##### 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
  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, 2007 AND 2006 (UNAUDITED)
    
    
    1CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2007 (UNAUDITED) AND DECEMBER 31, 2006 (UNAUDITED)
    
    
    2CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006 (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
    
    
    
    
    
    
    31Waiver and Seventh Amendment to Revolving Credit and Term Loan AgreementEighth Amendment to Revolving Credit and Term Loan AgreementCertification of Chief Executive OfficerCertification of Chief Financial OfficerSection 906 CertificationSection 906 Certification




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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 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)(In thousands, except per share amounts)REVENUES
    
    $
    158,566
    
    
    $
    234,787
    
    
    $
    357,367
    
    
    $
    464,132COST OF REVENUES
    
    
    141,947
    
    
    
    194,590
    
    
    
    314,479
    
    
    
    385,201Gross Profit
    
    
    16,619
    
    
    
    40,197
    
    
    
    42,888
    
    
    
    78,931SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    14,610
    
    
    
    13,247
    
    
    
    30,164
    
    
    
    26,399AMORTIZATION EXPENSE
    
    
    259
    
    
    
    103
    
    
    
    362
    
    
    
    208RESTRUCTURING CHARGES
    
    
    998
    
    
    
    
    
    
    
    998
    
    
    
    Operating Income
    
    
    752
    
    
    
    26,847
    
    
    
    11,364
    
    
    
    52,324OTHER (INCOME) EXPENSE
    
    
    (2,103
    )
    
    
    (1,308
    )
    
    
    217
    
    
    
    (1,078
    )INTEREST EXPENSE
    
    
    3,536
    
    
    
    3,849
    
    
    
    7,173
    
    
    
    7,739LOSS ON EARLY EXTINGUISHMENT OF DEBT
    
    
    149
    
    
    
    318
    
    
    
    149
    
    
    
    318(Loss) Income Before Income Taxes
    
    
    (830
    )
    
    
    23,988
    
    
    
    3,825
    
    
    
    45,345(BENEFIT) PROVISION FOR INCOME TAXES
    
    
    (599
    )
    
    
    8,494
    
    
    
    1,097
    
    
    
    16,443NET (LOSS) INCOME
    
    $
    (231
    )
    
    $
    15,494
    
    
    $
    2,728
    
    
    $
    28,902(LOSS) EARNINGS PER COMMON SHARE:Basic
    
    $
    (0.01
    )
    
    $
    0.73
    
    
    $
    0.13
    
    
    $
    1.37Diluted
    
    $
    (0.01
    )
    
    $
    0.72
    
    
    $
    0.13
    
    
    $
    1.35WEIGHTED AVERAGE SHARES OUTSTANDING:Basic
    
    
    21,413
    
    
    
    21,119
    
    
    
    21,401
    
    
    
    21,070Diluted
    
    
    21,413
    
    
    
    21,501
    
    
    
    21,680
    
    
    
    21,486
  1




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2007
    
    
    2006(Unaudited)
    
    
    (Unaudited)(In thousands, except share andper share amounts)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    24,425
    
    
    $
    19,821Accounts receivable,
net of reserve for doubtful accounts of $3,496
and $5,536, respectively
    
    
    97,907
    
    
    
    123,471Inventories, net
    
    
    85,212
    
    
    
    88,723Prepaid expenses
    
    
    17,512
    
    
    
    24,272Deferred income taxes
    
    
    8,862
    
    
    
    8,819Total current assets
    
    
    233,918
    
    
    
    265,106PROPERTY, PLANT AND EQUIPMENT, net
    
    
    89,499
    
    
    
    90,388GOODWILL
    
    
    131,905
    
    
    
    134,766INTANGIBLE ASSETS, net of accumulated amortization of $1,189 and
$840, respectively
    
    
    87,815
    
    
    
    84,188OTHER ASSETS, net
    
    
    16,404
    
    
    
    16,374TOTAL ASSETS
    
    $
    559,541
    
    
    $
    590,822LIABILITIES AND STOCKHOLDERS INVESTMENTCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    115
    
    
    $
    2,158Accounts payable
    
    
    66,696
    
    
    
    86,610Accrued liabilities
    
    
    37,077
    
    
    
    40,970Total current liabilities
    
    
    103,888
    
    
    
    129,738LONG-TERM DEBT, net of current maturities
    
    
    150,167
    
    
    
    159,956DEFERRED TAX LIABILITIES
    
    
    10,384
    
    
    
    10,611PENSION AND OTHER POST-RETIREMENT BENEFITS
    
    
    22,230
    
    
    
    22,188OTHER LONG-TERM LIABILITIES
    
    
    3,397
    
    
    
    3,424Total liabilities
    
    
    290,066
    
    
    
    325,917COMMITMENTS AND CONTINGENCIES (Note 11)STOCKHOLDERS INVESTMENT:Common stock $.01 par value; 30,000,000 shares authorized; 21,437,609
and 21,368,831 shares issued and outstanding, respectively
    
    
    214
    
    
    
    214Treasury stock purchased from employees; 5,836 shares
    
    
    (115
    )
    
