What changed in this filing

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Item 1. Business

2022-03-02 compared with 2021-03-09 · 133 added, 126 removed, 114 unchanged (69% of the section changed)

C OMPANY O VERVIEW

CVG 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.

COMPANY OVERVIEW

CVG is a global provider of systems, assemblies and components to the global commercial vehicle market, the electric vehicle market, and the warehouse automation markets.

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 to meet the requirements of our customer.

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

Our Long-term Strategy

Refer to Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.

We manage our business in two segments:

Electrical Systems and Global Seating.

Each of these segments offer various products which are sold into various end markets.

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

In the quarter ended December 31, 2021, we completed a strategic reorganization of our operations into four segments, Vehicle Solutions, Warehouse Automation, Electrical Systems and Aftermarket & Accessories.

The reorganization will allow the Company to better focus on growth opportunities, capital allocation and enhancing shareholder value.

As a result of the strategic reorganization, the prior period segment information has been reclassified to conform to the new organization structure.

See Note 16, Segment Reporting, to our consolidated financial statements in Item 8 in this Annual Report on Form 10-K.

Our segments offer various products which are sold into many end markets such as internal combustion commercial vehicles, electric vehicles, construction equipment, warehouse automation and military.

Certain of our facilities manufacture and sell products through multiple business segments.

The products produced by each of our segments are more specifically described below.

The Electrical Systems segment designs, manufactures and sells the following products:

• Electrical systems, 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;

The Vehicle Solutions 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 delivery trucks and vans, construction and agriculture equipment in North America, Europe and Asia-Pacific.

This segment includes a portion of the company’s activities in the 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 medium-duty/heavy-duty ("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;

and Cab structures for the North American medium-duty/heavy-duty ("MD/HD") truck market.

The Warehouse Automation segment designs, manufactures and sells the following products:

• Warehouse automation subsystems including control panels, electro-mechanical assemblies, cable assemblies, and power and communication solutions.

• The end markets for these products primarily include e-commerce, warehouse integration, transportation and the military/defense industry.

The Electrical Systems segment designs, manufactures and sells the following products:

• Cable and harness assemblies for both high and low voltage applications, control boxes, dashboard assemblies and design and engineering for these applications.

• The end markets for these products are construction, agricultural, industrial, automotive (both internal combustion and electric vehicles), truck, mining, rail and the military/ defense industries in North America, Europe and Asia-Pacific.

The Aftermarket & Accessories segment designs, manufactures and sells the following products:

• Seats and components sold into the commercial vehicle markets in North America, Europe and Asia-Pacific;

• Commercial vehicle accessories including wipers, mirrors, and sensors;

• Office seats primarily in Europe and Asia-Pacific.

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

E LECTRICAL S YSTEMS S EGMENT O VERVIEW

Electrical Systems Segment Products

Set forth below is a description of products designed and manufactured in the Electrical Systems Segment and their applications.

Electrical Systems, Electrical Wire Harnesses, Panel Assemblies, and Electro-Mechanical Assemblies .

We offer a wide range of electrical wire harnesses, electrical distribution systems, and related assemblies primarily for construction, agriculture, industrial, automotive, truck, mining, rail and military industries.

Our principal products in this category include:

Electrical Wire Harnesses.

We offer a broad range of electrical wire harness assemblies that function as the primary electric current carrying devices used to provide electrical interconnections for gauges, lights, control functions, power circuits, powertrain and transmission sensors, emissions systems and other electronic applications on commercial and other vehicles.

Our wire harnesses are customized to fit specific end-user requirements and can be complex.

Panel Assemblies.

We offer integrated assemblies and cabinets that are installed in a vehicle or unit of equipment and may be integrated with our wire harness assemblies.

These components provide the user control over multiple operational functions and features.

Electro-Mechanical Assemblies.

We offer electro-mechanical assemblies, including box builds, complex automated and robotic assemblies, and large multi-cabinet control cabinets with power distribution and cabling.

