##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 R 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
  OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
   COMMERCIAL VEHICLE GROUP, INC.
  Delaware
(State or other jurisdiction of
incorporation or organization)
    
    41-1990662
(I.R.S. Employer
Identification No.)6530 West Campus Oval
New Albany, Ohio
(Address of principal executive offices)
    
    43054
(Zip Code)
 (614) 289-5360
 Not Applicable
  þ o
  o þ o
  o þ




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##### 



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
 PART I
    
    FINANCIAL INFORMATIONITEM 1
    
    FINANCIAL STATEMENTS
    
    
    1CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS
ENDED JUNE 30, 2006 AND 2005 (UNAUDITED)
    
    
    1CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2006 (UNAUDITED) AND DECEMBER 31,
2005 (UNAUDITED)
    
    
    2CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX  MONTHS ENDED JUNE
30, 2006 AND 2005 (UNAUDITED)
    
    
    3NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
    
    
    4ITEM 2
    
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION  AND RESULTS OF OPERATIONS
    
    
    23ITEM 3
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    28ITEM 4
    
    CONTROLS AND PROCEDURES
    
    
    28PART II
    
    OTHER INFORMATION
    
    
    29SIGNATURES
    
    
    
    
    
    
    31Certification by Mervin Dunn, President and Chief Executive OfficerCertification by Chad M. Utrup, Chief Financial OfficerCertification Pursuant to Section 906Certification Pursuant to Section 906
  i




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##### Table of Contents



ITEM 1  FINANCIAL STATEMENTS
 
 COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)REVENUES
    
    $
    234,787
    
    
    $
    196,091
    
    
    $
    464,132
    
    
    $
    348,506COST OF REVENUES
    
    
    194,590
    
    
    
    159,949
    
    
    
    385,201
    
    
    
    286,112Gross Profit
    
    
    40,197
    
    
    
    36,142
    
    
    
    78,931
    
    
    
    62,394SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    13,247
    
    
    
    10,172
    
    
    
    26,399
    
    
    
    19,721AMORTIZATION EXPENSE
    
    
    103
    
    
    
    140
    
    
    
    208
    
    
    
    164Operating Income
    
    
    26,847
    
    
    
    25,830
    
    
    
    52,324
    
    
    
    42,509OTHER INCOME
    
    
    (1,308
    )
    
    
    (392
    )
    
    
    (1,078
    )
    
    
    (3,272
    )INTEREST EXPENSE
    
    
    3,849
    
    
    
    3,315
    
    
    
    7,739
    
    
    
    5,482LOSS ON EARLY EXTINGUISHMENT
OF DEBT
    
    
    318
    
    
    
    
    
    
    
    318
    
    
    
    Income Before Provision for Income Taxes
    
    
    23,988
    
    
    
    22,907
    
    
    
    45,345
    
    
    
    40,299PROVISION FOR INCOME TAXES
    
    
    8,494
    
    
    
    8,722
    
    
    
    16,443
    
    
    
    15,228NET INCOME
    
    $
    15,494
    
    
    $
    14,185
    
    
    $
    28,902
    
    
    $
    25,071EARNINGS PER COMMON SHARE:Basic
    
    $
    0.73
    
    
    $
    0.79
    
    
    $
    1.37
    
    
    $
    1.39Diluted
    
    $
    0.72
    
    
    $
    0.78
    
    
    $
    1.35
    
    
    $
    1.37WEIGHTED AVERAGE SHARES
OUTSTANDING:Basic
    
    
    21,119
    
    
    
    17,987
    
    
    
    21,070
    
    
    
    17,987Diluted
    
    
    21,501
    
    
    
    18,260
    
    
    
    21,486
    
    
    
    18,279
  1




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)
    
    
    (Unaudited)(In thousands)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    15,303
    
    
    $
    40,641Accounts receivable, net of reserve for
doubtful accounts of $6,461 and $6,087,
respectively
    
    
    144,360
    
    
    
    114,116Inventories, net
    
    
    74,798
    
    
    
    69,053Prepaid expenses and other current assets
    
    
    7,863
    
    
    
    4,724Deferred income taxes
    
    
    11,840
    
    
    
    12,571Total current assets
    
    
    254,164
    
    
    
    241,105PROPERTY, PLANT AND EQUIPMENT, net
    
    
    81,928
    
    
    
    80,415GOODWILL
    
    
    127,445
    
    
    
    125,607INTANGIBLE ASSETS, net of accumulated amortization of $646 and
$451, respectively
    
    
    84,382
    
    
    
    84,577OTHER ASSETS, net
    
    
    12,723
    
    
    
    12,179TOTAL ASSETS
    
    $
    560,642
    
    
    $
    543,883LIABILITIES AND STOCKHOLDERS INVESTMENTCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    1,878
    
    
    $
    5,309Accounts payable
    
    
    85,201
    
    
    
    73,709Accrued liabilities
    
    
    45,430
    
    
    
    42,983Total current liabilities
    
    
    132,509
    
    
    
    122,001LONG-TERM DEBT, net of current maturities
    
    
    161,771
    
    
    
    185,700DEFERRED TAX LIABILITIES
    
    
    8,802
    
    
    
    8,802OTHER LONG-TERM LIABILITIES
    
    
    21,887
    
    
    
    25,303Total liabilities
    
    
    324,969
    
    
    
    341,806COMMITMENTS AND CONTINGENCIES (Note 10)STOCKHOLDERS INVESTMENT:Common stock $.01 par value; 30,000,000 shares authorized;
21,152,461 and 21,145,954 shares issued and outstanding,
respectively
    
    
    211
    
    
    
    211Additional paid-in capital
    
    
    171,728
    
    
    
    169,252Retained earnings
    
    
    62,859
    
    
    
    33,957Accumulated other comprehensive income (loss)
    
