##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 000-50890
 COMMERCIAL VEHICLE GROUP, INC.
  Delaware
    
    41-1990662(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)7800 Walton Parkway
    
    43054New Albany, Ohio
    
    (Zip Code)(Address of principal executive offices)
 (614) 289-5360
 Not Applicable
  þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check is a smaller reporting company)
  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 NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED)
    
    
    1CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2008
(UNAUDITED) AND DECEMBER 31, 2007 (UNAUDITED)
    
    
    2CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED)
    
    
    3NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
    
    
    4ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    24ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    31ITEM 4 CONTROLS AND PROCEDURES
    
    
    31PART II OTHER INFORMATION
    
    
    32SIGNATURES
    
    
    34Certification of CEOCertification of CFOCEO Certification Pursuant to Section 906CFO Certification 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
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)(In thousands, except per share amounts)REVENUES
    
    $
    192,860
    
    
    $
    160,918
    
    
    $
    599,104
    
    
    $
    518,285COST OF REVENUES
    
    
    175,952
    
    
    
    143,099
    
    
    
    538,023
    
    
    
    457,578Gross Profit
    
    
    16,908
    
    
    
    17,819
    
    
    
    61,081
    
    
    
    60,707SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    15,983
    
    
    
    14,665
    
    
    
    47,761
    
    
    
    44,829GAIN ON SALE OF LONG-LIVED ASSET
    
    
    
    
    
    
    
    
    
    
    (6,075
    )
    
    
    AMORTIZATION EXPENSE
    
    
    379
    
    
    
    169
    
    
    
    1,065
    
    
    
    531RESTRUCTURING CHARGES
    
    
    
    
    
    
    182
    
    
    
    
    
    
    
    1,180Operating Income
    
    
    546
    
    
    
    2,803
    
    
    
    18,330
    
    
    
    14,167OTHER (INCOME) EXPENSE
    
    
    (72
    )
    
    
    4,339
    
    
    
    5,840
    
    
    
    4,556INTEREST EXPENSE
    
    
    3,708
    
    
    
    3,242
    
    
    
    11,407
    
    
    
    10,415LOSS ON EARLY EXTINGUISHMENT OF DEBT
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    149(Loss) Income Before Provision for Income Taxes
    
    
    (3,090
    )
    
    
    (4,778
    )
    
    
    1,083
    
    
    
    (953
    )(BENEFIT) PROVISION FOR INCOME TAXES
    
    
    (487
    )
    
    
    (2,096
    )
    
    
    131
    
    
    
    (999
    )NET (LOSS) INCOME
    
    $
    (2,603
    )
    
    $
    (2,682
    )
    
    $
    952
    
    
    $
    46(LOSS) EARNINGS PER COMMON SHARE:Basic
    
    $
    (0.12
    )
    
    $
    (0.13
    )
    
    $
    0.04
    
    
    $
    0.00Diluted
    
    $
    (0.12
    )
    
    $
    (0.13
    )
    
    $
    0.04
    
    
    $
    0.00WEIGHTED AVERAGE SHARES OUTSTANDING:Basic
    
    
    21,537
    
    
    
    21,438
    
    
    
    21,537
    
    
    
    21,413Diluted
    
    
    21,537
    
    
    
    21,438
    
    
    
    21,700
    
    
    
    21,640
  1




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2008
    
    
    2007(Unaudited)
    
    
    (Unaudited)(In thousands except share and per share amounts)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    7,922
    
    
    $
    9,867Accounts receivable, net of reserve for doubtful accounts of $3,703
and $3,758, respectively
    
    
    128,053
    
    
    
    107,687Inventories, net
    
    
    97,456
    
    
    
    96,385Prepaid expenses
    
    
    12,020
    
    
    
    16,508Deferred income taxes
    
    
    17,218
    
    
    
    12,989Total current assets
    
    
    262,669
    
    
    
    243,436PROPERTY, PLANT AND EQUIPMENT, net
    
    
    94,119
    
    
    
    98,258GOODWILL
    
    
    153,273
    
    
    
    151,189INTANGIBLE ASSETS, net of accumulated amortization of $2,723 and
$1,687, respectively
    
    
    96,239
    
    
    
    97,575OTHER ASSETS, net
    
    
    11,706
    
    
    
    8,631TOTAL ASSETS
    
    $
    618,006
    
    
    $
    599,089LIABILITIES AND STOCKHOLDERS INVESTMENTCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    120
    
    
    $
    116Accounts payable
    
    
    100,955
    
    
    
    93,033Accrued liabilities
    
    
    36,595
    
    
    
    33,115Total current liabilities
    
    
    137,670
    
    
    
    126,264LONG-TERM DEBT, net of current maturities
    
    
    159,510
    
    
    
    159,609DEFERRED TAX LIABILITIES
    
    
    27,770
    
    
    
    27,076PENSION AND OTHER POST-RETIREMENT BENEFITS
    
    
    15,456
    
    
    
    18,335OTHER LONG-TERM LIABILITIES
    
    
    11,544
    
    
    
    2,470Total liabilities
    
    
    351,950
    
    
    
    333,754COMMITMENTS AND CONTINGENCIES (Note 12)STOCKHOLDERS INVESTMENT:Common stock $.01 par value; 30,000,000 shares authorized; 21,536,814
and 21,536,814 shares issued and outstanding, respectively
    
    
    215
    
    
    
    215Treasury stock purchased from employees; 28,153 shares
    
    
    (414
    )
    
    
    (414
    )Additional paid-in capital
    
    
    180,321
    
    
    
    177,421Retained earnings
    
    
    89,770
    
    
    
    88,818Accumulated other comprehensive loss
    
    
    (3,836
    )
    
    
    (705
    )Total stockholders investment
    
    
    266,056
    
    
    
    265,335TOTAL LIABILITIES AND STOCKHOLDERS INVESTMENT
    
    $
    618,006
    
    
    $
    599,089
  2




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months EndedSeptember 30,2008
    
