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Item 1. Financial Statements

2022-05-04 compared with 2021-11-02 · 183 added, 290 removed, 455 unchanged (51% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

(In thousands, except per share amounts)

3 unchanged sentences

Selling, general and administrative expenses 16,999 15,718

Goodwill and other impairment — — — 29,017

Operating income (loss) 11,372 8,893 43,104 ( 28,146 )

Operating income 8,384 15,403

Other (income) expense 1,041 ( 656 )

Interest expense 1,961 5,041

Loss on extinguishment of debt — — 7,155 —

Income (loss) before provision for income taxes 9,928 3,219 27,587 ( 44,288 )

Provision (benefit) for income taxes 2,417 ( 959 ) 6,491 ( 11,375 )

Net income (loss) $ 7,511 $ 4,178 $ 21,096 $ ( 32,913 )

Earnings (loss) per Common Share:

Income before provision for income taxes 5,382 11,018

Provision for income taxes 1,400 2,528

Net income $ 3,982 $ 8,490

Earnings per Common Share:

Basic $ 0.12 $ 0.27

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

(In thousands)

Net income (loss) $ 7,511 $ 4,178 $ 21,096 $ ( 32,913 )

Net income $ 3,982 $ 8,490

Other comprehensive income (loss):

3 unchanged sentences

Other comprehensive income (loss) 3,112 ( 2,212 )

Comprehensive income (loss) $ 7,158 $ 6,742 $ 20,329 $ ( 35,801 )

Comprehensive income $ 7,094 $ 6,278

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

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

(In thousands, except per share amounts)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss) $ 21,096 $ ( 32,913 )

Net income $ 3,982 $ 8,490

Adjustments to reconcile net income to cash flows from operating activities:

Depreciation and amortization 4,432 4,642

Impairment expense — 29,017

Noncash amortization of debt financing costs 113 538

Payment in kind interest expense — 1,705

Share-based compensation expense 5,029 2,471

Shared-based compensation expense 1,117 965

Deferred income taxes 532 1,603

Non-cash loss (income) on derivative contracts 599 ( 212 )

Loss on extinguishment of debt 7,155 —

Change in other operating items:

4 unchanged sentences

Other operating activities, net ( 3,858 ) 1,213

Net cash provided by (used in) operating activities ( 20,889 ) 30,772

Net cash used in operating activities ( 21,398 ) ( 15,371 )

CASH FLOWS FROM INVESTING ACTIVITIES:

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CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings under term loan facility 150,000 —

Repayment of term loan facility ( 1,875 ) —

Repayment of 2023 term loan facility principal — ( 1,094 )

Borrowings under revolving credit facility 51,800 —

Borrowing under revolving credit facility 55,200 —

Repayment of revolving credit facility ( 24,400 ) —

Borrowings under ABL revolving credit facility — 6,800

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

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

Debt issuance and amendment costs ( 2,333 ) ( 2,579 )

Contingent Consideration payment ( 5,000 ) —

Surrender of common stock by employees ( 464 ) —

Other financing activities ( 55 ) ( 232 )

Net cash provided by (used in) financing activities 16,073 ( 11,199 )

Net cash provided by financing activities 28,406 5,474

EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH ( 168 ) ( 761 )

15 unchanged sentences

Balance - March 31, 2021 31,381,845 $ 315 $ ( 11,893 ) $ 250,277 $ ( 88,866 ) $ ( 47,218 ) $ 102,615

Share-based compensation expense 138,400 ( 14 ) — 868 — — 854

Total comprehensive income (loss) — — — — ( 12,497 ) 2,578 ( 9,919 )

Balance - June 30, 2020 30,985,669 $ 309 $ ( 11,230 ) $ 247,582 $ ( 97,398 ) $ ( 51,402 ) $ 87,861

Share-based compensation expense — $ 1 $ — $ 741 $ — $ — $ 742

Total comprehensive income (loss) — $ — $ — $ — $ 4,178 $ 2,564 $ 6,742

Balance - September 30, 2020 30,985,669 $ 310 $ ( 11,230 ) $ 248,323 $ ( 93,220 ) $ ( 48,838 ) $ 95,345

Balance - December 31, 2021 32,034,592 $ 321 $ ( 13,172 ) $ 255,566 $ ( 73,624 ) $ ( 42,438 ) $ 126,653

Share-based compensation income 132,034 2 — 965 — — 967

Total comprehensive income (loss) — — — — 8,490 ( 2,212 ) 6,278

Balance - March 31, 2021 31,381,845 $ 315 $ ( 11,893 ) $ 250,277 $ ( 88,866 ) $ ( 47,218 ) $ 102,615