    
    (115
    )Additional paid-in capital
    
    
    176,242
    
    
    
    174,044Retained earnings
    
    
    94,797
    
    
    
    92,007Accumulated other comprehensive loss
    
    
    (1,663
    )
    
    
    (1,245
    )Total stockholders investment
    
    
    269,475
    
    
    
    264,905TOTAL LIABILITIES AND STOCKHOLDERS INVESTMENT
    
    $
    559,541
    
    
    $
    590,822
  2




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six Months EndedJune 30,2007
    
    
    2006(Unaudited)
    
    
    (Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    2,728
    
    
    $
    28,902Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    7,727
    
    
    
    7,312Noncash amortization of debt financing costs
    
    
    436
    
    
    
    463Loss on early extinguishment of debt
    
    
    149
    
    
    
    318Stock-based compensation expense
    
    
    1,696
    
    
    
    965Loss (Gain) on sale of assets
    
    
    141
    
    
    
    (367
    )Pension and post-retirement curtailment gain
    
    
    
    
    
    
    (3,865
    )Deferred income tax (benefit) provision
    
    
    (270
    )
    
    
    787Noncash loss (gain) on forward exchange contracts
    
    
    586
    
    
    
    (1,067
    )Change in other operating items
    
    
    10,400
    
    
    
    (23,390
    )Net cash provided by operating activities
    
    
    23,593
    
    
    
    10,058CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, plant and equipment
    
    
    (6,531
    )
    
    
    (8,501
    )Proceeds from disposal/sale of property, plant and equipment
    
    
    101
    
    
    
    219Proceeds from disposal sale of other assets
    
    
    
    
    
    
    1,800Post-acquisition and acquisitions payments, net of cash received
    
    
    (487
    )
    
    
    (693
    )Other assets and liabilities
    
    
    (21
    )
    
    
    (270
    )Net cash used in investing activities
    
    
    (6,938
    )
    
    
    (7,445
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock under equity incentive plans
    
    
    463
    
    
    
    1,059Excess tax benefit from equity incentive plans
    
    
    39
    
    
    
    151Repayment of revolving credit facility
    
    
    (56,411
    )
    
    
    (4,925
    )Borrowings under revolving credit facility
    
    
    54,926
    
    
    
    4,030Repayments of long-term debt
    
    
    (10,295
    )
    
    
    (27,375
    )Payments on capital lease obligations
    
    
    (68
    )
    
    
    (51
    )Other, net
    
    
    
    
    
    
    (2
    )Net cash used in financing activities
    
    
    (11,346
    )
    
    
    (27,113
    )EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS
    
    
    (705
    )
    
    
    (838
    )NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    4,604
    
    
    
    (25,338
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    19,821
    
    
    
    40,641End of period
    
    $
    24,425
    
    
    $
    15,303SUPPLEMENTAL CASH FLOW INFORMATION:Cash paid for interest
    
    $
    6,730
    
    
    $
    7,126Cash (refund) paid for income taxes, net
    
    $
    (4,983
    )
    
    $
    11,254
  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
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities.
 
 4




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3. Restructuring Activities
 Accounting
for Costs Associated with Exit or Disposal Activities
 Facility Exitand OtherEmployee
    
    
    ContractualCosts
    
    
    Costs
    
    
    TotalBalance  December 31, 2006
    
    $
    
    
    
    $
    
    
    
    $
    Provisions recorded
    
    
    786
    
    
    
    
    
    
    
    786Deductions for payments made
    
    
    (79
    )
    
    
    
    
    
    
    (79
    )Balance  June 30, 2007
    
    $
    707
    
    
    $
    
    
    
    $
    707
 4. Share-Based Compensation
 Stock Option Grants and Restricted Stock Awards
      5




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2004StockOptionGrantsWeighted-average fair value of option
    
    $
    3.34Risk-free interest rate
    
    
    4.50
    %Expected volatility
    
    
    23.12
    %Expected life in months
    
    
    36
   Weighted-AverageWeighted-
    
    
    Remaining
    
    
    AggregateOptions
    
    
    Average
    
    
    Contractual Life
    
    
    Intrinsic ValueStock Options
    
    (000s)
    
    
    Exercise Price
    
    
    (Years)
    
    
    (000s)Outstanding at December 31, 2006
    
    
    848
    
    
    $
    11.94
    
    
    
    7.5
    
    
    $
    8,588Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (69
    )
    
    
    6.74
    
    
    
    
    
    
    
    Forfeited
    
    
    (5
    )
    
    
    15.84
    
    
    
    
    
    
    
    Outstanding at June 30, 2007
    
    
    774
    
    
    $
    12.37
    
    
    
    7.0
    
    
    $
    5,694Exercisable at June 30, 2007
    
    
    604
    
    
    $
    11.40
    
    
    
    6.9
    
    
    $
    4,793Nonvested, expected to vest at December 31, 2007
    
    
    155
    
    
    $
    15.84
    
    
    
    7.3
    
    
    $
    542
  Nonvested Stock Options
    
    
    Nonvested Restricted StockWeighted-Average
    
    
    
    
    
