What changed in this filing

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Item 1. Financial Statements

2023-05-02 compared with 2022-11-02 · 140 added, 316 removed, 435 unchanged (51% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

2022 2021 2022 2021

Three Months Ended March 31,

(In thousands, except per share amounts)

6 unchanged sentences

Interest expense 2,890 1,961

Loss on extinguishment of debt — — 921 7,155

Income before provision for income taxes 11,956 5,382

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

2022 2021 2022 2021

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended March 31,

(In thousands)

Net income $ 8,700 $ 3,982

Other comprehensive loss:

Other comprehensive income (loss):

Foreign currency exchange translation adjustments 2,557 327

1 unchanged sentence

Derivative instrument, net of tax 1,343 2,814

Other comprehensive loss ( 3,017 ) ( 353 ) ( 4,593 ) ( 767 )

Other comprehensive income 4,040 3,112

Comprehensive income $ 12,740 $ 7,094

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

(In thousands, except per share amounts)

15 unchanged sentences

Accrued liabilities and other 47,340 42,809

Current portion of long-term debt 9,844 9,375

Current portion of long-term debt and short-term debt 16,399 10,938

Total current liabilities 182,796 175,838

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

4 unchanged sentences

Noncash amortization of debt financing costs 76 113

Payment in kind interest expense — 2,254

Share-based compensation expense 4,644 5,029

Pension cash reversion 2,942 —

Shared-based compensation expense 1,771 1,117

Deferred income taxes ( 467 ) 532

Non-cash loss (income) on derivative contracts ( 658 ) 599

Loss on extinguishment of debt 921 7,155

Settlement of derivative contract 3,900 —

Change in other operating items:

4 unchanged sentences

Other operating activities, net 5,301 ( 3,858 )

Net cash provided by (used in) operating activities 33,794 ( 20,889 )

Net cash (used in) provided by operating activities 58 ( 21,398 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment ( 3,321 ) ( 3,590 )

Proceeds from disposal/sale of property, plant and equipment 16 42

Net cash used in investing activities ( 3,321 ) ( 3,590 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings under term loan facility 30,625 150,000

Repayment of term loan facility ( 2,188 ) ( 1,875 )

Repayment of 2023 term loan facility principal — ( 152,654 )

Borrowings under revolving credit facility 65,200 51,800

Borrowing under revolving credit facility 11,000 55,200

Repayment of revolving credit facility — ( 24,400 )

Borrowings under ABL revolving credit facility — 11,300

Repayment of ABL revolving credit facility — ( 11,300 )

Surrender of shares to pay withholding taxes ( 966 ) ( 73 )

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

Debt issuance and amendment costs ( 648 ) ( 2,333 )

Contingent Consideration payment — ( 5,000 )

Surrender of common stock by employees ( 764 ) ( 464 )

Other financing activities 4,329 ( 55 )

Net cash provided by (used in) financing activities ( 13,031 ) 16,073

Net cash provided by financing activities 12,377 28,406

EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH 545 ( 168 )

NET INCREASE (DECREASE) IN CASH 3,755 ( 16,900 )

NET INCREASE IN CASH 9,659 3,250

Beginning of period 31,825 34,958

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

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 187,904 1 ( 73 ) 2,201 — — 2,129

Total comprehensive income — — — — 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 (loss) — — — — 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

Balance - December 31, 2022 32,826,852 $ 328 $ ( 14,514 ) $ 261,371 $ ( 95,595 ) $ ( 31,550 ) $ 120,040

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Balance - March 31, 2023 32,991,468 $ 330 $ ( 15,278 ) $ 263,142 $ ( 86,895 ) $ ( 27,510 ) $ 133,789

Share-based compensation expense 290,558 3 ( 448 ) 1,701 — — 1,256

Total comprehensive income (loss) — — — — 2,485 ( 4,688 ) ( 2,203 )

Balance - June 30, 2022 32,447,768 $ 325 $ ( 14,084 ) $ 258,384 $ ( 67,157 ) $ ( 44,014 ) $ 133,454

Share-based compensation expense 103,573 1 ( 54 ) 1,826 — — 1,773

Total comprehensive income — — — — 3,551 ( 3,017 ) 534

Balance - September 30, 2022 32,551,341 $ 326 $ ( 14,138 ) $ 260,210 $ ( 63,606 ) $ ( 47,031 ) $ 135,761

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

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Description of Business and Basis of Presentation

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.

