Group 1 - Commercial Vehicle Group, Inc. (CVGI) has been added to the Zacks Rank 5 (Strong Sell) List due to a 116.7% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - First Internet Bancorp (INBK) is also on the Zacks Rank 5 (Strong Sell) List, with a 38.5% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - MannKind Corporation (MNKD) has seen a 50% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days, leading to its inclusion in the Zacks Rank 5 (Strong Sell) List [2]

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2025 was $172 million, down from $193.7 million in the prior year, primarily due to softening customer demand [13] - Adjusted EBITDA was $5.2 million, compared to $8.2 million in the prior year, with adjusted EBITDA margins at 3%, down 120 basis points from 4.2% [13] - Free cash flow for the quarter was $17.3 million, a significant increase from $0.8 million in the prior year [15] - Net loss for the quarter was $4.1 million, or a loss of $0.12 per diluted share, compared to a net loss of $1.3 million, or a loss of $0.04 per diluted share in the prior year [14] Business Line Data and Key Metrics Changes - Global Seating segment revenues decreased by 10% to $74.5 million, with adjusted operating income increasing by $200,000 to $3.1 million [15][16] - Global Electrical segment revenues remained flat at $53.6 million, with adjusted operating income increasing by $400,000 to $1.2 million [16] - Trim Systems and Components revenues decreased by 24% to $43.9 million, with adjusted operating income down by $3.7 million to $300,000 [18] Market Data and Key Metrics Changes - The Class 8 heavy truck build forecast for 2025 indicates a 24% decline in year-over-year volumes, with flat projections for 2026 and a 12% improvement expected in 2027 [20] - The construction market is expected to decline by approximately 5% to 15%, while the agriculture market is anticipated to decline in the same range due to economic factors [20] Company Strategy and Development Direction - The company is focused on improving cash generation and aligning SG&A structure with current revenue, expecting $30 million in working capital reduction [22] - Strategic portfolio actions taken in 2024 are expected to lower cost structures and improve earnings power as market demand recovers [22] - The company is actively pursuing new business opportunities and maintaining strong relationships with customers to gain market share [30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged broader market and macroeconomic uncertainties but remains optimistic about long-term recovery in construction and agriculture markets [20] - The company is adjusting its full-year 2025 revenue guidance to a range of $650 million to $670 million, down from $660 million to $690 million [24] - Free cash flow guidance for 2025 has been increased to at least $30 million, reflecting strong year-to-date performance [25] Other Important Information - The company completed a debt refinancing during the second quarter, providing more financial flexibility for operational initiatives [8] - The net leverage ratio at the end of Q2 was 4.8x, down from 5.0x at the end of Q1 [15] Q&A Session Summary Question: Are you seeing new business being bid and won? - Management confirmed ongoing new business wins and a robust pipeline, although some implementation dates have shifted due to economic conditions [30][32] Question: How much of the expected cost savings are permanent? - Management indicated that cost savings are both material and permanent, with ongoing actions to optimize SG&A and manufacturing overhead [35][36] Question: How is the tariff renegotiation process progressing? - Management expects to complete tariff renegotiations by the end of the year, with ongoing assessments of impacts and mitigation strategies [38][39] Question: How did July perform relative to Q2? - Management noted increased downtime in July due to OEMs' schedules, requiring adjustments in manufacturing and inventory management [42] Question: Is there a natural replacement cycle for Class 8 trucks? - Management acknowledged a replacement cycle exists, but current economic uncertainty is causing delays in purchases [53][55]

These slides contain 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, these slides 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 ...

Commercial Vehicle Group (CVGI 11.90%), a global supplier of systems and components for the commercial vehicle, construction, agriculture, and military markets, reported its second quarter 2025 results on August 4, 2025. The main news in the release was that revenue (GAAP) was $172.0 million—above analyst expectations of $161.5 million—but profits fell short, with adjusted earnings per share (Non-GAAP) at $(0.09), missing the $(0.07) consensus. Results reflected ongoing weakness in end-market demand, partic ...

Financial Performance - Commercial Vehicle Group (CVGI) reported a quarterly loss of $0.09 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.07, and compared to earnings of $0.06 per share a year ago, indicating a significant decline [1] - The company posted revenues of $171.96 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 6.39%, but down from $229.91 million in the same quarter last year [2] - Over the last four quarters, the company has surpassed consensus revenue estimates three times, but only once for EPS estimates [2] Stock Performance - Commercial Vehicle Group shares have lost approximately 32.3% since the beginning of the year, contrasting with the S&P 500's gain of 6.1% [3] - The current status of estimate revisions has resulted in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is -$0.03 on revenues of $163.35 million, and for the current fiscal year, it is -$0.18 on revenues of $660.29 million [7] - The outlook for the industry, specifically the Automotive - Original Equipment sector, is currently in the top 37% of over 250 Zacks industries, indicating a favorable environment for potential stock performance [8]

PART I FINANCIAL INFORMATION [ITEM 1 – FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201%20%E2%80%93%20FINANCIAL%20STATEMENTS) This section presents the company's unaudited condensed consolidated financial statements and accompanying notes [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company's revenues, gross profit, and net income declined in the second quarter and first half of 2025 Three Months Ended June 30, 2025 vs 2024 (in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $171,956 | $193,665 | $(21,709) | -11.2% | | Gross profit | $19,529 | $20,459 | $(930) | -4.5% | | Operating income | $797 | $1,064 | $(267) | -25.1% | | Net income (loss) | $(4,761) | $(1,600) | $(3,161) | 197.6% | | Basic EPS (continuing operations) | $(0.12) | $(0.04) | $(0.08) | 200.0% | | Basic EPS (discontinued operations) | $(0.02) | $(0.01) | $(0.01) | 100.0% | Six Months Ended June 30, 2025 vs 2024 (in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $341,751 | $388,291 | $(46,540) | -12.0% | | Gross profit | $37,322 | $43,623 | $(6,301) | -14.4% | | Operating income | $2,205 | $5,573 | $(3,368) | -60.4% | | Net income (loss) | $(9,073) | $1,338 | $(10,411) | -778.1% | | Basic EPS (continuing operations) | $(0.21) | $0.01 | $(0.22) | -2200.0% | | Basic EPS (discontinued operations) | $(0.05) | $0.03 | $(0.08) | -266.7% | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive income improved significantly due to favorable foreign currency adjustments and derivative gains Comprehensive Income (Loss) (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $5,007 | $(7,263) | $12,270 | 169.0% | | Six Months Ended June 30 | $5,301 | $(5,319) | $10,620 | 199.7% | Other Comprehensive Income (Loss) Components (Six Months Ended June 30, 2025 vs 2024, in thousands) | Component | 2025 | 2024 | Change ($) | | :--- | :--- | :--- | :--- | | Foreign currency exchange adjustments | $8,366 | $(3,856) | $12,222 | | Minimum pension liability, net of tax | $33 | $(858) | $891 | | Derivative instruments, net of tax | $5,975 | $(1,943) | $7,918 | | Total Other Comprehensive Income (Loss) | $14,374 | $(6,657) | $21,031 