What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-03-02 compared with 2021-03-09 · 357 added, 466 removed, 800 unchanged (51% of the section changed)

3 unchanged sentences

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2020 and 2019

Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2021, 2020 and 2019

Consolidated Balance Sheets as of December 31, 2021 and 2020

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2021, 2020 and 2019

1 unchanged sentence

Notes to Consolidated Financial Statements

Item 15 - Exhibits and Financial Statement Schedules

Item 15 - Exhibits

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

7 unchanged sentences

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, 2021, 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 1, 2022 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, 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.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates 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 a critical audit matter 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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Testing of revenue

3 unchanged sentences

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.

of customer billing data.

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

3 unchanged sentences

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.

For a selection of transactions, we (1) compared the amount of revenue recorded to a combination of Company internal data, executed contracts, and/or 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.

3 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31, 2021, 2020 and 2019

2021 2020 2019

(In thousands, except per share amounts)

Revenues $ 971,578 $ 717,699 $ 901,238

Cost of revenues 852,591 643,623 796,101

Gross profit 118,987 74,076 105,137

Selling, general and administrative expenses 69,406 68,228 64,501

Goodwill and other impairment — 29,017 —

Operating income (loss) 49,581 ( 23,169 ) 40,636

Other (income) expense ( 878 ) 728 2,225

Interest expense 11,179 20,603 16,855

Loss on extinguishment of debt 7,155 — —

Income (loss) before provision for income taxes 32,125 ( 44,500 ) 21,556

Provision (benefit) for income taxes 8,393 ( 7,451 ) 5,778

Net income (loss) $ 23,732 $ ( 37,049 ) $ 15,778

Earnings (loss) per common share

Basic $ 0.75 $ ( 1.20 ) $ 0.52

Diluted $ 0.72 $ ( 1.20 ) $ 0.51

Weighted average shares outstanding

Basic 31,501 30,943 30,602

Diluted 32,790 30,943 30,823

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

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Years Ended December 31, 2021, 2020 and 2019

2021 2020 2019

(In thousands)

Net income (loss) $ 23,732 $ ( 37,049 ) $ 15,778

Other comprehensive income (loss):

Foreign currency translation adjustments ( 1,421 ) 5,008 ( 1,185 )

Change in defined benefit plans, net of tax 4,673 ( 5,041 ) 2,738

Derivative instruments, net of tax ( 684 ) 977 ( 32 )

Other comprehensive income 2,568 944 1,521

Comprehensive income (loss) $ 26,300 $ ( 36,105 ) $ 17,299

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

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

11 unchanged sentences

Operating lease right-of-use asset, net 26,116 30,047

Goodwill — 27,816

Intangible assets, net of accumulated amortization of $ 18,180 and $ 14,831 , respectively

31 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31, 2020, 2019 and 2018

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

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

Interest expense 20,603 16,855 14,676

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.

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Years Ended December 31, 2020, 2019 and 2018

2020 2019 2018

(In thousands)

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

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 instruments, net of tax 977 ( 32 ) 496

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

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

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

COMMERCIAL VEHICLE GROUP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

3 unchanged sentences

Capital Retained

Deficit Accum.

Deficit Accumulated

Comprehensive

Loss Total CVG

6 unchanged sentences

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

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

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

3 unchanged sentences

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

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

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

22 unchanged sentences

Noncash loss (gain) on forward exchange contracts ( 788 ) 299 1,972

Loss on extinguishment of debt

Change in other operating items:

5 unchanged sentences

Other operating activities, net ( 7,126 ) 6,441 ( 1,047 )

Net cash provided by operating activities 34,372 36,746 40,992

Net cash (used in) provided by operating activities ( 29,832 ) 34,372 36,746

CASH FLOWS FROM INVESTING ACTIVITIES:

4 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings of revolving credit facility 15,000 35,700 80,500

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

Borrowings under term loan facility 150,000 — —

Repayment of term loan facility ( 3,750 ) — —

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

Repayment of 2023 term loan facility principal ( 152,654 ) ( 14,375 ) ( 8,525 )

Borrowings under revolving credit facility 86,200 — —

Repayment of revolving credit facility ( 36,800 ) — —

Borrowings under ABL revolving credit facility 11,300 15,000 35,700

Repayment of ABL revolving credit facility ( 11,300 ) ( 15,000 ) ( 35,700 )

Surrender of common stock by employees ( 1,279 ) ( 663 ) ( 985 )

Debt extinguishment payments and early payment fees on debt ( 3,031 ) — —

Debt issuance and amendment costs ( 2,333 ) ( 2,779 ) ( 160 )

Contingent consideration payment ( 5,000 ) ( 1,000 ) —

Other financing activities, net ( 342 ) ( 445 ) ( 443 )

Net cash used in financing activities ( 19,262 ) ( 10,113 ) ( 5,835 )

Net cash provided by ( used in) financing activities 31,011 ( 19,262 ) ( 10,113 )

EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH 842 2,302 ( 56 )

13 unchanged sentences

Organization - Commercial Vehicle Group, Inc.

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.

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

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

2 unchanged sentences

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 primarily manufacture customized products to meet the requirements of our customers.

We report our financial results by business segment;

more specifically, Electrical Systems and Global Seating.

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.

more specifically, Vehicle Solutions, Warehouse Automation, Electrical Systems and Aftermarket & Accessories.

In the quarter ended December 31, 2021, we completed a strategic reorganization of our operations into four segments, As a result of the strategic reorganization, the prior period segment information has been reclassified to conform to the new organization structure.

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

See Note 17, Segment Reporting, for more information.

40 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.