    
    2007(Unaudited)
    
    
    (Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    952
    
    
    $
    46Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    14,165
    
    
    
    11,789Noncash amortization of debt financing costs
    
    
    685
    
    
    
    644Loss on early extinguishment of debt
    
    
    
    
    
    
    149Share-based compensation expense
    
    
    2,900
    
    
    
    2,246(Gain) loss on sale of long-lived assets
    
    
    (5,945
    )
    
    
    133Deferred income tax (benefit) provision
    
    
    (3,951
    )
    
    
    1,681Noncash loss on forward exchange contracts
    
    
    5,786
    
    
    
    5,048Change in other operating items
    
    
    (7,588
    )
    
    
    9,214Net cash provided by operating activities
    
    
    7,004
    
    
    
    30,950CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, plant and equipment
    
    
    (10,978
    )
    
    
    (11,229
    )Proceeds from disposal/sale of property, plant and equipment
    
    
    7,470
    
    
    
    102Post-acquisition and acquisitions payments, net of cash received
    
    
    (2,083
    )
    
    
    (817
    )Other assets and liabilities
    
    
    (956
    )
    
    
    (498
    )Net cash used in investing activities
    
    
    (6,547
    )
    
    
    (12,442
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock under equity incentive plans
    
    
    
    
    
    
    463Excess tax benefit from equity incentive plans
    
    
    
    
    
    
    73Repayment of revolving credit facility
    
    
    (146,500
    )
    
    
    (72,984
    )Borrowings under revolving credit facility
    
    
    146,500
    
    
    
    82,987Repayments of long-term borrowings
    
    
    
    
    
    
    (10,295
    )Payments on capital lease obligations
    
    
    (96
    )
    
    
    (94
    )Debt issuance costs and other, net
    
    
    (251
    )
    
    
    Net cash (used in) provided by financing activities
    
    
    (347
    )
    
    
    150EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS
    
    
    (2,055
    )
    
    
    (404
    )NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (1,945
    )
    
    
    18,254CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    9,867
    
    
    
    19,821End of period
    
    $
    7,922
    
    
    $
    38,075SUPPLEMENTAL CASH FLOW INFORMATION:Cash paid for interest
    
    $
    12,651
    
    
    $
    12,790Cash received for income taxes, net
    
    $
    (4,031
    )
    
    $
    (4,371
    )
  3




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##### Table of Contents



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
 Fair Value Measurements
  The Fair Value Option for Financial Assets and
Financial Liabilities Accounting for Certain Investments
in Debt and Equity Securities
 Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106, and 132(R)
 4




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##### Table of Contents



Amendment of FASB Interpretation No. 39. Offsetting of Amounts Related to Certain Contracts
 Business Combinations Noncontrolling Interests in Consolidated Finance Statements
 Disclosures about Derivative Instruments and Hedging
Activities an Amendment of FASB No. 133. S Accounting for Derivative Instruments and Hedging Activities.
 Determination of the Useful Life of Intangible
Assets Goodwill and Other Intangible Assets
 Determining
Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities
 5




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##### Table of Contents



3. Fair Value Measurement
       Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Derivative assets (1)
    
    $
    1,950
    
    
    $
    
    
    
    $
    1,950
    
    
    $
    Deferred compensation (2)
    
    
    1,435
    
    
    
    1,435
    
    
    
    
    
    
    
    Total assets
    
    $
    3,385
    
    
    $
    1,435
    
    
    $
    1,950
    
    
    $
    Derivative liabilities (1)
    
    $
    9,233
    
    
    $
    
    
    
    $
    9,233
    
    
    $
    
 
 (1)
    
    Based on observable market transactions of spot and forward rates.(2)
    
    Deferred compensation includes mutual funds and cash equivalents for payment of certain non-qualified
benefits for employees. 4. Restructuring Activities
 Accounting for Costs Associated with Exit or Disposal
Activities
 6




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##### Table of Contents



EmployeeCostsBalance  December 31, 2007
    
    $
    646Provision adjustment
    
    
    (206
    )Deductions for payments made
    
    
    (416
    )Balance  September 30, 2008
    
    $
    24
  5. Share-Based Compensation
 Stock Option Grants and Restricted Stock Awards
       Weighted-AverageGrant-Date FairShares (000s)
    
    
    ValueNonvested at December 31, 2007
    
    
    520
    
    
    $
    16.94Granted
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    Forfeited
    
    
    (7
    )
    
    
    14.94Nonvested at September 30, 2008
    
    
    513
    
    
    $
    16.96
 7




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##### Table of Contents



Weighted-AverageWeighted-
    
    
    Remaining
    
    
    AggregateOptions
    
    
    Average
    
    
    Contractual
    
    
    IntrinsicStock Options
    
    (000s)
    
    
    Exercise Price
    
    
    Life (Years)
    
    
    Value (000s)Outstanding at December 31, 2007
    
    
    750
    
    
    $
    12.45
    
    
    
    6.5
    
    
    $
    2,013Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Oustanding at September 30, 2008
    
    
    750
    
    
    $
    12.45
    
    
    
    5.8
    
    
    $
    1,058Exercisable at September 30, 2008
    
    
    750
    
    
    $
    12.45
    
    
    
    5.8
    
    
    $
    1,058
  6. Stockholders Investment
 Common Stock 
 Preferred Stock 
 Earnings Per Share  Earnings per Share Share Based Payment
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net (loss) income applicable to common shareholders 
basic and diluted
    
    $
    (2,603
    )
    
    $
    (2,682
    )
    
    $
    952
    
    
    $
    46Weighted average number of common shares outstanding
    
    
    21,537
    
    
    
    21,438
    
    
    
    21,537
    
    
    
    21,413Dilutive effect of outstanding stock options and restricted stock
grants after application of the treasury stock method
    
    
    
    
    
    
    
    
    
    
    163
    
    
    
    227Dilutive shares outstanding
    
    
    21,537
    
    
    