Commercial Vehicle Group, Inc.

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

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.

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

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.

We believe our products are used by a majority of the North American Commercial Truck manufacturers, many construction vehicle original equipment manufacturers ("OEMs"), parts and service dealers, distributors, as well as 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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Recently Issued Accounting Pronouncements

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

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

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

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

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

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

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

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 applies 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.

New accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.

Revenue Recognition

We had outstanding customer accounts receivable, net of allowances, of $ 178.3 million as of September 30, 2022 and $ 174.5 million as of December 31, 2021.

We had outstanding customer accounts receivable, net of allowances, of $ 171.9 million as of March 31, 2023 and $ 152.6 million as of December 31, 2022.

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, 2022

Vehicle Solutions Warehouse Automation Electrical Systems Aftermarket and Accessories Total

Seats $ 77,843 $ — $ — $ 20,080 $ 97,923

Electrical wire harnesses, panels and assemblies 45 3,416 45,608 2,744 51,813

Trim 45,980 — — 2,623 48,603

Warehouse Automation — 10,700 521 — 11,221

Cab structures 28,739 — — 497 29,236

Mirrors, wipers and controls 1,417 — — 11,199 12,616

Total $ 154,024 $ 14,116 $ 46,129 $ 37,143 $ 251,412

Three Months Ended September 30, 2021

Vehicle Solutions Warehouse Automation Electrical Systems Aftermarket and Accessories Total

Seats $ 60,813 $ — $ — $ 15,533 $ 76,346

Electrical wire harnesses, panels and assemblies 597 14,334 39,938 1,476 56,345

Trim 39,164 — — 730 39,894

Warehouse Automation — 37,347 — — 37,347

Cab structures 15,863 — — 2,780 18,643

Mirrors, wipers and controls 1,477 — 147 9,411 11,035

Total $ 117,914 $ 51,681 $ 40,085 $ 29,930 $ 239,610

Nine Months Ended September 30, 2022

Vehicle Solutions Warehouse Automation Electrical Systems Aftermarket and Accessories Total

Three Months Ended March 31, 2023

Vehicle Solutions Electrical Systems Aftermarket & Accessories Industrial Automation Total

Seats $ 76,990 $ — $ 19,164 $ — $ 96,154

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Trim 46,423 — 2,873 — 49,296

Warehouse Automation — 66,180 520 — 66,700

Industrial Automation — — — 9,747 9,747

Cab structures 33,903 — 998 — 34,901

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Total $ 160,584 $ 54,749 $ 37,629 $ 9,747 $ 262,709

Nine Months Ended September 30, 2021

Vehicle Solutions Warehouse Automation Electrical Systems Aftermarket and Accessories Total

Three Months Ended March 31, 2022

Vehicle Solutions Electrical Systems Aftermarket & Accessories Industrial Automation Total

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

1 unchanged sentence

Trim 44,758 — 1,296 — 46,054

Warehouse Automation — 130,008 — — 130,008

Industrial Automation — — — 32,331 32,331

Cab structures 25,591 — — — 25,591

2 unchanged sentences

Debt consisted of the following:

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Term loan facility $ 150,312 $ 152,500

Revolving credit facility 11,000 —

Unamortized issuance costs and discount ( 67 ) ( 694 )

$ 184,334 $ 194,956

current portion

China credit facility 4,368 —

Unamortized discount and issuance costs ( 60 ) ( 63 )

$ 165,620 $ 152,437

current portion of long-term debt and short-term debt ( 16,399 ) ( 10,938 )

Total long-term debt, net of current portion $ 149,221 $ 141,499

3 unchanged sentences

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 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.

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.

On May 12, 2022, the Company and certain of its subsidiaries entered into a second amendment (the “Amendment”) to its Credit Agreement pursuant to which the Lenders upsized the existing Term Loan Facility to $ 175 million in aggregate principal amount and increased the Revolving Credit Facility commitments by $ 25 million to an aggregate of $ 150 million in revolving credit facility commitments.