Our service includes mechanical assembly, wire and cable routing, automated wire preparation capabilities, complex configurations, test and custom palletizing and crating solutions.

Plastic Components and Assemblies .

We design, engineer and produce plastic components and assemblies for trucks, recreational vehicles, specialty vehicle applications, and diversified markets.

The charts below display CVG's net sales by segment and geography for the year ended December 31, 2021.

VEHICLE SOLUTIONS SEGMENT OVERVIEW

Vehicle Solutions Segment Products

Set forth below is a brief description of our products manufactured in the Vehicle Solutions Segment and their applications.

Seats and Seating Systems .

We design, engineer and produce seats for MD/HD truck, bus, construction, agriculture and military markets.

Our seats are primarily sold fully-assembled and ready for installation.

We offer a wide range of seats that include mechanical and air suspension seats, static seats, bus seats and military seats.

As a result of our product design and product technology, we believe we are a leader in designing seats with convenience and safety features.

Our seats are designed to achieve a high level of operator comfort by adding a wide range of manual and power features such as lumbar support, cushion and back bolsters, and leg and thigh support.

Our seats are built to meet customer requirements in low volumes and produced in numerous feature combinations to form a full-range product line with a wide level of price points.

Our seats are sold under multiple brands, including KAB Seating ™ , National Seating ™ , Bostrom Seating ® , and Stratos ™ .

Plastic Assemblies and Components .

We design, engineer and produce plastic components and assemblies for medium and heavy duty trucks, recreational vehicles, specialty vehicle applications, and diversified markets.

We offer thermoformed products, injection molded products, reaction injection molded products (RIM), and decorated / hydrographic finished products.

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We offer customers a wide variety of cost-effective finishes in paint, ultra violet, hard coating and customized industrial hydrographic films (simulated appearance of wood grain, carbon fiber, brushed metal, marbles, camouflage and custom patterns), and other interior and exterior finishes.

Vehicle Structures, Interior Parts, and Accessories .

Our plastic products are sold under several brand names including FinishTEK ™ and AdvancTek ™ .

Cab Structures and Interior Parts .

We design, engineer and produce complete cab structures and interior design components for commercial vehicles.

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We design, manufacture and provide a variety of interior design products including armrests, grab handles, storage systems, floor coverings, floor mats, sleeper bunks, headliners, wall panels, and privacy curtains that can be part of the overall cab structure or standalone assemblies depending on the customer application.

We design, manufacture and provide a variety of mirrors, wipers and controls used in commercial, military and specialty recreational vehicles.

Electrical Systems Segment’s Customers

The Electrical Systems segment’s revenues are currently and have historically been primarily derived from commercial vehicle customers.

However, during the year ended December 31, 2020, approximately 15% of total Electrical Systems segment revenue was from warehouse automation customers.

Our Electrical Systems segment revenues are primarily from North American operations, at approximately 87%, 88%, and 87% for the years ended December 31, 2020, 2019 and 2018, respectively.

Our European and Asia-Pacific operations collectively contributed approximately 13%, 12% and 13% of our Electrical Systems segment revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

G LOBAL S EATING S EGMENT O VERVIEW

Global Seating Segment Products

Set forth below is a brief description of our products manufactured in the Global Seating Segment and their applications.

Seats and Seating Systems .

We design, engineer and produce seats for MD/HD truck, bus, construction, agriculture and military markets.

For the most part, our seats are fully-assembled and ready for installation when they are delivered to the OEM.

We offer a wide range of seats that include mechanical and air suspension seats, static seats, bus seats and military seats.

As a result of our product design and product technology, we believe we are a leader in designing seats with convenience and safety features.

Our seats are designed to achieve a high level of operator comfort by adding a wide range of manual and power features such as lumbar support, cushion and back bolsters, and leg and thigh support.

Our seats are built to meet customer

requirements in low volumes and produced in numerous feature combinations to form a full-range product line with a wide level of price points.

We also manufacture seats, parts and components for the aftermarket.

