Company: CVGI
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001628280-25-051174
Chunk: 17

Company: Commercial Vehicle Group, Inc.
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 1
Chunk 17
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 fair value using observable market inputs such as forward rates, interest rates, our own credit risk and counterparty credit risk. Based on the utilization of these inputs, the derivative assets and liabilities are classified as Level 2. To manage our risk for transactions denominated in Mexican Pesos and Czech Crown, we have entered into forward exchange contracts that are designated as cash flow hedge instruments, which are recorded in the Condensed Consolidated Balance Sheets at fair value. The gains and losses as a result of the changes in fair value of the hedge contract for transactions denominated in Mexican Pesos are deferred in accumulated other comprehensive loss and recognized in cost of revenues in the period the related hedge transactions are settled. As of September 30, 2025, hedge contracts for transactions denominated in Czech Crown were not designated as a hedging instruments; therefore, they are marked-to-market and the fair value of agreements is recorded in the Condensed Consolidated Balance Sheets with the offsetting gains and losses recognized in other (income) expense and recognized in cost of revenues in the period the related hedge transactions are settled in the Condensed Consolidated Statements of Operations.Interest Rate Swaps. To manage our exposure to variable interest rates, we have historically entered into interest rate swaps to exchange, at a specified interval, the difference between fixed and variable interest amounts calculated by reference to an agreed upon notional principal amount. The interest rate swaps are intended to mitigate the impact of rising interest rates on the Company and covered approximately 50% of outstanding debt under the Prior Term Loan. Any changes in fair value were included in earnings or deferred through Accumulated other comprehensive loss, depending on the nature and effectiveness of the offset. Any ineffectiveness in a cash flow hedging relationship would be recognized immediately in earnings in the consolidated statements of operations.At March 31, 2025, the Company entered into transactions to cash settle existing interest rate swaps and received proceeds of $0.6 million. The gain on the swap settlement has been recorded in Other comprehensive income (loss) and will be recognized over the life of the hedged transactions. Stock Warrants Issued in Connection with Long-Term Debt — In connection with entering into the Term Loan due 2030, the Company issued to affiliates of TCW Management five-year warrants for the purchase of up to an aggregate of 3,934,776 shares of the Company’s common stock, issued in two equal tranches.  The tranches have an exercise price of $1.52 and $2.07  per share