What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-09 compared with 2023-08-08 · 103 added, 85 removed, 566 unchanged (25% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

5 unchanged sentences

Operating income 12,448 9,538 43,036 24,149

Other (income) expense 307 ( 167 ) 105 874

Other expense 383 1,924 488 2,798

Interest expense 2,614 2,813 8,308 6,892

13 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

11 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2023 December 31, 2022

(In thousands, except per share amounts)

September 30, 2023 December 31, 2022

(In thousands, except share and per share amounts)

Current Assets:

37 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands)

16 unchanged sentences

Other operating activities, net ( 2,123 ) 3,169

Net cash provided by (used in) operating activities 11,522 ( 4,507 )

Net cash provided by operating activities 29,990 33,794

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment ( 15,196 ) ( 12,541 )

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

Net cash used in investing activities ( 15,196 ) ( 12,525 )

7 unchanged sentences

Other financing activities 3,995 ( 166 )

Net cash provided by financing activities 7,893 8,659

Net cash provided by (used in) financing activities 531 ( 13,031 )

EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH ( 857 ) ( 4,483 )

NET INCREASE (DECREASE) IN CASH 10,616 ( 6,458 )

NET INCREASE IN CASH 14,468 3,755

Beginning of period 31,825 34,958

8 unchanged sentences

Shares Amount

(In thousands, except per share amounts)

(In thousands, except share amounts)

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

5 unchanged sentences

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 (loss) — — — — 3,551 ( 3,017 ) 534

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

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

5 unchanged sentences

Balance - June 30, 2023 33,092,992 $ 330 $ ( 15,302 ) $ 262,897 $ ( 76,755 ) $ ( 27,410 ) $ 143,760

Share-based compensation expense 15,997 — ( 20 ) 744 — — 724

Total comprehensive income — — — — 7,290 ( 5,220 ) 2,070

Balance - September 30, 2023 33,108,989 $ 330 $ ( 15,322 ) $ 263,641 $ ( 69,465 ) $ ( 32,630 ) $ 146,554

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

25 unchanged sentences

Revenue Recognition

We had outstanding customer accounts receivable, net of allowances, of $ 173.5 million as of June 30, 2023 and $ 152.6 million as of December 31, 2022.

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

We had outstanding customer accounts receivable, net of allowances, of $ 159.9 million as of September 30, 2023 and $ 152.6 million as of December 31, 2022.

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

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

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Vehicle Solutions Electrical Systems Aftermarket and Accessories Industrial Automation Total

6 unchanged sentences

Total $ 145,393 $ 53,862 $ 34,412 $ 13,020 $ 246,687

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Vehicle Solutions Electrical Systems Aftermarket and Accessories Industrial Automation Total

6 unchanged sentences

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

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Vehicle Solutions Electrical Systems Aftermarket and Accessories Industrial Automation Total

6 unchanged sentences

Total $ 458,707 $ 172,236 $ 108,870 $ 31,777 $ 771,590

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Vehicle Solutions Electrical Systems Aftermarket and Accessories Industrial Automation Total

7 unchanged sentences

Debt consisted of the following:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Term loan facility $ 144,844 $ 152,500

18 unchanged sentences

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 twelve months ended December 31, 2022.

At June 30, 2023, we had $ 9.0 million of borrowings under the Revolving Credit Facility, outstanding letters of credit of $ 1.2 million and availability of $ 139.8 million.

Combined with availability under our newly established foreign credit facility (described below) of approximately $ 8.3 million, total consolidated availability was $ 148.1 million at June 30, 2023.

The unamortized deferred financing fees associated with the Revolving Credit Facility of $ 1.1 million and $ 1.3 million as of June 30, 2023 and December 31, 2022, respectively, are being amortized over the remaining life of the Credit Agreement.

At September 30, 2023, we had $ 5.0 million of borrowings under the Revolving Credit Facility, outstanding letters of credit of $ 1.2 million and availability of $ 143.8 million.

Combined with availability under our China Credit Facility (described below) of approximately $ 8.2 million, total consolidated availability was $ 152.0 million at September 30, 2023.

The unamortized deferred financing fees associated with the Revolving Credit Facility of $ 1.1 million and $ 1.3 million as of September 30, 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.

48 unchanged sentences

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

and will be subject to step-downs 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 June 30, 2023.