1 unchanged sentence

The amended 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.

Further, separate from the Company’s annual $ 35 million capital spending cap, a one-time $ 45 million capital project basket was

included in the Amendment.

Further, separate from the Company’s annual $ 35 million capital spending cap, a one-time $ 45 million capital project basket was included in the Amendment.

All other key provisions, including the $ 75 million accordion, acquisition holiday, and other baskets remain unchanged.

The Credit Facilities mature on May 12, 2027 (the “Maturity Date”).

The Amendment resulted in a loss on extinguishment of debt of $ 0.9 million, including $ 0.6 million non-cash write off relating to deferred financing costs and unamortized discount of the Term Loan Facility and $ 0.3 million of other fees associated with the Amendment, recorded in our Consolidated Statements of Operations for the nine months ended September 30, 2022.

The proceeds of the Credit Facilities will be used, together with cash on hand of the Company, to (a) pay transaction costs, fees and expenses incurred in connection therewith and in connection with the Amended Credit Agreement and (b) for working capital and other lawful corporate purposes of the Company and its subsidiaries.

At September 30, 2022, we had $ 11.6 million of borrowings under the Revolving Credit Facility, outstanding letters of credit of $ 1.2 million and availability of $ 137.2 million.

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

At March 31, 2023, we had $ 11.0 million of borrowings under the Revolving Credit Facility, outstanding letters of credit of $ 1.2 million and availability of $ 137.8 million.

Combined with availability under our newly established foreign credit facilities of approximately $ 8.7 million, total consolidated availability was $ 146.5 million as of March 31, 2023.

The unamortized deferred financing fees associated with the Revolving Credit Facility of $ 1.2 million and $ 1.3 million as of March 31, 2023 and December 31, 2022, respectively, are being amortized over the remaining life of the Credit Agreement.

At December 31, 2022, we had no borrowings under the Revolving Credit Facility and we had outstanding letters of credit of $ 1.2 million.

Interest rates and fees

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grant certain liens on assets;

pay dividends or make certain other distributions;

pay dividends or make

certain other distributions;

make certain investments or acquisitions;

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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 (which will be subject to step-downs to 3.50 :1.0 at the end of the fiscal quarter ending March 31, 2023;

to 3.25 :1.0 at the end of the fiscal quarter ending June 30, 2023;

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 (which was subject to step-down to 3.50 :1.0 at the end of the fiscal quarter ending March 31, 2023;

and will be subject to step-downs to 3.25 :1.0 at the end of the fiscal quarter ending June 30, 2023;

and to 3.00 :1.0 for each fiscal quarter on and after the fiscal quarter ending September 30, 2023).

We were in compliance with these covenants as of September 30, 2022.

We were in compliance with the covenants as of March 31, 2023.

Repayment and prepayment

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

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 associated fees, recorded in our Consolidated Statements of Operations for the nine months ended September 30, 2021.

Foreign Facilities

In the quarter ended March 31, 2023, we established a credit facility in China with availability of approximately $ 13.1 million (denominated in the local currency) consisting of a line of credit which is subject to annual renewal (the "China Credit Facility").

We utilize the China Credit Facility to meet local working capital demands, fund letters of credit and bank guarantees, and support other short-term cash requirements in our China operations.

We had $ 4.4 million and $ 0 million outstanding under the China Credit Facility as of March 31, 2023 and December 31, 2022, respectively, which are included in Current portion of long-term debt and short-term debt on the Condensed Consolidated Balance Sheets.

At March 31, 2023, we had $ 8.7 million availability under the China Credit Facility.

Cash Paid for Interest

For the nine months ended September 30, 2022 and 2021, cash payments for interest were $ 6.2 million and $ 7.0 million, respectively.

For the three months ended March 31, 2023 and 2022, cash payments for interest were $ 3.2 million and $ 1.6 million, respectively.

