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PRNewswire 11-Mar-2019 4:24 PM
NEW ALBANY, Ohio, March 11, 2019 /PRNewswire/ -- Commercial Vehicle Group, Inc. (the "Company" or "CVG") (NASDAQ:CVGI) today reported financial results for the fourth quarter and fiscal year ended December 31, 2018.
Fourth Quarter |
|||
( $ in millions except EPS) |
2018 |
2017 |
|
Revenues |
$223.6 |
$188.3 |
|
Operating Income |
$14.4 |
$8.0 |
|
Net Income (Loss) |
$8.9 |
$(7.2) |
|
Basic EPS (Loss) |
$0.29 |
$(0.24) |
|
Diluted EPS (Loss) |
$0.29 |
$(0.24) |
"For the full year 2018, our team delivered exceptional results not seen since the peak markets in 2006, with revenues increasing 19 percent and operating income more than doubling year-over-year. These results reflect strong growth in the North America heavy-duty truck market and continued robust demand in the global construction equipment market. While we continue to experience some headwinds related to material cost inflation and difficult global labor markets, we have implemented a number of actions to mitigate the impact, which are bearing fruit," commented Patrick Miller, President and Chief Executive Officer. "In late February, we announced the reorganization of our operations, which we believe will accelerate growth, drive synergies, and better position the Company to capitalize on attractive industry trends. Through this new operating structure, we believe we are better suited to allocate resources to the highest return opportunities, both organically and inorganically to deliver increasing shareholder value."
Tim Trenary, Chief Financial Officer, stated, "As we head into 2019, we expect further revenue growth related to the record order backlog for North America heavy-duty truck production, as well as continued strength in the global construction equipment market despite some softening in China. Our initiatives to improve CVG's financial performance and balance sheet over the last three years have better positioned the Company to invest prudently in strategic growth opportunities. Today, we have a stronger balance sheet, as we have brought net leverage down to 1.2 times EBITDA and have liquidity of $134 million. As a result, we believe we are well positioned for growth in 2019."
Consolidated Results
Fourth Quarter 2018 Results
Fiscal Year 2018 Results
Full Year |
|||
( $ in millions except EPS) |
2018 |
2017 |
|
Revenues |
$897.7 |
$755.2 |
|
Operating Income |
$66.9 |
$30.9 |
|
Net Income (Loss) |
$44.5 |
($1.7) |
|
Basic EPS (Loss) |
$1.47 |
($0.06) |
|
Diluted EPS (Loss) |
$1.46 |
($0.06) |
At December 31, 2018, the Company had liquidity of $134.2 million; $70.9 million of cash and $63.3 million availability from our asset based revolver. There were no borrowings under our asset based revolver at December 31, 2018.
Segment Results
Electrical Systems Segment (ES)
Fourth Quarter 2018 Results
Fiscal Year 2018 Results
Global Seating Segment (GS)
Fourth Quarter 2018 Results
Fiscal Year 2018 Results
2019 End Market Outlook
Management estimates that 2019 North American Class 8 truck production will be in the range of 330,000 to 350,000 units and 2019 North American Class 5-7 truck production will be similar to 2018. We have seen strong orders in the construction markets we serve in Europe and North America. Order patterns in Asia have been moderating in the first quarter of 2019.
GAAP to Non-GAAP Reconciliation
A reconciliation of GAAP to non-GAAP financial measures referenced in this release is included as Appendix A to this release.
Conference Call
A conference call to discuss the contents of this press release is scheduled for Tuesday, March 12, 2019, at 8:00 a.m. ET. To participate, dial (844) 743-2497 using conference code 1892736.
The call will be webcast and can be accessed at Commercial Vehicle Group's Web site at www.cvgrp.com, where it will be archived for one year.
A telephonic replay of the conference call will be available for a period of two weeks following the call. To access the replay, dial (855) 859-2056 using access code 1892736.
About Commercial Vehicle Group, Inc.
Commercial Vehicle Group, Inc. (through its subsidiaries) is a leading supplier of electrical wire harnesses, seating systems, and a full range of other cab related products for the global commercial vehicle markets, including the medium- and heavy-duty truck, medium-and heavy-construction vehicle, military, bus, agriculture, specialty transportation, mining, industrial equipment and off-road recreational markets. Information about the Company and its products is available on the internet at www.cvgrp.com.
