##### 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, 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
    
    41-1990662(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)6530 West Campus Oval
    
    43054New Albany, Ohio
    
    (Zip Code)(Address of principal executive offices)
 (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, 2007 AND 2006 (UNAUDITED)
    
    
    1CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2007 (UNAUDITED) AND DECEMBER
31, 2006 (UNAUDITED)
    
    
    2CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (UNAUDITED)
    
    
    3NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
    
    
    4ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    23ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    28ITEM 4 CONTROLS AND PROCEDURES
    
    
    28PART II OTHER INFORMATION
    
    
    29SIGNATURES
    
    
    31Certification by Mervin Dunn, President and CEOCertification by Chad M. Utrup, CFOCertifcation Pursuant to Section 906Certifcation 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 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)(In thousands, except per share amounts)REVENUES
    
    $
    160,918
    
    
    $
    235,841
    
    
    $
    518,285
    
    
    $
    699,973COST OF REVENUES
    
    
    143,099
    
    
    
    195,044
    
    
    
    457,578
    
    
    
    580,245Gross Profit
    
    
    17,819
    
    
    
    40,797
    
    
    
    60,707
    
    
    
    119,728SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    14,665
    
    
    
    13,294
    
    
    
    44,829
    
    
    
    39,693AMORTIZATION EXPENSE
    
    
    169
    
    
    
    104
    
    
    
    531
    
    
    
    312RESTRUCTURING CHARGES
    
    
    182
    
    
    
    
    
    
    
    1,180
    
    
    
    Operating Income
    
    
    2,803
    
    
    
    27,399
    
    
    
    14,167
    
    
    
    79,723OTHER EXPENSE (INCOME)
    
    
    4,339
    
    
    
    (1,642
    )
    
    
    4,556
    
    
    
    (2,720
    )INTEREST EXPENSE
    
    
    3,242
    
    
    
    3,582
    
    
    
    10,415
    
    
    
    11,321LOSS ON EARLY EXTINGUISHMENT OF DEBT
    
    
    
    
    
    
    
    
    
    
    149
    
    
    
    318(Loss) Income Before Income Taxes
    
    
    (4,778
    )
    
    
    25,459
    
    
    
    (953
    )
    
    
    70,804(BENEFIT) PROVISION FOR INCOME TAXES
    
    
    (2,096
    )
    
    
    7,453
    
    
    
    (999
    )
    
    
    23,896NET (LOSS) INCOME
    
    $
    (2,682
    )
    
    $
    18,006
    
    
    $
    46
    
    
    $
    46,908(LOSS) EARNINGS PER COMMON SHARE:Basic
    
    $
    (0.13
    )
    
    $
    0.85
    
    
    $
    0.00
    
    
    $
    2.22Diluted
    
    $
    (0.13
    )
    
    $
    0.84
    
    
    $
    0.00
    
    
    $
    2.18WEIGHTED AVERAGE SHARES OUTSTANDING:Basic
    
    
    21,438
    
    
    
    21,156
    
    
    
    21,413
    
    
    
    21,099Diluted
    
    
    21,438
    
    
    
    21,548
    
    
    
    21,640
    
    
    
    21,507
  1




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2007
    
    
    2006(Unaudited)
    
    
    (Unaudited)(In thousands, except share and pershare amounts)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    38,075
    
    
    $
    19,821Accounts receivable, net of reserve for doubtful accounts of $3,297
and $5,536, respectively
    
    
    103,465
    
    
    
    123,471Inventories, net
    
    
    85,006
    
    
    
    88,723Prepaid expenses
    
    
    19,406
    
    
    
    24,272Deferred income taxes
    
    
    10,308
    
    
    
    8,819Total current assets
    
    
    256,260
    
    
    
    265,106PROPERTY, PLANT AND EQUIPMENT, net
    
    
    90,669
    
    
    
    90,388GOODWILL
    
    
    132,718
    
    
    
    134,766INTANGIBLE ASSETS, net of accumulated amortization of $1,352 and
$840, respectively
    
    
    87,652
    
    
    
    84,188OTHER ASSETS, net
    
    
    11,994
    
    
    
    16,374TOTAL ASSETS
    
    $
    579,293
    
    
    $
    590,822LIABILITIES AND STOCKHOLDERS INVESTMENTCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    115
    
    
    $
    2,158Accounts payable
    
    
    77,468
    
    
    
    86,610Accrued liabilities
    
    
    34,009
    
    
    
    40,970Total current liabilities
    
    
    111,592
    
    
    
    129,738LONG-TERM DEBT, net of current maturities
    
    
    161,640
    
    
    
    159,956DEFERRED TAX LIABILITIES
    
    
    13,779
    
    
    
    10,611PENSION AND OTHER POST-RETIREMENT BENEFITS
    
    
    20,874
    
    
    
    22,188OTHER LONG-TERM LIABILITIES
    
    
    1,847
    
    
    
    3,424Total liabilities
    
    
    309,732
    
    
    
