Company: CVGI
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001628280-25-022764
Chunk: 23

Company: Commercial Vehicle Group, Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Item 1
Chunk 23
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4 and $20 million (subject to adjustment) on October 1, 2024. The decision to divest this business was part of our strategy to reduce our exposure to the cyclical Class 8 market, lower our customer concentration, remove complexity from our business, and improve our return profile. On October 30, 2024, the Company entered into a purchase agreement to sell its First Source Electronics (FSE) business with operations in Elkridge, Maryland for approximately $1.5 million, with a note in the amount of $0.5 million and earn out potential of an additional $1.5 million subject to certain criteria. The Elkridge facility was the primary manufacturing facility of the Company's Industrial Automation segment.  The decision to divest this business was part of our strategy to continually evaluate our portfolio of businesses and product lines for strategic fit and continued investment.We determined that the sale of the cab structures and Industrial Automation businesses represent discontinued operations as they constitute disposals of a product line and an operating segment, respectively, and are a strategic shift that will have a major effect on our operations and financial results (individually and collectively). As a result, we reclassified the related earnings (loss) from continuing operations to earnings (loss) from discontinued operations - net of income taxes on the consolidated 

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statement of earnings (loss) for all the periods presented. No amounts for shared general and administrative operating support expense were allocated to the discontinued operation. The Company has continuing involvement with the cab structures business through a transition services agreement (TSA), pursuant to which the Company and Buyer parties provide certain service to each other for a period of time following the disposition, up to one year. While the transition services are expected to vary in duration depending upon the type of service provided, the Company expects to reduce costs as the transition services are completed. The Company recognized $0.4 million of income related to the transition services agreement for the three months ended March 31, 2025, which was presented in Continuing operations, Other (income) expense in the Condensed Consolidated Statements of Operations.The following table provides a reconciliation of the individual discontinued operations to the Condensed Consolidated Statements of Operations for the three and three months ended March 31, 2025 and 2024. Three Months Ended March 31,20252024Income (loss) from discontinued operations, net of taxCab structures business$(1,023)$3,020 Industrial Automation segment(150)(1,527