##### 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 March 31, 2007
 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
(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 MONTHS ENDED MARCH 31, 2007
AND 2006 (UNAUDITED)
    
    
    1CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2007 (UNAUDITED) AND DECEMBER 31,
2006 (UNAUDITED)
    
    
    2CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE
MONTHS ENDED MARCH 31, 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
    
    
    20ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    24ITEM 4 CONTROLS AND PROCEDURES
    
    
    24PART II OTHER INFORMATION
    
    
    25SIGNATURES
    
    
    27Certification of President and CEOCertification of Chief Financial OfficerSection 906 CertificationSection 906 Certification
  i




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##### Table of Contents



ITEM 1  FINANCIAL STATEMENTS
 COMMERCIAL
VEHICLE GROUP, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months EndedMarch 31,2007
    
    
    2006(Unaudited)
    
    
    (Unaudited)(In thousands, except pershare amounts)REVENUES
    
    $
    198,801
    
    
    $
    229,345COST OF REVENUES
    
    
    172,532
    
    
    
    190,611Gross Profit
    
    
    26,269
    
    
    
    38,734SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    15,554
    
    
    
    13,152AMORTIZATION EXPENSE
    
    
    103
    
    
    
    105Operating Income
    
    
    10,612
    
    
    
    25,477OTHER EXPENSE
    
    
    2,320
    
    
    
    230INTEREST EXPENSE
    
    
    3,637
    
    
    
    3,890Income Before Provision for Income Taxes
    
    
    4,655
    
    
    
    21,357PROVISION FOR INCOME TAXES
    
    
    1,696
    
    
    
    7,949NET INCOME
    
    $
    2,959
    
    
    $
    13,408EARNINGS PER COMMON SHARE:Basic
    
    $
    0.14
    
    
    $
    0.64Diluted
    
    $
    0.14
    
    
    $
    0.62WEIGHTED AVERAGE SHARES OUTSTANDING:Basic
    
    
    21,389
    
    
    
    21,021Diluted
    
    
    21,663
    
    
    
    21,471
  1




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##### Table of Contents



COMMERCIAL
VEHICLE GROUP, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31,
    
    
    December 31,2007
    
    
    2006(Unaudited)
    
    
    (Unaudited)(In thousands except share and pershare amounts)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    16,703
    
    
    $
    19,821Accounts receivable, net of reserve for doubtful accounts of $4,474
and $5,536, respectively
    
    
    117,461
    
    
    
    123,471Inventories, net
    
    
    90,888
    
    
    
    88,723Prepaid expenses
    
    
    17,904
    
    
    
    24,272Deferred income taxes
    
    
    9,572
    
    
    
    8,819Total current assets
    
    
    252,528
    
    
    
    265,106PROPERTY, PLANT AND EQUIPMENT, net
    
    
    89,806
    
    
    
    90,388GOODWILL
    
    
    134,874
    
    
    
    134,766INTANGIBLE ASSETS, net of accumulated amortization of $936 and
$840, respectively
    
    
    84,092
    
    
    
    84,188OTHER ASSETS, net
    
    
    14,747
    
    
    
    16,374TOTAL ASSETS
    
    $
    576,047
    
    
    $
    590,822LIABILITIES AND STOCKHOLDERS INVESTMENTCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    2,259
    
    
    $
    2,158Accounts payable
    
    
    77,026
    
    
    
    86,610Accrued liabilities
    
    
    32,604
    
    
    
    40,970Total current liabilities
    
    
    111,889
    
    
    
    129,738LONG-TERM DEBT, net of current maturities
    
    
    158,871
    
    
    
    159,956DEFERRED TAX LIABILITIES
    
    
    10,572
    
    
    
    10,611PENSION AND OTHER POST-RETIREMENT BENEFITS
    
    
    22,481
    
    
    
    22,188OTHER LONG-TERM LIABILITIES
    
    
    3,238
    
    
    
    3,424Total liabilities
    
    
    307,051
    
    
    