Intangible Assets

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Amount Accumulated

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Amortization Net

Definite-lived intangible assets:

Trademarks/tradenames 22 years $ 11,474 $ ( 5,453 ) $ 6,021 $ 11,487 $ ( 5,377 ) $ 6,110

3 unchanged sentences

$ 35,794 $ ( 22,003 ) $ 13,791 $ 35,768 $ ( 21,148 ) $ 14,620

The aggregate intangible asset amortization expense was $ 0.9 million for the three months ended September 30, 2022 and 2021.

The aggregate intangible asset amortization expense was $ 2.6 million for the nine months ended September 30, 2022 and 2021.

The aggregate intangible asset amortization expense was $ 0.8 million for the three months ended March 31, 2023 and $ 0.9 million for the three months ended March 31, 2022, respectively.

Fair Value Measurement

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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, 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 September 30, 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.

Settlements of hedge transactions are recognized in cost of revenues in the Condensed Consolidated Statements of Operations in the period they are settled.

To manage our risk for transactions denominated in Mexican Pesos and Czech Crown, 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 March 31, 2023, hedge contracts for transactions denominated in 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 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 50 % of outstanding debt under the Term Loan Facility.

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

Any ineffectiveness in a cash flow hedging relationship is recognized immediately in earnings in the Condensed Consolidated Statements of Operations.

During the second quarter ended June 30, 2022, the Company entered into transactions to cash settle existing interest rate swaps and received proceeds of $ 3.9 million.

The gain on the swap settlement has been recorded in Other comprehensive income (loss) and will be recognized over the life of the settled swaps.

Following the settlement of the existing interest rate swaps, we entered into a new interest rate swap agreement to align with the SOFR rate and maturity date of the Credit Agreement.

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 September 30, 2022, the remaining undiscounted Contingent Consideration payment is estimated at $ 4.8 million and the fair value is $ 4.8 million, which is presented in the Condensed 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 are categorized as follows:

September 30, 2022 December 31, 2021

The interest rate swaps are intended to mitigate the impact of rising interest rates on the Company and covers approximately 50 % of outstanding debt under the Term Loan Facility.

Any changes in fair value are included in

earnings or deferred through Accumulated other comprehensive loss, 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.

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

March 31, 2023 December 31, 2022

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

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Foreign exchange contract $ — $ — $ — $ — $ 356 $ — $ 356 $ —

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

Contingent Consideration $ 4,750 $ — $ — $ 4,750 $ 4,409 $ — $ — $ 4,409

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, 2021

Change in fair value 341

Contingent Consideration liability balance at September 30, 2022

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Equivalent U.S.

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Location Fair Value

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Foreign exchange contracts Other current assets $ 3,109 $ —

Interest rate swap agreement Other current assets $ 389 $ —

Interest rate swap agreement Other assets, net $ 954 $ 1,849

Interest rate swap agreement Accrued liabilities and other $ — $ 241

Derivative Liability

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Location Fair Value

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Foreign exchange contracts Accrued liabilities and other $ — $ 356

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

Derivative Equity

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Location Fair Value

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Derivative instruments Accumulated other comprehensive (loss) income $ 6,115 $ 3,777

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,

2022 2021 2022 2021

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 $ 451 $ 456

Interest rate swap agreements Interest and other expense $ ( 67 ) $ ( 1 ) $ ( 344 ) $ ( 7 )

Interest rate swap agreement Interest expense $ 454 $ ( 193 )

Foreign exchange contracts Other (income) expense $ 469 $ ( 671 )

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Amount Fair Value Carrying

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Revolving credit facility $ 11,000 $ 11,000 $ — $ —

$ 11,588 $ 11,588 $ 49,400 $ 49,400

Presented in the Condensed Consolidated Balance Sheets as the current portion of long-term debt of $ 9.8 million and long-term debt of $ 174.5 million as of September 30, 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.

Presented in the Condensed Consolidated Balance Sheets are the current portion of long-term debt of $ 12.0 million and long-term debt of $ 149.2 million as of March 31, 2023, and current portion of long-term debt of $ 10.9 million and long-term debt of $ 141.5 million as of December 31, 2022.

