What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2021-03-09 compared with 2020-03-16 · 744 added, 2043 removed, 522 unchanged (84% of the section changed)

15 unchanged sentences

We have audited the accompanying consolidated balance sheets of Commercial Vehicle Group, Inc.

and subsidiaries (the Company) as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes and financial statement schedule II:

Valuation and Qualifying Accounts and Reserves (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three‑year period ended December 31, 2020, and the related notes to the consolidated financial statements (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2020, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 16, 2020 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting.

Restatement of Previously Issued Financial Statements

As discussed in Note 2 to the consolidated financial statements, the Company has restated its consolidated financial statements as of December 31, 2018 and for the year ended December 31, 2018 to correct misstatements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 9, 2021 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, effective January 1, 2019, the Company changed its method of accounting for leases due to the adoption of Financial Accounting Standards Board Accounting Standards Codification Topic 842, Leases .

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2019 due to the adoption of Accounting Standards Update (ASU) No.

2016-12, Leases (Topic 842).

Basis for Opinion

9 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Testing of revenue

As discussed in Note 2 to the consolidated financial statements, revenue is recognized when a performance obligation has been satisfied and control of products has been transferred to the customer, usually at a designated shipping point and in accordance with customer specifications.

Revenue is measured based on the amount of consideration the Company expects to receive in exchange for the transfer of goods or services.

For the year ended December 31, 2020, the Company recorded $717.7 million of revenue.

We identified the testing of revenue as a critical audit matter due to the large volume of data and the number and complexity of the revenue accounting systems.

While revenues consist of a large number of similar, individually low value transactions, the processing and recording of revenue is reliant upon multiple information technology (IT) systems used to process large volumes of customer billing data.

Specialized skills and knowledge were needed to test the IT systems used for the processing and recording of revenue.

The following are the primary procedures we performed to address this critical audit matter.

We applied auditor judgment to determine the nature and extent of procedures to be performed over revenue.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the processing and recording of revenue.

This included controls over the IT systems and automated and manual process level controls related to the processing and recording of revenue.

For a selection of transactions, we (1) compared the amount of revenue recorded to a combination of Company internal data, executed contracts, and other relevant and reliable third-party data, including cash received from customers and (2) evaluated the timing of revenue recognition based on the shipment date.

In addition, we involved IT professionals with specialized skills and knowledge, who assisted in the identification and testing of certain IT systems used by the Company for the processing and recording of revenue.

We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of the audit effort.

Goodwill impairment

As discussed in Note 4, goodwill represents the excess of acquisition purchase price over the fair value of net assets acquired in a business combination.

During the first quarter of 2020, as a result of the Company’s market capitalization value being less than the carrying value of its equity for a duration of time, the Company determined it had an impairment indicator.

Accordingly, the Company estimated the fair value of each of the reporting units with goodwill by discounting the estimated cash flows of each reporting unit.

The estimated fair values of the reporting units were then compared to their net carrying values as of March 31, 2020 and, as a result, the Company recognized $27.1 million impairment of goodwill, which represented the carrying amount of goodwill prior to the impairment charge.

We identified the evaluation of the goodwill impairment analysis for each reporting unit with goodwill as a critical audit matter.

The fair value of each reporting unit was based on a discounted cash flow model, which involved estimation uncertainty in the projection of future cash flows, resulting in an increased level of subjective auditor judgment.

We determined the revenue growth rates and discount rate assumptions represented the significant assumptions.

Evaluation of the revenue growth rates and discount rate assumptions used to estimate the fair value of the reporting units was challenging as they represented subjective determinations of future market and economic conditions that were also sensitive to variation.

Additionally, the audit effort associated with this estimate required specialized skills and knowledge.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the goodwill impairment analysis.

This included controls related to the Company’s determination of the estimated fair value of the reporting units over the:

• development of the revenue growth rate assumptions

• selection of the discount rate assumptions used to develop the estimate

• reconciliation of the aggregate reporting unit fair values to the Company’s market capitalization.

We evaluated the reasonableness of the Company’s forecasted revenue growth rates for the reporting units by comparing the growth assumptions to forecasted growth rates in analyst reports for the Company and industry reports.

We compared the Company’s historical revenue forecasts to actual results to assess the Company’s ability to accurately forecast.

In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

• evaluating the discount rates used by management in the valuation, by comparing them against discount rate ranges that were independently developed using publicly available market data for comparable entities

• developing estimates of each reporting unit’s fair value using each reporting unit’s cash flow forecast and an independently developed discount rate, and comparing the results of these estimates of fair value to the Company’s fair value estimates

• evaluating the Company’s reconciliation of the aggregate reporting unit fair values to the Company’s market capitalization and assessing the reasonableness of the resulting implied premium by comparing it to a range of premiums from recent transactions in the Company’s industry.

We have served as the Company’s auditor since 2012.

5 unchanged sentences

December 31, 2020 and 2019

2018 (as restated)

(in thousands, except share and per share amounts)

ASSETS (in thousands, except share and per share amounts)

Current assets:

Cash $ 50,503 $ 39,511

Accounts receivable, net of allowances of $ 644 and $ 433 , respectively

151,101 115,099

Inventories 91,247 82,872

Other current assets 17,686 18,490

Total current assets 310,537 255,972

Property, Plant and Equipment:

Land and buildings

Machinery and equipment

Construction in progress

Less accumulated depreciation

Property, plant and equipment, net

Property, plant and equipment, net of accumulated depreciation of $ 159,026 and $ 154,939 , respectively

62,776 73,686

Operating lease right-of-use asset, net 30,047 34,960

Goodwill — 27,816

Intangible assets, net of accumulated amortization of $ 14,831 and $ 11,440 , respectively

21,804 25,258

Deferred income taxes, net 25,981 14,654

Other assets 3,228 3,480

TOTAL ASSETS $ 454,373 $ 435,826

LIABILITIES AND STOCKHOLDERS’ EQUITY

10 unchanged sentences

Total liabilities 359,003 307,138

Commitments and contingencies (Note 13)

Stockholders’ equity:

5 unchanged sentences

1,560,623 and 1,464,392 shares, respectively

( 11,893 ) ( 11,230 )

Additional paid-in capital 249,312 245,852

8 unchanged sentences

Years Ended December 31, 2020, 2019 and 2018

(as restated)

2020 2019 2018

(In thousands, except per share amounts)

Revenues $ 717,699 $ 901,238 $ 897,737

Cost of revenues 643,623 796,101 772,817

Gross profit 74,076 105,137 124,920

Selling, general and administrative expenses 64,794 62,549 60,679

Goodwill and other impairment 29,017 — —

Amortization expense 3,434 1,952 1,300

Operating Income

Operating income (loss) ( 23,169 ) 40,636 62,941

Other (expense) income ( 728 ) ( 2,225 ) 1,311

Interest expense 20,603 16,855 14,676

Income Before Provision for Income Taxes

Provision for income taxes

Income (loss) before provision for income taxes ( 44,500 ) 21,556 49,576

Provision (benefit) for income taxes ( 7,451 ) 5,778 8,087

Net income (loss) $ ( 37,049 ) $ 15,778 $ 41,489

Earnings (loss) per common share

Basic $ ( 1.20 ) $ 0.52 $ 1.37

Diluted $ ( 1.20 ) $ 0.51 $ 1.36

Weighted average shares outstanding

Basic 30,943 30,602 30,277

Diluted 30,943 30,823 30,587

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Years Ended December 31, 2020, 2019 and 2018

2018 (as restated)

2020 2019 2018

(In thousands)

Net income (loss) $ ( 37,049 ) $ 15,778 $ 41,489

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation adjustments 5,008 ( 1,185 ) ( 5,675 )

Minimum pension liability, net of tax ( 5,041 ) 2,738 ( 1,057 )

Derivative instrument

Derivative instruments, net of tax 977 ( 32 ) 496

Other comprehensive income (loss) 944 1,521 ( 6,236 )

Comprehensive income

Comprehensive income (loss) $ ( 36,105 ) $ 17,299 $ 35,253

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

Years Ended December 31, 2020, 2019 and 2018

Common Stock Treasury

Stock Additional

Capital Retained

Deficit Accum.

Loss Total CVG

Stockholders’

Shares Amount

(In thousands, except share data )

8 unchanged sentences

Share-based compensation expense — — — 2,845 — — 2,845

Total comprehensive income (as restated)

BALANCE - December 31, 2018 (as restated)

Cumulative effect of adoption of Topic 842 — — — — ( 72 ) — ( 72 )

Total comprehensive income — — — — 15,778 1,521 17,299

Balance - December 31, 2019 30,801,255 $ 323 $ ( 11,230 ) $ 245,852 $ ( 60,307 ) $ ( 45,950 ) $ 128,688

Issuance of restricted stock 544,787 ( 10 ) — — — — ( 10 )

1 unchanged sentence

Share-based compensation expense — — — 3,460 — — 3,460

Cumulative effect of adoption of Topic 842

Total comprehensive income

Total comprehensive income (loss) — — — — ( 37,049 ) 944 ( 36,105 )

Balance - December 31, 2020 31,249,811 $ 313 $ ( 11,893 ) $ 249,312 $ ( 97,356 ) $ ( 45,006 ) $ 95,370

4 unchanged sentences

Years Ended December 31, 2020, 2019 and 2018

2018 (as restated)

2020 2019 2018

(In thousands)

1 unchanged sentence

Net income (loss) $ ( 37,049 ) $ 15,778 $ 41,489

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 18,493 15,514 15,270

Provision for doubtful accounts

Impairment expense 29,017 — —

Noncash amortization of debt financing costs 1,929 1,393 1,404

Payment in kind interest expense 5,431 — —

Shared-based compensation expense 3,460 2,843 3,137

3 unchanged sentences

Accounts receivable ( 34,284 ) 18,815 ( 27,380 )

Inventories ( 6,828 ) 9,495 4,836

Prepaid expenses 2,896 ( 1,793 ) ( 2,292 )

11 unchanged sentences

Repayment of revolving credit facility ( 15,000 ) ( 35,700 ) ( 80,500 )

Borrowings of Term Loan Facility

Repayment of term loan facility ( 14,375 ) ( 8,525 ) ( 4,375 )

Early payment fee on debt and other debt issuance costs ( 2,779 ) ( 160 ) —

Surrender of common stock by employees ( 663 ) ( 985 ) ( 1,131 )

Redemption of Notes

Prepayment charge for redemption of Notes

Payment of Term Loan Facility discount

Payment of debt issuance costs

Contingent consideration payment ( 1,000 ) — —

Other financing activities, net ( 445 ) ( 443 ) ( 329 )

15 unchanged sentences

Organization - 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.

We are differentiated from automotive industry suppliers by our ability to manufacture low volume, customized products on a sequenced basis to meet the requirements of our customers.

We believe our products are used by a majority of the North American MD/HD Truck and many medium- and heavy-duty construction vehicle original equipment manufacturers (“OEMs”), and to a lesser extent other makers of industrial equipment.

We have manufacturing operations in the United States, Mexico, China, United Kingdom, Czech Republic, Ukraine, Thailand, India and Australia.

and its subsidiaries is a global provider of components and assemblies into two primary end markets – the global vehicle market and the U.S.

technology integrator markets.

The company provides components and assemblies to global vehicle companies to build original equipment and provides aftermarket products for fleet owners.

The company also provides mechanical assemblies to warehouse automation integrators and to U.S.

military technology integrators.

References herein to the "Company", "CVG", "we", "our", or "us" refer to Commercial Vehicle Group, Inc.

and its subsidiaries.

We have manufacturing operations in the United States, Mexico, China, United Kingdom, Belgium, Czech Republic, Ukraine, Thailand, India and Australia.

Our products are primarily sold in North America, Europe, and the Asia-Pacific region.

We primarily manufacture customized products on a sequenced basis to meet the requirements of our customers.

We believe our trucking products are used by a majority of the North American Commercial Truck markets, many construction vehicle original equipment manufacturers (“OEMs”), and many of the top e-commerce retailers.

We report our financial results by business segment;

1 unchanged sentence

The Company’s Chief Operating Decision Maker (“CODM”), its President and Chief Executive Officer, reviews financial information for these two reportable segments and makes decisions regarding the allocation of resources based on these segments.

See Note 12 of the Notes to Consolidated Financial Statements for more information.

Unless otherwise indicated, all amounts are in thousands, except share and per share amounts.

See Note 17, Segment Reporting, for more information.

Unless otherwise indicated, all amounts in the tables below are in thousands, except share and per share amounts.

Principles of Consolidation - The accompanying consolidated financial statements include the accounts of our wholly-owned or controlled subsidiaries.

2 unchanged sentences

GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant estimates include allowance for doubtful accounts, inventory reserves, goodwill, intangible and long-lived assets, pension and other post-retirement benefits, product warranty reserves, litigation reserves, and income tax valuation allowances.

Actual results may differ materially from those estimates.

Certain prior period amounts have been reclassified to conform to footnote presentation for the current year.

Cash - Cash consists of deposits with high credit-quality financial institutions.

1 unchanged sentence

We review our receivables on an ongoing basis to ensure that they are properly valued and collectible.

The allowance for doubtful accounts is used to record the estimated risk of loss related to our customers’ inability to pay.

This allowance is maintained at a level that we consider appropriate based on factors that affect collectability, such as the financial health of our customers, historical trends of charge-offs and recoveries and current economic market conditions.

As we monitor our receivables, we identify customers that may have payment problems and adjust the allowance accordingly, with the offset to selling, general and administrative expense.

The allowance for credit losses is used to record the estimated risk of loss related to our customers’ inability to pay.

As we monitor our receivables, we identify customers that may have payment problems, and we adjust the allowance accordingly, with the offset to selling, general and administrative expense.

Account balances are charged off against the allowance when recovery is considered remote.

1 unchanged sentence

Inventory quantities on-hand are regularly reviewed and when necessary provisions for excess and obsolete inventory are recorded based primarily on our estimated production requirements, taking into consideration expected market volumes and future potential use.

Inventories consisted of the following as of December 31:

Raw materials $ 65,334 $ 57,742

Work in process 13,373 12,612

Finished goods 12,540 12,518

Total Inventory $ 91,247 $ 82,872

Property, Plant and Equipment - Property, plant and equipment are stated at cost, net of accumulated depreciation.

For financial reporting purposes, depreciation is computed using the straight-line method over the following estimated useful lives:

Buildings and improvements

15 to 40 years

Property, plant, and equipment, net consisted of the following as of December 31:

Land and buildings $ 30,305 $ 29,153

Machinery and equipment 189,939 186,511

3 to 20 years

Tools and dies

Computer hardware and software

Construction in progress 1,558 12,961

Property, plant, and equipment, gross 221,802 228,625

Less accumulated depreciation ( 159,026 ) ( 154,939 )

Property, plant and equipment, net $ 62,776 $ 73,686

For financial reporting purposes, depreciation is computed using the straight-line method over the estimated useful lives (generally 15 to 40 years for buildings and building improvements, three to 20 years for machinery and equipment, three to seven years for tools and dies, and three to five years for computer hardware and software).

Expenditures for maintenance and repairs are charged to expense as incurred.

9 unchanged sentences

We base our fair value estimates on assumptions we believe to be reasonable, but that are inherently uncertain.

Leases - The Company adopted ASU No.

2016-02, Leases (“Topic 842”) as of January 1, 2019, using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of 2019.

The cumulative effect of this transition was recorded as an increase to Accumulated deficit of $ 0.1 million as of this date.

The Company determines if an arrangement is a lease at inception.

Operating lease assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term.

Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

As most leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.

The length of a lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options.

The Company made an accounting policy election to not recognize lease assets or liabilities for leases with a term of 12 months or less.

Additionally, when accounting for leases, the Company combines payments for leased assets, related services and other components of a lease.

Goodwill - Assets and liabilities acquired in business combinations are accounted for using the acquisition method and recorded at their respective fair values.

Goodwill represents the excess of consideration paid over the net assets acquired and is assigned to the reporting unit that acquires the business.

A reporting unit is an operating segment as defined in ASC 280, Segment Reporting, or a business one level below an operating segment if discrete financial information for that business is prepared and regularly reviewed by segment management.

The Company conducts annual impairment tests of goodwill in the second quarter or more frequently if events or circumstances indicate a reporting unit’s fair value may be less than its carrying value.

If an initial assessment indicates it is more likely than not goodwill may be impaired, it is evaluated by comparing the reporting unit’s estimated fair value to its carrying value.

If its carrying value exceeds its estimated fair value, goodwill impairment is

recognized to the extent that recorded goodwill exceeds the fair value of goodwill.

Estimated fair values of the reporting unit are Level 3 measures and are developed under an income approach that discounts estimated future cash flows using risk-adjusted interest rates and also the market approach.

Revenue Recognition - We recognize revenue when our performance obligation has been satisfied and control of products has been transferred to a customer, which typically occurs upon shipment.

Revenue is measured based on the amount of consideration we expect to receive in exchange for the transfer of goods or services.

Returns and allowances are used to record estimates of returns or allowances resulting from quality, delivery, discounts or other issues affecting the value of receivables.

This amount is estimated based on historical trends and current market conditions, with the offset to revenues.

Refer to Note 2, Revenue Recognition, for our revenue recognition policies.

Income Taxes - We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financial statements or tax returns.

5 unchanged sentences

Comprehensive Income (Loss) - Comprehensive income (loss) reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources including foreign currency translation, derivative instruments and pension and other post-retirement adjustments.

See Note 18 for a rollforward of activity in accumulated comprehensive loss.

See Note 14, Accumulated Other Comprehensive Loss, for a rollforward of activity in accumulated comprehensive loss.

Fair Value of Financial Instruments - The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (i.e., inputs) used to price the assets or liabilities.

8 unchanged sentences

We routinely assess the financial strength of our customers and maintain allowances for anticipated losses.

As of December 31, 2019 and 2018 , receivables from our largest customers, A.B.

Volvo, Daimler Trucks, Caterpillar, Navistar, John Deere and PACCAR, represented approximately 62% and 66% of total receivables, respectively.

As of December 31, 2020, receivables from our five top customers represented approximately 48 % of total receivables.

Foreign Currency Translation - Our functional currency is the local currency.

13 unchanged sentences

Recently Issued Accounting Pronouncements

In July 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2019-07, "Codification Updates to SEC Sections".

2019-07 clarifies or improves the disclosure and presentation requirements of a variety of codification topics by aligning them with the SEC's regulations, thereby eliminating redundancies.

This ASU is effective upon issuance and did not have a significant impact on the Company's consolidated financial statements and related disclosures.

In October 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2020-10, "Codification Improvements".

The ASU updates various codification topics by clarifying and improving disclosure requirements to align with the SEC's regulations.

We will adopt ASU 2020-10 as of the reporting period beginning January 1, 2021.

Adoption of this update is not expected to have a material impact on the Company's consolidated financial statements and related disclosures.

In March 2020, the FASB issued ASU No.

2020-04, "Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting".

The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

Also, in January 2021, the FASB issued ASU No.

2021-01 "Reference Rate Reform (Topic 848):

Scope", to clarify that certain provisions in Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform.

ASU 2020-04 and ASU 2021-01 are effective beginning on March 12, 2020 and the amendments will be applied prospectively through December 31, 2022.

We are evaluating the effect these ASUs will have on the Company.

Accounting Pronouncements Implemented During the Year Ended December 31, 2020

In March 2020, the FASB issued ASU No.

2020-03, "Codification Improvements to Financial Instruments".

The ASU clarifies disclosure guidance for fair value options, adds clarifications to the subsequent measurement of fair value, clarifies disclosure for depository and lending institutions, clarifies the line-of-credit or revolving-debt arrangements guidance, and the interaction of Financial Instruments - Credit Losses (Topic 326) with Leases (Topic 842) and Transfers and Servicing-Sales of Financial Assets (Subtopic 860-20).

In accordance with ASU 2020-03, the Company adopted the guidance as of March 31, 2020.

We were not materially impacted by the implementation of this pronouncement.