    21,438
    
    
    
    21,700
    
    
    
    21,640Basic (loss) earnings per share
    
    $
    (0.12
    )
    
    $
    (0.13
    )
    
    $
    0.04
    
    
    $
    0.00Diluted
(loss) earnings per share
    
    $
    (0.12
    )
    
    $
    (0.13
    )
    
    $
    0.04
    
    
    $
    0.00
  Dividends 
 8




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##### Table of Contents



7. Accounts Receivable
  8. Inventories
  September 30,
    
    
    December 31,2008
    
    
    2007Raw materials
    
    $
    60,505
    
    
    $
    62,129Work in process
    
    
    23,236
    
    
    
    19,811Finished goods
    
    
    19,626
    
    
    
    19,862Less excess and obsolete
    
    
    (5,911
    )
    
    
    (5,417
    )$
    97,456
    
    
    $
    96,385
  9. Goodwill and Intangible Assets
 Goodwill and Intangible Assets Accounting for
Impairment or Disposal of Long-Lived Assets.
   9




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##### Table of Contents



September 30, 2008
    
    
    December 31, 2007Weighted-
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted-Average
    
    
    Gross
    
    
    
    
    
    
    Net
    
    
    Average
    
    

Gross
    

    

    

    
    
    NetAmortization
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Amortization
    
    
    Carrying
    
    
    Accumulated
    
    
    CarryingPeriod
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    Period
    
    
    Amount
    
    
    Amortization
    
    
    AmountDefinite-lived intangible assets:Tradenames/Trademarks
    
    30 years
    
    $
    9,790
    
    
    $
    (1,160
    )
    
    $
    8,630
    
    
    30 years
    
    $
    9,790
    
    
    $
    (915
    )
    
    $
    8,875Licenses
    
    7 years
    
    
    438
    
    
    
    (359
    )
    
    
    79
    
    
    7 years
    
    
    438
    
    
    
    (313
    )
    
    
    125Customer relationships
    
    15 years
    
    
    13,846
    
    
    
    (1,145
    )
    
    
    12,701
    
    
    15 years
    
    
    14,234
    
    
    
    (459
    )
    
    
    13,775Non-compete agreement
    
    1.5 years
    
    
    88
    
    
    
    (59
    )
    
    
    29
    
    
    
    N/A
    
    
    
    
    
    
    
    
    
    
    
    $
    24,162
    
    
    $
    (2,723
    )
    
    $
    21,439
    
    
    
    
    
    
    $
    24,462
    
    
    $
    (1,687
    )
    
    $
    22,775Indefinite-lived intangible assets:Goodwill
    
    
    
    
    
    $
    153,273
    
    
    $
    
    
    
    $
    153,273
    
    
    
    
    
    
    $
    151,189
    
    
    $
    
    
    
    $
    151,189Customer relationships
    
    
    
    
    
    
    74,800
    
    
    
    
    
    
    
    74,800
    
    
    
    
    
    
    
    74,800
    
    
    
    
    
    
    
    74,800$
    228,073
    
    
    $
    
    
    
    $
    228,073
    
    
    
    
    
    
    $
    225,989
    
    
    $
    
    
    
    $
    225,989Total consolidated goodwill and intangible assets
    
    
    
    
    
    
    
    
    
    
    
    $
    249,512
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    248,764
   Fiscal Year Ended
    
    EstimatedDecember 31,
    
    Amortization Expense2008
    
    $
    1,3792009
    
    $
    1,3272010
    
    $
    1,2492011
    
    $
    1,2492012
    
    $
    1,2492013
    
    $
    1,249
 10




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##### Table of Contents



Balance  December 31, 2007
    
    $
    151,189Currency translation adjustment
    
    
    (1,766
    )Post-acquisition adjustments
    
    
    3,850Balance  September 30, 2008
    
    $
    153,273
  10. Debt
  September 30,
    
    
    December 31,2008
    
    
    2007Revolving credit facilities bore interest at a weighted average of 7.9%
as of September 30, 2008 and 8.5% as of December 31, 2007
    
    $
    9,500
    
    
    $
    9,5008.0% senior notes due 2013
    
    
    150,000
    
    
    
    150,000Other
    
    
    130
    
    
    
    225159,630
    
    
    
    159,725Less current maturities
    
    
    120
    
    
    
    116$
    159,510
    
    
    $
    159,609
 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
   11




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Terms, Covenants and Compliance Status 
 11. Income Taxes
  Accounting for Uncertainty in Income Taxes
   12. Commitments and Contingencies
 Warranty 
 Balance  December 31, 2007
    
    $
    3,958Additional provisions recorded
    
    
    2,608Deduction for payments made
    
    
    (2,674
    )Currency translation adjustment
    
    
    109Balance  September 30, 2008
    
    $
    4,001
 12




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##### Table of Contents



Leases
 Guarantees
 Foreign Currency Forward Exchange Contracts  Accounting for
Derivative Instruments and Hedging Activities.
  U.S. $Local Currency
    
    U.S. $
    
    Equivalent FairAmount
    
    Equivalent
    
    ValueContracts to sell currencies:Eurodollar
    
    
    34,777
    
    
    
    45,678
    
    
    
    51,242Swedish kronor
    
    
    3,000
    
    
    
    425
    
    
    
    454Japanese yen
    
    
    2,285,000
    
    
    
    21,143
    
    
    
    22,785Australian dollar
    
    
    1,200
    
    
    
    948
    
    
    
    993
  Litigation 
 13. Pension and Other Post-Retirement Benefit Plans
  13




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##### Table of Contents



Other Post-Non-U.S. Pension
    
    
    RetirementU.S. Pension Plans
    
    
    Plans
    
    
    Benefit Plans2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Service cost
    
    $
    69
    
    
    $
    85
    
    
    $
    
    
    
    $
    
    
    
    $
    5
    
    
    $
    1Interest cost
    
    
    459
    
    
    
    429
    
    
    
    529
    
    
    