Share-based compensation expense 122,618 1 ( 464 ) 1,117 — — 654

Total comprehensive income (loss) — — — — 3,982 3,112 7,094

Balance - June 30, 2021 31,569,749 $ 316 $ ( 11,966 ) $ 252,478 $ ( 83,771 ) $ ( 45,420 ) $ 111,637

Share-based compensation expense — $ — $ — $ 1,863 $ — $ — $ 1,863

Total comprehensive income — $ — $ — $ — $ 7,511 $ ( 353 ) $ 7,158

Balance - September 30, 2021 31,569,749 $ 316 $ ( 11,966 ) $ 254,341 $ ( 76,260 ) $ ( 45,773 ) $ 120,658

Balance - March 31, 2022 32,157,210 $ 322 $ ( 13,636 ) $ 256,683 $ ( 69,642 ) $ ( 39,326 ) $ 134,401

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except for share and per share amounts and where specifically disclosed)

Description of Business and Basis of Presentation

Commercial Vehicle Group, Inc.

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

At Commercial Vehicle Group, Inc.

and its subsidiaries, we deliver real solutions to complex design, engineering and manufacturing problems across a range of global industries by innovating, constantly adding value, and treating our customer's bottom line as if it were our own.

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

and its subsidiaries.

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

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

We primarily manufacture customized products to meet the requirements of our customer.

We believe our products are used by a majority of the North American Commercial Truck markets, many construction vehicle OEMs and top e-commerce retailers.

The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America and the rules and regulations of the Securities and Exchange Commission and include the accounts of the Company and its subsidiaries.

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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.

Recently Adopted Accounting Pronouncements

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 condensed 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 condensed consolidated financial statements and related disclosures.

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.

Revenue Recognition

We had outstanding customer accounts receivable, net of allowances, of $ 192.1 million as of September 30, 2021 and $ 151.1 million as of December 31, 2020.

We had outstanding customer accounts receivable, net of allowances, of $ 210.4 million as of March 31, 2022 and $ 174.5 million as of December 31, 2021.

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

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

Three Months Ended September 30, 2021

Electrical Systems Global Seating Elimination/

Seats $ 667 $ 75,439 $ ( 288 ) $ 75,818

Electrical wire harnesses, panels and assemblies 93,895 590 ( 159 ) 94,326

Trim 40,174 78 ( 446 ) 39,806

Cab structures and sleeper boxes 18,625 — — 18,625

Mirrors, wipers and controls 10,751 383 ( 99 ) 11,035

Total $ 164,112 $ 76,490 $ ( 992 ) $ 239,610

Three Months Ended September 30, 2020

Electrical Systems Global Seating Elimination/

Seats $ 344 $ 65,802 $ ( 1,946 ) $ 64,200

Electrical wire harnesses, panels and assemblies 65,791 1,557 ( 111 ) 67,237

Trim 33,364 1,187 ( 73 ) 34,478

Cab structures and sleeper boxes 12,479 — — 12,479

Mirrors, wipers and controls 9,089 356 ( 142 ) 9,303

Total $ 121,067 $ 68,902 $ ( 2,272 ) $ 187,697

Nine Months Ended September 30, 2021

Electrical Systems Global Seating Elimination/

Three Months Ended March 31, 2022

Vehicle Solutions Warehouse Automation Electrical Systems Aftermarket and Accessories Total

Seats $ 69,808 $ — $ — $ 15,788 $ 85,596

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Trim 44,758 — — 1,296 46,054

Cab structures and sleeper boxes 60,952 — — 60,952

Warehouse Automation — 32,331 — — 32,331

Cab structures 25,591 — — — 25,591

Mirrors, wipers and controls — — — 9,810 9,810

Total $ 140,157 $ 34,126 $ 39,876 $ 30,215 $ 244,374

Nine Months Ended September 30, 2020

Electrical Systems Global Seating Elimination/

Three Months Ended March 31, 2021

Vehicle Solutions Warehouse Automation Electrical Systems Aftermarket and Accessories Total

Seats $ 67,502 $ — $ — $ 14,077 $ 81,579

1 unchanged sentence

Trim 36,757 — — 560 37,317

Cab structures and sleeper boxes 32,910 — — 32,910

Warehouse Automation — 41,120 — — 41,120

Cab structures 17,913 — — 2,747 20,660

Mirrors, wipers and controls 1,475 — 335 9,090 10,900

1 unchanged sentence

Debt consisted of the following:

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Term loan facility due 2026 $ 144,375 $ 146,250

Revolving credit facility due 2026 80,200 49,400

Term loan and security agreement due 2023 — 150,950

Unamortized issuance costs and discount ( 734 ) ( 4,374 )

Unamortized discount and issuance costs ( 654 ) ( 694 )

$ 223,921 $ 194,956

current portion, net of unamortized issuance costs and discount of $ 0.0 million at September 30, 2021 and $ 1.9 million at December 31, 2020, respectively

current portion, net of unamortized discount and issuance costs of $ 0.00 and $ 0.7 million, respectively

( 10,313 ) ( 9,375 )

6 unchanged sentences

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.