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

and to 3.00 :1.0 for any fiscal quarter ending thereafter, including the quarter ended September 30, 2023).

We were in compliance with these covenants as of September 30, 2023.

Repayment and prepayment

8 unchanged sentences

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 $ 4.1 million and $ 0.0 million outstanding under the China Credit Facility as of June 30, 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 June 30, 2023, we had $ 8.3 million availability under the China Credit Facility.

We had $ 4.1 million and $ 0.0 million outstanding under the China Credit Facility as of September 30, 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 September 30, 2023, we had $ 8.2 million of availability under the China Credit Facility.

Cash Paid for Interest

For the six months ended June 30, 2023 and 2022, cash payments for interest were $ 6.6 million and $ 3.5 million, respectively.

For the nine months ended September 30, 2023 and 2022, cash payments for interest were $ 9.9 million and $ 6.2 million, respectively.

Intangible Assets

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Amount Accumulated

7 unchanged sentences

$ 35,691 $ ( 23,650 ) $ 12,041 $ 35,768 $ ( 21,148 ) $ 14,620

The aggregate intangible asset amortization expense was $ 0.9 million for the three months ended June 30, 2023 and 2022.

The aggregate intangible asset amortization expense was $ 1.7 million for the six months ended June 30, 2023 and 2022.

The aggregate intangible asset amortization expense was $ 0.8 million for the three months ended September 30, 2023 and $ 0.9 million for the nine months ended September 30, 2022.

The aggregate intangible asset amortization expense was $ 2.5 million for the nine months ended September 30, 2023 and $ 2.6 million for the nine months ended September 30, 2022 .

Fair Value Measurement

13 unchanged sentences

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 June 30, 2023, hedge contracts for transactions denominated in Czech Crown were not designated as a hedging instruments;

As of September 30, 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.

5 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

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

3 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Equivalent U.S.

6 unchanged sentences

Location Fair Value

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Foreign exchange contracts Other current assets $ 1,748 $ —

Interest rate swap agreement Other assets, net $ 2,396 $ 1,849

Interest rate swap agreement Other current assets $ 2,938 $ 1,849

Derivative Liability

1 unchanged sentence

Location Fair Value

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Foreign exchange contracts Accrued liabilities and other $ — $ 356

2 unchanged sentences

Location Fair Value

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Derivative instruments Accumulated other comprehensive income $ 6,545 $ 3,777

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

Three Months Ended June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

11 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Amount Fair Value Carrying

3 unchanged sentences

Revolving credit facility $ 5,000 $ 5,000 $ — $ —

Presented in the Condensed Consolidated Balance Sheets as the current portion of long-term debt of $ 13.1 million and long-term debt of $ 143.9 million as of June 30, 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.

Presented in the Condensed Consolidated Balance Sheets as the current portion of long-term debt of $ 14.2 million and long-term debt of $ 135.6 million as of September 30, 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 June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

6 unchanged sentences

Supplemental balance sheet information related to leases is as follows:

Balance Sheet Location June 30, 2023 December 31, 2022

Balance Sheet Location September 30, 2023 December 31, 2022

Operating Leases

8 unchanged sentences

Total finance lease liabilities $ 248 $ 270

For the six months ended June 30, 2023 and 2022, cash payments on operating leases were $ 4.7 million and $ 5.0 million, respectively.

Cash payments on operating leases were $ 7.5 million for the nine months ended September 30, 2023 and 2022.

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

9 unchanged sentences

Present value of lease liabilities $ 30,083 $ 248 $ 30,331

We recorded a $ 2.7 million tax provision, or 21 % effective tax rate for the three months ended June 30, 2023, and $ 5.9 million tax provision, or 24 % effective tax rate for the six months ended June 30, 2023, compared to a $ 0.9 million and $ 2.3 million tax provision for the three and six months ended June 30, 2022, respectively, or approximately 26 % effective tax rate for each period.

We recorded a $ 2.2 million tax provision, or 23 % effective tax rate for the three months ended September 30, 2023, and $ 8.1 million tax provision, or 24 % effective tax rate for the nine months ended September 30, 2023, compared to a $ 1.3 million and $ 3.5 million tax provision for the three and nine months ended September 30, 2022, respectively, or approximately 26 % 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.