Office Seating.

We design, engineer and produce office seating products.

Our office seating is designed to suit different office environments including heavy usage environments, such as emergency services, call centers, reception areas, studios, general office environments and gaming applications.

Global Seating Segment Customers

The Global Seating segment’s revenues are primarily derived from commercial vehicle customers.

Our Global Seating segment revenues are split between North American operations, at approximately 51%, 57%, and 52% for the years ended December 31, 2020, 2019 and 2018, respectively.

Our European and Asia-Pacific operations collectively contributed approximately 49%, 43% and 48% of the Global Seating segment’s revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

O UR C ONSOLIDATED O PERATIONS

WAREHOUSE AUTOMATION SEGMENT OVERVIEW

Warehouse Automation Segment Products

Electrical Systems, Panel Assemblies, and Electro-Mechanical Assemblies .

We offer a wide range of material handling equipment, electrical distribution systems, and related assemblies primarily for the e-commerce, warehouse integration, transportation and the military/ defense markets.

Our principal products in this category include:

Panel Assemblies.

We offer integrated assemblies and cabinets that are installed in a vehicle or unit of equipment and may be integrated with our wire harness assemblies.

These components provide the user control over multiple operational functions and features.

Electro-Mechanical Assemblies.

We offer electro-mechanical assemblies, including box builds, complex automated and robotic assemblies, and large multi-cabinet control cabinets with power distribution and cabling.

Our service includes mechanical assembly, wire and cable routing, automated wire preparation capabilities, complex configurations, test and custom palletizing and crating solutions.

ELECTRICAL SYSTEMS SEGMENT OVERVIEW

Electrical Systems Segment Products

Wire Harness Assemblies .

We design, engineer and produce a wide range of high and low voltage electrical wire systems for vehicles and subsystems, which include, Ethernet, battery cables and power distribution boxes.

Our electrical wire harness assemblies function as the primary electric current carrying devices used to provide electrical interconnections for gauges, lights, control functions, power circuits, powertrain and transmission sensors, emissions systems and other electronic applications on commercial and other vehicles.

Our wire harnesses are customized to fit specific end-user requirements and can be complex.

Our production capabilities include low and high volume serial production with low and high volume circuitry, RIM (reaction injection molding) and specialized testing.

Cable Harness Assemblies .

Our primary product offerings include engineering design for customized cable assemblies, control boxes, fuse boxes, dashboard assemblies in multiple sizes, complexity, and applications.

Our engineering and production capabilities include virtual wiring boards, automatic plug insertion stations, system architecture and schematic development and prototyping.

Our electrical systems segment products are sold into the construction, agriculture, industrial, e-commerce and electric vehicles, traditional automotive, mining, rail and military end markets.

AFTERMARKET & ACCESSORIES SEGMENT OVERVIEW

Aftermarket & Accessories Segment Products

We design, manufacture, and provide a variety of seats, mirrors, wipers and wiper systems sold into the commercial MD/HD truck, military and specialty recreational vehicles, electric vehicle, office and home office markets.

These products are sold under various brands including, Bostrom ® , National Seating ™ , Moto Mirror ® , KAB Seating ™ (for both vehicles and Office markets), Sprague Devices ® and RoadWatch ® .

Our aftermarket products are primarily sold through the Original Equipment Service (OES) sales channel and direct into the retail aftermarket as replacements for original equipment in North America, Europe and Asia Pacific.

OUR CONSOLIDATED OPERATIONS

As a diverse global company, we are affected by economic and market developments around the world, supply chain disruptions, instability in certain regions, commodity prices, foreign currency volatility and policies regarding trade and imports.

While we continue to operate, consistent with applicable government guidelines, we are experiencing, and may continue to experience, production slowdowns and/or shutdowns at our manufacturing facilities in North America, Europe and Asia Pacific as a result of government orders, our inability to obtain component parts from suppliers and/or unpredictable customer demand.