    Weighted-AverageOptions
    
    
    Grant-Date
    
    Shares
    
    
    Grant-Date(000s)
    
    
    Fair Value
    
    (000s)
    
    
    Fair ValueNonvested at December 31, 2006
    
    
    175
    
    
    $
    3.34
    
    
    
    309
    
    
    $
    20.21Granted
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    20.10Forfeited
    
    
    (5
    )
    
    
    
    
    
    
    (10
    )
    
    
    20.19Nonvested at June 30, 2007
    
    
    170
    
    
    $
    3.34
    
    
    
    319
    
    
    $
    20.21
 6




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5. Stockholders Investment
 Earnings Per Share  Earnings per Share Share Based Payment
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net (loss) income applicable to common shareholders
    
    $
    (231
    )
    
    $
    15,494
    
    
    $
    2,728
    
    
    $
    28,902Weighted average number of common shares outstanding
    
    
    21,413
    
    
    
    21,119
    
    
    
    21,401
    
    
    
    21,070Dilutive effect of outstanding stock options and
restricted stock grants after application of the
treasury stock method
    
    
    
    
    
    
    382
    
    
    
    279
    
    
    
    416Dilutive shares outstanding
    
    
    21,413
    
    
    
    21,501
    
    
    
    21,680
    
    
    
    21,486Basic (loss) earnings per share
    
    $
    (0.01
    )
    
    $
    0.73
    
    
    $
    0.13
    
    
    $
    1.37Diluted (loss) earning per share
    
    $
    (0.01
    )
    
    $
    0.72
    
    
    $
    0.13
    
    
    $
    1.35
  Dividends 
 6. Accounts Receivable
  7. Inventories
  June 30,
    
    
    December 31,2007
    
    
    2006Raw materials
    
    $
    58,402
    
    
    $
    61,617Work in process
    
    
    14,037
    
    
    
    14,436Finished goods
    
    
    17,438
    
    
    
    17,314Less excess and obsolete
    
    
    (4,665
    )
    
    
    (4,644
    )$
    85,212
    
    
    $
    88,723
 7




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8. Goodwill and Intangible Assets
 Business Combinations Goodwill and Intangible Assets
 Accounting
for the Impairment or Disposal of Long-Lived Assets
  8




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June 30, 2007

    
    December 31, 2006Weighted-Average
    
    
    Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetAmortization
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    CarryingPeriod
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    Amount
    
    
    Amortization
    
    
    AmountDefinite-lived intangible
assets:Tradenames/Trademarks
    
    30 years
    
    $
    9,790
    
    
    $
    (752
    )
    
    $
    9,038
    
    
    $
    9,790
    
    
    $
    (589
    )
    
    $
    9,201Licenses
    
    7 years
    
    
    438
    
    
    
    (282
    )
    
    
    156
    
    
    
    438
    
    
    
    (251
    )
    
    
    187Customer relationships
    
    15 years
    
    
    3,976
    
    
    
    (155
    )
    
    
    3,821
    
    
    
    
    
    
    
    
    
    
    
    $
    14,204
    
    
    $
    (1,189
    )
    
    $
    13,015
    
    
    $
    10,228
    
    
    $
    (840
    )
    
    $
    9,388Indefinite-lived intangible assets:Goodwill
    
    
    
    
    
    $
    131,905
    
    
    $
    
    
    
    $
    131,905
    
    
    $
    134,766
    
    
    $
    
    
    
    $
    134,766Customer relationships
    
    
    
    
    
    
    74,800
    
    
    
    
    
    
    
    74,800
    
    
    
    74,800
    
    
    
    
    
    
    
    74,800$
    206,705
    
    
    $
    
    
    
    $
    206,705
    
    
    $
    209,566
    
    
    $
    
    
    
    $
    209,566Total consolidated goodwill and
intangible assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    219,720
    
    
    
    
    
    
    
    
    
    
    $
    218,954
   Fiscal Year Ended December 31,
    
    Estimated Amortization Expense2007
    
    
    $6762008
    
    
    $6542009
    
    
    $6542010
    
    
    $5912011
    
    
    $5912012
    
    
    $591
  Balance  December 31, 2006
    
    $
    134,766Post acquisition adjustments
    
    
    487Definite-lived intangible assets
    
    
    (3,976
    )Currency translation adjustment
    
    
    628Balance  June 30, 2007
    
    $
    131,905
  
 9




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9. Debt
  June 30,
    
    
    December 31,2007
    
    
    2006Revolving credit facilities bore interest at a weighted average of
7.8% as of June 30, 2007 and 7.1% as of December 31, 2006
    
    $
    
    
    
    $
    1,469Term loan, with principal and interest payable quarterly, bore
interest at a weighted average rate of 7.4% as of June 30,
2007 and 6.8% as of December 31, 2006
    
    
    
    
    
    
    10,2958.0% senior notes due 2013
    
    
    150,000
    
    
    
    150,000Other
    
    
    282
    
    
    
    350150,282
    
    
    
    162,114Less current maturities
    
    
    115
    
    
    