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and stockholders' equity increased slightly, driven by a significant rise in cash balances Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total assets | $429,794 | $424,573 | $5,221 | 1.2% | | Total current assets | $303,008 | $303,300 | $(292) | -0.1% | | Cash | $45,290 | $26,630 | $18,660 | 70.1% | | Accounts receivable, net | $107,369 | $118,683 | $(11,314) | -9.5% | | Inventories | $116,662 | $128,224 | $(11,562) | -9.0% | | Total liabilities | $287,159 | $288,981 | $(1,822) | -0.6% | | Total stockholders' equity | $142,635 | $135,592 | $7,043 | 5.2% | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow from operations increased substantially, while financing activities resulted in a cash outflow Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | Change ($) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $34,041 | $10,232 | $23,809 | | Net cash used in investing activities | $(5,271) | $(8,066) | $2,795 | | Net cash provided by (used in) financing activities | $(12,219) | $355 | $(12,574) | | Effect of currency exchange rate changes on cash | $2,109 | $(1,028) | $3,137 | | Net increase in cash | $18,660 | $1,493 | $17,167 | | Cash, end of period | $45,290 | $39,341 | $5,949 | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity increased, driven by other comprehensive income despite a larger retained deficit Stockholders' Equity Summary (in thousands, except share amounts) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | | :--- | :--- | :--- | :--- | | Common Stock (shares issued) | 33,882,848 | 33,694,396 | 188,452 | | Common Stock (amount) | $339 | $337 | $2 | | Treasury stock, at cost | $(16,479) | $(16,468) | $(11) | | Additional paid-in capital | $270,868 | $269,117 | $1,751 | | Retained deficit | $(83,124) | $(74,051) | $(9,073) | | Accumulated other comprehensive loss | $(28,969) | $(43,343) | $14,374 | | Total stockholders' equity | $142,635 | $135,592 | $7,043 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Description of Business and Basis of Presentation](index=8&type=section&id=1.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) The company provides components for commercial and electric vehicles and recently reorganized into three segments - CVG is a global provider of systems, assemblies, and components for the commercial vehicle and electric vehicle markets[21](index=21&type=chunk) - Manufacturing operations are located in the United States, Mexico, China, United Kingdom, Czech Republic, Ukraine, Thailand, India, Australia, and Morocco[22](index=22&type=chunk) - The company sold its cab structures business and Industrial Automation segment (including FSE business) during 2024, reclassifying their operating results as **discontinued operations**[25](index=25&type=chunk) - Effective March 31, 2025, the company reorganized its operations into three segments: **Global Seating, Global Electrical Systems, and Trim Systems and Components** to enhance alignment with customers and end markets[26](index=26&type=chunk) [2. Recently Issued Accounting Pronouncements](index=8&type=section&id=2.%20Recently%20Issued%20Accounting%20Pronouncements) The company is assessing new accounting standards for income tax and expense disaggregation disclosures - ASU No 2023-09, Improvements to Income Tax Disclosures (Topic 740), is effective for annual periods beginning after December 15, 2024, requiring disaggregated information about effective tax rate reconciliation and income taxes paid[29](index=29&type=chunk)[30](index=30&type=chunk) - ASU No 2024-03 (clarified by ASU No 2025-01), Disaggregation of Income Statement Expenses, is effective for fiscal years beginning after December 15, 2026, requiring additional disclosures about specific expense categories and the definition of selling expenses[31](index=31&type=chunk) [3. Revenue Recognition](index=9&type=section&id=3.%20Revenue%20Recognition) Revenue declined across most product categories in the first half of 2025 due to softening customer demand Revenue Disaggregation by Product Category (Three Months Ended June 30, in thousands) | Product Category | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Seats | $73,463 | $81,705 | $(8,242) | -10.1% | | Electrical wire harnesses, panels, assemblies | $54,579 | $54,338 | $241 | 0.4% | | Plastic & Trim components | $34,670 | $44,329 | $(9,659) | -21.8% | | Mirrors, wipers and controls | $9,244 | $13,293 | $(4,049) | -30.5% | | **Total Revenues** | **$171,956** | **$193,665** | **$(21,709)** | **-11.2%** | Revenue Disaggregation by Product Category (Six Months Ended June 30, in thousands) | Product Category | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Seats | $146,166 | $161,972 | $(15,806) | -9.8% | | Electrical wire harnesses, panels, assemblies | $105,737 | $113,594 | $(7,857) | -6.9% | | Plastic & Trim components | $70,393 | $85,984 | $(15,591) | -18.1% | | Mirrors, wipers and controls | $19,455 | $26,741 | $(7,286) | -27.2% | | **Total Revenues** | **$341,751** | **$388,291** | **$(46,540)** | **-12.0%** | [4. Debt](index=10&type=section&id=4.%20Debt) The company refinanced its debt in June 2025 with a new Term Loan and ABL Revolving Credit Facility - On June 27, 2025, the Company entered into a new **$95 million secured Term Loan due 2030** and a **$115 million ABL Revolving Credit Facility due 2030**, replacing its Prior Credit Facilities due 2027[36](index=36&type=chunk)[45](index=45&type=chunk) - The Term Loan proceeds were used to pay down existing debt, cover transaction costs, and for working capital[37](index=37&type=chunk) - Interest rates for the Term Loan are SOFR plus 8.75% to 10.75% (initially SOFR plus 9.75%), and for the ABL Revolving Credit Facility, SOFR/SONIA/EURIBOR plus 1.50% to 2.00% (initially SOFR plus 1.75%)[38](index=38&type=chunk)[47](index=47&type=chunk) - The Term Loan includes a maximum total leverage ratio covenant, stepping down from **7.25:1.0 (Q3 2025) to 4.00:1.0 (Q4 2027 and thereafter)**[39](index=39&type=chunk)[40](index=40&type=chunk) - The ABL Revolving Credit Facility has a springing minimum fixed charge coverage ratio of 1.0:1.0 when availability is low[49](index=49&type=chunk) - As of June 30, 2025, the company had **$30.3 million borrowings** under the ABL Revolving Credit Facility and **$4.2 million** under the China Credit Facility, with total consolidated availability of **$90.6 million**[53](index=53&type=chunk)[58](index=58&type=chunk) Debt Composition (in thousands) | Debt Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Term Loan due 2030 | $95,000 | — | | ABL Revolving credit facility | $30,300 | — | | Prior Term Loan due 2027 | — | $85,000 | | Prior Revolver due 2027 | — | $50,500 | | Fair value of warrants issued to lenders | $(2,636) | — | | Unamortized debt discount and issuance costs | $(4,514) | — | | **Total Debt** | **$118,150** | **$135,500** | | Less: current portion of long-term debt | $(946) | $(8,438) | | **Total long-term debt, net of current portion** | **$117,204** | **$127,062** | | Short-term debt - China credit facility | $4,186 | — | [5. Intangible Assets](index=13&type=section&id=5.%20Intangible%20Assets) The net carrying amount of definite-lived intangible assets, mainly trademarks and customer relationships, was $3.7 million Definite-Lived Intangible Assets (in thousands) | Asset Type | June 30, 2025 Net Carrying Amount | December 31, 2024 Net Carrying Amount | | :--- | :--- | :--- | | Trademarks/tradenames | $2,844 | $2,931 | | Customer relationships | $812 | $987 | | **Total** | **$3,656** | **$3,918** | Aggregate Intangible Asset Amortization Expense (in thousands) | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended June 30 | $0.1 | $0.1 | | Six Months Ended June 30 | $0.3 | $0.3 | [6. Fair Value Measurement](index=13&type=section&id=6.