Leases - 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.

2 unchanged sentences

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.

The Company's accounting policy election is 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.

32 unchanged sentences

Interest Rate Swap Agreement - We use an interest rate swap agreement to fix the interest rate on a portion of our variable interest debt thereby reducing exposure to interest rate changes.

The interest rate swap agreement was not designated as a hedging instrument;

therefore, the interest rate swap agreement has been marked-to-market and the fair value of the agreement recorded in the Consolidated Balance Sheets with the offsetting gain or loss recorded in interest and other expense in our Consolidated Statements of Operations.

The interest rate swap agreement was formally designated at inception as a hedging instrument.

Therefore, changes in the fair value of the interest rate swap are recorded in accumulated other comprehensive income (loss) and recognized in the Consolidated Statement of Operations when the contracts are settled.

Recently Issued Accounting Pronouncements

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.

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU No.

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

4 unchanged sentences

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.

The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022.

The Company will apply the guidance to impacted transactions during the transition period.

The Company does not expect the adoption of this standard to have a material impact on the Company’s Consolidated Financial Statements.

Accounting Pronouncements Implemented During the Year Ended December 31, 2021

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.

2016-13, "Financial Instruments - Credit Losses (Topic 326)".

The ASU requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected.

The FASB subsequently issued ASU No.

2018-19, "Codification Improvements to Topic 326:

Financial Instruments - Credit Losses", in November 2018 which provided further guidance on assessment of receivables for operating leases.

2019-04, "Codification Improvements to Topic 326, Topic 815 and Topic 825" and ASU No.

2019-05, "Targeted Transition Relief", that were issued in April and May of 2019 do not materially impact the Company.

In November 2019, the FASB issued ASU No.

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 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.

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.

The Company implemented ASU 2019-12 as of January 1, 2021 and the ASU did not have a material impact on the Company's consolidated financial statements and related disclosures.

In October 2020, the 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.

The Company implemented ASU 2020-10 as of January 1, 2021 and the ASU did not have a material impact on the Company's consolidated financial statements and related disclosures.

Revenue Recognition

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.

Our products include seating systems, plastic components, cab structures, warehouse automation subsystems, electrical wire harnesses, mirrors, wipers and other accessories.

We sell these products into multiple geographic regions including North America, Europe and Asia-Pacific and to multiple end markets.

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.

18 unchanged sentences

Twelve Months Ended December 31, 2021

Electrical Systems Global Seating Corporate/

Vehicle Solutions Warehouse Automation Electrical Systems Aftermarket and Accessories Total

Seats $ 267,580 $ — $ — $ 55,377 $ 322,957

1 unchanged sentence

Trim 154,205 — — 2,555 156,760

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

Warehouse Automation — 162,583 — — 162,583

Cab structures 69,749 — — 7,761 77,510

Mirrors, wipers and controls 4,697 — 863 38,875 44,435

1 unchanged sentence

Twelve Months Ended December 31, 2020

Electrical Systems Global Seating Corporate/

Vehicle Solutions Warehouse Automation Electrical Systems Aftermarket and Accessories Total

Seats $ 205,232 $ 147 $ — $ 58,832 $ 264,211

1 unchanged sentence

Trim 109,450 — — 2,413 111,863

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

Warehouse Automation — 63,559 — — 63,559

Cab structures 46,483 — — 3,298 49,781

Mirrors, wipers and controls 3,720 — 2,191 34,409 40,320

1 unchanged sentence

Twelve Months Ended December 31, 2019

Electrical Systems Global Seating Corporate/

Vehicle Solutions Warehouse Automation Electrical Systems Aftermarket and Accessories Total

Seats $ 291,496 $ — $ — $ 71,272 $ 362,768

1 unchanged sentence

Trim 193,918 — 342 1,827 196,087

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

Warehouse Automation — 1,151 — — 1,151

Cab structures 85,885 — — 1,987 87,872

Mirrors, wipers and controls 4,286 — 5,715 45,163 55,164

1 unchanged sentence

Debt consisted of the following at December 31:

Term loan facility due 2026 $ 146,250 $ —

Revolving credit facility due 2026 49,400 —

Term loan and security agreement due 2023 — 150,950

4 unchanged sentences

Total long-term debt, net of current portion $ 185,581 $ 144,147

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.

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.

The unamortized deferred financing fees of $ 3.1 million and original issue discount of $ 1.3 million are netted against the aggregate book value of the outstanding debt to arrive at a balance of $ 146.6 million as of December 31, 2020 and are being amortized over the remaining life of the agreement.

The weighted average interest rate was 10.71 % as of December 31, 2020 and 8.29 % as of December 31, 2019.

The Term Loan Facility is a senior secured obligation of the Company.

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 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

The TLS Agreement contains customary restrictive covenants, including limitations on our ability and the ability of our subsidiaries to:

incur additional debt;

pay dividends or other restricted payments;

make investments;

engage in transactions with affiliates;

create liens on assets;

and consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries.

In addition, the TLS Agreement contains a financial maintenance covenant requiring the Company to maintain a total leverage ratio as of the last day of any fiscal quarter not to exceed the ratios set forth in the applicable table within the TLS Agreement.

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.

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;

and in the case of an asset disposition or insurance or condemnation event, to the extent the Company does not reinvest the proceeds within the periods set forth in the TLS Agreement.

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.

Revolving Credit Facility

On April 12, 2017, Commercial Vehicle Group Inc.

and certain subsidiaries, collectively the "borrowers", entered into the Third Amended and Restated Loan and Security Agreement (the "Third ARLS Agreement") increasing its senior secured revolving credit facility (the "Revolving Credit Facility") to $ 65 million from $ 40 million and setting the maturity date to April 12, 2022.