In January 2017, the FASB issued ASU No.

2017-04, "Intangibles - Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment".

ASU 2017-04 provides simplification for the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test.

Annual impairment tests should be completed by comparing the fair value of a reporting unit to its carrying amount and impairment should not exceed the goodwill allocated to the reporting unit.

Additionally, this ASU eliminated the requirement to assess reporting units with zero or negative carrying amounts.

The Company implemented ASU 2017-04 as of January 1, 2020 with no material impact.

Subsequent to such implementation, we fully impaired our goodwill.

Refer to Note 4, Goodwill and Intangible Assets, for more details.

In June 2016, the FASB issued ASU No.

8 unchanged sentences

2019-11, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses", which further clarified and improved the Codification to make it easier to understand and apply.

The Company anticipates ASU 2016-13, ASU 2018-19 and ASU 2019-11 will apply to its trade receivables and will not have a material impact on the reported value of such receivables.

We expect to implement ASU No.

2016-13, 2018-19 and 2019-11 on the effective date of January 1, 2020.

In December 2019, the FASB issued ASU No.

2019-12, "Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes".

The ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and otherwise clarifies and amends existing guidance.

ASU 2019-12 is effective for fiscal years beginning after December 15, 2020.

We are evaluating the effect this ASU will have on the Company.

Accounting Pronouncements Implemented During the Year Ended December 31, 2019

In June 2018, the FASB issued ASU No.

2018-07, "Compensation - Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting".

The ASU changed the measurement date for determining the fair value of share awards to nonemployees to the grant date and requires the consideration of the probability of satisfying performance obligations in assessing the awards.

The ASU did not have a material impact on our recognition of share-based payments for nonemployees.

Lease Accounting Guidance

In February 2016, the FASB issued ASU No.

2016-02, "Leases (Topic 842)" followed by ASU No.

2018-11, "Leases (Topic 842):

Targeted Improvements", issued in July 2018.

These ASUs are intended to increase transparency and comparability among companies by recognizing lease assets and liabilities and disclosing key information about leasing arrangements.

ASU 2016-02 was adopted by the Company on January 1, 2019.

In accordance with Topic 842, we elected not to recognize lease assets and lease liabilities for leases with a term of twelve months or less and elected to not separate lease and non-lease components.

We elected the transition method option under ASU 2018-11 with the package of practical expedients that permits the Company to:

(a) not reassess whether expired or existing contracts contain

leases, (b) not reassess lease classification for existing or expired leases and (c) not consider whether previously capitalized initial direct costs would be appropriate under the new standard.

We recorded a right-of-use asset of $21.2 million and a lease liability of $22.2 million upon adoption.

We also elected the option to apply the new leasing standard on the date of adoption and recognize a cumulative-effect transition adjustment to the opening balance of retained earnings in the period of adoption resulting in a cumulative effect as of January 1, 2019 of $0.1 million .

Refer to Note 6 for further details.

Restatement of Previously Issued Consolidated Financial Statements

Restatement Background

On March 12, 2020, the Audit Committee of the Board of Directors (the “Audit Committee”) of the Company, after considering the recommendations of management, and discussing such recommendations with outside SEC counsel, concluded that our 2018 Financial Statements, included in our Annual Report on Form 10-K as of and for the fiscal year ended December 31, 2018 (the “2018 Annual Report”), and our unaudited consolidated financial statements as of and for the quarterly periods ended March 31, 2019 and 2018, June 30, 2019 and 2018, and September 30, 2019 and 2018, included in our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2019, June 30, 2019 and September 30, 2019 (the "2019 Quarterly Reports”), should no longer be relied upon due to misstatements that are described in greater detail below, and that we would restate such financial statements to make the necessary accounting corrections.

During the preparation of our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report”), we noted a potential overstatement of the prepaid production tooling account of our vehicle cab structures manufacturing facility (presented in other current assets in the consolidated balance sheets).

An investigation was conducted, under the direction of the Audit Committee, by external counsel with the assistance of a forensic accounting firm.

As a result of the investigation, the Company concluded that the misstatements in our consolidated financial statements for the periods identified above were due to a former employee preparing manual journal entries to understate cost of revenues by improperly capitalizing certain manufacturing expenses, primarily in the prepaid production tooling account.

The former employee made intentional misrepresentations during the investigation.

During the course of, and as a result of, the investigation, the Company terminated the former employee and has taken additional personnel actions.

The Company evaluated the materiality of these errors both qualitatively and quantitatively in accordance with Staff Accounting Bulletin (“SAB”) No.

99, Materiality and SAB No.

108, Considering the Effects of Prior Year Misstatements in Current Year Financial Statements , and determined the effect of these corrections was material to the consolidated financial statements as of and for the year ended December 31, 2018 and the quarterly periods ended March 31, 2019 and 2018, June 30, 2019 and 2018, and September 30, 2019 and 2018.

As a result of the material misstatements, we have restated our consolidated financial statements as of and for the year ended December 31, 2018 and our unaudited consolidated financial statements as of and for the quarterly periods ended March 31, 2019 and 2018, June 30, 2019 and 2018, and September 30, 2019 and 2018, in accordance with ASC 250, Accounting Changes and Error Corrections (the "Restated Financial Statements").

Based on the analysis noted above, the correction of errors resulting from the former employee's actions noted above were immaterial to the previously reported consolidated financial statements as of and for the year ended December 31, 2017 (the “2017 Annual Report”).

The amounts in the 2017 Annual Report have been revised to reflect the correction of these errors.

In addition to the adjustments to correct the understatement of cost of revenues and impacted balance sheet accounts, we also made an adjustment to correct an overstatement of property, plant and equipment (“PPE”) that was no longer in service as of the year ended December 31, 2016, and was unrelated to the correction of errors resulting from the former employee's actions.

The Company evaluated this error in accordance with SAB 99 and 108 and concluded that the correction of the PPE error was immaterial to our consolidated financial statements.

The restated interim financial information for the relevant unaudited interim financial statements for the quarterly periods ended March 31, 2019 and 2018, June 30, 2019 and 2018, September 30, 2019 and 2018, and December 31, 2018, is included in Note 19.

The restatement adjustments and error correction and their impact on previously reported consolidated financial statements are described below.

(a) Understatement of cost of revenues and impacted balance sheet accounts - Corrections for the understatement of cost of revenues by improperly capitalizing certain manufacturing expenses.

Balance sheet accounts adjusted as a result of

the improper capitalization of expenses include other current assets, accounts receivable, net of allowances and construction in progress.

(b) Property, plant and equipment, net - We recorded an adjustment for a previously identified property, plant and equipment, net error unrelated to the understatement of cost of revenues and related balance sheet accounts misstatements.

This PPE was no longer in service as of and for the year ended December 31, 2016.

Summary impact of restatement adjustments and immaterial error correction to previously reported financial information

The following tables present the summary impacts of the restatement adjustments and immaterial error correction on our previously reported retained deficit and total stockholders’ equity for the year ended December 31, 2016, and income before provision for income taxes and net income (loss) for the years ended December 31, 2018 and 2017:

December 31, 2016

Retained deficit

Total Stockholders' Equity

As previously reported

Cumulative adjustments

For the years ended December 31,

Income before income taxes - as previously reported

Restatement adjustments

Error corrections

Income before income taxes - as restated / adjusted

Net income (loss) - as previously reported

Restatement adjustments

Error corrections

Net income (loss) - as restated / adjusted

The following table presents the effect of the error correction on the Company’s consolidated balance sheets for the period indicated:

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

As of December 31, 2018

Restatement References

As Previously Reported

Restatement Adjustments

Current Assets:

Accounts receivable, net of allowances of $5,139

Other current assets

Total current assets

Property, Plant and Equipment:

Land and buildings

Machinery and equipment

Construction in progress

Less accumulated depreciation

Property, plant and equipment, net

Intangible assets, net of accumulated amortization of of $9,568

Deferred income taxes, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable

Accrued liabilities and other

Current portion of long-term debt

Total current liabilities

Long-term debt

Pension and other post-retirement liabilities

Other long-term liabilities

Total liabilities

Stockholders’ Equity:

Preferred stock, $.01 par value (5,000,000 shares authorized;

no shares issued and outstanding)

Common stock, $.01 par value (60,000,000 shares authorized;

30,512,843 shares issued and outstanding)

Treasury stock, at cost:

1,334,251 shares

Additional paid-in capital

Retained deficit

Accumulated other comprehensive loss

Total CVG stockholders’ equity

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

As of December 31, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $0.7 million decrease in accounts receivable, net;

a $4.7 million decrease in other current assets;

a $1.3 million increase in long-term deferred tax assets;

and a $4.1 million increase in retained deficit.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $2.2 million decrease in machinery and equipment;

a $1.2 million decrease in accumulated depreciation;

a $0.3 million decrease in long-term deferred tax assets;

and a $1.3 million increase in retained deficit.

The following table presents the effect of the error corrections on the consolidated statements of income for the periods indicated:

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2018

For the Year Ended December 31, 2017

As Previously Reported

Restatement Adjustments

As Previously Reported

Restatement References

Cost of revenues

Selling, general and administrative expenses

Amortization expense

Operating income

Other expense

Interest expense

Income before provision for income taxes

Provision for income taxes

Net income (loss)

Earnings (loss) per common share

Weighted average shares outstanding

For the year ended December 31, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $4.1 million increase in cost of revenues;

a $1.0 million decrease in provision for income taxes;

and a $3.1 million decrease in net income.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million decrease in cost of revenues;

an immaterial increase in provision for income taxes;

and a $0.1 million increase in net income.

For the year ended December 31, 2017

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $1.0 million increase in cost of revenues;

a $0.2 million decrease in provision for income taxes;

and a $0.8 million increase in net loss.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million decrease in cost of revenues;

a $0.1 million decrease in provision for income taxes;

and a $0.2 million decrease in net loss.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME

For the Year Ended December 31, 2018

For the Year Ended December 31, 2017

As Previously Reported

Restatement Adjustments

As Previously Reported

Restatement References

Net income (loss)

Other comprehensive (loss) income:

Foreign currency translation adjustments

Minimum pension liability, net of tax

Derivative instrument

Other comprehensive (loss) income

Comprehensive income (loss)

For the year ended December 31, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $3.1 million decrease in net income.

Refer to descriptions of the adjustments and their impacts to net income above.

(b) Property, Plant and Equipment, Net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million increase in net income.

Refer to descriptions of the adjustment and its impact to net income above.

For the year ended December 31, 2017

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $0.8 million increase in net loss.

Refer to descriptions of the adjustments and their impacts to net loss above.

(b) Property, Plant and Equipment, Net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.2 million decrease in net loss.

Refer to descriptions of the adjustment and its impact to net loss above.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Accumulated Other Comprehensive Loss

Stockholders’

BALANCE - December 31, 2016 (As Previously Reported)

Cumulative adjustments

BALANCE - December 31, 2016 (As Adjusted)

BALANCE - December 31, 2017 (As Previously Reported)

Cumulative adjustments

BALANCE - December 31, 2017 (As Adjusted)

BALANCE - December 31, 2018 (As Previously Reported)

Cumulative restatement adjustments

BALANCE - December 31, 2018 (As Restated)

As of December 31, 2018, 2017 and 2016

The increase in retained deficit and corresponding decrease of total CVG stockholders’ equity for each restated period was the result of the adjustments for understatement of costs of revenues and impacted balance sheet accounts and the adjustment to property, plant and equipment, net.

These adjustments resulted in a $5.4 million increase in retained deficit and corresponding decrease of total CVG stockholders’ equity as of December 31, 2018, a $2.4 million increase in retained deficit and corresponding decrease of total CVG stockholders’ equity as of December 31, 2017, and a $1.9 million increase in retained deficit and corresponding decrease of total CVG stockholders’ equity as of December 31, 2016.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOW

For the Year Ended December 31, 2018

As Previously Reported

Restatement Adjustments

Restatement References

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization

Provision for doubtful accounts

Noncash amortization of debt financing costs

Shared-based compensation expense

Deferred income tax

Noncash (gain) loss on derivative contracts

Change in other operating items:

Accounts receivable

Prepaid expenses

Accounts payable

Accrued liabilities

Other operating activities, net

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment

Proceeds from disposal/sale of property, plant and equipment

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings of Revolving Credit Facility

Repayment of Revolving Credit Facility

Repayment of Term Loan Facility principal

Surrender of common stock by employees

Other financing activities, net

Net cash used in financing activities

EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH

NET (DECREASE) INCREASE IN CASH

Beginning of period

End of period

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest

Cash paid for income taxes, net

Unpaid purchases of property and equipment included in accounts payable

For the year ended December 31, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $3.1 million decrease in net income;

a $0.9 million decrease in deferred income

a $0.7 million decrease in change in accounts receivable;

and a $3.4 million decrease in change in prepaid expenses.

Refer to descriptions of the adjustments and their impacts to net income above.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million increase in net income;

a $0.1 million decrease in depreciation expense;

and an immaterial increase in deferred income tax.

Refer to descriptions of the adjustment and its impact to net income above.

The impact of these error corrections to relevant segment and quarterly financial information is presented in Notes 12 and 19 to these consolidated financial statements, respectively.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOW

For the Year Ended December 31, 2017

As Previously Reported

Restatement References

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization

Provision for doubtful accounts

Noncash amortization of debt financing costs

Shared-based compensation expense

(Gain) loss on sale of assets

Deferred income tax

Noncash (gain) loss on derivative contracts

Change in other operating items:

Accounts receivable

Prepaid expenses

Accounts payable

Accrued liabilities

Other operating activities, net

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment

Proceeds from disposal/sale of property, plant and equipment

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings of Term Loan Facility

Repayment of Term Loan Facility principal

Surrender of common stock by employees

Redemption of Notes

Prepayment charge for redemption of Notes

Payment of Term Loan Facility discount

Payment of debt issuance costs

Net cash used in financing activities

EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH

NET (DECREASE) INCREASE IN CASH

Beginning of period

End of period

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest

Cash paid for income taxes, net

Unpaid purchases of property and equipment included in accounts payable

For the year ended December 31, 2017

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $0.8 million increase in net loss;

a $0.2 million decrease in deferred income tax;

an immaterial decrease in change in accounts receivable;

and a $1.0 million decrease in change in prepaid expenses.

Refer to descriptions of the adjustments and their impacts to net income above.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.2 million decrease in net loss;

a $0.1 million decrease in depreciation expense;

and a $0.1 million decrease in deferred income tax.

Refer to descriptions of the adjustment and its impact to net income above.

The impact of these error corrections to relevant segment and quarterly financial information is presented in Notes 12 and 19 to these consolidated financial statements, respectively.

The Company implemented ASU 2016-13, ASU 2018-19 and ASU 2019-11 as of January 1, 2020 and the ASUs did not have a material impact on the Company's consolidated financial statements.

Revenue Recognition

Our products include electrical wire harnesses, control panels and assemblies;

trim systems and components ("Trim");

cab structures and sleeper boxes;

mirrors, wipers and controls;

and seats and seating systems ("Seats").

We sell these products into multiple geographic regions including North America, Europe and Asia-Pacific and to multiple customer end markets including MD/HD Truck OEMs, Bus OEMs, Construction OEMs, the aftermarket and other markets.

Our products include electrical wire harnesses, control panels, electro-mechanical and cable assemblies;

and cab structures and sleeper boxes;

mirrors, wipers, controls and warehouse automation subsystems.

We sell these products, except warehouse automation subsystems, into multiple geographic regions including North America, Europe and Asia-Pacific and to multiple customer end markets including MD/HD Truck OEMs, Construction OEMs, industrial, military, Bus OEMs, the aftermarket and other markets.

We sell warehouse automation subsystems to warehouse automation customers.

The nature, timing and uncertainty of recognition of revenue and associated cash flows across the varying product lines, geographic regions and customer end markets is substantially consistent.

Contractual Arrangements

Revenue is measured based on terms and conditions specified in contracts or purchase orders with customers.

Contractual Arrangements - Revenue is measured based on terms and conditions specified in contracts or purchase orders with customers.

We have long-term contracts with some customers that govern overall terms and conditions which are accompanied by purchase orders that define specific order quantities and/or price.

We have many customers with which we conduct business outlined in purchase orders without a long-term contract.

We have many customers with which we conduct business for which the terms and conditions are outlined in purchase orders without a long-term contract.

We generally do not have customer contracts with minimum order quantity requirements.

Amount and Timing of Revenue Recognition

The transaction price is based on the consideration to which the Company will be entitled in exchange for transferring control of a product to the customer.

Amount and Timing of Revenue Recognition - The transaction price is based on the consideration to which the Company will be entitled in exchange for transferring control of a product to the customer.

This is defined in a purchase order or in a separate pricing arrangement and represents the stand-alone selling price.

3 unchanged sentences

We recognize revenue at the point in time when we satisfy a performance obligation by transferring control of a product to a customer, usually at a designated shipping point and in accordance with customer specifications.

We make estimates for potential customer returns or adjustments based on historical experience, which reduce revenues.

Other Matters

Shipping and handling costs billed to customers are recorded in revenues and costs associated with outbound freight are generally accounted for as a fulfillment cost and are included in cost of revenues.

Estimates are made for variable consideration resulting from quality, delivery, discounts or other issues affecting the value of revenue and accounts receivable.

This amount is estimated based on historical trends and current market conditions, and only amounts deemed collectible are recognized as revenues.

Other Matters - Shipping and handling costs billed to customers are recorded in revenues and costs associated with outbound freight are generally accounted for as a fulfillment cost and are included in cost of revenues.

We generally do not provide for extended warranties or material customer incentives.

2 unchanged sentences

We generally do not have other assets or liabilities associated with customer arrangements.

In general, we do not make significant judgments or have variable consideration that impact our recognition of revenue.

Refer to Note 12 for revenue disclosures by reportable segments.

Fair Value Measurement

At December 31, 2019 , our financial instruments consisted of cash, accounts receivable, accounts payable, accrued liabilities and our revolving credit facility.

The carrying value of these instruments approximates fair value as a result of the short duration of such instruments or due to the variability of the interest cost associated with such instruments.

Foreign Currency Forward Exchange Contracts.

Our derivative assets and liabilities represent foreign exchange contracts that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk and counterparty credit risk.

Based on the utilization of these inputs, the derivative assets and liabilities are classified as Level 2.

To manage our risk for transactions denominated in Mexican Pesos, we have entered into forward exchange contracts that are designated as cash flow hedge instruments, which are recorded in the Consolidated Balance Sheets at fair value.

The gains and losses as a result of the changes in fair value of the hedge contract is deferred in accumulated other comprehensive loss and recognized in cost of revenues in the period the related hedge transactions are recognized.

Interest Rate Swap Agreement.

To manage our exposure to variable interest rates, we have entered into an agreement (the “Interest Rate Swap Agreement”) with Bank of America, N.A.

whereby the Company has agreed to exchange, at a specified interval, the difference between fixed and variable interest amounts calculated by reference to an agreed upon notional principal amount.

The Interest Rate Swap Agreement is intended to mitigate the impact of rising interest rates on the Company and covers $80 million of outstanding debt under the senior secured term loan facility.

The Company expects this agreement to remain effective during the remaining term of the Interest Rate Swap Agreement and records the impact of the agreement in interest and other expense in the Consolidated Statements of Operations.

The fair values of our derivative instruments and contingent consideration measured on a recurring basis as of December 31 and are categorized as follows:

Derivative assets

Foreign exchange contract 1

Interest rate swap agreement 2

Derivative liabilities

Interest rate swap agreement 3

Earnout liability

Contingent consideration 5

Derivative equity

Foreign exchange contract 4

Presented in the Consolidated Balance Sheets in other current assets and based on observable market transactions of spot and forward rates.

Presented in the Consolidated Balance Sheets in other assets and based on observable market transactions of forward rates.

Presented in the Consolidated Balance Sheets in accrued liabilities and other and based on observable market transactions of forward rates.

Presented in the Consolidated Balance Sheets in accumulated other comprehensive income (loss) and based on observable market transactions of forward rates.

