##### 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, 2011
 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 001-34365
 COMMERCIAL VEHICLE GROUP, INC.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    41-1990662
(I.R.S. Employer
Identification No.)7800 Walton Parkway 
New Albany, Ohio
(Address of principal executive offices)
    
    43054
(Zip Code)
 (614) 289-5360
 Not Applicable
  þ o
  o o
  Large accelerated filer o
    

Accelerated filer þ
    

Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ




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##### 



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
 PART I FINANCIAL INFORMATIONITEM 1 FINANCIAL STATEMENTS
    
    
    1CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
THREE MONTHS ENDED MARCH 31, 2011 AND 2010 (UNAUDITED)
    
    
    1CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2011
AND DECEMBER 31, 2010 (UNAUDITED)
    
    
    2CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE
MONTHS ENDED MARCH 31, 2011 AND 2010 (UNAUDITED)
    
    
    3NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
    
    
    4ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    21ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    28ITEM 4 CONTROLS AND PROCEDURES
    
    
    28PART II OTHER INFORMATION
    
    
    29SIGNATURES
    
    
    31EX-31.1EX-31.2EX-32.1EX-32.2
  
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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 31,2011
    
    
    2010(Unaudited)
    
    
    (Unaudited)(In thousands, except per share amounts)REVENUES
    
    $
    182,509
    
    
    $
    146,407COST OF REVENUES
    
    
    157,793
    
    
    
    129,515Gross Profit
    
    
    24,716
    
    
    
    16,892SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    16,194
    
    
    
    13,211AMORTIZATION EXPENSE
    
    
    96
    
    
    
    60RESTRUCTURING COSTS
    
    
    310
    
    
    
    Operating Income
    
    
    8,116
    
    
    
    3,621OTHER EXPENSE (INCOME)
    
    
    6
    
    
    
    (1,459
    )INTEREST EXPENSE
    
    
    3,981
    
    
    
    4,514Income Before Provision (Benefit) for Income Taxes
    
    
    4,129
    
    
    
    566PROVISION (BENEFIT) FOR INCOME TAXES
    
    
    852
    
    
    
    (110
    )NET INCOME
    
    $
    3,277
    
    
    $
    676INCOME PER COMMON SHARE:Basic
    
    $
    0.12
    
    
    $
    0.03Diluted
    
    $
    0.12
    
    
    $
    0.03WEIGHTED AVERAGE SHARES OUTSTANDING:Basic
    
    
    27,765
    
    
    
    22,898Diluted
    
    
    28,186
    
    
    
    23,834
  1




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COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31,
    
    
    December 31,2011
    
    
    2010(Unaudited)
    
    
    (Unaudited)(In thousands, except share and pershare amounts)ASSETSCURRENT ASSETS:Cash
    
    $
    18,492
    
    
    $
    42,591Accounts receivable, net of reserve for doubtful accounts of $4,347
and $2,717, respectfully
    
    
    121,016
    
    
    
    91,101Inventories
    
    
    69,929
    
    
    
    66,622Prepaid expenses and other, net
    
    
    14,489
    
    
    
    11,109Total current assets
    
    
    223,926
    
    
    
    211,423PROPERTY, PLANT AND EQUIPMENT, net
    
    
    64,703
    
    
    
    59,321INTANGIBLE ASSETS, net of accumulated amortization of $2,340 and
$2,245, respectfully
    
    
    6,960
    
    
    
    3,848OTHER ASSETS, net
    
    
    11,016
    
    
    
    11,615TOTAL ASSETS
    
    $
    306,605
    
    
    $
    286,207LIABILITIES AND STOCKHOLDERS INVESTMENT (DEFICIT)CURRENT LIABILITIES:Accounts payable
    
    $
    78,549
    
    
    $
    61,216Accrued liabilities
    
    
    31,972
    
    
    
    34,130Total current liabilities
    
    
    110,521
    
    
    
    95,346LONG-TERM DEBT
    
    
    164,718
    
    
    
    164,987PENSION AND OTHER POST-RETIREMENT BENEFITS
    
    
    22,802
    
    
    
    23,343OTHER LONG-TERM LIABILITIES
    
    
    2,771
    
    
    
    2,643Total liabilities
    
    
    300,812
    
    
    
    286,319COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS INVESTMENT (DEFICIT):Preferred stock $.01 par value; 5,000,000 shares authorized; no
shares issued and outstanding; common stock $.01 par value;
30,000,000 shares authorized; 27,766,024 and 27,756,759 shares
issued and outstanding, respectively
    
    
    280
    
    
    
    280Treasury stock purchased from employees; 285,208 shares, respectively
    
    
    (2,851
    )
    
    
    (2,851
    )Additional paid-in capital
    
    
    216,333
    
    
    
    215,491Retained loss
    
    
    (190,082
    )
    
