Commercial Vehicle Group Announces First Quarter 2018 Results

Commercial Vehicle Group Announces First Quarter 2018 Results

OPERATING INCOME UP ON HIGHER SALES

PR Newswire

NEW ALBANY, Ohio, May 3, 2018 /PRNewswire/ -- Commercial Vehicle Group, Inc. (the "Company") CVGI today reported financial results for the first quarter ended March 31, 2018.



First Quarter

($ in millions except EPS)

2018



2017

Revenues

$215.7



$173.4

Operating Income

$15.5



$4.6

Net Income

$9.9



$0.6

Basic EPS

$0.33



$0.02

Diluted EPS

$0.32



$0.02

Patrick Miller, President and CEO, stated, "We are pleased with our strong year over year revenue growth that continues to trend favorably.  Heavy- and medium-duty truck production in North America is forecast to be at the highest levels since 2006 and we are well positioned for strong top line performance throughout the year.  Importantly, we are delivering improved earnings on the higher sales."

Tim Trenary, Chief Financial Officer, stated, "Revenues in the first quarter of 2018 were $216 million, 24 percent higher than the prior year period, and operating income rose to $15.5 million, a margin of 7.2% for the quarter.  On a sequential basis, the first quarter of 2018 compared to the fourth quarter of 2017, revenues were up 15 percent and pull through of operating income on this improvement in revenues was 25 percent.  These improved results include the benefit of the higher sales and the actions taken to address the labor shortage in our North American wire harness business, and the absence of the facility restructuring and litigation settlement costs incurred in 2017.  Additionally, these improvements were achieved notwithstanding continuing pressure from rising commodity prices, tightening labor markets and costs associated with the accelerating build rates."

Consolidated Results

First Quarter 2018 Results

  • First quarter 2018 revenues were $215.7 million compared to $173.4 million in the prior year period, an increase of 24.4 percent. The increase in revenues period-over-period reflects higher heavy-duty truck production in North America and improvement in the global construction markets we serve. Foreign currency translation favorably impacted first quarter 2018 revenues by $7.1 million, or by 4.1 percent when compared to the same period in the prior year.
  • Operating income for the first quarter 2018 was $15.5 million compared to operating income of $4.6 million in the prior year period. The increase in operating income period-over-period is primarily attributable to the increase in sales volume and actions taken to address the labor shortage in our North American wire harness business. These gains were partially offset by costs associated with rising commodity prices and tighter labor markets, and costs associated with accelerating build rates. The first quarter 2017 results included $1.1 million in charges relating to facility restructuring and other related costs, and $2.4 million associated with litigation settlement costs.
  • Net income was $9.9 million for the first quarter 2018, or $0.32 per diluted share, compared to net income of $0.6 million in the prior year period, or $0.02 per diluted share.

At March 31, 2018, the Company had liquidity of $94 million: $38 million of cash and $56 million of availability from our asset based revolver.  Borrowings under our asset based revolver, at March 31, 2018, were $7.5 million.

Segment Results

Global Truck and Bus Segment

First Quarter 2018 Results

  • Revenues for the Global Truck and Bus Segment in the first quarter 2018 were $128.3 million compared to $102.1 million for the prior year period, an increase of 25.7 percent primarily resulting from higher North American heavy-duty truck production. Foreign currency translation favorably impacted first quarter 2018 revenue by $0.8 million, or by 0.7 percent when compared to the same period in the prior year.
  • Operating income for the first quarter 2018 was $13.2 million compared to operating income of $8.3 million in the prior year period. The increase in operating income period-over-period is primarily attributable to the increase in sales volume and the absence of the 2017 costs associated with the now completed facility restructuring. The first quarter of 2017 results included charges of $1.0 million relating to facility restructuring and other related costs.

Global Construction and Agriculture Segment

First Quarter 2018 Results

  • Revenues for the Global Construction and Agriculture Segment in the first quarter 2018 were $91.2 million compared to $73.5 million in the prior year period, an increase of 24.1 percent primarily as a result of improvement in the global construction markets we serve. Foreign currency translation favorably impacted first quarter 2018 revenues by $6.7 million, or by 9.1 percent when compared to the same period in the prior year.
  • Operating income for the first quarter 2018 was $8.2 million compared to operating income of $3.3 million in the prior year period. The increase in operating income period-over-period is primarily attributable to the increase in sales volume and actions taken to address the labor shortage in our North American wire harness business.

2018 End Market Outlook

Management estimates that the 2018 North American Class 8 truck production will be in the range of 300,000 to 325,000 units, as compared to 256,000 units in 2017; North American Class 5-7 production is expected to be up slightly year-over-year.  We believe the construction markets we serve in Europe, Asia, and North America have improved.

CONFERENCE CALL

A conference call to discuss this press release is scheduled for Friday, May 4, 2018, at 10:00 a.m. ET. To participate, dial (844) 743-2497 using conference code 9692779. 

This call is being webcast by NASDAQ 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 9692779.

About Commercial Vehicle Group, Inc.