%20Fair%20Value%20Measurement) The fair value of long-term debt was reclassified to Level 3 due to a lack of observable market inputs after refinancing - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (significant unobservable inputs)[61](index=61&type=chunk)[62](index=62&type=chunk) - Foreign currency forward exchange contracts are measured at fair value using observable market inputs (Level 2)[64](index=64&type=chunk) - Warrants issued to TCW Management for the purchase of up to **3,934,776 shares** of common stock were valued at **$2.6 million** using the Binomial Lattice Model and recorded in Other long-term liabilities[67](index=67&type=chunk)[68](index=68&type=chunk) - The fair value of long-term debt obligations was **reclassified from Level 2 to Level 3** as of June 30, 2025, due to a lack of observable market inputs or comparable instruments after refinancing[72](index=72&type=chunk) Fair Value of Financial Instruments (June 30, 2025, in thousands) | Instrument | Total Level 2 | Total Level 3 | | :--- | :--- | :--- | | Foreign exchange contract designated as hedging instruments (Assets) | $2,304 | — | | Foreign exchange contract not designated as hedging instruments (Assets) | $89 | — | | Interest rate swap agreement settled in 2025 (Assets) | — | — | | Foreign exchange contract designated as hedging instruments (Liabilities) | $62 | — | | Foreign exchange contract not designated as hedging instruments (Liabilities) | — | — | | Warrants (Liabilities) | $2,636 | — | Fair Value of Long-Term Debt Obligations (in thousands) | Debt Type | June 30, 2025 Carrying Amount | June 30, 2025 Fair Value | December 31, 2024 Carrying Amount | December 31, 2024 Fair Value | | :--- | :--- | :--- | :--- | :--- | | Term Loan due 2030 | $87,850 | $87,850 | — | — | | Prior Term Loan due 2027 | — | — | $85,000 | $84,363 | | Revolving credit facility | $30,300 | $30,300 | $50,500 | $50,500 | [7. Leases](index=16&type=section&id=7.%20Leases) Total lease expense and operating lease liabilities increased in the first half of 2025 compared to the prior year Total Lease Expense (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $4,470 | $3,753 | $717 | 19.1% | | Six Months Ended June 30 | $8,733 | $6,982 | $1,751 | 25.1% | Operating Lease Liabilities (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Right-of-use assets, net | $34,412 | $29,931 | $4,481 | 15.0% | | Total operating lease liabilities | $35,379 | $30,828 | $4,551 | 14.8% | Anticipated Future Lease Payments (in thousands) | Year | Operating | Financing | Total | | :--- | :--- | :--- | :--- | | Remainder of 2025 | $6,150 | $44 | $6,194 | | 2026 | $10,461 | $79 | $10,540 | | 2027 | $7,124 | $57 | $7,181 | | 2028 | $5,563 | $50 | $5,613 | | 2029 | $4,508 | $45 | $4,553 | | Thereafter | $20,598 | $6 | $20,604 | | **Total lease payments** | **$54,404** | **$281** | **$54,685** | [8. Income Taxes](index=17&type=section&id=8.%20Income%20Taxes) The company recorded a significant income tax provision, resulting in negative effective tax rates for H1 2025 Income Tax Provision (Benefit) and Effective Tax Rate | Period | 2025 Provision (Benefit) ($ in thousands) | 2025 Effective Tax Rate (%) | 2024 Provision (Benefit) ($ in thousands) | 2024 Effective Tax Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $1,725 | (72)% | $(260) | 17% | | Six Months Ended June 30 | $3,841 | (113)% | $405 | 73% | - The effective tax rate is significantly impacted by the mix of profitable foreign operations and losses in the U.S, coupled with a **full valuation allowance on U.S. deferred tax assets**[76](index=76&type=chunk) - Cash paid for taxes, net of refunds, decreased to **$1.7 million** for the six months ended June 30, 2025, from $3.6 million in the prior year[77](index=77&type=chunk) [9. Pension and Other Post-Retirement Benefit Plans](index=17&type=section&id=9.%20Pension%20and%20Other%20Post-Retirement%20Benefit%20Plans) Net periodic pension cost for the non-U.S. pension plan increased due to higher interest costs and actuarial losses Non-U.S. Pension Plan Net Cost (in thousands) | Component | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Interest cost | $405 | $347 | $789 | $696 | | Expected return on plan assets | $(363) | $(315) | $(708) | $(632) | | Amortization of prior service cost | $13 | $13 | $26 | $26 | | Recognized actuarial loss | $242 | $199 | $473 | $399 | | **Net cost** | **$297** | **$244** | **$580** | **$489** | - Net periodic cost components, excluding service costs, are recognized in other (income) expense within the Condensed Consolidated Statements of Operations[79](index=79&type=chunk) [10. Performance Awards](index=18&type=section&id=10.%20Performance%20Awards) The liability for cash-settled performance-based stock awards increased to $1.0 million as of June 30, 2025 - Performance-based stock awards are granted under the 2014 EIP and 2020 EIP, with the 2020 EIP amended and restated on May 15, 2025[80](index=80&type=chunk) - Cash-settled performance awards are earned based on the greater of EBITDA performance or stock price performance, with the EBITDA component measured annually and the stock price component measured during the last 18 months of the award[81](index=81&type=chunk)[82](index=82&type=chunk) - Unrecognized compensation expense for these awards was **$2.8 million** as of June 30, 2025[85](index=85&type=chunk) Performance Awards Settled in Cash (in thousands) | Metric | Amount | | :--- | :--- | | Adjusted Award Value at December 31, 2024 | $700 | | New grants | $3,461 | | Forfeitures | $(164) | | Adjustments | $(2,958) | | Payments | — | | **Adjusted Award Value at June 30, 2025** | **$1,039** | [11. Share-Based Compensation](index=18&type=section&id=11.%20Share-Based%20Compensation) Unrecognized compensation expense for share-based awards was $5.8 million, with a significant increase in unvested awards - The company's share-based compensation is comprised solely of restricted stock awards and performance stock awards to be settled in stock[86](index=86&type=chunk) - As of June 30, 2025, there was approximately **$5.8 million of unrecognized compensation expense** related to unvested share-based compensation arrangements[87](index=87&type=chunk) - Stockholders approved increasing the number of shares available by **1.8 million shares** under the amended and restated Commercial Vehicle Group, Inc 2020 Equity Incentive Plan on May 15, 2025[88](index=88&type=chunk) - A total of **0.02 million shares** were available for future grants as of June 30, 2025[89](index=89&type=chunk) Restricted Stock Awards Status (in thousands, except fair value) | Metric | Shares (in thousands) | Weighted Average Grant-Date Fair Value | | :--- | :--- | :--- | | Unvested - December 31, 2024 | 835 | $5.02 | | Granted | 2,538 | $1.33 | | Vested | (199) | $(4.07) | | Forfeited | (92) | $3.64 | | **Unvested - June 30, 2025** | **3,082** | **$2.07** | [12. Stockholders' Equity](index=19&type=section&id=12.%20Stockholders'%20Equity) Basic and diluted earnings per share from continuing operations were negative due to net losses in H1 2025 - Common stock outstanding increased to **33,882,848 shares** as of June 30, 2025, from 33,694,396 shares at December 31, 2024[90](index=90&type=chunk) - No preferred shares were outstanding as of June 30, 2025, or December 31, 2024[90](index=90&type=chunk) - No outstanding restricted shares were excluded from diluted EPS calculation for the three and six months ended June 30, 2025, indicating no dilutive effect[92](index=92&type=chunk) Earnings (Loss) Per Common Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Basic EPS (continuing operations) | $(0.12) | $(0.04) | $(0.21) | $0.01 | | Basic EPS (discontinued operations) | $(0.02) | $(0.01) | $(0.05) | $0.03 | | Diluted EPS (continuing operations) | $(0.12) | $(0.04) | $(0.21) | $0.01 | | Diluted EPS (discontinued operations) | $(0.02) | $(0.01) | $(0.05) | $0.03 | Weighted Average Shares Outstanding (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Basic | 33,799 | 33,393 | 33,747 | 33,359 | | Diluted | 33,799 | 33,393 | 33,747 | 33,834 | [13. Other Comprehensive Income (Loss)](index=20&type=section&id=13.