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 September 30, 2021 we had $ 31.3 million of borrowings under the Revolving Credit Facility, outstanding letters of credit of $ 1.4 million and availability of $ 92.3 million.

The unamortized deferred financing fees associated with the Revolving Credit Facility were $ 1.3 million as of September 30, 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.

At March 31, 2022, we had $ 80.2 million of borrowings under the Revolving Credit Facility, outstanding letters of credit of $ 1.2 million and availability of $ 43.6 million.

The unamortized deferred financing fees associated with the Revolving Credit Facility of $ 1.2 million and $ 1.3 million as of March 31, 2022 and December 31, 2021, respectively, are being amortized over the remaining life of the Credit Agreement.

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

Interest rates and fees

39 unchanged sentences

certain events of bankruptcy or insolvency;

certain Employee Retirement Income Securities Act events;

certain Employee Retirement Income Security Act events;

and a change in control of the Company.

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

We were in compliance with the covenants as of September 30, 2021.

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 March 31, 2022.

Repayment and prepayment

8 unchanged sentences

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”), the terms of which are described in Note 3, Debt in our 2020 Form 10-K.

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, the terms of which are described in Note 3, Debt in our 2020 10-K and which governed the Company’s 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.

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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 Condensed Consolidated Statements of Operations for the nine months ended September 30, 2021.

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.

Cash Paid for Interest

For the nine months ended September 30, 2021 and 2020, cash payments for interest were $ 7.0 million and $ 9.3 million, respectively.

Goodwill and Intangible Assets

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

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.

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

The changes in the carrying amounts of goodwill are as follows:

Electrical Systems Global Seating Total

Balance - December 31, 2019 $ 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 - December 31, 2020 $ — $ — $ —

For the three months ended March 31, 2022 and 2021, cash payments for interest were $ 1.6 million and $ 3.0 million, respectively.

Intangible Assets

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Amount Accumulated

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Amortization Net

Definite-lived intangible assets:

Trademarks/tradenames 22 years $ 11,597 $ ( 5,145 ) $ 6,452 $ 11,573 $ ( 5,043 ) $ 6,530

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$ 36,390 $ ( 18,983 ) $ 17,407 $ 36,463 $ ( 18,180 ) $ 18,283

The aggregate intangible asset amortization expense was $ 0.9 million for the three months ended September 30, 2021 and 2020.

The aggregate intangible asset amortization expense was $ 2.6 million for the nine months ended September 30, 2021 and 2020.

The aggregate intangible asset amortization expense was $ 0.9 million for the three months ended March 31, 2022 and 2021.

Fair Value Measurement

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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 and our revolving credit facility.

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.

3 unchanged sentences

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 and in Ukrainian Hryvnia, we have entered into forward exchange contracts that are designated as cash flow hedge instruments, which are recorded in the Condensed 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 September 30, 2021, the hedge contract for transactions denominated in Ukrainian Hryvnia was not designated as a hedging instrument;

therefore, it is marked-to-market and the fair value of the agreement is recorded in the Condensed 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 Condensed Consolidated Statements of Operations.

To manage our risk for transactions denominated in Mexican Pesos, Czech Crown and Ukrainian Hryvnia, we have entered into forward exchange contracts which are recorded in the Condensed Consolidated Balance Sheets at fair value.

The hedge contracts for transactions denominated in Mexican Pesos are designated as cash flow hedge instruments and gains and losses as a result of the changes in fair value of the hedge contract are deferred in accumulated other comprehensive loss and recognized in cost of revenues in the period the related hedge transactions are settled.

As of March 31, 2022, the hedge contracts for transactions denominated in Ukrainian Hryvnia and Czech Crown were not designated as hedging instruments;

therefore, they are marked-to-market and the fair value of the agreements is recorded in the Condensed 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 Condensed 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 $ 80 million of outstanding debt under the Term Loan Facility.