    2,158$
    150,167
    
    
    $
    159,956
 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
     10




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Terms, Covenants and Compliance Status
 10. Income Taxes
     11. Commitments and Contingencies
 Warranty 
  Balance  December 31, 2006
    
    $
    5,197Additional provisions recorded
    
    
    1,310Deduction for payments made
    
    
    (1,850
    )Currency translation adjustment
    
    
    10Balance  June 30, 2007
    
    $
    4,667
 Foreign Currency Forward Exchange Contracts 
 11




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Local
    
    
    
    
    
    
    U.S. $Currency
    
    
    U.S. $
    
    
    EquivalentAmount
    
    
    Equivalent
    
    
    Fair ValueContracts to (buy) sell currencies:U.S. dollar
    
    $
    (275
    )
    
    $
    (275
    )
    
    $
    (275
    )Eurodollar
    
    
    38,075
    
    
    
    54,069
    
    
    
    52,452Swedish krona
    
    
    11,500
    
    
    
    1,719
    
    
    
    1,680Japanese yen
    
    
    3,630,100
    
    
    
    37,771
    
    
    
    31,419Australian dollar
    
    
    5,829
    
    
    
    4,827
    
    
    
    4,948
  Litigation 
 12. Pension and Other Post-Retirement Benefit Plans
   Other Post-RetirementU.S. Pension Plans
    
    Non U.S. Pension Plans
    
    Benefit PlansThree Months Ended
    
    
    Three Months Ended
    
    
    Three Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    125
    
    
    $
    119
    
    
    $
    
    
    
    $
    13
    
    
    $
    7
    
    
    $
    10Interest cost
    
    
    441
    
    
    
    409
    
    
    
    609
    
    
    
    541
    
    
    
    34
    
    
    
    26Expected return on plan assets
    
    
    (381
    )
    
    
    (414
    )
    
    
    (580
    )
    
    
    (514
    )
    
    
    
    
    
    
    Amortization of prior service costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Recognized actuarial loss
    
    
    55
    
    
    
    12
    
    
    
    47
    
    
    
    41
    
    
    
    96
    
    
    
    261Curtailment (gain) loss
    
    
    
    
    
    
    (500
    )
    
    
    
    
    
    
    142
    
    
    
    
    
    
    
    (2,058
    )Net periodic benefit cost
    
    $
    240
    
    
    $
    (374
    )
    
    $
    76
    
    
    $
    223
    
    
    $
    137
    
    
    $
    (1,761
    )
 12




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##### Table of Contents



Other Post-RetirementU.S. Pension Plans
    
    
    Non U.S. Pension Plans
    
    
    Benefit PlansSix Months Ended
    
    
    Six Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    250
    
    
    $
    401
    
    
    $
    
    
    
    $
    218
    
    
    $
    13
    
    
    $
    40Interest cost
    
    
    881
    
    
    
    824
    
    
    
    1,195
    
    
    
    1,048
    
    
    
    68
    
    
    
    78Expected return on plan assets
    
    
    (762
    )
    
    
    (829
    )
    
    
    (1,137
    )
    
    
    (976
    )
    
    
    
    
    
    
    Amortization of prior service costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    Recognized actuarial loss
    
    
    110
    
    
    
    35
    
    
    
    94
    
    
    
    154
    
    
    
    192
    
    
    
    354Curtailment (gain) loss
    
    
    
    
    
    
    (1,949
    )
    
    
    
    
    
    
    142
    
    
    
    
    
    
    
    (2,058
    )Net periodic benefit cost
    
    $
    479
    
    
    $
    (1,518
    )
    
    $
    152
    
    
    $
    591
    
    
    $
    273
    
    
    $
    (1,586
    )
  13. Comprehensive Income
 Reporting Comprehensive Income,
  Foreign currency translation adjustment
    
    $
    6,119Pension liability
    
    
    (6,702
    )Unrealized loss on derivative instruments
    
    
    (1,080
    )$
    (1,663
    )
  2007
    
    
    2006Net income
    
    $
    2,728
    
    
    $
    28,902Other comprehensive income:Foreign currency translation adjustment
    
    
    662
    
    
    
    2,218Unrealized loss on derivative instruments
    
    
    (1,080
    )
    
    
    Comprehensive income
    
    $
    2,310
    
    
    $
    31,120
 
 13




---



##### Table of Contents



14. Related Party Transactions
 ,
 15. 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, 2007
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    118,831
    
    
    $
    43,973
    
    
    $
    (4,238
    )
    
    $
    158,566COST OF REVENUES
    
    
    
    
    
    
    108,408
    
    
    
    37,371
    
    
    
    (3,832
    )
    
    
    141,947Gross Profit
    
    
    
    
    
    
    10,423
    
    
    
    6,602
    
    
    
    (406
    )
    
    
    16,619SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    11,045
    
    
    
    3,842
    
    
    
    (277
    )
    
    
    14,610AMORTIZATION EXPENSE
    
    
    
    
    
    
    104
    
    
    
    155
    
    
    
    
    
    
    
    259RESTRUCTURING CHARGES
    
    
    
    
    
    
    998
    
    
    
    
    
    
    
    
    
    
    