%20Other%20Comprehensive%20Income%20(Loss)) Accumulated other comprehensive loss improved significantly, driven by positive foreign currency and derivative gains - The company estimates that net pre-tax derivative income of **$2.7 million** included in Accumulated other comprehensive income (loss) will be reclassified into earnings within the next 12 months[93](index=93&type=chunk) Accumulated Other Comprehensive Income (Loss) (in thousands) | Component | December 31, 2024 | June 30, 2025 | Change ($) | | :--- | :--- | :--- | :--- | | Foreign currency translation adjustment | $(30,662) | $(22,296) | $8,366 | | Pension and post-retirement benefits plans | $(11,459) | $(11,426) | $33 | | Derivative instruments | $(1,222) | $4,753 | $5,975 | | **Total Accumulated other comprehensive income (loss)** | **$(43,343)** | **$(28,969)** | **$14,374** | Total Other Comprehensive Income (Loss) (in thousands) | Period | 2025 | 2024 | Change ($) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $9,768 | $(5,663) | $15,431 | | Six Months Ended June 30 | $14,374 | $(6,657) | $21,031 | [14. Cost Reduction and Manufacturing Capacity Rationalization](index=21&type=section&id=14.%20Cost%20Reduction%20and%20Manufacturing%20Capacity%20Rationalization) The company incurred $1.8 million in restructuring charges in H1 2025, primarily for headcount reductions - The restructuring program aims to align cost structure for margin expansion through workforce reductions and footprint optimization[94](index=94&type=chunk) Accrued Restructuring Balances (in thousands) | Segment | December 31, 2024 | New Charges (Q2 2025) | Payments & Adjustments (Q2 2025) | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Global Seating | $28 | $358 | $(358) | — | | Global Electrical Systems | — | $539 | $(539) | — | | Trim Systems and Components | — | $243 | $(243) | — | | Corporate/Other | $360 | — | $(133) | $225 | | **Total** | **$388** | **$1,140** | **$(1,273)** | **$225** | Restructuring Costs Incurred (in thousands) | Period | Total Costs | Headcount Reductions | Facility Exit & Other | Recorded in Cost of Revenues | Recorded in SG&A | | :--- | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30, 2025 | $1,140 | $1,140 | — | $1,140 | — | | Six Months Ended June 30, 2025 | $1,842 | $1,842 | — | $1,642 | $200 | | Three Months Ended June 30, 2024 | $3,775 | $3,375 | $400 | $3,475 | $300 | | Six Months Ended June 30, 2024 | $5,600 | $4,900 | $700 | $5,100 | $500 | [15. Commitments and Contingencies](index=22&type=section&id=15.%20Commitments%20and%20Contingencies) The company faces various commitments and contingencies, with adequate reserves and insurance believed to be in place - The company is subject to various legal proceedings and claims in the ordinary course of business, including product liability, customer/supplier disputes, and employment matters[101](index=101&type=chunk) - Management believes that adequate insurance and reserves are in place for probable and estimable liabilities, and the ultimate outcome of legal actions is not expected to have a material adverse impact[102](index=102&type=chunk) - A voluntary safety recall by a customer related to wiper system components in July 2023 could lead to additional losses, but the company believes it has reasonable insurance coverage[104](index=104&type=chunk) Warranty Provision (in thousands) | Metric | Amount | | :--- | :--- | | Balance - December 31, 2024 | $1,207 | | Provision for warranty claims | $1,013 | | Deduction for payments made and other adjustments | $(699) | | **Balance - June 30, 2025** | **$1,521** | Future Minimum Principal Payments on Long-Term Debt (in thousands) | Year | Total | | :--- | :--- | | Remainder of 2025 | $474 | | 2026 | $942 | | 2027 | $3,691 | | 2028 | $4,411 | | 2029 | $4,195 | | Thereafter | $111,587 | [16. Segment Reporting](index=23&type=section&id=16.%20Segment%20Reporting) The company reorganized into three new reportable segments, with corporate expenses now allocated to segments - The company reorganized its operations into three segments: **Global Seating, Global Electrical Systems, and Trim Systems and Components**, effective March 31, 2025[107](index=107&type=chunk) - The reorganization aims to enhance alignment with customers and end markets, focusing on growth opportunities, capital allocation, and shareholder value[107](index=107&type=chunk) - Corporate expenses are now allocated to segment operating income based on how segments utilize corporate support activities, a change from prior periods[108](index=108&type=chunk) - Unallocated corporate costs include enterprise and governance stewardship expenses, interest expense, income taxes, and certain other items managed on a consolidated basis[111](index=111&type=chunk) Segment Operating Income (Loss) (Three Months Ended June 30, 2025 vs 2024, in thousands) | Segment | 2025 Operating Income (Loss) | 2024 Operating Income (Loss) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Global Seating | $2,711 | $2,100 | $611 | 29.1% | | Global Electrical Systems | $707 | $(539) | $1,246 | 231.2% | | Trim Systems and Components | $105 | $2,327 | $(2,222) | -95.5% | | **Total Segment Operating Income** | **$3,523** | **$3,888** | **$(365)** | **-9.4%** | Segment Operating Income (Loss) (Six Months Ended June 30, 2025 vs 2024, in thousands) | Segment | 2025 Operating Income (Loss) | 2024 Operating Income (Loss) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Global Seating | $5,415 | $4,895 | $520 | 10.6% | | Global Electrical Systems | $389 | $(96) | $485 | 505.2% | | Trim Systems and Components | $1,638 | $6,527 | $(4,889) | -74.9% | | **Total Segment Operating Income** | **$7,442** | **$11,326** | **$(3,884)** | **-34.3%** | [17. Other Financial Information](index=25&type=section&id=17.%20Other%20Financial%20Information) Inventories decreased by 9.0%, while accrued liabilities saw notable shifts in compensation and derivative liabilities Inventories (in thousands) | Category | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Raw materials | $86,701 | $98,677 | $(11,976) | -12.1% | | Work in process | $11,383 | $10,960 | $423 | 3.9% | | Finished goods | $18,578 | $18,587 | $(9) | -0.0% | | **Total Inventories** | **$116,662** | **$128,224** | **$(11,562)** | **-9.0%** | Property, Plant, and Equipment, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Land and buildings | $30,147 | $26,613 | $3,534 | 13.3% | | Machinery and equipment | $220,926 | $211,984 | $8,942 | 4.2% | | Construction in progress | $4,848 | $8,075 | $(3,227) | -40.0% | | Property, plant, and equipment, gross | $255,921 | $246,672 | $9,249 | 3.7% | | Less accumulated depreciation | $(188,150) | $(177,811) | $(10,339) | 5.8% | | **Property, plant and equipment, net** | **$67,771** | **$68,861** | **$(1,090)** | **-1.6%** | Accrued Liabilities and Other (in thousands) | Category | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Compensation and benefits | $18,580 | $12,542 | $6,038 | 48.1% | | Operating lease liabilities | $8,041 | $8,033 | $8 | 0.1% | | Taxes payable | $3,930 | $2,122 | $1,808 | 85.2% | | Accrued legal and professional fees | $2,720 | $1,694 | $1,026 | 60.6% | | Derivative liabilities | $62 | $5,701 | $(5,639) | -98.9% | | Accrued freight | $1,885 | $3,243 | $(1,358) | -41.9% | | Warranty costs | $1,521 | $1,207 | $314 | 26.0% | | Customer tooling projects | $815 | $1,259 | $(444) | -35.3% | | Other | $3,142 | $4,557 | $(1,415) | -31.0% | | **Total Accrued liabilities and other** | **$40,696** | **$40,358** | **$338** | **0.8%** | [18. Discontinued Operations](index=25&type=section&id=18.