As of September 30, 2021, the interest rate swaps were not designated as hedging instrument, therefore, are marked-to-market and the fair value of the agreement recorded in the Condensed Consolidated Balance Sheets with the offsetting gain or loss recorded in interest and other expense in the Condensed Consolidated Statements of Operations.

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 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 September 30, 2021, the remaining undiscounted Contingent Consideration payment is estimated at $ 4.8 million and the fair value is $ 4.3 million, which is presented in the Condensed Consolidated Balance Sheets in other long term liabilities.

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

As of March 31, 2022, the remaining undiscounted Contingent Consideration payment is estimated at $ 4.8 million and the fair value is $ 4.5 million, which is presented in the Condensed Consolidated Balance Sheets in accrued liabilities and other.

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

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

Foreign exchange contract $ 2,371 $ — $ 2,371 $ — $ 1,375 $ — $ 1,375 $ —

Interest rate swaps $ 411 $ — $ 411 $ — $ 936 $ — $ 936 $ —

Interest rate swaps $ 913 $ — $ 913 $ — $ 2,080 $ — $ 2,080 $ —

Interest rate swap agreement $ 2,700 $ — $ 2,700 $ — $ 241 $ — $ 241 $ —

Foreign exchange contract $ 799 $ — $ 799 $ — $ — $ — $ — $ —

Interest rate swap agreement $ — $ — $ — $ — $ 498 $ — $ 498 $ —

Contingent consideration $ 4,528 $ — $ — $ 4,528 $ 4,409 $ — $ — $ 4,409

2 unchanged sentences

Change in fair value 119

Payments ( 5,000 )

Contingent Consideration liability balance at September 30, 2021

Contingent consideration liability balance at March 31, 2022

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Equivalent U.S.

6 unchanged sentences

Location Fair Value

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Foreign exchange contracts Other current assets $ 2,371 $ 1,375

Interest rate swaps Accrued liabilities and other $ 411 $ 936

Interest rate swap agreement Other current assets $ 2,700 $ 241

Derivative Liability

1 unchanged sentence

Location Fair Value

September 30, 2021 December 31, 2020

Interest rate swaps Accrued liabilities and other $ 913 $ 2,080

March 31, 2022 December 31, 2021

Foreign exchange contracts Accrued liabilities and other $ 799 $ —

Interest rate swap agreement Accrued liabilities and other $ — $ 498

Derivative Equity

1 unchanged sentence

Location Fair Value

September 30, 2021 December 31, 2020

Foreign exchange contracts Accumulated other comprehensive loss $ 389 $ 1,441

March 31, 2022 December 31, 2021

Derivative instruments Accumulated other comprehensive (loss) income $ 3,571 $ 757

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Location of Gain (Loss) on Derivatives

Recognized in Income (Loss) Amount of Gain (Loss) on Derivatives

Recognized in Income (Loss)

Recognized in Income Amount of Gain (Loss) on Derivatives

Recognized in Income

Foreign exchange contracts Cost of revenues $ 456 $ ( 307 )

Interest rate swaps Interest and other expense $ ( 1 ) $ ( 2 ) $ ( 7 ) $ ( 1,026 )

Interest rate swap agreement Interest and other expense $ ( 193 ) $ 2

Foreign exchange contracts Other (income) expense $ ( 671 ) $ ( 182 )

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Amount Fair Value Carrying

Amount Fair Value

Term Loan Facility 1

$ 147,391 $ 144,057 $ — $ —

Term loan and security agreement 1

1 unchanged sentence

Revolving credit facility $ 80,200 $ 80,200 $ 49,400 $ 49,400

$ 31,300 $ 31,300 $ — $ —

Presented in the Condensed Consolidated Balance Sheets as the current portion of long-term debt of $ 8.4 million and long-term debt of $ 170.3 million as of September 30, 2021

Presented in the Condensed 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.

Presented in the Condensed Consolidated Balance Sheets as the current portion of long-term debt of $ 10.3 million and long-term debt of $ 213.6 million as of March 31, 2022, and current portion of long-term debt of $ 9.4 million and long-term debt of $ 185.6 million as of December 31, 2021.

The components of lease expense are as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Operating lease cost

1 unchanged sentence

Finance lease cost

Amortization of right-of-use assets 71 92

Interest on lease liabilities 5 8

Total finance lease cost 76 100

Short-term lease cost

1,799 922 4,771 2,988

Total lease expense $ 4,179 $ 3,970

Supplemental balance sheet information related to leases is as follows:

Balance Sheet Location September 30, 2021 December 31, 2020

Balance Sheet Location March 31, 2022 December 31, 2021

Operating Leases

4 unchanged sentences

Finance Leases

Right-of-use assets, net Other assets, net $ 545 $ 767

Right-of-use assets, net Other assets $ 398 $ 468

Current liabilities Accrued liabilities and other 168 194

1 unchanged sentence

Total finance lease liabilities $ 404 $ 466

For the nine months ended September 30, 2021 and 2020, cash payments on operating leases were $ 8.5 million and $ 7.8 million, respectively.