1 unchanged sentence

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 2023 could be different from the forecasted amount used to estimate the income tax expense for the three and six months ended June 30, 2023.

For the six months ended June 30, 2023 and 2022, cash paid for taxes, net of refunds received, were $ 5.9 million and $ 3.1 million, respectively.

We have recorded valuation allowances in prior years related to U.S.

deferred tax assets due to multiple year cumulative losses.

Given the current earnings and anticipated future earnings of our U.S.

jurisdiction,we will continue to assess if there is sufficient positive evidence to allow us to reach a conclusion that the VA on US deferred taxes 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 we are able to actually achieve.

For the nine months ended September 30, 2023 and 2022, cash paid for taxes, net of refunds received, were $ 9.2 million and $ 4.2 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:

Three Months Ended June 30,

Three Months Ended September 30,

Interest cost $ 359 $ 187

3 unchanged sentences

Net cost $ 252 $ 96

Six months ended June 30,

Nine months ended September 30,

Interest cost $ 1,064 $ 602

11 unchanged sentences

Payments ( 1,159 )

Adjusted Award Value at June 30, 2023 $ 2,874

Unrecognized compensation expense was $ 5.2 million and $ 2.4 million as of June 30, 2023 and 2022, respectively.

Adjusted Award Value at September 30, 2023 $ 2,295

Unrecognized compensation expense was $ 2.8 million and $ 2.0 million as of September 30, 2023 and 2022, respectively.

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.

As of June 30, 2023, there was approximately $ 4.1 million of unrecognized compensation expense related to non-vested share-based compensation arrangements granted under our equity incentive plans.

As of September 30, 2023, there was approximately $ 3.1 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 June 30, 2023 and changes during the six months ended June 30, 2023, are presented below:

A summary of the status of our restricted stock awards as of September 30, 2023 and changes during the nine months ended September 30, 2023, are presented below:

(in thousands) Weighted-

3 unchanged sentences

Forfeited ( 48 ) 7.66

Nonvested - June 30, 2023 648 $ 7.86

As of June 30, 2023, a total of 2.5 million shares were available for future grants from the shares authorized for award under our 2020 EIP, including cumulative forfeitures.

Nonvested - September 30, 2023 598 $ 7.88

As of September 30, 2023, a total of 2.5 million shares were available for future grants from the shares authorized for award under our 2020 Equity Incentive Plan, 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, 33,092,992 and 32,826,852 shares were issued and outstanding as of June 30, 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 June 30, 2023 and December 31, 2022.

of which, 33,108,989 and 32,826,852 shares were issued and outstanding as of September 30, 2023 and December 31, 2022, respectively.

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.

1 unchanged sentence

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

Diluted earnings per share for the three and six months ended June 30, 2023 and 2022 includes the effect of potential common shares issuable when dilutive, and is as follows:

Three Months Ended June 30, Six Months Ended June 30,

Diluted earnings per share for the three and nine months ended September 30, 2023 and 2022 includes the effect of potential common shares issuable when dilutive, and is as follows:

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

2023 2022 2023 2022

5 unchanged sentences

Diluted earnings per share $ 0.22 $ 0.11 $ 0.78 $ 0.30

There were no outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three months ended June 30, 2023 and 19 thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three months ended June 30, 2022.

There were 11 thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the six months ended June 30, 2023 and 21 thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the six months ended June 30, 2022.

There were no outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three months ended September 30, 2023 and eight thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three months ended September 30, 2022.

There were no outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the nine months ended September 30, 2023 and 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.

Other Comprehensive Income (Loss)

8 unchanged sentences

Derivative instruments — — 1,772 1,772

Balance - June 30, 2023 $ ( 23,305 ) $ ( 11,519 ) $ 7,414 $ ( 27,410 )

Balance - September 30, 2023 $ ( 26,757 ) $ ( 12,418 ) $ 6,545 $ ( 32,630 )

currency translation adjustment Pension and

6 unchanged sentences

Derivative instruments — — 4,011 4,011

Balance - June 30, 2022 $ ( 25,641 ) $ ( 21,303 ) $ 2,930 $ ( 44,014 )

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

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

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

Amount Tax Expense After Tax Amount Before Tax

4 unchanged sentences

Total other comprehensive income (loss) $ ( 5,839 ) $ 619 $ ( 5,220 ) $ ( 655 ) $ ( 425 ) $ ( 1,080 )

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

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

Amount Tax Expense After Tax

17 unchanged sentences

June 30, 2023 $ — $ — $ — $ 698 $ — $ 698

New charges — — — 70 — 70

Payments and other adjustments — — — ( 70 ) — ( 70 )

September 30, 2023 $ — $ — $ — $ 698 $ — $ 698

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

6 unchanged sentences

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

Of the $ 0.7 million costs incurred in the three months ended June 30, 2023, $ 0.3 million primarily related to headcount reductions and $ 0.4 million related to facility exit and other costs.