Forward-Looking Statements
This press release contains forward-looking statements that are subject to risks and uncertainties. These statements often include words such as "believe", "anticipate", "plan", "expect", "intend", "will", "should", "could", "would", "project", "continue", "likely", and similar expressions. In particular, this press release may contain forward-looking statements about Company expectations for future periods with respect to its plans to improve financial results and enhance the Company, the future of the Company's end markets, including Class 8 and Class 5-7 North America truck build rates and performance of the global construction equipment business, expected cost savings, the Company's initiatives to address customer needs, organic growth, the Company's plans to focus on certain segments and markets and the Company's financial position or other financial information. These statements are based on certain assumptions that the Company has made in light of its experience as well as its perspective on historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Actual results may differ materially from the anticipated results because of certain risks and uncertainties, including but not limited to: (i) general economic or business conditions affecting the markets in which the Company serves; (ii) the Company's ability to develop or successfully introduce new products; (iii) risks associated with conducting business in foreign countries and currencies; (iv) increased competition in the medium- and heavy-duty truck markets, construction, agriculture, aftermarket, military, bus and other markets; (v) the Company's failure to complete or successfully integrate strategic acquisitions; (vi) the Company's ability to recognize synergies from the reorganization of the segments; (vii) the Company's failure to successfully manage any divestitures; (viii) the impact of changes in governmental regulations on the Company's customers or on its business; (ix) the loss of business from a major customer, a collection of smaller customers or the discontinuation of particular commercial vehicle platforms; (x) the Company's ability to obtain future financing due to changes in the lending markets or its financial position; (xi) the Company's ability to comply with the financial covenants in its debt facilities; (xii) fluctuation in interest rates relating to the Company's debt facilities; (xiii) the Company's ability to realize the benefits of its cost reduction and strategic initiatives; (xiv) a material weakness in our internal control over financial reporting which could, if not remediated, result in material misstatements in our financial statements; (xv) volatility and cyclicality in the commercial vehicle market adversely affecting us; (xvi) the geographic profile of our taxable income and changes in valuation of our deferred tax assets and liabilities impacting our effective tax rate; (xvii) changes to domestic manufacturing initiatives; and (xviii) implementation of tax or other changes, by the United States or other international jurisdictions, related to products manufactured in one or more jurisdictions where the Company does business; and (xix) various other risks as outlined under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for fiscal year ending December 31, 2018. There can be no assurance that statements made in this press release relating to future events will be achieved. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by such cautionary statements.
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES |
||||||||
2018 |
2017 |
|||||||
(Unaudited) |
(Unaudited) |
|||||||
ASSETS |
||||||||
Current Assets: |
||||||||
Cash |
$ |
70,913 |
$ |
52,244 |
||||
Accounts receivable, net of allowances of $5,139 and $5,242, respectively |