The components of lease expense are as follows:

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

2022 2021 2022 2021

Three Months Ended March 31,

Operating lease cost

2 unchanged sentences

Short-term lease cost

1,470 1,799 3,908 4,771

Total lease expense $ 4,326 $ 4,179

Supplemental balance sheet information related to leases is as follows:

Balance Sheet Location September 30, 2022 December 31, 2021

Balance Sheet Location March 31, 2023 December 31, 2022

Operating Leases

8 unchanged sentences

Total finance lease liabilities $ 230 $ 270

For the nine months ended September 30, 2022 and 2021, cash payments on operating leases were $ 7.5 million and $ 8.5 million, respectively.

For the three months ended March 31, 2023 and 2022, cash payments on operating leases were $ 2.7 million and $ 2.0 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:

9 unchanged sentences

Present value of lease liabilities $ 26,140 $ 230 $ 26,370

For the three and nine months ended September 30, 2022, we recorded a $ 1.3 million, and $ 3.5 million tax provision, respectively, or 26 % effective tax rate for each period, compared to a $ 2.4 million and $ 6.5 million tax provision for the three and nine months ended September 30, 2021, respectively, or approximately 24 % effective tax rate for each period.

Income tax expense is based on an estimated annual effective tax rate, which requires management to make its best estimate of annual pretax income or loss.

For the three months ended March 31, 2023, we recorded a $ 3.3 million tax provision, or 27 % effective tax rate for the period, compared to a $ 1.4 million tax provision, or 26 % effective tax rate for the three months ended March 31, 2022.

Income tax expense for the three months ended March 31, 2023 and 2022 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 2023 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 and nine months ended September 30, 2022.

We have recorded valuation allowances in prior years related to certain foreign subsidiaries due to multiple year cumulative losses.

Given the current earnings and anticipated future earnings of some of the Company's foreign locations, the Company believes there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow it to reach a conclusion that the valuation allowance on the deferred tax assets of certain foreign entities will no longer be needed.

Releasing the valuation allowance would result in the recognition of previously unrecognized deferred tax assets and a decrease to income tax expense for the period the release is recorded.

However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that the Company is able to actually achieve.

For the nine months ended September 30, 2022 and 2021, cash paid for taxes, net of refunds received, were $ 4.2 million and $ 3.1 million, respectively.

and foreign income or loss vary from estimates, the actual income tax expense recognized in 2023 could be different from the forecasted amount used to estimate the income tax expense for the three months ended March 31, 2023.

For the three months ended March 31, 2023 and 2022, cash paid for taxes, net of refunds received were $ 2.0 million and $ 1.4 million, respectively.

Pension and Other Post-Retirement Benefit Plans

The components of net periodic (benefit) cost related to pension and other post-retirement benefit plans is as follows:

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

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

2022 2021 2022 2021

Interest cost $ 193 $ 207 $ 187 $ 160

Expected return on plan assets ( 208 ) ( 553 ) ( 244 ) ( 251 )

Amortization of prior service cost 1

1,118 2 11 12

Recognized actuarial loss 82 70 142 239

Net (benefit) cost $ 1,185 $ ( 274 ) $ 96 $ 160

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

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

2022 2021 2022 2021

Three Months Ended March 31,

Interest cost 347 215

1 unchanged sentence

Amortization of prior service cost 12 13

1,122 6 37 40

Recognized actuarial loss 185 164

Net (benefit) cost $ 1,327 $ ( 822 ) $ 321 $ 489

Includes $ 1.1 million non-cash settlement charge.

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

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 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.

During the nine months ended September 30, 2022, the Company partially settled the U.S.

Pension Plan liabilities.

Payouts totaling $ 4.4 million were made out of plan assets and, as reflected in amortization of prior service cost in the table above, resulted in a non-cash settlement charge of $ 1.1 million, which was recorded in other expense in the Condensed Consolidated Statements of Income.

On October 3, 2022, the Company settled the remaining U.S.

Pension Plan liabilities through purchase of an annuity contract.

The contract totaling $ 25.2 million was paid out of plan assets and is expected to result in an $ 8.1 million non-cash settlement charge, which will be recognized in the three months ending December 31, 2022.