Presented in the Consolidated Balance Sheets in accrued liabilities and other long term liabilities and based on a Monte Carlo valuation model.

The following table summarizes the notional amount of our open foreign exchange contracts at December 31 :

Commitments to buy or sell currencies

We consider the impact of our credit risk on the fair value of the contracts, as well as the ability to execute obligations under the contract.

The following table summarizes the effect of derivative instruments on the Consolidated Statements of Operations for derivatives not designated as hedging instruments at December 31 :

Location of Gain (Loss)

Recognized on Derivatives

Amount of Gain (Loss)

Recognized on Derivatives

Foreign exchange contracts

Cost of Revenues

Interest rate swap agreement

Interest and Other Expense

Long-term Debt .

The fair value of long-term debt obligations is based on a fair value model utilizing observable inputs.

Based on these inputs, our long-term debt is classified as Level 2.

The carrying amounts and fair values of our long-term debt at December 31 are as follows:

Term loan and security agreement 1

Presented in the Consolidated Balance Sheets as the current portion of long-term debt (net of current prepaid debt financing costs of $0.5 million and current original issue discount of $0.6 million ) of $3.3 million and long-term debt (net of long-term prepaid debt financing costs of $1.2 million and long-term original issue discount of $1.3 million ) of $153.1 million .

Long-lived Assets.

There are no fair value measurements of our long-lived assets and definite-lived intangible assets measured on a non-recurring basis, except for definite-lived intangibles acquired and contingent consideration as a part of the acquisition of First Source Electronics, LLC discussed in Note 5, as of December 31, 2019 and December 31, 2018 .

The contingent consideration is classified as Level 3 and valued based on a Monte Carlo valuation model.

Business Combinations

On September 17, 2019, the Company entered into and closed on an Asset Purchase Agreement (the “Agreement”) with First Source Electronics, LLC (“FSE”), Kevin Popielarczyk and Richard Vuoto (collectively, “Principals”) and the Company’s wholly-owned subsidiary, CVG FSE, LLC (“CVG FSE”).

The Agreement provided for the acquisition (the "FSE Acquisition") by CVG FSE of substantially all of the assets and certain liabilities of FSE in exchange for a cash purchase price of $34.0 million , subject to a net working capital adjustment, plus a right to earn up to $10.8 million in contingent milestone payments.

The purchase was funded through domestic cash on hand and $2.0 million of borrowings under our revolving credit facility.

FSE is in the business of manufacturing, distributing, marketing and selling cable and electro-mechanical assemblies, control panels and other business and consumer electronics products and services.

FSE improves our ability to participate in the progression of digitalization, connectivity and associated power and data applications.

Furthermore, this strategic acquisition complements our high-complexity, low-to-medium volume electrical business, and provides an entry into the warehouse automation market, while also providing us with the opportunity to leverage our global footprint and to increase cross selling opportunities.

The milestone payments are payable based on achieving certain earnings before interest, taxes, depreciation and amortization ("EBITDA") thresholds over the periods from (a) September 18, 2019 through September 17, 2020, (b) September 18, 2019 through March 17, 2021, (c) September 18, 2019 through September 17, 2022 and (d) March 18, 2021 through September 17, 2022.

The payment amount will be determined on a sliding scale for reaching between 90% and 100% of the respective EBITDA targets.

The fair value for the milestone payments is based on a Monte Carlo simulation utilizing forecasted EBITDA through September 17, 2022.

The estimate was recorded within other long-term liabilities in the Consolidated Balance Sheet as of September 30, 2019.

The total undiscounted milestone payments is estimated at $5.6 million and the fair value is $4.7 million as of September 30, 2019.

The Agreement contains customary indemnification provisions and provided for the establishment of an escrow fund of $3.0 million of the purchase price to secure indemnification claims by CVG FSE for an 18-month period.

The Company is a party to the Agreement solely as a guarantor of CVG FSE’s payment obligations.

The operating results of FSE, since the date of acquisition, have been included in our consolidated financial statements.

From the date of the FSE Acquisition through December 31, 2019, FSE operations recorded revenues of approximately $12.8 million resulting in net income of $0.2 million for the period within the Electrical Systems Segment.

Acquisition related expenses for FSE of approximately $0.9 million were incurred for the year ended December 31, 2019 and have been recorded as selling, general and administrative expenses in our consolidated statements of operations.

The FSE Acquisition was accounted for under the acquisition method of accounting.

Under acquisition accounting, the acquired tangible and intangible assets and liabilities of FSE have been recorded at their respective fair values.

The Company has completed its preliminary assessment of fair values of assets acquired and liabilities assumed, and the preliminary amounts are reflected in the table below.

The purchase price associated with the FSE Acquisition exceeded the preliminary fair value of the net assets acquired by approximately $20.4 million .

This reflects an increase of $2.7 million from the initial valuation as of September 30, 2019 .

As of December 31, 2019, the net working capital adjustment is still preliminary.

The excess purchase price over net assets acquired is recorded as goodwill and was determined as follows:

Initial cash paid, net of working capital adjustment

Contingent consideration at fair value

Total consideration

Net assets at fair value

Excess of total consideration over net assets acquired

In the fourth quarter of 2019, management decreased the value of definite-lived intangible assets with an offset to goodwill to reflect a refinement of valuation assumptions.

The allocation of the fair value of the assets acquired and liabilities assumed is as follows:

Accounts receivable

Prepaid and other current assets

Property, plant and equipment

Other long-term assets

Definite-lived intangible assets

Accounts payable and accrued liabilities

Other long-term liabilities

Total consideration

The following unaudited pro forma information for the twelve months ended December 31, 2019 and 2018 presents the result of operations as if the FSE Acquisition had taken place at the beginning of the annual reporting period.

The pro forma results reflect estimates and assumptions and are not necessarily indicative of the financial position or result of operations had the acquisition taken place at the beginning of the period.

The Company adjusted historical results for assumed intangible amortization expense consistent with future years and assumed an effective tax rate of 25% .

In addition, the pro forma results are not necessarily indicative of the future financial or operating results.

Revenue Disaggregation - The following is the composition, by product category, of our revenues:

Twelve Months Ended December 31, 2020

2018 (as restated)

Earnings per share attributable to common stockholders:

The Company leases office, warehouse and manufacturing space and certain equipment under non-cancelable operating lease agreements that generally require us to pay maintenance, insurance, taxes and other expenses in addition to annual rental fees.

Our leases have remaining lease terms of one year to nine years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year.

The components of lease expense are as follows:

Electrical Systems Global Seating Corporate/

Seats $ 1,244 $ 261,942 $ ( 3,536 ) $ 259,650

Electrical wire harnesses, panels and assemblies 241,704 8,055 ( 129 ) 249,630

Trim 114,209 5,862 ( 1,636 ) 118,435

Cab structures and sleeper boxes 49,774 — — 49,774

Mirrors, wipers and controls 39,024 1,971 ( 785 ) 40,210

Total $ 445,955 $ 277,830 $ ( 6,086 ) $ 717,699

Twelve Months Ended December 31, 2019

Operating lease cost

Finance lease cost:

Amortization of right-of-use assets

Interest on lease liabilities

Total finance lease cost

Short-term lease cost 1

Total lease expense

1 Includes variable lease costs, which are not significant.

Supplemental cash flow information related to leases is as follows:

Electrical Systems Global Seating Corporate/

Seats $ 1,447 $ 358,457 $ ( 3,027 ) $ 356,877

Electrical wire harnesses, panels and assemblies 196,280 2,360 ( 220 ) 198,420

Trim 190,877 18,714 ( 6,693 ) 202,898

Cab structures and sleeper boxes 87,864 — — 87,864

Mirrors, wipers and controls 54,433 2,017 ( 1,271 ) 55,179

Total $ 530,901 $ 381,548 $ ( 11,211 ) $ 901,238

Twelve Months Ended December 31, 2018

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

Financing cash flows from finance leases

The Company elected to apply the modified retrospective approach.

As such, we did not restate the prior year Consolidated Balance Sheet.

Supplemental balance sheet information related to leases is as follows:

Balance Sheet Location

December 31, 2019

Operating Leases

Right-of-use assets, net

Operating lease right-of-use assets, net 1

Current liabilities

Current operating lease liabilities

Non-current liabilities

Operating lease liabilities

Total operating lease liabilities

Finance Leases

Right-of-use assets

Accumulated depreciation

Right-of-use assets, net

Other assets, net

Current liabilities

Accrued liabilities and other

Non-current liabilities

Other long-term liabilities

Total finance lease liabilities

Weighted Average Remaining Lease Term

Operating leases

Finance leases

Weighted Average Discount Rate

Operating leases

Finance leases

Includes $21.2 million for operating leases existing on January 1, 2019 and $18.6 million for operating leases that commenced or were renewed in the twelve months ended December 31, 2019 , net of amortization of $4.8 million .

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

We utilize an incremental borrowing rate,

which is reflective of the specific term of the leases and economic environment of each geographic region, and apply a portfolio approach for certain machinery and equipment that have consistent terms in a specific geographic region.

Anticipated future lease costs, which are based in part on certain assumptions to approximate minimum annual rental commitments under non-cancelable leases, are as follows:

Year Ending December 31,

Total lease payments

Imputed interest

Present value of lease liabilities

The following are the future minimum annual rental commitments under Topic 840 as disclosed in our December 31, 2018 Form 10-K:

Year Ending December 31,

Inventories consisted of the following as of December 31 :

Raw materials

Work in process

Finished goods

Accrued and Other Liabilities

Accrued and other liabilities consisted of the following as of December 31 :

Compensation and benefits

Warranty costs

Taxes payable

Accrued freight

Restructuring

Legal and professional fees

Accrued services

Deferred tooling revenue

Electrical Systems Global Seating Corporate/

Seats $ 1,626 $ 373,322 $ ( 5,611 ) $ 369,337

Electrical wire harnesses, panels and assemblies 193,390 3,021 — 196,411

Trim 184,199 18,135 ( 6,907 ) 195,427

Cab structures and sleeper boxes 76,380 — — 76,380

Mirrors, wipers and controls 57,159 3,023 — 60,182

Total $ 512,754 $ 397,501 $ ( 12,518 ) $ 897,737

Debt consisted of the following at December 31:

Term loan and security agreement 1, 2

Presented in the Consolidated Balance Sheets as current portion of long-term debt of $3.3 million , net of current prepaid debt financing costs of $0.5 million and current original issue discount of $0.6 million ;

and long-term debt of $153.1 million , net of long-term prepaid debt financing costs of $1.2 million and long-term original issue discount of $1.3 million as of December 31, 2019 .

Presented in the Consolidated Balance Sheets as current portion of long-term debt of $9.1 million , net of current prepaid debt financing costs of $0.6 million , and current original issue discount of $0.6 million ;

and long-term debt of $154.7 million , net of long-term prepaid debt financing costs of $1.7 million and long-term original issue discount of $1.8 million as of December 31, 2018 .

Term loan and security agreement due 2023 $ 150,950 $ 159,912

Unamortized discount and issuance costs ( 4,374 ) ( 3,528 )

146,576 156,384

current portion, net of unamortized discount and issuance costs of $ 1.9 million and $ 1.1 million, respectively

( 2,429 ) ( 3,256 )

Total long-term debt, net of current portion $ 144,147 $ 153,128

Term Loan and Security Agreement

On April 12, 2017, the Company entered into a $ 175.0 million senior secured term loan credit facility (the “Term Loan Facility”), maturing on April 12, 2023, pursuant to a term loan and security agreement (the “TLS Agreement”) with the Company and certain subsidiaries of the Company party thereto as guarantors, Bank of America, N.A., as administrative agent, and other lender parties thereto.

Concurrent with the closing of the TLS Agreement, the proceeds of the Term Loan Facility were used, together with cash on hand in the amount of $74.0 million , to (a) fund the redemption, satisfaction and discharge of all of the Company’s outstanding 7.875% notes along with accrued interest;

and (b) pay related transaction costs, fees and expenses.

In conjunction with the redemption of the 7.875% notes, the Company recognized a non-cash charge of $1.6 million in the second quarter of 2017 to write-off deferred financing fees and a charge for interest of $1.5 million paid to bondholders during the 30-day notification period associated with the redemption of the 7.875% notes.

The interest on the Term Loan Facility is variable and is comprised of 1) an applicable margin of either (i) 5.00% for base rate loans or (ii) 6.00% for LIBOR loans, and 2) an applicable rate of either (i) base rate for any day, a per annum rate equal to the greater of (a) the prime rate for such day, (b) the federal funds rate for such day, plus 0.50% , or (c) LIBOR for a 30 day interest period as of such day, plus 1.00% , or (ii) LIBOR as quoted two business days prior to the commencement of an interest period provided that LIBOR at no time falls below 1.00% .

The interest on the Term Loan Facility is variable and is comprised of 1) an applicable margin of either (i) 5.00 % for base rate loans or (ii) 6.00 % for LIBOR loans, in each case except for the period from April 1, 2020 through September 30, 2021, in which period such margin will be as amended by the Term Amendment, and 2) an applicable rate of either (i) base rate for any day (the “Base Rate”), a per annum rate equal to the greater of (a) the prime rate for such day, (b) the federal funds rate for such day, plus 0.50 %, or (c) LIBOR for a 30 day interest period as of such day, plus 1.00 %, or (ii) LIBOR as quoted two business days prior to the commencement of an interest period provided that LIBOR at no time falls below 1.00 %.

There was $ 0.1 million in accrued interest as of December 31, 2020.

3 unchanged sentences

Our obligations under the TLS Agreement are guaranteed by the Company and certain subsidiaries of the Company.

The obligations of the Company and the guarantors under the TLS Agreement are secured (subject to certain permitted liens) by a first-priority lien on substantially all of the non-current assets (and

a second priority lien on substantially all of the current assets) of the Company and the guarantors, including a first priority pledge of certain capital stock of the domestic and foreign subsidiaries directly owned by the Company and the guarantors.

The obligations of the Company and the guarantors under the TLS Agreement are secured (subject to certain permitted liens) by a first-priority lien on substantially all of the non-current assets (and a second priority lien on substantially all of the current assets) of the Company and the guarantors, including a first priority pledge of certain capital stock of the domestic and foreign subsidiaries directly owned by the Company and the guarantors.

The liens, the security interests and all of the obligations of the Company and the guarantors and all provisions regarding remedies in an event of default are subject to an intercreditor agreement among the Company, the guarantors, the agent for the lenders party to the Company’s revolving credit facility and the collateral agent under the TLS Agreement.

On May 11, 2020, the Company and certain of its subsidiaries, as guarantors or co-borrowers, as applicable, entered into an Amendment No.

1 (the “Term Amendment”), which amends TLS Agreement covenants.

As amended, from April 1, 2020 through September 30, 2021, loans outstanding under the TLS Agreement accrue interest at a per annum rate based on (at the Company's election) the Base Rate plus 9.50 % or the LIBOR rate plus 10.50 %.

The Company has the option of setting aside a portion of the interest accrual, not to exceed 4.5 %, as Payment In Kind and adding such amount to the outstanding principal balance in lieu of paying such interest amount in cash.

Commencing October 1, 2021, loans under the TLS Agreement will accrue interest at a per annum rate based on (at the Company's election) the Base Rate plus 5.00 % or the LIBOR rate plus 6.00 %.

Terms, Covenants and Compliance Status

8 unchanged sentences

The TLS Agreement also contains customary reporting and other affirmative covenants.

The Term Amendment added a new minimum consolidated liquidity covenant of $ 40.0 million, to be tested each fiscal quarter through the fiscal quarter ending September 30, 2021, temporarily suspended the leverage ratio covenant through the fiscal quarter ending December 31, 2020, and reset the leverage ratio covenant levels for quarterly periods ended on or after March 31, 2021.

In addition, amendments were made to certain restrictive covenants, the effect of which are to limit the Company's ability to incur additional debt, grant liens, repurchase the Company's stock and to issue dividends or make acquisitions.

We were in compliance with the covenants as of December 31, 2020.

The TLS Agreement requires the Company to repay principal of approximately $ 1.1 million on the last day of each quarter commencing with the quarter ending September 30, 2017 with the remaining outstanding principal due at maturity on April 12, 2023.

Voluntary prepayments of amounts outstanding under the TLS Agreement are permitted at any time, without premium or penalty.

In addition, to the extent applicable, customary LIBOR breakage charges may be payable in connection with any prepayment.

The TLS Agreement, as amended, includes a hard call premium on repayments of the term loans outstanding thereunder of 2 % on amounts repaid through June 30, 2021 and 1 % on amounts repaid through June 30, 2022, subject to certain exceptions.

The TLS Agreement requires the Company to make mandatory prepayments with excess cash flow, the proceeds of certain asset dispositions and upon the receipt of insurance or condemnation proceeds;

1 unchanged sentence

A mandatory prepayment of $ 4.2 million pursuant to the TLS Agreement was made during the first quarter of 2019 as a result of our 2018 Excess Cash Flow Period.

The TLS Agreement includes customary events of default (subject in certain cases to customary grace and cure periods) which include, among others:

• nonpayment of obligations when due;

• breach of covenants or other agreements in the TLS Agreement;

• defaults in payment of certain other indebtedness.

Revolving Credit Facility

6 unchanged sentences

Each of the Company and each other borrower is jointly and severally liable for the obligations under the Revolving Credit Facility and unconditionally guarantees the prompt payment and performance thereof.

The liens, the security interests and all of the obligations of the Company and each other borrower and all provisions regarding remedies in an event of default are subject to an intercreditor agreement among the Company, certain of its subsidiaries, the agent under the Third ARLS Agreement and the collateral agent for the lenders party to the Company’s Term Loan credit Facility.

On September 18, 2019, the Company and certain of its subsidiaries, as co-borrowers, entered into an Amendment No.

1 (the “Amendment”), which amends the Third ARLS Agreement.

The Amendment amends the terms of the Revolving Credit Facility

to entitle the Company and the other named borrowers thereunder (subject to the terms and conditions described therein) to request loans and other financial accommodations in an amount equal to the lesser of $90.0 million and a borrowing base composed of accounts receivable and inventory (such facility, the “Tranche A Facility”).

Of the $90.0 million , $7.0 million shall be available as a first-in, last-out facility (“Tranche B Facility”) at a 100 basis points premium, as detailed in the below applicable margin table.

The Company can increase the size of the revolving commitments under the Revolving Credit Facility by an incremental $20.0 million , subject to the consent of the lenders providing the incremental commitments.

The applicable margin is based on average daily availability under the revolving credit facility as follows:

Average Daily Availability

Revolver Loans

1 (the “Amendment”), which amends the terms of the Revolving Credit Facility to entitle the Company and the other named borrowers thereunder (subject to the terms and conditions described therein) to request loans and other financial accommodations in an amount equal to the lesser of $ 90.0 million and a borrowing base composed of accounts receivable and inventory (such facility, the “Tranche A Facility”).

Of the $ 90.0 million, $ 7.0 million shall be available as a first-in, last-out facility (“Tranche B Facility”) at a 100 basis points premium, as reflected in the below applicable margin table.

On May 11, 2020, the Company and certain of its subsidiaries, as guarantors or co-borrowers, as applicable, entered into an Amendment No.

2 (the “Revolving Amendment”), which amends the terms of the Third ARLS Agreement to align certain of the restrictive covenants with the restrictive covenants set forth in the TLS Agreement, as amended.

As amended, loans outstanding under the Third ARLS Agreement accrue interest at a per annum rate based on (at the Company’s election) the base rate or the LIBOR rate plus a margin determined by reference to availability under the Revolving Credit Facility as follows, subject to a LIBOR floor of 1.00 %:

Level Average Daily Availability Tranche A

Loans Tranche A

Revolver Loans Tranche B

Loans Tranche B

Revolver Loans

III ≥ $ 30,000,000

1.00 % 2.00 % 2.00 % 3.00 %

> $15,000,000 but < $30,000,000

II > $ 15,000,000 but < $ 30,000,000

1.25 % 2.25 % 2.25 % 3.25 %

I ≤ $ 15,000,000

1.50 % 2.50 % 2.50 % 3.50 %

The applicable margin is subject to increase or decrease by the agent on the first day of the calendar month following each fiscal quarter end.