    631
    
    
    
    37
    
    
    
    43Expected return on plan assets
    
    
    (497
    )
    
    
    (389
    )
    
    
    (412
    )
    
    
    (603
    )
    
    
    
    
    
    
    Recognized actuarial loss
    
    
    (5
    )
    
    
    
    
    
    
    51
    
    
    
    51
    
    
    
    (6
    )
    
    
    20Net periodic benefit cost
    
    
    26
    
    
    
    125
    
    
    
    168
    
    
    
    79
    
    
    
    36
    
    
    
    64Special termination benefits
    
    
    
    
    
    
    51
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    111Net benefit cost
    
    $
    26
    
    
    $
    176
    
    
    $
    168
    
    
    $
    79
    
    
    $
    36
    
    
    $
    175
  Other Post-Non-U.S. Pension
    
    
    RetirementU.S. Pension Plans
    
    
    Plans
    
    
    Benefit Plans2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Service cost
    
    $
    254
    
    
    $
    335
    
    
    $
    
    
    
    $
    
    
    
    $
    14
    
    
    $
    14Interest cost
    
    
    1,372
    
    
    
    1,310
    
    
    
    1,911
    
    
    
    1,826
    
    
    
    112
    
    
    
    111Expected return on plan assets
    
    
    (1,483
    )
    
    
    (1,151
    )
    
    
    (1,481
    )
    
    
    (1,740
    )
    
    
    
    
    
    
    Recognized actuarial loss
    
    
    (9
    )
    
    
    
    
    
    
    185
    
    
    
    145
    
    
    
    (17
    )
    
    
    20Net periodic benefit cost
    
    
    134
    
    
    
    494
    
    
    
    615
    
    
    
    231
    
    
    
    109
    
    
    
    145Special termination benefits
    
    
    
    
    
    
    161
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    303Net benefit cost
    
    $
    134
    
    
    $
    655
    
    
    $
    615
    
    
    $
    231
    
    
    $
    109
    
    
    $
    448
  14. Comprehensive Income
 Reporting Comprehensive Income,
 Foreign currency translation adjustment
    
    $
    1,573Pension liability
    
    
    (5,406
    )Unrealized loss on derivatives
    
    
    (3
    )$
    (3,836
    )
 14




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##### Table of Contents



2008
    
    
    2007Net income
    
    $
    952
    
    
    $
    46Other comprehensive income:Foreign currency translation adjustment
    
    
    (3,128
    )
    
    
    2,851Unrealized loss on derivative instruments
    
    
    (3
    )
    
    
    (1,085
    )Comprehensive (loss) income
    
    $
    (2,179
    )
    
    $
    1,812
 15. Related Party Transactions
   16. Consolidating Guarantor and Non-Guarantor Financial Information
   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 THREE MONTHS ENDED SEPTEMBER 30, 2008
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    147,665
    
    
    $
    53,617
    
    
    $
    (8,422
    )
    
    $
    192,860COST OF REVENUES
    
    
    
    
    
    
    135,798
    
    
    
    48,240
    
    
    
    (8,086
    )
    
    
    175,952Gross Profit
    
    
    
    
    
    
    11,867
    
    
    
    5,377
    
    
    
    (336
    )
    
    
    16,908SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    11,487
    
    
    
    4,762
    
    
    
    (266
    )
    
    
    15,983AMORTIZATION EXPENSE
    
    
    
    
    
    
    103
    
    
    
    276
    
    
    
    
    
    
    
    379Operating Income
    
    
    
    
    
    
    277
    
    
    
    339
    
    
    
    (70
    )
    
    
    546OTHER EXPENSE (INCOME)
    
    
    
    
    
    
    3,862
    
    
    
    (3,934
    )
    
    
    
    
    
    
    (72
    )INTEREST EXPENSE
    
    
    
    
    
    
    3,595
    
    
    
    870
    
    
    
    (757
    )
    
    
    3,708(Loss) Income Before Provision for
Income Taxes
    
    
    
    
    
    
    (7,180
    )
    
    
    3,403
    
    
    
    687
    
    
    
    (3,090
    )(BENEFIT) PROVISION FOR INCOME TAXES
    
    
    
    
    
    
    (2,022
    )
    
    
    1,535
    
    
    
    
    
    
    
    (487
    )NET (LOSS) INCOME
    
    $
    
    
    
    $
    (5,158
    )
    
    $
    1,868
    
    
    $
    687
    
    
    $
    (2,603
    )
 16




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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 NINE MONTHS ENDED SEPTEMBER 30, 2008
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    436,695
    
    
    $
    186,261
    
    
    $
    (23,852
    )
    
    $
    599,104COST OF REVENUES
    
    
    
    
    
    
    399,215
    
    
    
    161,870
    
    
    
    (23,062
    )
    
    
    538,023Gross Profit
    
    
    
    
    
    
    37,480
    
    
    
    24,391
    
    
    
    (790
    )
    
    
    61,081SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    33,713
    
    
    
    14,704
    
    
    
    (656
    )
    
    
    47,761GAIN ON SALE OF LONG-LIVED ASSETS
    
    
    
    
    
    
    (6,075
    )
    
    
    
    
    
    
    
    
    
    
    (6,075
    )AMORTIZATION EXPENSE
    
    
    
    
    
    
    310
    
    
    
    755
    
    
    
    
    
    
    
    1,065Operating Income
    
    
    
    
    
    
    9,532
    
    
    
    8,932
    
    
    
    (134
    )
    
    
    18,330OTHER EXPENSE
    
    
    
    
    
    
    161
    
    
    
    5,679
    
    
    
    
    
    
    
    5,840INTEREST EXPENSE
    
    
    
    
    
    
    11,010
    
    
    
    1,930
    
    
    
    (1,533
    )
    
    
    11,407(Loss) Income Before Provision for
Income Taxes
    
    
    
    
    
    
    (1,639
    )
    
    
    1,323
    
    
    
    1,399
    
    
    
