Commercial Vehicle(CVGI) - 2022 Q2 - Quarterly Report

PART I FINANCIAL INFORMATION ITEM 1 – FINANCIAL STATEMENTS Presents unaudited condensed consolidated financial statements for Q2 2022 and 2021, covering operations, balance sheets, cash flows, and detailed notes Condensed Consolidated Statements of Operations Q2 2022 revenues decreased to $250.8 million from $257.9 million, with net income falling to $2.5 million from $5.1 million Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $250,849 | $257,941 | $495,223 | $503,063 | | Gross profit | $21,879 | $34,368 | $47,262 | $65,489 | | Operating income | $6,227 | $16,329 | $14,611 | $31,732 | | Net income | $2,485 | $5,095 | $6,467 | $13,585 | | Diluted EPS | $0.08 | $0.16 | $0.20 | $0.42 | Condensed Consolidated Statements of Comprehensive Income (Loss) Q2 2022 saw a comprehensive loss of $2.2 million, a significant shift from $6.9 million comprehensive income in Q2 2021 Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net income | $2,485 | $5,095 | $6,467 | $13,585 | | Other comprehensive income (loss) | $(4,688) | $1,798 | $(1,576) | $(414) | | Comprehensive income (loss) | $(2,203) | $6,893 | $4,891 | $13,171 | Condensed Consolidated Balance Sheets Total assets increased to $556.6 million as of June 30, 2022, with total liabilities rising to $423.1 million and stockholders' equity reaching $133.5 million Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total current assets | $416,903 | $370,676 | | Total assets | $556,572 | $507,693 | | Total current liabilities | $192,537 | $162,130 | | Total liabilities | $423,118 | $381,040 | | Total stockholders' equity | $133,454 | $126,653 | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities improved to $4.5 million for H1 2022, with $8.7 million from financing and $8.6 million used in investing Six Months Ended Cash Flows (in thousands) | Metric | June 30, 2022 | June 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,507) | $(24,812) | | Net cash used in investing activities | $(8,616) | $(6,909) | | Net cash provided by financing activities | $8,659 | $22,241 | | Net decrease in cash | $(6,458) | $(9,532) | Notes to Condensed Consolidated Financial Statements Details strategic reorganization into four segments, credit facility amendment, revenue by product line, fair value, lease obligations, and restructuring initiatives - The company reorganized into four new segments in Q4 2021: Vehicle Solutions, Warehouse Automation, Electrical Systems, and Aftermarket & Accessories[93] - The Credit Agreement was amended on May 12, 2022, increasing the term loan to $175 million and revolving credit to $150 million, extending maturity to May 12, 2027[33][35] - A restructuring program approved in November 2021 aims to align cost structure and support margin expansion, with expected costs between $4.6 million and $6.0 million[84] Revenues by Segment (Three Months Ended June 30, in thousands) | Segment | 2022 | 2021 | | :--- | :--- | :--- | | Vehicle Solutions | $142,785 | $130,230 | | Warehouse Automation | $28,547 | $54,324 | | Electrical Systems | $47,345 | $44,195 | | Aftermarket & Accessories | $32,172 | $29,192 | | Total | $250,849 | $257,941 | ITEM 2 – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Q2 2022 revenue declined 2.7% due to Warehouse Automation, with gross profit margin contracting to 8.7% amid inflation and supply chain issues, while liquidity reached $146.3 million - Senior secured credit facilities were amended to $325 million (including $175M Term Loan A and $150M Revolver), extending maturity to May 12, 2027, for capital flexibility[106][108] - Operations faced impacts from the temporary shutdown of its Ukraine facility and COVID-19 related shutdowns at its Shanghai plant[109][111] Q2 2022 vs Q2 2021 Consolidated Results (in thousands) | Metric | Q2 2022 | Q2 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $250,849 | $257,941 | $(7,092) | (2.7)% | | Gross profit | $21,879 | $34,368 | $(12,489) | (36.3)% | | Net income | $2,485 | $5,095 | $(2,610) | (51.2)% | - Total liquidity as of June 30, 2022, was $146.3 million, comprising $28.5 million in cash and $117.8 million available under the revolving credit facility[176] ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK No material changes in market risk exposure, including interest rate, foreign currency, and commodity price risks, were reported since the 2021 Form 10-K - No material changes in market risk exposure were reported as of June 30, 2022, compared to the 2021 Form 10-K disclosures[189] ITEM 4 – CONTROLS AND PROCEDURES Disclosure controls and procedures were effective as of June 30, 2022, with no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were deemed effective by the principal executive and financial officers as of June 30, 2022[191] - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2022[192] PART II OTHER INFORMATION ITEM 1 Legal Proceedings The company is involved in various legal proceedings, but management anticipates no material adverse impact on its financial position or results - The company is involved in various legal proceedings incidental to its business but does not expect the outcomes to have a material adverse impact on its financial condition or results[196] ITEM 1A Risk Factors Refers to risk factors detailed in the 2021 Form 10-K and other SEC filings, which could materially affect business and financial results - Readers are referred to the 2021 Form 10-K and subsequent SEC filings for comprehensive risk factor disclosures[197] ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred during the six months ended June 30, 2022 - No unregistered equity securities were sold during the six months ended June 30, 2022[198] ITEM 6 Exhibits Lists exhibits filed with the Form 10-Q, including the Second Amendment to the Credit Agreement and CEO/CFO certifications - Filed exhibits include the Second Amendment to the Credit Agreement and CEO/CFO certifications[204]