Right-of-use Asset Impairment.

The impairment of an operating lease right-of-use asset of $ 0.4 million was recorded for first quarter ended March 31, 2020.

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

For the three months ended March 31, 2022 and 2021, cash payments on operating leases were $ 2.0 million and $ 2.2 million, respectively.

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

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Present value of lease liabilities $ 25,865 $ 404 $ 26,269

For the three and nine months ended September 30, 2021 we recorded a $ 2.4 million and $ 6.5 million tax provision, respectively, or 24 % effective tax rate for each period, compared to a $ 1.0 million and $ 11.4 million tax benefit for the three and nine months ended September 30, 2020, respectively.

The effective tax rate in the current three and nine month period is

higher than the U.S.

federal income tax rate primarily as a result of U.S.

state and non-U.S.

income taxes.

The Company’s prior year tax benefit for the three months ended September 30, 2020 was primarily a result of a $ 2.0 million income tax benefit recorded for the impact of the high-tax exception to Global Intangible Low-Taxed Income ("GILTI").

The Company’s prior year tax benefit for the nine months ended September 30, 2020 was primarily attributable to a pre-tax net loss versus a pre-tax net income in the nine months ended September 30, 2021.

For the nine months ended September 30, 2021 and 2020, cash paid for taxes, net of refunds received, were $ 3.1 million and $ 0.9 million, respectively.

For the three months ended March 31, 2022, we recorded a $ 1.4 million tax provision, or 26 % effective tax rate for the period, compared to a $ 2.5 million tax provision for the three months ended March 31, 2021.

Income tax expense for the three months ended March 31, 2022 and 2021 is based on an estimated annual effective tax rate, which requires management to make its best estimate of annual pretax income or loss.

During the year, management regularly updates forecasted annual pretax results for the various countries in which the Company operates based on changes in factors such as prices, shipments, product mix, material inflation and manufacturing operations.

To the extent that actual 2022 pretax results for U.S.

and foreign income or loss vary from estimates, the actual income tax expense recognized in 2022 could be different from the forecasted amount used to estimate the income tax expense for the three months ended March 31, 2022.

For the three months ended March 31, 2022 and 2021, cash paid for taxes, net of refunds received were $ 1.4 million and $ 1.0 million, respectively.

Pension and Other Post-Retirement Benefit Plans

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

Three Months Ended September 30, Three Months Ended September 30,

2021 2020 2021 2020

Interest cost $ 207 $ 281 $ 160 $ 210

Expected return on plan assets ( 553 ) ( 519 ) ( 251 ) ( 277 )

Amortization of prior service cost 2 2 12 151

Recognized actuarial loss 70 74 239 12

Net (benefit) cost $ ( 274 ) $ ( 162 ) $ 160 $ 96

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

Nine months ended September 30, Nine months ended September 30,

Three Months Ended March 31, Three Months Ended March 31,

2022 2021 2022 2021

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

Subsequent to the quarter ended September 30, 2021, the Audit Committee of the Board of Directors approved amendments to the U.S.

During 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.

The plan participants were 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.

Performance Awards

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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.

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

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Payments ( 300 )

Adjusted Award Value at September 30, 2021 $ 1,504

Unrecognized compensation expense was $ 2.3 million as of September 30, 2021.

Adjusted Award Value at March 31, 2022 $ 1,221

Unrecognized compensation expense was $ 1.3 million and $ 3.0 million as of March 31, 2022 and 2021, respectively.

Share-Based Compensation

The Company's outstanding share-based compensation is comprised of restricted and performance-stock awards.

The company's outstanding share-based compensation is comprised solely of restricted stock awards and performance stock awards to be settled in stock.

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

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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 – Performance-based stock awards have similar restrictions as restricted stock.

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 September 30, 2021, there was approximately $ 6.0 million of unrecognized compensation expense related to non-vested share-based compensation arrangements granted under our equity incentive plans.

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

A summary of the status of our share-based compensation awards as of September 30, 2021 and changes during the nine months ended September 30, 2021, are presented below:

As of March 31, 2022, there was approximately $ 3.9 million of unrecognized compensation expense related to non-vested share-based compensation arrangements granted under our equity incentive plans.

