

Research News and Market Data on CVGI

September 11, 2023

NEW ALBANY, Ohio, Sept. 11, 2023 (GLOBE NEWSWIRE) — CVG (NASDAQ: CVGI) announced today that Andy Cheung, Chief Financial Officer, will meet with investors at the D.A. Davidson Annual Diversified Industrials & Services Conference on September 21-22, 2023.

For further information, please contact 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.

Investor Relations Contact:
Ross Collins or Stephen Poe
Alpha IR Group
CVGI@alpha-ir.com

Source: Commercial Vehicle Group, Inc.

Commercial Vehicle Group, Inc. (CVGI) – Post Call Commentary – Continuing to Implement the Strategy


Thursday, August 03, 2023

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.


Get the Full Report

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. 

Release – CVG Reports Second Quarter 2023 Results

Research News and Market Data on CVGI

AUGUST, 01, 2023

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 2023 Highlights (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.

Industrial Automation 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.

Source: Commercial Vehicle Group, Inc.