    325,917COMMITMENTS AND CONTINGENCIES (Note 11)STOCKHOLDERS INVESTMENT:Common stock $.01 par value; 30,000,000 shares authorized; 21,437,609
and 21,368,831 shares issued and outstanding, respectively
    
    
    214
    
    
    
    214Treasury stock purchased from employees; 5,836 shares
    
    
    (115
    )
    
    
    (115
    )Additional paid-in capital
    
    
    176,825
    
    
    
    174,044Retained earnings
    
    
    92,115
    
    
    
    92,007Accumulated other comprehensive income (loss)
    
    
    522
    
    
    
    (1,245
    )Total stockholders investment
    
    
    269,561
    
    
    
    264,905TOTAL LIABILITIES AND STOCKHOLDERS INVESTMENT
    
    $
    579,293
    
    
    $
    590,822
  2




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months EndedSeptember 30,2007
    
    
    2006(Unaudited)
    
    
    (Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    46
    
    
    $
    46,908Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    11,789
    
    
    
    11,166Noncash amortization of debt financing costs
    
    
    644
    
    
    
    679Loss on early extinguishment of debt
    
    
    149
    
    
    
    318Stock-based compensation expense
    
    
    2,246
    
    
    
    1,418Loss (Gain) on sale of assets
    
    
    133
    
    
    
    (367
    )Pension and post-retirement curtailment gain
    
    
    
    
    
    
    (3,865
    )Deferred income tax (benefit) provision
    
    
    1,681
    
    
    
    (1,679
    )Noncash loss (gain) on forward exchange contracts
    
    
    5,048
    
    
    
    (2,707
    )Change in other operating items
    
    
    9,214
    
    
    
    (28,089
    )Net cash provided by operating activities
    
    
    30,950
    
    
    
    23,782CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, plant and equipment
    
    
    (11,229
    )
    
    
    (15,051
    )Proceeds from disposal/sale of property, plant and equipment
    
    
    102
    
    
    
    377Proceeds from disposal/sale of other assets
    
    
    
    
    
    
    1,800Post-acquisition payments, net of cash received
    
    
    (817
    )
    
    
    (606
    )Other assets and liabilities
    
    
    (498
    )
    
    
    (420
    )Net cash used in investing activities
    
    
    (12,442
    )
    
    
    (13,900
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock under equity incentive plans
    
    
    463
    
    
    
    1,165Excess tax benefit from equity incentive plans
    
    
    73
    
    
    
    148Repayment of revolving credit facility
    
    
    (72,984
    )
    
    
    (24,640
    )Borrowings under revolving credit facility
    
    
    82,987
    
    
    
    23,730Repayments of long-term debt
    
    
    (10,295
    )
    
    
    (27,786
    )Payments on capital lease obligations, other, net
    
    
    (94
    )
    
    
    (76
    )Net cash provided by (used in) financing activities
    
    
    150
    
    
    
    (27,459
    )EFFECT OF
CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
    
    
    (404
    )
    
    
    (1,168
    )NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    18,254
    
    
    
    (18,745
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    19,821
    
    
    
    40,641End of period
    
    $
    38,075
    
    
    $
    21,896SUPPLEMENTAL CASH FLOW INFORMATION:Cash paid for interest
    
    $
    12,790
    
    
    $
    13,415Cash (refund) paid for income taxes, net
    
    $
    (4,371
    )
    
    $
    19,440
  3




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 1. Description of Business and Basis of Presentation
    2. Recently Issued Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities.
 4




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##### Table of Contents



3. Restructuring Activities
 Accounting for Costs Associated with Exit or Disposal Activities
 EmployeeCostsBalance  December 31, 2006
    
    $
    Provisions recorded
    
    
    810Deductions for payments made
    
    
    (112
    )Balance  September 30, 2007
    
    $
    698
 4. 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-
    
    
    Average
    
    
    AggregateAverage
    
    
    Remaining
    
    
    IntrinsicOptions
    
    
    Exercise
    
    
    Contractual
    
    
    ValueStock Options
    

(000s)
    
    
    Price
    
    
    Life (Years)
    
    
    (000s)Outstanding at December 31, 2006
    
    
    848
    
    
    $
    11.94
    
    
    
    7.5
    
    
    $
    8,588Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (69
    )
    
    
    6.74
    
    
    
    
    
    
    
    Forfeited
    
    
    (15
    )
    
    
    15.84
    
    
    
    
    
    
    
    Outstanding at September 30, 2007
    
    
    764
    
    
    $
    12.33
    
    
    
    6.7
    
    
    $
    5,359Exercisable at September 30, 2007
    
    
    604
    
    
    $
    11.40
    
    
    
    6.6
    
    
    $
    4,792Nonvested, expected to vest at December 31, 2007
    
    
    160
    
    
    $
    15.84
    
    
    
    6.7
    
    
    $
    
  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
    
    
    
    20.10Forfeited
    
    
    (15
    )
    
    
    
    
    
    
    (10
    )
    