    
    (193,359
    )Accumulated other comprehensive loss
    
    
    (17,887
    )
    
    
    (19,673
    )Total stockholders investment (deficit)
    
    
    5,793
    
    
    
    (112
    )TOTAL LIABILITIES AND STOCKHOLDERS INVESTMENT (DEFICIT)
    
    $
    306,605
    
    
    $
    286,207
  2




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COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Three Months EndedMarch 31,2011
    
    
    2010(Unaudited)
    
    
    (Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    3,277
    
    
    $
    676Adjustments to reconcile net income to net cash used in operating activities:Depreciation and amortization
    
    
    2,901
    
    
    
    3,361Noncash amortization of debt financing costs
    
    
    379
    
    
    
    379Amortization of bond discount/premium, net
    
    
    (269
    )
    
    
    (333
    )Paid-in-kind interest
    
    
    
    
    
    
    1,429Pension plan contributions
    
    
    (821
    )
    
    
    (576
    )Shared-based compensation expense
    
    
    842
    
    
    
    647Loss (gain) on sale of assets
    
    
    6
    
    
    
    (13
    )Noncash gain on forward exchange contracts
    
    
    
    
    
    
    (1,068
    )Change in other operating items
    
    
    (18,983
    )
    
    
    (14,208
    )Net cash used in operating activities
    
    
    (12,668
    )
    
    
    (9,706
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, plant and equipment
    
    
    (3,020
    )
    
    
    (718
    )Proceeds from disposal/sale of property plant and equipment
    
    
    7
    
    
    
    22Payments for acquisitions, net of cash received
    
    
    (8,785
    )
    
    
    Other assets and liabilities
    
    
    
    
    
    
    (285
    )Net cash used in investing activities
    
    
    (11,798
    )
    
    
    (981
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock, net
    
    
    
    
    
    
    25,358Net cash provided by financing activities
    
    
    
    
    
    
    25,358EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH
    
    
    367
    
    
    
    1,119NET (DECREASE) INCREASE IN CASH
    
    
    (24,099
    )
    
    
    15,790CASH:Beginning of period
    
    
    42,591
    
    
    
    9,524End of period
    
    $
    18,492
    
    
    $
    25,314SUPPLEMENTAL CASH FLOW INFORMATION:Cash paid for interest
    
    $
    7,283
    
    
    $
    4,777Cash received for income taxes, net
    
    $
    (114
    )
    
    $
    (255
    )
  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
  3. Business Combinations
    4




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##### Table of Contents



Purchase price (cash consideration)
    
    $
    8,785Net assets  at fair value
    
    
    5,578Excess of purchase price over net assets acquired
    
    $
    3,207
  Cash
    
    $
    Accounts receivable
    
    
    3,898Inventories
    
    
    2,274Other current assets
    
    
    4Property, plant and equipment, net
    
    
    4,960Definite-lived intangible assets
    
    
    3,207Current liabilities
    
    
    (5,558
    )Net assets acquired
    
    
    8,785Less: Cash received
    
    
    Contract purchase price
    
    $
    8,785
  2011
    
    
    2010(Unaudited)
    
    
    (Unaudited)Revenue
    
    $
    184,819
    
    
    $
    152,439Operating income
    
    $
    8,001
    
    
    $
    3,171Net income
    
    $
    3,163
    
    
    $
    216Earnings Per Share:Basic
    
    $
    0.11
    
    
    $
    0.01Diluted
    
    $
    0.11
    
    
    $
    0.01
 4. Fair Value Measurement
  Level 1  Unadjusted quoted prices in active markets for identical assets and liabilities.
 Level 2  Observable inputs other than those included in Level 1. For example,
quoted prices for similar assets or liabilities in active markets or quoted prices
for identical assets or liabilities in inactive markets.
 Level 3  Unobservable inputs reflecting managements own assumptions about the
inputs used in pricing the asset or liability.
   5




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March 31, 2011
    
    
    December 31, 2010Carrying
    
    
    
    
    
    
    CarryingAmount
    
    
    Fair Value
    
    
    Amount
    
    
    Fair ValueLong-term debt
    
    $
    164,718
    
    
    $
    173,155
    
    
    $
    164,987
    
    
    $
    159,376
  5. Stockholders Investment
 Common Stock 
 Preferred Stock 
 Earnings Per Share 
 Three Months EndedMarch 31,2011
    
    
    2010Net income
applicable to common stockholders  basic and diluted
    
    $
    3,277
    
    
    $
    676Weighted average number of common shares outstanding
    
    
    27,765
    
    
    
    22,898Dilutive effect of outstanding stock options and restricted stock
grants after application of the Treasury Stock Method
    
    
    421
    
    
    
    936Dilutive shares outstanding
    
    
    28,186
    
    
    