2 unchanged sentences

The unamortized deferred financing fees associated with our revolving credit facility of $ 0.4 million and $ 0.6 million as of December 31, 2020 and December 31, 2019, respectively, are being amortized over the remaining life of the agreement.

As of December 31, 2019 and December 31, 2018 , we did not have borrowings under the revolving credit facility and had outstanding letters of credit of $1.6 million and $1.7 million , respectively.

As of December 31, 2020 and December 31, 2019, we did no t have borrowings under the revolving credit facility and had outstanding letters of credit of $ 1.6 million , respectively.

We had borrowing availability of $ 88.4 million at December 31, 2020.

16 unchanged sentences

The Third ARLS Agreement requires the borrowers to make mandatory prepayments upon the receipt of insurance or condemnation proceeds in respect of the revolving credit facility’s priority collateral.

The Third ARLS Agreement includes customary events of default (subject in certain cases to customary grace and cure periods) which include, among others:

• nonpayment of obligations when due;

• breach of covenants or other agreements in the Third ARLS Agreement;

• a change of control;

• defaults in payment of certain other indebtedness, including the term loan credit facility.

Goodwill and Intangible Assets

1 unchanged sentence

December 31, 2020

Amount Accumulated

Amortization Net

Definite-lived intangible assets:

Trademarks/Tradenames

Customer relationships

Technical know-how

Covenant not to compete

Trademarks/tradenames 22 years $ 11,634 $ ( 4,681 ) $ 6,953

Customer relationships 15 years 14,881 ( 7,536 ) 7,345

Technical know-how 5 years 9,790 ( 2,529 ) 7,261

Covenant not to compete 5 years 330 ( 85 ) 245

$ 36,635 $ ( 14,831 ) $ 21,804

December 31, 2019

Amount Accumulated

Amortization Net

Definite-lived intangible assets:

Trademarks/Tradenames

Customer relationships

The aggregate intangible asset amortization expense was $2.0 million for the fiscal year ended December 31, 2019 and $1.3 million for each of the fiscal years ended December 31 , 2018 and 2017 .

The estimated intangible asset amortization expense for each of the five succeeding fiscal years ending after December 31, 2019 is $3.5 million for years 2020 through 2023 and $2.9 million for the year through December 31, 2024.

Trademarks/tradenames 23 years $ 11,553 $ ( 4,276 ) $ 7,277

Customer relationships 15 years 15,025 ( 6,574 ) 8,451

Technical know-how 5 years $ 9,790 $ ( 571 ) 9,219

Covenant not to compete 5 years 330 ( 19 ) 311

$ 36,698 $ ( 11,440 ) $ 25,258

The aggregate intangible asset amortization expense was $ 3.4 million for the fiscal year ended December 31, 2020 and $ 2.0 million and $ 1.3 million for the fiscal years ended December 31, 2019 and 2018 respectively.

The estimated intangible asset amortization expense for each of the five succeeding fiscal years ending after December 31, 2020 is $ 3.4 million for years 2021 through 2023, $ 2.8 million for the year ending December 31, 2024 and $ 1.4 million for the year ending December 31, 2025.

Goodwill represents the excess of acquisition purchase price over the fair value of net assets acquired.

Accordingly, the Company estimated the fair value of each of the reporting units with goodwill by discounting the estimated cash flows of each reporting unit.

The estimated fair values of the reporting units were then compared to their net carrying values as of March 31, 2020 and, as a result, the Company recognized $ 27.1 million impairment of goodwill, which represented the carrying amount of goodwill prior to the impairment charge.

The impairment charge is presented in Goodwill and other impairment expense in the Consolidated Statements of Operations.

The changes in the carrying amounts of goodwill for the years ended December 31 are as follows:

Electrical Systems Global Seating Total

Balance - beginning of the year $ 22,802 $ 5,014 $ 27,816

FSE Acquisition

Finalization of FSE purchase accounting ( 537 ) — ( 537 )

Goodwill impairment ( 22,265 ) ( 4,809 ) ( 27,074 )

Currency translation adjustment — ( 205 ) ( 205 )

Balance - end of the year $ — $ — $ —

Electrical Systems Global Seating Total

Balance - beginning of the year $ 2,437 $ 5,139 $ 7,576

Finalization of FSE purchase accounting 20,365 — 20,365

Currency translation adjustment — ( 125 ) ( 125 )

Balance - end of the year $ 22,802 $ 5,014 $ 27,816

Business Combinations

On September 17, 2019, the Company entered into and closed on an Asset Purchase Agreement (the “Agreement”) with First Source Electronics, LLC (“FSE”), Kevin Popielarczyk and Richard Vuoto and the Company’s wholly-owned subsidiary, CVG FSE, LLC (“CVG FSE”).

The Agreement provided for the acquisition by CVG FSE of substantially all of the assets and certain liabilities of FSE in exchange for a cash purchase price of $ 34.0 million, subject to a net working capital adjustment, plus a right to earn up to $ 10.8 million in contingent milestone payments.

The purchase was funded through domestic cash on hand and $ 2.0 million of borrowings under our revolving credit facility.

FSE is in the business of manufacturing, distributing, marketing and selling cable and electro-mechanical assemblies, control panels and other business and consumer electronics products and services.

FSE improves our ability to participate in the progression of digitalization, connectivity and associated power and data applications.

Furthermore, this strategic acquisition complements our high-complexity, low-to-medium volume electrical business, provides an entry into the warehouse automation market, and provides the opportunity to leverage our global footprint and to increase cross-selling opportunities.

The contingent milestone payments are payable based on achieving certain earnings before interest, taxes, depreciation and amortization ("EBITDA") thresholds over the periods from (a) September 18, 2019 through September 17, 2020, (b) September 18, 2019 through March 17, 2021, (c) September 18, 2019 through September 17, 2022 and (d) March 18, 2021 through September 17, 2022.

The payment amount will be determined on a sliding scale for reaching between 90 % and 100 % of the respective EBITDA targets.

The fair value for the milestone payments is based on a Monte Carlo simulation utilizing forecasted EBITDA through September 17, 2022 and a discount rate of 21.0 %.

The estimate of $ 4.7 million was recorded within other long-term liabilities in the Consolidated Balance Sheet as of September 30, 2019.

The total undiscounted contingent milestone payments is estimated at $ 10.8 million.

The contingent consideration was revalued each quarter under the same valuation technique applied during purchase accounting.

The fair value of contingent consideration increased during the year ended December 31, 2020 by $ 5.1 million, due to remeasurement which is recognized in Selling, general and administrative expenses in the Consolidated Statements of Operations.

A payment of $ 1.0 million was made during the fourth quarter of 2020 based on achievement of the first EBITDA threshold.

The fair value is $ 8.8 million as of December 31, 2020, based on a discount rate of 16.8 %.

The Agreement contains customary indemnification provisions and provided for the establishment of an escrow fund of $ 3.0 million of the purchase price to secure indemnification claims by CVG FSE for an 18-month period.

The Company is a party to the Agreement solely as a guarantor of CVG FSE’s payment obligations.

The FSE Acquisition was accounted for under the acquisition method of accounting.

Under acquisition accounting, the acquired tangible and intangible assets and liabilities of FSE have been recorded at their respective fair values.

The Company has completed its assessment of fair values of assets acquired and liabilities assumed, and the final amounts are reflected in the table below.

The purchase price associated with the FSE Acquisition exceeded the preliminary fair value of the net assets acquired by approximately $ 19.8 million.

This reflects an increase of $ 2.2 million from the initial valuation as of December 31, 2019.

A final adjustment to the purchase price was made in the three months ended March 31, 2020 reducing goodwill by $ 0.5 million.

The excess purchase price over net assets acquired is recorded as goodwill and was determined as follows:

Initial cash paid, net of working capital adjustment $ 34,000

Purchase price adjustment ( 537 )

Contingent consideration at fair value 4,700

Total consideration $ 38,163

Net assets at fair value 18,335

Excess of total consideration over net assets acquired $ 19,828

In the first quarter of 2020, pursuant to the asset purchase agreement a final adjustment resulted in a $ 0.5 million reduction in the initial consideration paid and goodwill.

The valuation is final as of March 31, 2020.

The allocation of the fair value of the

assets acquired and liabilities assumed, at acquisition and as adjusted for the final adjustment at December 31, 2020, were as follows:

Preliminary Purchase Price Allocation Adjustment Final Purchase Price Allocation

Net working capital $ 2,856 $ — $ 2,856

Property, plant and equipment 503 — 503

Other long-term assets 1,650 — 1,650

Definite-lived intangible assets 14,500 — 14,500

20,365 ( 537 ) 19,828

Other long-term liabilities ( 1,174 ) ( 1,174 )

Total consideration $ 38,700 $ ( 537 ) $ 38,163

As disclosed in Note 4, Goodwill and Intangible Assets, the full value of the Company's goodwill was impaired during the three months ended March 31, 2020.

Fair Value Measurement

At December 31, 2020, our financial instruments included cash, accounts receivable, accounts payable, accrued liabilities and our revolving credit facility.

The carrying value of these instruments approximates fair value as a result of the short duration of such instruments or due to the variability of the interest cost associated with such instruments.

Foreign Currency Forward Exchange Contracts.

Based on the utilization of these inputs, the derivative assets and liabilities are classified as Level 2.

Interest Rate Swap Agreement.

To manage our exposure to variable interest rates, we have entered into an agreement (the “Interest Rate Swap Agreement”) with Bank of America, N.A.

whereby the Company has agreed to exchange, at a specified interval, the difference between fixed and variable interest amounts calculated by reference to an agreed upon notional principal amount.

The Interest Rate Swap Agreement is intended to mitigate the impact of rising interest rates on the Company and covers $ 80 million of outstanding debt under the senior secured term loan facility.

The Company expects this agreement to remain effective during the remaining term of the Interest Rate Swap Agreement and records the impact of the agreement in interest expense in the Consolidated Statements of Operations.

The fair values of our derivative instruments and contingent consideration measured on a recurring basis as of December 31 and are categorized as follows:

Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3

Derivative assets Foreign exchange contract 1

$ 1,882 $ — $ 1,882 $ — $ 464 $ — $ 464 $ —

Interest rate swap agreement 2

$ 936 $ — $ 936 $ — $ 150 $ — $ 150 $ —

Derivative liabilities Interest rate swap agreement 3

$ 2,080 $ — $ 2,080 $ — $ 995 $ — $ 995 $ —

Earnout liability Contingent consideration 4

$ 8,800 $ — $ — $ 8,800 $ 4,700 $ — $ — $ 4,700

Derivative equity Foreign exchange contract 5

$ 1,441 $ — $ 1,441 $ — $ 464 $ — $ 464 $ —

1 Presented in the Consolidated Balance Sheets in other current assets and based on observable market transactions of spot and forward rates.

2 Presented in the Consolidated Balance Sheets in accrued liabilities and based on observable market transactions of forward rates.

3 Presented in the Consolidated Balance Sheets in accrued liabilities and other and based on observable market transactions of forward rates.

4 Presented in the Consolidated Balance Sheets in accrued liabilities and other long term liabilities and based on a Monte Carlo valuation model.

5 Presented in the Consolidated Balance Sheets in accumulated other comprehensive income (loss) and based on observable market transactions of forward rates.

The following table summarizes the notional amount of our open foreign exchange contracts at December 31:

Equivalent U.S.

Fair Value U.S.

Equivalent U.S.

Commitments to buy or sell currencies $ 14,675 $ 16,558 $ 22,474 $ 22,939

We consider the impact of our credit risk on the fair value of the contracts, as well as the ability to execute obligations under the contract.

The following table summarizes the effect of derivative instruments on the Consolidated Statements of Operations for derivatives not designated as hedging instruments at December 31:

Location of Gain (Loss)

Recognized on Derivatives Amount of Gain (Loss)

Recognized on Derivatives

Foreign exchange contracts Cost of revenues $ ( 1,811 ) $ 4

Interest rate swap agreement Interest expense $ ( 1,031 ) $ ( 1,818 )

Long-term Debt .

The fair value of long-term debt obligations is based on a fair value model utilizing observable inputs.

Based on these inputs, our long-term debt is classified as Level 2.

The carrying amounts and fair values of our long-term debt at December 31 are as follows:

Amount Fair Value Carrying

Amount Fair Value

Term loan and security agreement 1

$ 146,576 $ 144,878 $ 156,384 $ 157,983

1 Presented in the Consolidated Balance Sheets as the current portion of long-term debt of $ 2.4 million and long-term debt of $ 144.1 million as of December 31, 2020, and current portion of long-term debt of $ 3.3 million and long-term debt of $ 153.1 million as of December 31, 2019.

Long-lived Assets.

The contingent consideration is classified as Level 3 and valued based on a Monte Carlo valuation model.

For the period ended December 31, 2020, an impairment charge of $ 1.1 million was recognized for the Electrical Systems segment, $ 0.4 million related to an operating lease right-of-use asset and $ 0.7 million related to property, plant and equipment.

Additionally, for the period ended December 31, 2020, an impairment charge of $ 0.8 million was recognized for the corporate aircraft and was based on the selling price, less selling costs, of $ 0.3 million.

These impairment charges are presented in impairment expense in the Consolidated Statements of Operations.

Goodwill Impairment.

For the period ended December 31, 2020, an impairment charge of $ 27.1 million was recognized for goodwill and was based on the estimated fair values of goodwill for the reporting units compared to the net carrying values at March 31, 2020.

The impairment charge is presented in impairment expense in the Consolidated Statements of Operations.

No other non-recurring fair value measurements were assessed during the period ended December 31, 2020 .

Our leases have remaining lease terms of one year to nine years , some of which include options to extend the leases for up to five years , and some of which include options to terminate the leases within one year .

The components of lease expense are as follows:

Twelve Months Ended December 31,

Operating lease cost 1

$ 11,214 $ 7,279

Finance lease cost:

Amortization of right-of-use assets 394 341

Interest on lease liabilities 43 60

Total finance lease cost $ 437 $ 401

Short-term lease cost 2

Total lease expense $ 15,909 $ 15,037

The Company recognized accelerated lease costs of $ 1.1 million during the year ended December 31, 2020 related to the corporate research and development center.

Includes variable lease costs, which are not significant.

Supplemental cash flow information related to leases is as follows:

Twelve Months Ended December 31, 2020 Twelve Months Ended December 31, 2019

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases $ 10,571 $ 7,898

Financing cash flows from finance leases $ 446 $ 443

Supplemental balance sheet information related to leases is as follows:

Balance Sheet Location December 31, 2020 December 31, 2019

Operating Leases

Right-of-use assets, net Operating lease right-of-use assets, net $ 30,047 $ 34,960

Current liabilities Current operating lease liabilities $ 9,236 $ 7,620

Non-current liabilities Operating lease liabilities 23,932 29,414

Total operating lease liabilities $ 33,168 $ 37,034

Finance Leases 1

Right-of-use assets $ 1,410 $ 1,135

Accumulated depreciation ( 643 ) ( 343 )

Right-of-use assets, net Other assets, net $ 767 $ 792

Current liabilities Accrued liabilities and other $ 293 $ 354

Non-current liabilities Other long-term liabilities 434 398

Total finance lease liabilities $ 727 $ 752

Weighted Average Remaining Lease Term

Operating leases 4.5 years 5.0 years

Finance leases 3.2 years 2.8 years

Weighted Average Discount Rate

Operating leases 8.0 % 9.1 %

Finance leases 5.1 % 7.2 %

Note that all new financing leases added during the twelve months ended December 31, 2020 were executed before the loan amendment discussed in Note 3, Debt, or May 11, 2020.

We utilize an incremental borrowing rate, which is reflective of the specific term of the leases and economic environment of each geographic region, and apply a portfolio approach for certain machinery and equipment that have consistent terms in a specific geographic region.

Anticipated future lease costs, which are based in part on certain assumptions to approximate minimum annual rental commitments under non-cancelable leases, are as follows:

Year Ending December 31, Operating Financing Total

2021 $ 10,862 $ 320 $ 11,182

2022 9,583 200 9,783

2023 5,836 131 5,967

2024 4,585 80 4,665

2025 3,969 42 4,011

Thereafter 3,939 1 3,940

Total lease payments $ 38,774 $ 774 $ 39,548

Imputed interest ( 5,606 ) ( 47 ) ( 5,653 )

Present value of lease liabilities $ 33,168 $ 727 $ 33,895

Pre-tax income (loss) consisted of the following for the years ended December 31:

(as restated)

(1) The Company has adjusted certain prior period amounts for the restatement and immaterial corrections of error.

See Note 2 for details.

2020 2019 2018

Domestic $ ( 55,907 ) $ 4,777 $ 23,092

Foreign 11,407 16,779 26,484

Total $ ( 44,500 ) $ 21,556 $ 49,576

A reconciliation of income taxes computed at the statutory rates to the reported income tax provision for the years ended December 31 follows:

(as restated)

Federal provision at statutory rate 1

2020 2019 2018

Federal (benefit) provision at statutory rate $ ( 9,345 ) $ 4,527 $ 10,411

U.S./Foreign tax rate differential 492 393 731

5 unchanged sentences

Change in valuation allowance 2,146 ( 2,054 ) 597

Tax credits ( 143 ) ( 2,652 ) ( 2,049 )

Share-based compensation ( 15 ) ( 14 ) ( 50 )

Change in U.S.

corporate tax rate

Repatriation of foreign earnings 37 1,235 ( 3,670 )

GILTI, net of related foreign tax credit ( 1,340 ) 730 1,194

Provision for income taxes

(1) The Company has adjusted certain prior period amounts for the restatement and immaterial corrections of error.

See Note 2 for details.

Other 419 479 758

(Benefit) Provision for income taxes $ ( 7,451 ) $ 5,778 $ 8,087

The provision (benefit) for income taxes for the years ended December 31 follows:

2018 (as restated)

2020 2019 2018

Current Deferred Total Current Deferred Total Current Deferred Total

Federal $ 109 $ ( 10,975 ) $ ( 10,866 ) $ ( 205 ) $ ( 336 ) $ ( 541 ) $ ( 3,432 ) $ 4,426 $ 994

State and local 120 ( 559 ) ( 439 ) 214 883 1,097 123 87 210

(1) The Company has adjusted certain prior period amounts for the restatement and immaterial corrections of error.

See Note 2 for details.

Foreign 4,449 ( 595 ) 3,854 4,207 1,015 5,222 6,365 518 6,883

Total $ 4,678 $ ( 12,129 ) $ ( 7,451 ) $ 4,216 $ 1,562 $ 5,778 $ 3,056 $ 5,031 $ 8,087

A summary of deferred income tax assets and liabilities as of December 31 follows:

(as restated)

Noncurrent deferred tax assets:

Amortization and fixed assets $ 5,094 $ 830

Accounts receivable

Inventories 2,325 2,659

Pension obligations 2,827 2,134

1 unchanged sentence

Accrued benefits 551 369

Foreign exchange contracts

Restricted stock

Operating leases 664 165

7 unchanged sentences

Amortization and fixed assets $ ( 952 ) $ ( 2,501 )

Accounts receivable

Warranty obligations

Inventories 115 115

Pension obligations 161 —

Accrued benefits ( 124 ) ( 111 )

Operating leases

Net operating loss carryforwards — 1,517

2 unchanged sentences

Total net deferred tax asset $ 24,920 $ 13,096

(1) The Company has adjusted certain prior period amounts for the restatement and immaterial corrections of error.

See Note 2 for details.

We assess whether valuation allowances should be established against deferred tax assets based on consideration of all available evidence using a “more likely than not” standard.