    1,083PROVISION (BENEFIT) FOR INCOME TAXES
    
    
    
    
    
    
    245
    
    
    
    (114
    )
    
    
    
    
    
    
    131NET (LOSS) INCOME
    
    $
    
    
    
    $
    (1,884
    )
    
    $
    1,437
    
    
    $
    1,399
    
    
    $
    952
 17




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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 SEPTEMBER 30, 2008
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    
    
    
    $
    1,490
    
    
    $
    6,432
    
    
    $
    
    
    
    $
    7,922Accounts receivable, net
    
    
    
    
    
    
    98,955
    
    
    
    29,098
    
    
    
    
    
    
    
    128,053Inventories, net
    
    
    
    
    
    
    58,514
    
    
    
    39,685
    
    
    
    (743
    )
    
    
    97,456Prepaid expenses and other current assets
    
    
    
    
    
    
    6,181
    
    
    
    5,839
    
    
    
    
    
    
    
    12,020Deferred income taxes
    
    
    
    
    
    
    17,753
    
    
    
    800
    
    
    
    (1,335
    )
    
    
    17,218Total current assets
    
    
    
    
    
    
    182,893
    
    
    
    81,854
    
    
    
    (2,078
    )
    
    
    262,669PROPERTY, PLANT AND
EQUIPMENT, net
    
    
    
    
    
    
    81,705
    
    
    
    12,414
    
    
    
    
    
    
    
    94,119INVESTMENT IN SUBSIDIARIES
    
    
    423,364
    
    
    
    (106,034
    )
    
    
    44,799
    
    
    
    (362,129
    )
    
    
    GOODWILL
    
    
    
    
    
    
    113,967
    
    
    
    39,306
    
    
    
    
    
    
    
    153,273INTANGIBLE ASSETS, net
    
    
    
    
    
    
    83,508
    
    
    
    12,731
    
    
    
    
    
    
    
    96,239OTHER ASSETS, net
    
    
    
    
    
    
    13,600
    
    
    
    5,282
    
    
    
    (7,176
    )
    
    
    11,706TOTAL ASSETS
    
    $
    423,364
    
    
    $
    369,639
    
    
    $
    196,386
    
    
    $
    (371,383
    )
    
    $
    618,006LIABILITIES AND STOCKHOLDERS INVESTMENTCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    
    
    
    $
    120
    
    
    $
    
    
    
    $
    
    
    
    $
    120Accounts payable
    
    
    
    
    
    
    71,180
    
    
    
    29,775
    
    
    
    
    
    
    
    100,955Accrued liabilities
    
    
    
    
    
    
    27,264
    
    
    
    12,200
    
    
    
    (2,869
    )
    
    
    36,595Total current liabilities
    
    
    
    
    
    
    98,564
    
    
    
    41,975
    
    
    
    (2,869
    )
    
    
    137,670LONG-TERM DEBT, net of current maturities
    
    
    
    
    
    
    159,490
    
    
    
    25,736
    
    
    
    (25,716
    )
    
    
    159,510DEFERRED TAX LIABILITIES
    
    
    
    
    
    
    35,762
    
    
    
    (816
    )
    
    
    (7,176
    )
    
    
    27,770PENSION AND OTHER POST-RETIREMENT BENEFITS
    
    
    
    
    
    
    5,566
    
    
    
    9,890
    
    
    
    
    
    
    
    15,456OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    1,111
    
    
    
    10,433
    
    
    
    
    
    
    
    11,544Total liabilities
    
    
    
    
    
    
    300,493
    
    
    
    87,218
    
    
    
    (35,761
    )
    
    
    351,950STOCKHOLDERS INVESTMENT
    
    
    423,364
    
    
    
    69,146
    
    
    
    109,168
    
    
    
    (335,622
    )
    
    
    266,056TOTAL LIABILITIES AND
STOCKHOLDERS INVESTMENT
    
    $
    423,364
    
    
    $
    369,639
    
    
    $
    196,386
    
    
    $
    (371,383
    )
    
    $
    618,006
 18




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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 NINE MONTHS ENDED SEPTEMBER 30, 2008
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss) income
    
    $
    
    
    
    $
    (1,884
    )
    
    $
    1,437
    
    
    $
    1,399
    
    
    $
    952Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    10,678
    
    
    
    3,487
    
    
    
    
    
    
    
    14,165Noncash amortization of debt financing costs
    
    
    
    
    
    
    685
    
    
    
    
    
    
    
    
    
    
    
    685Stock-based compensation expense
    
    
    
    
    
    
    2,900
    
    
    
    
    
    
    
    
    
    
    
    2,900Gain on sale of long-lived assets
    
    
    
    
    
    
    (5,940
    )
    
    
    (5
    )
    
    
    
    
    
    
    (5,945
    )Deferred income tax benefit
    
    
    
    
    
    
    (1,833
    )
    
    
    (2,118
    )
    
    
    
    
    
    
    (3,951
    )Noncash loss on forward exchange contracts
    
    
    
    
    
    
    
    
    
    
    5,786
    
    
    
    
    
    
    
    5,786Change in other operating items
    
    
    
    
    
    
    (3,993
    )
    
    
    (2,195
    )
    
    
    (1,400
    )
    
    
    (7,588
    )Net cash provided by operating activities
    
    
    
    
    
    
    613
    
    
    
    6,392
    
    
    
    (1
    )
    
    
    7,004CASH FLOWS FROM INVESTING
ACTIVITIES:Purchases of property, plant and equipment
    
    
    
    
    
    
    (7,809
    )
    
    
    (3,169
    )
    
    
    
    
    
    
    (10,978
    )Proceeds from disposal/sale of property, plant
and equipment
    
    
    
    
    
    
    7,450
    
    
    
    20
    
    
    
    
    
    
    
    7,470Post-acquisition and acquisitions payments, net
    
    
    
    
    
    
    (181
    )
    
    
    (1,902
    )
    
    
    
    
    