    
    875
    
    
    
    (1,343
    )Total stockholders investment
    
    
    235,673
    
    
    
    202,077TOTAL LIABILITIES AND STOCKHOLDERS INVESTMENT
    
    $
    560,642
    
    
    $
    543,883
  2




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six Months EndedJune 30,2006
    
    
    2005(Unaudited)
    
        (Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    28,902
    
    
    $
    25,071Adjustments to reconcile net income to net cash provided by operating
activities:Depreciation and amortization
    
    
    7,312
    
    
    
    5,900Noncash amortization of debt financing costs
    
    
    463
    
    
    
    372Loss on early extinguishment of debt
    
    
    318
    
    
    
    Stock-based compensation expense
    
    
    965
    
    
    
    (Gain)/loss on sale of assets
    
    
    (367
    )
    
    
    63Pension and post-retirement curtailment gain
    
    
    (3,865
    )
    
    
    Deferred income tax provision
    
    
    787
    
    
    
    1,262Noncash gain on forward exchange contracts
    
    
    (1,067
    )
    
    
    (3,238
    )Change in other operating items
    
    
    (23,390
    )
    
    
    (8,522
    )Net cash provided by operating activities
    
    
    10,058
    
    
    
    20,908CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, plant and equipment
    
    
    (8,501
    )
    
    
    (5,513
    )Proceeds from disposal/sale of property, plant and equipment
    
    
    219
    
    
    
    Proceeds from disposal/sale of other assets
    
    
    1,800
    
    
    
    Post-acquisition and acquisitions payments, net of cash received
    
    
    (693
    )
    
    
    (163,185
    )Other assets and liabilities
    
    
    (270
    )
    
    
    Net cash used in investing activities
    
    
    (7,445
    )
    
    
    (168,698
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock under equity incentive plans
    
    
    1,059
    
    
    
    Excess tax benefits from equity incentive plans
    
    
    151
    
    
    
    Repayment of revolving credit facility
    
    
    (4,925
    )
    
    
    (97,804
    )Borrowings under revolving credit facility
    
    
    4,030
    
    
    
    163,138Long-term borrowings
    
    
    
    
    
    
    225,733Repayments of long-term borrowings
    
    
    (27,375
    )
    
    
    (139,248
    )Other, net
    
    
    (53
    )
    
    
    21Net cash (used in) provided by financing activities
    
    
    (27,113
    )
    
    
    151,840EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS
    
    
    (838
    )
    
    
    (1,507
    )NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (25,338
    )
    
    
    2,543CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    40,641
    
    
    
    1,396End of period
    
    $
    15,303
    
    
    $
    3,939SUPPLEMENTAL CASH FLOW INFORMATION:Cash paid for interest
    
    $
    7,126
    
    
    $
    4,910Cash paid for income taxes, net
    
    $
    11,254
    
    
    $
    9,710
  3




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COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 1. Description of Business and Basis of Presentation
    2. Recently Issued Accounting Pronouncements
 Accounting for Uncertainty in Income
Taxes Accounting for Income Taxes
 3. Share-Based Compensation
 Share-Based Payment Accounting for Stock-Based Compensation Statement of Cash Flows
  4




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Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2005
    
    
    2005Net income, as reported
    
    $
    14,185
    
    
    $
    25,071(Less): Stock-based compensation expense determined under the
the fair-value-based method for all awards, net of related tax
effects
    
    
    (166
    )
    
    
    (334
    )Pro forma net income
    
    $
    14,019
    
    
    $
    24,737Basic net earnings per share:As reported
    
    $
    0.79
    
    
    $
    1.39Pro forma
    
    $
    0.78
    
    
    $
    1.38Diluted net earnings per share:As reported
    
    $
    0.78
    
    
    $
    1.37Pro forma
    
    $
    0.77
    
    
    $
    1.35
 Stock Options and Restricted Stock Grants
     5




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2004StockOptionGrantsWeighted-average fair value of option and restricted stock grants
    
    $
    3.34Risk-free interest rate
    
    
    4.50
    %Expected volatility
    
    
    23.12
    %Expected life in months
    
    
    36
   Weighted-Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateOptions
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicStock Options
    
    (000's)
    
    
    Price
    
    
    Life (Years)
    
    
    Value (000's)Outstanding at December 31, 2005
    
    
    1,219
    
    
    $
    10.45
    
    
    
    
    
    
    $
    Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (174
    )
    
    
    6.17
    
    
    
    
    
    
    
    2,355Forfeited
    
    
    (23
    )
    
    
    15.84
    
    
    
    
    
    
    
    Oustanding at June 30, 2006
    
    
    1,022
    
    
    $
    11.06
    
    
    
    8.0
    
    
    $
    9,326Exercisable at June 30, 2006
    
    
    666
    
    
    $
    8.49
    
    
    
    7.8
    
    
    
    7,472
  Nonvested Stock Options
    
    
    Nonvested Restricted StockWeighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    AverageOptions
    
    
    Grant-Date
    
    
    Shares
    
    
    Grant-Date(000's)
    
    
    Fair Value
    
    
    (000's)
    
    
    Fair ValueNonvested at December 31, 2005
    
    
    380
    
    
    $
    3.34
    
    
    
    167
    
    
    $
    19.50Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    (23
    )
    
    
    3.34
    
    
    
    (1
    )
    
    
    19.50Nonvested at June 30, 2006
    
    
    357
    
    
    $
    3.34
    
    
    
    166
    
    
    $
    19.50
  4. Accounts Receivable
  6




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##### Table of Contents



5. Inventories
  June 30,
    
    
    December 31,2006
    
    
    2005Raw materials
    
    $
    49,188
    
    
    $
    46,218Work in process
    
    
    11,865
    
    
    
    12,571Finished goods
    
    
    17,999
    
    
    