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

A summary of the status of our restricted stock awards as of March 31, and changes during the three months ended March 31, are presented below:

(in thousands) Weighted-

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Forfeited ( 4 ) 7.62

Nonvested - September 30, 2021 1,370 $ 5.07

As of September 30, 2021, a total of 2.9 million shares were available for future grants from the shares authorized for award under our 2020 EIP, including cumulative forfeitures.

Nonvested - March 31, 2022 725 $ 5.74

As of March 31, 2022, a total of 2.9 million shares were available for future grants from the shares authorized for award under our 2020 EIP, including cumulative forfeitures.

Stockholders’ Equity

Common Stock — Our authorized capital stock consists of 60,000,000 shares of common stock with a par value of $ 0.01 per share;

of which, 31,569,749 and 31,249,811 shares were issued and outstanding as of September 30, 2021 and December 31, 2020, respectively.

Preferred Stock — Our authorized capital stock also consists of 5,000,000 shares of preferred stock with a par value of $ 0.01 per share.

No preferred shares were outstanding as of September 30, 2021 and December 31, 2020.

Diluted earnings per share for the three and nine months ended September 30, 2021 and 2020 includes the effect of potential common shares issuable when dilutive, and is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Net income (loss) $ 7,511 $ 4,178 $ 21,096 $ ( 32,913 )

Common Stock — Our authorized capital stock consists of 60,000,000 shares of common stock with a par value of $ 0.01 per share, of which, 32,157,210 and 32,034,592 shares were issued and outstanding as of March 31, 2022 and December 31, 2021, respectively.

Preferred Stock — Our authorized capital stock also consists of 5,000,000 shares of preferred stock with a par value of $ 0.01 per share, with no preferred shares outstanding as of March 31, 2022 and December 31, 2021.

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

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

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

Diluted earnings per share for the three months ended March 31, 2022 and 2021 includes the effect of potential common shares issuable when dilutive, and is as follows:

Three Months Ended March 31,

Net income $ 3,982 $ 8,490

Weighted average number of common shares outstanding (in '000s) 32,065 31,264

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Diluted earnings (loss) per share $ 0.12 $ 0.26

There were no outstanding share-based compensation awards that were excluded from the calculation of diluted earnings per share for the three months ended September 30, 2021 and there were 282 thousand outstanding restricted shares that were excluded from the calculation of diluted earnings per share for the three months ended September 30, 2020.

There were no outstanding share-based compensation awards that were excluded from the calculation of diluted earnings per share for the nine months ended September 30, 2021 and there were 256 thousand outstanding restricted shares that were excluded from the calculation of diluted earnings per share for the nine months ended September 30, 2020.

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 received a dividend of one Right per share of common stock.

On April 15, 2021, the Company and Computershare Trust Company, N.A., as rights agent (“Rights Agent”), entered into an amendment (the “Amendment”) to the Rights Agreement, dated as of June 25, 2020, by and between the Company and Rights Agent (the “Rights Agreement”).

Pursuant to the Amendment, the Final Expiration Date of the Rights (each as defined in the Rights Agreement) was advanced from June 24, 2021 to April 15, 2021.

As a result of the Amendment, the Rights are no longer outstanding.

There were no outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2022 and 2021.

Other Comprehensive Income (Loss)

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comprehensive

income (loss)

Balance - December 31, 2021 $ ( 20,445 ) $ ( 22,750 ) 757 $ ( 42,438 )

Net current period change 327 ( 29 ) 298

Amortization of actuarial gain (loss) — 2,094 — 2,094

Derivative instruments — 2,814 2,814

Balance - September 30, 2021 $ ( 20,833 ) $ ( 25,329 ) $ 389 $ ( 45,773 )

Balance - March 31, 2022 $ ( 20,118 ) $ ( 22,779 ) $ 3,571 $ ( 39,326 )

currency translation adjustment Pension and

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comprehensive

income (loss)

Balance - December 31, 2020 $ ( 19,024 ) $ ( 27,423 ) $ 1,441 $ ( 45,006 )

Net current period change ( 2,072 ) — — ( 2,072 )

Amortization of actuarial gain (loss) — ( 1,850 ) — ( 1,850 )

Derivative instruments — — ( 426 ) ( 426 )

Balance - September 30, 2020 $ ( 24,289 ) $ ( 24,232 ) $ ( 317 ) $ ( 48,838 )

The related tax effects allocated to each component of other comprehensive loss are as follows:

Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021

Amount Tax Expense After Tax Amount Before Tax

Amortization of actuarial losses — 286 — 286

Balance - March 31, 2021 $ ( 21,096 ) $ ( 27,137 ) $ 1,015 $ ( 47,218 )

The related tax effects allocated to each component of other comprehensive income (loss) are as follows:

Three Months Ended March 31, 2022

Amount Tax Expense After Tax Amount

Amortization of actuarial gains $ 1 $ ( 30 ) $ ( 29 )

Cumulative translation adjustment 327 — 327

Amortization of actuarial gain (loss) 1,308 113 1,421 1,754 340 2,094

Derivative instruments 3,752 ( 938 ) 2,814

Total other comprehensive income (loss) $ 4,080 $ ( 968 ) $ 3,112

Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020

Amount Tax Expense After Tax

Amount Before Tax

Three Months Ended March 31, 2021

Amount Tax Expense After Tax

Amortization of actuarial losses $ 399 $ ( 113 ) $ 286

Cumulative translation adjustment ( 2,072 ) — ( 2,072 )

Amortization of actuarial gain (loss) ( 1,179 ) 222 ( 957 ) ( 2,284 ) 434 ( 1,850 )

Derivative instruments ( 556 ) 130 ( 426 )

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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 ("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/

December 31, 2020 $ 463 $ 40 $ 176 $ 679

Balance - December 31, 2020 $ 679

New charges —

Payments and other adjustments ( 262 )

September 30, 2021 $ — $ — $ — $ —

Electrical Systems Global

Seating Corporate/

December 31, 2019 $ 1,276 $ 102 $ 947 $ 2,325

Balance - March 31, 2021 $ 417

Balance - December 31, 2021 $ 486

New charges 989

Payments and other adjustments ( 1,092 )

September 30, 2020 $ 544 $ 235 $ 359 $ 1,138

Of the $ 4.2 million costs incurred in the nine months ended September 30, 2020, $ 3.3 million primarily related to headcount reductions and $ 0.9 million related to facility exit and other costs.

Balance - March 31, 2022 $ 383

Of the $ 1.0 million costs incurred in the three months ended March 31, 2022 for restructuring, $ 0.9 million related to facility exit and other costs and $ 0.1 million related to headcount reductions.

Of the $ 1.0 million costs incurred, $ 0.2 million related to Vehicle Solutions segment, $ 0.4 million related to Electrical Systems segment and $ 0.4 million related to Aftermarket segment.

Of the $ 1.0 million costs incurred, $ 0.9 million was recorded in cost of revenues and $ 0.1 million was recorded in selling, general and administrative expenses.

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Leases - As disclosed in Note 7, Leases, we lease office, warehouse and manufacturing space and equipment under non-cancelable operating lease agreements that generally require us to pay maintenance, insurance, taxes and other expenses in addition to annual rental fees.

As of September 30, 2021, our equipment leases did not provide for any material guarantee of a specified portion of residual values.

As of March 31, 2022, our equipment leases did not provide for any material guarantee of a specified portion of residual values.

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

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

As of September 30, 2021, we had no such guarantees.

As of March 31, 2022 and 2021, 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 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.

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

These amounts, as of September 30, 2021, are included within accrued liabilities and other in the accompanying Condensed Consolidated Balance Sheets.

The following presents a summary of the warranty provision for the nine months ended September 30, 2021:

These amounts, as they relate to the periods ended March 31, 2022 and 2021, are included within accrued liabilities and other in the accompanying Condensed Consolidated Balance Sheets.

The following presents a summary of the warranty provision for the three months ended March 31, 2022:

Balance - December 31, 2021 $ 1,490

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Deduction for payments made and other adjustments ( 242 )

Balance - September 30, 2021 $ 1,657

Balance - March 31, 2022 $ 1,255

Debt Payments - As disclosed in Note 4, 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:

Term loan facility Revolving credit facility Total

Remainder of 2022 $ 7,500

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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 systems, electrical wire harnesses, electro-mechanical assemblies for warehouses, electro-mechanical cable assemblies for the construction, agricultural, industrial, automotive, truck, mining, rail and military industries in North America, Europe and Asia-Pacific.

This segment includes a portion of the company’s activities in the emerging electric vehicle market;

The Vehicle Solutions segment designs, manufactures and sells the following products:

• Commercial vehicle seats for the global commercial vehicle markets including heavy duty trucks, medium duty trucks, last mile delivery trucks and vans, construction and agriculture equipment in North America, Europe and Asia-Pacific.