2 unchanged sentences

During 2020, we recorded additional valuation allowance of $ 4.5 million on the deferred tax assets of our United Kingdom subsidiary and certain U.S.

state tax net operating loss carryforwards, and released $3.4 million in valuation allowances related to the deferred tax assets of our Luxembourg subsidiaries.

federal and state tax attribute carryforwards, and released $ 0.1 million in valuation allowances related to the deferred tax assets of our Luxembourg subsidiary.

We expect to be able to realize the benefits of all of our deferred tax assets that are not currently offset by a valuation allowance, as discussed above.

In the event that our actual results differ from our estimates or we adjust these estimates in future periods, the effects of these adjustments could materially impact our financial position and results of operations.

Activity for the years ended December 31 is as follows (in thousands):

2020 2019 2018

Balance - Beginning of the year 11,992 $ 14,665 $ 15,021

Provisions 4,511 706 874

Utilizations ( 62 ) ( 3,379 ) ( 1,230 )

Balance - End of the year 16,441 $ 11,992 $ 14,665

As of December 31, 2020, the Company had net operating loss carryforwards of $ 126.5 million, of which $ 49.1 million related to foreign jurisdictions and $ 77.4 million related to U.S.

4 unchanged sentences

As of December 31, 2020, we had $ 3.3 million of U.S.

foreign tax credits carried forward primarily attributable to the deemed repatriation of the accumulated untaxed earnings of our foreign subsidiaries resulting from the U.S.

Utilization of these credits may be limited if the Company does not continue to generate U.S.

foreign tax credit carryforwards, net of a $ 1.7 million valuation allowance, primarily attributable to the deemed repatriation of the accumulated untaxed earnings of our foreign subsidiaries resulting from the U.S.

Utilization of these credits may be limited if the Company does not generate sufficient U.S.

federal taxable income in future years.

The credits begin to expire in 2027.

As of December 31, 2019 , we had $1.3 million of research and development tax credits being carried forward related to our U.S.

Utilization of these credits may be limited if the Company does not continue to generate U.S.

As of December 31, 2020, we had $ 0.9 million of research and development tax credit carryforwards related to our U.S.

Utilization of these credits may be limited if the Company does not generate sufficient U.S.

federal taxable income in future years.

As a result of the Tax Cuts and Jobs Act of 2017, the unutilized research and development tax credits the Company generated after December 31, 2017 can be carried forward indefinitely whereas the credits generated prior to that date are subject to a 20-year carryforward period.

Approximately $0.5 million of the Company's tax credits are subject to the 20-year carryforward period and begin to expire between between 2025 and 2039 .

The credits begin to expire in 2032.

As of December 31, 2020, cash of $ 41.9 million was held by foreign subsidiaries.

During the year ended December 31, 2020, $ 11.2 million, net of $ 0.6 million in foreign withholding tax incurred, was repatriated from the Company's foreign subsidiaries.

The Company plans to repatriate an additional $12.0 million in 2020 and a $0.8 million deferred tax liability was recorded during the year ended December 31, 2019 for the expected future income tax implications.

The Company had a $ 0.3 million deferred tax liability as of December 31, 2020 for the expected future income tax implications of repatriating cash from the foreign subsidiaries for which no indefinite reinvestment assertion has been made.

We file federal income tax returns in the U.S.

3 unchanged sentences

jurisdictions including China, Czech Republic, Mexico and the United Kingdom, tax years are typically subject to examination for three to five years.

As of December 31, 2019 , and 2018, we provided a liability of $0.9 million for unrecognized tax benefits related to U.S.

As of December 31, 2020, and 2019, we provided a liability of $ 1.0 million and $ 0.9 million, respectively, for unrecognized tax benefits associated with our U.S.

federal and state, and foreign jurisdictions.

The majority of these unrecognized tax benefits are netted against their related noncurrent deferred tax assets.

The majority of these unrecognized tax benefits are netted against their related non-current deferred tax assets.

We accrue interest and penalties related to unrecognized tax benefits through income tax expense.

2 unchanged sentences

A reconciliation of the beginning and ending amount of unrecognized tax benefits (including interest and penalties) at December 31 follows:

(as restated)

2020 2019 2018

Balance - Beginning of the year $ 908 $ 894 $ 811

5 unchanged sentences

Balance - End of the year $ 1,006 $ 908 $ 894

(1) The Company has adjusted certain prior period amounts for the restatement and immaterial corrections of error.

See Note 2 for details.

Segment Reporting and Geographic Locations

In the year ended December 31, 2018 , we completed a strategic reorganization of our operations into two business segments, Electrical Systems and Global Seating.

As a result of the strategic reorganization, we restated prior period segment information to conform to the current period segment presentation.

Operating segments are defined as components of an enterprise that are evaluated regularly by the Company’s CODM, which is our President and Chief Executive Officer.

Each of these segments consists of a number of manufacturing facilities.

Certain of our facilities manufacture and sell products through both of our segments.

Each manufacturing facility that sells products through both segments is reflected in the financial results of the segment that has the greatest amount of sales from that manufacturing facility.

Our segments are more specifically described below.

The Electrical Systems Segment manufactures and sells the following products:

Electrical wire harnesses, control panels, electro-mechanical and cable assemblies primarily for the construction, agricultural, industrial, automotive, truck, mining, rail and military industries in North America, Europe and Asia-Pacific;

Trim systems and components ("Trim") primarily for the North America MD/HD Truck market;

Mirrors, wipers and controls primarily for the truck, bus, agriculture, construction, rail and military markets in North America and Europe;

Cab structures for the North American MD/HD Truck market;

Aftermarket components in North America.

The Global Seating Segment manufactures and sells the following products:

Seats and seating systems ("Seats") primarily to the MD/HD Truck, construction, agriculture and mining markets in North America, Asia-Pacific and Europe;

Office seating in Europe and Asia-Pacific;

Aftermarket seats and components in North America, Europe and Asia-Pacific.

Corporate expenses consist of overhead and shared costs that are not directly attributable to the operations of a segment.

For purposes of business segment performance measurement, some of these costs are for the benefit of the operations and are allocated based on a combination of methodologies.

The costs that are not allocated to a segment are considered stewardship costs and remain at corporate in our segment reporting.

The following table presents segment revenues, gross profit, selling, general and administrative expenses, amortization expense, operating income, capital expenditures, depreciation expense and other items for the year ended December 31, 2019 .

The table does not include assets as the CODM does not review assets by segment.

For the year ended December 31, 2019

Electrical Systems

Global Seating

External revenues

Intersegment revenues

Total revenues

Selling, general & administrative expenses

Amortization expense

Operating income

Capital Expenditures, Depreciation Expense and Other:

Capital expenditures

Depreciation expense

Other items 1

1 Other items include costs associated with restructuring activities, including employee severance and retention costs, lease cancellation costs, building repairs, costs to transfer equipment, and costs of $0.9 million associated with the acquisition of the assets of FSE.

The following table presents segment revenues, gross profit, selling, general and administrative expenses, amortization expense, operating income, capital expenditures and depreciation expense for the year ended December 31, 2018 .

The table does not include assets as the CODM does not review assets by segment.

For the year ended December 31, 2018 (as restated)

Electrical Systems 1

Global Seating

External revenues

Intersegment revenues

Total revenues

Selling, general & administrative expenses

Amortization expense

Operating income

Capital Expenditures and Depreciation Expense:

Capital expenditures

Depreciation expense

1 The Company has adjusted certain prior period amounts for the restatement and immaterial correction of error.

See Note 2 for details.

The table does not include assets as the CODM does not review assets by segment.

For the year ended December 31, 2017

Electrical Systems 1

Global Seating

External revenues

Intersegment revenues

Total revenues

Selling, general & administrative expenses

Amortization expense

Operating income

Capital expenditures, depreciation expense and other:

Capital expenditures

Depreciation expense

Other items 2

1 The Company has adjusted certain prior period amounts for the immaterial corrections of error.

See Note 2 for details.

2 Other items include costs associated with restructuring activities, including employee severance and retention costs, lease cancellation costs, building repairs, costs to transfer equipment, and litigation settlement costs associated with a consulting contract.

The following table presents revenues and long-lived assets for the geographic areas in which we operate:

Years Ended December 31,

United States

United Kingdom

All other countries

1 The Company has adjusted certain prior period amounts for the immaterial corrections of error.

See Note 2 for details.

2 Long-lived assets for 2019 include right-of-use assets attributable to the implementation of ASC 842 discussed in Note 6 totaling $15.1 million for the United States, $9.3 million for the United Kingdom and $11.3 million for all other countries.

Revenues are attributed to geographic locations based on the geography from which the legal entity operates.

The following is the composition, by product category, of our revenues:

Years Ended December 31,

Electrical wire harnesses, panels and assemblies

Cab structures and sleeper boxes

Mirrors, wipers and controls

Sales to A.B.

Volvo, Daimler and PACCAR, which are included in both reporting segments, have been in excess of 10 percent of total Company revenues in each of the years ended December 31, 2019, 2018 and 2017.

No other customers exceed 10% of the Company’s revenues in any period presented.

The following table presents revenue from the above mentioned customers as a percentage of total revenue for the years ended December 31:

Commitments and Contingencies

Leases - As disclosed in Note 6, we lease office, warehouse and manufacturing space and equipment under non-cancelable operating lease agreements that generally require us to pay maintenance, insurance, taxes and other expenses in addition to annual rental fees.

As of December 31, 2019 , our equipment leases did not provide for any material guarantee of a specified portion of residual values.

Guarantees - Costs associated with guarantees are accrued when it is probable that a liability has been incurred and the amount can be reasonably estimated.

The most likely cost to be incurred is accrued based on an evaluation of available facts;

where no amount within a range of estimates is more likely, the minimum is accrued.

As of December 31, 2019 and 2018 , we had no such guarantees.

Litigation - We are subject to various legal proceedings and claims arising in the ordinary course of business, including but not limited to workers' compensation claims, OSHA investigations, employment disputes, unfair labor practice charges, customer and supplier disputes, service provider disputes, product liability claims, intellectual property disputes, environmental claims arising out of the conduct of our businesses and examinations by the Internal Revenue Service.

Management believes that the Company maintains adequate insurance and that we have established reserves for issues that are probable and estimable in amounts that are adequate to cover reasonable adverse judgments not covered by insurance.

Based upon the information available to management and discussions with legal counsel, it is the opinion of management that the ultimate outcome of the various legal actions and claims that are incidental to our business are not expected to have a material adverse impact on the consolidated financial position, results of operations, equity or cash flows;

however, such matters are subject to many uncertainties and the outcomes of individual matters are not predictable with any degree of assurance.

Warranty - We are subject to warranty claims for products that fail to perform as expected due to design or manufacturing deficiencies.

Depending on the terms under which we supply products to our customers, a customer may hold us responsible for some or all of the repair or replacement costs of defective products when the product supplied did not perform as represented.

Our policy is to record provisions for estimated future customer warranty costs based on historical trends and for specific claims.

These amounts, as they relate to the years ended December 31, 2019 and 2018 , are included within accrued liabilities and other in the accompanying Consolidated Balance Sheets.

The following presents a summary of the warranty provision for the years ended December 31 :

Balance - Beginning of the year

Provision for new warranty claims

Change in provision for preexisting warranty claims

Deduction for payments made

Currency translation adjustment

Balance - End of year

Debt Payments - As disclosed in Note 9, the TLS Agreement requires the Company to repay a fixed amount of principal on a quarterly basis, make mandatory prepayments of excess cash flows and make voluntary prepayments that coincide with certain events.

The following table provides future minimum principal payments and mandatory prepayment of excess cash flows due on long-term debt for the next five years.

The existing long-term debt agreement matures in 2023;

no payments are due thereafter:

Year Ending December 31,

Stockholders’ Equity

Common Stock - Our authorized capital stock includes common stock of 60,000,000 shares with a par value of $0.01 per share, with 30,801,255 and 30,512,843 shares outstanding as of December 31, 2019 and 2018 , respectively.

Preferred Stock - Our authorized capital stock includes preferred stock of 5,000,000 shares with a par value of $0.01 per share, with no shares outstanding as of December 31, 2019 and 2018 .

Earnings (Loss) Per Share - Basic earnings (loss) per share is determined by dividing net income by the weighted average number of common shares outstanding during the year.

Diluted earnings (loss) per share presented is determined by dividing net income by the weighted average number of common shares and potential common shares outstanding during the period as determined by the treasury stock method.

Potential common shares are included in the diluted earnings per share calculation when dilutive.

Diluted earnings (loss) per share for years ended December 31, 2019 , 2018 and 2017 includes the effects of potential common shares when dilutive.

Net income has been restated in 2018 and corrected for immaterial errors in 2017, along with its impact to Basic and Dilutive EPS as discussed in Note 2, and is as follows:

(as restated)

Net income (loss) attributable to common stockholders

Weighted average number of common shares outstanding

Dilutive effect of restricted stock grants after application of the treasury stock method

Dilutive shares outstanding

Basic earnings (loss) per share attributable to common stockholders

Diluted earnings (loss) per share attributable to common stockholders

The Company has adjusted certain prior period amounts for the restatement and immaterial corrections of error.

See Note 2 for details.

There were no anti-dilutive shares for the year ended December 31, 2019 .

For the year ended December 31, 2018 , diluted earnings (loss) per share excludes 55 thousand shares, of nonvested restricted stock as the effect would have been anti-dilutive.

Dividends — We have not declared or paid any cash dividends in the past.

The terms of the Third ARLS Agreement and the Term Loan Facility restrict the payment or distribution of our cash or other assets, including cash dividend payments.

The changes in stockholder's equity are as follows:

Twelve Months Ended December 31, 2019

Additional Paid In Capital

Total Stockholders’

December 31, 2018 (as restated)

Share-based compensation expense

Cumulative effect of adoption of Topic 842

Total comprehensive income (as restated)

March 31, 2019 (as restated)

Share-based compensation expense

Total comprehensive income (as restated)

June 30, 2019 (as restated)

Share-based compensation expense

Total comprehensive income (as restated)

September 30, 2019 (as restated)

Issuance of restricted stock

Surrender of common stock by employees

Share-based compensation expense

Total comprehensive income

December 31, 2019

(1) The Company has adjusted certain prior period amounts for the restatement and immaterial corrections of error.

See Notes 2 and 19 for details.

Twelve Months Ended December 31, 2018

Additional Paid In Capital

Total Stockholders’

December 31, 2017

Share-based compensation expense

Total comprehensive income (as restated)

March 31, 2018 (as restated)

Share-based compensation expense

Total comprehensive income (as restated)

June 30, 2018 (as restated)

Share-based compensation expense

Total comprehensive income (as restated)

September 30, 2018 (as restated)

Issuance of restricted stock

Surrender of common stock by employees

Share-based compensation expense

Total comprehensive income (as restated)

December 31, 2018 (as restated)

(1) The Company has adjusted certain prior period amounts for the restatement and immaterial corrections of error.

See Notes 2 and 19 for details.

Performance Awards

Awards, defined as cash, shares or other awards, may be granted to employees under the Commercial Vehicle Group, Inc.

2014 Equity Incentive Plan (the “2014 EIP”).

The cash award is earned and payable based upon the Company’s relative total shareholder return in terms of ranking as compared to the peer group over a three -year period (the “Performance Period”).

Total shareholder return is determined by the percentage change in value (positive or negative) over the applicable measurement period as measured by dividing (A) the sum of the cumulative value of dividends and other distributions paid on the Common Stock for the applicable measurement period and the difference (positive or negative) between each such company’s starting stock price and ending stock price, by (B) the starting stock price.

The award is payable at the end of the Performance Period in cash if the employee is employed through the end of the Performance Period.

If the employee is not employed during the entire Performance Period, the award is forfeited.

These grants are accounted for as cash settlement awards for which the fair value of the award fluctuates based on the change in total shareholder return in relation to the peer group.

The following table summarizes performance awards granted in the form of cash awards under the 2014 EIP in November 2018 , 2017 and 2016:

Adjusted Award Value at December 31, 2019

Vesting Schedule

Remaining Periods (in Months) to Vesting

November 2016

November 2019

November 2017

November 2020

November 2018

November 2021

The Company generally grants performance awards in November of each year.

However, there were no performance awards granted in November 2019.

The next cash award under the 2014 EIP will be granted in the three months ended March 31, 2020.

Unrecognized compensation expense was $1.1 million and $2.6 million as of December 31, 2019 and 2018 , respectively.

Share-Based Compensation

The compensation expense for our share-based compensation arrangements (see Restricted Stock Awards below) was $2.8 million , $3.1 million and $2.5 million for the years ended December 31, 2019 , 2018 and 2017 , respectively.

Share-based compensation expense is included in selling, general and administrative expenses in the Consolidated Statements of Operations.

Restricted Stock Awards - Restricted stock is a grant of shares of common stock that may not be sold, encumbered or disposed of and that may be forfeited in the event of certain terminations of employment or in the case of the board of directors, a separation for cause, prior to the end of a restricted period set by the compensation committee of the board of directors.

Forfeitures are recorded as they occur.

A participant granted restricted stock generally has all of the rights of a stockholder, unless the compensation committee determines otherwise.

The following table summarizes information about unvested restricted stock grants as of December 31, 2019 (in thousands):

Shares Granted

Unvested Shares

Vesting Schedule

Period to Vesting (in

3 equal annual installments commencing on October 20, 2018

3 equal annual installments commencing on October 20, 2019

Shares granted to independent board members that fully vest as of May 16, 2020

3 equal annual installments commencing on October 20, 2020

As of December 31, 2019 , there was approximately $2.4 million of unrecognized compensation expense related to non-vested share-based compensation arrangements granted under our equity incentive plans.

This expense is subject to future adjustments and forfeitures and will be recognized on a straight-line basis over the remaining period listed above for each grant.

A summary of the status of our restricted stock awards as of December 31, 2019 and changes during the twelve-month period ending December 31, 2019 , 2018 and 2017 is presented below:

Nonvested - beginning of year

Nonvested - end of year

As of December 31, 2019 , a total of 2.1 million shares were available for future grants from the shares authorized for award under our 2014 Equity Incentive Plan, including cumulative forfeitures.

Repurchase of Common Stock - We did not repurchase any of our common stock on the open market as part of a stock repurchase program during 2019 ;

however, our employees surrendered 130 thousand shares of our common stock to satisfy tax withholding obligations on the vesting of the restricted stock awards.

Accrued and Other Liabilities

Accrued and other liabilities consisted of the following as of December 31:

Compensation and benefits $ 13,172 $ 9,111

Contingent consideration 4,870 570

Taxes payable 4,057 2,513

Insurance 2,705 3,110

Accrued freight 2,556 2,408

Warranty costs 2,041 3,082

Legal and professional fees 2,008 2,115

Deferred tooling revenue 1,371 524

Accrued services 1,250 912

Restructuring 679 2,324

Other 6,111 6,004

$ 40,820 $ 32,673

Defined Contribution Plan, Pension and Other Post-Retirement Benefit Plans

2 unchanged sentences

In accordance with the terms of the 401(k) plan, we elect to match a certain percentage of the participants’ contributions to the plan, as defined.

We recognized expense associated with the plan of $4.6 million in 2019 , $3.6 million in 2018 and $3.0 million in 2017 .

We recognized expense associated with the plan of $ 1.9 million, $ 4.6 million and $ 3.6 million for the years ended December 31, 2020, 2019, and 2018, respectively.

The decrease in expense for the year ended December 31, 2020 as compared to the to the prior year period primarily resulted from the temporary suspension of the employer 401(k) match taken in response to the COVID-19 pandemic.

Pension and Other Post-Retirement Benefit Plans - We sponsor pension and other post-retirement benefit plans that cover certain hourly and salaried employees in the U.S.

5 unchanged sentences

defined benefit pension plan the opportunity to voluntarily elect an early payout of their benefits.

Payouts totaling $7.9 million were made during 2019 and were paid out of plan assets resulting in a non-cash settlement charge of $2.5 million , which was recorded in interest and other expense in the Condensed Consolidated Statements of Operations and is reflected in amortization of prior service cost in the net periodic (benefit) cost table below.