    325,917COMMITMENTS AND CONTINGENCIES (Note 10)STOCKHOLDERS INVESTMENT:Common stock $.01 par value; 30,000,000 shares authorized; 21,389,495
and 21,368,831 shares issued and outstanding, respectively
    
    
    214
    
    
    
    214Treasury stock purchased from employees; 5,836 shares
    
    
    (115
    )
    
    
    (115
    )Additional paid-in capital
    
    
    175,043
    
    
    
    174,044Retained earnings
    
    
    95,028
    
    
    
    92,007Accumulated other comprehensive loss
    
    
    (1,174
    )
    
    
    (1,245
    )Total stockholders investment
    
    
    268,996
    
    
    
    264,905TOTAL LIABILITIES AND STOCKHOLDERS INVESTMENT
    
    $
    576,047
    
    
    $
    590,822
  2




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COMMERCIAL
VEHICLE GROUP, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Three Months EndedMarch 31,2007
    
    
    2006(Unaudited)
    
    
    (Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    2,959
    
    
    $
    13,408Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    3,729
    
    
    
    3,501Noncash amortization of debt financing costs
    
    
    216
    
    
    
    231Stock-based compensation expense
    
    
    846
    
    
    
    608Loss on sale of assets
    
    
    61
    
    
    
    2Deferred income tax benefit
    
    
    (792
    )
    
    
    (91
    )Noncash loss on forward exchange contracts
    
    
    2,247
    
    
    
    238Change in other operating items
    
    
    (8,423
    )
    
    
    (26,778
    )Net cash provided by (used in) operating activities
    
    
    843
    
    
    
    (8,881
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, plant and equipment
    
    
    (3,098
    )
    
    
    (4,591
    )Proceeds from disposal/sale of property, plant and equipment
    
    
    24
    
    
    
    Other assets and liabilities
    
    
    (29
    )
    
    
    (101
    )Net cash used in investing activities
    
    
    (3,103
    )
    
    
    (4,692
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock under equity incentive plans
    
    
    114
    
    
    
    599Excess tax benefit from equity incentive plans
    
    
    39
    
    
    
    Repayment of revolving credit facility
    
    
    (51,409
    )
    
    
    (2,192
    )Borrowings under revolving credit facility
    
    
    50,918
    
    
    
    2,747Repayments of long-term debt
    
    
    (467
    )
    
    
    (1,974
    )Borrowings of long-term debt
    
    
    
    
    
    
    522Payments on capital lease obligations
    
    
    (32
    )
    
    
    (26
    )Debt issuance costs and other, net
    
    
    
    
    
    
    (1
    )Net cash used in financing activities
    
    
    (837
    )
    
    
    (325
    )EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS
    
    
    (21
    )
    
    
    (275
    )NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (3,118
    )
    
    
    (14,173
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    19,821
    
    
    
    40,641End of period
    
    $
    16,703
    
    
    $
    26,468SUPPLEMENTAL CASH FLOW INFORMATION:Cash paid for interest
    
    $
    6,486
    
    
    $
    6,551Cash (refund) paid for income taxes, net
    
    $
    (5,288
    )
    
    $
    1,170
  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
     4




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Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities.
 3. Share-Based Compensation
 Stock Option Grants and Restricted Stock Awards
       5




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##### Table of Contents



2004StockOptionGrantsWeighted-average fair value of option
    
    $
    3.34Risk-free interest rate
    
    
    4.50
    %Expected volatility
    
    
    23.12
    %Expected life in months
    
    
    36
   Weighted-Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateOptions
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicStock Options
    
    (000s)
    
    
    Price
    
    
    Life (Years)
    
    
    Value (000s)Outstanding at December 31, 2006
    
    
    848
    
    
    $
    11.94
    
    
    
    7.5
    
    
    $
    8,588Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (21
    )
    
    
    5.54
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Oustanding at March 31, 2007
    
    
    827
    
    
    $
    12.10
    
    
    
    7.5
    
    
    $
    6,595Exercisable at March 31, 2007
    
    
    653
    
    
    $
    11.09
    
    
    
