##### 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, 2006
 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.)6530 West Campus OvalNew Albany, Ohio
    
    43054(Address of principal executive offices)
    
    (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
NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005 (UNAUDITED)
    
    
    1CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2006 (UNAUDITED) AND DECEMBER
31, 2005 (UNAUDITED)
    
    
    2CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 2006 AND 2005 (UNAUDITED)
    
    
    3NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
    
    
    4ITEM 2
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    23ITEM 3
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    28ITEM 4
    
    CONTROLS AND PROCEDURES
    
    
    28PART II
    
    OTHER INFORMATION
    
    
    29SIGNATURES
    
    
    31Deferred Compensation PlanCertification by Chief Executive OfficerCertification by Chief Financial OfficerCertification Pursuant to Section 906Certification Pursuant to Section 906




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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 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)(In thousands, except per share amounts)REVENUES
    
    $
    235,841
    
    
    $
    205,859
    
    
    $
    699,973
    
    
    $
    554,365COST OF REVENUES
    
    
    195,044
    
    
    
    169,364
    
    
    
    580,245
    
    
    
    455,476Gross Profit
    
    
    40,797
    
    
    
    36,495
    
    
    
    119,728
    
    
    
    98,889SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    13,294
    
    
    
    11,876
    
    
    
    39,693
    
    
    
    31,597AMORTIZATION EXPENSE
    
    
    104
    
    
    
    53
    
    
    
    312
    
    
    
    217Operating Income
    
    
    27,399
    
    
    
    24,566
    
    
    
    79,723
    
    
    
    67,075OTHER INCOME
    
    
    (1,642
    )
    
    
    (325
    )
    
    
    (2,720
    )
    
    
    (3,598
    )INTEREST EXPENSE
    
    
    3,582
    
    
    
    3,977
    
    
    
    11,321
    
    
    
    9,460LOSS ON EARLY EXTINGUISHMENT OF DEBT
    
    
    
    
    
    
    1,525
    
    
    
    318
    
    
    
    1,525Income Before Provision for Income Taxes
    
    
    25,459
    
    
    
    19,389
    
    
    
    70,804
    
    
    
    59,688PROVISION FOR INCOME TAXES
    
    
    7,453
    
    
    
    7,491
    
    
    
    23,896
    
    
    
    22,719NET INCOME
    
    $
    18,006
    
    
    $
    11,898
    
    
    $
    46,908
    
    
    $
    36,969EARNINGS PER COMMON SHARE:Basic
    
    $
    0.85
    
    
    $
    0.58
    
    
    $
    2.22
    
    
    $
    1.96Diluted
    
    $
    0.84
    
    
    $
    0.57
    
    
    $
    2.18
    
    
    $
    1.93WEIGHTED AVERAGE SHARES OUTSTANDING:Basic
    
    
    21,156
    
    
    
    20,679
    
    
    
    21,099
    
    
    
    18,885Diluted
    
    
    21,548
    
    
    
    20,918
    
    
    
    21,507
    
    
    
    19,159
  1




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COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)
    
    
    (Unaudited)(In thousands)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    21,896
    
    
    $
    40,641Accounts receivable, net of reserve for doubtful accounts of $6,009
and $6,087, respectively
    
    
    146,752
    
    
    
    114,116Inventories, net
    
    
    87,233
    
    
    
    69,053Prepaid expenses and other current assets
    
    
    11,507
    
    
    
    4,724Deferred income taxes
    
    
    13,345
    
    
    
    12,571Total current assets
    
    
    280,733
    
    
    
    241,105PROPERTY, PLANT AND EQUIPMENT, net
    
    
    84,695
    
    
    
    80,415GOODWILL
    
    
    127,664
    
    
    
    125,607INTANGIBLE ASSETS, net of accumulated amortization of $744 and
$451, respectively
    
    
    84,284
    
    
    
    84,577OTHER ASSETS, net
    
    
    14,293
    
    
    
    12,179TOTAL ASSETS
    
    $
    591,669
    
    
    $
    543,883LIABILITIES AND STOCKHOLDERS INVESTMENTCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    1,981
    
    
    $
    5,309Accounts payable
    
    
    100,993
    
    
    
    73,709Accrued liabilities
    
    
    43,562
    
    
    
    42,983Total current liabilities
    
    
    146,536
    
    
    
    122,001LONG-TERM DEBT, net of current maturities
    
    
    161,406
    
    
    
    185,700DEFERRED TAX LIABILITIES
    
    
    8,802
    
    
    
    8,802OTHER LONG-TERM LIABILITIES
    
    
    20,357
    
    
    
    25,303Total liabilities
    
    
    337,101
    
    
    
    341,806COMMITMENTS AND CONTINGENCIES (Note 10)STOCKHOLDERS INVESTMENT:Common stock $.01 par value; 30,000,000 shares authorized; 21,163,675
and 21,145,954 shares issued and outstanding, respectively
    
    
    212
    
    
    
    211Additional paid-in capital
    
    
    172,285
    
    
    