Up to an aggregate of $ 10 million is available to the borrowers for the issuance of letters of credit, which reduces availability under the Third ARLS Agreement.

The Third ARLS Agreement included amendments to certain definitions and covenants including, but not limited to, amendments to (i) permitted debt, (ii) permitted distributions, (iii) distribution of assets, and (iv) the calculation of EBITDA.

The Third ARLS Agreement contains a fixed charge coverage ratio maintenance covenant of 1.00 :1.00 and amended the availability threshold for triggering compliance with the fixed charge coverage ratio.

The borrowers’ obligations under the Revolving Credit Facility are secured (subject to certain permitted liens) by a first-priority lien on substantially all of the current assets (and a second priority lien on substantially all of the non-current assets) of the borrowers.

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 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 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

Credit Agreement

On April 30, 2021, the Company and certain of its subsidiaries entered into a credit agreement (the “Credit Agreement”)

between, among others, Bank of America, N.A.

as administrative agent (the “Administrative Agent”) and other lenders party thereto (the “Lenders”) pursuant to which the Lenders made available a $ 150 million Term Loan Facility (the “Term Loan Facility”) and a $ 125 million Revolving Credit Facility (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Credit Facilities”).

Subject to the terms of the Credit Agreement, the Revolving Credit Facility includes a $ 10 million swing line sublimit and a $ 10 million letter of credit sublimit.

The Credit Agreement provides for an incremental term facility agreement and/or an increase of the Revolving Credit Facility (together, the “Incremental Facilities”), in a maximum aggregate amount of (a) up to the date of receipt of financial statements for the fiscal quarter ending June 30, 2022, $ 75 million, and (b) thereafter, (i) $ 75 million less the aggregate principal amount of Incremental Facilities incurred before such date, plus (ii) an unlimited amount if the pro forma consolidated total leverage ratio (assuming the Incremental Facilities are fully drawn) is less than 2.50 :1.0.

The Credit Facilities mature on April 30, 2026 (the “Maturity Date”).

The proceeds of the Credit Facilities were used, together with cash on hand of the Company, to (a) fund the redemption, satisfaction and discharge of all of the Company’s outstanding secured credit facility due 2023 (the “2023 Term Loan Facility”) issued pursuant to a term facility agreement (the “Term Facility Agreement”) between, among others, Bank of America, N.A.

as administrative agent and other lender parties thereto, (b) fund the redemption, satisfaction and discharge of all of the Company’s asset-based revolving credit facility (the “ABL Revolving Credit Facility”) issued pursuant to a facility agreement (the “ABL Facility Agreement”) between, among others, Bank of America, N.A.

as agent and certain financial institutions as lenders, (c) pay transaction costs, fees and expenses incurred in connection therewith and in connection with the Credit Agreement, and (d) for working capital and other lawful corporate purposes of the Company and its subsidiaries.

At December 31, 2021 we had $ 49.4 million of borrowings under the Revolving Credit Facility, outstanding letters of credit of $ 1.4 million and availability of $ 74.2 million.

The unamortized deferred financing fees associated with the Revolving Credit Facility were $ 1.3 million as of December 31, 2021, which are being amortized over the remaining life of the Credit Agreement.

The unamortized deferred financing fees associated with the ABL Revolving Credit Facility were $ 0.4 million as of December 31, 2020.

At December 31, 2020, we had outstanding letters of credit of $ 1.6 million.

Interest rates and fees

Amounts outstanding under the Credit Facilities and the commitment fee payable in connection with the Credit Facilities accrue interest at a per annum rate equal to (at the Company’s option) the base rate or the Eurodollar rate plus a rate which will vary according to the Consolidated Total Leverage Ratio as set forth in the most recent compliance certificate received by the Administrative Agent, as set out in the following table:

Pricing Tier Consolidated Total

Leverage Ratio Commitment Fee Letter of Credit Fee Eurodollar Rate Loans Base Rate Loans

I > 3.00 to 1.00

0.30 % 3.00 % 3.00 % 2.00 %

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

II < 3.00 to 1.00 but

> 2.00 to 1.00

0.25 % 2.75 % 2.75 % 1.75 %

I ≤ $ 15,000,000

III < 2.00 to 1.00 but

> 1.50 to 1.00

0.20 % 2.50 % 2.50 % 1.50 %

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.

If the agent is unable to calculate average daily availability for a fiscal quarter due to the borrowers' failure to deliver a borrowing base certificate when required, the applicable margin will be set at Level I until the first day of the calendar month following receipt of a borrowing base certificate.

As of December 31, 2020, the applicable margin was set at Level III.

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, 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.

The Company pays a commitment fee to the lenders equal to 0.35 % per annum of the unused amounts under the revolving credit facility.

Terms, Covenants and Compliance Status

The Third ARLS Agreement requires the maintenance of a minimum fixed charge coverage ratio.

The borrowers are not required to comply with the fixed charge coverage ratio requirement for so long as the borrowers maintain borrowing availability under the revolving credit facility at the greater of (i) $ 5,000,000 or (ii) ten percent ( 10 %) of the revolving commitments.

If borrowing availability falls below this threshold at any time, the borrowers would be required to comply with the fixed charge coverage ratio of 1.00 :1.00 as of the end of each relevant fiscal quarter and would be required to continue to comply with these requirements until the borrowers have borrowing availability in excess of this threshold for 60 consecutive days.