    7.4
    
    
    $
    5,851Nonvested, expected to vest at December 31, 2007
    
    
    162
    
    
    $
    15.84
    
    
    
    1.0
    
    
    $
    683
  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, 2006
    
    
    175
    
    
    $
    3.34
    
    
    
    309
    
    
    $
    20.21Granted
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    20.10Vested
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Nonvested at March 31, 2007
    
    
    175
    
    
    $
    3.34
    
    
    
    329
    
    
    $
    20.21
  4. Accounts Receivable
  6




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5. Inventories
  March 31,
    
    
    December 31,2007
    
    
    2006Raw materials
    
    $
    62,347
    
    
    $
    61,617Work in process
    
    
    14,737
    
    
    
    14,436Finished goods
    
    
    18,466
    
    
    
    17,314Less excess and obsolete
    
    
    (4,662
    )
    
    
    (4,644
    )$
    90,888
    
    
    $
    88,723
  6. Stockholders Investment
 Common Stock 
 Preferred Stock 
 Earnings Per Share  Earnings per Share Share Based Payment
 Three Months EndedMarch 31,2007
    
    
    2006Net income applicable to common shareholders  basic and diluted
    
    $
    2,959
    
    
    $
    13,408Weighted average number of common shares outstanding
    
    
    21,389
    
    
    
    21,021Dilutive effect of outstanding stock options and restricted stock
grants after application of the treasury stock method
    
    
    274
    
    
    
    450Dilutive shares outstanding
    
    
    21,663
    
    
    
    21,471Basic earnings per share
    
    $
    0.14
    
    
    $
    0.64Diluted earning per share
    
    $
    0.14
    
    
    $
    0.62
 Dividends 
 
 7




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Debt
  March 31,
    
    
    December 31,2007
    
    
    2006Revolving credit facilities bore interest at a weighted average of
7.7% as of March 31, 2007 and 7.1% as of December 31, 2006
    
    $
    984
    
    
    $
    1,469Term loan, with principal and interest payable quarterly, bore
interest at a weighted average rate of 7.2% as of March 31,
2007 and 6.8% as of December 31, 2006
    
    
    9,828
    
    
    
    10,2958.0% senior notes due 2013
    
    
    150,000
    
    
    
    150,000Other
    
    
    318
    
    
    
    350161,130
    
    
    
    162,114Less current maturities
    
    
    2,259
    
    
    
    2,158$
    158,871
    
    
    $
    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 (
     8




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




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March 31, 2007Weighted-Average
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingAmortization Period
    
    
    Amount
    
    
    Amortization
    
    
    AmountDefinite-lived intangible assets:Tradenames/Trademarks
    
    30 years
    
    $
    9,790
    
    
    $
    (670
    )
    
    $
    9,120Licenses
    
    7 years
    
    
    438
    
    
    
    (266
    )
    
    
    172$
    10,228
    
    
    $
    (936
    )
    
    $
    9,292Indefinite-lived intangible assets:Goodwill
    
    
    
    
    
    $
    134,874
    
    
    $
    
    
    
    $
    134,874Customer relationships
    
    
    
    
    
    
    74,800
    
    
    
    
    
    
    
    74,800$
    209,674
    
    
    $
    
    
    
    $
    209,674Total consolidated goodwill and intangible assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    218,966
 December 31, 2006Weighted-Average
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingAmortization Period
    
    
    Amount
    
    
    Amortization
    
    
    AmountDefinite-lived intangible assets:Tradenames/Trademarks
    
    30 years
    
    $
    9,790
    
    
    $
    (589
    )
    
    $
    9,201Licenses
    
    7 years
    
    
    438
    
    
    
    (251
    )
    
    
    187$
    10,228
    
    
    $
    (840
    )
    
    $
    9,388Indefinite-lived intangible assets:Goodwill
    
    
    
    
    
    $
    134,766
    
    
    $
    
    
    
    $
    134,766Customer relationships
    
    
    