    998Operating (Loss) Income
    
    
    
    
    
    
    (1,724
    )
    
    
    2,605
    
    
    
    (129
    )
    
    
    752OTHER INCOME
    
    
    
    
    
    
    (425
    )
    
    
    (1,678
    )
    
    
    
    
    
    
    (2,103
    )INTEREST EXPENSE
    
    
    
    
    
    
    3,204
    
    
    
    332
    
    
    
    
    
    
    
    3,536LOSS ON EARLY EXTINGUISHMENT OF DEBT
    
    
    
    
    
    
    24
    
    
    
    125
    
    
    
    
    
    
    
    149(Loss) Income Before Income Taxes
    
    
    
    
    
    
    (4,527
    )
    
    
    3,826
    
    
    
    (129
    )
    
    
    (830
    )(BENEFIT) PROVISION FOR INCOME TAXES
    
    
    
    
    
    
    (1,789
    )
    
    
    1,190
    
    
    
    
    
    
    
    (599
    )NET (LOSS) INCOME
    
    $
    
    
    
    $
    (2,738
    )
    
    $
    2,636
    
    
    $
    (129
    )
    
    $
    (231
    )
 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, 2007
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    277,230
    
    
    $
    85,853
    
    
    $
    (5,716
    )
    
    $
    357,367COST OF REVENUES
    
    
    
    
    
    
    246,824
    
    
    
    72,671
    
    
    
    (5,016
    )
    
    
    314,479Gross Profit
    
    
    
    
    
    
    30,406
    
    
    
    13,182
    
    
    
    (700
    )
    
    
    42,888SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    23,009
    
    
    
    7,717
    
    
    
    (562
    )
    
    
    30,164AMORTIZATION EXPENSE
    
    
    
    
    
    
    207
    
    
    
    155
    
    
    
    
    
    
    
    362RESTRUCTURING CHARGES
    
    
    
    
    
    
    998
    
    
    
    
    
    
    
    
    
    
    
    998Operating Income
    
    
    
    
    
    
    6,192
    
    
    
    5,310
    
    
    
    (138
    )
    
    
    11,364OTHER (INCOME) EXPENSE
    
    
    
    
    
    
    (356
    )
    
    
    573
    
    
    
    
    
    
    
    217INTEREST EXPENSE
    
    
    
    
    
    
    6,560
    
    
    
    613
    
    
    
    
    
    
    
    7,173LOSS ON EARLY EXTINGUISHMENT OF
DEBT
    
    
    
    
    
    
    24
    
    
    
    125
    
    
    
    
    
    
    
    149(Loss) Income Before Income Taxes
    
    
    
    
    
    
    (36
    )
    
    
    3,999
    
    
    
    (138
    )
    
    
    3,825PROVISION FOR INCOME TAXES
    
    
    
    
    
    
    38
    
    
    
    1,059
    
    
    
    
    
    
    
    1,097NET (LOSS) INCOME
    
    $
    
    
    
    $
    (74
    )
    
    $
    2,940
    
    
    $
    (138
    )
    
    $
    2,728
 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, 2007
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    
    
    
    $
    16,984
    
    
    $
    7,441
    
    
    $
    
    
    
    $
    24,425Accounts receivable, net
    
    
    
    
    
    
    237,432
    
    
    
    25,315
    
    
    
    (164,840
    )
    
    
    97,907Inventories, net
    
    
    
    
    
    
    63,300
    
    
    
    22,273
    
    
    
    (361
    )
    
    
    85,212Prepaid expenses and other current assets
    
    
    
    
    
    
    6,324
    
    
    
    5,919
    
    
    
    5,269
    
    
    
    17,512Deferred income taxes
    
    
    
    
    
    
    13,384
    
    
    
    (2,611
    )
    
    
    (1,911
    )
    
    
    8,862Total current assets
    
    
    
    
    
    
    337,424
    
    
    
    58,337
    
    
    
    (161,843
    )
    
    
    233,918PROPERTY, PLANT AND
EQUIPMENT, net
    
    
    
    
    
    
    80,676
    
    
    
    8,823
    
    
    
    
    
    
    
    89,499INVESTMENT IN SUBSIDIARIES
    
    
    402,944
    
    
    
    (122,862
    )
    
    
    11,997
    
    
    
    (292,079
    )
    
    
    GOODWILL
    
    
    
    
    
    
    104,034
    
    
    
    27,871
    
    
    
    
    
    
    
    131,905INTANGIBLE ASSETS, net
    
    
    
    
    
    
    83,994
    
    
    
    3,821
    
    
    
    
    
    
    
    87,815OTHER ASSETS, net
    
    
    
    
    
    
    17,371
    
    
    
    11,207
    
    
    
    (12,174
    )
    
    
    16,404TOTAL ASSETS
    
    $
    402,944
    
    
    $
    500,637
    
    
    $
    122,056
    
    
    $
    (466,096
    )
    
    $
    559,541LIABILITIES AND STOCKHOLDERS INVESTMENTCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    
    
    
    $
    115
    
    
    $
    
    
    
    $
    
    
    
    $
    115Accounts payable
    
    
    