    
    20.19Nonvested at
September 30, 2007
    
    
    160
    
    
    $
    3.34
    
    
    
    319
    
    
    $
    20.21
 6




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##### Table of Contents



5. Stockholders Investment
 Earnings Per Share  Earnings per Share Share Based Payment
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net (loss) income applicable to common shareholders
    
    $
    (2,682
    )
    
    $
    18,006
    
    
    $
    46
    
    
    $
    46,908Weighted average number of common shares outstanding
    
    
    21,438
    
    
    
    21,156
    
    
    
    21,413
    
    
    
    21,099Dilutive effect of outstanding stock options and
restricted stock grants after application of the
treasury stock method
    
    
    
    
    
    
    392
    
    
    
    227
    
    
    
    408Dilutive shares outstanding
    
    
    21,438
    
    
    
    21,548
    
    
    
    21,640
    
    
    
    21,507Basic (loss) earnings per share
    
    $
    (0.13
    )
    
    $
    0.85
    
    
    $
    0.00
    
    
    $
    2.22Diluted (loss) earnings per share
    
    $
    (0.13
    )
    
    $
    0.84
    
    
    $
    0.00
    
    
    $
    2.18
  Dividends 
 6. Accounts Receivable
  7. Inventories
  September 30,
    
    
    December 31,2007
    
    
    2006Raw materials
    
    $
    57,590
    
    
    $
    61,617Work in process
    
    
    13,415
    
    
    
    14,436Finished goods
    
    
    19,843
    
    
    
    17,314Less excess and obsolete
    
    
    (5,842
    )
    
    
    (4,644
    )$
    85,006
    
    
    $
    88,723
 7




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##### Table of Contents



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




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##### Table of Contents



September 30, 2007
    
    
    December 31, 2006Weighted-Average
    
    
    Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetAmortization
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    CarryingPeriod
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    Amount
    
    
    Amortization
    
    
    AmountDefinite-lived intangible assets:Tradenames/Trademarks
    
    30 years
    
    $
    9,790
    
    
    $
    (834
    )
    
    $
    8,956
    
    
    $
    9,790
    
    
    $
    (589
    )
    
    $
    9,201Licenses
    
    7 years
    
    
    438
    
    
    
    (297
    )
    
    
    141
    
    
    
    438
    
    
    
    (251
    )
    
    
    187Customer relationships
    
    15 years
    
    
    3,976
    
    
    
    (221
    )
    
    
    3,755
    
    
    
    
    
    
    
    
    
    
    
    $
    14,204
    
    
    $
    (1,352
    )
    
    $
    12,852
    
    
    $
    10,228
    
    
    $
    (840
    )
    
    $
    9,388Indefinite-lived intangible assets:Goodwill
    
    
    
    
    
    $
    132,718
    
    
    $
    
    
    
    $
    132,718
    
    
    $
    134,766
    
    
    $
    
    
    
    $
    134,766Customer relationships
    
    
    
    
    
    
    74,800
    
    
    
    
    
    
    
    74,800
    
    
    
    74,800
    
    
    
    
    
    
    
    74,800$
    207,518
    
    
    $
    
    
    
    $
    207,518
    
    
    $
    209,566
    
    
    $
    
    
    
    $
    209,566Total consolidated goodwill and
intangible assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    220,370
    
    
    
    
    
    
    
    
    
    
    $
    218,954
   Fiscal Year Ended
    
    
    
    EstimatedDecember 31,
    
    
    
    Amortization Expense2007
    
    
    
    
    $
    6762008
    
    
    
    
    $
    6542009
    
    
    
    
    $
    6542010
    
    
    
    
    $
    5912011
    
    
    
    
    $
    5912012
    
    
    
    
    $
    591
  Balance  December 31, 2006
    
    $
    134,766Post acquisition adjustments
    
    
    817Definite-lived intangible assets
    
    
    (3,976
    )Currency translation adjustment
    
    
    1,111Balance  September 30, 2007
    
    $
    132,718
 9




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##### Table of Contents



9. Debt
  September 30,
    
    
    December 31,2007
    
    
    2006Revolving credit facilities bore interest at a weighted average of
8.0% as of September 30, 2007 and 7.1% as of December 31, 2006
    
    $
    11,500
    
    
    $
    1,469Term loan, with principal and interest payable quarterly, bore
interest at a weighted average rate of 7.4% as of September 30,
2007 and 6.8% as of December 31, 2006
    
    
    
    
    
    
    10,2958.0% senior notes due 2013
    
    
    150,000
    
    
    
    150,000Other
    
    
    255
    
    
    
    350161,755
    
    
    
    162,114Less current maturities
    
    
    115
    
    
    
    2,158$
    161,640
    
    
    $
    159,956
 Credit Agreement  Debtors Accounting for the Changes in Line-of-Credit or Revolving-Debt
Arrangements Debtors Accounting for a Modification or Exchange of Debt Instruments
     10