Substantially all costs incurred were recorded in cost of revenues.

Of the $ 1.4 million costs incurred in the six months ended June 30, 2023, $ 0.5 million primarily related to headcount reductions and $ 0.9 million related to facility exit and other costs.

New charges $ 66 $ — $ 445 $ 136 $ — $ 647

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

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

The $ 0.1 million costs incurred in the three months ended September 30, 2023 primarily related to headcount reductions and were recorded in cost of revenues.

Of the $ 1.5 million costs incurred in the nine months ended September 30, 2023, $ 0.6 million primarily related to headcount reductions and $ 0.9 million related to facility exit and other costs.

Substantially all costs incurred were recorded in cost of revenues.

1 unchanged sentence

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 June 30, 2023, our equipment leases did not provide for any material guarantee of a specified portion of residual values.

As of September 30, 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.

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

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

As of June 30, 2023 and 2022, we had no such guarantees.

amount within a range of estimates is more likely, the minimum is accrued.

As of September 30, 2023 and 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.

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

Based upon the information available to management and discussions with legal counsel, it is the opinion of management that the

ultimate outcome of the various legal actions and claims that are incidental to our business are not expected to have a material adverse impact on the consolidated financial position, results of operations, equity or cash flows;

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

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

2 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 June 30, 2023 and December 31, 2022, are included within accrued liabilities and other in the accompanying Condensed Consolidated Balance Sheets.

On July 24, 2023, one of CVG’s customers issued a voluntary safety recall related to certain wiper system components supplied by CVG.

To the extent a loss occurs that is attributed to CVG, CVG believes that it has reasonable levels of insurance coverage to mitigate recall exposure risk.

It is reasonably possible that CVG will incur additional losses and fees above the amount accrued for warranty claims but we cannot estimate a range of such reasonably possible losses or fees related to these claims at this time.

There are no assurances, however, that settlements reached and/or adverse judgments received, if any, will not exceed amounts accrued.

The following presents a summary of the warranty provision for the six months ended June 30, 2023:

These amounts, as they relate to the periods ended September 30, 2023 and December 31, 2022, are included within accrued liabilities and other in the accompanying Condensed Consolidated Balance Sheets.

On July 24, 2023, one of our customers issued a voluntary safety recall related to certain wiper system components supplied by us.

To the extent a loss occurs that is attributed to us, we believe that we have reasonable levels of insurance coverage to mitigate recall exposure risk.

It is reasonably possible that we will incur additional losses and fees above the amount accrued for warranty claims but we cannot estimate a range of such reasonably possible losses or fees related to these claims at this time.

There are no assurances, however, that settlements reached and/or adverse judgments received, if any, will not exceed amounts normally accrued.

The following presents a summary of the warranty provision for the nine months ended September 30, 2023:

Balance - December 31, 2022 $ 1,433

1 unchanged sentence

Deduction for payments made and other adjustments ( 763 )

Balance - June 30, 2023 $ 1,577

Balance - September 30, 2023 $ 1,573

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.

34 unchanged sentences

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

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

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

3 unchanged sentences

Operating income (loss) $ 10,900 $ 5,863 $ 4,501 $ 690 $ ( 9,506 ) $ 12,448

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

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

4 unchanged sentences

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

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

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

3 unchanged sentences

Operating income (loss) $ 38,426 $ 19,592 $ 15,603 $ ( 2,233 ) $ ( 28,352 ) $ 43,036

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

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

6 unchanged sentences

Items reported in inventories consisted of the following:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Raw materials $ 96,630 $ 108,417

3 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Land and buildings $ 33,645 $ 32,267

5 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Compensation and benefits $ 26,496 $ 13,370

6 unchanged sentences

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