• CVG Reports Second Quarter 2023 Results

    المصدر: Nasdaq GlobeNewswire / 01 أغسطس 2023 16:00:01   America/Chicago

    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.”

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

     Second Quarter    
     2023 2022 $ Change % Change
    Revenues$262.2  $250.8  $11.4 4.5%
    Gross profit$38.4  $21.9  $16.5 75.3%
    Gross margin 14.6%  8.7%    
    Adjusted gross profit1$39.1  $23.3  $15.8 67.8%
    Adjusted gross margin1 14.9%  9.3%    
    Operating income$15.9  $6.2  $9.7 156.5%
    Operating margin 6.1%  2.5%    
    Adjusted operating income1$16.7  $8.1  $8.6 106.2%
    Adjusted operating margin1 6.4%  3.2%    
    Net income$10.1  $2.5  $7.6 304.0%
    Adjusted net income1$10.7  $4.3  $6.4 148.8%
    Earnings per share, diluted$0.30  $0.08  $0.22 275.0%
    Adjusted earnings per share, diluted1$0.32  $0.13  $0.19 146.2%
    Adjusted EBITDA1$20.8  $12.4  $8.4 67.7%
    Adjusted EBITDA margin1 7.9%  4.9%    
    1See Appendix A for GAAP to Non-GAAP reconciliation    

    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.

    COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    Three Months and Six Months Ended June 30, 2023 and 2022
    (Unaudited)
    (Amounts in thousands, except per share amounts)
     
     Three Months Ended Six Months Ended
     June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
    Revenues$262,194 $250,849  $524,903 $495,223
    Cost of revenues 223,793  228,970   451,293  447,961
    Gross profit 38,401  21,879   73,610  47,262
    Selling, general and administrative expenses 22,457  15,652   43,022  32,651
    Operating income 15,944  6,227   30,588  14,611
    Other (income) expense 307  (167)  105  874
    Interest expense 2,804  2,118   5,694  4,079
    Loss on extinguishment of debt   921     921
    Income before provision for income taxes 12,833  3,355   24,789  8,737
    Provision for income taxes 2,693  870   5,949  2,270
    Net income$10,140 $2,485  $18,840 $6,467
    Earnings per Common Share:       
    Basic$0.31 $0.08  $0.57 $0.20
    Diluted$0.30 $0.08  $0.57 $0.20
    Weighted average shares outstanding:       
    Basic 33,051  32,237   32,960  32,152
    Diluted 33,429  33,039   33,312  33,009


    COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Unaudited)
    (Amounts in thousands, except per share amounts)
     
    ASSETSJune 30, 2023 December 31,
    2022
    Current assets:   
    Cash$42,441  $31,825 
    Accounts receivable, net 173,461   152,626 
    Inventories 131,695   142,542 
    Other current assets 22,180   12,582 
    Total current assets 369,777   339,575 
    Property, plant and equipment, net 70,371   67,805 
    Intangible assets, net 12,924   14,620 
    Deferred income taxes 11,004   12,275 
    Other assets, net 36,414   35,993 
    Total assets$500,490  $470,268 
    LIABILITIES AND STOCKHOLDERS' EQUITY   
    Current liabilities:   
    Accounts payable$106,310  $122,091 
    Accrued liabilities and other 54,680   42,809 
    Current portion of long-term debt and short-term debt 17,260   10,938 
    Total current liabilities 178,250   175,838 
    Long-term debt 143,943   141,499 
    Pension and other post-retirement benefits 8,780   8,428 
    Other long-term liabilities 25,757   24,463 
    Total liabilities$356,730  $350,228 
    Stockholders’ equity:   
    Preferred stock$  $ 
    Common stock 330   328 
    Treasury stock (15,302)  (14,514)
    Additional paid-in capital 262,897   261,371 
    Retained deficit (76,755)  (95,595)
    Accumulated other comprehensive loss (27,410)  (31,550)
    Total stockholders’ equity 143,760   120,040 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$500,490  $470,268 


    COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
    BUSINESS SEGMENT FINANCIAL INFORMATION
    (Unaudited)
    (Amounts in thousands)
     
     Three Months Ended June 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$152,730 $142,785 $63,625 $47,345 $36,829 $32,172 $9,010  $28,547 $  $  $262,194 $250,849
    Gross profit 20,904  8,912  10,345  7,245  7,788  2,867  (636)  2,855        38,401  21,879
    Selling, general & administrative expenses 6,769  7,403  2,686  1,303  2,262  1,735  1,425   1,547  9,315   3,664   22,457  15,652
    Operating income (loss)$14,135 $1,509 $7,659 $5,942 $5,526 $1,132 $(2,061) $1,308 $(9,315) $(3,664) $15,944 $6,227


     Six Months Ended June 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$313,315 $282,941 $118,373 $87,222 $74,458 $62,387 $18,757  $62,673 $  $  $524,903 $495,223
    Gross profit 40,374  21,817  18,643  10,647  15,015  6,952  (422)  7,846        73,610  47,262
    Selling, general & administrative expenses 12,847  13,990  4,914  2,942  3,913  3,199  2,501   2,871  18,847   9,649   43,022  32,651
    Operating income (loss)$27,527 $7,827 $13,729 $7,705 $11,102 $3,753 $(2,923) $4,975 $(18,847) $(9,649) $30,588 $14,611