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##### Table of Contents



Terms, Covenants and Compliance Status
 10. Income Taxes
     11. Commitments and Contingencies
 Warranty 
 11




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##### Table of Contents



Balance  December 31, 2006
    
    $
    5,197Additional provisions recorded
    
    
    1,703Deduction for payments made
    
    
    (2,744
    )Currency translation adjustment
    
    
    15Balance  September 30, 2007
    
    $
    4,171
 Foreign Currency Forward Exchange Contracts 
  Local
    
    
    
    
    
    U.S. $Currency
    
    U.S. $
    
    EquivalentAmount
    
    Equivalent
    
    Fair ValueContracts to (buy) sell currencies:U.S. dollar
    
    $
    (469
    )
    
    $
    (469
    )
    
    $
    (469
    )Eurodollar
    
    
    42,295
    
    
    
    61,076
    
    
    
    61,440Swedish krona
    
    
    19,010
    
    
    
    2,934
    
    
    
    2,991Japanese yen
    
    
    3,214,500
    
    
    
    34,142
    
    
    
    30,111Australian dollar
    
    
    6,100
    
    
    
    5,212
    
    
    
    5,391
  Litigation 
 12. 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 EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    85
    
    
    $
    114
    
    
    $
    
    
    
    $
    3
    
    
    $
    1
    
    
    $
    10Interest cost
    
    
    429
    
    
    
    430
    
    
    
    631
    
    
    
    573
    
    
    
    43
    
    
    
    43Expected return on plan assets
    
    
    (389
    )
    
    
    (410
    )
    
    
    (603
    )
    
    
    (544
    )
    
    
    
    
    
    
    Amortization of prior service costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    Recognized actuarial loss
    
    
    
    
    
    
    
    
    
    
    51
    
    
    
    46
    
    
    
    20
    
    
    
    Special Termination Benefits
    
    
    51
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    111
    
    
    
    Net periodic benefit cost
    
    $
    176
    
    
    $
    145
    
    
    $
    79
    
    
    $
    79
    
    
    $
    175
    
    
    $
    53
  Other Post-RetirementU.S. Pension Plans
    
    
    Non U.S. Pension Plans
    
    
    Benefit PlansNine Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    335
    
    
    $
    515
    
    
    $
    
    
    
    $
    221
    
    
    $
    14
    
    
    $
    50Interest cost
    
    
    1,310
    
    
    
    1,254
    
    
    
    1,826
    
    
    
    1,621
    
    
    
    111
    
    
    
    121Expected return on plan assets
    
    
    (1,151
    )
    
    
    (1,239
    )
    
    
    (1,740
    )
    
    
    (1,520
    )
    
    
    
    
    
    
    Amortization of prior service costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    Recognized actuarial loss
    
    
    
    
    
    
    
    
    
    
    145
    
    
    
    200
    
    
    
    20
    
    
    
    Curtailment (gain) loss
    
    
    
    
    
    
    (1,949
    )
    
    
    
    
    
    
    142
    
    
    
    
    
    
    
    (2,058
    )Special termination benefits
    
    
    161
    
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    303
    
    
    
    354Net periodic benefit cost
    
    $
    655
    
    
    $
    (1,373
    )
    
    $
    231
    
    
    $
    670
    
    
    $
    448
    
    
    $
    (1,533
    )
  13. Comprehensive Income
 Reporting Comprehensive Income,
  Foreign currency translation adjustment
    
    $
    8,308Pension liability
    
    
    (6,701
    )Unrealized loss on derivative instruments
    
    
    (1,085
    )$
    522
 13




---



##### Table of Contents



2007
    
    
    2006Net income
    
    $
    46
    
    
    $
    46,908Other comprehensive income:Foreign currency translation adjustment
    
    
    2,851
    
    
    
    2,549Unrealized loss on derivative instruments
    
    
    (1,085
    )
    
    
    Comprehensive income
    
    $
    1,812
    
    
    $
    49,457
 14. Related Party Transactions
 
 15. Subsequent Events
   16. 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, 2007
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    123,819
    
    
    $
    40,029
    
    
    $
    (2,930
    )
    
    $
    160,918COST OF REVENUES
    
    
    
    
    
    
    111,832
    
    
    
    33,776
    
    
    
    (2,509
    )
    
    
    143,099Gross Profit
    
    
    
    
    
    
    11,987
    
    
    
    6,253
    
    
    
    (421
    )
    
    
    17,819SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    10,972
    
    
    
    3,923
    
    
    
    (230
    )
    
    
    14,665AMORTIZATION EXPENSE
    
    
    
    
    
    
    103
    
    
    
    66
    
    
    
    
    
    
    
    169RESTRUCTURING CHARGES
    
    
    
    
    
    
    182
    
    
    
    
    
    
    
    
    
    
    
    182Operating Income (Loss)
    
    
    
    
    
    
    730
    
    
    
    2,264
    
    
    
    (191
    )
    
    
    2,803OTHER
(INCOME) EXPENSE
    
    
    
    
    