Since the Company had borrowing availability in excess of this threshold from December 31, 2019 through December 31, 2020, the Company was not required to comply with the minimum fixed charge coverage ratio covenant during the year ended December 31, 2020.

The Third ARLS Agreement contains customary restrictive covenants, including limitations on our ability and the ability of our subsidiaries to:

incur additional debt;

pay dividends or other restricted payments;

make investments;

IV < 1.50 to 1.00

0.20 % 2.25 % 2.25 % 1.25 %

Guarantee and Security

All obligations under the Credit Agreement and related documents are unconditionally guaranteed by each of the Company’s existing and future direct and indirect wholly owned material domestic subsidiaries, subject to certain exceptions (the “Guarantors”).

All obligations of the Company under the Credit Agreement and the guarantees of those obligations are secured by a first priority pledge of substantially all of the assets of the Company and of the Guarantors, subject to certain exceptions.

The property pledged by the Company and the Guarantors includes a first priority pledge of all of the equity interests owned by the Company and the Guarantors in their respective domestic subsidiaries and a first priority pledge of the equity interests owned by the Company and the Guarantors in certain foreign subsidiaries, in each case, subject to certain exceptions.

Covenants and other terms

The Credit Agreement contains customary restrictive covenants, including, without limitation, limitations on the ability of the Company and its subsidiaries to incur additional debt and guarantees;

grant certain liens on assets;

pay dividends or make certain other distributions;

make certain investments or acquisitions;

dispose of certain assets;

make payments on certain indebtedness;

merge, combine with any other person or liquidate;

amend organizational documents;

make material changes in accounting treatment or reporting practices;

enter into certain restrictive agreements;

enter into certain hedging agreements;

engage in transactions with affiliates;

create liens on assets;

and consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries.

The Third ARLS Agreement also contains customary reporting and other affirmative covenants.

The Company was in compliance with these covenants as of December 31, 2020.

Voluntary prepayments of amounts outstanding under the Revolving Credit Facility are permitted at any time, without premium or penalty, other than (to the extent applicable) customary LIBOR breakage charges.

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.

Goodwill and Intangible Assets

Our intangible assets as of December 31 were comprised of the following:

enter into certain employee benefit plans;

and other matters customarily included in senior secured loan agreements.

The Credit Agreement also contains customary reporting and other affirmative covenants, as well as customary events of default, including, without limitation, nonpayment of obligations under the Credit Facilities when due;

material inaccuracy of representations and warranties;

violation of covenants in the Credit Agreement and certain other documents executed in connection therewith;

breach or default of agreements related to material debt;

revocation or attempted revocation of guarantees;

denial of the validity or enforceability of the loan documents or failure of the loan documents to be in full force and effect;

certain material judgments;

certain events of bankruptcy or insolvency;

certain Employee Retirement Income Security Act events;

and a change in control of the Company.

Certain of the defaults are subject to exceptions, materiality qualifiers, grace periods and baskets customary for credit facilities of this type.

The Credit Agreement includes (a) a minimum consolidated fixed charge coverage ratio of 1.20 :1.0, and (b) a maximum consolidated total leverage ratio of 3.75 :1.0 (subject to step-downs to 3.50 :1.0 at the end of the fiscal quarter ending September 30, 2021;

to 3.25 :1.0 at the end of the fiscal quarter ending March 31, 2022;

and to 3.00 :1.0 for each fiscal quarter on and after the fiscal quarter ending September 30, 2022).

On October 25, 2021, the Company entered into the Amendment to the Credit Agreement.

The Amendment permits the Company to engage in supply chain financing arrangements with financial institutions to cover up to $ 20.0 million in accounts receivable from customers per month.

Additionally, the Amendment increased the Company’s capital expenditure investment threshold from $ 25.0 million to $ 32.0 million.

We were in compliance with the covenants as of December 31, 2021.

Repayment and prepayment

The Credit Agreement requires the Company to make quarterly amortization payments to the Term Loan Facility at an annualized rate of the loans under the Term Loan Facility for every year beginning in the third quarter of 2021 as follows:

5.0 %, 7.5 %, 10.0 %, 12.5 % and 15 %.

The Credit Agreement also requires all outstanding amounts under the Credit Facilities to be repaid in full on the Maturity Date.

The Credit Agreement requires prepayments from the receipt of proceeds of dispositions or debt issuance, subject to certain exceptions and ability to re-invest and use proceeds towards acquisitions permitted by the Credit Agreement.

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

Any prepayment of Eurodollar loans shall be in a principal amount of $ 1 million or a whole multiple of $ 1 million in excess thereof (or, if less, the entire principal amount thereof then outstanding) and any prepayment of base rate loans shall be in a principal amount of $ 0.5 million or a whole multiple of $ 0.1 million in excess thereof (or, if less, the entire principal amount thereof then outstanding).

The Credit Agreement contains customary representations and warranties by the Company.

The representations and warranties contained in the Credit Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties.

Term Loan and Security Agreement

On April 12, 2017, the Company entered into the $ 175.0 million 2023 Term Loan Facility, maturing on April 12, 2023, pursuant to a term loan and security agreement (the “TLS Agreement”).

On April 30, 2021, the 2023 Term Loan Facility was fully repaid and terminated as described below.

ABL Revolving Credit Facility

On September 18, 2019, the Company entered into an amendment of the Third Amended and Restated Loan and Security Agreement (the “Third ARLS Agreement”), dated as of April 12, 2017, which governed the Company’s ABL Revolving Credit Facility.

On March 1, 2021, the Company and certain of its subsidiaries entered into Amendment No.