    23,834Basic income per share
    
    $
    0.12
    
    
    $
    0.03Diluted income per share
    
    $
    0.12
    
    
    $
    0.03
  Dividends 
 Stockholder Rights Plan 
  6. Share-Based Compensation
 Restricted Stock Awards
 6




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EstimatedForfeitureGrant
    
    Shares
    
    Rate
    
    Vesting ScheduleNovember 2008
    
    
    798,450
    
    
    
    8.8
    %
    
    3 equal annual installments commencing on October 20, 2009November 2009
    
    
    638,150
    
    
    
    8.2
    %
    
    3 equal annual installments commencing on October 20, 2010November 2010
    
    
    404,000
    
    
    
    8.2
    %
    
    3 equal annual installments commencing on October 20, 2011
   Weighted-AverageShares
    
    
    Grant-Date Fair(in thousands)
    
    
    ValueNonvested at December 31, 2010
    
    
    1,023
    
    
    $
    9.02Granted
    
    
    
    
    
    
    Vested
    
    
    (9
    )
    
    
    2.44Forfeited
    
    
    
    
    
    
    Nonvested at March 31, 2011
    
    
    1,014
    
    
    $
    9.02
  7. Accounts Receivable
  8. Inventories
  March 31,
    
    
    December 31,2011
    
    
    2010Raw materials
    
    $
    44,059
    
    
    $
    46,194Work in process
    
    
    14,948
    
    
    
    12,477Finished goods
    
    
    17,395
    
    
    
    13,727Less excess and obsolete
    
    
    (6,473
    )
    
    
    (5,776
    )$
    69,929
    
    
    $
    66,622
 7




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9. Intangible Assets
   March 31, 2011
    
    
    December 31, 2010Amortization
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Net Carrying
    
    
    Amortization
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingPeriod
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    Period
    
    
    Amount
    
    
    Amortization
    
    
    AmountDefinite-lived intangible assets:Trademarks/Tradenames
    
    22 years
    
    $
    8,862
    
    
    $
    (1,902
    )
    
    $
    6,960
    
    
    20 years
    
    $
    5,655
    
    
    $
    (1,807
    )
    
    $
    3,848
    Fiscal Year Ended
    
    EstimatedDecember 31,
    
    Amortization Expense2011
    
    $
    3382012
    
    $
    3472013
    
    $
    3472014
    
    $
    3472015
    
    $
    3472016
    
    $
    347
 10. Restructuring Activities
  
    
    A reduction in workforce and the closure of certain manufacturing, warehousing and assembly
facilities. The facilities closed included an assembly and sequencing facility in Kent,
Washington; seat sequencing and assembly facility in Statesville, North Carolina;
manufacturing facility in Lake Oswego, Oregon; inventory and product warehouse in Concord,
North Carolina; and seat assembly and distribution facility in Seneffs, Belgium. The decision
to reduce our workforce was the result of the extended downturn of the global economy and, in
particular, the commercial vehicle markets. We substantially completed these activities as of
December 31, 2009.
 
    
    The closure of our Vancouver, Washington manufacturing facility. The decision to close the
facility was the result of the extended downturn of the global economy and, in particular, the
commercial vehicle markets. We substantially completed this closure as of December 31, 2009.
 
    
    The closure and consolidation of one of our facilities located in Liberec, Czech Republic and
the closing of our
 8




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Norwalk, Ohio truck cab assembly facility. The closure and consolidation
of our Liberec, Czech Republic facility was a result of managements continued focus on reducing fixed costs and eliminating excess
capacity. The closure of this facility was substantially completed as of December 31, 2009.
The closure of our Norwalk, Ohio facility was a result of Navistars decision to insource the
cab assembly operations into its existing assembly facility in Escobedo, Mexico. We
substantially completed the Norwalk closure as of September 30, 2010.
   Facility Exitand OtherEmployee
    
    
    ContractualCosts
    
    
    Costs
    
    
    TotalBalance  December 31, 2010
    
    $
    101
    
    
    $
    1,362
    
    
    $
    1,463Provisions
    
    
    31
    
    
    
    279
    
    
    
    310Utilizations
    
    
    (66
    )
    
    
    (547
    )
    
    
    (613
    )Currency
    
    
    
    
    
    
    60
    
    
    
    60Balance  March 31, 2011
    
    $
    66
    
    
    $
    1,154
    
    
    $
    1,220
  11. Commitments and Contingencies
 Warranty 
 Balance  December 31, 2010
    
    $
    2,653Increase due to acquisitions
    
    
    297Additional provisions recorded
    
    
    415Deduction for payments made
    
    
    (414
    )Currency translation adjustment
    
    
    8Balance  March 31, 2011
    
    $
    2,959
 Leases
 Guarantees
 9




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Litigation 
 12. Debt
  March 31,
    