    169,252Retained earnings
    
    
    80,865
    
    
    
    33,957Accumulated other comprehensive income (loss)
    
    
    1,206
    
    
    
    (1,343
    )Total stockholders investment
    
    
    254,568
    
    
    
    202,077TOTAL LIABILITIES AND STOCKHOLDERS INVESTMENT
    
    $
    591,669
    
    
    $
    543,883
  2




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COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months EndedSeptember 30,2006
    
    
    2005(Unaudited)
    
    
    (Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    46,908
    
    
    $
    36,969Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    11,166
    
    
    
    8,926Noncash amortization of debt financing costs
    
    
    679
    
    
    
    619Loss on early extinguishment of debt
    
    
    318
    
    
    
    1,525Stock-based compensation expense
    
    
    1,418
    
    
    
    (Gain)/loss on sale of assets
    
    
    (367
    )
    
    
    78Pension and post-retirement curtailment gain
    
    
    (3,865
    )
    
    
    Deferred income tax (benefit)/provision
    
    
    (1,679
    )
    
    
    1,361Noncash gain on forward exchange contracts
    
    
    (2,707
    )
    
    
    (3,495
    )Change in other operating items
    
    
    (28,089
    )
    
    
    (19,228
    )Net cash provided by operating activities
    
    
    23,782
    
    
    
    26,755CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, plant and equipment
    
    
    (15,051
    )
    
    
    (9,332
    )Proceeds from disposal/sale of property, plant and equipment
    
    
    377
    
    
    
    Proceeds from disposal/sale of other assets
    
    
    1,800
    
    
    
    Acquisitions payments, net of cash received
    
    
    (606
    )
    
    
    (175,528
    )Other assets and liabilities
    
    
    (420
    )
    
    
    Net cash used in investing activities
    
    
    (13,900
    )
    
    
    (184,860
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock under equity incentive plans
    
    
    1,165
    
    
    
    44,937Excess tax benefits from equity incentive plans
    
    
    148
    
    
    
    Repayment of revolving credit facility
    
    
    (24,640
    )
    
    
    (203,219
    )Borrowings under revolving credit facility
    
    
    23,730
    
    
    
    201,613Long-term borrowings
    
    
    
    
    
    
    227,459Proceeds from issuance of 8% senior notes
    
    
    
    
    
    
    150,000Repayments of long-term borrowings
    
    
    (27,786
    )
    
    
    (237,223
    )Other, net
    
    
    (76
    )
    
    
    104Net cash (used in) provided by financing activities
    
    
    (27,459
    )
    
    
    183,671EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS
    
    
    (1,168
    )
    
    
    (1,712
    )NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (18,745
    )
    
    
    23,854CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    40,641
    
    
    
    1,396End of period
    
    $
    21,896
    
    
    $
    25,250SUPPLEMENTAL CASH FLOW INFORMATION:Cash paid for interest
    
    $
    13,415
    
    
    $
    5,774Cash paid for income taxes, net
    
    $
    19,440
    
    
    $
    17,451
  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
 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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Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements
 3. Share-Based Compensation
 Share-Based Payment Accounting for Stock-Based
Compensation Statement of Cash Flows
    5




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2005Net income, as reported
    
    $
    11,898
    
    
    $
    36,969(Less): Stock-based compensation
expense determined under the
the fair-value-based
method for all awards,
net of related tax
effects
    
    
    (257
    )
    
    
    (364
    )Pro forma net income
    
    $
    11,641
    
    
    $
    36,605Basic earnings per share:As reported
    
    $
    0.58
    
    
    $
    1.96Pro forma
    
    $
    0.56
    
    
    $
    1.94Diluted earnings per share:As reported
    
    $
    0.57
    
    
    $
    1.93Pro forma
    
    $
    0.56
    
    
    $
    1.91
 Stock Option Grants and Restricted Stock Awards
      2004StockOptionGrantsWeighted-average fair value of option and restricted stock grants
    
    $
    3.34Risk-free interest rate
    
    
    4.50
    %Expected volatility
    
    
    23.12
    %Expected life in months
    
    
    36
  6




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Weighted-Weighted-
    
    
    Average
    
    
    AggregateAverage
    
    
    Remaining
    
    
    IntrinsicOptions
    
    
    Exercise
    
    
    Contractual
    
    
    ValueStock Options
    
    (000s)
    
    
    Price
    
    
    Life (Years)
    
    
    (000s)Outstanding at December 31, 2005
    
    
    1,219
    
    
    $
    10.45
    
    
    
    
    
    
    $
    Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (185
    )
    
    
    6.36
    
    
    
    
    
    
    
    2,315Forfeited
    
    
    (29
    )
    
    
    15.84
    
    
    
    
    
    
    
    Oustanding at September 30, 2006
    
    
    1,005
    
    
    $
    11.05
    
    
    
    7.7
    
    
    $
    7,950Exercisable at September 30, 2006
    
    
    654
    
    
    $
    8.48
    
    
    