3, which amended the terms of the Third ARLS Agreement, among other things, to extend the maturity date of the ABL 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 Third ARLS Agreement, as amended, also allowed the Company to increase the size of the ABL Revolving Credit Facility by up to $ 50.0 million with the consent of Lenders providing the increase in the ABL Revolving Credit Facility.

On April 30, 2021, the ABL Revolving Credit Facility was fully repaid and terminated as described below.

Termination of TLS Agreement and Third ARLS Agreement

Effective on April 30, 2021, the Company issued a notice of redemption in respect of its 2023 Term Loan Facility and the ABL Revolving Credit Facility and deposited with the Bank of America, N.A.

as Administrative Agent under the TLS Agreement and the Third ARLS Agreement proceeds from the Credit Facilities, together with cash on hand in an amount sufficient to

discharge the Company’s obligations under the TLS Agreement and the Third ARLS Agreement and respective related agreements.

All amounts under the 2023 Term Loan Facility and ABL Revolving Credit Facility were repaid and discharged in full on April 30, 2021 and the TLS Agreement and Third ARLS Agreement were terminated.

The discharge resulted in a loss on extinguishment of debt of $ 7.2 million, including $ 3.7 million non-cash write off relating to deferred financing costs and unamortized discount of the 2023 Term Loan Facility, a voluntary repayment premium of $ 3.0 million, and $ 0.5 million of other fees associated with the new debt, recorded in our Consolidated Statements of Operations for the twelve months ended December 31, 2021.

Intangible Assets

Our definite-lived intangible assets were comprised of the following:

December 31, 2021

17 unchanged sentences

The aggregate intangible asset amortization expense was $ 3.4 million for the fiscal year ended December 31, 2021 and $ 3.4 million and $ 2.0 million for the fiscal years ended December 31, 2020 and 2019 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

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.

The estimated intangible asset amortization expense for each of the five succeeding fiscal years ending after December 31, 2021 is $ 3.4 million for the years ending December 31, 2022 and 2023, $ 2.9 million for the year ending December 31, 2024 and $ 1.4 million for the years ending December 31, 2025 and 2026.

Fair Value Measurement

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

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2 - Observable inputs other than those included in Level 1.

For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3 - Significant unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

Our financial instruments consisted of cash, accounts receivable, accounts payable, accrued liabilities, pension assets and liabilities.

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.

Recurring Measurements

Foreign Currency Forward Exchange Contracts.

1 unchanged sentence

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 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:

To manage our risk for transactions denominated in Mexican Pesos, Czech Crown and Ukrainian Hryvnia, 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 for transactions denominated in Mexican Pesos are deferred in accumulated other comprehensive loss and recognized in cost of revenues in the period the related hedge transactions are settled.

As of December 31, 2021, hedge contracts for transactions denominated in Ukrainian Hryvnia and Czech Crown were not designated as a hedging instruments;

therefore, they are marked-to-market and the fair value of agreements is recorded in the Consolidated Balance Sheets with the offsetting gains and losses recognized in other (income) expense and recognized in cost of revenues in the period the related hedge transactions are settled in the Consolidated Statements of Operations.

Interest Rate Swaps.

To manage our exposure to variable interest rates, we have entered into interest rate swaps 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 swaps are intended to mitigate the impact of rising interest rates on the Company and covers 50 % of outstanding debt under the Term Loan Facility.

Any changes in fair value are included in earnings or deferred through OCI, depending on the nature and effectiveness of the offset.

Any ineffectiveness in a cash flow hedging relationship is recognized immediately in earnings in the consolidated statements of operations.

Contingent Consideration.

As a result of the acquisition of First Source Electronics, LLC (“FSE”) on September 17, 2019, the Company agreed to pay up to $ 10.8 million in contingent milestone payments (“Contingent Consideration”).

The Contingent Consideration is 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.

As of December 31, 2021, the remaining undiscounted Contingent Consideration payment is estimated at $ 4.8 million and the fair value is $ 4.4 million, which is presented in the Consolidated Balance Sheets in accrued liabilities and other.

A payment of $ 5.0 million was made during the second quarter of 2021 based on achievement of the second EBITDA threshold.

The fair values of our derivative assets and liabilities and Contingent Consideration measured on a recurring basis as of December 31 and are categorized as follows:

December 31, 2021 December 31, 2020

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 $ —

Foreign exchange contract $ 1,375 $ — $ 1,375 $ — $ 1,882 $ — $ 1,882 $ —

Interest rate swap agreement $ 241 $ — $ 241 $ — $ 936 $ — $ 936 $ —

$ 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.

Interest rate swap agreement $ 498 $ — $ 498 $ — $ 2,080 $ — $ 2,080 $ —

Contingent Consideration $ 4,409 $ — $ — $ 4,409 $ 8,800 $ — $ — $ 8,800

Details of the changes in value for the Contingent Consideration that is measured using significant unobservable inputs (Level 3) are as follows:

Contingent Consideration liability balance at December 31, 2020

Change in fair value 609

Payments ( 5,000 )

Contingent Consideration liability balance at December 31, 2021

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

4 unchanged sentences

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:

The following table summarizes the fair value and presentation of derivatives in the Consolidated Balance Sheets at December 31 :

Derivative Asset

Balance Sheet

Location Fair Value

Foreign exchange contracts Other assets $ 1,375 $ 1,882

Interest Rate Swap Contract Accrued liabilities and other $ 241 $ 936

Derivative Liability

Balance Sheet

Location Fair Value

Interest Rate Swap Accrued liabilities and other $ 498 $ 2,080

Derivative Equity

Balance Sheet

Location Fair Value

Foreign exchange contracts Accumulated other comprehensive loss $ 757 $ 1,441

The following table summarizes the effect of derivative instruments on the Consolidated Statements of Operations:

Location of Gain (Loss)

Recognized on Derivatives Amount of Gain (Loss)

Recognized on Derivatives

Recognized in Income on

Foreign exchange contracts Cost of revenues $ 2,452 $ ( 1,811 )

Interest rate swap agreement Interest expense $ ( 9 ) $ ( 1,031 )

Long-term Debt .