    
    December 31,2011
    
    
    20108.0% senior notes due July 1, 2013
    
    $
    97,810
    
    
    $
    97,81015% second lien term loan
due November 1, 2012
($16,800 principal amount,
net of $2,719
and $3,042, respectively,
of original issue
discount)
    
    
    14,081
    
    
    
    13,75811%/13% third lien senior
secured notes due February
15, 2013 ($42,124
principal
amount and $4,870 and
$5,463, respectively, of
issuance premium)
    
    
    46,994
    
    
    
    47,587Paid-in-kind interest on 11%/13% third
lien senior secured notes due February 15,
2013
    
    
    5,833
    
    
    
    5,832$
    164,718
    
    
    $
    164,987
      10




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Domestic Base
    
    LIBORLevel
    
    Ratio
    
    Rate Loans
    
    Revolver LoansIII
    

≤ 1.25 to 1.00
    
    
    2.00
    %
    
    
    3.00
    %II
    
    ≥ 1.25 to 1.00 but < 1.75 to 1.00
    
    
    1.75
    %
    
    
    2.75
    %I
    
    ≥ 1.75 to 1.00
    
    
    1.50
    %
    
    
    2.50
    %
         11




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pari passu
  13. Income Taxes
     14. Foreign Currency Forward Exchange Contracts
   Three Months EndedMarch 31,Location of Gain
    
    
    2011
    
    
    2010Recognized in Income on
    
    
    Amount of Gain Recognized inDerivatives
    
    
    Income on DerivativesForeign exchange contracts
    
    Other income
    
    $
    
    
    
    $
    1,068
 12




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15. Pension and Other Post-Retirement Benefit Plans
   Other Post-RetirementU.S. Pension Plans
    
    
    Non-U.S. Pension Plans
    
    
    Benefit PlansThree Months Ended March 31,
    
    
    Three Months Ended March 31,
    
    
    Three Months Ended March 31,2011
    
    
    2010
    
    
    2011
    
    
    2010
    
    
    2011
    
    
    2010Service cost
    
    $
    20
    
    
    $
    46
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1Interest cost
    
    
    488
    
    
    
    504
    
    
    
    561
    
    
    
    528
    
    
    
    16
    
    
    
    30Expected return on plan assets
    
    
    (478
    )
    
    
    (424
    )
    
    
    (467
    )
    
    
    (400
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32
    )
    
    
    Recognized actuarial loss (gain)
    
    
    25
    
    
    
    32
    
    
    
    75
    
    
    
    93
    
    
    
    (34
    )
    
    
    1Net periodic benefit cost
    
    
    55
    
    
    
    158
    
    
    
    169
    
    
    
    221
    
    
    
    (50
    )
    
    
    32Special termination benefits
    
    
    
    
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68Net benefit cost
    
    $
    55
    
    
    $
    186
    
    
    $
    169
    
    
    $
    221
    
    
    $
    (50
    )
    
    $
    100
  16. Comprehensive Loss
  Foreign currency translation adjustment
    
    $
    (6,060
    )Pension liability
    
    
    (11,827
    )Accumulated other comprehensive loss
    
    $
    (17,887
    )
  Three Months Ended March 31,2011
    
    
    2010Net income
    
    $
    3,277
    
    
    $
    676Other comprehensive income:Foreign currency translation adjustment
    
    
    1,786
    
    
    
    158Pension liability
    
    
    
    
    
    
    200Comprehensive income
    
    $
    5,063
    
    
    $
    1,034
 17. Related Party Transactions
  13




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18. Subsequent Events
    19. Consolidating Guarantor and Non-Guarantor Financial Information
   14




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COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2011
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(In thousands)REVENUES
    
    $
    
    
    
    $
    134,624
    
    
    $
    64,975
    
    
    $
    (17,090
    )
    
    $
    182,509COST OF REVENUES
    
    
    
    
    
    
    117,763
    
    
    
    57,120
    
    
    
    (17,090
    )
    
    
    157,793Gross Profit
    
    
    
    
    
    
    16,861
    
    
    
    7,855
    
    
    
    
    
    
    
    24,716SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    11,611
    
    
    
    4,583
    
    
    
    
    
    
    
    16,194AMORTIZATION EXPENSE
    
    
    
    
    
    
    96
    
    
    
    
    
    
    
    
    
    
    
    96EQUITY IN EARNINGS OF CONSOLIDATED
SUBSIDIARIES
    
    
    (2,865
    )
    
    
    (146
    )
    
    
    
    
    
    
    3,011
    
    
    
    RESTRUCTURING COSTS
    
    
    
    
    
    
    310
    
    
    
    
    
    
    
    
    
    
    
    310Operating Income
    
    
    2,865
    
    
    
    4,990
    
    
    
    3,272
    
    
    
    (3,011
    )
    