Payouts totaling $ 7.9 million were made during 2019 and were paid out of plan assets resulting in a non-cash settlement charge of $ 2.5 million, which was recorded in interest and other expense in the Consolidated Statements of Operations and is reflected in amortization of prior service cost in the net periodic (benefit) cost table below.

The change in benefit obligation, plan assets and funded status as of December 31 is as follows:

Pension and Other Post-Retirement Benefit Plans

Pension and Other Post-Retirement Benefit Plans Non-U.S.

2020 2019 2020 2019

Change in benefit obligation:

Benefit obligation — Beginning of the year $ 39,577 $ 45,238 $ 44,841 $ 40,265

Service cost — — 37 —

Interest cost 1,117 1,483 838 1,112

1 unchanged sentence

Benefits paid ( 2,344 ) ( 10,346 ) ( 1,820 ) ( 1,681 )

Actuarial (gain) loss

Actuarial loss 2,866 3,196 7,514 3,730

Exchange rate changes — — 2,244 1,415

9 unchanged sentences

Funded status $ 1,410 $ 468 $ ( 15,169 ) $ ( 10,520 )

Significant Obligation Loss - The projected U.S.

Actuarial Loss - The projected U.S.

benefit obligation includes a net loss of $ 2.9 million for the year ended December 31, 2020.

The loss is a result of changes in key actuarial assumptions, including the early payout of benefits decrease in the discount rate.

The loss is a result of changes in key actuarial assumptions, including the decrease in the discount rate.

The projected Non-U.S.

benefit obligation includes a net loss of $ 7.5 million for the year ended December 31, 2020 driven primarily by a decrease in the discount rate assumption.

As a result of pension legislation in the United Kingdom that was effective October 2018, the Company was required to amend its pension plan to equalize benefits between male and female pensioners.

This resulted in additional pension obligation and a reduction to accumulated other comprehensive income of $0.8 million in 2018.

There are no material updates to this estimate for as of December 31, 2019.

Amounts recognized in the Consolidated Balance Sheets at December 31 consisted of:

Pension and Other Post-Retirement Benefit Plans

Pension and Other Post-Retirement Benefit Plans Non-U.S.

2020 2019 2020 2019

Noncurrent assets $ 1,557 $ 633 $ — $ —

3 unchanged sentences

The components of net periodic (benefit) cost for the years ended December 31 were as follows:

Pension and Other Post-Retirement Benefit Plans

Pension and Other Post-Retirement Benefit Plans Non-U.S.

2020 2019 2018 2020 2019 2018

Interest cost $ 1,117 $ 1,483 $ 1,664 $ 838 $ 1,112 $ 1,030

1 unchanged sentence

Amortization of prior service cost 1

6 2,528 6 47 47 —

Recognized actuarial loss 283 308 263 592 531 496

1 unchanged sentence

1 Includes $ 2.5 million non-cash settlement charge arising from the early payout of the U.S.

defined benefit plan benefits.

Net periodic (benefit) cost components, not inclusive of service costs, are recognized in Other Income within the Consolidated Statements of Operations.

defined benefit plan benefits in the year ended December 31, 2019.

Net periodic (benefit) cost components, not inclusive of service costs, are recognized in Other (expense) income within the Consolidated Statements of Operations.

Amounts Recognized in Accumulated Other Comprehensive Income (Loss) - Amounts recognized in Accumulated other comprehensive income (loss), before taking into account income tax effects, at December 31 are as follows:

Pension and Other Post-Retirement Benefit Plans

Pension and Other Post-Retirement Benefit Plans Non-U.S.

2020 2019 2018 2020 2019 2018

Net actuarial loss $ 10,689 $ 10,937 $ 14,767 $ 18,574 $ 13,783 $ 12,972

Prior service cost 39 45 51 748 747 788

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) — Amounts recognized as other changes in plan assets and benefit obligations in other comprehensive income (loss), before taking into account income tax effects, for the year ended December 31 are as follows:

Pension and Other Post-Retirement Plans

$ 10,728 $ 10,982 $ 14,818 $ 19,322 $ 14,530 $ 13,760

Other Changes in Plan Assets and Benefit Obligations Recognized in Comprehensive Income (Loss) - Amounts recognized as other changes in plan assets and benefit obligations in comprehensive income (loss), before taking into account income tax effects, for the year ended December 31 are as follows:

Pension and Other Post-Retirement Plans Non-U.S.

2020 2019 2020 2019

Actuarial (gain) loss $ 34 $ ( 1,001 ) $ 5,428 $ 968

3 unchanged sentences

Weighted-average assumptions used to determine benefit obligations at December 31 were as follows:

Pension and Other Post-Retirement Benefit Plans

Pension and Other Post-Retirement Benefit Plans Non-U.S.

2020 2019 2020 2019

Discount rate 2.08 % 2.93 % 1.20 % 1.95 %

Weighted-average assumptions used to determine net periodic benefit cost at December 31 were as follows:

Pension and Other Post-Retirement Plans

Pension and Other Post-Retirement Plans Non-U.S.

2020 2019 2018 2020 2019 2018

Discount rate 2.93 % 3.40 % 3.42 % 1.95 % 2.80 % 2.45 %

14 unchanged sentences

We expect to contribute approximately $ 1.1 million to our pension plans and our other post-retirement benefit plans in 2021.

Our current investment allocation target for our pension plans for 2019 and our weighted-average asset allocations of our pension assets for the years ended December 31 , by asset category, are as follows:

Target Allocation

Actual Allocations as of December 31,

Our investment allocation target for our pension plans for 2020 and our weighted-average asset allocations of our pension assets for the years ended December 31, by asset category, are as follows:

Target Allocation Actual Allocations as of December 31,

2020 2019 2020 2019

Cash and cash equivalents 1 — — — 1 5 — 1

1 unchanged sentence

Fixed income securities 61 48 63 45 61 46 62 46

Real estate 9 — 10 — 9 — 10 —

100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 %

Our plan assets can be described as follows:

12 unchanged sentences

Assumptions used to revalue the properties are updated every quarter.

The fair values of our pension plan assets by asset category and by level as described in Note 4 for the years ended December 31, 2019 and 2018 are as follows:

The fair values of our pension plan assets by asset category and by level as described in Note 6, Fair Value Measurement, for the years ended December 31, 2020 and for the year ended December 31, 2019 are as follows:

December 31, 2020

1 unchanged sentence

Active Markets for

Identical Assets

Observable Inputs

Identical Assets Significant

Observable Inputs Significant

Unobservable Inputs

Total Level 1 Level 2 Level 3

Cash and cash equivalents $ 2,125 $ 2,125 $ — $ —

large value 2,525 2,525 — —

large growth 2,741 2,741 — —

International blend 5,253 — 5,253 —

Emerging markets 1,717 1,717 — —

Balanced 18,958 — 18,958 —

Fixed income securities:

Government bonds

Corporate bonds 40,485 — 40,485 —

Other 3,221 — 3,221 —

property 4,088 — — 4,088

Total pension fund assets $ 81,113 $ 9,108 $ 67,917 $ 4,088

2 unchanged sentences

Active Markets for

Identical Assets

Observable Inputs

Identical Assets Significant

Observable Inputs Significant

Unobservable Inputs

Total Level 1 Level 2 Level 3

Cash and cash equivalents $ 332 $ 332 $ — $ —

large value 2,434 2,434 — —

large growth 2,059 2,059 — —

International blend 4,854 — 4,854 —

Emerging markets 1,603 1,603 — —

Balanced 18,246 — 18,246 —

Fixed income securities:

1 unchanged sentence

Corporate bonds 12,634 — 12,634 —

Other 3,217 — 3,217 —

property 4,070 — — 4,070

Total pension fund assets $ 74,366 $ 6,428 $ 63,868 $ 4,070

5 unchanged sentences

The following table summarizes our expected future benefit payments of our pension and other post-retirement benefit plans:

Year Ending December 31,

Pension Plans

Year Ending December 31, Pension Plans

2025 to 2029 $ 22,290

Performance Awards

In 2020, the Company made awards, defined as cash, shares or other awards, to employees under the Commercial Vehicle Group, Inc.

2014 Equity Incentive Plan (the “2014 EIP”) and the Commercial Vehicle Group, Inc.

2020 Equity Incentive Plan (the “2020 EIP”).

Effective June 15, 2020, as part of the Company’s stockholders’ approval of the 2020 EIP, the Company agreed that no more awards will be made under the 2014 Plan.

The award is payable at the end of the Performance Period in cash if the employee is employed through the end of the Performance Period.

If the employee is not employed during the entire Performance Period, the award is forfeited.

These grants are accounted for as cash settlement awards for which the fair value of the award fluctuates based on the change in total shareholder return in relation to the peer group.

The following table summarizes performance awards granted in the form of cash awards under the equity incentive plans:

Adjusted Award Value at December 31, 2019

New grants 2,108

Forfeitures ( 2,704 )

Adjustments ( 854 )

Payments ( 300 )

Adjusted Award Value at December 31, 2020

The Company generally grants performance awards in the first quarter of each year.

Unrecognized compensation expense was $ 1.7 million and $ 1.1 million as of December 31, 2020 and 2019, respectively.

Share-Based Compensation

The compensation expense for our share-based compensation arrangements (see Restricted Stock Awards below) was $ 3.5 million, $ 2.8 million and $ 3.1 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Share-based compensation expense is included in selling, general and administrative expenses in the Consolidated Statements of Operations.

Forfeitures are recorded as they occur.

A participant granted restricted stock generally has all of the rights of a stockholder, unless the compensation committee determines otherwise.

As of December 31, 2020, there was approximately $ 4.3 million of unrecognized compensation expense related to non-vested share-based compensation arrangements granted under our equity incentive plans.

This expense is subject to future adjustments and forfeitures and will be recognized on a straight-line basis over the remaining period listed above for each grant.

A summary of the status of our restricted stock awards as of December 31, 2020 and changes during the twelve-month period ending December 31, 2020, is presented below:

(000’s) Weighted- Average Grant-Date Fair Value

Non-vested - beginning of year 403 $ 7.72

Granted 1,708 $ 3.25

Vested ( 545 ) $ 5.33

Forfeited ( 303 ) $ 4.54

Non-vested - end of year 1,263 $ 3.48

As of December 31, 2020, a total of 2.9 million shares were available for future grants from the shares authorized for award under our 2020 EIP, including cumulative forfeitures.

We have elected to report forfeitures as they occur as opposed to estimating future forfeitures in our share-based compensation expense.

Repurchase of Common Stock - We did not repurchase any of our common stock on the open market as part of a stock repurchase program during 2020;

however, our employees surrendered 96 thousand shares of our common stock to satisfy tax withholding obligations on the vesting of the restricted stock awards.

Stockholders’ Equity

Common Stock - Our authorized capital stock includes common stock of 60,000,000 shares with a par value of $ 0.01 per share, with 31,249,811 and 30,801,255 shares outstanding as of December 31, 2020 and 2019, respectively.

Preferred Stock - Our authorized capital stock includes preferred stock of 5,000,000 shares with a par value of $ 0.01 per share, with no shares outstanding as of December 31, 2020 and 2019.

Earnings (Loss) Per Share - Basic earnings (loss) per share is determined by dividing net income by the weighted average number of common shares outstanding during the year.

Potential common shares are included in the diluted earnings per share calculation when dilutive.

Diluted earnings (loss) per share for years ended December 31, 2020, 2019 and 2018 includes the effects of potential common shares when dilutive and is as follows:

2020 2019 2018

Net income (loss) attributable to common stockholders $ ( 37,049 ) $ 15,778 $ 41,489

Weighted average number of common shares outstanding 30,943 30,602 30,277

Dilutive effect of restricted stock grants after application of the treasury stock method — 221 310

Dilutive shares outstanding 30,943 30,823 30,587

Basic earnings (loss) per share attributable to common stockholders $ ( 1.20 ) $ 0.52 $ 1.37

Diluted earnings (loss) per share attributable to common stockholders $ ( 1.20 ) $ 0.51 $ 1.36

For the year ended December 31, 2020, diluted earnings (loss) per share excludes 220 thousand shares, of non-vested restricted stock as the effect would have been anti-dilutive.

There were no anti-dilutive shares for the year ended December 31, 2019.

Dividends — We have not declared or paid any cash dividends in the past.

The terms of the Third ARLS Agreement and the Term Loan Facility restrict the payment or distribution of our cash or other assets, including cash dividend payments.

Shareholder Rights Plan

On June 23, 2020, the Company’s Board of Directors adopted a limited duration rights plan and declared a dividend distribution of one right (each, a “Right” and together with all other such rights distributed or issued pursuant thereto, the “Rights”) for each outstanding share of common stock, par value $ 0.01 , of the Company, as of July 5, 2020, the record date for such dividend.

Each holder of common stock as of the record date will receive a dividend of one Right per share of common stock.

The Rights will become exercisable only if a person or persons acquires beneficial ownership of 10 % or more of the Company's outstanding common stock, or 15 % in the case of certain passive investors.

In the event that the Rights become exercisable, each holder of Rights (other than the person or group triggering the rights plan) will be entitled to purchase, at the Right’s exercise price, a number of shares of our common stock having a market value of twice the Right’s exercise price.

The rights plan will expire on June 24, 2021 unless earlier terminated or amended by our Board of Directors.

Accumulated Other Comprehensive Loss

The activity for each item of accumulated other comprehensive loss is as follows:

currency items

Derivative Instruments

Pension and Other Post-Retirement Benefit Plans

Accumulated other

currency items Derivative Instruments Pension and Other Post-Retirement Benefit Plans Accumulated other

comprehensive

Ending balance, December 31, 2017

Balance - December 31, 2018 $ ( 22,847 ) $ 496 $ ( 25,120 ) $ ( 47,471 )

Net current period change ( 1,185 ) — 2,415 1,230

1 unchanged sentence

Reclassification adjustments for losses reclassified into income — — 323 323

Ending balance, December 31, 2018

Balance - December 31, 2019 $ ( 24,032 ) $ 464 $ ( 22,382 ) $ ( 45,950 )

Net current period change $ 5,008 $ — $ ( 4,597 ) $ 411

1 unchanged sentence

Reclassification adjustments for losses reclassified into income — — ( 444 ) ( 444 )

Ending balance, December 31, 2019

Balance - December 31, 2020 $ ( 19,024 ) $ 1,441 $ ( 27,423 ) $ ( 45,006 )

The related tax effects allocated to each component of other comprehensive (loss) income for the years ended December 31, 2020 and 2019 are as follows:

After Tax Amount

2020 Before Tax

Amount Tax Expense After Tax Amount

Retirement benefits adjustment:

Net actuarial gain and prior service credit

Net actuarial loss and prior service credit $ ( 4,537 ) $ ( 60 ) $ ( 4,597 )

Reclassification of actuarial loss and prior service cost to net income ( 505 ) 61 ( 444 )

Net unrealized gain

Net unrealized loss ( 5,042 ) 1 ( 5,041 )

Cumulative translation adjustment 5,008 — 5,008

Derivative instruments 1,419 ( 442 ) 977

Total other comprehensive income

After Tax Amount

Total other comprehensive gain $ 1,385 $ ( 441 ) $ 944

2019 Before Tax

Amount Tax Expense After Tax Amount

Retirement benefits adjustment:

1 unchanged sentence

Reclassification of actuarial loss and prior service cost to net income 323 — 323

Net unrealized loss

Net unrealized gain 3,643 ( 905 ) 2,738

Cumulative translation adjustment ( 1,185 ) — ( 1,185 )

Derivative instruments ( 32 ) — ( 32 )

Total other comprehensive loss

Quarterly Financial Data (Unaudited)

As further described in Note 2, the previously reported financial information for the quarters ended March 31, 2019 and 2018, June 30, 2019 and 2018 and September 30, 2019 and 2018, have been restated.

Relevant restated financial information for the first, second and third quarters of fiscal 2019 and 2018 is included in this Annual Report on Form 10-K in the tables that follow.

The unaudited interim financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented.

Restated amounts are computed independently each quarter;

therefore, the sum of the quarterly amounts may not equal the total amount for the respective year due to rounding.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

As of March 31, 2019

As of June 30, 2019

As of September 30, 2019

Current Assets:

Accounts receivable, net of allowances

Other current assets

Total current assets

Property, plant and equipment, net

Operating lease right-of-use assets, net

Intangible assets, net of accumulated amortization

Deferred income taxes, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable

Current operating lease liabilities

Accrued liabilities and other

Current portion of long-term debt

Total current liabilities

Long-term debt

Operating lease liabilities

Pension and other post-retirement liabilities

Other long-term liabilities

Total liabilities

Stockholders’ Equity:

Preferred stock, $.01 par value (5,000,000 shares authorized;

no shares issued and outstanding)

Common stock, $.01 par value (60,000,000 shares authorized)

Treasury stock, at cost:

1,334,251 shares

Additional paid-in capital

Retained deficit

Accumulated other comprehensive loss

Total stockholders’ equity

Total liabilities and stockholders’ equity

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

As of March 31, 2018

As of June 30, 2018

As of September 30, 2018

Current Assets:

Accounts receivable, net of allowances

Other current assets

Total current assets

Property, plant and equipment, net

Operating lease right-of-use assets, net

Intangible assets, net of accumulated amortization

Deferred income taxes, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable

Current operating lease liabilities

Accrued liabilities and other

Current portion of long-term debt

Total current liabilities

Long-term debt

Revolving Credit Facility

Pension and other post-retirement liabilities

Other long-term liabilities

Total liabilities

Stockholders’ Equity:

Preferred stock, $.01 par value (5,000,000 shares authorized;

no shares issued and outstanding)

Common stock, $.01 par value (60,000,000 shares authorized)

Treasury stock, at cost:

1,175,795 shares

Additional paid-in capital

Retained deficit

Accumulated other comprehensive loss

Total stockholders’ equity

Total liabilities and stockholders’ equity

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended

Six Months Ended

Three Months Ended

Nine Months Ended

Three Months Ended

March 31, 2019

June 30, 2019

September 30, 2019

December 31, 2019

Cost of Revenues

Selling, General and Administrative Expenses

Amortization Expense

Operating Income (Loss)

Interest and Other Expense

Income before provision for income taxes

Provision for Income Taxes

Net Income (Loss)

Income (Loss) per share attributable to common stockholders:

Weighted average common shares outstanding:

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended

Six Months Ended

Three Months Ended

Nine Months Ended

Three Months Ended

March 31, 2018

June 30, 2018

September 30, 2018

December 31, 2018

Cost of Revenues

Selling, General and Administrative Expenses

Amortization Expense

Operating Income

Interest and Other Expense

Income before provision for income taxes

Provision for Income Taxes

Income per share attributable to common stockholders:

Weighted average common shares outstanding:

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended

Six Months Ended

Three Months Ended

Nine Months Ended

Three Months Ended

March 31, 2019

June 30, 2019

September 30, 2019

December 31, 2019

Net income (loss)

Other comprehensive income (loss):

Foreign currency translation adjustments

Minimum pension liability, net of tax

Derivative instrument

Other comprehensive income (loss)

Comprehensive income (loss)

Three Months Ended

Six Months Ended

Three Months Ended

Nine Months Ended

Three Months Ended

March 31, 2018

June 30, 2018

September 30, 2018

December 31, 2018

Net income (loss)

Other comprehensive income (loss):

Foreign currency translation adjustments

Minimum pension liability, net of tax

Derivative instrument

Other comprehensive income (loss)

Comprehensive income (loss)

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

Nine Months Ended

March 31, 2019

June 30, 2019

September 30, 2019

Cash Flows from Operating Activities:

Adjustments to reconcile net income to cash flows from operating activities:

Depreciation and amortization

Provision for doubtful accounts

Non-cash amortization of debt financing costs

Shared-based compensation expense

Deferred income taxes

Non-cash loss / (gain) on derivative contracts

Change in other operating items:

Accounts receivable

Prepaid expenses

Accounts payable

Other operating activities, net

Net cash provided by operating activities

Cash Flows from Investing Activities:

Purchases of property, plant and equipment

Proceeds from disposal/sale of property, plant and equipment

Payments for acquisitions

Net cash used in investing activities

Cash Flows from Financing Activities:

Borrowings on Revolving Credit Facility

Repayment of Revolving Credit Facility

Repayment of Term Loan

Other financing activities

Net cash used in financing activities

Effect of Foreign Currency Exchange Rate Changes on Cash

Net (Decrease) Increase in Cash

Beginning of period

End of period

Supplemental Cash Flow Information:

Cash paid for interest

Cash paid for income taxes, net

Unpaid purchases of property and equipment included in accounts payable

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

Nine Months Ended

March 31, 2018

June 30, 2018

September 30, 2018

Cash Flows from Operating Activities:

Adjustments to reconcile net income to cash flows from operating activities:

Depreciation and amortization

Provision for doubtful accounts

Non-cash amortization of debt financing costs

Shared-based compensation expense

Deferred income taxes

Non-cash loss / (gain) on derivative contracts

Change in other operating items:

Accounts receivable

Prepaid expenses

Accounts payable

Other operating activities, net

Net cash provided by operating activities

Cash Flows from Investing Activities:

Purchases of property, plant and equipment

Proceeds from disposal/sale of property, plant and equipment

Net cash used in investing activities

Cash Flows from Financing Activities:

Borrowings on Revolving Credit Facility

Repayment of Revolving Credit Facility

Repayment of Term Loan

Net cash used in financing activities

Effect of Foreign Currency Exchange Rate Changes on Cash

Net (Decrease) Increase in Cash

Beginning of period

End of period

Supplemental Cash Flow Information:

Cash paid for interest

Cash paid for income taxes, net

Unpaid purchases of property and equipment included in accounts payable

Restatement of Previously Issued Interim Condensed Consolidated Financial Statements

The following tables present the impacts of the restatement adjustments to the previously reported financial information as of and for the periods ended March 31, 2019 and 2018, June 30, 2019 and 2018, September 30, 2019 and 2018, and December 31, 2018.