    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 Six Months Ended
     June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
    Gross profit$38,401  $21,879  $73,610  $47,262 
    Restructuring 683   1,455   1,373   2,349 
    Adjusted gross profit$39,084  $23,334  $74,983  $49,611 
    % of revenues 14.9%  9.3%  14.3%  10.0%


     Three Months Ended Six Months Ended
     June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
    Operating income (loss)$15,944  $6,227  $30,588  $14,611 
    Restructuring 718   1,751   1,431   2,740 
    Deferred consideration purchase accounting    119      238 
    Total operating income adjustments 718   1,870   1,431   2,978 
    Adjusted operating income$16,662  $8,097  $32,019  $17,589 
    % of revenues 6.4%  3.2%  6.1%  3.6%


     Three Months Ended Six Months Ended
     June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
    Net income$10,140  $2,485  $18,840  $6,467 
    Operating income adjustments 718   1,870   1,431   2,978 
    Loss on extinguishment of debt    921      921 
    Hryvnia fair value adjustments on forward exchange contracts    (424)     251 
    Adjusted provision for income taxes1 (180)  (592)  (358)  (1,038)
    Adjusted net income$10,678  $4,260  $19,913  $9,579 
            
    Diluted EPS$0.30  $0.08  $0.57  $0.20 
    Adjustments to diluted EPS$0.02  $0.05  $0.03  $0.09 
    Adjusted diluted EPS$0.32  $0.13  $0.60  $0.29 
    1. Reported Tax Provision adjusted for tax effect of special charges at 25%
     Three Months Ended Six Months Ended
     June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
    Net income$10,140  $2,485  $18,840  $6,467 
    Interest expense 2,804   2,118   5,694   4,079 
    Provision for income taxes 2,693   870   5,949   2,270 
    Depreciation expense 3,547   3,719   6,977   7,294 
    Amortization expense 864   855   1,696   1,712 
    EBITDA$20,048  $10,047  $39,156  $21,822 
    % of revenues 7.6%  4.0%  7.5%  4.4%
            
    EBITDA adjustments       
    Restructuring$718  $1,751  $1,431  $2,740 
    Deferred consideration purchase accounting    119      238 
    Loss on extinguishment of debt    921      921 
    Hryvnia fair value adjustments on forward exchange contracts    (424)     251 
    Adjusted EBITDA$20,766  $12,414  $40,587  $25,972 
    % of revenues 7.9%  4.9%  7.7%  5.2%


     Three Months Ended June 30, 2023
     Vehicle
    Solutions
     Electrical
    Systems
     Aftermarket
    and
    Accessories
     Industrial
    Automation
     Corporate/
    Other
     Total
    Operating income (loss)$14,135  $7,659  $5,526  $(2,061) $(9,315) $15,944 
    Restructuring 340         378      718 
    Adjusted operating income (loss)$14,475  $7,659  $5,526  $(1,683) $(9,315) $16,662 
    % of revenues 9.5%  12.0%  15.0%  (18.7)%    6.4%


     Six Months Ended June 30, 2023
     Vehicle
    Solutions
     Electrical
    Systems
     Aftermarket
    and
    Accessories
     Industrial
    Automation
     Corporate/
    Other
     Total
    Operating income (loss)$27,527  $13,729  $11,102  $(2,923) $(18,847) $30,588 
    Restructuring 423   8      1,000      1,431 
    Adjusted operating income (loss)$27,950  $13,737  $11,102  $(1,923) $(18,847) $32,019 
    % of revenues 8.9%  11.6%  14.9%  (10.3)%    6.1%


     Three Months Ended June 30, 2022
     Vehicle
    Solutions
     Electrical
    Systems
     Aftermarket
    and
    Accessories
     Industrial
    Automation
     Corporate/
    Other
     Total
    Operating income (loss)$1,509  $5,942  $1,132  $1,308  $(3,664) $6,227 
    Restructuring    571   560   314   306  $1,751 
    Deferred consideration purchase accounting          119      119 
    Adjusted operating income (loss)$1,509  $6,513  $1,692  $1,741  $(3,358) $8,097 
    % of revenues 1.1%  13.8%  5.3%  6.1%    3.2%


     Six Months Ended June 30, 2022
     Vehicle
    Solutions
     Electrical
    Systems
     Aftermarket
    and
    Accessories
     Industrial
    Automation
     Corporate/
    Other
     Total
    Operating income (loss)$7,827  $7,705  $3,753  $4,975  $(9,649) $14,611 
    Restructuring 204   571   995   664   306   2,740 
    Deferred consideration purchase accounting          238      238 
    Adjusted operating income (loss)$8,031  $8,276  $4,748  $5,877  $(9,343) $17,589 
    % of revenues 2.8%  9.5%  7.6%  9.4%    3.6%

    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.

     


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