Foreign exchange contracts Other (income) expense $ 134 $ —

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

Other Fair Value Measurements

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:

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

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

December 31, 2021 December 31, 2020

Amount Fair Value Carrying

2 unchanged sentences

$ 145,556 $ 142,265 $ — $ —

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.

Term loan and security agreement 2

$ — $ — $ 146,576 $ 144,878

Revolving Credit Facility 1

$ 49,400 $ 49,400 $ — $ —

1 Presented in the Consolidated Balance Sheets as the current portion of long-term debt of $ 9.4 million and long-term debt of $ 185.6 million as of December 31, 2021.

2 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.

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, Business Combination, as of December 31, 2020 and December 31, 2019.

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.

For the year 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.

3 unchanged sentences

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 .

No non-recurring fair value measurements were assessed during the period ended December 31, 2021.

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.

20 unchanged sentences

Operating Leases

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

Right-of-use assets, net Operating lease right-of-use asset, net $ 26,116 $ 30,047

Current liabilities Current operating lease liabilities 9,048 9,236

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

Non-current liabilities Long-term operating lease liabilities 18,519 23,932

Total operating lease liabilities $ 27,567 $ 33,168

Finance Leases

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

Accumulated depreciation ( 643 ) ( 343 )

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

Right-of-use assets, net Other assets $ 468 $ 767

Current liabilities Accrued liabilities and other 194 293

7 unchanged sentences

Finance leases 4.7 % 5.1 %

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.

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.

28 unchanged sentences

Share-based compensation ( 857 ) ( 15 ) ( 14 )

Executive compensation (IRC 162m) 1,128 — —

Repatriation of foreign earnings 208 37 1,235

19 unchanged sentences

Net operating loss carryforwards 14,944 17,369

Other temporary differences not currently available for tax purposes 7,089 3,248

Other temporary differences 5,483 7,089

Total noncurrent deferred tax assets $ 42,479 $ 42,422

5 unchanged sentences

Pension obligations — 161

Accrued benefits ( 124 ) ( 111 )

Net operating loss carryforwards — 1,517

Other temporary differences not currently available for tax purposes ( 261 ) ( 578 )

Other temporary differences ( 303 ) ( 385 )

Total noncurrent tax liabilities ( 1,168 ) ( 1,061 )

3 unchanged sentences

In making such judgments, significant weight is given to evidence that can be objectively verified.

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.

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

During 2021, we recorded an additional valuation allowance of $ 2.5 million primarily related to the deferred tax assets of our United Kingdom subsidiary and certain U.S.

federal and state tax attribute carryforwards, and released $ 0.6 million in valuation allowances primarily 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.

12 unchanged sentences

As of December 31, 2021, we had $ 3.2 million of 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.

foreign tax credit carryforwards, net of a $ 2.3 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.

6 unchanged sentences

As of December 31, 2021, cash of $ 34.6 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.

During the year ended December 31, 2021, $ 5.3 million was repatriated from the Company's foreign subsidiaries.

The Company had a $ 0.5 million deferred tax liability as of December 31, 2021 for the expected future income tax implications of repatriating cash from the foreign subsidiaries for which no indefinite reinvestment assertion has been made.

15 unchanged sentences

Gross decreases - tax positions in prior periods — — ( 39 )

Gross increases - current period tax positions — — 59

Lapse of statute of limitations — — ( 12 )

4 unchanged sentences

Compensation and benefits $ 16,677 $ 15,877

Contingent consideration 4,870 570

Taxes payable 4,057 2,513

Insurance 2,705 3,110

Accrued freight 5,628 2,556

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

Taxes payable 6,391 4,057

Contingent Consideration 4,409 4,870

Other 8,687 13,460

5 unchanged sentences

We recognized expense associated with the plan of $ 4.0 million, $ 1.9 million and $ 4.6 million for the years ended December 31, 2021, 2020, and 2019, 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.

The increase in expense for the year ended December 31, 2021 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 in the year ended December 31, 2020.

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.

and United Kingdom.

Each of the plans are frozen to new participants and to additional service credits earned.

Each of the plans are frozen to new participants and to

additional service credits earned.

In December 2018, we consolidated the U.S.

Our policy is to make annual contributions to the plans to fund the minimum contributions, as required by local regulations.

During the three months ended March 31, 2019, the Company offered employees with deferred vested balances in the U.S.

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 Consolidated Statements of Operations and is reflected in amortization of prior service cost in the net periodic (benefit) cost table below.

During the fourth quarter of the year ended December 31, 2021, the Audit Committee of the Board of Directors approved amendments to the U.S.

Pension Plan to terminate the plan.

The plan participants have been notified of the Company's intention to terminate the plan effective December 31, 2021 and settle plan liabilities through either lump sum distributions to plan participants or annuity contracts that cover vested benefits.

The Company currently expects to complete the settlement of plan liabilities between the fourth quarter of 2022 and the first quarter of 2023.

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

7 unchanged sentences

Benefits paid ( 2,422 ) ( 2,344 ) ( 1,692 ) ( 1,820 )

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

Actuarial (gain) loss ( 776 ) 2,866 ( 3,595 ) 7,514

Exchange rate changes — — ( 460 ) 2,244

9 unchanged sentences

Funded status $ 2,353 $ 1,410 $ ( 9,905 ) $ ( 15,169 )

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 decrease in the discount rate.