    13,655Less excess and obsolete
    
    
    (4,254
    )
    
    
    (3,391
    )$
    74,798
    
    
    $
    69,053
  6. Stockholders Investment
 Common Stock 
 Preferred Stock 
 Earnings Per Share  Earnings per Share
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net income
applicable to
common shareholders
 basic and
diluted
    
    $
    15,494
    
    
    $
    14,185
    
    
    $
    28,902
    
    
    $
    25,071Weighted average
number of common
shares outstanding
    
    
    21,119
    
    
    
    17,987
    
    
    
    21,070
    
    
    
    17,987Dilutive effect of
outstanding stock
options and
restricted stock
grants after
application of the
treasury stock
method
    
    
    382
    
    
    
    273
    
    
    
    416
    
    
    
    292Dilutive shares
outstanding
    
    
    21,501
    
    
    
    18,260
    
    
    
    21,486
    
    
    
    18,279Basic earnings per
share
    
    $
    0.73
    
    
    $
    0.79
    
    
    $
    1.37
    
    
    $
    1.39Diluted earning per
share
    
    $
    0.72
    
    
    $
    0.78
    
    
    $
    1.35
    
    
    $
    1.37
 Dividends 
 7




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7. Debt
  June 30,
    
    
    December 31,2006
    
    
    2005Revolving credit facilities bore interest at a weighted average of
6.6% as of June 30, 2006 and 6.6% as of December 31, 2005
    
    $
    2,772
    
    
    $
    3,446Term loans, with principal and interest payable quarterly, bore
interest at a weighted average rate of 6.8% as of June 30, 2006
and 6.3% as of December 31, 2005
    
    
    10,518
    
    
    
    37,1528.0% senior notes due 2013
    
    
    150,000
    
    
    
    150,000Other
    
    
    359
    
    
    
    411163,649
    
    
    
    191,009Less current maturities
    
    
    1,878
    
    
    
    5,309$
    161,771
    
    
    $
    185,700
 Credit Agreement  Debtors Accounting for the Changes in Line-of-Credit or Revolving-Debt
Arrangements Debtors Accounting for a Modification or Exchange of Debt Instruments (
     8




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Terms, Covenants and Compliance Status
 8. Goodwill and Intangible Assets
 Goodwill and Intangible
Assets, Business Combinations, Goodwill and Intangible Assets.
 Accounting for the
Impairment or Disposal of Long-Lived Assets
 9




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June 30, 2006Weighted-Average
    
    
    GrossAmortization
    
    
    Carrying
    
    
    Accumulated
    
    
    Net CarryingPeriod
    
    
    Amount
    
    
    Amortization
    
    
    AmountAmortizing intangible assets:Tradenames/Trademarks
    
    30 years
    
    $
    9,790
    
    
    $
    (427
    )
    
    $
    9,363Licenses
    
    7 years
    
    
    438
    
    
    
    (219
    )
    
    
    219$
    10,228
    
    
    $
    (646
    )
    
    $
    9,582Non-amortizing intangible assets:Goodwill
    
    
    
    
    
    $
    127,445
    
    
    $
    
    
    
    $
    127,445Customer relationship
    
    
    
    
    
    
    74,800
    
    
    
    
    
    
    
    74,800$
    202,245
    
    
    $
    
    
    
    $
    202,245Total consolidated goodwill and intangible
assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    211,827
 December 31, 2005Weighted-Average
    
    
    GrossAmortization
    
    
    Carrying
    
    
    Accumulated
    
    
    Net CarryingPeriod
    
    
    Amount
    
    
    Amortization
    
    
    AmountAmortizing intangible assets:Tradenames/Trademarks
    
    30 years
    
    $
    9,790
    
    
    $
    (263
    )
    
    $
    9,527Licenses
    
    7 years
    
    
    438
    
    
    
    (188
    )
    
    
    250$
    10,228
    
    
    $
    (451
    )
    
    $
    9,777Non-amortizing intangible assets:Goodwill
    
    
    
    
    
    $
    125,607
    
    
    $
    
    
    
    $
    125,607Customer relationship
    
    
    
    
    
    
    74,800
    
    
    
    
    
    
    
    74,800$
    200,407
    
    
    $
    
    
    
    $
    200,407Total consolidated goodwill and intangible
assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    210,184
  10




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EstimatedFiscal Year Ended
    
    AmortizationDecember 31,
    
    Expense2006
    
    $
    3892007
    
    $
    3892008
    
    $
    3892009
    
    $
    3892010
    
    $
    3262011
    
    $
    326
 
 Balance  December 31, 2005
    
    $
    125,607Post-acquisition adjustments
    
    
    693Asset sale
    
    
    (440
    )Currency translation adjustment
    
    
    1,585Balance  June 30, 2006
    
    $
    127,445
  9. Comprehensive Income
 Reporting Comprehensive Income,
 Foreign currency translation adjustment
    
    $
    3,801Minimum pension liability
    
    
    (2,926
    )$
    875
  2006
    
    
    2005Net income
    
    $
    28,902
    
    
    $
    25,071Other comprehensive income:Foreign currency translation adjustment
    
    
    2,218
    
    
    
    (2,900
    )Minimum pension liability adjustment
    
    
    
    
    
    
    (505
    )Comprehensive income
    
    $
    31,120
    
    
    $
    21,666
 10. Commitments and Contingencies
 Warranty 
 11




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Balance  Beginning of period
    
    $
    7,117Additional provisions recorded
    
    
    1,770Deduction for payments made
    
    
    (2,161
    )Currency translation adjustment
    
    
    26Balance  End of period
    
    $
    6,752
 Foreign Currency Forward Exchange Contracts 
 
 Local
    
    
    

    


    
    
    U.S. $Currency
    
    
    U.S. $
   
    
    EquivalentAmount
    
    
    Equivalent

    
    