    7.5
    
    
    $
    6,798
  Nonvested Stock Options
    
    
    Nonvested Restricted StockWeighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    AverageOptions
    
    
    Grant-Date
    
    
    Shares
    
    
    Grant-Date(000s)
    
    
    Fair Value
    
    
    (000s)
    
    
    Fair ValueNonvested at December 31, 2005
    
    
    380
    
    
    $
    3.34
    
    
    
    167
    
    
    $
    19.50Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    (29
    )
    
    
    3.34
    
    
    
    (4
    )
    
    
    19.50Nonvested at September 30, 2006
    
    
    351
    
    
    $
    3.34
    
    
    
    163
    
    
    $
    19.50
  4. Accounts Receivable
  5. Inventories
  September 30,
    
    
    December 31,2006
    
    
    2005Raw materials
    
    $
    60,515
    
    
    $
    46,218Work in process
    
    
    14,470
    
    
    
    12,571Finished goods
    
    
    17,727
    
    
    
    13,655Less excess and obsolete
    
    
    (5,479
    )
    
    
    (3,391
    )$
    87,233
    
    
    $
    69,053
  7




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6. Stockholders Investment
 Common Stock 
 Preferred Stock 
 Earnings Per Share  Earnings per Share
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net income applicable to common shareholders  basic and diluted
    
    $
    18,006
    
    
    $
    11,898
    
    
    $
    46,908
    
    
    $
    36,969Weighted average number of common shares outstanding
    
    
    21,156
    
    
    
    20,679
    
    
    
    21,099
    
    
    
    18,885Dilutive effect of outstanding stock options and restricted stock
grants after application of the treasury stock method
    
    
    392
    
    
    
    239
    
    
    
    408
    
    
    
    274Dilutive shares outstanding
    
    
    21,548
    
    
    
    20,918
    
    
    
    21,507
    
    
    
    19,159Basic earnings per share
    
    $
    0.85
    
    
    $
    0.58
    
    
    $
    2.22
    
    
    $
    1.96Diluted earning per share
    
    $
    0.84
    
    
    $
    0.57
    
    
    $
    2.18
    
    
    $
    1.93
 Dividends 
 7. Debt
  September 30,
    
    
    December 31,2006
    
    
    2005Revolving credit facilities bore interest at a weighted average of
6.8% as of September 30, 2006 and 6.6% as of December 31, 2005
    
    $
    2,808
    
    
    $
    3,446Term loan, with principal and interest payable quarterly, bore
interest at a weighted average rate of 6.7% as of September 30,
2006 and 6.3% as of December 31, 2005
    
    
    10,245
    
    
    
    37,1528.0% senior notes due 2013
    
    
    150,000
    
    
    
    150,000Other
    
    
    334
    
    
    
    411163,387
    
    
    
    191,009Less current maturities
    
    
    1,981
    
    
    
    5,309$
    161,406
    
    
    $
    185,700
 Credit Agreement  Debtors Accounting for the Changes in Line-of-Credit or Revolving-Debt
Arrangements Debtors Accounting for a Modification or Exchange of Debt Instruments (
 8




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9




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Terms, Covenants and Compliance Status
 8. Goodwill and Intangible Assets
    10




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September 30, 2006Weighted-Average
    
    
    GrossAmortization
    
    
    Carrying
    
    
    Accumulated
    
    
    Net CarryingPeriod
    
    
    Amount
    
    
    Amortization
    
    
    AmountDefinite-lived intangible assets:Tradenames/Trademarks
    
    30 years
    
    $
    9,790
    
    
    $
    (509
    )
    
    $
    9,281Licenses
    
    7 years
    
    
    438
    
    
    
    (235
    )
    
    
    203$
    10,228
    
    
    $
    (744
    )
    
    $
    9,484Indefinite-lived intangible assets:Goodwill
    
    
    
    
    
    $
    127,664
    
    
    $
    
    
    
    $
    127,664Customer relationships
    
    
    
    
    
    
    74,800
    
    
    
    
    
    
    
    74,800$
    202,464
    
    
    $
    
    
    
    $
    202,464Total consolidated goodwill and
intangible assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    211,948
 December 31, 2005Weighted-Average
    
    
    GrossAmortization
    
    
    Carrying
    
    
    Accumulated
    
    
    Net CarryingPeriod
    
    
    Amount
    
    
    Amortization
    
    
    AmountDefinite-lived intangible assets:Tradenames/Trademarks
    
    30 years
    
    $
    9,790
    
    
    $
    (263
    )
    
    $
    9,527Licenses
    
    7 years
    
    
    438
    
    
    
    (188
    )
    
    
    250$
    10,228
    
    
    $
    (451
    )
    
    $
    9,777Indefinite-lived intangible assets:Goodwill
    
    
    
    
    
    $
    125,607
    
    
    $
    
    
    
    $
    125,607Customer relationships
    
    
    
    
    
    
    74,800
    
    
    
    
    
    
    