134,624 |
108,595 |
||||||
Inventories |
92,359 |
99,015 |
||||||
Other current assets |
16,828 |
14,792 |
||||||
Total current assets |
314,724 |
274,646 |
||||||
Property, plant and equipment, net of accumulated depreciation of $143,781 and $147,553, respectively |
65,099 |
64,630 |
||||||
Goodwill |
7,576 |
8,045 |
||||||
Intangible assets, net of accumulated amortization of $9,568 and $8,533, respectively |
12,800 |
14,548 |
||||||
Deferred income taxes, net |
15,348 |
20,273 |
||||||
Other assets |
2,583 |
2,246 |
||||||
TOTAL ASSETS |
$ |
418,130 |
$ |
384,388 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
Current Liabilities: |
||||||||
Accounts payable |
$ |
86,645 |
$ |
86,608 |
||||
Accrued liabilities and other |
36,969 |
33,944 |
||||||
Current portion of long-term debt |
9,102 |
3,191 |
||||||
Total current liabilities |
132,716 |
123,743 |
||||||
Long-term debt |
154,656 |
163,758 |
||||||
Pension and other post-retirement liabilities |
12,065 |
15,450 |
||||||
Other long-term liabilities |
3,655 |
6,695 |
||||||
Total liabilities |
303,092 |
309,646 |
||||||
Stockholders' Equity: |
||||||||
Common stock, $.01 par value (60,000,000 shares authorized; 30,512,843 and 30,219,278 shares issued and outstanding, respectively); |
318 |
304 |
||||||
Treasury stock, at cost: 1,334,251 and 1,175,795 shares, respectively |
(10,245) |
(9,114) |
||||||
Additional paid-in capital |
243,007 |
239,870 |
||||||
Retained deficit |
(70,571) |
(115,083) |
||||||
Accumulated other comprehensive loss |
(47,471) |
(41,235) |
||||||
Total stockholders' equity |
115,038 |
74,742 |
||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
418,130 |
$ |
384,388 |
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share amounts) |
|||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||
2018 |
2017 |
2018 |
2017 |
||||||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
||||||||||||
Revenues |
$ |
223,602 |
$ |
188,339 |
$ |
897,737 |
$ |
755,231 |
|||||||
Cost of Revenues |
193,335 |
165,681 |
768,885 |
663,513 |
|||||||||||
Gross Profit |
30,267 |
22,658 |
128,852 |
91,718 |
|||||||||||
Selling, General and Administrative Expenses |
15,503 |
14,307 |
60,679 |
59,547 |
|||||||||||
Amortization Expense |
319 |
331 |
1,300 |
1,320 |
|||||||||||
Operating Income |
14,445 |
8,020 |
66,873 |
30,851 |
|||||||||||
Interest and Other Expense |
4,961 |
2,394 |
13,365 |
17,206 |
|||||||||||
Income Before Provision for Income Taxes |
9,484 |
5,626 |
53,508 |
13,645 |
|||||||||||
Provision for Income Taxes |
603 |
12,853 |
8,996 |
15,350 |
|||||||||||
Net Income (Loss) |
$ |
8,881 |
$ |
(7,227) |
$ |
44,512 |
$ |
(1,705) |
|||||||
Earnings (Loss) per Common Share: |
|||||||||||||||
Basic |
$ |
0.29 |
$ |
(0.24) |
$ |
1.47 |
$ |
(0.06) |
|||||||
Diluted |
$ |
0.29 |
$ |
(0.24) |
$ |
1.46 |
$ |
(0.06) |
|||||||
Weighted Average Shares Outstanding: |
|||||||||||||||
Basic |
30,447 |
30,145 |
30,277 |
29,942 |
|||||||||||
Diluted |
30,622 |
30,145 |
30,587 |
29,942 |
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES BUSINESS SEGMENT FINANCIAL INFORMATION (Unaudited) (Amounts in thousands) |
|||||||||||||||||||||||||||||||
For the three months ended December 31, |
|||||||||||||||||||||||||||||||
Electrical Systems |
Global Seating |
Corporate / Other |
Total |
||||||||||||||||||||||||||||
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
||||||||||||||||||||||||
Revenues |
|||||||||||||||||||||||||||||||
External |
$ |
125,067 |
$ |
107,391 |
$ |
98,535 |
$ |
80,948 |
$ |
— |
$ |
— |
$ |
223,602 |
$ |
188,339 |
|||||||||||||||
Intersegment |
1,981 |
1,819 |
716 |
280 |
(2,697) |
(2,099) |
— |
— |
|||||||||||||||||||||||
Total Revenues |
$ |
127,048 |
$ |
109,210 |
$ |
99,251 |
$ |
81,228 |
$ |
(2,697) |
$ |
(2,099) |
$ |
223,602 |
$ |
188,339 |
|||||||||||||||