The restatement references identified in the following tables directly correlate to the restatement adjustments detailed below.

The restatement adjustments and error correction and their impact on previously reported consolidated financial statements are described below.

(a) Understatement of cost of revenues and impacted balance sheet accounts - Corrections for the understatement of cost of revenues by improperly capitalizing certain manufacturing expenses.

Balance sheet accounts adjusted as a result of the improper capitalization of expenses include other current assets, accounts receivable, net of allowances and construction in progress.

This PPE was no longer in service as of the year ended December 31, 2016.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

As of March 31, 2019

As of March 31, 2018

As Previously Reported

Restatement Adjustments

As Previously Reported

Restatement Adjustments

Restatement References

Current Assets:

Accounts receivable, net of allowances

Other current assets

Total current assets

Property, plant and equipment, net of accumulated depreciation

Operating lease right-of-use assets, net

Intangible assets, net of accumulated amortization

Deferred income taxes, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable

Current operating lease liabilities

Accrued liabilities and other

Current portion of long-term debt

Total current liabilities

Long-term debt

Revolving Credit Facility

Operating lease liabilities

Pension and other post-retirement liabilities

Other long-term liabilities

Total liabilities

Stockholders’ Equity:

Preferred stock, $.01 par value

Common stock, $.01 par value

Treasury stock, at cost

Additional paid-in capital

Retained deficit

Accumulated other comprehensive loss

Total stockholders’ equity

Total liabilities and stockholders’ equity

As of March 31, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $0.7 million decrease in accounts receivable, net;

a $6.3 million decrease in other current assets;

a $1.6 million increase in long-term deferred tax assets;

and a $5.3 million increase in retained deficit.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $1.0 million decrease in property, plant and equipment, net, a $0.3 million decrease in long-term deferred tax assets;

and a $1.2 million increase in retained deficit.

As of March 31, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in an immaterial decrease in accounts receivable, net;

a $1.9 million decrease in other current assets, a $0.4 million increase in long-term deferred tax assets;

and a $1.5 million increase in retained deficit.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $1.1 million decrease in property, plant and equipment, net, a $0.2 million decrease in long-term deferred tax assets;

and a $1.3 million increase in retained deficit.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30, 2019

As of June 30, 2018

As Previously Reported

Restatement Adjustments

As Previously Reported

Restatement Adjustments

Restatement References

Current Assets:

Accounts receivable, net of allowances

Other current assets

Total current assets

Property, plant and equipment, net of accumulated depreciation

Operating lease right-of-use assets, net

Intangible assets, net of accumulated amortization

Deferred income taxes, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable

Current operating lease liabilities

Accrued liabilities and other

Current portion of long-term debt

Total current liabilities

Long-term debt

Operating lease liabilities

Pension and other post-retirement liabilities

Other long-term liabilities

Total liabilities

Stockholders’ Equity:

Preferred stock, $.01 par value

Common stock, $.01 par value

Treasury stock, at cost

Additional paid-in capital

Retained deficit

Accumulated other comprehensive loss

Total stockholders’ equity

Total liabilities and stockholders’ equity

As of June 30, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $0.7 million decrease in accounts receivable, net;

a $7.7 million decrease in other current assets;

a $0.1 million increase in property, plant and equipment, net;

a $1.9 million increase in long-term deferred tax assets;

and a $6.4 million increase in retained deficit.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.9 million decrease in property, plant and equipment, net;

a $0.3 million decrease in long-term deferred tax assets;

and a $1.2 million increase in retained deficit.

As of June 30, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in an immaterial decrease in accounts receivable, net;

a $2.6 million decrease in other current assets, a $0.6 million increase in long-term deferred tax assets;

and a $2.0 million increase in retained deficit.

(b) Property, plant and equipment, net error correction.

and a $1.3 million increase in retained deficit.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

As of September 30, 2019

As of September 30, 2018

As Previously Reported

Restatement Adjustments

As Previously Reported

Restatement Adjustments

Restatement References

Current Assets:

Accounts receivable, net of allowances

Other current assets

Total current assets

Property, plant and equipment, net of accumulated depreciation

Operating lease right-of-use assets, net

Intangible assets, net of accumulated amortization

Deferred income taxes, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable

Current operating lease liabilities

Accrued liabilities and other

Current portion of long-term debt

Total current liabilities

Long-term debt

Operating lease liabilities

Pension and other post-retirement liabilities

Other long-term liabilities

Total liabilities

Stockholders’ Equity:

Preferred stock, $.01 par value

Common stock, $.01 par value

Treasury stock, at cost

Additional paid-in capital

Retained deficit

Accumulated other comprehensive loss

Total stockholders’ equity

Total liabilities and stockholders’ equity

As of September 30, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $9.6 million decrease in other current assets;

a $0.5 million decrease in property, plant and equipment, net;

a $2.3 million increase in long-term deferred tax assets;

a $7.8 million increase in retained deficit.

(b) Property, plant and equipment, net error correction .

The immaterial error correction of property, plant and equipment, net, resulted in a $0.9 million decrease in property, plant and equipment, net;

a $0.3 million decrease in long-term deferred tax assets;

and a $1.2 million increase in retained deficit

As of September 30, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $0.7 million decrease in accounts receivable, net;

a $3.7 million decrease in other current assets;

a $1.0 million increase in long-term deferred tax assets;

and a $3.4 million increase in retained deficit.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $1.0 million decrease in property, plant and equipment, net;

a $0.3 million decrease in long-term deferred tax assets;

and a $1.3 million increase in retained deficit.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31, 2019

As Previously Reported

Restatement Adjustments

Restatement References

Cost of Revenues

Selling, General and Administrative Expenses

Amortization Expense

Operating Income (Loss)

Interest and Other Expense

Income before provision for income taxes

Provision for Income Taxes

Net Income (Loss)

Income (Loss) per share attributable to common stockholders:

Weighted average common shares outstanding:

For the three months ended March 31, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $1.5 million increase in cost of revenues;

a $0.3 million decrease in provision for income taxes;

and a $1.1 million decrease in net income.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial decrease in cost of revenues;

an immaterial increase in provision for income taxes;

and an immaterial increase in net income.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended June 30, 2019

Six Months Ended June 30, 2019

As Previously Reported

Restatement Adjustments

As Previously Reported

Restatement Adjustments

Restatement References

Cost of Revenues

Selling, General and Administrative Expenses

Amortization Expense

Operating Income (Loss)

Interest and Other Expense

Income before provision for income taxes

Provision for Income Taxes

Net Income (Loss)

Income (Loss) per share attributable to common stockholders:

Weighted average common shares outstanding:

For the three months ended June 30, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $1.4 million increase in cost of revenues;

a $0.3 million decrease in provision for income taxes;

and a $1.0 million decrease in net income.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial decrease in cost of revenues;

an immaterial increase in provision for income taxes;

and an immaterial increase in net income.

For the six months ended June 30, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $2.9 million increase in cost of revenues;

a $0.7 million decrease in provision for income taxes;

and a $2.2 million decrease in net income.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million decrease in cost of revenues;

an immaterial increase in provision for income taxes;

and a $0.1 million increase in net income.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended September 30, 2019

Nine Months Ended September 30, 2019

As Previously Reported

Restatement Adjustments

As Previously Reported

Restatement Adjustments

Restatement References

Cost of Revenues

Selling, General and Administrative Expenses

Amortization Expense

Operating Income (Loss)

Interest and Other Expense

Income before provision for income taxes

Provision for Income Taxes

Net Income (Loss)

Income (Loss) per share attributable to common stockholders:

Weighted average common shares outstanding:

For the three months ended September 30, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $1.8 million increase in cost of revenues;

a $0.4 million decrease in provision for income taxes;

and a $1.3 million decrease in net income.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial decrease in cost of revenues;

an immaterial increase in provision for income taxes;

and an immaterial increase in net income.

For the nine months ended September 30, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $4.7 million increase in cost of revenues;

a $1.1 million decrease in provision for income taxes;

and a $3.6 million decrease in net income.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million decrease in cost of revenues;

an immaterial increase in provision for income taxes;

and a $0.1 million increase in net income.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31, 2018

As Previously Reported

Restatement Adjustments

Restatement References

Cost of Revenues

Selling, General and Administrative Expenses

Amortization Expense

Operating Income (Loss)

Interest and Other Expense

Income before provision for income taxes

Provision for Income Taxes

Net Income (Loss)

Income (Loss) per share attributable to common stockholders:

Weighted average common shares outstanding:

For the three months ended March 31, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $0.5 million increase in cost of revenues;

a $0.1 million decrease in provision for income taxes;

and a $0.4 million decrease in net income.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial decrease in cost of revenues;

an immaterial increase in provision for income taxes;

and an immaterial increase in net income.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended June 30, 2018

Six Months Ended June 30, 2018

As Previously Reported

Restatement Adjustments

As Previously Reported

Restatement Adjustments

Restatement References

Cost of Revenues

Selling, General and Administrative Expenses

Total other comprehensive gain $ 2,426 $ ( 905 ) $ 1,521

Cost Reduction and Manufacturing Capacity Rationalization

During 2019, the Company began implementing cost reduction and manufacturing capacity rationalization initiatives (the "Restructuring Initiatives") in response to declines in end market volumes.

Furthermore, in 2020 the Company began implementing additional cost reduction initiatives and further manufacturing capacity rationalization initiatives in response to the COVID-19 pandemic ("the 2020 Initiatives").

These actions were substantially complete as of December 31, 2020.

The Restructuring Initiatives and 2020 Initiatives consist primarily of headcount reductions in each segment and at corporate, as well as other costs associated with transfer of production and subsequent closure of facilities, and expansion of production footprint to manufacture warehouse automation subsystems.

The changes in accrued restructuring balances are as follows:

Electrical Systems Global

Seating Corporate/

Balance - December 31, 2018 $ — $ — $ — $ —

New charges 2,159 489 310 2,958

Payments and other adjustments ( 883 ) ( 387 ) 636 ( 634 )

Balance - December 31, 2019 $ 1,276 $ 102 $ 946 $ 2,324

New charges 4,149 1,126 1,639 6,914

Payments and other adjustments ( 4,962 ) ( 1,188 ) ( 2,409 ) ( 8,559 )

Balance - December 31, 2020 $ 463 $ 40 $ 176 $ 679

Of the $ 6.9 million costs incurred in the twelve months ended December 31, 2020, $ 3.5 million primarily related to headcount reductions and $ 3.4 million related to facility exit and other costs.

Of the $ 6.9 million costs incurred, $ 4.7 million was recorded in cost of revenues and $ 2.2 million was recorded in selling, general and administrative expenses.

Of the $ 3.0 million costs incurred in the twelve months ended December 31, 2019, $ 2.6 million primarily related to headcount reductions and $ 0.4 million related to facility exit and other costs.

Of the $ 3.0 million costs incurred, $ 2.2 million was recorded in cost of revenues and $ 0.8 million was recorded in selling, general and administrative expenses.

Commitments and Contingencies

Leases - As disclosed in Note 7, Leases, we lease office, warehouse and manufacturing space and equipment under non-cancelable operating lease agreements that generally require us to pay maintenance, insurance, taxes and other expenses in addition to annual rental fees.

As of December 31, 2020, our equipment leases did not provide for any material guarantee of a specified portion of residual values.

Guarantees - Costs associated with guarantees are accrued when it is probable that a liability has been incurred and the amount can be reasonably estimated.

The most likely cost to be incurred is accrued based on an evaluation of available facts;

where no amount within a range of estimates is more likely, the minimum is accrued.

As of December 31, 2020 and 2019, we had no such guarantees.

however, such matters are subject to many uncertainties and the outcomes of individual matters are not predictable with any degree of assurance.

Warranty - We are subject to warranty claims for products that fail to perform as expected due to design or manufacturing deficiencies.

Our policy is to record provisions for estimated future customer warranty costs based on historical trends and for specific

These amounts, as they relate to the years ended December 31, 2020 and 2019, are included within accrued liabilities and other in the accompanying Consolidated Balance Sheets.

The following presents a summary of the warranty provision for the years ended December 31:

Balance - beginning of the year $ 3,082 $ 3,911

Provision for warranty claims 656 1,868

Deduction for payments made and other adjustments ( 1,697 ) ( 2,697 )

Balance - end of year $ 2,041 $ 3,082

Debt Payments - As disclosed in Note 3, Debt, the TLS Agreement requires the Company to repay a fixed amount of principal on a quarterly basis, make mandatory prepayments of excess cash flows and voluntary prepayments that coincide with certain events.

The following table provides future minimum principal payments and mandatory prepayment of excess cash flows due on long-term debt for the next five years.

The existing long-term debt agreement matures in 2023;

no payments are due thereafter:

Year Ending December 31,

Segment Reporting

Operating segments are defined as components of an enterprise that are evaluated regularly by the Company’s chief operating decision maker (“CODM”), which is our President and Chief Executive Officer.

Each of these segments consists of a number of manufacturing facilities.

Certain of our facilities manufacture and sell products through both of our segments.

Each manufacturing facility that sells products through both segments is reflected in the financial results of the segment that has the greatest amount of revenues from that manufacturing facility.

Our segments are more specifically described below.

The Electrical Systems segment designs, manufactures and sells the following products:

• Electrical sytstems, electrical wire harnesses, electro-mechanical assemblies for warehouses, electro-mechanical cable assemblies for the construction, agricultural, industrial, automotive, truck, mining, rail and military industries in North America, Europe and Asia-Pacific.

This segment includes a portion of the company’s activities in the emerging electric vehicle market;

• Plastic components ("Trim") primarily for the North America commercial vehicle market and recreational vehicle markets;

• Warehouse automation subsystems primarily for the North American e-commerce markets and include electro-mechanical assemblies and panels;

• Commercial vehicle accessories including wipers, mirrors, floormats and sensors;

• Cab structures for the North American MD/HD truck market.

The Global Seating segment designs, manufactures and sells the following products:

• Commercial vehicle seats for the global commercial vehicle markets including heavy duty trucks, medium duty trucks, last mile trucks, construction equipment, material handling equipment and agriculture equipment in North America, Europe and Asia-Pacific.

This segment includes a portion of the company’s activities in the emerging electric vehicle market;

• Office seats primarily in Europe and Asia-Pacific;

• Aftermarket seats and components in North America, Europe and Asia-Pacific.

Corporate expenses consist of certain overhead and shared costs that are not directly attributable to the operations of a segment.

For purposes of business segment performance measurement, some of these costs that are for the benefit of the operations are allocated based on a combination of methodologies.

The costs that are not allocated to a segment are considered stewardship costs and remain at corporate in our segment reporting.

The table does not include assets as the CODM does not review assets by segment.

For the year ended December 31, 2020

Electrical Systems Global Seating Corporate/

External revenues $ 443,363 $ 274,336 $ — $ 717,699

Intersegment revenues 2,592 3,494 ( 6,086 ) —

Total revenues $ 445,955 $ 277,830 $ ( 6,086 ) $ 717,699

Gross profit $ 42,811 $ 31,635 $ ( 370 ) $ 74,076

Selling, general & administrative expenses

19,811 18,355 26,628 64,794

Amortization expense 2,917 517 — 3,434

Goodwill and other impairment 23,415 4,809 793 29,017

Operating income (loss) $ ( 3,332 ) $ 7,954 $ ( 27,791 ) $ ( 23,169 )

Interest and Other Expense

Income before provision for income taxes

Provision for Income Taxes

Net Income (Loss)

Income (Loss) per share attributable to common stockholders:

Weighted average common shares outstanding:

For the three months ended June 30, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $0.7 million increase in cost of revenues;

a $0.2 million decrease in provision for income taxes;

and a $0.5 million decrease in net income.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial decrease in cost of revenues;

an immaterial increase in provision for income taxes;

and an immaterial increase in net income.

For the six months ended June 30, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $1.3 million increase in cost of revenues;

a $0.3 million decrease in provision for income taxes;

and a $1.0 million decrease in net income.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million decrease in cost of revenues;

an immaterial increase in provision for income taxes;

and a $0.1 million increase in net income.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended September 30, 2018

Nine Months Ended September 30, 2018

As Previously Reported

Restatement Adjustments

As Previously Reported

Restatement Adjustments

Restatement References

Cost of Revenues

Selling, General and Administrative Expenses

Capital expenditures and depreciation expense:

Capital expenditures $ 4,617 $ 1,485 $ 1,040 $ 7,142

Depreciation expense $ 8,760 $ 4,287 $ 2,012 $ 15,059

The table does not include assets as the CODM does not review assets by segment.

For the year ended December 31, 2019

Electrical Systems Global Seating Corporate/Other Total

External revenues $ 522,484 $ 378,754 $ — $ 901,238

Intersegment revenues 8,417 2,794 ( 11,211 ) —

Total revenues $ 530,901 $ 381,548 $ ( 11,211 ) $ 901,238

Gross profit $ 60,008 $ 45,201 $ ( 72 ) $ 105,137

Selling, general & administrative expenses

15,815 20,429 26,305 62,549

Amortization expense 1,415 537 — 1,952

Operating income (loss) $ 42,778 $ 24,235 $ ( 26,377 ) $ 40,636

Interest and Other Expense

Income before provision for income taxes

Provision for Income Taxes

Net Income (Loss)

Income (Loss) per share attributable to common stockholders:

Weighted average common shares outstanding:

For the three months ended September 30, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $1.7 million increase in cost of revenues;

a $0.4 million decrease in provision for income taxes;

and a $1.3 million decrease in net income.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial decrease in cost of revenues;

an immaterial increase in provision for income taxes;

and an immaterial increase in net income.

For the nine months ended September 30, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the corrections resulted in a $3.0 million increase in cost of revenues;

a $0.7 million decrease in provision for income taxes;

and a $2.3 million decrease in net income.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million decrease in cost of revenues;

and a $0.1 million increase in net income.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended December 31, 2018

As Previously Reported

Restatement Adjustments

Restatement References

Cost of Revenues

Selling, General and Administrative Expenses

Capital expenditures and depreciation expense:

Capital expenditures $ 17,728 $ 3,721 $ 2,668 $ 24,117

Depreciation expense $ 6,699 $ 4,379 $ 2,484 $ 13,562

The table does not include assets as the CODM does not review assets by segment.