    74,800$
    200,407
    
    
    $
    
    
    
    $
    200,407Total consolidated goodwill and
intangible assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    210,184
   EstimatedFiscal Year Ended
    
    AmortizationDecember 31,
    
    Expense2006
    
    $
    3892007
    
    $
    3892008
    
    $
    3892009
    
    $
    3892010
    
    $
    3262011
    
    $
    326
 11




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Balance  December 31, 2005
    
    $
    125,607Post-acquisition adjustments
    
    
    606Asset sale
    
    
    (440
    )Currency translation adjustment
    
    
    1,891Balance  September 30, 2006
    
    $
    127,664
 9. Comprehensive Income
 Reporting Comprehensive Income,
 Foreign currency translation adjustment
    
    $
    4,132Minimum pension liability
    
    
    (2,926
    )$
    1,206
  2006
    
    
    2005Net income
    
    $
    46,908
    
    
    $
    36,969Other comprehensive income:Foreign currency translation adjustment
    
    
    2,549
    
    
    
    (3,231
    )Minimum pension liability adjustment
    
    
    
    
    
    
    (505
    )Comprehensive income
    
    $
    49,457
    
    
    $
    33,233
 10. Commitments and Contingencies
 Warranty 
 Balance  December 31, 2005
    
    $
    7,117Additional provisions recorded
    
    
    2,936Deduction for payments made
    
    
    (3,900
    )Currency translation adjustment
    
    
    28Balance  September 30, 2006
    
    $
    6,181
 Foreign Currency Forward Exchange Contracts 
 12




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Local
    
    
    
    
    
    U.S. $Currency
    
    U.S. $
    
    EquivalentAmount
    
    Equivalent
    
    Fair ValueContracts to (buy)
sell currencies:U.S. dollar
    
    $
    (621
    )
    
    $
    (617
    )
    
    $
    (621
    )Eurodollar
    
    
    38,444
    
    
    
    51,530
    
    
    
    49,596Swedish kronor
    
    
    16,000
    
    
    
    2,247
    
    
    
    2,195Japanese yen
    
    
    3,550,000
    
    
    
    36,608
    
    
    
    31,727Australian dollar
    
    
    3,183
    
    
    
    2,473
    
    
    
    2,368
  Litigation 
 11. Defined Benefit and Post-Retirement Benefit Plans
   U.S. Defined Benefit Plans
    
    
    Non U.S. Defined Benefit Plans
    
    

Post-Retirement
Benefit PlansThree Months Ended
    
    
    Three Months Ended
    
    
    Three Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Service cost
    
    $
    114
    
    
    $
    393
    
    
    $
    3
    
    
    $
    251
    
    
    $
    10
    
    
    $
    69Interest cost
    
    
    430
    
    
    
    415
    
    
    
    573
    
    
    
    469
    
    
    
    43
    
    
    
    109Expected return on plan assets
    
    
    (410
    )
    
    
    (406
    )
    
    
    (544
    )
    
    
    (487
    )
    
    
    
    
    
    
    Amortization of prior service
costs
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    4
    
    
    
    
    
    
    
    Special termination benefits
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Recognized actuarial loss
    
    
    
    
    
    
    
    
    
    
    46
    
    
    
    83
    
    
    
    
    
    
    
    Net periodic benefit cost
    
    $
    145
    
    
    $
    402
    
    
    $
    79
    
    
    $
    320
    
    
    $
    53
    
    
    $
    178
  13




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##### Table of Contents



U.S. Defined Benefit Plans
    
    
    Non U.S. Defined Benefit Plans
    
    
    Post-Retirement Benefit PlansNine Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Service cost
    
    $
    515
    
    
    $
    1,004
    
    
    $
    221
    
    
    $
    763
    
    
    $
    50
    
    
    $
    165Interest cost
    
    
    1,254
    
    
    
    1,060
    
    
    
    1,621
    
    
    
    1,433
    
    
    
    121
    
    
    
    254Expected return on plan assets
    
    
    (1,239
    )
    
    
    (1,037
    )
    
    
    (1,520
    )
    
    
    (1,486
    )
    
    
    
    
    
    
    Amortization of prior service
costs
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    14
    
    
    
    
    
    
    
    Curtailment (gain)/loss
    
    
    (1,949
    )
    
    
    
    
    
    
    142
    
    
    
    
    
    
    
    (2,058
    )
    
    
    Special termination benefits
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    354
    
    
    
    Recognized actuarial loss
    
    
    
    
    
    
    
    
    
    
    200
    
    
    
    254
    
    
    
    
    
    
    
    Net periodic benefit cost
    
    $
    (1,373
    )
    
    $
    1,027
    
    
    $
    670
    
    
    $
    978
    
    
    $
    (1,533
    )
    
    $
    419
   12. Related Party Transactions
   13. Consolidating Guarantor and Non-Guarantor Financial Information
   14




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2006
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    202,931
    
    
    $
    34,421
    
    
    $
    (1,511
    )
    
    $
    235,841COST OF REVENUES
    
    
    