    
    
    
    74,800
    
    
    
    
    
    
    
    74,800$
    209,566
    
    
    $
    
    
    
    $
    209,566Total consolidated goodwill
and intangible assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    218,954
 10




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EstimatedFiscal Year Ended
    
    
    
    AmortizationDecember 31,
    
    
    
    Expense2007
    
    
    
    
    $
    3892008
    
    
    
    
    $
    3892009
    
    
    
    
    $
    3892010
    
    
    
    
    $
    3262011
    
    
    
    
    $
    3262012
    
    
    
    
    $
    326
  Balance  December 31, 2006
    
    $
    134,766Currency translation adjustment
    
    
    108Balance  March 31, 2007
    
    $
    134,874
 9. Comprehensive Income
 Reporting Comprehensive Income,
 Foreign currency translation adjustment
    
    $
    5,528Pension liability
    
    
    (6,702
    )$
    (1,174
    )
  2007
    
    
    2006Net income
    
    $
    2,959
    
    
    $
    13,408Other comprehensive income:Foreign currency translation adjustment
    
    
    71
    
    
    
    71Comprehensive income
    
    $
    3,030
    
    
    $
    13,479
 11




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##### Table of Contents



10. Commitments and Contingencies


Warranty 


Balance  December 31, 2006
    
    $
    5,197Additional provisions recorded
    
    
    709Deduction for payments made
    
    
    (834
    )Currency translation adjustment
    
    
    3Balance  March 31, 2007
    
    $
    5,075
 Foreign Currency Forward Exchange Contracts 
  Local
    
    
    
    
    
    
    U.S. $Currency
    
    
    U.S. $
    
    
    EquivalentAmount
    
    
    Equivalent
    
    
    Fair ValueContracts to (buy) sell currencies:U.S. dollar
    
    $
    (267
    )
    
    $
    (267
    )
    
    $
    (267
    )Eurodollar
    
    
    38,192
    
    
    
    53,338
    
    
    
    52,015Swedish kronor
    
    
    8,490
    
    
    
    1,244
    
    
    
    1,221Japanese yen
    
    
    4,050,000
    
    
    
    41,484
    
    
    
    36,541Australian dollar
    
    
    3,250
    
    
    
    2,564
    
    
    
    2,624
  Litigation 
 11. Pension and Other Post-Retirement Benefit Plans
  12




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##### Table of Contents



Other Post-RetirementU.S. Pension Plans
    
    
    Non U.S. Pension Plans
    
    
    Benefit PlansThree Months Ended
    
    
    Three Months Ended
    
    
    Three Months EndedMarch 31,
    
    
    March 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    125
    
    
    $
    282
    
    
    $
    
    
    
    $
    205
    
    
    $
    6
    
    
    $
    30Interest cost
    
    
    440
    
    
    
    415
    
    
    
    586
    
    
    
    507
    
    
    
    34
    
    
    
    52Expected return on
plan assets
    
    
    (381
    )
    
    
    (415
    )
    
    
    (557
    )
    
    
    (462
    )
    
    
    
    
    
    
    Amortization of
prior service costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    Recognized
actuarial loss
    
    
    55
    
    
    
    23
    
    
    
    47
    
    
    
    113
    
    
    
    96
    
    
    
    93Curtailment gain
    
    
    
    
    
    
    (1,449
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net periodic
benefit cost
    
    $
    239
    
    
    $
    (1,144
    )
    
    $
    76
    
    
    $
    368
    
    
    $
    136
    
    
    $
    175
  12. Related Party Transactions
 ,
 13. Consolidating Guarantor and Non-Guarantor Financial Information
   13




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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 MARCH 31, 2007
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    158,399
    
    
    $
    41,880
    
    
    $
    (1,478
    )
    
    $
    198,801COST OF REVENUES
    
    
    
    
    
    
    138,416
    
    
    
    35,300
    
    
    
    (1,184
    )
    
    
    172,532Gross Profit
    
    
    
    
    