    
    8,116OTHER EXPENSE
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    6INTEREST EXPENSE
    
    
    379
    
    
    
    3,596
    
    
    
    6
    
    
    
    
    
    
    
    3,981Income Before (Benefit) Provision for Income
Taxes
    
    
    2,486
    
    
    
    1,394
    
    
    
    3,260
    
    
    
    (3,011
    )
    
    
    4,129(BENEFIT) PROVISION FOR INCOME TAXES
    
    
    (791
    )
    
    
    1,186
    
    
    
    457
    
    
    
    
    
    
    
    852NET INCOME
    
    $
    3,277
    
    
    $
    208
    
    
    $
    2,803
    
    
    $
    (3,011
    )
    
    $
    3,277
 15




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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 MARCH 31, 2011
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(In thousands)ASSETSCURRENT ASSETS:Cash
    
    $
    4,901
    
    
    $
    36
    
    
    $
    13,555
    
    
    $
    
    
    
    $
    18,492Accounts receivable, net
    
    
    219
    
    
    
    86,756
    
    
    
    34,041
    
    
    
    
    
    
    
    121,016Intercompany receivable
    
    
    68,929
    
    
    
    14,461
    
    
    
    
    
    
    
    (83,390
    )
    
    
    Inventories
    
    
    
    
    
    
    41,726
    
    
    
    28,203
    
    
    
    
    
    
    
    69,929Prepaid expenses and other, net
    
    
    1,063
    
    
    
    8,423
    
    
    
    5,043
    
    
    
    (40
    )
    
    
    14,489Total current assets
    
    
    75,112
    
    
    
    151,402
    
    
    
    80,842
    
    
    
    (83,430
    )
    
    
    223,926PROPERTY, PLANT AND
EQUIPMENT, net
    
    
    
    
    
    
    57,340
    
    
    
    7,363
    
    
    
    
    
    
    
    64,703EQUITY INVESTMENT IN
SUBSIDIARIES
    
    
    96,730
    
    
    
    18,586
    
    
    
    
    
    
    
    (115,316
    )
    
    
    INTANGIBLE ASSETS, net
    
    
    
    
    
    
    6,960
    
    
    
    
    
    
    
    
    
    
    
    6,960OTHER ASSETS, net
    
    
    2,222
    
    
    
    8,766
    
    
    
    28
    
    
    
    
    
    
    
    11,016TOTAL ASSETS
    
    $
    174,064
    
    
    $
    243,054
    
    
    $
    88,233
    
    
    $
    (198,746
    )
    
    $
    306,605
 LIABILITIES AND STOCKHOLDERS INVESTMENT
 CURRENT LIABILITIES:Accounts payable
    
    $
    
    
    
    $
    51,208
    
    
    $
    27,341
    
    
    $
    
    
    
    $
    78,549Intercompany payable
    
    
    
    
    
    
    69,949
    
    
    
    13,441
    
    
    
    (83,390
    )
    
    
    Accrued liabilities
    
    
    2,742
    
    
    
    20,396
    
    
    
    8,874
    
    
    
    (40
    )
    
    
    31,972Total current liabilities
    
    
    2,742
    
    
    
    141,553
    
    
    
    49,656
    
    
    
    (83,430
    )
    
    
    110,521LONG-TERM DEBT
    
    
    164,718
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    164,718PENSION AND OTHER POST-RETIREMENT BENEFITS
    
    
    
    
    
    
    12,569
    
    
    
    10,233
    
    
    
    
    
    
    
    22,802OTHER LONG-TERM LIABILITIES
    
    
    811
    
    
    
    929
    
    
    
    1,031
    
    
    
    
    
    
    
    2,771Total liabilities
    
    
    168,271
    
    
    
    155,051
    
    
    
    60,920
    
    
    
    (83,430
    )
    
    
    300,812STOCKHOLDERS INVESTMENT
    
    
    5,793
    
    
    
    88,003
    
    
    
    27,313
    
    
    
    (115,316
    )
    
    
    5,793TOTAL LIABILITIES AND
STOCKHOLDERS INVESTMENT
    
    $
    174,064
    
    
    $
    243,054
    
    
    $
    88,233
    
    
    $
    (198,746
    )
    
    $
    306,605
 16




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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, 2011
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidation(In thousands)CASH FLOWS
FROM OPERATING ACTIVITIES:Net cash (used in) provided by operating
activities
    
    $
    (3,744
    )
    
    $
    (11,269
    )
    
    $
    2,345
    
    
    $
    
    
    
    $
    (12,668
    )CASH FLOWS
FROM INVESTING ACTIVITIES:Purchases of property, plant and equipment
    
    
    
    
    
    
    (2,009
    )
    
    
    (1,011
    )
    
    
    
    
    