Actuarial Gain - The projected U.S.

benefit obligation includes a net gain of $ 0.8 million for the year ended December 31, 2021.

The gain is a result of changes in key actuarial assumptions, including the change to termination basis and demographic gain due to higher mortality experience during 2020 than expected.

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.

benefit obligation includes a net gain of $ 3.6 million for the year ended December 31, 2021 driven primarily by an increase in the discount rate assumption.

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

42 unchanged sentences

Our pension plan investment strategy is reviewed periodically, but no less frequently than annually.

Due to the termination of the U.S.

Pension Plan effective December 31, 2021, the related investments were reallocated to fixed income securities.

We employ a total return investment approach whereby a mix of equities, fixed income and real estate investments are intended to maximize the long-term return of plan assets taking into consideration a prudent level of risk.

10 unchanged sentences

Our investment allocation target for our pension plans for 2021 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,

Target Allocation Actual Allocations

2021 2020 2021 2020

18 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 6, Fair Value Measurement, for the years ended December 31, 2020 and for the year ended December 31, 2019 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, 2021 and 2020 are as follows:

December 31, 2021

2 unchanged sentences

Identical Assets Significant

Observable Inputs Significant

Unobservable Inputs

Total Level 1 Level 2 Level 3

Observable Inputs Net Asset Value Per Share

Total Level 1 Level 2 NAV

Cash and cash equivalents $ 9,192 $ 442 $ — $ 8,750

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 20,239 — 20,239

2 unchanged sentences

Other 13,294 — 10,091 3,203

property 4,088 — — 4,088

Total pension fund assets $ 79,842 $ 442 $ 32,452 $ 46,948

13 unchanged sentences

Fixed income securities:

Government bonds 24,917 — 24,917 —

Corporate bonds 40,485 — 40,485 —

10 unchanged sentences

2027 to 2031 $ 10,096

It is not practical to estimate at this time how much of the U.S.

Pension Plan liabilities will be settled in 2022 or 2023;

therefore, the table above assumes that all settlement occurs in 2022.

Performance Awards

2 unchanged sentences

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 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”).

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 EIP.

Restricted Cash Awards – Restricted cash is a grant that is earned and payable in cash based upon the Company’s relative total shareholder return in terms of ranking as compared to the peer group generally ranging from a one to three-year period.

Performance Stock Awards Settled in Cash – Performance-based stock award is a grant that is earned and payable in cash.

The total amount payable as of the award's vesting date is determined based upon number of shares allocated to each participant, the Company’s relative total shareholder return in terms of ranking which can fluctuate as compared to the peer group over the performance period, and the share price of the Company's stock.

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.

Performance targets are based on relative total shareholder return in terms of ranking as compared to the peer group over the performance period.

These awards are 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.

2 unchanged sentences

Adjusted Award Value at December 31, 2020

New grants 2,108

Forfeitures ( 309 )

3 unchanged sentences

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.

Unrecognized compensation expense was $ 1.5 million as of December 31, 2021.

Share-Based Compensation

4 unchanged sentences

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

Time-based restricted stock awards generally vest over the three-year period following the date of grant, unless forfeited, and will be paid out in the form of stock at the end of the vesting period.

Performance Stock Awards Settled in Stock – Performance-based stock awards have similar restrictions as restricted stock.

They vest over the specified period following the date of grant, unless forfeited, and will be paid out in the form of stock at the end of the vesting period if the Company meets the performance targets set at the time the award was granted.

Performance targets are based on relative total shareholder return in terms of ranking as compared to the peer group over the performance period.

As of December 31, 2021, there was approximately $ 5.0 million of unrecognized compensation expense related to non-vested share-based compensation arrangements granted under our equity incentive plans.

1 unchanged sentence

A summary of the status of our restricted stock awards as of December 31, 2021 and changes during the twelve-month period ending December 31, 2021, is presented below:

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

(in thousands) Weighted- Average Grant-Date Fair Value

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

21 unchanged sentences

Diluted earnings (loss) per share attributable to common stockholders $ 0.72 $ ( 1.20 ) $ 0.51

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, 2021.

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.

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 terms of our Credit Agreement 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

Each holder of common stock as of the record date received a dividend of one Right per share of common stock.

On April 15, 2021, the Company amended the rights plan.

Pursuant to the amendment, the final expiration date of the Rights was advanced from June 24, 2021 to April 15, 2021.

As a result of the amendment, the Rights are no longer outstanding, thereby resulting in termination of the rights plan.

Other Comprehensive (Income) 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 Pension and Other Post-Retirement Benefit Plans Derivative Instruments Accumulated other

comprehensive

12 unchanged sentences

Retirement benefits adjustment:

Net actuarial loss and prior service credit $ ( 4,537 ) $ ( 60 ) $ ( 4,597 )

Net actuarial gain and prior service credit $ 4,620 $ ( 44 ) $ 4,576

Reclassification of actuarial loss and prior service cost to net income 97 — 97

Net unrealized loss ( 5,042 ) 1 ( 5,041 )

Net unrealized gain 4,717 ( 44 ) 4,673

Cumulative translation adjustment ( 1,421 ) — ( 1,421 )

4 unchanged sentences

Retirement benefits adjustment:

Net actuarial gain and prior service credit $ 3,320 $ ( 905 ) $ 2,415

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 3,643 ( 905 ) 2,738

Net unrealized loss ( 5,042 ) 1 ( 5,041 )

Cumulative translation adjustment 5,008 — 5,008

3 unchanged sentences

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.