    Fair ValueComments to sell currencies:U.S. dollar
    
    $
    (1,119
    )
    
    $
    (1,137
    )
    
    $
    (1,119
    )Eurodollar
    
    
    43,012
    
    
    
    56,922
    
    
    
    55,826Swedish krona
    
    
    15,260
    
    
    
    2,110
    
    
    
    2,123Japanese yen
    
    
    3,300,000
    
    
    
    34,638
    
    
    
    30,486Australian dollar
    
    
    3,620
    
    
    
    2,808
    
    
    
    2,689
  Litigation 
 11. Defined Benefit and Post-Retirement Benefit Plans
  12




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U.S. Defined Benefit Plans
    
    
    Non U.S. Defined Benefit Plans
    
    
    Post-Retirement Benefit PlansThree Months Ended
    
    
    Three Months Ended
    
    
    Three Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Service cost
    
    $
    119
    
    
    $
    389
    
    
    $
    13
    
    
    $
    241
    
    
    $
    10
    
    
    $
    69Interest cost
    
    
    409
    
    
    
    410
    
    
    
    541
    
    
    
    454
    
    
    
    26
    
    
    
    109Expected return on
plan assets
    
    
    (414
    )
    
    
    (401
    )
    
    
    (514
    )
    
    
    (470
    )
    
    
    
    
    
    
    Amortization of
prior service costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    Curtailment
(gain)/loss
    
    
    (500
    )
    
    
    
    
    
    
    142
    
    
    
    
    
    
    
    (2,058
    )
    
    
    Special termination
benefits
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    261
    
    
    
    Recognized
actuarial loss
    
    
    
    
    
    
    
    
    
    
    41
    
    
    
    81
    
    
    
    
    
    
    
    Net periodic
benefit cost
    
    $
    (374
    )
    
    $
    398
    
    
    $
    223
    
    
    $
    310
    
    
    $
    (1,761
    )
    
    $
    178
  U.S. Defined Benefit Plans
    
    
    Non U.S. Defined Benefit Plans
    
    
    Post-Retirement Benefit PlansThree Months Ended
    
    
    Three Months Ended
    
    
    Three Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Service cost
    
    $
    401
    
    
    $
    611
    
    
    $
    218
    
    
    $
    512
    
    
    $
    40
    
    
    $
    96Interest cost
    
    
    824
    
    
    
    645
    
    
    
    1,048
    
    
    
    964
    
    
    
    78
    
    
    
    145Expected return on
plan assets
    
    
    (829
    )
    
    
    (631
    )
    
    
    (976
    )
    
    
    (999
    )
    
    
    
    
    
    
    Amortization of
prior service costs
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    10
    
    
    
    
    
    
    
    Curtailment
(gain)/loss
    
    
    (1,949
    )
    
    
    
    
    
    
    142
    
    
    
    
    
    
    
    (2,058
    )
    
    
    Special termination
benefits
    
    
    35
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    354
    
    
    
    Recognized
actuarial loss
    
    
    
    
    
    
    
    
    
    
    154
    
    
    
    171
    
    
    
    
    
    
    
    Net periodic
benefit cost
    
    $
    (1,518
    )
    
    $
    625
    
    
    $
    591
    
    
    $
    658
    
    
    $
    (1,586
    )
    
    $
    241
   12. Related Party Transactions
  
 13




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##### Table of Contents



13. Consolidating Guarantor and Non-Guarantor Financial Information
   14




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2006
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    201,327
    
    
    $
    34,935
    
    
    $
    (1,475
    )
    
    $
    234,787COST OF REVENUES
    
    
    
    
    
    
    166,610
    
    
    
    29,221
    
    
    
    (1,241
    )
    
    
    194,590Gross Profit
    
    
    
    
    
    
    34,717
    
    
    
    5,714
    
    
    
    (234
    )
    
    
    40,197SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    10,080
    
    
    
    3,331
    
    
    
    (164
    )
    
    
    13,247AMORTIZATION EXPENSE
    
    
    
    
    
    
    103
    
    
    
    
    
    
    
    
    
    
    
    103Operating Income
    
    
    
    
    
    
    24,534
    
    
    
    2,383
    
    
    
    (70
    )
    
    
    26,847OTHER EXPENSE (INCOME)
    
    
    
    
    
    
    22
    
    
    
    (1,330
    )
    
    
    
    
    
    
    (1,308
    )INTEREST EXPENSE
    
    
    
    
    
    
    3,507
    
    
    
    342
    
    
    
    
    
    
    
    3,849LOSS ON EARLY EXTINGUISHMENT
OF DEBT
    
    
    
    
    
    
    282
    
    
    
    36
    
    
    
    
    
    
    
    318Income Before Provision for
Income Taxes
    
    
    
    
    
    
    20,723
    
    
    
    3,335
    
    
    
    (70
    )
    
    
    23,988PROVISION FOR INCOME TAXES
    
    
    
    
    
    
    7,214
    
    
    
    1,280
    
    
    
    
    
    
    
    8,494NET INCOME
    
    $
    
    
    
    $
    13,509
    
    
    $
    2,055
    
    
    $
    (70
    )
    
    $
    15,494
 15




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2006
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    398,797
    
    
    $
    68,292
    
    
    $
    (2,957
    )
    
    $
    464,132COST OF REVENUES
    
    
    
    
    
    
    330,859
    
    
    
    56,955
    
    
    
    (2,613
    )
    
    
    385,201Gross Profit
    
    
    
    
    
    
    67,938
    
    
    
    11,337
    
    
    
    (344
    )
    
    
    78,931SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    19,962
    
    
    
    6,705
    
    
    
    (268
    )
    
    
    26,399AMORTIZATION EXPENSE
    
    
    
    
    
    
    208
    
    
    
    
    