    
    (3,020
    )Proceeds from disposal/sale of property plant
and equipment
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    7Payments for acquisitions, net of cash received
    
    
    
    
    
    
    (8,785
    )
    
    
    
    
    
    
    
    
    
    
    (8,785
    )Other assets and liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    
    
    
    
    (10,794
    )
    
    
    (1,004
    )
    
    
    
    
    
    
    (11,798
    )CASH FLOWS
FROM FINANCING ACTIVITIES:Change in intercompany receivables/payables
    
    
    (22,828
    )
    
    
    22,072
    
    
    
    756
    
    
    
    
    
    
    
    Net cash (used in) provided by financing
activities
    
    
    (22,828
    )
    
    
    22,072
    
    
    
    756
    
    
    
    
    
    
    
    EFFECT OF CURRENCY EXCHANGE RATE
CHANGES ON CASH
    
    
    
    
    
    
    
    
    
    
    367
    
    
    
    
    
    
    
    367NET (DECREASE) INCREASE IN CASH
    
    
    (26,572
    )
    
    
    9
    
    
    
    2,464
    
    
    
    
    
    
    
    (24,099
    )CASH:Beginning of period
    
    
    31,473
    
    
    
    27
    
    
    
    11,091
    
    
    
    
    
    
    
    42,591End of period
    
    $
    4,901
    
    
    $
    36
    
    
    $
    13,555
    
    
    $
    
    
    
    $
    18,492
 17




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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, 2010
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(In thousands)REVENUES
    
    $
    
    
    
    $
    115,975
    
    
    $
    39,273
    
    
    $
    (8,841
    )
    
    $
    146,407COST OF REVENUES
    
    
    
    
    
    
    102,962
    
    
    
    35,394
    
    
    
    (8,841
    )
    
    
    129,515Gross Profit
    
    
    
    
    
    
    13,013
    
    
    
    3,879
    
    
    
    
    
    
    
    16,892SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    10,278
    
    
    
    2,933
    
    
    
    
    
    
    
    13,211AMORTIZATION EXPENSE
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    
    
    
    
    60EQUITY IN EARNINGS OF CONSOLIDATED
SUBSIDIARIES
    
    
    (3,282
    )
    
    
    (488
    )
    
    
    
    
    
    
    3,770
    
    
    
    Operating Income
    
    
    3,282
    
    
    
    3,163
    
    
    
    946
    
    
    
    (3,770
    )
    
    
    3,621OTHER INCOME
    
    
    
    
    
    
    
    
    
    
    (1,459
    )
    
    
    
    
    
    
    (1,459
    )INTEREST EXPENSE (INCOME)
    
    
    4,510
    
    
    
    (18
    )
    
    
    22
    
    
    
    
    
    
    
    4,514(Loss) Income Before (Benefit) Provision for
Income Taxes
    
    
    (1,228
    )
    
    
    3,181
    
    
    
    2,383
    
    
    
    (3,770
    )
    
    
    566(BENEFIT) PROVISION FOR INCOME TAXES
    
    
    (1,904
    )
    
    
    1,535
    
    
    
    259
    
    
    
    
    
    
    
    (110
    )NET INCOME
    
    $
    676
    
    
    $
    1,646
    
    
    $
    2,124
    
    
    $
    (3,770
    )
    
    $
    676
 18




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COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2010
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(In thousands)ASSETSCURRENT ASSETS:Cash
    
    $
    31,473
    
    
    $
    27
    
    
    $
    11,091
    
    
    $
    
    
    
    $
    42,591Accounts receivable, net
    
    
    220
    
    
    
    63,172
    
    
    
    27,708
    
    
    
    1
    
    
    
    91,101Intercompany receivable
    
    
    46,102
    
    
    
    942
    
    
    
    
    
    
    
    (47,044
    )
    
    
    Inventories
    
    
    
    
    
    
    38,284
    
    
    
    28,340
    
    
    
    (2
    )
    
    
    66,622Prepaid expenses and other, net
    
    
    
    
    
    
    6,490
    
    
    
    4,659
    
    
    
    (40
    )
    
    
    11,109Total current assets
    
    
    77,795
    
    
    
    108,915
    
    
    
    71,798
    
    
    
    (47,085
    )
    
    
    211,423PROPERTY, PLANT AND
EQUIPMENT, net
    
    
    
    
    
    
    52,875
    
    
    
    6,446
    
    
    
    
    
    
    
    59,321EQUITY INVESTMENT IN
SUBSIDIARIES
    
    
    91,238
    
    
    
    9,559
    
    
    
    
    
    
    
    (100,797
    )
    
    
    INTANGIBLE ASSETS, net
    
    
    
    
    
    
    3,848
    
    
    
    
    
    
    
    
    
    
    
    3,848OTHER ASSETS, net
    
    
    2,600
    
    
    