    
    (2,083
    )Other asset and liabilities
    
    
    
    
    
    
    (957
    )
    
    
    
    
    
    
    1
    
    
    
    (956
    )Net cash used in investing activities
    
    
    
    
    
    
    (1,497
    )
    
    
    (5,051
    )
    
    
    1
    
    
    
    (6,547
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repayment of revolving credit facility
    
    
    
    
    
    
    (145,500
    )
    
    
    (1,000
    )
    
    
    
    
    
    
    (146,500
    )Borrowings under revolving credit facility
    
    
    
    
    
    
    145,500
    
    
    
    1,000
    
    
    
    
    
    
    
    146,500Payments on capital lease obligations
    
    
    
    
    
    
    (86
    )
    
    
    (10
    )
    
    
    
    
    
    
    (96
    )Other, net
    
    
    
    
    
    
    (251
    )
    
    
    
    
    
    
    
    
    
    
    (251
    )Net cash used in financing activities
    
    
    
    
    
    
    (337
    )
    
    
    (10
    )
    
    
    
    
    
    
    (347
    )EFFECT OF CURRENCY EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    1,362
    
    
    
    (3,417
    )
    
    
    
    
    
    
    (2,055
    )NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
    
    
    
    
    
    
    141
    
    
    
    (2,086
    )
    
    
    
    
    
    
    (1,945
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    
    
    
    
    1,349
    
    
    
    8,518
    
    
    
    
    
    
    
    9,867End of period
    
    $
    
    
    
    $
    1,490
    
    
    $
    6,432
    
    
    $
    
    
    
    $
    7,922
 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 SEPTEMBER 30, 2007
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    123,819
    
    
    $
    40,029
    
    
    $
    (2,930
    )
    
    $
    160,918COST OF REVENUES
    
    
    
    
    
    
    111,832
    
    
    
    33,776
    
    
    
    (2,509
    )
    
    
    143,099Gross Profit
    
    
    
    
    
    
    11,987
    
    
    
    6,253
    
    
    
    (421
    )
    
    
    17,819SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    10,972
    
    
    
    3,923
    
    
    
    (230
    )
    
    
    14,665AMORTIZATION EXPENSE
    
    
    
    
    
    
    103
    
    
    
    66
    
    
    
    
    
    
    
    169RESTRUCTURING CHARGES
    
    
    
    
    
    
    182
    
    
    
    
    
    
    
    
    
    
    
    182Operating Income
    
    
    
    
    
    
    730
    
    
    
    2,264
    
    
    
    (191
    )
    
    
    2,803OTHER (INCOME) EXPENSE
    
    
    
    
    
    
    (115
    )
    
    
    4,454
    
    
    
    
    
    
    
    4,339INTEREST EXPENSE (INCOME)
    
    
    
    
    
    
    3,268
    
    
    
    (26
    )
    
    
    
    
    
    
    3,242(Loss) Before Income Taxes
    
    
    
    
    
    
    (2,423
    )
    
    
    (2,164
    )
    
    
    (191
    )
    
    
    (4,778
    )BENEFIT FOR INCOME TAXES
    
    
    
    
    
    
    (1,088
    )
    
    
    (1,008
    )
    
    
    
    
    
    
    (2,096
    )NET LOSS
    
    $
    
    
    
    $
    (1,335
    )
    
    $
    (1,156
    )
    
    $
    (191
    )
    
    $
    (2,682
    )
 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 NINE MONTHS ENDED SEPTEMBER 30, 2007
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    401,049
    
    
    $
    125,882
    
    
    $
    (8,646
    )
    
    $
    518,285COST OF REVENUES
    
    
    
    
    
    
    358,656
    
    
    
    106,447
    
    
    
    (7,525
    )
    
    
    457,578Gross Profit
    
    
    
    
    
    
    42,393
    
    
    
    19,435
    
    
    
    (1,121
    )
    
    
    60,707SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    33,981
    
    
    
    11,640
    
    
    
    (792
    )
    
    
    44,829AMORTIZATION EXPENSE
    
    
    
    
    
    
    310
    
    
    
    221
    
    
    
    
    
    
    
    531RESTRUCTURING CHARGES
    
    
    
    
    
    
    1,180
    
    
    
    
    
    
    
    
    
    
    
    1,180Operating Income
    
    
    
    
    
    
    6,922
    
    
    
    7,574
    
    
    
    (329
    )
    
    
    14,167OTHER (INCOME) EXPENSE
    
    
    
    
    
    
    (471
    )
    
    
    5,027
    
    
    
    
    
    
    
    4,556INTEREST EXPENSE
    
    
    
    
    
    
    9,828
    
    
    
    587
    
    
    
    
    
    
    
    10,415LOSS ON EARLY EXTINGUISHMENT OF DEBT
    
    
    
    
    
    
    24
    
    
    
    125
    
    
    
    
    
    
    
    149(Loss) Income Before Income Taxes
    
    
    
    
    
    
    (2,459
    )
    
    
    1,835
    
    
    
    (329
    )
    
    
    (953
    )(BENEFIT) PROVISION FOR INCOME TAXES
    
    
    
    
    
    
    (1,050
    )
    
    
    51
    
    
    
    
    
    
    
    (999
    )NET (LOSS) INCOME
    
    $
    
    
    
    $
    (1,409
    )
    
    $
    1,784
    
    
    $
    (329
    )
    
    $
    46
 21




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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, 2007
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(In thousands)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    
    
    
    $
    1,349
    
    
    $
    8,518
    
    
    $
    
    
    
    $
    9,867Accounts receivable, net
    
    
    
    
    
    
    242,842
    
    
    
    34,824
    
    
    
    (169,979
    )
    
    
    107,687Inventories, net
    
    
    
    
    
    
    58,757
    
    
    
    38,238
    
    
    
    (610
    )
    
    
    96,385Prepaid expenses
    
    
    
    
    
    
    3,175
    
    
    
    7,914
    
    
    