    
    
    
    
    
    
    208Operating Income
    
    
    
    
    
    
    47,768
    
    
    
    4,632
    
    
    
    (76
    )
    
    
    52,324OTHER EXPENSE (INCOME)
    
    
    
    
    
    
    14
    
    
    
    (1,092
    )
    
    
    
    
    
    
    (1,078
    )INTEREST EXPENSE
    
    
    
    
    
    
    7,124
    
    
    
    615
    
    
    
    
    
    
    
    7,739LOSS ON EARLY EXTINGUISHMENT
OF DEBT
    
    
    
    
    
    
    282
    
    
    
    36
    
    
    
    
    
    
    
    318Income Before Provision for
Income Taxes
    
    
    
    
    
    
    40,348
    
    
    
    5,073
    
    
    
    (76
    )
    
    
    45,345PROVISION FOR INCOME TAXES
    
    
    
    
    
    
    14,569
    
    
    
    1,874
    
    
    
    
    
    
    
    16,443NET INCOME
    
    $
    
    
    
    $
    25,779
    
    
    $
    3,199
    
    
    $
    (76
    )
    
    $
    28,902
 16




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2006
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    
    
    
    $
    14,298
    
    
    $
    1,005
    
    
    $
    
    
    
    $
    15,303Accounts receivable, net
    
    
    
    
    
    
    170,257
    
    
    
    30,728
    
    
    
    (56,625
    )
    
    
    144,360Inventories, net
    
    
    
    
    
    
    54,667
    
    
    
    20,286
    
    
    
    (155
    )
    
    
    74,798Prepaid expenses and other current assets
    
    
    
    
    
    
    5,264
    
    
    
    2,599
    
    
    
    
    
    
    
    7,863Deferred income taxes
    
    
    
    
    
    
    13,549
    
    
    
    (1,709
    )
    
    
    
    
    
    
    11,840Total current assets
    
    
    
    
    
    
    258,035
    
    
    
    52,909
    
    
    
    (56,780
    )
    
    
    254,164PROPERTY, PLANT AND
EQUIPMENT, net
    
    
    
    
    
    
    75,894
    
    
    
    6,034
    
    
    
    
    
    
    
    81,928INVESTMENT IN SUBSIDIARIES
    
    
    362,032
    
    
    
    1,201
    
    
    
    1,715
    
    
    
    (364,948
    )
    
    
    GOODWILL
    
    
    
    
    
    
    104,009
    
    
    
    23,436
    
    
    
    
    
    
    
    127,445INTANGIBLE ASSETS, net
    
    
    
    
    
    
    84,382
    
    
    
    
    
    
    
    
    
    
    
    84,382OTHER ASSETS, net
    
    
    
    
    
    
    18,064
    
    
    
    7,314
    
    
    
    (12,655
    )
    
    
    12,723TOTAL ASSETS
    
    $
    362,032
    
    
    $
    541,585
    
    
    $
    91,408
    
    
    $
    (434,383
    )
    
    $
    560,642LIABILITIES AND STOCKHOLDERS INVESTMENTCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    
    
    
    $
    1,878
    
    
    $
    
    
    
    $
    
    
    
    $
    1,878Accounts payable
    
    
    
    
    
    
    124,790
    
    
    
    17,036
    
    
    
    (56,625
    )
    
    
    85,201Accrued liabilities
    
    
    
    
    
    
    41,444
    
    
    
    3,986
    
    
    
    
    
    
    
    45,430Total current liabilities
    
    
    
    
    
    
    168,112
    
    
    
    21,022
    
    
    
    (56,625
    )
    
    
    132,509LONG-TERM DEBT, net of current maturities
    
    
    
    
    
    
    148,482
    
    
    
    13,289
    
    
    
    
    
    
    
    161,771DEFERRED TAX LIABILITIES
    
    
    
    
    
    
    22,273
    
    
    
    (816
    )
    
    
    (12,655
    )
    
    
    8,802OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    16,452
    
    
    
    5,435
    
    
    
    
    
    
    
    21,887Total liabilities
    
    
    
    
    
    
    355,319
    
    
    
    38,930
    
    
    
    (69,280
    )
    
    
    324,969STOCKHOLDERS INVESTMENT
    
    
    362,032
    
    
    
    186,266
    
    
    
    52,478
    
    
    
    (365,103
    )
    
    
    235,673TOTAL LIABILITIES AND
STOCKHOLDERS INVESTMENT
    
    $
    362,032
    
    
    $
    541,585
    
    
    $
    91,408
    
    
    $
    (434,383
    )
    
    $
    560,642
 17




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2006
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    
    
    
    $
    25,780
    
    
    $
    3,198
    
    
    $
    (76
    )
    
    $
    28,902Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    6,406
    
    
    
    906
    
    
    
    
    
    
    
    7,312Noncash amortization of debt financing costs
    
    
    
    
    
    
    442
    
    
    
    21
    
    
    
    
    
    
    
    463Loss on early extinguishment of debt
    
    
    
    
    
    
    282
    
    
    
    36
    
    
    
    
    
    
    
    318Stock-based compensation expense
    
    
    
    
    
    
    965
    
    
    
    
    
    
    
    
    
    
    
    965(Gain)/loss on sale of assets
    
    
    
    
    
    
    (369
    )
    
    
    2
    
    
    
    
    
    
    
    (367
    )Pension and post-retirement curtailment
(gain)/loss
    
    
    
    
    
    
    (4,007
    )
    
    
    142
    
    
    
    
    
    
    
    (3,865
    )Deferred income tax provision
    
    
    
    
    
    
    
    
    
    
    787
    
    
    
    
    
    
    
    787Noncash gain on forward exchange contracts
    
    
    
    
    
    
    
    
    
    
    (1,067
    )
    
    
    
    
    