%20Discontinued%20Operations) The company divested its cab structures and Industrial Automation businesses, which are now reported as discontinued operations - The company sold its cab structures business (Kings Mountain, NC) for approximately **$40 million** and its First Source Electronics (FSE) business (Elkridge, MD) for approximately **$1.5 million** in 2024[113](index=113&type=chunk)[114](index=114&type=chunk) - These divestitures represent a strategic shift to reduce exposure to the cyclical Class 8 market, lower customer concentration, and improve return profile[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - The company has continuing involvement with the cab structures business through a transition services agreement (TSA), recognizing **$0.4 million of income** for the six months ended June 30, 2025[117](index=117&type=chunk) Income (Loss) from Discontinued Operations, Net of Tax (in thousands) | Operation | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Cab structures business | $(512) | $493 | $(1,535) | $3,513 | | Industrial Automation segment | $(143) | $(794) | $(293) | $(2,322) | | **Total** | **$(655)** | **$(301)** | **$(1,828)** | **$1,191** | Cash Flows from Discontinued Operations (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $306 | $8,310 | | Net cash used in investing activities | — | $(434) | | **Total cash provided by discontinued operations** | **$306** | **$7,876** | [ITEM 2 – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=28&type=section&id=ITEM%202%20%E2%80%93%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, liquidity, capital resources, and critical accounting policies [Business Overview](index=28&type=section&id=Business%20Overview) The company is a global provider of customized systems and components for commercial and electric vehicle markets - CVG is a global provider of systems, assemblies, and components for the commercial vehicle and electric vehicle markets, with manufacturing operations across multiple countries[124](index=124&type=chunk)[125](index=125&type=chunk) - The company primarily manufactures customized products for North American Commercial Truck manufacturers and construction/agriculture vehicle OEMs[126](index=126&type=chunk) [Key Developments](index=28&type=section&id=Key%20Developments) The company completed a major debt refinancing, implemented a new organizational structure, and is navigating market volatility - On June 27, 2025, the company closed on **$210 million in senior secured credit facilities**, including a $95 million Term Loan and a $115 million ABL revolving credit facility, both maturing on June 27, 2030[127](index=127&type=chunk) - In connection with the financing, TCW Group affiliates received five-year warrants to purchase up to **3,934,776 shares** of common stock[128](index=128&type=chunk) - Effective January 1, 2025, the company implemented a new organizational structure, reorganizing into three operating divisions and reporting segments: **Global Electrical Systems, Global Seating, and Trim Systems and Components**[129](index=129&type=chunk) - The company is navigating external factors such as geopolitical dynamics, new tariff actions, tax regulation, and fluctuating foreign exchange rates, which create uncertainty and volatility[130](index=130&type=chunk) - The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, includes tax reform provisions like immediate expensing of R&E and expanded bonus depreciation, but the company does not expect a material impact[131](index=131&type=chunk) [Consolidated Results of Operations (Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024)](index=29&type=section&id=Consolidated%20Results%20of%20Operations%20(Three%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202024)) Revenues decreased due to softer demand, but gross margin improved partly due to lower restructuring charges - The decrease in revenues was primarily due to a softening in customer demand across Global Seating and Trim Systems & Components segments, with a **$20.8 million (12.9%) decrease in OEM and other sales** and a **$0.9 million (2.8%) decrease in aftermarket and OES sales**[133](index=133&type=chunk)[140](index=140&type=chunk) - **Gross profit margin improved to 11.4%** in 2025 from 10.6% in 2024, despite lower sales volumes, partly due to reduced restructuring charges ($1.1 million in 2025 vs $5.1 million in 2024)[134](index=134&type=chunk) - SG&A expenses decreased by **$0.7 million**, mainly due to reduced incentive compensation expense[135](index=135&type=chunk) - A **$0.5 million loss on extinguishment of debt** was recorded due to the write-off of deferred financing fees from early repayment of the prior revolver[137](index=137&type=chunk) Consolidated Operating Data (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $171,956 | $193,665 | $(21,709) | -11.2% | | Gross profit | $19,529 | $20,459 | $(930) | -4.5% | | Selling, general and administrative expenses | $18,732 | $19,395 | $(663) | -3.4% | | Other (income) expense | $427 | $206 | $221 | 107.3% | | Interest expense | $2,291 | $2,417 | $(126) | -5.2% | | Loss on extinguishment of debt | $460 | — | $460 | NM | | Provision for income taxes | $1,725 | $(260) | $1,985 | NM | | Net income (loss) from continuing operations | $(4,106) | $(1,299) | $(2,807) | 216.1% | [Segment Results (Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024)](index=30&type=section&id=Segment%20Results%20(Three%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202024)) Segment performance varied, with improved operating income in Seating and Electrical Systems but a sharp decline in Trim [Global Seating Segment Results](index=30&type=section&id=Global%20Seating%20Segment%20Results) Revenues decreased due to lower demand, but operating income improved due to reduced SG&A expenses - Revenues decreased by **$7.9 million (9.6%)** due to decreased customer demand[141](index=141&type=chunk) - **Gross profit margin increased to 13.3%** from 12.9%, despite lower sales volumes[142](index=142&type=chunk) - SG&A expenses decreased by **$1.3 million**, primarily due to reduced incentive compensation and headcount reduction[143](index=143&type=chunk) Global Seating Segment Operating Data (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $74,457 | $82,404 | $(7,947) | -9.6% | | Gross profit | $9,930 | $10,634 | $(704) | -6.6% | | Selling, general & administrative expenses | $7,219 | $8,534 | $(1,315) | -15.4% | | Operating income | $2,711 | $2,100 | $611 | 29.1% | [Global Electrical Systems Segment Results](index=30&type=section&id=Global%20Electrical%20Systems%20Segment%20Results) Revenues remained flat while gross profit and operating income improved significantly due to lower restructuring costs - Revenues were essentially flat compared to the prior year[145](index=145&type=chunk) - Gross profit increased by **$1.9 million**, and **gross profit margin improved significantly to 11.0%** from 7.4%, primarily due to lower start-up and restructuring costs ($0.5 million in 2025 vs $2.5 million in 2024)[146](index=146&type=chunk)[147](index=147&type=chunk) - SG&A expenses increased by **$0.7 million**[148](index=148&type=chunk) Global Electrical Systems Segment Operating Data (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $53,585 | $53,639 | $(54) | -0.1% | | Gross profit | $5,911 | $3,984 | $1,927 | 48.4% | | Selling, general & administrative expenses | $5,204 | $4,523 | $681 | 15.1% | | Operating income (loss) | $707 | $(539) | $1,246 | NM | [Trim Systems and Components Segment Results](index=31&type=section&id=Trim%20Systems%20and%20Components%20Segment%20Results) Revenues and operating income declined sharply due to decreased customer demand and lower sales volumes - Revenues decreased by **$13.7 million (23.8%)** due to decreased customer demand[150](index=150&type=chunk) - Gross profit decreased by **$2.3 million**, and **gross profit margin declined to 8.4%** from 10.3%, primarily due to lower sales volumes[150](index=150&type=chunk)[151](index=151&type=chunk) - SG&A expenses were relatively flat[151](index=151&type=chunk) Trim Systems and Components Segment Operating Data (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $43,914 | $57,622 | $(13,708) | -23.8% | | Gross profit | $3,688 | $5,950 | $(2,262) | -38.0% | | Selling, general & administrative expenses | $3,583 | $3,623 | $(40) | -1.1% | | Operating income | $105 | $2,327 | $(2,222) | -95.5% | [Consolidated Results of Operations (Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024)](index=31&type=section&id=Consolidated%20Results%20of%20Operations%20(Six%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030,%202024)) Revenues and gross profit decreased in the first half of 2025 due to softening customer demand across all segments - Revenues decreased by **$46.5 million (12.0%)** primarily due to softening customer demand across all segments, with a **$44.4 million (13.8%) decrease in OEM and other revenues** and a **$2.2 million (3.3%) decrease in aftermarket and OES sales**[153](index=153&type=chunk) - Gross