    5,419
    
    
    
    16,508Deferred income taxes
    
    
    
    
    
    
    15,223
    
    
    
    624
    
    
    
    (2,858
    )
    
    
    12,989Total current assets
    
    
    
    
    
    
    321,346
    
    
    
    90,118
    
    
    
    (168,028
    )
    
    
    243,436PROPERTY, PLANT AND
EQUIPMENT, net
    
    
    
    
    
    
    85,817
    
    
    
    12,441
    
    
    
    
    
    
    
    98,258INVESTMENT IN SUBSIDIARIES
    
    
    417,428
    
    
    
    (100,082
    )
    
    
    45,502
    
    
    
    (362,848
    )
    
    
    GOODWILL
    
    
    
    
    
    
    113,787
    
    
    
    37,402
    
    
    
    
    
    
    
    151,189INTANGIBLE ASSETS, net
    
    
    
    
    
    
    83,800
    
    
    
    13,775
    
    
    
    
    
    
    
    97,575OTHER ASSETS, net
    
    
    
    
    
    
    8,631
    
    
    
    
    
    
    
    
    
    
    
    8,631DEFERRED INCOME TAXES
    
    
    
    
    
    
    4,172
    
    
    
    3,323
    
    
    
    (7,495
    )
    
    
    TOTAL ASSETS
    
    $
    417,428
    
    
    $
    517,471
    
    
    $
    202,561
    
    
    $
    (538,371
    )
    
    $
    599,089LIABILITIES AND STOCKHOLDERS INVESTMENTCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    
    
    
    $
    116
    
    
    $
    
    
    
    $
    
    
    
    $
    116Accounts payable
    
    
    
    
    
    
    220,923
    
    
    
    42,089
    
    
    
    (169,979
    )
    
    
    93,033Accrued liabilities
    
    
    
    
    
    
    21,128
    
    
    
    9,426
    
    
    
    2,561
    
    
    
    33,115Total current liabilities
    
    
    
    
    
    
    242,167
    
    
    
    51,515
    
    
    
    (167,418
    )
    
    
    126,264LONG-TERM DEBT, net
    
    
    
    
    
    
    159,581
    
    
    
    25,744
    
    
    
    (25,716
    )
    
    
    159,609DEFERRED TAX LIABILITIES
    
    
    
    
    
    
    35,387
    
    
    
    (816
    )
    
    
    (7,495
    )
    
    
    27,076OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    7,614
    
    
    
    13,191
    
    
    
    
    
    
    
    20,805Total liabilities
    
    
    
    
    
    
    444,749
    
    
    
    89,634
    
    
    
    (200,629
    )
    
    
    333,754STOCKHOLDERS INVESTMENT
    
    
    417,428
    
    
    
    72,722
    
    
    
    112,927
    
    
    
    (337,742
    )
    
    
    265,335TOTAL LIABILITIES AND
STOCKHOLDERS INVESTMENT
    
    $
    417,428
    
    
    $
    517,471
    
    
    $
    202,561
    
    
    $
    (538,371
    )
    
    $
    599,089
 22




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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 NINE MONTHS ENDED SEPTEMBER 30, 2007
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss) income
    
    $
    
    
    
    $
    (1,409
    )
    
    $
    1,784
    
    
    $
    (329
    )
    
    $
    46Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    9,702
    
    
    
    2,087
    
    
    
    
    
    
    
    11,789Noncash amortization of debt financing costs
    
    
    
    
    
    
    624
    
    
    
    20
    
    
    
    
    
    
    
    644Loss on early extinguishment of debt
    
    
    
    
    
    
    24
    
    
    
    125
    
    
    
    
    
    
    
    149Stock-based compensation expense
    
    
    
    
    
    
    2,246
    
    
    
    
    
    
    
    
    
    
    
    2,246Loss on sale of assets
    
    
    
    
    
    
    107
    
    
    
    26
    
    
    
    
    
    
    
    133Deferred income tax provision (benefit)
    
    
    
    
    
    
    3,171
    
    
    
    (1,490
    )
    
    
    
    
    
    
    1,681Noncash loss on forward exchange contracts
    
    
    
    
    
    
    
    
    
    
    5,048
    
    
    
    
    
    
    
    5,048Change in other operating items
    
    
    
    
    
    
    (4,945
    )
    
    
    13,830
    
    
    
    329
    
    
    
    9,214Net cash provided by operating activities
    
    
    
    
    
    
    9,520
    
    
    
    21,430
    
    
    
    
    
    
    
    30,950CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, plant and equipment
    
    
    
    
    
    
    (9,078
    )
    
    
    (2,151
    )
    
    
    
    
    
    
    (11,229
    )Proceeds from disposal/sale of property, plant
and equipment
    
    
    
    
    
    
    
    
    
    
    102
    
    
    
    
    
    
    
    102Post-acquisition and acquisition payments, net of cash received
    
    
    
    
    
    
    (330
    )
    
    
    (487
    )
    
    
    
    
    
    
    (817
    )Other asset and liabilities
    
    
    
    
    
    
    (26,338
    )
    
    
    124
    
    
    
    25,716
    
    
    
    (498
    )Net cash used in investing activities
    
    
    
    
    
    
    (35,746
    )
    
    
    (2,412
    )
    
    
    25,716
    
    
    
    (12,442
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock
under equity incentive plans
    
    
    
    
    
    
    463
    
    
    
    
    
    
    
    
    
    
    
    463Excess tax benefits from equity incentive plans
    
    
    
    
    
    
    73
    
    
    
    
    
    
    
    
    
    
    
    73Repayment of revolving credit facility
    
    
    
    
    
    
    (64,000
    )
    
    
    (8,984
    )
    
    
    
    
    
    
    (72,984
    )Borrowings under revolving credit facility
    
    
    
    
    
    
    75,500
    
    
    
    33,203
    
    
    
    (25,716
    )
    
    
    82,987Repayments of long-term debt
    
    
    
    
    