    
    (1,067
    )Change in other operating items
    
    
    
    
    
    
    (21,797
    )
    
    
    (1,669
    )
    
    
    76
    
    
    
    (23,390
    )Net cash provided by operating activities
    
    
    
    
    
    
    7,702
    
    
    
    2,356
    
    
    
    
    
    
    
    10,058CASH FLOWS FROM INVESTING
ACTIVITIES:Purchases of property, plant and equipment
    
    
    
    
    
    
    (7,682
    )
    
    
    (819
    )
    
    
    
    
    
    
    (8,501
    )Proceeds from disposal/sale of property, plant
and equipment
    
    
    
    
    
    
    219
    
    
    
    
    
    
    
    
    
    
    
    219Proceeds from disposal/sale of other assets
    
    
    
    
    
    
    1,800
    
    
    
    
    
    
    
    
    
    
    
    1,800Post-acquisition and acquisitions payments,
net of cash received
    
    
    
    
    
    
    (693
    )
    
    
    
    
    
    
    
    
    
    
    (693
    )Other asset and liabilities
    
    
    
    
    
    
    (270
    )
    
    
    
    
    
    
    
    
    
    
    (270
    )Net cash used in investing activities
    
    
    
    
    
    
    (6,626
    )
    
    
    (819
    )
    
    
    
    
    
    
    (7,445
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock
under equity incentive plans
    
    
    
    
    
    
    1,059
    
    
    
    
    
    
    
    
    
    
    
    1,059Excess tax benefits from equity incentive plans
    
    
    
    
    
    
    151
    
    
    
    
    
    
    
    
    
    
    
    151Repayment of revolving credit facility
    
    
    
    
    
    
    
    
    
    
    (4,925
    )
    
    
    
    
    
    
    (4,925
    )Borrowings under revolving credit facility
    
    
    
    
    
    
    
    
    
    
    4,030
    
    
    
    
    
    
    
    4,030Repayments of long-term borrowings
    
    
    
    
    
    
    (26,591
    )
    
    
    (784
    )
    
    
    
    
    
    
    (27,375
    )Other, net
    
    
    
    
    
    
    (501
    )
    
    
    448
    
    
    
    
    
    
    
    (53
    )Net cash used in financing activities
    
    
    
    
    
    
    (25,882
    )
    
    
    (1,231
    )
    
    
    
    
    
    
    (27,113
    )EFFECT OF CURRENCY EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    (49
    )
    
    
    (789
    )
    
    
    
    
    
    
    (838
    )NET (DECREASE) IN CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    (24,855
    )
    
    
    (483
    )
    
    
    
    
    
    
    (25,338
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    
    
    
    
    39,153
    
    
    
    1,488
    
    
    
    
    
    
    
    40,641End of period
    
    $
    
    
    
    $
    14,298
    
    
    $
    1,005
    
    
    $
    
    
    
    $
    15,303
 18




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2005
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    
    
    
    $
    39,153
    
    
    $
    1,488
    
    
    $
    
    
    
    $
    40,641Accounts receivable, net
    
    
    
    
    
    
    144,793
    
    
    
    25,657
    
    
    
    (56,334
    )
    
    
    114,116Inventories, net
    
    
    
    
    
    
    50,953
    
    
    
    18,179
    
    
    
    (79
    )
    
    
    69,053Prepaid expenses and other current assets
    
    
    
    
    
    
    (540
    )
    
    
    2,484
    
    
    
    2,780
    
    
    
    4,724Deferred income taxes
    
    
    
    
    
    
    13,551
    
    
    
    (980
    )
    
    
    
    
    
    
    12,571Total current assets
    
    
    
    
    
    
    247,910
    
    
    
    46,828
    
    
    
    (53,633
    )
    
    
    241,105PROPERTY, PLANT AND
EQUIPMENT, net
    
    
    
    
    
    
    74,633
    
    
    
    5,782
    
    
    
    
    
    
    
    80,415INVESTMENT IN SUBSIDIARIES
    
    
    328,815
    
    
    
    752
    
    
    
    1,715
    
    
    
    (331,282
    )
    
    
    GOODWILL
    
    
    
    
    
    
    103,758
    
    
    
    21,849
    
    
    
    
    
    
    
    125,607INTANGIBLE ASSETS, net
    
    
    
    
    
    
    84,577
    
    
    
    
    
    
    
    
    
    
    
    84,577OTHER ASSETS, net
    
    
    
    
    
    
    18,529
    
    
    
    6,305
    
    
    
    (12,655
    )
    
    
    12,179TOTAL ASSETS
    
    $
    328,815
    
    
    $
    530,159
    
    
    $
    82,479
    
    
    $
    (397,570
    )
    
    $
    543,883LIABILITIES AND STOCKHOLDERS INVESTMENTCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    
    
    
    $
    5,309
    
    
    $
    
    
    
    $
    
    
    
    $
    5,309Accounts payable
    
    
    
    
    
    
    115,704
    
    
    
    14,339
    
    
    
    (56,334
    )
    
    
    73,709Accrued liabilities
    
    
    
    
    
    
    37,124
    
    
    
    3,079
    
    
    
    2,780
    
    
    
    42,983Total current liabilities
    
    
    
    
    
    
    158,137
    
    
    
    17,418
    
    
    
    (53,554
    )
    
    
    122,001LONG-TERM DEBT, net of current
maturities
    
    
    
    
    
    
    171,693
    
    
    
    14,007
    
    
    
    
    
    
    
    185,700DEFERRED TAX LIABILITIES
    
    
    
    
    
    
    22,273
    
    
    
    (816
    )
    
    
    (12,655
    )
    
    
    8,802OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    19,994
    
    
    
    5,309
    
    
    
    
    
    
    
    25,303Total liabilities
    
    
    
    
    
    
    372,097
    
    
    