    
    
    
    204,236
    
    
    
    27,300
    
    
    
    (164,840
    )
    
    
    66,696Accrued liabilities
    
    
    
    
    
    
    28,284
    
    
    
    5,435
    
    
    
    3,358
    
    
    
    37,077Total current liabilities
    
    
    
    
    
    
    232,635
    
    
    
    32,735
    
    
    
    (161,482
    )
    
    
    103,888LONG-TERM DEBT, net of current maturities
    
    
    
    
    
    
    150,140
    
    
    
    27
    
    
    
    
    
    
    
    150,167DEFERRED TAX LIABILITIES
    
    
    
    
    
    
    23,374
    
    
    
    (816
    )
    
    
    (12,174
    )
    
    
    10,384PENSION AND OTHER POST-RETIREMENT BENEFITS
    
    
    
    
    
    
    12,123
    
    
    
    10,107
    
    
    
    
    
    
    
    22,230OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    3,381
    
    
    
    16
    
    
    
    
    
    
    
    3,397Total liabilities
    
    
    
    
    
    
    421,653
    
    
    
    42,069
    
    
    
    (173,656
    )
    
    
    290,066STOCKHOLDERS INVESTMENT
    
    
    402,944
    
    
    
    78,984
    
    
    
    79,987
    
    
    
    (292,440
    )
    
    
    269,475TOTAL LIABILITIES AND
STOCKHOLDERS INVESTMENT
    
    $
    402,944
    
    
    $
    500,637
    
    
    $
    122,056
    
    
    $
    (466,096
    )
    
    $
    559,541
 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, 2007
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss) income
    
    $
    
    
    
    $
    (74
    )
    
    $
    2,940
    
    
    $
    (138
    )
    
    $
    2,728Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    6,377
    
    
    
    1,350
    
    
    
    
    
    
    
    7,727Noncash amortization of debt financing costs
    
    
    
    
    
    
    416
    
    
    
    20
    
    
    
    
    
    
    
    436Loss on early extinguishment of debt
    
    
    
    
    
    
    24
    
    
    
    125
    
    
    
    
    
    
    
    149Stock-based compensation expense
    
    
    
    
    
    
    1,696
    
    
    
    
    
    
    
    
    
    
    
    1,696Loss on sale of assets
    
    
    
    
    
    
    119
    
    
    
    22
    
    
    
    
    
    
    
    141Deferred income tax provision
    
    
    
    
    
    
    (224
    )
    
    
    (46
    )
    
    
    
    
    
    
    (270
    )Noncash loss on forward exchange contracts
    
    
    
    
    
    
    
    
    
    
    586
    
    
    
    
    
    
    
    586Change in other operating items
    
    
    
    
    
    
    (5,023
    )
    
    
    15,285
    
    
    
    138
    
    
    
    10,400Net cash provided by operating
activities
    
    
    
    
    
    
    3,311
    
    
    
    20,282
    
    
    
    
    
    
    
    23,593CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, plant and equipment
    
    
    
    
    
    
    (5,037
    )
    
    
    (1,494
    )
    
    
    
    
    
    
    (6,531
    )Proceeds from disposal/sale of property, plant
and equipment
    
    
    
    
    
    
    
    
    
    
    101
    
    
    
    
    
    
    
    101Post-acquisition and acquisition payments, net
of cash received
    
    
    
    
    
    
    
    
    
    
    (487
    )
    
    
    
    
    
    
    (487
    )Other asset and liabilities
    
    
    
    
    
    
    (21
    )
    
    
    
    
    
    
    
    
    
    
    (21
    )Net cash provided by (used in) investing
activities
    
    
    
    
    
    
    (5,058
    )
    
    
    (1,880
    )
    
    
    
    
    
    
    (6,938
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock
under equity incentive plans
    
    
    
    
    
    
    463
    
    
    
    
    
    
    
    
    
    
    
    463Excess tax benefits from equity incentive plans
    
    
    
    
    
    
    39
    
    
    
    
    
    
    
    
    
    
    
    39Repayment of revolving credit facility
    
    
    
    
    
    
    (47,500
    )
    
    
    (8,911
    )
    
    
    
    
    
    
    (56,411
    )Borrowings under revolving credit facility
    
    
    
    
    
    
    47,500
    
    
    
    7,426
    
    
    
    
    
    
    
    54,926Repayments of long-term debt
    
    
    
    
    
    
    
    
    
    
    (10,295
    )
    
    
    
    
    
    
    (10,295
    )Other, net
    
    
    
    
    
    
    (59
    )
    
    
    (9
    )
    
    
    
    
    
    
    (68
    )Net cash (used in) financing activities
    
    
    
    
    
    
    443
    
    
    
    (11,789
    )
    
    
    
    
    
    
    (11,346
    )EFFECT OF CURRENCY EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    20
    
    
    
    (725
    )
    
    
    
    
    
    
    (705
    )NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    (1,284
    )
    
    
    5,888
    
    
    
    
    
    
    
    4,604CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    
    
    
    
    18,268
    
    
    
    1,553
    
    
    
    
    
    
    