Furthermore, in 2020, the Company began implementing additional cost reduction initiatives and further manufacturing capacity rationalization initiatives in response to the COVID-19 pandemic ("2020 Initiatives").

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.

On November 1, 2021, the Company's Board of Directors approved a restructuring program to align the Company's cost structure to support margin expansion.

The program includes workforce reductions and footprint optimization across segments.

We expect the restructuring cost to be between $ 4.0 million to $ 6.0 million for the entire program.

The changes in accrued restructuring balances are as follows:

Electrical Systems Global

Seating Corporate/

Balance - December 31, 2019 $ 2,324

5 unchanged sentences

Balance - December 31, 2021 $ 486

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.

Substantially all of the $ 1.9 million costs incurred in the twelve months ended December 31, 2021, related to headcount reductions and none related to facility exit and other costs.

More than half of the costs were incurred in the Electrical Systems segment with the remainder split between Vehicle Solutions and Warehouse Automation segments.

Of the $ 1.9 million costs incurred, $ 1.2 million was recorded in cost of revenues and $ 0.7 million was recorded in selling, general and administrative expenses.

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.

The headcount reductions were primarily related to the Vehicle Solutions segment and Corporate, and the facility costs were primarily related to the Vehicle Solutions segment.

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.

6 unchanged sentences

As of December 31, 2021 and 2020, 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.

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

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.

3 unchanged sentences

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

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, 2021 and 2020, are included within accrued liabilities and other in the accompanying Consolidated Balance Sheets.

4 unchanged sentences

Balance - end of year $ 1,490 $ 2,041

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.

Debt Payments - As disclosed in Note 3, Debt, the Credit Agreement requires the Company to repay a fixed amount of principal on a quarterly basis and make voluntary prepayments that coincide with certain events.

The following table provides future minimum principal payments due on long-term debt for the next five years.

The existing long-term debt agreement matures in 2026;

1 unchanged sentence

Year Ending December 31,

2023 $ 13,125

2024 $ 16,875

2025 $ 20,625

2026 $ 135,650

Thereafter $ —

Segment Reporting

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 amounts have been reclassified to conform to the new organization structure.

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.

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

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;

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 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.

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

1 unchanged sentence

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, 2020.

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

The following tables present financial information for the Company's reportable segments for the periods indicated:

For the year ended December 31, 2021

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

Vehicle Solutions Warehouse Automation Electrical Systems Aftermarket and Accessories Corporate/

Revenues $ 498,913 $ 187,912 $ 168,971 $ 115,782 $ — $ 971,578

Gross profit $ 50,608 $ 29,669 $ 20,773 $ 17,980 $ ( 43 ) $ 118,987

Selling, general & administrative expenses 26,959 6,106 6,213 5,889 24,239 69,406

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) $ 23,649 $ 23,563 $ 14,560 $ 12,091 $ ( 24,282 ) $ 49,581

Capital expenditures and depreciation expense:

Capital expenditures and other items:

Capital expenditures $ 6,203 $ 4,480 $ 5,976 $ 482 $ 512 $ 17,653

Depreciation expense $ 7,911 $ 687 $ 3,550 $ 1,240 $ 1,671 $ 15,059

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, 2019.

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/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

Vehicle Solutions Warehouse Automation Electrical Systems Aftermarket and Accessories Corporate/

Revenues $ 366,636 $ 101,655 $ 141,094 $ 108,314 $ — $ 717,699

Gross profit $ 32,398 $ 13,205 $ 12,185 $ 16,658 $ ( 370 ) $ 74,076

1 unchanged sentence

22,510 9,698 3,996 5,396 26,628 68,228

Amortization expense 1,415 537 — 1,952

Goodwill and other impairment 7,245 19,829 1,150 — 793 29,017

Operating income (loss) $ 2,643 $ ( 16,322 ) $ 7,039 $ 11,262 $ ( 27,791 ) $ ( 23,169 )

2 unchanged sentences

Depreciation expense $ 7,682 $ 377 $ 3,552 $ 1,436 $ 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 $ 503,717 $ 394,020 $ — $ 897,737

Intersegment revenues 9,037 3,481 ( 12,518 ) —

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

Vehicle Solutions Warehouse Automation Electrical Systems Aftermarket and Accessories Corporate/

Revenues $ 577,989 $ 12,803 $ 178,398 $ 132,048 $ — $ 901,238

Gross profit $ 65,121 $ 1,248 $ 16,588 $ 22,252 $ ( 72 ) $ 105,137

1 unchanged sentence

24,875 1,396 5,331 6,594 26,305 64,501

Amortization expense 747 553 — 1,300

Operating income (loss) $ 40,246 $ ( 148 ) $ 11,257 $ 15,658 $ ( 26,377 ) $ 40,636

9 unchanged sentences

United States $ 738,937 $ 60,260 $ 536,846 $ 60,605 $ 691,224 $ 70,870

United Kingdom 33,329 10,763 48,070 12,233 51,451 3,204

All other countries 232,641 29,450 180,853 32,985 210,014 38,568

1 unchanged sentence

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.

Volvo and two other customers, were in excess of 10% of total Company revenues in each of the years ended December 31, 2021, 2020 and 2019, as noted in the table below.

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

1 unchanged sentence

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.

Customer Primary Segment 2021 2020 2019

Volvo Vehicle Solutions 17 % 16 % 22 %

Customer B Warehouse Automation 17 % 9 % — %

Customer C Vehicle Solutions 12 % 14 % 17 %

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