    35,918
    
    
    
    (66,209
    )
    
    
    341,806STOCKHOLDERS INVESTMENT
    
    
    328,815
    
    
    
    158,062
    
    
    
    46,561
    
    
    
    (331,361
    )
    
    
    202,077TOTAL LIABILITIES AND
STOCKHOLDERS INVESTMENT
    
    $
    328,815
    
    
    $
    530,159
    
    
    $
    82,479
    
    
    $
    (397,570
    )
    
    $
    543,883
 19




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    165,401
    
    
    $
    32,492
    
    
    $
    (1,802
    )
    
    $
    196,091COST OF SALES
    
    
    
    
    
    
    134,875
    
    
    
    26,785
    
    
    
    (1,711
    )
    
    
    159,949Gross Profit
    
    
    
    
    
    
    30,526
    
    
    
    5,707
    
    
    
    (91
    )
    
    
    36,142SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    7,235
    
    
    
    3,028
    
    
    
    (91
    )
    
    
    10,172AMORTIZATION EXPENSE
    
    
    
    
    
    
    140
    
    
    
    
    
    
    
    
    
    
    
    140Operating Income
    
    
    
    
    
    
    23,151
    
    
    
    2,679
    
    
    
    
    
    
    
    25,830OTHER INCOME
    
    
    
    
    
    
    (26
    )
    
    
    (366
    )
    
    
    
    
    
    
    (392
    )INTEREST EXPENSE
    
    
    
    
    
    
    2,953
    
    
    
    362
    
    
    
    
    
    
    
    3,315Income Before Provision for
Income Taxes
    
    
    
    
    
    
    20,224
    
    
    
    2,683
    
    
    
    
    
    
    
    22,907PROVISION FOR INCOME TAXES
    
    
    
    
    
    
    7,883
    
    
    
    839
    
    
    
    
    
    
    
    8,722NET INCOME
    
    $
    
    
    
    $
    12,341
    
    
    $
    1,844
    
    
    $
    
    
    
    $
    14,185
 20




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    287,534
    
    
    $
    63,321
    
    
    $
    (2,349
    )
    
    $
    348,506COST OF SALES
    
    
    
    
    
    
    235,857
    
    
    
    52,414
    
    
    
    (2,159
    )
    
    
    286,112Gross Profit
    
    
    
    
    
    
    51,677
    
    
    
    10,907
    
    
    
    (190
    )
    
    
    62,394SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    13,783
    
    
    
    6,128
    
    
    
    (190
    )
    
    
    19,721AMORTIZATION EXPENSE
    
    
    
    
    
    
    164
    
    
    
    
    
    
    
    
    
    
    
    164Operating Income
    
    
    
    
    
    
    37,730
    
    
    
    4,779
    
    
    
    
    
    
    
    42,509OTHER INCOME
    
    
    
    
    
    
    (34
    )
    
    
    (3,238
    )
    
    
    
    
    
    
    (3,272
    )INTEREST EXPENSE
    
    
    
    
    
    
    4,780
    
    
    
    702
    
    
    
    
    
    
    
    5,482Income Before Provision for
Income Taxes
    
    
    
    
    
    
    32,984
    
    
    
    7,315
    
    
    
    
    
    
    
    40,299PROVISION FOR INCOME TAXES
    
    
    
    
    
    
    12,724
    
    
    
    2,504
    
    
    
    
    
    
    
    15,228NET INCOME
    
    $
    
    
    
    $
    20,260
    
    
    $
    4,811
    
    
    $
    
    
    
    $
    25,071
 21




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2005
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    
    
    
    $
    20,260
    
    
    $
    4,811
    
    
    $
    
    
    
    $
    25,071Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    4,854
    
    
    
    1,046
    
    
    
    
    
    
    
    5,900Noncash amortization of debt financing costs
    
    
    
    
    
    
    306
    
    
    
    66
    
    
    
    
    
    
    
    372Loss on sale of assets
    
    
    
    
    
    
    63
    
    
    
    
    
    
    
    
    
    
    
    63Deferred income tax provision
    
    
    
    
    
    
    
    
    
    
    1,262
    
    
    
    
    
    
    
    1,262Noncash gain on forward exchange contracts
    
    
    
    
    
    
    
    
    
    
    (3,238
    )
    
    
    
    
    
    
    (3,238
    )Change in other operating items
    
    
    
    
    
    
    (9,159
    )
    
    
    637
    
    
    
    
    
    
    
    (8,522
    )Net cash provided by operating activities
    
    
    
    
    
    
    16,324
    
    
    
    4,584
    
    
    
    
    
    
    
    20,908CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, plant and equipment
    
    
    
    
    
    
    (4,795
    )
    
    
    (718
    )
    
    
    
    
    
    
    (5,513
    )Acquisitions and post-acquisition payments,
net of cash received
    
    
    
    
    
    
    (163,766
    )
    
    
    581
    
    
    
    
    
    
    
    (163,185
    )Net cash used in investing activities
    
    
    
    
    
    
    (168,561
    )
    
    
    (137
    )
    
    
    
    
    
    
    (168,698
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repayment of revolving credit facility
    
    
    
    
    
    
    (89,541
    )
    
    
    (8,263
    )
    
    
    
    
    
    
    (97,804
    )Borrowings under revolving credit facility
    
    
    
    
    
    
    157,068
    
    
    
    6,070
    
    
    
    
    
    
    
    163,138Long-term borrowings
    
    
    
    
    
    
    225,733
    
    
    
    
    
    
    
    
    
    
    
    225,733Repayments of long-term borrowings
    
    
    
    
    
    
    (138,560
    )
    
    
    (688
    )
    
    
    
    
    
    
    (139,248
    )Other, net
    
    
    
    
    
    
    (479
    )
    
    
    500
    
    
    
    
    