This segment includes a portion of the company’s activities in the electric vehicle market;

• Plastic components ("Trim") primarily for the North America commercial vehicle market and recreational vehicle markets;

• Warehouse automation subsystems primarily for the North American e-commerce markets and include electro-mechanical assemblies and panels;

• Commercial vehicle accessories including OE and aftermarket 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.

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

The following table presents segment results for the three and nine months ended September 30, 2021 and 2020.

Three Months Ended September 30, 2021

Systems Global

Seating Corporate/

External revenues $ 163,134 $ 76,476 $ — $ 239,610

Intersegment revenues 978 14 ( 992 ) —

Total revenues $ 164,112 $ 76,490 $ ( 992 ) $ 239,610

Gross profit $ 23,662 $ 6,484 $ ( 2 ) $ 30,144

Selling, general & administrative expenses 5,878 6,061 6,833 18,772

Operating income (loss) $ 17,784 $ 423 $ ( 6,835 ) $ 11,372

Three Months Ended September 30, 2020

Electrical Systems Global

Seating Corporate/

External revenues $ 120,723 $ 66,974 $ — $ 187,697

Intersegment revenues 344 1,928 ( 2,272 ) —

Total revenues $ 121,067 $ 68,902 $ ( 2,272 ) $ 187,697

Gross profit $ 16,118 $ 8,418 $ ( 377 ) $ 24,159

Selling, general & administrative expenses

3,895 3,646 7,725 15,266

Operating income (loss) $ 12,223 $ 4,772 $ ( 8,102 ) $ 8,893

Nine Months Ended September 30, 2021

System Global

Seating Corporate/

External revenues $ 496,926 $ 245,747 $ — $ 742,673

Intersegment revenues 4,532 6,735 ( 11,267 ) —

Total revenues $ 501,458 $ 252,482 $ ( 11,267 ) $ 742,673

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

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

Three Months Ended March 31, 2022

Vehicle Solutions Warehouse Automation Electrical Systems Aftermarket and Accessories Corporate/Other Total

Revenues $ 140,157 $ 34,126 $ 39,876 $ 30,215 $ — $ 244,374

Gross profit 12,907 4,991 3,401 4,086 $ ( 2 ) 25,383

Selling, general & administrative expenses 6,588 1,324 1,640 1,465 $ 5,982 16,999

Operating income (loss) $ 51,205 $ 10,950 $ ( 19,051 ) $ 43,104

Nine Months Ended September 30, 2020

Electrical Global

Seating Corporate/

External revenues $ 305,389 $ 196,309 $ — $ 501,698

Intersegment revenues 1,987 2,435 ( 4,422 ) —

Total revenues $ 307,376 $ 198,744 $ ( 4,422 ) $ 501,698

Operating income $ 6,319 $ 3,667 $ 1,761 $ 2,621 $ ( 5,984 ) $ 8,384

Three Months Ended March 31, 2021

Vehicle Solutions Warehouse Automation Electrical Systems Aftermarket and Accessories Corporate/Other Total

Revenues $ 124,342 $ 44,372 $ 46,462 $ 29,946 $ — $ 245,122

Gross profit 13,808 5,440 6,324 5,585 ( 36 ) 31,121

Selling, general & administrative expenses 6,325 1,531 1,468 1,422 4,972 15,718

15,884 12,379 21,803 50,066

Goodwill and other impairment 23,415 4,809 793 29,017

Operating income (loss) $ ( 11,091 ) $ 5,945 $ ( 23,000 ) $ ( 28,146 )

Operating income $ 7,483 $ 3,909 $ 4,856 $ 4,163 $ ( 5,008 ) $ 15,403

Other Financial Information

Items reported in inventories consisted of the following:

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Raw materials $ 124,549 $ 107,505

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Finished goods 13,116 11,869

Inventories $ 146,469 $ 91,247

Inventories increased by $ 55.2 million from December 31, 2020 to September 30, 2021 due to cost inflation, customer schedule volatility, and supply chain issues.

$ 158,355 $ 141,045

Items reported in property, plant, and equipment, net consisted of the following:

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Land and buildings $ 32,235 $ 32,012

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Items reported in accrued expenses and other liabilities consisted of the following:

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Compensation and benefits $ 15,093 $ 16,677

Operating lease liabilities 9,078 9,236

Accrued freight 5,434 5,628

Contingent Consideration 4,288 4,870

Taxes payable 5,980 6,391

Operating lease liabilities 8,738 9,048

Contingent Consideration 4,528 4,409

Other 6,639 8,687

Accrued liabilities and other $ 52,070 $ 50,056

Subsequent Event

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.

$ 46,412 $ 50,840

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-Q

Item 1. Financial Statements