    19,821End of period
    
    $
    
    
    
    $
    16,984
    
    
    $
    7,441
    
    
    $
    
    
    
    $
    24,425
 18




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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 SALES
    
    
    
    
    
    
    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 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
 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 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 SALES
    
    
    
    
    
    
    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 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
 20




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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, 2006
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    
    
    
    $
    18,268
    
    
    $
    1,553
    
    
    $
    
    
    
    $
    19,821Accounts receivable, net
    
    
    
    
    
    
    148,244
    
    
    
    31,356
    
    
    
    (56,129
    )
    
    
    123,471Inventories, net
    
    
    
    
    
    
    66,337
    
    
    
    22,610
    
    
    
    (224
    )
    
    
    88,723Prepaid expenses
    
    
    
    
    
    
    6,984
    
    
    
    5,819
    
    
    
    11,469
    
    
    
    24,272Deferred income taxes
    
    
    
    
    
    
    11,570
    
    
    
    (2,751
    )
    
    
    
    
    
    
    8,819Total current assets
    
    
    
    
    
    
    251,403
    
    
    
    58,587
    
    
    
    (44,884
    )
    
    
    265,106PROPERTY, PLANT AND
EQUIPMENT, net
    
    
    
    
    
    
    81,930
    
    
    
    8,458
    
    
    
    
    
    
    
    90,388INVESTMENT IN SUBSIDIARIES
    
    
    400,817
    
    
    
    10,602
    
    
    
    11,987
    
    
    
    (423,406
    )
    
    
    GOODWILL
    
    
    
    
    
    
    104,033
    
    
    
    30,733
    
    
    
    
    
    
    
    134,766INTANGIBLE ASSETS, net
    
    
    
    
    
    
    84,188
    
    
    
    
    
    
    
    
    
    
    
    84,188OTHER ASSETS, net
    
    
    
    
    
    
    7,761
    
    
    
    8,613
    
    
    
    
    
    
    
    16,374DEFERRED INCOME TAXES
    
    
    
    
    
    
    8,624
    
    
    
    3,323
    
    
    
    (11,947
    )
    
    
    TOTAL ASSETS
    
    $
    400,817
    
    
    $
    548,541
    
    
    $
    121,701
    
    
    $
    (480,237
    )
    
    $
    590,822LIABILITIES AND STOCKHOLDERS INVESTMENTCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    
    
    
    $
    2,158
    
    
    $
    
    
    
    $
    
    
    
    $
    2,158Accounts payable
    
    
    
    
    
    
    123,398
    
    
    
    19,341
    
    
    
    (56,129
    )
    
    
    86,610Accrued liabilities
    
    
    
    
    
    
    25,661
    
    
    
    3,840
    
    
    
    11,469
    
    
    
    40,970Total current liabilities
    
    
    
    
    
    
    151,217
    
    
    
    23,181
    
    
    
    (44,660
    )
    
    
    129,738LONG-TERM DEBT, net
    
    
    
    
    
    
    148,156
    
    
    
    11,800
    
    
    
    
    
    
    
    159,956DEFERRED TAX LIABILITIES
    
    
    
    
    
    
    23,374
    
    
    
    (816
    )
    
    
    (11,947
    )
    
    
    10,611OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    15,556
    
    
    
    10,056
    
    
    
    
    
    
    
    25,612Total liabilities
    
    
    
    
    
    
    338,303
    
    
    
    44,221
    
    
    
    (56,607
    )
    
    
    325,917STOCKHOLDERS INVESTMENT
    
    
    400,817
    
    
    
    210,238
    
    
    
    77,480
    
    
    
    (423,630
    )
    
    
    264,905TOTAL LIABILITIES AND
STOCKHOLDERS INVESTMENT
    
    $
    400,817
    
    
    $
    548,541
    
    
    $
    121,701
    
    
    $
    (480,237
    )
    
    $
    590,822
 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, 2006
 Non-Parent
    
    
    Guarantor
    
    
    GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    
    
    
    $
    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 benefit
    
    
    
    
    
    
    
    
    
    
    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 the disposal /sale of other assets
    
    
    
    
    
    
    1,800
    
    
    
    
    
    
    
    
    
    
    
    1,800Post-acquisition and acquisition payments, net
of cash received
    
    
    
    
    
    
    (693
    )
    
    
    
    
    
    
    
    
    
    
    (693
    )Other assets 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
    
    
    
    
    
    
    
    
    
    
    
    151Repayments under revolving credit facility
    
    
    
    
    
    
    
    
    
    
    (4,925
    )
    
    
    
    
    
    
    (4,925
    )Borrowings under revolving credit facility
    
    
    
    
    
    
    
    
    
    
    4,030
    
    
    
    
    
    
    
    4,030Repayments of long-term debt
    
    
    
    
    
    
    (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
 22




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##### Table of Contents



ITEM 2 
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Company Overview
       
    
    establishing sourcing efforts in China and Europe and other lower cost regions of the
world;
    
    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.
 