Net cost $ 249 $ 117

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

Performance Awards

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

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

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

Effective June 15, 2020, as part of the Company’s stockholders’ approval of the 2020 EIP, the Company agreed that no more awards will be made under the 2014 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 and Return on Invested Capital ("ROIC") component established by the Compensation Committee of the Board of Directors.

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 the number of shares allocated to a 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, ROIC performance, 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.

ROIC is defined as adjusted net income plus interest expense (net of tax), divided by total assets less current liabilities plus current debt.

A five -point average is used to calculate the asset denominator.

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.

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

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

Adjusted Award Value at December 31, 2022 $ 2,188

New grants 2,108

Forfeitures —

1 unchanged sentence

Payments ( 1,159 )

Adjusted Award Value at September 30, 2022 $ 1,242

Unrecognized compensation expense was $ 2.0 million and $ 2.3 million as of September 30, 2022 and 2021, respectively.

Adjusted Award Value at March 31, 2023 $ 1,873

Unrecognized compensation expense was $ 5.0 million as of March 31, 2023.

Share-Based Compensation

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.

Forfeitures are recorded as they occur.

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

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 and ROIC performance.

As of September 30, 2022, there was approximately $ 4.2 million of unrecognized compensation expense related to non-vested share-based compensation arrangements granted under our equity incentive plans.

As of March 31, 2023, there was approximately $ 5.3 million of unrecognized compensation expense related to non-vested share-based compensation arrangements granted under our equity incentive plans.

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

A summary of the status of our restricted stock awards as of September 30, 2022 and changes during the nine months ended September 30, 2022, are presented below:

A summary of the status of our restricted stock awards as of March 31, 2023 and changes during the three months ended March 31, 2023 are presented below:

(in thousands) Weighted-

3 unchanged sentences

Forfeited ( 1 ) 8.45

Nonvested - September 30, 2022 683 $ 6.81

As of September 30, 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.

Nonvested - March 31, 2023 341 $ 7.52

As of March 31, 2023, a total of 2.1 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, 32,551,341 and 32,034,592 shares were issued and outstanding as of September 30, 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.

No preferred shares were outstanding as of September 30, 2022 and December 31, 2021.

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

Diluted earnings 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.

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, 32,991,468 and 32,826,852 shares were issued and outstanding as of March 31, 2023 and December 31, 2022, 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, 2023 and December 31, 2022.

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 and nine months ended September 30, 2022 and 2021 includes the effect of potential common shares issuable when dilutive, and is as follows:

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

2022 2021 2022 2021

Diluted earnings per share for the three months ended March 31, 2023 and 2022 includes the effect of potential common shares issuable when dilutive, and is as follows:

Three Months Ended March 31,

Net income $ 8,700 $ 3,982

4 unchanged sentences

Diluted earnings per share $ 0.26 $ 0.12

There were 8 thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three months ended September 30, 2022 and no outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three months ended September 30, 2021.

There were 10 thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the nine months ended September 30, 2022 and no outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the nine months ended September 30, 2021.

There were 134 thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2023 as the effect would have been antidilutive and no outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2022.

Other Comprehensive Income (Loss)

4 unchanged sentences

comprehensive

income (loss)

Balance - December 31, 2022 $ ( 24,811 ) $ ( 11,512 ) 4,773 $ ( 31,550 )

1 unchanged sentence

Derivative instruments — 1,343 1,343

Amortization of actuarial gain — 1,085 — 1,085

Balance - September 30, 2022 $ ( 30,134 ) $ ( 21,665 ) $ 4,768 $ ( 47,031 )

Balance - March 31, 2023 $ ( 22,254 ) $ ( 11,372 ) $ 6,116 $ ( 27,510 )

currency translation adjustment Pension and

2 unchanged sentences

comprehensive

income (loss)