    
    
    
    167,818
    
    
    
    28,575
    
    
    
    (1,349
    )
    
    
    195,044Gross Profit
    
    
    
    
    
    
    35,113
    
    
    
    5,846
    
    
    
    (162
    )
    
    
    40,797SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    9,891
    
    
    
    3,552
    
    
    
    (149
    )
    
    
    13,294AMORTIZATION EXPENSE
    
    
    
    
    
    
    104
    
    
    
    
    
    
    
    
    
    
    
    104Operating Income
    
    
    
    
    
    
    25,118
    
    
    
    2,294
    
    
    
    (13
    )
    
    
    27,399OTHER EXPENSE (INCOME)
    
    
    
    
    
    
    (5
    )
    
    
    (1,637
    )
    
    
    
    
    
    
    (1,642
    )INTEREST EXPENSE
    
    
    
    
    
    
    3,293
    
    
    
    289
    
    
    
    
    
    
    
    3,582Income Before Provision for
Income Taxes
    
    
    
    
    
    
    21,830
    
    
    
    3,642
    
    
    
    (13
    )
    
    
    25,459PROVISION FOR INCOME TAXES
    
    
    
    
    
    
    6,205
    
    
    
    1,248
    
    
    
    
    
    
    
    7,453NET INCOME
    
    $
    
    
    
    $
    15,625
    
    
    $
    2,394
    
    
    $
    (13
    )
    
    $
    18,006
 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 NINE MONTHS ENDED SEPTEMBER 30, 2006
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    601,728
    
    
    $
    102,713
    
    
    $
    (4,468
    )
    
    $
    699,973COST OF REVENUES
    
    
    
    
    
    
    498,677
    
    
    
    85,530
    
    
    
    (3,962
    )
    
    
    580,245Gross Profit
    
    
    
    
    
    
    103,051
    
    
    
    17,183
    
    
    
    (506
    )
    
    
    119,728SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    29,853
    
    
    
    10,257
    
    
    
    (417
    )
    
    
    39,693AMORTIZATION EXPENSE
    
    
    
    
    
    
    312
    
    
    
    
    
    
    
    
    
    
    
    312Operating Income
    
    
    
    
    
    
    72,886
    
    
    
    6,926
    
    
    
    (89
    )
    
    
    79,723OTHER EXPENSE (INCOME)
    
    
    
    
    
    
    9
    
    
    
    (2,729
    )
    
    
    
    
    
    
    (2,720
    )INTEREST EXPENSE
    
    
    
    
    
    
    10,417
    
    
    
    904
    
    
    
    
    
    
    
    11,321LOSS ON EARLY EXTINGUISHMENT
OF DEBT
    
    
    
    
    
    
    282
    
    
    
    36
    
    
    
    
    
    
    
    318Income Before Provision for
Income Taxes
    
    
    
    
    
    
    62,178
    
    
    
    8,715
    
    
    
    (89
    )
    
    
    70,804PROVISION FOR INCOME TAXES
    
    
    
    
    
    
    20,774
    
    
    
    3,122
    
    
    
    
    
    
    
    23,896NET INCOME
    
    $
    
    
    
    $
    41,404
    
    
    $
    5,593
    
    
    $
    (89
    )
    
    $
    46,908
 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 SEPTEMBER 30, 2006
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    
    
    
    $
    20,645
    
    
    $
    1,251
    
    
    $
    
    
    
    $
    21,896Accounts receivable, net
    
    
    
    
    
    
    166,907
    
    
    
    28,524
    
    
    
    (48,679
    )
    
    
    146,752Inventories, net
    
    
    
    
    
    
    65,687
    
    
    
    21,714
    
    
    
    (168
    )
    
    
    87,233Prepaid expenses and other current assets
    
    
    
    
    
    
    8,340
    
    
    
    3,167
    
    
    
    
    
    
    
    11,507Deferred income taxes
    
    
    
    
    
    
    15,998
    
    
    
    (2,653
    )
    
    
    
    
    
    
    13,345Total current assets
    
    
    
    
    
    
    277,577
    
    
    
    52,003
    
    
    
    (48,847
    )
    
    
    280,733PROPERTY, PLANT AND
EQUIPMENT, net
    
    
    
    
    
    
    78,601
    
    
    
    6,094
    
    
    
    
    
    
    
    84,695INVESTMENT IN SUBSIDIARIES
    
    
    380,813
    
    
    
    1,201
    
    
    
    1,715
    
    
    
    (383,729
    )
    
    
    GOODWILL
    
    
    
    
    
    
    103,922
    
    
    
    23,742
    
    
    
    
    
    
    
    127,664INTANGIBLE ASSETS, net
    
    
    
    
    
    
    84,284
    
    
    
    
    
    
    
    
    
    
    
    84,284OTHER ASSETS, net
    
    
    
    
    
    
    18,004
    
    
    
    8,944
    
    
    
    (12,655
    )
    