In addition, many of our suppliers and customers are also experiencing, and may continue to experience, production slowdowns and/or shutdowns, which may further impact our business, sales and results of operation.

Primary Industries Served

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to 33,000 lbs.

The current market is impacted by the COVID-19 pandemic.

Separately, we are seeing changes in e-commerce behaviors that are driving increased demand for middle-mile and last-mile vehicles.

The following describes the major markets within the commercial vehicle market in which the Global Seating Segment competes:

The following describes the major markets within the commercial vehicle market in which the Vehicle Solutions Segment competes:

Class 8 Truck Market.

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We primarily participate in the Class 6 and 7 portion of the medium-duty truck market.

The medium-duty truck market is influenced by overall economic conditions but has historically been less cyclical than the North American Class 8 truck market, with highs and lows generally not as pronounced as the Class 8 truck market.

The medium-duty truck market is influenced by overall economic conditions but has historically been less cyclical than the North American Class 8 truck market.

Commercial Truck Aftermarket.

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We believe CVG has a widely recognized brand portfolio and participates in most retail sales channels including original equipment dealer networks and independent distributors.

Commercial Construction Equipment Market.

Construction Equipment Market.

New vehicle demand in the global construction equipment market generally follows certain economic conditions including gross domestic product, infrastructure investment, housing starts, business investment, oil and energy investment and industrial production around the world.

construction market, there are two classes of construction equipment markets:

Within the construction market, there are two classes of construction equipment markets:

the medium and heavy construction equipment market (weighing over 12 metric tons) and the light construction equipment market (weighing below 12 metric tons).

We primarily supply OEMs with our wire harness and seating products.

Our construction equipment products are primarily used in the medium and heavy construction equipment markets.

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Purchasers of light construction equipment include contractors, rental fleet owners, landscapers, logistics companies and farmers.

In the medium and heavy construction equipment market, we primarily supply OEMs with our wire harness and seating products.

Military Equipment Market.

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Shifting retailer behavior and consumer expectations are creating a significant need for incremental automation within warehouses.

Given consumer demands for next-day (and even same-day) delivery, there has been a surge in demand for “last mile” urban fulfillment centers, which are typically supported by very large distribution centers located in the outer ring of a city.

Additionally, increased throughput volume, a greater variety of order and package types, more frequent product returns by end consumers, and COVID-19-driven social distancing protocols on warehouse floors all support the rationale for continued investment in automated solutions by warehouse operators.

As a result, warehouses are experiencing a continuous increase in investment, driven by increasing levels of automation within the warehouse as well as the integration of supply chains.

Given consumer demands for next-day (and same-day) delivery,

there has been a surge in demand for “last mile” urban fulfillment centers, which are typically supported by very large distribution centers located in the outer ring of a city.

Additionally, increased throughput volume, a greater variety of order and package types, and more frequent product returns by end consumers, all support the rationale for continued investment in automated solutions by warehouse operators.

We supply material handling subsystems incorporated into automated warehouses.

Our Customer Contracts, and Sales and Marketing

Our customers generally source business to us pursuant to written contracts, purchase orders or other commitments (“Commercial Arrangements”) with terms of price, quality, technology, and delivery.

Awarded business generally covers the supply of all or a portion of a customer’s production and service requirements for a particular product program rather than the supply of a specific quantity of products.

In general, these Commercial Arrangements provide that the customer can terminate them if we do not meet specified quality, delivery and cost requirements.

Although these Commercial Arrangements may be terminated at any time by our customers (but generally not by us), such terminations have historically been minimal and have not had a material impact on our results of operations.

Our Commercial Arrangements with our OEM customers may provide for an annual prospective productivity price reduction.

These productivity price reductions are generally calculated on an annual basis as a percentage of the previous year’s purchases by each customer.

Historically, most of these price reductions have been offset by internal cost reductions and through the assistance of our supply base, although no assurances can be given that we will be able to achieve such reductions in the future.

The cost reduction is achieved through engineering changes, material cost reductions, logistics savings, reductions in packaging cost, labor efficiencies and other productivity actions.