 23




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##### Table of Contents



Results of Operations
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0Cost of Revenues
    
    
    89.5
    
    
    
    82.9
    
    
    
    88.0
    
    
    
    83.0Gross Profit
    
    
    10.5
    
    
    
    17.1
    
    
    
    12.0
    
    
    
    17.0Selling, General and Administrative Expenses
    
    
    9.2
    
    
    
    5.7
    
    
    
    8.4
    
    
    
    5.7Amortization Expense
    
    
    0.2
    
    
    
    
    
    
    
    0.1
    
    
    
    Restructuring Charges
    
    
    0.6
    
    
    
    
    
    
    
    0.3
    
    
    
    Operating Income
    
    
    0.5
    
    
    
    11.4
    
    
    
    3.2
    
    
    
    11.3Other (Income) Expense
    
    
    (1.3
    )
    
    
    (0.6
    )
    
    
    0.1
    
    
    
    (0.3
    )Interest Expense
    
    
    2.2
    
    
    
    1.7
    
    
    
    2.0
    
    
    
    1.7Loss on Early Extinguishment of Debt
    
    
    0.1
    
    
    
    0.1
    
    
    
    
    
    
    
    0.1(Loss) Income Before Income Taxes
    
    
    (0.5
    )
    
    
    10.2
    
    
    
    1.1
    
    
    
    9.8(Benefit) Provision for Income Taxes
    
    
    (0.4
    )
    
    
    3.6
    
    
    
    0.3
    
    
    
    3.6Net (Loss) Income
    
    
    (0.1
    )%
    
    
    6.6
    %
    
    
    0.8
    %
    
    
    6.2
 Three Months Ended June 30, 2007 Compared to Three Months Ended June 30, 2006
 Revenues
 Gross Profit
 24




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##### Table of Contents



Selling, General and Administrative Expenses
 Other Income
 Interest Expense
 Loss on
Early Extinguishment of Debt.
 (Benefit) Provision for Income Taxes
 Net (Loss) Income
 Six Months Ended June 30, 2007 Compared to Six Months Ended June 30, 2006
 Revenues
 Gross Profit
 Selling, General and Administrative Expenses
 25




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##### Table of Contents



Other Expense (Income)
 Interest Expense
 Loss on
Early Extinguishment of Debt.
 Provision for Income Taxes
 Net Income
 Liquidity and Capital Resources
 Cash Flows
    Debt and Credit Facilities
   26




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##### Table of Contents



Debtors Accounting for a Modification or Exchange of Debt
Instruments,
  Maximum TotalQuarters(s) Ending
    
    Leverage Ratio12/31/06 and each fiscal quarter thereafter
    
    
    2.50 to 1.00
   Update on Contractual Obligations
 Accounting for Uncertainty in Income Taxes
 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
 Disclosure Controls and Procedures
   28




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##### Table of Contents



PART II. OTHER INFORMATION
 COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
        Votes For
    
    
    Votes WithheldScott C. Arves
    
    
    20,578,604
    
    
    
    384,752Robert C. Griffin
    
    
    20,085,507
    
    
    
    877,849Richard A. Snell
    
    
    19,792,240
    
    
    
    1,201,116
  b.
    
    The Companys Second Amended and Restated Equity Incentive Plan was approved. The Plan was
amended to increase the number of shares of common stock that may be issued under the Plan
from 1,000,000 shares to 2,000,000 shares:
 Shares Voted For
    
    Shares VotedProposal
    
    Against Proposal
        
    Abstain
    
    
    Broker Non-Votes19,134,366
    
    
    1,063,016
    
    
    
    21,404
    
    
    
    744,570
 c.
    
    Deloitte & Touche LLP was ratified as the Companys independent registered public
accounting firm for the fiscal year ending December 31, 2007:
 Shares Voted For
    
    Shares VotedProposal
    
    Against Proposal
        
    Abstain
    
    
    Broker Non-Votes20,027,524
    
    
    930,232
    
    
    
    5,600
    
    
    
    0
 29




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##### Table of Contents



10.1
    
    Waiver and Seventh Amendment to Revolving Credit and Term Loan Agreement, dated as of March 26, 2007, by and among
Commercial Vehicle Group, Inc., the subsidiary borrowers from time to time parties thereto, the foreign currency
borrowers from time to time parties thereto, the banks from time to time parties thereto, U.S. Bank National
Association, one of the banks, as administrative agent for the banks, and Comerica Bank, one of the banks, as
syndication agent for the banks.10.2
    
    Eighth Amendment to Revolving Credit and Term Loan Agreement, dated as of June 26, 2007, by and among Commercial
Vehicle Group, Inc., the subsidiary borrowers from time to time parties thereto, the foreign currency borrowers from
time to time parties thereto, the banks from time to time parties thereto, U.S. Bank National Association, one of the
banks, as administrative agent for the banks, and Comerica Bank, one of the banks, as syndication agent for the banks.10.3
    
    Commercial Vehicle Group, Inc. Second Amended and Restated Equity Incentive Plan (incorporated by reference to the
Companys current report on Form 8-K (File No. 000-50890), filed on May 25, 2007).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 3, 2007
    By:
    /s/ Chad M. UtrupChad M. UtrupChief Financial Officer 31