profit decreased by **$6.3 million**, and **gross profit margin slightly declined to 10.9%** from 11.2%, primarily due to lower sales volumes, partially offset by reduced restructuring charges ($1.6 million in 2025 vs $5.1 million in 2024)[154](index=154&type=chunk) - SG&A expenses decreased by **$2.9 million**, mainly due to reduced incentive compensation expense[155](index=155&type=chunk) - Interest expense increased by **$0.2 million**, primarily due to less benefit from interest rate swaps[156](index=156&type=chunk) - A **$0.5 million loss on extinguishment of debt** was recorded[157](index=157&type=chunk) Consolidated Operating Data (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $341,751 | $388,291 | $(46,540) | -12.0% | | Gross profit | $37,322 | $43,623 | $(6,301) | -14.4% | | Selling, general and administrative expenses | $35,117 | $38,050 | $(2,933) | -7.7% | | Other (income) expense | $355 | $418 | $(63) | -15.1% | | Interest expense | $4,794 | $4,603 | $191 | 4.1% | | Loss on extinguishment of debt | $460 | — | $460 | NM | | Provision (benefit) for income taxes | $3,841 | $405 | $3,436 | NM | | Net income (loss) from continuing operations | $(7,245) | $147 | $(7,392) | NM | [Segment Results (Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024)](index=32&type=section&id=Segment%20Results%20(Six%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030,%202024)) Operating income improved for Seating and Electrical Systems but declined sharply for Trim Systems and Components [Global Seating Segment Results](index=32&type=section&id=Global%20Seating%20Segment%20Results) Revenues and gross profit decreased, but operating income improved due to significantly lower SG&A expenses - Revenues decreased by **$15.3 million (9.4%)** due to decreased customer demand[160](index=160&type=chunk) - Gross profit decreased by **$2.5 million**, and **gross profit margin declined to 12.9%** from 13.2%, driven by lower sales volume and increased freight costs[161](index=161&type=chunk)[162](index=162&type=chunk) - SG&A expenses decreased by **$3.0 million**, primarily due to reduced incentive compensation and headcount reduction[163](index=163&type=chunk) Global Seating Segment Operating Data (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $147,866 | $163,201 | $(15,335) | -9.4% | | Gross profit | $19,023 | $21,480 | $(2,457) | -11.4% | | Selling, general & administrative expenses | $13,608 | $16,585 | $(2,977) | -17.9% | | Operating income | $5,415 | $4,895 | $520 | 10.6% | [Global Electrical Systems Segment Results](index=33&type=section&id=Global%20Electrical%20Systems%20Segment%20Results) Revenues decreased, but gross profit and operating income improved significantly due to lower restructuring costs - Revenues decreased by **$8.3 million (7.4%)** due to decreased customer demand[164](index=164&type=chunk) - Gross profit increased by **$1.1 million**, and **gross profit margin improved to 9.5%** from 7.8%, primarily due to lower start-up and restructuring costs ($1.0 million in 2025 vs $2.5 million in 2024)[165](index=165&type=chunk)[166](index=166&type=chunk) - SG&A expenses increased by **$0.6 million**[167](index=167&type=chunk) Global Electrical Systems Segment Operating Data (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $104,037 | $112,365 | $(8,328) | -7.4% | | Gross profit | $9,900 | $8,809 | $1,091 | 12.4% | | Selling, general & administrative expenses | $9,511 | $8,905 | $606 | 6.8% | | Operating income (loss) | $389 | $(96) | $485 | -505.2% | [Trim Systems and Components Segment Results](index=33&type=section&id=Trim%20Systems%20and%20Components%20Segment%20Results) Revenues, gross profit, and operating income all declined substantially due to lower customer demand and freight costs - Revenues decreased by **$22.9 million (20.3%)** due to decreased customer demand[168](index=168&type=chunk) - Gross profit decreased by **$5.2 million**, and **gross profit margin declined to 9.3%** from 12.0%, driven by lower sales volume and increased freight costs[169](index=169&type=chunk)[170](index=170&type=chunk) - SG&A expenses decreased by **$0.3 million**[171](index=171&type=chunk) Trim Systems and Components Segment Operating Data (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $89,848 | $112,725 | $(22,877) | -20.3% | | Gross profit | $8,399 | $13,550 | $(5,151) | -38.0% | | Selling, general & administrative expenses | $6,761 | $7,023 | $(262) | -3.7% | | Operating income (loss) | $1,638 | $6,527 | $(4,889) | -74.9% | [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity remains adequate with cash of $45.3 million and $90.6 million available under credit facilities - Primary sources of liquidity as of June 30, 2025, were operating income, **cash ($45.3 million)**, and **availability under credit facilities ($90.6 million)**[172](index=172&type=chunk) - The company believes these sources will provide adequate funds for working capital, capital expenditures, and debt service for the next twelve months[172](index=172&type=chunk) - As of June 30, 2025, **$30.7 million of cash** was held by foreign subsidiaries, with a $0.1 million deferred tax liability for expected repatriation[173](index=173&type=chunk) - The company expects to maintain compliance with financial covenants in the Term Loan and ABL Revolving Credit Facility based on current forecasts[174](index=174&type=chunk) - **Net cash provided by operating activities increased significantly to $34.0 million** in 2025, primarily due to a decrease in trade working capital[175](index=175&type=chunk) - Net cash used in investing activities decreased to **$5.3 million**, mainly due to less capital spending and proceeds from the sale of the FinishTEK business in 2024[176](index=176&type=chunk) - Net cash used in financing activities was **$12.2 million**, primarily due to debt refinancing costs ($6.1 million) and a net reduction of debt ($6.0 million)[177](index=177&type=chunk) - Capital expenditures for 2025 are expected to be in the range of **$10 million to $15 million**[176](index=176&type=chunk) Sources and Uses of Cash (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | Change ($) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $34,041 | $10,232 | $23,809 | | Net cash used in investing activities | $(5,271) | $(8,066) | $2,795 | | Net cash provided by (used in) financing activities | $(12,219) | $355 | $(12,574) | | Effect of currency exchange rate changes on cash | $2,109 | $(1,028) | $3,137 | | **Net increase in cash** | **$18,660** | **$1,493** | **$17,167** | [Critical Accounting Policies and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) There have been no material changes to the company's critical accounting estimates since the 2024 Form 10-K - The company's consolidated financial statements are prepared in conformity with U.S GAAP[179](index=179&type=chunk) - Critical accounting estimates involve management's most difficult, subjective, or complex judgments due to inherent uncertainties[180](index=180&type=chunk) - There have been **no material changes** to critical accounting estimates from those disclosed in the 2024 Form 10-K as of June 30, 2025[180](index=180&type=chunk) [Forward-Looking Statements](index=35&type=section&id=Forward-Looking%20Statements) This report contains forward-looking statements that are subject to various economic and competitive risks - The report contains forward-looking statements regarding industry outlook, financial results, end markets, strategic plans, and economic factors[181](index=181&type=chunk) - These statements represent management's current expectations and are inherently uncertain, with actual results potentially differing materially due to various economic and competitive factors[181](index=181&type=chunk) - The company undertakes no obligation to update any forward-looking statement to reflect future events or developments[182](index=182&type=chunk) [ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=35&type=section&id=ITEM%203%20%E2%80%93%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) There have been no material changes in the company's market risk exposure since its 2024 Form 10-K - **No material changes** in exposure to market risk as of June 30, 2025, compared to the 2024 Form 10-K[183](index=183&type=chunk) [ITEM 4 – CONTROLS AND PROCEDURES](index=35&type=section&id=ITEM%204%20%E2%80%93%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of the end of the reporting period - Disclosure controls and procedures were evaluated and **deemed effective** as of June 30, 2025, by senior management[184](index=184&type=chunk)[186](index=186&type=chunk) - **No material changes** occurred in internal control over financial reporting during the quarter ended June 30, 2025[187](index=187&type=chunk) - Management acknowledges the inherent limitations of control systems, which can only provide **reasonable, not absolute, assurance** against errors or fraud[188](index=188&type=chunk) PART II OTHER INFORMATION [ITEM 1 Legal Proceedings](index=37&type=section&id=ITEM%201%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings not expected to have a material adverse impact - The company is subject to various legal proceedings and claims, including product liability, customer/supplier disputes, and employment matters[189](index=189&type=chunk) - Management believes the ultimate outcome of these legal actions is **not expected to have a material adverse impact** on the consolidated financial position, results of operations, stockholders' equity, or cash flows[189](index=189&type=chunk) [ITEM 1A Risk Factors](index=37&type=section&id=ITEM%201A%20Risk%20Factors) Future sales of common stock could dilute existing stockholders' ownership and cause the stock price to decline - Investors should consider risk factors from this Form 10-Q and the 2024 Form 10-K[190](index=190&type=chunk) - Future sales and issuances of common stock or rights to purchase common stock could **dilute existing stockholders' ownership** and potentially cause the stock price to decline[191](index=191&type=chunk) [ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=ITEM%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued unregistered warrants to purchase up to 3.9 million shares of common stock in connection with financing - On June 30, 2025, the company issued five-year warrants to TCW Management affiliates to purchase up to **3,934,776 shares** of common stock[192](index=192&type=chunk) - The warrants were issued as **unregistered securities** pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, in connection with loan financing[192](index=192&type=chunk) - The warrants have exercise prices of **$1.52 and $2.07 per share** and include company repurchase rights and anti-dilution adjustments[192](index=192&type=chunk) [ITEM 3 Defaults Upon Senior Securities](index=37&type=section&id=ITEM%203%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - Not applicable[193](index=193&type=chunk) [ITEM 4 Mine Safety Disclosures](index=37&type=section&id=ITEM%204%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - Not applicable[194](index=194&type=chunk) [ITEM 5 Other Information](index=38&type=section&id=ITEM%205%20Other%20Information) No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated during the last fiscal quarter - Neither the company nor its officers or directors adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the last fiscal quarter[195](index=195&type=chunk) [ITEM 6 Exhibits](index=38&type=section&id=ITEM%206%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including credit agreements, warrants, and certifications - Exhibits include retention agreements, the amended and restated 2020 Equity Incentive Plan, loan and security agreements for the Term Loan and ABL Revolving Credit Facility, the form of warrant, and an Investor Rights Agreement[197](index=197&type=chunk) - Certifications by the President and CEO, and Executive Vice President and CFO (302 and 906 certifications) are also included[197](index=197&type=chunk) SIGNATURE - The report was signed on August 4, 2025, by Andy Cheung, Chief Financial Officer (Principal Financial Officer), and Angela M O'Leary, Chief Accounting Officer (Principal Accounting Officer)[199](index=199&type=chunk)[201](index=201&type=chunk)

[CVG Second Quarter 2025 Earnings Release](index=1&type=section&id=CVG%20Second%20Quarter%202025%20Earnings%20Release) [Financial Highlights and Management Commentary](index=1&type=section&id=Financial%20Highlights%20and%20Management%20Commentary) CVG reported Q2 2025 sales of $172 million and strong free cash flow despite market headwinds Q2 2025 Key Financial Metrics | Metric | Value | YoY Change | | :--- | :--- | :--- | | Revenues | $172.0 million | -11.2% | | Net Loss from Continuing Operations | $(4.1) million | Increased from $(1.3) million | | EPS (diluted) | $(0.12) | Decreased from $(0.04) | | Adjusted EBITDA | $5.2 million | -36.6% | | Free Cash Flow | $17.3 million | +$16.5 million | - Management highlighted progress in operational improvements, leading to a **second consecutive quarter of sequential gross margin improvement**[2](index=2&type=chunk) - Strategic priorities include **reducing SG&A levels**, negotiating with customers to mitigate tariff impacts, and focusing on **debt paydown**[2](index=2&type=chunk)[4](index=4&type=chunk) - The **Global Electrical Systems segment showed improved performance** and margin expansion, driven by new business wins[2](index=2&type=chunk) [Consolidated Financial Performance](index=2&type=section&id=Consolidated%20Financial%20Performance) Q2 2025 revenues decreased 11.2% to $172.0 million, resulting in a net loss of $4.1 million Q2 2025 vs Q2 2024 Consolidated Results (from Continuing Operations) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $172.0 M | $193.7 M | (11.2)% | | Gross Profit | $19.5 M | $20.5 M | (4.9)% | | Operating Income | $0.8 M | $1.1 M | (27.3)% | | Adjusted Operating Income | $1.9 M | $4.8 M | (60.4)% | | Net Loss | $(4.1) M | $(1.3) M | NM | | Adjusted Net (Loss)/Income | $(2.9) M | $1.5 M | NM | | Diluted EPS | $(0.12) | $(0.04) | NM | - The primary driver for the decrease in revenues and operating income was **lower sales volumes** resulting from a softening in customer demand[6](index=6&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Performance) Segment results were mixed, with operating income growth in Seating and Electrical Systems offset by a sharp decline in Trim Systems [Global Seating Segment](index=3&type=section&id=Global%20Seating%20Segment) Revenue declined 9.6% due to lower volume, but operating income grew 29.1% from reduced SG&A Global Seating Q2 Performance | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $74.5 M | $82.4 M | (9.6)% | | Operating Income | $2.7 M | $2.1 M | +29.1% | [Global Electrical Systems Segment](index=3&type=section&id=Global%20Electrical%20Systems%20Segment) Revenue remained flat while operating income turned positive due to lower salary and restructuring costs Global Electrical Systems Q2 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $53.6 M | $53.6 M | Flat | | Operating Income | $0.7 M | $(0.5) M | +$1.2 M | [Trim Systems and Components Segment](index=3&type=section&id=Trim%20Systems%20and%20Components%20Segment) Revenue fell 23.8% and operating income plummeted due to significantly decreased customer demand Trim Systems and Components Q2 Performance | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $43.9 M | $57.6 M | (23.8)% | | Operating Income | $0.1 M | $2.3 M | (95.7)% | [Financial Position and Liquidity](index=3&type=section&id=Financial%20Position%20and%20Liquidity) The company reported total liquidity of $135.9 million and a $31.8 million decrease in net debt from year-end 2024 Liquidity as of June 30, 2025 | Component | Amount (millions) | | :--- | :--- | | Cash | $45.3 | | U.S. Revolver Borrowings | $30.3 | | China Facility Borrowings | $4.2 | | Credit Facility Availability | $90.6 | | **Total Liquidity** | **$135.9** | - **Net debt decreased by $31.8 million** compared to the year-end 2024 level, driven by strong free cash flow[3](index=3&type=chunk) [Full Year 2025 Outlook](index=3&type=section&id=Full%20Year%202025%20Outlook) CVG lowered its sales and EBITDA guidance but raised its free cash flow outlook for full-year 