    
    14,293TOTAL ASSETS
    
    $
    380,813
    
    
    $
    563,589
    
    
    $
    92,498
    
    
    $
    (445,231
    )
    
    $
    591,669LIABILITIES AND STOCKHOLDERS INVESTMENTCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    
    
    
    $
    1,981
    
    
    $
    
    
    
    $
    
    
    
    $
    1,981Accounts payable
    
    
    
    
    
    
    133,135
    
    
    
    16,537
    
    
    
    (48,679
    )
    
    
    100,993Accrued liabilities
    
    
    
    
    
    
    40,512
    
    
    
    3,050
    
    
    
    
    
    
    
    43,562Total current liabilities
    
    
    
    
    
    
    175,628
    
    
    
    19,587
    
    
    
    (48,679
    )
    
    
    146,536LONG-TERM DEBT, net of current maturities
    
    
    
    
    
    
    148,353
    
    
    
    13,053
    
    
    
    
    
    
    
    161,406DEFERRED TAX LIABILITIES
    
    
    
    
    
    
    22,273
    
    
    
    (816
    )
    
    
    (12,655
    )
    
    
    8,802OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    14,859
    
    
    
    5,498
    
    
    
    
    
    
    
    20,357Total liabilities
    
    
    
    
    
    
    361,113
    
    
    
    37,322
    
    
    
    (61,334
    )
    
    
    337,101STOCKHOLDERS INVESTMENT
    
    
    380,813
    
    
    
    202,476
    
    
    
    55,176
    
    
    
    (383,897
    )
    
    
    254,568TOTAL LIABILITIES AND
STOCKHOLDERS INVESTMENT
    
    $
    380,813
    
    
    $
    563,589
    
    
    $
    92,498
    
    
    $
    (445,231
    )
    
    $
    591,669
 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 NINE MONTHS ENDED SEPTEMBER 30, 2006
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    
    
    
    $
    41,404
    
    
    $
    5,593
    
    
    $
    (89
    )
    
    $
    46,908Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    9,633
    
    
    
    1,533
    
    
    
    
    
    
    
    11,166Noncash amortization of debt financing costs
    
    
    
    
    
    
    649
    
    
    
    30
    
    
    
    
    
    
    
    679Loss on early extinguishment of debt
    
    
    
    
    
    
    282
    
    
    
    36
    
    
    
    
    
    
    
    318Stock-based compensation expense
    
    
    
    
    
    
    1,418
    
    
    
    
    
    
    
    
    
    
    
    1,418(Gain)/loss on sale of assets
    
    
    
    
    
    
    (380
    )
    
    
    13
    
    
    
    
    
    
    
    (367
    )Pension and post-retirement curtailment
(gain)/loss
    
    
    
    
    
    
    (4,007
    )
    
    
    142
    
    
    
    
    
    
    
    (3,865
    )Deferred income tax provision
    
    
    
    
    
    
    (3,415
    )
    
    
    1,736
    
    
    
    
    
    
    
    (1,679
    )Noncash gain on forward exchange contracts
    
    
    
    
    
    
    
    
    
    
    (2,707
    )
    
    
    
    
    
    
    (2,707
    )Change in other operating items
    
    
    
    
    
    
    (25,755
    )
    
    
    (2,423
    )
    
    
    89
    
    
    
    (28,089
    )Net cash provided by operating activities
    
    
    
    
    
    
    19,829
    
    
    
    3,953
    
    
    
    
    
    
    
    23,782CASH FLOWS FROM INVESTING
ACTIVITIES:Purchases of property, plant and equipment
    
    
    
    
    
    
    (13,617
    )
    
    
    (1,434
    )
    
    
    
    
    
    
    (15,051
    )Proceeds from disposal/sale of property, plant
and equipment
    
    
    
    
    
    
    332
    
    
    
    45
    
    
    
    
    
    
    
    377Proceeds from disposal/sale of other assets
    
    
    
    
    
    
    1,800
    
    
    
    
    
    
    
    
    
    
    
    1,800Post-acquisition and acquisitions payments,
net of cash received
    
    
    
    
    
    
    (606
    )
    
    
    
    
    
    
    
    
    
    
    (606
    )Other asset and liabilities
    
    
    
    
    
    
    (420
    )
    
    
    
    
    
    
    
    
    
    
    (420
    )Net cash used in investing activities
    
    
    
    
    
    
    (12,511
    )
    
    
    (1,389
    )
    
    
    
    
    
    
    (13,900
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock
under equity incentive plans
    
    
    
    
    
    
    1,165
    
    
    
    
    
    
    
    
    
    
    
    1,165Excess tax benefits from equity incentive plans
    
    
    
    
    
    
    148
    
    
    
    
    
    
    
    
    
    
    
    148Repayment of revolving credit facility
    
    
    
    
    
    
    (16,000
    )
    
    
    (8,640
    )
    
    
    
    
    
    
    (24,640
    )Borrowings under revolving credit facility
    
    
    
    
    
    
    16,000
    
    
    
    7,730
    
    
    