    
    (115
    )
    
    
    4,454
    
    
    
    
    
    
    
    4,339INTEREST
EXPENSE (INCOME)
    
    
    
    
    
    
    3,268
    
    
    
    (26
    )
    
    
    
    
    
    
    3,242LOSS ON EARLY EXTINGUISHMENT OF DEBT
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Loss) Before Income Taxes
    
    
    
    
    
    
    (2,423
    )
    
    
    (2,164
    )
    
    
    (191
    )
    
    
    (4,778
    )(BENEFIT) FOR INCOME TAXES
    
    
    
    
    
    
    (1,088
    )
    
    
    (1,008
    )
    
    
    
    
    
    
    (2,096
    )NET (LOSS)
    
    $
    
    
    
    $
    (1,335
    )
    
    $
    (1,156
    )
    
    $
    (191
    )
    
    $
    (2,682
    )
 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, 2007
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    401,049
    
    
    $
    125,882
    
    
    $
    (8,646
    )
    
    $
    518,285COST OF REVENUES
    
    
    
    
    
    
    358,656
    
    
    
    106,447
    
    
    
    (7,525
    )
    
    
    457,578Gross Profit
    
    
    
    
    
    
    42,393
    
    
    
    19,435
    
    
    
    (1,121
    )
    
    
    60,707SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    
    
    
    
    33,981
    
    
    
    11,640
    
    
    
    (792
    )
    
    
    44,829AMORTIZATION EXPENSE
    
    
    
    
    
    
    310
    
    
    
    221
    
    
    
    
    
    
    
    531RESTRUCTURING CHARGES
    
    
    
    
    
    
    1,180
    
    
    
    
    
    
    
    
    
    
    
    1,180Operating Income (Loss)
    
    
    
    
    
    
    6,922
    
    
    
    7,574
    
    
    
    (329
    )
    
    
    14,167OTHER (INCOME) EXPENSE
    
    
    
    
    
    
    (471
    )
    
    
    5,027
    
    
    
    
    
    
    
    4,556INTEREST EXPENSE
    
    
    
    
    
    
    9,828
    
    
    
    587
    
    
    
    
    
    
    
    10,415LOSS ON EARLY EXTINGUISHMENT OF DEBT
    
    
    
    
    
    
    24
    
    
    
    125
    
    
    
    
    
    
    
    149(Loss) Income Before Income Taxes
    
    
    
    
    
    
    (2,459
    )
    
    
    1,835
    
    
    
    (329
    )
    
    
    (953
    )(BENEFIT) PROVISION FOR INCOME TAXES
    
    
    
    
    
    
    (1,050
    )
    
    
    51
    
    
    
    
    
    
    
    (999
    )NET (LOSS) INCOME
    
    $
    
    
    
    $
    (1,409
    )
    
    $
    1,784
    
    
    $
    (329
    )
    
    $
    46
 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, 2007
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    
    
    
    $
    3,990
    
    
    $
    34,085
    
    
    $
    
    
    
    $
    38,075Accounts receivable, net
    
    
    
    
    
    
    77,318
    
    
    
    26,147
    
    
    
    
    
    
    
    103,465Inventories, net
    
    
    
    
    
    
    59,888
    
    
    
    25,671
    
    
    
    (553
    )
    
    
    85,006Prepaid expenses and other current assets
    
    
    
    
    
    
    4,784
    
    
    
    6,634
    
    
    
    7,988
    
    
    
    19,406Deferred income taxes
    
    
    
    
    
    
    13,385
    
    
    
    (1,131
    )
    
    
    (1,946
    )
    
    
    10,308Total current assets
    
    
    
    
    
    
    159,365
    
    
    
    91,406
    
    
    
    5,489
    
    
    
    256,260PROPERTY, PLANT AND
EQUIPMENT, net
    
    
    
    
    
    
    81,510
    
    
    
    9,159
    
    
    
    
    
    
    
    90,669INVESTMENT IN SUBSIDIARIES
    
    
    401,658
    
    
    
    (95,736
    )
    
    
    19,739
    
    
    
    (325,661
    )
    
    
    GOODWILL
    
    
    
    
    
    
    104,363
    
    
    
    28,355
    
    
    
    
    
    
    
    132,718INTANGIBLE ASSETS, net
    
    
    
    
    
    
    83,897
    
    
    
    3,755
    
    
    
    
    
    
    
    87,652OTHER ASSETS, net
    
    
    
    
    
    
    15,578
    
    
    
    6,746
    
    
    
    (10,330
    )
    
    
    11,994TOTAL ASSETS
    
    $
    401,658
    
    
    $
    348,977
    
    
    $
    159,160
    
    
    $
    (330,502
    )
    
    $
    579,293LIABILITIES AND STOCKHOLDERS INVESTMENTCURRENT LIABILITIES:Current maturities of long-term debt
    
    $
    
    
    
    $
    115
    
    
    $
    
    
    
    $
    
    
    
    $
    115Accounts payable
    
    
    