2025 Updated Full Year 2025 Guidance ($ millions) | Metric | Prior Outlook | Updated Outlook | | :--- | :--- | :--- | | Net Sales | $660 - $690 | $650 - $670 | | Adjusted EBITDA | $22 - $27 | $21 - $25 | | Free Cash Flow | > $20 | > $30 | - The outlook is based on ACT Research's forecast for North American Class 8 truck production to be **252,000 units in 2025**, a significant drop from 332,372 units in 2024[10](index=10&type=chunk) - Construction and Agriculture end markets are projected to **decline by 5-15%** in 2025, though new business wins are expected to partially offset this[12](index=12&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) Unaudited statements detail a Q2 net loss of $4.1 million and total assets of $429.8 million as of June 30, 2025 [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a Q2 2025 net loss from continuing operations of $4.1 million on revenues of $172.0 million Statement of Operations Highlights (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $171,956 | $193,665 | | Gross Profit | $19,529 | $20,459 | | Operating Income | $797 | $1,064 | | Net Loss from Continuing Operations | $(4,106) | $(1,299) | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, cash increased to $45.3 million while total debt decreased to $122.3 million Balance Sheet Highlights (in thousands) | Line Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash | $45,290 | $26,630 | | Total Current Assets | $303,008 | $303,300 | | Total Assets | $429,794 | $424,573 | | Total Debt (Current + Long-term) | $122,336 | $135,500 | | Total Liabilities | $287,159 | $288,981 | | Total Stockholders' Equity | $142,635 | $135,592 | [Business Segment Financial Information](index=8&type=section&id=Business%20Segment%20Financial%20Information) Global Seating was the largest contributor to both revenue and operating income in Q2 2025 Q2 2025 Segment Results (in thousands) | Segment | Revenues | Operating Income (Loss) | | :--- | :--- | :--- | | Global Seating | $74,457 | $2,711 | | Global Electrical Systems | $53,585 | $707 | | Trim Systems and Components | $43,914 | $105 | | Corporate/Other | — | $(2,726) | | **Total** | **$171,956** | **$797** | [Appendix: Non-GAAP Reconciliations](index=9&type=section&id=Appendix%3A%20Non-GAAP%20Reconciliations) This section provides detailed reconciliations of GAAP to non-GAAP measures to clarify underlying operational performance [Reconciliation of Net Income and EPS](index=9&type=section&id=Reconciliation%20of%20Net%20Income%20and%20EPS) The Q2 2025 GAAP net loss of $4.1 million reconciles to a non-GAAP adjusted net loss of $2.9 million Q2 2025 GAAP to Non-GAAP Net Loss Reconciliation (in thousands) | Line Item | Amount | | :--- | :--- | | Net Loss from Continuing Operations (GAAP) | $(4,106) | | Operating income adjustments | $1,140 | | Loss on early extinguishment of debt | $460 | | Adjusted provision for income taxes | $(400) | | **Adjusted Net Loss (Non-GAAP)** | **$(2,906)** | [Reconciliation of EBITDA](index=10&type=section&id=Reconciliation%20of%20EBITDA) The Q2 2025 net loss of $4.1 million reconciles to an Adjusted EBITDA of $5.2 million Q2 2025 Net Loss to Adjusted EBITDA Reconciliation (in thousands) | Line Item | Amount | | :--- | :--- | | Net Loss from Continuing Operations | $(4,106) | | Interest, Taxes, Depreciation & Amortization | $7,672 | | EBITDA | $3,566 | | Restructuring | $1,140 | | Loss on extinguishment of debt | $460 | | **Adjusted EBITDA** | **$5,166** | [Reconciliation of Free Cash Flow](index=11&type=section&id=Reconciliation%20of%20Free%20Cash%20Flow) Q2 2025 free cash flow was $17.3 million, a significant improvement from $0.8 million in the prior year Free Cash Flow from Continuing Operations (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Cash flows from operating activities | $18,720 | $6,754 | | Purchases of property, plant and equipment | $(1,465) | $(5,995) | | **Free Cash Flow** | **$17,255** | **$759** |

Financial Performance - Second quarter 2025 revenues were $172 million, a decrease of 11.2% compared to $193.7 million in the prior year, primarily due to softening global demand [3][4][8] - Operating income for the second quarter was $0.8 million, down from $1.1 million in the prior year, with adjusted operating income decreasing to $1.9 million from $4.8 million [4][8] - Net loss from continuing operations was $4.1 million, or $(0.12) per diluted share, compared to a net loss of $1.3 million, or $(0.04) per diluted share, in the prior year [4][8][19] - Adjusted EBITDA was $5.2 million, down 36.6% from $8.2 million, with an adjusted EBITDA margin of 3.0%, down from 4.2% [4][5][8] Cash Flow and Debt Management - The company generated strong free cash flow of $17.3 million, an increase of $16.5 million due to improved working capital management [4][6] - Net debt decreased by $31.8 million compared to the year-end 2024 level, indicating effective debt management [4][6] Segment Performance - The Global Electrical Systems segment showed improved performance driven by new business wins outside of the Construction and Agriculture end markets, despite lower demand in those markets [2][11] - The Global Seating segment reported revenues of $74.5 million, down 9.6% year-over-year, while the Trim Systems and Components segment remained flat at $53.6 million [9][24] - The company is focusing on operational efficiency and margin improvement across all segments [2][4] Guidance and Outlook - The company updated its full-year 2025 outlook, lowering net sales expectations to $650-670 million from a prior range of $660-690 million [7][10] - The Construction and Agriculture end markets are projected to decline by approximately 5-15% in 2025, but new business contributions in Electrical Systems are expected to mitigate this decline [11][10]

Group 1 - The Company, Commercial Vehicle Group (CVG), will hold its quarterly conference call on August 5, 2025, at 8:30 a.m. ET to discuss second quarter 2025 financial results [1] - A press release and presentation will be issued prior to the conference call [1] - The conference call will be accessible via a toll-free number for participants and will also be webcasted on the Company's website [2] Group 2 - A telephonic replay of the conference call will be available until August 19, 2025, with specific access codes provided for toll-free and toll callers [3] - The Company focuses on delivering solutions to complex design, engineering, and manufacturing problems, aiming to create positive change for customers and communities [4] - Additional information about the Company and its products can be found on its website [4]

Core Viewpoint - Commercial Vehicle Group (CVG) successfully refinanced $210 million in senior secured credit facilities, extending maturity to 2030 and enhancing financial flexibility [1][2] Group 1: Refinancing Details - The refinancing includes a $95 million senior secured term loan and a $115 million asset-based revolving credit facility [1] - The term loan matures on June 27, 2030, with interest rates ranging from SOFR plus 8.75% to SOFR plus 10.75% based on leverage ratios [3] - The ABL Facility also matures on June 27, 2030, and is subject to a borrowing base based on US and UK inventory and receivables [5][6] Group 2: Financial Flexibility and Covenants - The new facilities provide funding certainty and increased financial flexibility, supporting cost reductions and operational efficiency [2] - The term loan has a consolidated total leverage ratio covenant starting at 7.25x, with scheduled step-downs to 4.00x by September 30, 2027 [8] - A maximum capital expenditure covenant is set at $20 million per fiscal year, with a sublimit of $10 million for foreign capital expenditures [8] Group 3: Warrants and Additional Information - TCW Group affiliates received five-year warrants for the purchase of up to 3,934,776 shares of common stock at exercise prices of $1.58 and $2.07 [10] - The company is required to file a Current Report on Form 8-K with the SEC to provide further details regarding the transactions [11] - CVG is a global provider of systems and components for the commercial vehicle and electric vehicle markets [12]