    
    
    
    
    
    (10,295
    )
    
    
    
    
    
    
    (10,295
    )Payments on capital lease obligations, other, net
    
    
    
    
    
    
    (88
    )
    
    
    (6
    )
    
    
    
    
    
    
    (94
    )Net cash provided by financing activities
    
    
    
    
    
    
    11,948
    
    
    
    13,918
    
    
    
    (25,716
    )
    
    
    150EFFECT OF CURRENCY EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    
    
    
    
    (404
    )
    
    
    
    
    
    
    (404
    )NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    (14,278
    )
    
    
    32,532
    
    
    
    
    
    
    
    18,254CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    
    
    
    
    18,268
    
    
    
    1,553
    
    
    
    
    
    
    
    19,821End of period
    
    $
    
    
    
    $
    3,990
    
    
    $
    34,085
    
    
    $
    
    
    
    $
    38,075
 23




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##### Table of Contents



ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Company Overview
      24




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##### Table of Contents




    
    sourcing efforts in Europe and Asia;
    
    consolidating our supply base to improve purchasing leverage;
    
    eliminating excess production capacity through the closure and consolidation of
manufacturing or assembly facilities; and
    
    implementing Lean Manufacturing and Total Quality Production System (TQPS) initiatives
to improve operating efficiency and product quality.
   25




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##### Table of Contents



Results of Operations
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2008
    
    2007
    
    2008
    
    2007Revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of Revenues
    
    
    91.2
    
    
    
    88.9
    
    
    
    89.8
    
    
    
    88.3Gross Profit
    
    
    8.8
    
    
    
    11.1
    
    
    
    10.2
    
    
    
    11.7Selling, General and Administrative Expenses
    
    
    8.3
    
    
    
    9.1
    
    
    
    8.0
    
    
    
    8.6Gain on Sale of Long-Lived Assets
    
    
    
    
    
    
    
    
    
    
    (1.0
    )
    
    
    Amortization Expense
    
    
    0.2
    
    
    
    0.1
    
    
    
    0.2
    
    
    
    0.1Restructuring Charges
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    0.2Operating Income
    
    
    0.3
    
    
    
    1.8
    
    
    
    3.0
    
    
    
    2.8Other Expense
    
    
    
    
    
    
    2.7
    
    
    
    1.0
    
    
    
    0.9Interest Expense
    
    
    1.9
    
    
    
    2.0
    
    
    
    1.9
    
    
    
    2.0Loss on Early Extinguishment of Debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Loss) Income Before Provision for Income
Taxes
    
    
    (1.6
    )
    
    
    (2.9
    )
    
    
    0.1
    
    
    
    (0.1
    )Benefit for Income Taxes
    
    
    (0.3
    )
    
    
    (1.3
    )
    
    
    
    
    
    
    (0.2
    )Net (Loss) Income
    
    
    (1.3
    )%
    
    
    (1.6
    )%
    
    
    0.1
    %
    
    
    0.1
    %
 Three Months Ended September 30, 2008 Compared to Three Months Ended September 30, 2007
 Revenues
 Gross Profit
 Selling, General and Administrative Expenses
 Amortization Expense.
 Restructuring Charges
 Other (Income) Expense
 26




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##### Table of Contents



Interest Expense
 Benefit for Income Taxes
 Net Loss
 Nine Months Ended September 30, 2008 Compared to Nine Months Ended September 30, 2007
 Revenues
 Gross Profit
 Selling, General and Administrative Expenses
 Gain on Sale of Long-Lived Assets
 Amortization Expense.
 Restructuring Charges
 Other Expense
 27




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##### Table of Contents



Interest Expense
 Loss on Early Extinguishment of Debt
 Provision (Benefit) for Income Taxes
 Net Income
 Liquidity and Capital Resources
 Cash Flows
    Debt and Credit Facilities
  
    
    $9.5 million under our revolving credit facility, which provides for up to $50.0
million of borrowings;
    
    $0.1 million of capital lease obligations; and
    
    $150.0 million of 8.0% senior notes due 2013.
  28




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##### Table of Contents



Debtors Accounting for a Modification or Exchange of Debt Instruments,
  EBITDA to CashQuarter(s) Ending
    
    Interest Expense Ratio09/30/2008
    
    
    2.25 to 1.0012/31/2008 and each fiscal quarter thereafter
    
    
    2.50 to 1.00
 Fixed ChargeQuarter(s) Ending
    
    Coverage Ratio09/30/2008, 12/31/2008 and 03/31/2009
    
    
    .90 to 1.006/30/2009
    
    
    1.00 to 1.009/30/2009
    
    
    1.15 to 1.0012/31/2009 and each fiscal quarter thereafter
    
    
    1.25 to 1.00
 Maximum Ratio ofQuarter(s) Ending
    
    Total Indebtedness09/30/2008
    
    
    5.15 to 1.0012/31/2008
    
    
    4.75 to 1.0003/31/2009
    
    
    4.50 to 1.0006/30/2009
    
    
    4.00 to 1.0009/30/2009
    
    
    3.50 to 1.0012/31/2009 and each fiscal quarter thereafter
    
    
    3.00 to 1.00
   29




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##### Table of Contents



Update on Critical Accounting Policies and Estimates
   Update on Contractual Obligations
 Accounting for Uncertainty in Income Taxes
 Forward-Looking Statements
  30




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##### Table of Contents



ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4  CONTROLS AND PROCEDURES
    31




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##### Table of Contents



PART II. OTHER INFORMATION
 COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
     Current economic conditions and disruptions in the credit and financial markets could have an
adverse effect on our business, financial condition and results of operations.
  32




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##### Table of Contents



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.
 33




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##### Table of Contents



SIGNATURE
  COMMERCIAL VEHICLE GROUP, INC.Date:  November 7, 2008
    By:
    /s/ Chad M. UtrupChad M. UtrupChief Financial Officer
(Principal financial and accounting officer
and duly authorized officer) 34