Gross Profit |
$ |
17,584 |
$ |
12,387 |
$ |
12,719 |
$ |
10,575 |
$ |
(36) |
$ |
(304) |
$ |
30,267 |
$ |
22,658 |
|||||||||||||||
Selling, General & Administrative Expenses |
$ |
4,066 |
$ |
3,720 |
$ |
5,570 |
$ |
5,127 |
$ |
5,867 |
$ |
5,460 |
$ |
15,503 |
$ |
14,307 |
|||||||||||||||
Amortization Expense |
$ |
187 |
$ |
187 |
$ |
132 |
$ |
144 |
$ |
— |
$ |
— |
$ |
319 |
$ |
331 |
|||||||||||||||
Operating Income |
$ |
13,331 |
$ |
8,480 |
$ |
7,017 |
$ |
5,304 |
$ |
(5,903) |
$ |
(5,764) |
$ |
14,445 |
$ |
8,020 |
|||||||||||||||
For the twelve months ended December 31, |
|||||||||||||||||||||||||||||||
Electrical Systems |
Global Seating |
Corporate / Other |
Total |
||||||||||||||||||||||||||||
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
||||||||||||||||||||||||
Revenues |
|||||||||||||||||||||||||||||||
External |
$ |
503,717 |
$ |
427,476 |
$ |
394,020 |
$ |
327,755 |
$ |
— |
$ |
— |
$ |
897,737 |
$ |
755,231 |
|||||||||||||||
Intersegment |
9,037 |
6,922 |
3,481 |
1,761 |
(12,518) |
(8,683) |
— |
— |
|||||||||||||||||||||||
Total Revenues |
$ |
512,754 |
$ |
434,398 |
$ |
397,501 |
$ |
329,516 |
$ |
(12,518) |
$ |
(8,683) |
$ |
897,737 |
$ |
755,231 |
|||||||||||||||
Gross Profit |
$ |
75,184 |
$ |
52,011 |
$ |
54,231 |
$ |
40,722 |
$ |
(563) |
$ |
(1,015) |
$ |
128,852 |
$ |
91,718 |
|||||||||||||||
Selling, General & Administrative Expenses |
$ |
15,390 |
$ |
15,757 |
$ |
22,433 |
$ |
21,585 |
$ |
22,856 |
$ |
22,205 |
$ |
60,679 |
$ |
59,547 |
|||||||||||||||
Amortization Expense |
$ |
747 |
$ |
746 |
$ |
553 |
$ |
574 |
$ |
— |
$ |
— |
$ |
1,300 |
$ |
1,320 |
|||||||||||||||
Operating Income |
$ |
59,047 |
$ |
35,508 |
$ |
31,245 |
$ |
18,563 |
$ |
(23,419) |
$ |
(23,220) |
$ |
66,873 |
$ |
30,851 |
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES Appendix A: Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) (Amounts in thousands, except per share data) |
||||||||
Trailing Twelve Months Ended December 31, |
||||||||
2018 |
2017 |
|||||||
Net (Loss) Income |
$ |
44,512 |
$ |
(1,705) |
||||
Interest Expense |
14,676 |
19,149 |
||||||
Income Tax Expense |
8,996 |
15,350 |
||||||
Depreciation Expense |
14,118 |
14,024 |
||||||
Amortization Expense |
1,300 |
1,320 |
||||||
EBITDA |
$ |
83,602 |
$ |
48,138 |
||||
Debt per Balance Sheet |
$ |
163,758 |
$ |
166,949 |
||||
Plus: Original Issue Discount |
2,430 |
3,045 |
||||||
Plus: Prepaid Financing |
2,249 |
2,818 |
||||||
Gross Debt |
$ |
168,437 |
$ |
172,812 |
||||
Less: Cash |
70,913 |
52,244 |
||||||
Net Debt |
$ |
97,524 |
$ |
120,568 |
||||
Divide by Trailing 12 Months EBITDA |
$ |
83,602 |
$ |
48,138 |
||||
Net Leverage |
1.2x |
2.5x |
Use of Non-GAAP Measures
This earnings release contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). In general, the non-GAAP measures exclude items that (i) management believes reflect the Company's multi-year corporate activities; or (ii) relate to activities or actions that may have occurred over multiple or in prior periods without predictable trends. Management uses these non-GAAP financial measures internally to evaluate the Company's performance, engage in financial and operational planning and to determine incentive compensation.
Management provides these non-GAAP financial measures to investors as supplemental metrics to assist readers in assessing the effects of items and events on the Company's financial and operating results and in comparing the Company's performance to that of its competitors and to comparable reporting periods. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. The financial results calculated in accordance with GAAP and reconciliations to those financial statements set forth above should be carefully evaluated.
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SOURCE Commercial Vehicle Group, Inc.