    
    
    
    
    23,730Repayments of long-term borrowings
    
    
    
    
    
    
    (26,591
    )
    
    
    (1,195
    )
    
    
    
    
    
    
    (27,786
    )Other, net
    
    
    
    
    
    
    (527
    )
    
    
    451
    
    
    
    
    
    
    
    (76
    )Net cash used in financing activities
    
    
    
    
    
    
    (25,805
    )
    
    
    (1,654
    )
    
    
    
    
    
    
    (27,459
    )EFFECT OF CURRENCY EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    (21
    )
    
    
    (1,147
    )
    
    
    
    
    
    
    (1,168
    )NET (DECREASE) IN CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    (18,508
    )
    
    
    (237
    )
    
    
    
    
    
    
    (18,745
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    
    
    
    
    39,153
    
    
    
    1,488
    
    
    
    
    
    
    
    40,641End of period
    
    $
    
    
    
    $
    20,645
    
    
    $
    1,251
    
    
    $
    
    
    
    $
    21,896
 18




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##### Table of Contents



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




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    174,702
    
    
    $
    31,715
    
    
    $
    (558
    )
    
    $
    205,859COST OF SALES
    
    
    
    
    
    
    143,321
    
    
    
    26,492
    
    
    
    (449
    )
    
    
    169,364Gross Profit
    
    
    
    
    
    
    31,381
    
    
    
    5,223
    
    
    
    (109
    )
    
    
    36,495SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    8,871
    
    
    
    3,114
    
    
    
    (109
    )
    
    
    11,876AMORTIZATION EXPENSE
    
    
    
    
    
    
    53
    
    
    
    
    
    
    
    
    
    
    
    53Operating Income
    
    
    
    
    
    
    22,457
    
    
    
    2,109
    
    
    
    
    
    
    
    24,566OTHER INCOME
    
    
    
    
    
    
    (32
    )
    
    
    (293
    )
    
    
    
    
    
    
    (325
    )INTEREST EXPENSE
    
    
    
    
    
    
    3,683
    
    
    
    294
    
    
    
    
    
    
    
    3,977LOSS ON EARLY
EXTINGUISHMENT OF DEBT
    
    
    
    
    
    
    1,354
    
    
    
    171
    
    
    
    
    
    
    
    1,525Income Before Provision for
Income Taxes
    
    
    
    
    
    
    17,452
    
    
    
    1,937
    
    
    
    
    
    
    
    19,389PROVISION FOR INCOME TAXES
    
    
    
    
    
    
    6,969
    
    
    
    522
    
    
    
    
    
    
    
    7,491NET INCOME
    
    $
    
    
    
    $
    10,483
    
    
    $
    1,415
    
    
    $
    
    
    
    $
    11,898
 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, 2005
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    462,236
    
    
    $
    95,036
    
    
    $
    (2,907
    )
    
    $
    554,365COST OF SALES
    
    
    
    
    
    
    379,178
    
    
    
    78,906
    
    
    
    (2,608
    )
    
    
    455,476Gross Profit
    
    
    
    
    
    
    83,058
    
    
    
    16,130
    
    
    
    (299
    )
    
    
    98,889SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    22,654
    
    
    
    9,242
    
    
    
    (299
    )
    
    
    31,597AMORTIZATION EXPENSE
    
    
    
    
    
    
    217
    
    
    
    
    
    
    
    
    
    
    
    217Operating Income
    
    
    
    
    
    
    60,187
    
    
    
    6,888
    
    
    
    
    
    
    
    67,075OTHER INCOME
    
    
    
    
    
    
    (67
    )
    
    
    (3,531
    )
    
    
    
    
    
    
    (3,598
    )INTEREST EXPENSE
    
    
    
    
    
    
    8,464
    
    
    
    996
    
    
    
    
    
    
    
    9,460LOSS ON EARLY
EXTINGUISHMENT OF DEBT
    
    
    
    
    
    
    1,354
    
    
    
    171
    
    
    
    
    
    
    
    1,525Income Before Provision for
Income Taxes
    
    
    
    
    
    
    50,436
    
    
    
    9,252
    
    
    
    
    
    
    
    59,688PROVISION FOR INCOME TAXES
    
    
    
    
    
    
    19,693
    
    
    
    3,026
    
    
    
    
    
    
    
    22,719NET INCOME
    
    $
    
    
    
    $
    30,743
    
    
    $
    6,226
    
    
    $
    
    
    
    $
    36,969
 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 NINE MONTHS ENDED SEPTEMBER 30, 2005
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    
    
    
    $
    30,743
    
    
    $
    6,226
    
    
    $
    
    
    
    $
    36,969Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    7,370
    
    
    
    1,556
    
    
    
    
    
    
    
    8,926Noncash amortization of debt financing costs
    
    
    
    
    
    
    534
    
    
    
    85
    
    
    
    
    
    
    
    619Loss on early extinguishment of debt
    
    
    
    
    
    
    1,354
    
    
    
    171
    
    
    