    
    
    21Net cash provided by (used in) financing
activities
    
    
    
    
    
    
    154,221
    
    
    
    (2,381
    )
    
    
    
    
    
    
    151,840EFFECT OF CURRENCY EXCHANGE RATECHANGES ON CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    2
    
    
    
    (1,509
    )
    
    
    
    
    
    
    (1,507
    )NET INCREASE IN CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    1,986
    
    
    
    557
    
    
    
    
    
    
    
    2,543CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    
    
    
    
    394
    
    
    
    1,002
    
    
    
    
    
    
    
    1,396End of period
    
    $
    
    
    
    $
    2,380
    
    
    $
    1,559
    
    
    $
    
    
    
    $
    3,939
 22




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##### Table of Contents



ITEM 2 
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Company Overview
      23




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##### Table of Contents



Results of Operations
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0Cost of Revenues
    
    
    82.9
    
    
    
    81.6
    
    
    
    83.0
    
    
    
    82.1Gross Profit
    
    
    17.1
    
    
    
    18.4
    
    
    
    17.0
    
    
    
    17.9Selling, General and Administrative Expenses
    
    
    5.7
    
    
    
    5.2
    
    
    
    5.7
    
    
    
    5.7Amortization Expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Income
    
    
    11.4
    
    
    
    13.2
    
    
    
    11.3
    
    
    
    12.2Other Expense (Income)
    
    
    (0.6
    )
    
    
    (0.2
    )
    
    
    (0.3
    )
    
    
    (1.0
    )Interest Expense
    
    
    1.7
    
    
    
    1.7
    
    
    
    1.7
    
    
    
    1.6Loss on Early Extinguishment of Debt
    
    
    0.1
    
    
    
    
    
    
    
    0.1
    
    
    
    Income Before Provision for Income Taxes
    
    
    10.2
    
    
    
    11.7
    
    
    
    9.8
    
    
    
    11.6Provision for Income Taxes
    
    
    3.6
    
    
    
    4.5
    
    
    
    3.6
    
    
    
    4.4Net Income
    
    
    6.6
    %
    
    
    7.2
    %
    
    
    6.2
    %
    
    
    7.2
 Three Months Ended June 30, 2006 Compared to Three Months Ended June 30, 2005
 Revenues
 Gross Profit
 Selling, General and Administrative Expenses Share-Based
Payment
 Amortization Expense
 Other Expense (Income)
 24




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##### Table of Contents



Interest Expense
 Loss on Early Extinguishment of Debt
 Provision for Income Taxes
 Net Income
 Six Months Ended June 30, 2006 Compared to Six Months Ended June 30, 2005
 Revenues
 Gross Profit
 Selling, General and Administrative Expenses
 Amortization Expense
 Other Expense (Income)
 Interest Expense
 25




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##### Table of Contents



Loss on Early Extinguishment of Debt
 Provision for Income Taxes
 Net Income
 Liquidity and Capital Resources
 Cash Flows
    Debt and Credit Facilities
    Debtors Accounting for a Modification or Exchange of Debt
Instruments,
  26




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##### Table of Contents



Maximum TotalQuarters(s) Ending
    
    Leverage Ratio12/31/05 through 09/30/06
    
    2.75 to 1.0012/31/06 and each fiscal quarter thereafter
    
    2.50 to 1.00
   Forward-Looking Statements
  27




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##### Table of Contents



ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4  CONTROLS AND PROCEDURES
   28




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##### Table of Contents



PART II. OTHER INFORMATION
 COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
       a.
    
    The following directors were elected for terms expiring at the annual meeting in 2009:
 Votes For
    
    Votes WithheldMervin Dunn
    
    
    19,520,870
    
    
    
    879,094S.A. Johnson
    
    
    19,153,202
    
    
    
    1,246,762
 David R. Bovee and Scott D. Rued continue to serve as directors of the Company for terms
expiring at the annual meeting in 2008; and Scott C. Arves, Robert C. Griffin and Richard A.
Snell continue to serve as directors of the Company for terms expiring at the annual meeting in
2007.b.
    
    The Board of Directors removed from the ballot a proposed amendment to the Companys Amended
and Restated Equity Incentive Plan.c.
    
    Deloitte & Touche LLP was ratified as the Companys independent registered public accounting
firm for the fiscal year ending December 31, 2006:
 Shares Voted
    
    Shares VotedFor Proposal
    
    Against Proposal
    
    Abstain
    
    Broker Non-Votes19,423,710
    
    971,555
    
    4,669
    
    0
 29




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##### Table of Contents



10.1
    
    Change in Control & Non-Competition Agreement dated April 5, 2006
with Mervin Dunn, (incorporated by reference to the Companys current
report on Form 8-K (File No. 000-50890) filed on April 7, 2006).10.2
    
    Change in Control & Non-Competition Agreement dated April 5, 2006
with Gerald L. Armstrong, (incorporated by reference to the Companys
current report on Form 8-K (File No. 000-50890) filed on April 7,
2006).10.3
    
    Change in Control & Non-Competition Agreement dated April 5, 2006
with Chad M. Utrup, (incorporated by reference to the Companys
current report on Form 8-K (File No. 000-50890) filed on April 7,
2006).10.4
    
    Change in Control & Non-Competition Agreement dated April 5, 2006
with James F. Williams, (incorporated by reference to the Companys
current report on Form 8-K (File No. 000-50890) filed on April 7,
2006).31.1
    
    Certification by Mervin Dunn, President and Chief Executive Officer.31.2
    
    Certification by Chad M. Utrup, Chief Financial Officer.32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 30




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##### Table of Contents



SIGNATURE
  COMMERCIAL VEHICLE GROUP, INC.Date:  August 4, 2006
    By
    /s/ Chad M. UtrupChad M. UtrupChief Financial Officer 31