Our sales and marketing efforts are designed to create customer awareness of our engineering, design and manufacturing capabilities.

Our sales and marketing staff work closely with our design and engineering personnel to prepare the materials used for bidding on new business, as well as to provide an interface between us and our key customers.

We have sales and marketing personnel located in every major region in which we operate.

From time to time, we participate in industry trade shows and advertise in industry publications.

Our Supply Agreements

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Due to the volatility in pricing, we use methods such as market index pricing and competitive bidding to assist in reducing our overall cost.

The recent imposition of tariffs and the impact of the COVID-19 pandemic on steel and aluminum have impacted the prices of certain of our materials.

We strive to align our customer pricing and material costs to minimize the impact of steel, copper and petrochemical price fluctuations.

The impact of the COVID-19 pandemic on raw materials has affected the supply and prices of certain of our products.

We strive to align our customer pricing and material costs to minimize the impact of price fluctuations.

Certain component purchases and suppliers are directed by our customers, so we generally will pass through directly to the customer cost changes from these components.

We generally are not dependent on a single supplier or limited group of suppliers for our raw materials.

Research and Development

Our research and development capabilities offer quality and technologically advanced products to our customers at competitive prices.

We offer product styling, product design, specialized simulation and testing and evaluation services that are necessary in today’s global markets.

Our capabilities in acoustics, thermal efficiency, benchmarking, multi-axis durability, biomechanics, comfort, prototyping and process prove-out allow us to provide complete integrated solutions.

We engage in global engineering, and research and development activities that improve the reliability, performance and cost-effectiveness of our existing products and support the design, development and testing of new products for existing and new applications.

Generally, we work with our customers’ engineering and development teams at the beginning of the design process for new components and assemblies and systems, or the re-engineering process for existing components and assemblies, in order to leverage production efficiency and quality.

Research and development costs for the years ended December 31, 2020, 2019 and 2018 totaled $6.4 million, $9.9 million and $9.5 million, respectively.

Intellectual Property

Our major brands include CVG ™ , Sprague Devices ® , Moto Mirror ® , RoadWatch ® , KAB Seating ™ , National Seating ™ , Bostrom Seating ® , Stratos ™ , and FinishTEK ™ .

We believe that our brands are valuable but that our business is not dependent on any one brand.

federal trademark registrations for several of our products.

Within each of our principal product categories we compete with a variety of independent suppliers and with vertically integrated in-house operations, primarily on the basis of price, breadth of product offerings, product quality, technical expertise, development capability, product delivery and product service.

Manufacturing Processes

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When compared to the more traditional, less flexible assembly line process, cell manufacturing allows us to better maintain our product output consistent with our OEM customers’ requirements and minimize the level of inventory.

We have systems in place that allow us to provide complete customized interior kits in boxes that are delivered in sequence.

Sequencing reduces our cost of production because it eliminates warehousing costs and reduces waste and obsolescence, thereby offsetting increased labor costs.

We have systems in place that allow us to provide complete customized interior kits in returnable containers and disposable dunnage that are delivered in sequence.

Several of our manufacturing facilities are strategically located near our customers’ assembly facilities, which facilitates this process and minimizes shipping costs.

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We utilize material systems to manage inventory levels and, in certain locations, we have inventory delivered as often as two times per day from a nearby facility based on the previous day’s order, which reduces the need to carry excess inventory at our facilities.

Within our cyclical industries, we strive to maintain a certain portion of temporary labor to improve our ability to flex our costs and throughput as required by fluctuating customer demand.

We strive to maintain a certain portion of temporary labor to improve our ability to flex our costs and throughput as required by fluctuating customer demand.

We engage our core employees to assist in making our processes efficient.

Our Customer Contracts, and Sales and Marketing

Our OEM customers generally source business to us pursuant to written contracts, purchase orders or other commitments (“Commercial Arrangements”) with terms of price, quality, technology and delivery.