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

1 unchanged sentence

Derivative instruments — — 2,814 2,814

Amortization of actuarial gain — 2,094 — 2,094

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

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

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

Amount Tax Expense After Tax Amount Before Tax

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

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

Three Months Ended March 31, 2023

Amount Tax Expense After Tax Amount

Cumulative translation adjustment 2,557 — 2,557

Amortization of actuarial gain (loss) ( 396 ) 34 ( 362 ) 989 96 1,085

Amortization of actuarial losses $ 137 $ 3 $ 140

Derivative instruments 1,815 ( 472 ) 1,343

Total other comprehensive income (loss) $ ( 2,395 ) $ ( 622 ) $ ( 3,017 ) $ ( 3,240 ) $ ( 1,353 ) $ ( 4,593 )

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

Amount Tax Expense After Tax

Amount Before Tax

Total other comprehensive income $ 4,509 $ ( 469 ) $ 4,040

Three Months Ended March 31, 2022

Amount Tax Expense After Tax

Cumulative translation adjustment 327 — 327

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

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

Derivative instruments 3,752 ( 938 ) 2,814

Total other comprehensive income (loss) $ ( 634 ) $ 281 $ ( 353 ) $ ( 1,428 ) $ 661 $ ( 767 )

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

Cost Reduction and Manufacturing Capacity Rationalization

During 2019, the Company began implementing cost reduction and manufacturing capacity rationalization initiatives (the "Restructuring Initiatives") in response to declines in end market volumes.

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

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 Company's restructuring program includes aligning cost structure to support margin expansion.

The program includes workforce reductions and footprint optimization across segments.

The changes in accrued restructuring balances are as follows:

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

Vehicle Solutions Electrical Systems Aftermarket & Accessories Industrial Automation Corporate/

December 31, 2022 $ ( 5 ) $ — $ — $ 458 $ — $ 453

2 unchanged sentences

March 31, 2023 $ — $ — $ — $ — $ 711 $ — $ 711

New charges — 314 571 560 306 1,751

Payments and other adjustments ( 91 ) ( 311 ) ( 571 ) ( 560 ) ( 444 ) ( 1,977 )

June 30, 2022 $ 34 $ — $ — $ — $ 123 $ 157

New charges 66 136 — 445 — 647

Payments and other adjustments ( 90 ) ( 46 ) — ( 445 ) ( 123 ) ( 704 )

September 30, 2022 $ 10 $ 90 $ — $ — $ — $ 100

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

Vehicle Solutions Electrical Systems Aftermarket & Accessories Industrial Automation Corporate/

December 31, 2021 $ 230 $ 417 $ — $ — $ ( 161 ) $ 486

Payments and other adjustments ( 186 ) — — ( 40 ) ( 36 ) ( 262 )

March 31, 2021 $ 163 $ — $ — $ — $ 254 $ 417

Payments and other adjustments ( 67 ) — — — ( 171 ) ( 238 )

June 30, 2021 $ 96 $ — $ — $ — $ 83 $ 179

New charges 204 — 435 350 — 989

Payments and other adjustments ( 309 ) ( 417 ) ( 435 ) ( 353 ) 422 ( 1,092 )

September 30, 2021 $ — $ — $ — $ — $ — $ —

Of the $ 0.6 million costs incurred in the three months ended September 30, 2022, $ 0.1 million primarily related to headcount reductions and $ 0.5 million related to facility exit and other costs.

Substantially all costs incurred were recorded in cost of revenues.

Of the $ 3.4 million costs incurred in the nine months ended September 30, 2022, $ 0.9 million primarily related to headcount reductions and $ 2.5 million related to facility exit and other costs.

Of the $ 3.4 million costs incurred, $ 3.0 million was recorded in cost of revenues and $ 0.4 million was recorded in selling, general and administrative expenses.

March 31, 2022 $ 125 $ — $ — $ ( 3 ) $ 261 $ 383

Of the $ 0.7 million costs incurred in the three months ended March 31, 2023 for restructuring, $ 0.5 million related to facility exit and other costs and $ 0.2 million related to headcount reductions were recorded in cost of revenues.

Of the $ 0.7 million costs incurred in the three months ended March 31, 2023 for restructuring, $ 0.6 million primarily related to the Industrial Automation segment and were recorded in Cost of revenues in the Condensed Consolidated Statements of Operations.

Commitments and Contingencies

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

As of September 30, 2022, our equipment leases did not provide for any material guarantee of a specified portion of residual values.