    
    19,983
    
    
    
    6,580
    
    
    
    (294
    )
    
    
    26,269SELLING, GENERAL AND
ADMINISTRATIVE
EXPENSES
    
    
    
    
    
    
    11,963
    
    
    
    3,876
    
    
    
    (285
    )
    
    
    15,554AMORTIZATION EXPENSE
    
    
    
    
    
    
    103
    
    
    
    
    
    
    
    
    
    
    
    103Operating Income
    
    
    
    
    
    
    7,917
    
    
    
    2,704
    
    
    
    (9
    )
    
    
    10,612OTHER EXPENSE
    
    
    
    
    
    
    69
    
    
    
    2,251
    
    
    
    
    
    
    
    2,320INTEREST EXPENSE
    
    
    
    
    
    
    3,356
    
    
    
    281
    
    
    
    
    
    
    
    3,637Income Before
Provision for
Income Taxes
    
    
    
    
    
    
    4,492
    
    
    
    172
    
    
    
    (9
    )
    
    
    4,655PROVISION FOR
INCOME TAXES
    
    
    
    
    
    
    1,827
    
    
    
    (131
    )
    
    
    
    
    
    
    1,696NET INCOME
    
    $
    
    
    
    $
    2,665
    
    
    $
    303
    
    
    $
    (9
    )
    
    $
    2,959
 14




---



##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2007
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    
    
    
    $
    14,907
    
    
    $
    1,796
    
    
    $
    
    
    
    $
    16,703Accounts receivable, net
    
    
    
    
    
    
    147,857
    
    
    
    32,190
    
    
    
    (62,586
    )
    
    
    117,461Inventories, net
    
    
    
    
    
    
    67,298
    
    
    
    23,823
    
    
    
    (233
    )
    
    
    90,888Prepaid expenses and other
current assets
    
    
    
    
    
    
    8,334
    
    
    
    5,803
    
    
    
    3,767
    
    
    
    17,904Deferred income taxes
    
    
    
    
    
    
    13,383
    
    
    
    (1,940
    )
    
    
    (1,871
    )
    
    
    9,572Total current assets
    
    
    
    
    
    
    251,779
    
    
    
    61,672
    
    
    
    (60,923
    )
    
    
    252,528PROPERTY, PLANT AND
EQUIPMENT, net
    
    
    
    
    
    
    81,288
    
    
    
    8,518
    
    
    
    
    
    
    
    89,806INVESTMENT IN SUBSIDIARIES
    
    
    404,945
    
    
    
    10,602
    
    
    
    11,997
    
    
    
    (427,544
    )
    
    
    GOODWILL
    
    
    
    
    
    
    104,033
    
    
    
    30,841
    
    
    
    
    
    
    
    134,874INTANGIBLE ASSETS, net
    
    
    
    
    
    
    84,092
    
    
    
    
    
    
    
    
    
    
    
    84,092OTHER ASSETS, net
    
    
    
    
    
    
    17,062
    
    
    
    9,671
    
    
    
    (11,986
    )
    
    
    14,747TOTAL ASSETS
    
    $
    404,945
    
    
    $
    548,856
    
    
    $
    122,699
    
    
    $
    (500,453
    )
    
    $
    576,047LIABILITIES AND
STOCKHOLDERS
INVESTMENTCURRENT LIABILITIES:Current maturities of
long-term debt
    
    $
    
    
    
    $
    2,259
    
    
    $
    
    
    
    $
    
    
    
    $
    2,259Accounts payable
    
    
    
    
    
    
    117,813
    
    
    
    21,799
    
    
    
    (62,586
    )
    
    
    77,026Accrued liabilities
    
    
    
    
    
    
    27,819
    
    
    
    2,889
    
    
    
    1,896
    
    
    
    32,604Total current liabilities
    
    
    
    
    
    
    147,891
    
    
    
    24,688
    
    
    
    (60,690
    )
    
    
    111,889LONG-TERM DEBT, net of
current maturities
    
    
    
    
    
    
    148,025
    
    
    