    
    
    
    47,861
    
    
    
    29,607
    
    
    
    
    
    
    
    77,468Accrued liabilities
    
    
    
    
    
    
    22,288
    
    
    
    5,679
    
    
    
    6,042
    
    
    
    34,009Total current liabilities
    
    
    
    
    
    
    70,264
    
    
    
    35,286
    
    
    
    6,042
    
    
    
    111,592LONG-TERM DEBT, net of current maturities
    
    
    
    
    
    
    161,609
    
    
    
    25,747
    
    
    
    (25,716
    )
    
    
    161,640DEFERRED TAX LIABILITIES
    
    
    
    
    
    
    24,925
    
    
    
    (816
    )
    
    
    (10,330
    )
    
    
    13,779PENSION AND OTHER POST-RETIREMENT BENEFITS
    
    
    
    
    
    
    10,845
    
    
    
    10,029
    
    
    
    
    
    
    
    20,874OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    1,835
    
    
    
    12
    
    
    
    
    
    
    
    1,847Total liabilities
    
    
    
    
    
    
    269,478
    
    
    
    70,258
    
    
    
    (30,004
    )
    
    
    309,732STOCKHOLDERS INVESTMENT
    
    
    401,658
    
    
    
    79,499
    
    
    
    88,902
    
    
    
    (300,498
    )
    
    
    269,561TOTAL LIABILITIES AND
STOCKHOLDERS INVESTMENT
    
    $
    401,658
    
    
    $
    348,977
    
    
    $
    159,160
    
    
    $
    (330,502
    )
    
    $
    579,293
 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, 2007
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss) income
    
    $
    
    
    
    $
    (1,409
    )
    
    $
    1,784
    
    
    $
    (329
    )
    
    $
    46Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    9,702
    
    
    
    2,087
    
    
    
    
    
    
    
    11,789Noncash amortization of debt financing costs
    
    
    
    
    
    
    624
    
    
    
    20
    
    
    
    
    
    
    
    644Loss on early extinguishment of debt
    
    
    
    
    
    
    24
    
    
    
    125
    
    
    
    
    
    
    
    149Stock-based compensation expense
    
    
    
    
    
    
    2,246
    
    
    
    
    
    
    
    
    
    
    
    2,246Loss on sale of assets
    
    
    
    
    
    
    107
    
    
    
    26
    
    
    
    
    
    
    
    133Deferred income tax provision
    
    
    
    
    
    
    3,171
    
    
    
    (1,490
    )
    
    
    
    
    
    
    1,681Noncash loss on forward exchange contracts
    
    
    
    
    
    
    
    
    
    
    5,048
    
    
    
    
    
    
    
    5,048Change in other operating items
    
    
    
    
    
    
    (4,945
    )
    
    
    13,830
    
    
    
    329
    
    
    
    9,214Net cash provided by operating activities
    
    
    
    
    
    
    9,520
    
    
    
    21,430
    
    
    
    
    
    
    
    30,950CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property, plant and equipment
    
    
    
    
    
    
    (9,078
    )
    
    
    (2,151
    )
    
    
    
    
    
    
    (11,229
    )Proceeds from disposal/sale of property, plant
and equipment
    
    
    
    
    
    
    
    
    
    
    102
    
    
    
    
    
    
    
    102Post-acquisition and acquisition payments, net of cash received
    
    
    
    
    
    
    (330
    )
    
    
    (487
    )
    
    
    
    
    
    
    (817
    )Other asset and liabilities
    
    
    
    
    
    
    (26,338
    )
    
    
    124
    
    
    
    25,716
    
    
    
    (498
    )Net cash (used in) provided by investing activities
    
    
    
    
    
    
    (35,746
    )
    
    
    (2,412
    )
    
    
    25,716
    
    
    
    (12,442
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock
under equity incentive plans
    
    
    
    
    
    
    463
    
    
    
    
    
    
    
    
    
    
    
    463Excess tax benefits from equity incentive plans
    
    
    
    
    
    
    73
    
    
    
    
    
    
    
    
    
    
    
    73Repayment of revolving credit facility
    
    
    
    
    
    
    (64,000
    )
    
    
    (8,984
    )
    
    
    
    
    
    
    (72,984
    )Borrowings under revolving credit facility
    
    
    
    
    
    
    75,500
    
    
    
    33,203
    
    
    
    (25,716
    )
    
    
    82,987Repayments of long-term debt
    
    
    
    
    
    
    
    
    
    
    (10,295
    )
    
    
    
    
    
    
    (10,295
    )Payments on capital lease obligations, other, net
    
    
    
    
    
    
    (88
    )
    
    
    (6
    )
    
    
    
    
    
    
    (94
    )Net cash provided by (used in) financing activities
    
    
    
    
    
    
    11,948
    
    
    
    13,918
    
    
    
    (25,716
    )
    
    
    150EFFECT OF CURRENCY EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    
    
    
    
    (404
    )
    
    
    
    
    