    
    
    
    
    1,525Loss on sale of assets
    
    
    
    
    
    
    72
    
    
    
    6
    
    
    
    
    
    
    
    78Deferred income tax provision
    
    
    
    
    
    
    
    
    
    
    1,361
    
    
    
    
    
    
    
    1,361Noncash gain on forward exchange contracts
    
    
    
    
    
    
    
    
    
    
    (3,495
    )
    
    
    
    
    
    
    (3,495
    )Change in other operating items
    
    
    
    
    
    
    (19,406
    )
    
    
    178
    
    
    
    
    
    
    
    (19,228
    )Net cash provided by operating
activities
    
    
    
    
    
    
    20,667
    
    
    
    6,088
    
    
    
    
    
    
    
    26,755CASH FLOWS FROM INVESTING
ACTIVITIES:Purchases of property, plant and equipment
    
    
    
    
    
    
    (8,217
    )
    
    
    (1,115
    )
    
    
    
    
    
    
    (9,332
    )Post-acquisition and acquisitions payments,
net of cash received
    
    
    
    
    
    
    (175,753
    )
    
    
    225
    
    
    
    
    
    
    
    (175,528
    )Other asset and liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    
    
    
    
    (183,970
    )
    
    
    (890
    )
    
    
    
    
    
    
    (184,860
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock
under equity incentive plans
    
    
    
    
    
    
    44,937
    
    
    
    
    
    
    
    
    
    
    
    44,937Repayment of revolving credit facility
    
    
    
    
    
    
    (187,068
    )
    
    
    (16,151
    )
    
    
    
    
    
    
    (203,219
    )Borrowings under revolving credit facility
    
    
    
    
    
    
    187,068
    
    
    
    14,545
    
    
    
    
    
    
    
    201,613Long-term borrowings
    
    
    
    
    
    
    227,459
    
    
    
    
    
    
    
    
    
    
    
    227,459Proceeds from issuance of 8% senior notes
    
    
    
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    150,000Repayments of long-term borrowings
    
    
    
    
    
    
    (236,209
    )
    
    
    (1,014
    )
    
    
    
    
    
    
    (237,223
    )Other, net
    
    
    
    
    
    
    104
    
    
    
    
    
    
    
    
    
    
    
    104Net cash used in financing activities
    
    
    
    
    
    
    186,291
    
    
    
    (2,620
    )
    
    
    
    
    
    
    183,671EFFECT OF CURRENCY EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    
    
    
    
    (1,712
    )
    
    
    
    
    
    
    (1,712
    )NET INCREASE IN CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    22,988
    
    
    
    866
    
    
    
    
    
    
    
    23,854CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    
    
    
    
    394
    
    
    
    1,002
    
    
    
    
    
    
    
    1,396End of period
    
    $
    
    
    
    $
    23,382
    
    
    $
    1,868
    
    
    $
    
    
    
    $
    25,250
 22




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##### Table of Contents



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




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##### Table of Contents



Results of Operations
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2006
    
    2005
    
    2006
    
    2005Revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of Revenues
    
    
    82.7
    
    
    
    82.3
    
    
    
    82.9
    
    
    
    82.2Gross Profit
    
    
    17.3
    
    
    
    17.7
    
    
    
    17.1
    
    
    
    17.8Selling, General and Administrative
Expenses
    
    
    5.6
    
    
    
    5.8
    
    
    
    5.7
    
    
    
    5.7Amortization Expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Income
    
    
    11.7
    
    
    
    11.9
    
    
    
    11.4
    
    
    
    12.1Other (Income)
    
    
    (0.7
    )
    
    
    (0.2
    )
    
    
    (0.4
    )
    
    
    (0.7
    )Interest Expense
    
    
    1.5
    
    
    
    1.9
    
    
    
    1.6
    
    
    
    1.7Loss on Early Extinguishment of Debt
    
    
    
    
    
    
    0.7
    
    
    
    
    
    
    
    0.3Income Before Provision for Income Taxes
    
    
    10.9
    
    
    
    9.5
    
    
    
    10.2
    
    
    
    10.8Provision for Income Taxes
    
    
    3.2
    
    
    
    3.6
    
    
    
    3.4
    
    
    
    4.1Net Income
    
    
    7.7
    %
    
    
    5.9
    %
    
    
    6.8
    %
    
    
    6.7
    %
 Three Months Ended September 30, 2006 Compared to Three Months Ended September 30, 2005
 Revenues
 Gross Profit
 Selling, General and Administrative Expenses
 Amortization Expense
 Other (Income)
 Interest Expense
 24




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##### Table of Contents



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




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##### Table of Contents



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




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##### Table of Contents



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




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##### Table of Contents



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




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##### Table of Contents



PART II. OTHER INFORMATION
 COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
     29




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##### Table of Contents



10.1
    
    Deferred Compensation Plan31.1
    
    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: November 6, 2006
    By:
    /s/ Chad M. UtrupChad M. UtrupChief Financial Officer 31