    10,846
    
    
    
    
    
    
    
    158,871DEFERRED TAX LIABILITIES
    
    
    
    
    
    
    23,374
    
    
    
    (816
    )
    
    
    (11,986
    )
    
    
    10,572PENSION AND OTHER
POST-RETIREMENT BENEFITS
    
    
    
    
    
    
    12,383
    
    
    
    10,098
    
    
    
    
    
    
    
    22,481OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    3,216
    
    
    
    22
    
    
    
    
    
    
    
    3,238Total liabilities
    
    
    
    
    
    
    334,889
    
    
    
    44,838
    
    
    
    (72,676
    )
    
    
    307,051STOCKHOLDERS INVESTMENT
    
    
    404,945
    
    
    
    213,970
    
    
    
    77,858
    
    
    
    (427,777
    )
    
    
    268,996TOTAL LIABILITIES AND
STOCKHOLDERS INVESTMENT
    
    $
    404,945
    
    
    $
    548,859
    
    
    $
    122,696
    
    
    $
    (500,453
    )
    
    $
    576,047
 15




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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 THREE MONTHS ENDED MARCH 31, 2007
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    
    
    
    $
    2,665
    
    
    $
    303
    
    
    $
    (9
    )
    
    $
    2,959Adjustments to reconcile net
income to net
cash provided by operating
activities:Depreciation and amortization
    
    
    
    
    
    
    3,135
    
    
    
    594
    
    
    
    
    
    
    
    3,729Noncash amortization of debt
financing costs
    
    
    
    
    
    
    208
    
    
    
    8
    
    
    
    
    
    
    
    216Stock-based compensation
expense
    
    
    
    
    
    
    846
    
    
    
    
    
    
    
    
    
    
    
    846Loss (gain) on sale of assets
    
    
    
    
    
    
    63
    
    
    
    (2
    )
    
    
    
    
    
    
    61Deferred income tax provision
    
    
    
    
    
    
    (42
    )
    
    
    (750
    )
    
    
    
    
    
    
    (792
    )Noncash gain on forward
exchange contracts
    
    
    
    
    
    
    
    
    
    
    2,247
    
    
    
    
    
    
    
    2,247Change in other operating
items
    
    
    
    
    
    
    (7,874
    )
    
    
    (557
    )
    
    
    8
    
    
    
    (8,423
    )Net cash (used in)
provided by operating
activities
    
    
    
    
    
    
    (999
    )
    
    
    1,843
    
    
    
    (1
    )
    
    
    843CASH FLOWS FROM INVESTING
ACTIVITIES:Purchases of property, plant
and equipment
    
    
    
    
    
    
    (2,456
    )
    
    
    (642
    )
    
    
    
    
    
    
    (3,098
    )Proceeds from disposal/sale of
property, plant
and equipment
    
    
    
    
    
    
    
    
    
    
    24
    
    
    
    
    
    
    
    24Other asset and liabilities
    
    
    
    
    
    
    (29
    )
    
    
    (1
    )
    
    
    1
    
    
    
    (29
    )Net cash (used in)
provided by investing
activities
    
    
    
    
    
    
    (2,485
    )
    
    
    (619
    )
    
    
    1
    
    
    
    (3,103
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of
common stock
under equity incentive plans
    
    
    
    
    
    
    114
    
    
    
    
    
    
    
    
    
    
    
    114Excess tax benefits from equity
incentive plans
    
    
    
    
    
    
    39
    
    
    
    
    
    
    
    
    
    
    
    39Repayment of revolving credit
facility
    
    
    
    
    
    
    (46,500
    )
    
    
    (4,909
    )
    
    
    
    
    
    
    (51,409
    )Borrowings under revolving
credit facility
    
    
    
    
    
    
    46,500
    
    
    
    4,418
    
    
    
    
    
    
    
    50,918Repayments of long-term debt
    
    
    
    
    
    
    
    
    
    
    (467
    )
    
    
    
    
    
    
    (467
    )Other, net
    
    
    