    
    (404
    )NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    (14,278
    )
    
    
    32,532
    
    
    
    
    
    
    
    18,254CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    
    
    
    
    18,268
    
    
    
    1,553
    
    
    
    
    
    
    
    19,821End of period
    
    $
    
    
    
    $
    3,990
    
    
    $
    34,085
    
    
    $
    
    
    
    $
    38,075
 18




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2006
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(Unaudited)(In thousands)REVENUES
    
    $
    
    
    
    $
    202,931
    
    
    $
    34,421
    
    
    $
    (1,511
    )
    
    $
    235,841COST OF SALES
    
    
    
    
    
    
    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 INCOME
    
    
    
    
    
    
    (5
    )
    
    
    (1,637
    )
    
    
    
    
    
    
    (1,642
    )INTEREST EXPENSE
    
    
    
    
    
    
    3,293
    
    
    
    289
    
    
    
    
    
    
    
    3,582LOSS ON EARLY
EXTINGUISHMENT OF
DEBT
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income Before
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
 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 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 SALES
    
    
    
    
    
    
    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
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
 20




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2006
 Parent
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Companies
    
    
    Companies
    
    
    Elimination
    
    
    Consolidated(In thousands)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    
    
    
    $
    18,268
    
    
    $
    1,553
    
    
    $
    
    
    
    $
    19,821Accounts receivable, net
    
    
    
    
    
    
    148,244
    
    
    
    31,356
    
    
    
    (56,129
    )
    
    
    123,471Inventories, net
    
    
    
    
    
    
    66,337
    
    
    
    22,610
    
    
    
    (224
    )
    
    
    88,723Prepaid expenses
    
    
    
    
    
    
    6,984
    
    
    
    5,819
    
    
    
    11,469
    
    
    
    24,272Deferred income taxes
    
    
    
    
    
    
    11,570
    
    
    
    (2,751
    )
    
    
    
    
    
    
    8,819Total current assets
    
    
    
    
    
    
    251,403
    
    
    
    58,587
    
    
    
    (44,884
    )
    
    
    265,106PROPERTY, PLANT AND
EQUIPMENT, net
    
    
    
    
    
    
    81,930
    
    
    
    8,458
    
    
    
    
    
    
    
    90,388INVESTMENT IN SUBSIDIARIES
    
    
    400,817
    
    
    
    10,602
    
    
    
    11,987
    
    
    
    (423,406
    )
    
    
    GOODWILL
    
    
    
    
    
    
    104,033
    
    
    
    30,733
    
    
    
    
    
    
    
    134,766INTANGIBLE ASSETS, net
    
    
    
    
    
    
    84,188
    
    
    
    
    
    
    
    
    
    
    
    84,188OTHER ASSETS, net
    
    
    
    
    
    
    7,761
    
    
    
    8,613
    
    
    
    
    
    
    
    16,374DEFERRED INCOME TAXES
    
    
    
    
    
    
    8,624
    
    
    
    3,323
    
    
    
    (11,947
    )
    
    
    TOTAL ASSETS
    
    $
    400,817
    
    
    $
    548,541
    
    
    $
    121,701
    
    
    $
    (480,237
    )
    
    $
    590,822LIABILITIES AND STOCKHOLDERS INVESTMENTCURRENT LIABILITIES:Current maturities of
long-term debt
    
    $
    
    
    
    $
    2,158
    
    
    $
    
    
    
    $
    
    
    
    $
    2,158Accounts payable
    
    
    
    
    
    
    123,398
    
    
    
    19,341
    
    
    
    (56,129
    )
    
    
    86,610Accrued liabilities
    
    
    
    
    
    
    25,661
    
    
    
    3,840
    
    
    
    11,469
    
    
    
    40,970Total current liabilities
    
    
    
    
    
    
    151,217
    
    
    
    23,181
    
    
    
    (44,660
    )
    
    
    129,738LONG-TERM DEBT, net
    
    
    
    
    
    
    148,156
    
    
    
    11,800
    
    
    
    
    
    
    
    159,956DEFERRED TAX LIABILITIES
    
    
    
    
    
    
    23,374
    
    
    
    (816
    )
    
    
    (11,947
    )
    
    
    10,611OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    15,556
    
    
    
    10,056
    
    
    
    
    
    
    
    25,612Total liabilities
    
    
    
    
    
    
    338,303
    
    
    
    44,221
    
    
    
    (56,607
    )
    
    
    325,917STOCKHOLDERS INVESTMENT
    
    
    400,817
    
    
    
    210,238
    
    
    
    77,480
    
    
    
    (423,630
    )
    
    
    264,905TOTAL LIABILITIES AND
STOCKHOLDERS INVESTMENT
    
    $
    400,817
    
    
    $
    548,541
    
    
    $
    121,701
    
    
    $
    (480,237
    )
    
    $
    590,822
 21




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##### Table of Contents



COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 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 RATECHANGES 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
 22