In general, these Commercial Arrangements provide that the customer can terminate them if we do not meet specified quality, delivery and cost requirements.

Because we produce products for a broad cross section of vehicle models, we are not overly reliant on any one vehicle model.

Our Commercial Arrangements with our OEM customers may provide for an annual prospective productivity price reduction.

These productivity price reductions are generally calculated on an annual basis as a percentage of the previous year’s purchases by each customer.

The cost reduction is achieved through engineering changes, material cost reductions, logistics savings, reductions in packaging cost, labor efficiencies and other productivity actions.

Our sales and marketing efforts are designed to create customer awareness of our engineering, design and manufacturing capabilities.

We have sales and marketing personnel located in every major region in which we operate.

From time to time, we participate in industry trade shows and advertise in industry publications.

Our principal customers for our aftermarket sales include OEM dealers and independent wholesale or retail distributors.

Our sales and marketing efforts are focused on supporting these two distribution channels, as well as participation in industry trade shows and direct contact with major fleets.

Within each of our principal product categories we compete with a variety of independent suppliers and with OEMs’ in-house operations, primarily on the basis of price, breadth of product offerings, product quality, technical expertise, development capability, product delivery and product service.

Research and Development

Our research and development capabilities offer quality and technologically advanced products to our customers at competitive prices.

We offer product styling, product design, specialized simulation and testing and evaluation services that are necessary in today’s global markets.

Our capabilities in acoustics, thermal efficiency, benchmarking, multi-axis durability, biomechanics, comfort, prototyping and process prove-out allow us to provide complete integrated solutions.

Research and development costs for the years ended December 31, 2021, 2020 and 2019 totaled $9.1 million, $6.4 million and $9.9 million, respectively.

Intellectual Property

Our major brands include CVG ™ , Sprague Devices ® , Moto Mirror ® , RoadWatch ® , KAB Seating ™ , National Seating ™ , Bostrom Seating ® , Stratos ™ , FinishTEK ™ and AdvancTek ™ .

We believe that our brands are valuable but that our business is not dependent on any one brand.

federal trademark registrations for several of our product brands.

Environmental

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As of December 31, 2021, we had approximately 7,600 employees of which 7,300 were permanent employees and 300 (4%) were temporary employees.

6,240 (81%) of the Company's employees are international and 1,500 (19%) of the Company's employees are in the United States.

It is customary for the company to employ temporary employees to both flex up / down to demand rates as well as an onboarding approach for new employees.

Of our permanent workforce, 940 (13%) were salaried and the remainder were hourly.

6,100 (81%) of the Company's employees are international and 1,500 (20%) of the Company's

employees are in the United States.

It is customary for the company to employ temporary employees to both flex up / down to demand rates.

Of our permanent workforce, approximately 1,000 (13%) were salaried and the remainder were hourly.

As of December 31, 2021, all of the Company's U.S.

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The Company is committed to establishing and developing a workforce to support our long term diversification and growth strategy through targeted external recruiting, and internal development and succession planning.

We have developed cohorts of plant leaders and emerging leaders for targeted training opportunities and have leveraged online learning platforms to make training more accessible for our workforce.

We have developed leaders and emerging leaders for targeted training opportunities and have leveraged online learning platforms to make training more accessible for our workforce.

Compensation and Benefits - Our compensation programs reinforce a pay for performance philosophy with market-based compensation and benefits that are competitive for the manufacturing sector.

Specific programs vary worldwide based on regional practices and benchmarks.

Diversity and Inclusion - The Company is intentional in its commitment to diversity and inclusion including a diverse Board of Directors and executive leadership team.

One third of our current Board is diverse by race or gender and one fourth of our current executive team is diverse by race or gender with others bringing diversity of experience, thought and perspective to their leadership roles.

Diversity, Equity and Inclusion - The Company is intentional in its commitment to diversity, equity and inclusion including a diverse Board of Directors and executive leadership team.

Approximately one fourth of our current Board is diverse by race or gender and one fourth of our current executive team is diverse by race or gender with others bringing diversity of experience, thought and perspective to their leadership roles.