    
    
    
    (30
    )
    
    
    (2
    )
    
    
    
    
    
    
    (32
    )Net cash provided by
(used in) financing
activities
    
    
    
    
    
    
    123
    
    
    
    (960
    )
    
    
    
    
    
    
    (837
    )EFFECT OF CURRENCY EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    
    
    
    
    (21
    )
    
    
    
    
    
    
    (21
    )NET (DECREASE) INCREASE IN CASH AND
CASH
EQUIVALENTS
    
    
    
    
    
    
    (3,361
    )
    
    
    243
    
    
    
    
    
    
    
    (3,118
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    
    
    
    
    18,268
    
    
    
    1,553
    
    
    
    
    
    
    
    19,821End of period
    
    $
    
    
    
    $
    14,907
    
    
    $
    1,796
    
    
    $
    
    
    
    $
    16,703
 16




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2006
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    197,470
    
    
    $
    33,357
    
    
    $
    (1,482
    )
    
    $
    229,345COST OF SALES
    
    
    
    
    
    
    164,249
    
    
    
    27,734
    
    
    
    (1,372
    )
    
    
    190,611Gross Profit
    
    
    
    
    
    
    33,221
    
    
    
    5,623
    
    
    
    (110
    )
    
    
    38,734SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    9,882
    
    
    
    3,374
    
    
    
    (104
    )
    
    
    13,152AMORTIZATION EXPENSE
    
    
    
    
    
    
    105
    
    
    
    
    
    
    
    
    
    
    
    105Operating Income
    
    
    
    
    
    
    23,234
    
    
    
    2,249
    
    
    
    (6
    )
    
    
    25,477OTHER INCOME
    
    
    
    
    
    
    (8
    )
    
    
    238
    
    
    
    
    
    
    
    230INTEREST EXPENSE
    
    
    
    
    
    
    3,617
    
    
    
    273
    
    
    
    
    
    
    
    3,890Income Before Provision for
Income Taxes
    
    
    
    
    
    
    19,625
    
    
    
    1,738
    
    
    
    (6
    )
    
    
    21,357PROVISION FOR INCOME TAXES
    
    
    
    
    
    
    7,355
    
    
    
    594
    
    
    
    
    
    
    
    7,949NET INCOME
    
    $
    
    
    
    $
    12,270
    
    
    $
    1,144
    
    
    $
    (6
    )
    
    $
    13,408
 17




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET AS OF 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
 18




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2006
 Non-Parent
    
    
    Guarantor
    
    
    GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)CASH FLOWS FROM OPERATING
ACTIVITIES:Net income
    
    $
    
    
    
    $
    12,270
    
    
    $
    1,144
    
    
    $
    (6
    )
    
    $
    13,408Adjustments to reconcile net income
to net
cash (used in) provided by operating
activities:Depreciation and amortization
    
    
    
    
    
    
    3,055
    
    
    
    446
    
    
    
    
    
    
    
    3,501Noncash amortization of debt
financing costs
    
    
    
    
    
    
    222
    
    
    
    9
    
    
    
    
    
    
    
    231Stock-based compensation expense
    
    
    
    
    
    
    608
    
    
    
    
    
    
    
    
    
    
    
    608Deferred income tax benefit
    
    
    
    
    
    
    (91
    )
    
    
    
    
    
    
    
    
    
    
    (91
    )Loss on sale of assets
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    2Noncash loss on forward exchange
contracts
    
    
    
    
    
    
    
    
    
    
    238
    
    
    
    
    
    
    
    238Change in other operating items
    
    
    
    
    
    
    (24,981
    )
    
    
    (1,803
    )
    
    
    6
    
    
    
    (26,778
    )Net
cash (used in) provided by operating activities
    
    
    
    
    
    
    (8,917
    )
    
    
    36
    
    
    
    
    
    
    
    (8,881
    )CASH FLOWS FROM INVESTING
ACTIVITIES:Purchases of property, plant and
equipment
    
    
    
    
    