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##### Table of Contents



ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Company Overview
       
    
    establishing sourcing efforts in China and Europe and other lower cost regions of the
world;
    
    eliminating excess production capacity through the closure and consolidation of
manufacturing or assembly facilities; and
    
    implementing Lean Manufacturing and Total Quality Production System (TQPS) initiatives
to improve operating efficiency and product quality.
 23




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##### Table of Contents



Results of Operations
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2007
    
    2006
    
    2007
    
    2006Revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of Revenues
    
    
    88.9
    
    
    
    82.7
    
    
    
    88.3
    
    
    
    82.9Gross Profit
    
    
    11.1
    
    
    
    17.3
    
    
    
    11.7
    
    
    
    17.1Selling, General and Administrative Expenses
    
    
    9.1
    
    
    
    5.6
    
    
    
    8.6
    
    
    
    5.7Amortization Expense
    
    
    0.1
    
    
    
    
    
    
    
    0.1
    
    
    
    Restructuring Charges
    
    
    0.1
    
    
    
    
    
    
    
    0.2
    
    
    
    Operating Income
    
    
    1.8
    
    
    
    11.7
    
    
    
    2.8
    
    
    
    11.4Other Expense (Income)
    
    
    2.7
    
    
    
    (0.7
    )
    
    
    0.9
    
    
    
    (0.4
    )Interest Expense
    
    
    2.0
    
    
    
    1.5
    
    
    
    2.0
    
    
    
    1.6Loss on Early Extinguishment of Debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Loss) Income Before Income Taxes
    
    
    (2.9
    )
    
    
    10.9
    
    
    
    (0.1
    )
    
    
    10.2(Benefit) Provision for Income Taxes
    
    
    (1.3
    )
    
    
    3.2
    
    
    
    (0.2
    )
    
    
    3.4Net (Loss) Income
    
    
    (1.6
    )%
    
    
    7.7
    %
    
    
    0.1
    %
    
    
    6.8
    %
 Three Months Ended September 30, 2007 Compared to Three Months Ended September 30, 2006
 Revenues
 Gross Profit
 24




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##### Table of Contents



Selling, General and Administrative Expenses
 Other Income
 Interest Expense
 (Benefit) Provision for Income Taxes
 Net (Loss) Income
 Nine Months Ended September 30, 2007 Compared to Nine Months Ended September 30, 2006
 Revenues
 Gross Profit
 Selling, General and Administrative Expenses
 25




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##### Table of Contents



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




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##### Table of Contents



Debtors Accounting for a Modification or Exchange of Debt
Instruments,
  Fixed ChargeQuarter(s) Ending
    
    Coverage Ratio09/30/2007 through 12/31/2007
    
    
    1.10 to 1.0003/31/2008
    
    
    1.00 to 1.0006/30/2008
    
    
    1.10 to 1.0009/30/2008 and each fiscal quarter end thereafter
    
    
    1.30 to 1.00
 Maximum Ratio ofQuarter(s) Ending
    
    Total Indebtedness09/30/2007
    
    
    3.75 to 1.0012/31/2007 through 03/31/2008
    
    
    4.75 to 1.0006/30/2008
    
    
    3.75 to 1.0009/30/2008
    
    
    2.75 to 1.0012/31/2008 and each fiscal quarter end thereafter
    
    
    2.50 to 1.00
   Update on Contractual Obligations
 Accounting for Uncertainty in Income Taxes
 27




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##### Table of Contents



Forward-Looking Statements
  
 ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4  CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
   28




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##### Table of Contents



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




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##### Table of Contents



10.1
    
    Amendment and Waiver Letter to Revolving Credit and Term Loan Agreement,
dated as of August 16, 2007, by and among Commercial Vehicle Group, Inc.,
the subsidiary borrowers from time to time parties thereto, the foreign
currency borrowers from time to time parties thereto, the banks from time
to time parties thereto, U.S. Bank National Association, one of the
banks, as administrative agents for the banks, and Comerica Bank, one of
the banks, as syndication agent for the banks (incorporated by reference
to the Companys current report on Form 8-K (File No. 000-50890), filed
on October 1, 2007).10.2
    
    Tenth Amendment to Revolving Credit and Term Loan Agreement, dated as of
September 28, 2007, by and among Commercial Vehicle Group, Inc., the
subsidiary borrowers from time to time parties thereto, the foreign
currency borrowers from time to time parties thereto, the banks from time
to time parties thereto, U.S. Bank National Association, one of the
banks, as administrative agents for the banks, and Comerica Bank, one of
the banks, as syndication agent for the banks (incorporated by reference
to the Companys current report on Form 8-K (File No. 000-50890), filed
on October 1, 2007).31.1
    
    Certification by Mervin Dunn, President and Chief Executive Officer.31.2
    
    Certification by Chad M. Utrup, Chief Financial Officer.32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 30




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##### Table of Contents



SIGNATURE
   Date:  November  5, 2007
    By:
    /s/ Chad M. UtrupChad M. UtrupChief Financial Officer 31