Among our global workforce, 44% is female, and among our domestic workforce, 27% is racially diverse.

The Company established an Executive Diversity & Inclusion Steering Committee in 2020 to champion diversity, inclusion and awareness through our recruiting, retention and communication programs.

The Company recognizes the importance of leveraging diversity, equity and inclusion in who we are and how we work.

Our Executive Diversity & Inclusion Steering Committee continues to focus on expanding the diversity of our talent pipeline through our recruiting, development, communication, and retention.

We will focus on the role our culture plays in creating the right environment for diverse thinking and inclusive approaches to work.

During regular engagements with our leadership teams, we are highlighting how our organizational evolution benefits from a culture of diversity.

We are also reestablishing the connection to the communities where our employees live and work, enabling our teams to grow both professionally and personally.

Safety - The safety of our workforce has always been a top priority and the Company is proud of our safety record, which includes three consecutive years of declining recordable incidents and five consecutive years of declining incident rates.

Our 2020 full year incident rate of 0.51 is below the industry benchmarks and six of our global facilities were incident free in calendar year 2020.

The impact of the COVID-19 pandemic on our global organization was significant.

A key focus for 2020 was the adaptation of our operations to protect our employees and continue our work as an essential manufacturing employer.

We implemented a number of prevention and mitigation strategies over the past year including a non-essential travel ban, and visitor restrictions and screening protocols.

We installed plexiglass barriers and touchless faucets and dispensers in high traffic facilities, and we adopted temporary alternating remote work schedules for non-production employees to encourage social distancing and reduce density for critical onsite personnel.

We introduced pilot programs in our largest facilities for rapid onsite antibody testing and high capacity thermal scanners;

and we implemented a shared drive to track facility level statistical reporting and share best practice prevention and response plans.

We also expanded our distribution of PPE and industrial hygiene products in all facilities, including the manufacturing of disposable face masks in our Saltillo facility for distribution to our global employees and their families.

Our 2021 full year incident rate of 0.63 is below the industry benchmarks and five of our global facilities were incident free in calendar year 2021.

The impact of the COVID-19 pandemic continues to require our focus and monitoring.

We continued the evolution of safety practices and procedures to protect our employees, ensuring our work continuity as an essential manufacturing employer.

During 2021, we maintained our prevention and mitigation strategies including minimal travel across borders where non-essential, visitor restrictions, and site screening protocols were in place.

We continue to use safety programs in our largest facilities for rapid onsite antibody testing and high-capacity thermal scanners.

As we see surges occur in local areas, our sites have adopted flexible programs regarding masks and social distancing as required.

Some of our plants continue to operate with masking policies where we experience a surge in cases both in the facility or the larger community.

CVG is committed to operating in an ethical and sustainable manner that benefits all our stakeholders including customers, employees and the communities we serve.

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More information on these policies can be found on our website under the caption “About Us - CVG Policies,” including highlights of our ongoing Environmental, Social and Governance (“ESG”) efforts related to safety, quality, environmental, community engagement and corporate governance.

A VAILABLE I NFORMATION

AVAILABLE INFORMATION

We maintain a website on the Internet at www.cvgrp.com.

We make available free of charge through our website, by way of a hyperlink to a third-party Securities Exchange Commission ("SEC") filing website, our Annual Reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports electronically filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934.

We make available free of charge through our website, by way of a hyperlink to a third-party Securities Exchange Commission ("SEC") filing website, our Annual Reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, including exhibits and amendments to those reports electronically filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934.

Such information is available as soon as such reports are filed with the SEC.

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Information found on our website is not part of this Annual Report on Form 10-K or any other report filed with the SEC.

E XECUTIVE O FFICERS OF R EGISTRANT

Directors, Executive Officers and Corporate Governance" in Part III.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

Directors, Executive Officers and Corporate Governance" in Part III of this Annual Report on Form 10-K.

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 1. Business