    
    (4,306
    )
    
    
    (285
    )
    
    
    
    
    
    
    (4,591
    )Other assets and liabilities
    
    
    
    
    
    
    (105
    )
    
    
    4
    
    
    
    
    
    
    
    (101
    )Net cash (used in) investing
activities
    
    
    
    
    
    
    (4,411
    )
    
    
    (281
    )
    
    
    
    
    
    
    (4,692
    )CASH FLOWS FROM FINANCING
ACTIVITIES:Proceeds from issuance of common
stock
under equity incentive plans
    
    
    
    
    
    
    599
    
    
    
    
    
    
    
    
    
    
    
    599Repayments under revolving credit
facility
    
    
    
    
    
    
    
    
    
    
    (2,192
    )
    
    
    
    
    
    
    (2,192
    )Borrowings under revolving credit
facility
    
    
    
    
    
    
    117
    
    
    
    2,630
    
    
    
    
    
    
    
    2,747Repayments of long-term debt
    
    
    
    
    
    
    (1,590
    )
    
    
    (384
    )
    
    
    
    
    
    
    (1,974
    )Borrowings of long-term debt
    
    
    
    
    
    
    522
    
    
    
    
    
    
    
    
    
    
    
    522Other, net
    
    
    
    
    
    
    (476
    )
    
    
    449
    
    
    
    
    
    
    
    (27
    )Net cash (used in) provided by
financing activities
    
    
    
    
    
    
    (828
    )
    
    
    503
    
    
    
    
    
    
    
    (325
    )EFFECT OF CURRENCY EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    (19
    )
    
    
    (256
    )
    
    
    
    
    
    
    (275
    )NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS
    
    
    
    
    
    
    (14,175
    )
    
    
    2
    
    
    
    
    
    
    
    (14,173
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    
    
    
    
    39,153
    
    
    
    1,488
    
    
    
    
    
    
    
    40,641End of period
    
    $
    
    
    
    $
    24,978
    
    
    $
    1,490
    
    
    $
    
    
    
    $
    26,468
 19




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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
 20




---



##### Table of Contents




    
    implementing Lean Manufacturing and Total Quality Production System (TQPS) initiatives
to improve operating efficiency and product quality.
   Results of Operations
  Three MonthsMarch 31,2007
    
    2006Revenues
    
    
    100.0
    %
    
    
    100.0
    %Cost of Revenues
    
    
    86.8
    
    
    
    83.1Gross Profit
    
    
    13.2
    
    
    
    16.9Selling, General and Administrative Expenses
    
    
    7.8
    
    
    
    5.7Amortization Expense
    
    
    0.1
    
    
    
    0.1Operating Income
    
    
    5.3
    
    
    
    11.1Other Expense
    
    
    1.2
    
    
    
    0.1Interest Expense
    
    
    1.8
    
    
    
    1.7Income Before Provision for Income Taxes
    
    
    2.3
    
    
    
    9.3Provision for Income Taxes
    
    
    0.8
    
    
    
    3.5Net Income
    
    
    1.5
    %
    
    
    5.8
    %
 Three Months Ended March 31, 2007 Compared to Three Months Ended March 31, 2006
 Revenues
 Gross Profit
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##### Table of Contents



Selling, General and Administrative Expenses
 Other Expense
 Interest Expense
 Provision for Income Taxes
 Net Income
 Liquidity and Capital Resources
 Cash Flows
    Debt and Credit Facilities
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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
  23




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##### Table of Contents



ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4  CONTROLS AND PROCEDURES
    24




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##### Table of Contents



PART II. OTHER INFORMATION
 COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
     25




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##### Table of Contents



10.1
    
    Commercial Vehicle Group, Inc. 2007 Bonus Plan (incorporated by
reference to the Companys current report on Form 8-K (File No.
000-50890), filed on March 9, 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.
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##### Table of Contents



SIGNATURE
   Date:  May 4, 2007
    By:
    /s/ Chad M. UtrupChad M. UtrupChief Financial Officer 27