Commercial Vehicle Group, Inc. (and its subsidiaries) is a leading supplier of a full range of cab related products and systems for the global commercial vehicle market, including the medium- and heavy-duty truck market, the medium-and heavy-construction vehicle markets, the 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", "expect", "anticipate", "intend", "plan", "estimate", or 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 to enhance the Company, the future of the Company's end markets, Class 8 and Class 5-7 North America build rates, performance of the global construction and agriculture equipment business, expected cost savings, the Company's initiatives to address customer needs, organic growth, the Company's economic growth 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 or intends to serve; (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, construction, agriculture, aftermarket, military, bus and other markets; (v) the Company's failure to complete or successfully integrate strategic acquisitions; (vi) the impact of changes in governmental regulations on the Company's customers or on the Company's business; (vii) the loss of business from a major customer, a collection of smaller customers or the discontinuation of particular commercial vehicle platforms; (viii) security breaches and other disruptions to our information systems and/or our business; (ix) the Company's ability to obtain future financing due to changes in the capital markets or Company's financial position; (x) the Company's ability to comply with the financial covenants in its debt facilities; (xi) fluctuation in interest rates relating to the Company's debt facilities; (xii) the Company's ability to realize the benefits of its cost reduction and strategic initiatives; (xiii) a material weakness in our internal control over financial reporting which could, if not remediated, result in material misstatements in our financial statements; (xiv) volatility and cyclicality in the commercial vehicle market adversely affecting us; (xv) the geographic profile of our taxable income and changes in valuation of our deferred tax assets and liabilities impacting our effective tax rate; (xvi) changes to domestic manufacturing initiatives; (xvii) implementation of tax or other changes, by the United States or other international jurisdictions, related to products manufactured in one or more jurisdictions where we do business; and (xviii) 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, 2017. 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

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Amounts in thousands, except per share amounts)





Three Months Ended March 31,



2018



2017

Revenues

$

215,734





$

173,416



Cost of Revenues

184,613





151,913



Gross Profit

31,121





21,503



Selling, General and Administrative Expenses

15,304





16,619



Amortization Expense

332





327



Operating Income

15,485





4,557



Interest and Other Expense

1,959





4,565



Income (Loss) Before Provision for Income Taxes

13,526





(8)



Provision (Benefit) for Income Taxes

3,673





(636)



Net Income

$

9,853





$

628











Earnings per Common Share:







Basic

$

0.33





$

0.02



Diluted

$

0.32





$

0.02



Weighted Average Shares Outstanding:







Basic

30,219





29,872



Diluted

30,574





30,194



 

 

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES 

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Amounts in thousands)







March 31, 2018



December 31, 2017

ASSETS

Current Assets:









Cash



$

37,908





$

52,244



Accounts receivable, net of allowances of $6,236 and $5,242, respectively



141,823





108,595



Inventories



94,637





99,015



Other current assets



18,385





14,792



Total current assets



292,753





274,646



Property, plant and equipment, net of accumulated depreciation of $151,502 and  $147,553, respectively



63,400





64,630



Goodwill



7,941





8,045



Intangible assets, net of accumulated amortization of $8,808 and $8,533, respectively



14,121





14,548



Deferred income taxes, net



18,240





20,273



Other assets



3,187





2,246



Total assets



$

399,642





$

384,388













LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:









Accounts payable



$

85,602





$

86,608



Accrued liabilities and other



31,761





33,944



Current portion of long-term debt



3,199





3,191



Total current liabilities



120,562





123,743



Long-term debt



162,951





163,758



Revolving credit facility



7,500







Pension and other post-retirement benefits



15,367





15,450



Other long-term liabilities



6,862





6,695



Total liabilities



313,242





309,646



Stockholders' Equity:









Preferred stock, $0.01 par value (5,000,000 shares authorized; no shares issued and outstanding)









Common stock, $0.01 par value (60,000,000 shares authorized;  30,219,278 shares issued and outstanding, as of March 2018 and December 2017)



304





304



Treasury stock, at cost: 1,175,795 shares, as of March 2018 and December 2017



(9,114)





(9,114)



Additional paid-in capital



240,543





239,870



Retained deficit



(105,230)





(115,083)



Accumulated other comprehensive loss



(40,103)





(41,235)



Total stockholders' equity



86,400





74,742



Total liabilities and stockholders' equity



$

399,642





$

384,388



 

 

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES

BUSINESS SEGMENT FINANCIAL INFORMATION

(Unaudited)

(Amounts in thousands)





Three Months Ended March 31,















Global Truck & Bus



Global Construction & Agriculture



Corporate / Other



Total



2018



2017



2018



2017



2018



2017



2018



2017

Revenues































External Revenues

$

127,492





$

101,864





$

88,242





$

71,552





$





$





$

215,734





$

173,416



Intersegment Revenues

812





225





2,923





1,953





(3,735)





(2,178)











Total Revenues

$

128,304





$

102,089





$

91,165





$

73,505





$

(3,735)





$

(2,178)





$

215,734





$

173,416



Gross Profit

$

18,971





$

14,038





$

12,535





$

7,822





$

(385)





$

(357)





$

31,121





$

21,503



Selling, General & Administrative Expenses

$

5,512





$

5,453





$

4,266





$

4,483





$

5,526





$

6,683





$

15,304





$

16,619



Operating Income

$

13,162





$

8,293





$

8,234





$

3,305





$

(5,911)





$

(7,041)





$

15,485





$

4,557



 

Cision View original content:http://www.prnewswire.com/news-releases/commercial-vehicle-group-announces-first-quarter-2018-results-300642477.html

SOURCE Commercial Vehicle Group, Inc.

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