    8,986
    
    
    
    28
    
    
    
    1
    
    
    
    11,615TOTAL ASSETS
    
    $
    171,633
    
    
    $
    184,183
    
    
    $
    78,272
    
    
    $
    (147,881
    )
    
    $
    286,207
 LIABILITIES AND STOCKHOLDERS (DEFICIT) INVESTMENT
 CURRENT LIABILITIES:Accounts payable
    
    $
    
    
    
    $
    37,657
    
    
    $
    23,559
    
    
    $
    
    
    
    $
    61,216Intercompany payable
    
    
    
    
    
    
    34,359
    
    
    
    12,685
    
    
    
    (47,044
    )
    
    
    Accrued liabilities
    
    
    6,092
    
    
    
    19,931
    
    
    
    8,147
    
    
    
    (40
    )
    
    
    34,130Total current liabilities
    
    
    6,092
    
    
    
    91,947
    
    
    
    44,391
    
    
    
    (47,084
    )
    
    
    95,346LONG-TERM DEBT
    
    
    164,987
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    164,987PENSION AND OTHER POST-
RETIREMENT BENEFITS
    
    
    
    
    
    
    13,253
    
    
    
    10,090
    
    
    
    
    
    
    
    23,343OTHER LONG-TERM LIABILITIES
    
    
    666
    
    
    
    911
    
    
    
    1,066
    
    
    
    
    
    
    
    2,643Total liabilities
    
    
    171,745
    
    
    
    106,111
    
    
    
    55,547
    
    
    
    (47,084
    )
    
    
    286,319STOCKHOLDERS (DEFICIT)
INVESTMENT
    
    
    (112
    )
    
    
    78,072
    
    
    
    22,725
    
    
    
    (100,797
    )
    
    
    (112
    )TOTAL LIABILITIES AND
STOCKHOLDERS (DEFICIT)
INVESTMENT
    
    $
    171,633
    
    
    $
    184,183
    
    
    $
    78,272
    
    
    $
    (147,881
    )
    
    $
    286,207
 19




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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, 2010
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidation(In thousands)CASH FLOWS FROM OPERATING
ACTIVITIES:Net cash used in operating activities
    
    $
    (5,045
    )
    
    $
    (2,200
    )
    
    $
    (2,461
    )
    
    $
    
    
    
    $
    (9,706
    )CASH FLOWS FROM INVESTING
ACTIVITIES:Purchases of property, plant and equipment
    
    
    
    
    
    
    (593
    )
    
    
    (125
    )
    
    
    
    
    
    
    (718
    )Proceeds from disposal/sale of property plant
and equipment
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    
    
    
    
    22Other assets and liabilities
    
    
    
    
    
    
    (285
    )
    
    
    
    
    
    
    
    
    
    
    (285
    )Net cash used in investing activities
    
    
    
    
    
    
    (856
    )
    
    
    (125
    )
    
    
    
    
    
    
    (981
    )CASH FLOWS
FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock, net
    
    
    25,358
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,358Change in intercompany receivables/payables
    
    
    (3,130
    )
    
    
    3,018
    
    
    
    112
    
    
    
    
    
    
    
    Net cash provided by financing activities
    
    
    22,228
    
    
    
    3,018
    
    
    
    112
    
    
    
    
    
    
    
    25,358EFFECT OF CURRENCY EXCHANGE RATE
CHANGES ON CASH
    
    
    
    
    
    
    
    
    
    
    1,119
    
    
    
    
    
    
    
    1,119NET INCREASE (DECREASE) IN CASH
    
    
    17,183
    
    
    
    (38
    )
    
    
    (1,355
    )
    
    
    
    
    
    
    15,790CASH:Beginning of period
    
    
    9
    
    
    
    38
    
    
    
    9,477
    
    
    
    
    
    
    
    9,524End of period
    
    $
    17,192
    
    
    $
    
    
    
    $
    8,122
    
    
    $
    
    
    
    $
    25,314
 20




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##### Table of Contents



ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 Company Overview
        
    
    adjusting our hourly and salaried workforce to optimize costs in line with our
production levels;
 21




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##### Table of Contents




    
    sourcing efforts in Mexico, Europe and Asia;
    
    consolidating our supply base to improve purchasing leverage;
    
    eliminating excess production capacity through the closure and consolidation of
manufacturing, warehousing or assembly facilities;
    
    improving our manufacturing cost basis by locating production in low-cost regions of
the world; and
    
    implementing Lean Manufacturing and TQPS initiatives to improve operating efficiency
and product quality.
   Results of Operations
  Three Months Ended March 31,2011
    
    
    2010Revenues
    
    
    100.0
    %
    
    
    100.0
    %Cost of revenues
    
    
    86.5
    
    
    
    88.5Gross profit
    
    
    13.5
    
    
    