For the year ended December 31, 2018

Electrical Systems Global Seating Corporate/Other Total

External revenues $ 503,717 $ 394,020 $ — $ 897,737

Intersegment revenues 9,037 3,481 ( 12,518 ) —

Total revenues $ 512,754 $ 397,501 $ ( 12,518 ) $ 897,737

Gross profit $ 71,104 $ 54,231 $ ( 415 ) $ 124,920

Selling, general & administrative expenses

15,390 22,433 22,856 60,679

Amortization expense 747 553 — 1,300

Operating income (loss) $ 54,967 $ 31,245 $ ( 23,271 ) $ 62,941

Interest and Other Expense

Income before provision for income taxes

Provision for Income Taxes

Net Income (Loss)

Income (Loss) per share attributable to common stockholders:

Weighted average common shares outstanding:

For the three months ended December 31, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $1.0 million increase in cost of revenues;

a $0.2 million decrease in provision for income taxes;

and a $0.8 million decrease in net income.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial decrease in cost of revenues;

an immaterial increase in provision for income taxes;

and an immaterial increase in net income.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended March 31, 2019

As Previously Reported

Restatement Adjustments

Restatement References

Net income (loss)

Other comprehensive income (loss):

Foreign currency translation adjustments

Minimum pension liability, net of tax

Derivative instrument

Other comprehensive income (loss)

Comprehensive income (loss)

For the three months ended March 31, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $1.1 million decrease in net income.

Refer to descriptions of the adjustments and their impacts to net income above.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial increase in net income.

Refer to descriptions of the adjustment and its impact to net income above.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended June 30, 2019

Six Months Ended June 30, 2019

As Previously Reported

Restatement Adjustments

As Previously Reported

Restatement Adjustments

Restatement References

Net Income (Loss)

Other comprehensive income (loss):

Foreign currency translation adjustments

Minimum pension liability, net of tax

Derivative instrument

Other comprehensive income (loss)

Comprehensive income (loss)

For the three months ended June 30, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $1.0 million decrease in net income.

Refer to descriptions of the adjustments and their impacts to net income above.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial increase in net income.

Refer to descriptions of the adjustment and its impact to net income above.

For the six months ended June 30, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $2.2 million decrease in net income.

Refer to descriptions of the adjustments and their impacts to net income above.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million increase in net income.

Refer to descriptions of the adjustment and its impact to net income above.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended September 30, 2019

Nine Months Ended September 30, 2019

As Previously Reported

Restatement Adjustments

As Previously Reported

Restatement Adjustments

Restatement References

Net Income (Loss)

Other comprehensive income (loss):

Foreign currency translation adjustments

Minimum pension liability, net of tax

Derivative instrument

Other comprehensive income (loss)

Comprehensive income (loss)

For the three months ended September 30, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $1.3 million decrease in net income.

Refer to descriptions of the adjustments and their impacts to net income above.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial increase in net income.

Refer to descriptions of the adjustment and its impact to net income above.

For the nine months ended September 30, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $3.6 million decrease in net income.

Refer to descriptions of the adjustments and their impacts to net income above.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million increase in net income.

Refer to descriptions of the adjustment and its impact to net income above.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended March 31, 2018

As Previously Reported

Restatement Adjustments

Restatement References

Net income (loss)

Other comprehensive income (loss):

Foreign currency translation adjustments

Minimum pension liability, net of tax

Derivative instrument

Other comprehensive income (loss)

Comprehensive income (loss)

For the three months ended March 31, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $0.4 million decrease in net income.

Refer to descriptions of the adjustments and their impacts to net income above.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial increase in net income.

Refer to descriptions of the adjustment and its impact to net income above.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended June 30, 2018

Six Months Ended June 30, 2018

As Previously Reported

Restatement Adjustments

As Previously Reported

Restatement Adjustments

Restatement References

Net Income (Loss)

Other comprehensive income (loss):

Foreign currency translation adjustments

Minimum pension liability, net of tax

Derivative instrument

Other comprehensive income (loss)

Comprehensive income (loss)

For the three months ended June 30, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $0.5 million decrease in net income.

Refer to descriptions of the adjustments and their impacts to net income above.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial increase in net income.

Refer to descriptions of the adjustment and its impact to net income above.

For the six months ended June 30, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $1.0 million decrease in net income.

Refer to descriptions of the adjustments and their impacts to net income above.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million increase in net income.

Refer to descriptions of the adjustment and its impact to net income above.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended September 30, 2018

Nine Months Ended September 30, 2018

As Previously Reported

Restatement Adjustments

As Previously Reported

Restatement Adjustments

Restatement References

Net Income (Loss)

Other comprehensive income (loss):

Foreign currency translation adjustments

Minimum pension liability, net of tax

Derivative instrument

Other comprehensive income (loss)

Comprehensive income (loss)

For the three months ended September 30, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $1.3 million decrease in net income.

Refer to descriptions of the adjustments and their impacts to net income above.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial increase in net income.

Refer to descriptions of the adjustment and its impact to net income above.

For the nine months ended September 30, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $2.3 million decrease in net income.

Refer to descriptions of the adjustments and their impacts to net income above.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million increase in net income.

Refer to descriptions of the adjustment and its impact to net income above.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended December 31, 2018

As Previously Reported

Restatement Adjustments

Restatement References

Net income (loss)

Other comprehensive income (loss):

Foreign currency translation adjustments

Minimum pension liability, net of tax

Derivative instrument

Other comprehensive income (loss)

Comprehensive income (loss)

For the three months ended December 31, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $0.8 million decrease in net income.

Refer to descriptions of the adjustments and their impacts to net income above.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial increase in net income.

Refer to descriptions of the adjustment and its impact to net income above.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31, 2019

As Previously Reported

Restatement Adjustments

Restatement References

Cash Flows from Operating Activities:

Adjustments to reconcile net income to cash flows from operating activities:

Depreciation and amortization

Provision for doubtful accounts

Non-cash amortization of debt financing costs

Shared-based compensation expense

Deferred income taxes

Non-cash loss / (gain) on derivative contracts

Change in other operating items:

Accounts receivable

Prepaid expenses

Accounts payable

Other operating activities, net

Net cash provided by operating activities

Cash Flows from Investing Activities:

Purchases of property, plant and equipment

Proceeds from disposal/sale of property, plant and equipment

Net cash used in investing activities

Cash Flows from Financing Activities:

Repayment of Term Loan

Other financing activities

Net cash used in financing activities

Effect of Foreign Currency Exchange Rate Changes on Cash

Net Decrease in Cash

Beginning of period

End of period

Supplemental Cash Flow Information:

Cash paid for interest

Cash paid for income taxes, net

Unpaid purchases of property and equipment included in accounts payable

For the three months ended March 31, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $1.1 million decrease in net income;

a $0.3 million decrease in deferred income tax;

and a $1.5 million decrease in change in prepaid expenses.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial increase in net income;

an immaterial decrease in depreciation expense;

and an immaterial increase in deferred income tax.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30, 2019

As Previously Reported

Restatement Adjustments

Restatement References

Cash Flows from Operating Activities:

Adjustments to reconcile net income to cash flows from operating activities:

Depreciation and amortization

Provision for doubtful accounts

Non-cash amortization of debt financing costs

Shared-based compensation expense

Deferred income taxes

Non-cash loss / (gain) on derivative contracts

Change in other operating items:

Accounts receivable

Prepaid expenses

Accounts payable

Other operating activities, net

Net cash provided by operating activities

Cash Flows from Investing Activities:

Purchases of property, plant and equipment

Proceeds from disposal/sale of property, plant and equipment

Net cash used in investing activities

Cash Flows from Financing Activities:

Repayment of Term Loan

Other financing activities

Net cash used in financing activities

Effect of Foreign Currency Exchange Rate Changes on Cash

Net Decrease in Cash

Beginning of period

End of period

Supplemental Cash Flow Information:

Cash paid for interest

Cash paid for income taxes, net

Unpaid purchases of property and equipment included in accounts payable

For the six months ended June 30, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $2.2 million decrease in net income;

a $0.7 million decrease in deferred income tax;

a $3.0 million decrease in change in prepaid expenses;

and a $0.1 million increase in p urchases of property, plant and equipment .

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million increase in net income;

a $0.1 million decrease in depreciation expense;

and an immaterial increase in deferred income tax.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30, 2019

As Previously Reported

Restatement Adjustments

Restatement References

Cash Flows from Operating Activities:

Adjustments to reconcile net income to cash flows from operating activities:

Depreciation and amortization

Provision for doubtful accounts

Non-cash amortization of debt financing costs

Shared-based compensation expense

Deferred income taxes

Non-cash loss / (gain) on derivative contracts

Change in other operating items:

Accounts receivable

Prepaid expenses

Accounts payable

Other operating activities, net

Net cash provided by operating activities

Cash Flows from Investing Activities:

Purchases of property, plant and equipment

Proceeds from disposal/sale of property, plant and equipment

Payments for acquisitions

Net cash used in investing activities

Cash Flows from Financing Activities:

Borrowings on Revolving Credit Facility

Repayment of Revolving Credit Facility

Repayment of Term Loan

Other financing activities

Net cash used in financing activities

Effect of Foreign Currency Exchange Rate Changes on Cash

Net Decrease in Cash

Beginning of period

End of period

Supplemental Cash Flow Information:

Cash paid for interest

Cash paid for income taxes, net

Unpaid purchases of property and equipment included in accounts payable

For the nine months ended September 30, 2019

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $3.6 million decrease in net income;

a $1.1 million decrease in deferred income tax;

a $0.7 million increase in change in accounts receivable;

a $4.9 million decrease in change in prepaid expenses;

and a $0.5 million decrease in p urchases of property, plant and equipment .

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million increase in net income;

a $0.1 million decrease in depreciation expense;

and an immaterial increase in deferred income tax.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31, 2018

As Previously Reported

Restatement Adjustments

Restatement References

Cash Flows from Operating Activities:

Adjustments to reconcile net income to cash flows from operating activities:

Depreciation and amortization

Provision for doubtful accounts

Non-cash amortization of debt financing costs

Shared-based compensation expense

Deferred income taxes

Non-cash loss / (gain) on derivative contracts

Change in other operating items:

Accounts receivable

Prepaid expenses

Accounts payable

Other operating activities, net

Net cash provided by operating activities

Cash Flows from Investing Activities:

Purchases of property, plant and equipment

Net cash used in investing activities

Cash Flows from Financing Activities:

Borrowings on Revolving Credit Facility

Repayment of Revolving Credit Facility

Repayment of Term Loan

Net cash used in financing activities

Effect of Foreign Currency Exchange Rate Changes on Cash

Net Decrease in Cash

Beginning of period

End of period

Supplemental Cash Flow Information:

Cash paid for interest

Cash paid for income taxes, net

Unpaid purchases of property and equipment included in accounts payable

For the three months ended March 31, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $0.4 million decrease in net income;

a $0.1 million decrease in deferred income tax;

and a $0.5 million decrease in change in prepaid expenses.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in an immaterial increase in net income;

an immaterial decrease in depreciation expense;

and an immaterial increase in deferred income tax.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30, 2018

As Previously Reported

Restatement Adjustments

Restatement References

Cash Flows from Operating Activities:

Adjustments to reconcile net income to cash flows from operating activities:

Depreciation and amortization

Provision for doubtful accounts

Non-cash amortization of debt financing costs

Shared-based compensation expense

Deferred income taxes

Non-cash loss / (gain) on derivative contracts

Change in other operating items:

Accounts receivable

Prepaid expenses

Accounts payable

Other operating activities, net

Net cash provided by operating activities

Cash Flows from Investing Activities:

Purchases of property, plant and equipment

Net cash used in investing activities

Cash Flows from Financing Activities:

Borrowings on Revolving Credit Facility

Repayment of Revolving Credit Facility

Repayment of Term Loan

Net cash used in financing activities

Effect of Foreign Currency Exchange Rate Changes on Cash

Net Decrease in Cash

Beginning of period

End of period

Supplemental Cash Flow Information:

Cash paid for interest

Cash paid for income taxes, net

Unpaid purchases of property and equipment included in accounts payable

For the six months ended June 30, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $1.0 million decrease in net income;

a $0.3 million decrease in deferred income tax;

an immaterial increase in change in accounts receivable;

and a $1.3 million decrease in change in prepaid expenses.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million increase in net income;

a $0.1 million decrease in depreciation expense;

and an immaterial increase in deferred income tax.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30, 2018

As Previously Reported

Restatement Adjustments

Restatement References

Cash Flows from Operating Activities:

Adjustments to reconcile net income to cash flows from operating activities:

Depreciation and amortization

Provision for doubtful accounts

Non-cash amortization of debt financing costs

Shared-based compensation expense

Deferred income taxes

Non-cash loss / (gain) on derivative contracts

Change in other operating items:

Accounts receivable

Prepaid expenses

Accounts payable

Other operating activities, net

Net cash provided by operating activities

Cash Flows from Investing Activities:

Purchases of property, plant and equipment

Proceeds from disposal/sale of property, plant and equipment

Net cash used in investing activities

Cash Flows from Financing Activities:

Borrowings on Revolving Credit Facility

Repayment of Revolving Credit Facility

Repayment of Term Loan

Net cash used in financing activities

Effect of Foreign Currency Exchange Rate Changes on Cash

Net Decrease in Cash

Beginning of period

End of period

Supplemental Cash Flow Information:

Cash paid for interest

Cash paid for income taxes, net

Unpaid purchases of property and equipment included in accounts payable

For the nine months ended September 30, 2018

(a) Understatement of cost of revenues and impacted balance sheet accounts.

As a result of the understatement of cost of revenues, the correction resulted in a $2.3 million decrease in net income;

a $0.7 million decrease in deferred income tax;

a $0.7 million increase in change in accounts receivable;

and a $2.3 million decrease in change in prepaid expenses.

(b) Property, plant and equipment, net error correction.

The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million increase in net income;

a $0.1 million decrease in depreciation expense;

and an immaterial increase in deferred income tax.

Cost Reduction and Manufacturing Capacity Rationalization

During 2019, the Company began implementing cost reduction and manufacturing capacity rationalization initiatives (the "Restructuring Initiatives") in response to declines in end market volumes.

These actions were initiated in 2019 and are expected to continue through 2020.

The Restructuring Initiatives consist primarily of headcount reductions in each segment and at corporate, as well as other costs associated with transfer of production and subsequent closure of facilities.

Total pre-tax costs associated with these actions are estimated to be $5 million to $7 million and are expected to lower operating costs beginning in the first quarter of 2020.

A summary of the costs incurred in the year ended December 31, 2019 follows:

Employee Costs

Facility Exit and Other Costs

Electrical Systems

Global Seating

Of the $3.0 million incurred in the year ended December 31, 2019, $2.2 million was recorded in cost of revenues and $0.8 million was recorded in selling, general and administrative expenses.

Capital expenditures and depreciation expense:

Capital expenditures $ 9,825 $ 3,579 $ 2,140 $ 15,544

Depreciation expense $ 6,919 $ 4,604 $ 2,448 $ 13,971

The following table presents revenues and long-lived assets for the geographic areas in which we operate:

Years Ended December 31,

2020 2019 2018

Revenues Long-lived

United States $ 536,846 $ 60,605 $ 691,224 $ 70,870 $ 670,075 $ 49,874

United Kingdom 33,329 10,763 48,070 12,233 51,451 3,204

All other countries 147,524 22,222 161,944 26,335 176,211 11,023

$ 717,699 $ 93,590 $ 901,238 $ 109,438 $ 897,737 $ 64,101

Sales to A.B.

Volvo and Daimler, which are included in both reporting segments, have been in excess of 10% of total Company revenues in each of the years ended December 31, 2020, 2019 and 2018.

No other customers exceed 10% of the Company’s revenues in any period presented.

The following table presents revenue from the above mentioned customers as a percentage of total revenue:

Years Ended December 31,

2020 2019 2018

Volvo 16 % 22 % 19 %

Daimler 14 % 17 % 16 %

Quarterly Financial Data (Unaudited)

The following is a condensed summary of quarterly results of operations for 2020 and 2019:

Revenues Gross Profit Operating Income Net Income (Loss) Basic Earnings (Loss) Per Share 1

Dilutive Earnings (Loss) Per Share 1

First $ 187,105 20,303 ( 26,523 ) $ ( 24,594 ) $ ( 0.80 ) $ ( 0.80 )

Second $ 126,896 6,475 ( 10,515 ) $ ( 12,497 ) $ ( 0.40 ) $ ( 0.40 )

Third $ 187,697 24,159 8,893 $ 4,178 $ 0.13 $ 0.13

Fourth $ 216,001 $ 23,139 $ 4,976 $ ( 4,136 ) $ ( 0.13 ) $ ( 0.13 )

First $ 243,164 $ 33,089 $ 17,569 $ 9,986 $ 0.33 $ 0.33

Second $ 243,190 $ 32,436 $ 15,866 $ 6,146 $ 0.20 $ 0.20

Third $ 225,399 $ 29,444 $ 11,476 $ 7,180 $ 0.23 $ 0.23

Fourth $ 189,485 $ 10,168 $ ( 4,275 ) $ ( 7,534 ) $ ( 0.24 ) $ ( 0.24 )

The sum of earnings per share for the quarters may not equal earnings per share for the total year due to changes in the average number of ordinary shares outstanding.

Subsequent Event

On March 1, 2021, Commercial Vehicle Group, Inc.

(the “Company”) and certain of its subsidiaries entered into Amendment No.

3 (the “Revolving Amendment”) to the Third Amended and Restated Loan and Security Agreement (as amended prior to the Revolving Amendment, the “Revolving Loan Agreement”) originally dated as of April 12, 2017, with Bank of America, N.A., as agent, and certain financial institutions as lenders (the “Lenders”), which Revolving Loan Agreement governs the Company’s asset-based revolving credit facility (the “Revolving Credit Facility”).

The Revolving Amendment amends the terms of the Revolving Loan Agreement, among other things, to extend the maturity date of the Revolving Credit Facility to March 1, 2026 and to remove the condition that the first $ 7.0 million of the $ 90.0 million Revolver Commitments are available as a first-in, last-out facility.

The Revolving Loan Agreement, as amended, also allows the Company to increase the size of the Revolving Credit Facility by up to $ 50.0 million with the consent of Lenders providing the increase in the Revolving Credit Facility.

The Revolving Loan Agreement, provides that loans outstanding under the Revolving Credit Facility accrue interest at a per annum rate based on (at the Company’s election) the base rate or the LIBOR rate plus a margin determined by reference to availability under the Revolving Credit Facility as follows, subject to a LIBOR floor of 0.25 %:

Level Average Daily Availability Base

III ≥ $ 30,000,000

0.50 % 1.50 %

II > $ 15,000,000 but < $ 30,000,000

0.75 % 1.75 %

I ≤ $ 15,000,000

1.00 % 2.00 %

The Revolving Loan Agreement, provides for an unused line fee of 0.20 % on undrawn amounts under the Revolving Credit Facility if Revolver Usage is equal to or greater than 50% of the Revolver Commitment and a fee of 0.25 % if Revolver Usage is less than 50% of the Revolver Commitment.

The Revolving Loan Agreement, requires maintenance of a minimum fixed charge coverage ratio if availability under the Revolving Credit Facility is less than the greater of (i) $ 5.0 million, and (ii) 10 % of the lesser of the Revolver Commitment and

the Borrowing Base.

The minimum fixed charge coverage ratio must be maintained until availability under the Revolving Credit Facility has been greater than or equal to the greater of (i) $ 5.0 million, and (ii) 10 % of the lesser of the Revolver Commitment and the Borrowing Base for 60 consecutive days.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data