Commercial Vehicle(CVGI) - 2025 Q2 - Quarterly Results

CVG Second Quarter 2025 Earnings Release Financial Highlights and Management Commentary 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] - Strategic priorities include reducing SG&A levels, negotiating with customers to mitigate tariff impacts, and focusing on debt paydown[2][4] - The Global Electrical Systems segment showed improved performance and margin expansion, driven by new business wins[2] Consolidated Financial Performance 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] Segment Performance Segment results were mixed, with operating income growth in Seating and Electrical Systems offset by a sharp decline in Trim Systems Global Seating Segment 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 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 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 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 $31.8 million compared to the year-end 2024 level, driven by strong free cash flow[3] Full Year 2025 Outlook CVG lowered its sales and EBITDA guidance but raised its free cash flow outlook for full-year 2025 Updated Full Year 2025 Guidance ($ 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] - 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] Financial Statements 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 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 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 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 This section provides detailed reconciliations of GAAP to non-GAAP measures to clarify underlying operational performance Reconciliation of Net Income and EPS 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 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 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 |