    11.5Selling, general and administrative expenses
    
    
    8.9
    
    
    
    9.0Amortization expense
    
    
    
    
    
    
    Restructuring costs
    
    
    0.2
    
    
    
    Operating income
    
    
    4.4
    
    
    
    2.5Other expense (income)
    
    
    
    
    
    
    (1.0
    )Interest expense
    
    
    2.2
    
    
    
    3.1Income
before provision (benefit) for income taxes
    
    
    2.2
    
    
    
    0.4Provision (Benefit) for income taxes
    
    
    0.4
    
    
    
    (0.1
    )Net income
    
    
    1.8
    %
    
    
    0.5
    %
 22




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##### Table of Contents



Three Months Ended March 31, 2011 Compared to Three Months Ended March 31, 2010
 Revenues
 
    
    a 48% increase in North American heavy-duty (class 8) production, fluctuations in
production levels for other North American end markets and net new business awards
resulting in approximately $17.3 million of increased revenues;
    
    an increase in production levels due to higher global demand in our European, Australian
and Asian markets resulting in approximately $11.7 million of increased revenues;
    
    favorable foreign exchange fluctuations from the translation of our foreign operations
into U.S. Dollars resulting in an increase of approximately $1.5 million; and
    
    our acquisition of Bostrom Seating, Inc. (Bostrom) resulting in approximately $5.6
million of increased revenues.
 Gross Profit
 Selling, General and Administrative Expenses
 Amortization Expense.
 Restructuring Costs.
 Other Expense (Income)
 Interest Expense
 Provision (Benefit) for Income Taxes
 Net Income.
 23




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##### Table of Contents



Liquidity and Capital Resources
 Cash Flows
    Debt and Credit Facilities
  
    
    $97.8 million of 8.0% senior notes due 2013;
    
    $14.1 million ($16.8 million principal amount, net of $2.7 million of original issue
discount) of 15% second lien term loan due 2012;
    
    $47.0 million ($42.1 million principal amount, net of $4.9 million of issuance
premium) of 11%/13% third lien secured notes due 2013; and
    
    $5.8 million of paid-in-kind interest on the 11%/13% third lien secured notes due
2013.
 Revolving Credit Facility
    Amendment and Restatement to Revolving Credit Facility
  24




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##### Table of Contents



Domestic
Base
    

LIBORLevel
    
    Ratio
    
    Rate Loans
    
    Revolver LoansIII
    
    < 1.25 to 1.00
    
    1.50%
    
    2.50%II
    
    ≥ 1.25 to 1.00 but < 1.75 to 1.00
    
    1.25%
    
    2.25%I
    
    ≥ 1.75 to 1.00
    
    1.00%
    
    2.00%
   Terms, Covenants and Compliance Status
    25




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##### Table of Contents



Refinancing Transactions
   7.875% Senior Secured Notes due 2019
      26




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##### Table of Contents



Covenants and Liquidity
   Update on Contractual Obligations
  Forward-Looking Statements
  27




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##### Table of Contents



ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4  CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting.
 Inherent Limitations on Effectiveness of Controls.
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##### Table of Contents



PART II. OTHER INFORMATION
 COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
     Volatility in the commercial vehicle market could result from manmade and natural disasters and
other global business disruptions.
  29




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##### Table of Contents



2.4**
    
    Asset Purchase Agreement, dated as of January 28, 2011, by and among
CVG Alabama LLC and Bostrom Seating, Inc. (incorporated by reference
to the Companys annual report on Form 10-K (File No. 001-34365),
filed on March 15, 2011).4.12
    
    Commercial Vehicle Group, Inc. Amendment No. 1 to Rights Agreement,
dated as of March 9, 2011, by and between the Company and
Computershare Trust Company, N.A. (incorporated by reference to the
Companys current report on Form 8-K (File No. 001-34365), filed on
March 9, 2011).4.6
    
    Supplemental Indenture, dated as of January 27, 2011, by and among
Commercial Vehicle Group, Inc., CVG Alabama LLC, the subsidiary
guarantors party thereto and U.S. Bank National Association
(incorporated by reference to the Companys annual report on Form
10-K (File No. 001-34365), filed on March 15, 2011).10.1
    
    Commercial Vehicle Group, Inc. 2011 Bonus Plan (incorporated by
reference to the Companys current report on Form 8-K (File No.
001-34365), filed on February 28, 2011).31.1
    
    Certification by Mervin Dunn, President and Chief Executive Officer.31.2
    
    Certification by Chad M. Utrup, Chief Financial Officer.32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 30




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SIGNATURE
  COMMERCIAL VEHICLE GROUP, INC.Date:  May 6, 2011
    By:
    /s/ Chad M. UtrupChad M. UtrupChief Financial Officer
(Principal financial and accounting officer
and duly authorized officer) 31