As of March 31, 2023, 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.

1 unchanged sentence

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

As of September 30, 2022 and 2021, we had no such guarantees.

As of March 31, 2023 and December 31, 2022, 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.

5 unchanged sentences

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 periods ended September 30, 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 nine months ended September 30, 2022:

These amounts, as they relate to the periods ended March 31, 2023 and December 31, 2022, 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, 2023:

Balance - December 31, 2022 $ 1,433

1 unchanged sentence

Deduction for payments made and other adjustments ( 227 )

Balance - September 30, 2022 $ 1,236

Balance - March 31, 2023 $ 1,599

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

The existing long-term debt agreement matures in 2027;

no payments are due thereafter:

Remainder of 2023 $ 8,750

5 unchanged sentences

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 has allowed 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.

5 unchanged sentences

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;

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

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 end markets for these products are construction, agricultural, warehouse, 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;

• Seats and components sold into the commercial vehicle channels that provide repair and refurbishing.

These channels include Original Equipment Service ("OES") centers and retail distributors, and are spread across North America, Europe and Asia-Pacific.

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

• Office seats primarily in Europe and Asia-Pacific.

These products are sold both as Original Equipment and as repair products.

• Office seats primarily sold into the commercial and home office furniture distribution channels in Europe and Asia-Pacific.

The Industrial 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.

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

2 unchanged sentences

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

Three Months Ended September 30, 2022

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

Revenues $ 154,024 $ 14,116 $ 46,129 $ 37,143 $ — $ 251,412

Gross profit 13,839 404 6,210 6,389 — 26,842

Selling, general & administrative expenses 4,279 1,371 1,055 1,436 9,163 17,304

Operating income (loss) $ 9,560 $ ( 967 ) $ 5,155 $ 4,953 $ ( 9,163 ) $ 9,538

Three Months Ended September 30, 2021

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

Revenues $ 117,914 $ 51,681 $ 40,085 $ 29,930 $ — $ 239,610

Gross profit 10,143 9,486 6,633 3,885 ( 3 ) 30,144

Selling, general & administrative expenses

7,222 1,461 1,718 1,536 6,835 18,772

Operating income (loss) $ 2,921 $ 8,025 $ 4,915 $ 2,349 $ ( 6,838 ) $ 11,372

Nine Months Ended September 30, 2022

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

Three Months Ended March 31, 2023

Vehicle Solutions Electrical Systems Aftermarket & Accessories Industrial Automation Corporate/Other Total

Revenues $ 160,584 $ 54,749 $ 37,629 $ 9,747 $ — $ 262,709

1 unchanged sentence

Selling, general & administrative expenses 6,077 2,227 1,650 1,076 $ 9,535 20,565

Operating income (loss) $ 17,388 $ 4,007 $ 12,859 $ 8,705 $ ( 18,810 ) $ 24,149

Nine Months Ended September 30, 2021

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

Operating income $ 13,394 $ 6,070 $ 5,577 $ ( 862 ) $ ( 9,535 ) $ 14,644

Three Months Ended March 31, 2022

Vehicle Solutions Electrical Systems Aftermarket & Accessories Industrial Automation Corporate/Other Total

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

1 unchanged sentence

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

20,269 4,199 4,646 4,407 19,008 52,529

Operating income (loss) $ 18,645 $ 20,413 $ 12,899 $ 10,198 $ ( 19,051 ) $ 43,104

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

Other Financial Information

Items reported in inventories consisted of the following:

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Raw materials $ 103,506 $ 108,417

1 unchanged sentence

Finished goods 18,002 16,368

Inventories $ 150,347 $ 141,045

Total Inventory $ 139,553 $ 142,542

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Land and buildings $ 32,599 $ 32,267

5 unchanged sentences

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Compensation and benefits $ 16,822 $ 13,370

2 unchanged sentences

Accrued freight 4,298 4,225

Contingent Consideration 4,750 4,409

Deferred tooling revenue 1,401 851

Warranty costs 1,599 1,433

Other 8,658 11,268

Accrued liabilities and other $ 48,446 $ 50,840

$ 47,340 $ 42,809

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