Commercial Vehicle Group, Inc. 10-Q

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The discussion and analysis below described material changes in financial condition and results of operations as reflected in our condensed consolidated financial statements for the three and nine months ended September 30, 2023 and 2022. This discussion and analysis should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2022 Form 10-K. Business Overview CVG is a global provider of systems, assemblies and components to the global commercial vehicle market, the electric vehicle market, and the industrial automation markets. We deliver real solutions to complex design, engineering and manufacturing problems while creating positive change for our customers, industries, and communities we serve. 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 customers. We believe our products are used by a majority of the North American Commercial Truck markets, many construction vehicle OEMs parts and service dealers distributors, as well as top e-commerce retailers. Key Developments During the quarter ended March 31, 2023, we established two new plant locations: one in Tangier, Morocco, and another in Aldama, Mexico. These plants are a cornerstone in our strategy of globally expanding our electrical systems business. Consolidated Results of Operations Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022 The table below sets forth certain consolidated operating data for the three months ended September 30 (dollars are in thousands): 2023 2022 $ Change % Change Revenues $ 246,687 $ 251,412 $ (4,725) (1.9)% Gross profit 33,924 26,842 7,082 26.4 Selling, general and administrative expenses 21,476 17,304 4,172 24.1 Other expense 383 1,924 (1,541) (80.1) Interest expense 2,614 2,813 (199) (7.1) Provision for income taxes 2,161 1,250 911 72.9 Net income 7,290 3,551 3,739 105.3 Revenues . The decrease in consolidated revenues resulted from: • a $0.9 million, or 0.4%, decrease in OEM and other revenues; • a $2.7 million, or 7.4%, decrease in aftermarket and OES sales; and • a $1.1 million, or 7.8%, decrease in industrial automation sales. Third quarter 2023 revenues were favorably impacted by foreign currency exchange translation of $2.0 million, which is reflected in the change in revenues above. The decrease in revenues of 1.9% is due primarily to the previous year benefiting from a post-COVID backlog in Asia-Pacific. In addition, Industrial Automation and Aftermarket & Accessories segments experienced lower volumes. These reductions were partially offset by increased pricing and volume from the Electrical Systems business. Gross Profit . Included in gross profit is cost of revenues, which consists primarily of raw materials and purchased components for our products, wages and benefits for our employees and overhead expenses such as manufacturing supplies, facility rent and utilities costs related to our operations. The $7.1 million increase in gross profit is primarily attributable to price increases with customers and cost reduction initiatives, partially offset by volume decreases. Cost of revenues decreased $11.8 million, or 5.3%, as a result of a decrease in raw material and purchased component costs of $16.1 million, or 10.6%, offset by an increase in labor and overhead expenses of $4.3 million, or 5.8%. As a percentage of revenues, gross profit margin was 13.8% for the three months ended September 30, 2023 compared to 10.7% for the three months ended September 30, 2022. 21 Table of Contents Selling, General and Administrative Expenses . Selling, general and administrative expenses ("SG&A”) consist primarily of wages and benefits and other expenses such as marketing, travel, legal, audit, rent and utility costs which are not directly associated with the manufacturing of our products. SG&A expenses increased $4.2 million compared to the three months ended September 30, 2022, primarily as a result of increased employee salaries including an increase in incentive compensation expenses and professional service. As a percentage of revenues, SG&A expense was 8.7% for the three months ended September 30, 2023 compared to 6.9% for the three months ended September 30, 2022. Other Expense. Other expenses decreased $1.5 million in the three months ended September 30, 2023 as compared to the three months ended September 30, 2022 due primarily to partial settlement of the Company's U.S. Pension Plan liabilities of $1.1 million completed in the three months ended September 30, 2022 as well as favorable change in foreign currency of $0.5 million. Interest Expense . Interest associated with our debt was $2.6 million and $2.8 million for the three months ended September 30, 2023 and 2022, respectively. The decrease in interest expense primarily related to lower average debt balances during the respective comparative periods, offset by higher interest rates on variable rate debt. Provision for Income Taxes. An income tax provision of $2.2 million and $1.3 million were recorded for the three months ended September 30, 2023 and 2022, respectively. The period over period change in income tax was primarily attributable to a $4.7 million increase in pre-tax income versus the prior year period. Net Income. Net income was $7.3 million for the three months ended September 30, 2023 compared to $3.6 million for the three months ended September 30, 2022. The increase in net income is attributable to the factors noted above. Segment Results Vehicle Solutions Segment Results Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022 The table below sets forth certain Vehicle Solutions Segment operating data for the three months ended September 30 (dollars are in thousands): 2023 2022 $ Change % Change Revenues $ 145,393 $ 154,024 $ (8,631) (5.6)% Gross profit 17,661 13,839 3,822 27.6 Selling, general & administrative expenses 6,761 4,279 2,482 58.0 Operating income 10,900 9,560 1,340 14.0 Revenues. The decrease in Vehicle Solutions Segment revenues was primarily as a result of high APAC sales volume in 2022 generated from COVID backlog production in region. Gross Profit. The increase in gross profit was primarily attributable to price increases with customers and cost reduction initiatives, partially offset by volume decreases. Included in gross profit is cost of revenues, which decreased $12.5 million, or 8.9%, as a result of a decrease in raw material and purchased component costs of $15.8 million, or 15.8%, offset by an increase in labor and overhead expenses of $3.3 million, or 8.1%. As a percentage of revenues, gross profit margin was 12.1% for the three months ended September 30, 2023 compared to 9.0% for the three months ended September 30, 2022, driven by increased pricing and material & freight cost reduction improvements. Selling, General and Administrative Expenses . SG&A expenses increased $2.5 million for the three months ended September 30, 2023 compared to the three months ended September 30, 2022, primarily due to an increase in employee benefit costs and professional service. 22 Table of Contents Electrical Systems Segment Results Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022 The table below sets forth certain Electrical Systems Segment operating data for the three months ended September 30 (dollars are in thousands): 2023 2022 $ Change % Change Revenues $ 53,862 $ 46,129 $ 7,733 16.8% Gross profit 7,881 6,210 1,671 26.9 Selling, general & administrative expenses 2,018 1,055 963 91.3 Operating income 5,863 5,155 708 13.7 Revenues. The increase in Electrical Systems Segment revenues primarily resulted from increased sales volume, pricing and favorable foreign exchange. Gross Profit. The increase in gross profit is primarily attributable to increased sales volume and pricing, partially offset by startup costs related to new facilities. Included in gross profit is cost of revenues, which increased $6.1 million, or 15.2%, as a result of an increase in raw material and purchased component costs of $1.6 million, or 6.7%, and an increase in labor and overhead expenses of $4.5 million, or 27.1%. As a percentage of revenues, gross profit margin was 14.6% for the three months ended September 30, 2023 compared to 13.5% for the three months ended September 30, 2022, driven by increased pricing and volume leverage. Selling, General and Administrative Expenses . SG&A expenses increased $1.0 million for the three months ended September 30, 2023 compared to the three months ended September 30, 2022, primarily driven by increased employee benefit costs and salaries including an increase in incentive compensation expenses. Aftermarket & Accessories Segment Results Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022 The table below sets forth certain Aftermarket & Accessories Segment operating data for the three months ended September 30 (dollars are in thousands): 2023 2022 $ Change % Change Revenues $ 34,412 $ 37,143 $ (2,731) (7.4)% Gross profit 6,605 6,389 216 3.4 Selling, general & administrative expenses 2,104 1,436 668 46.5 Operating income 4,501 4,953 (452) (9.1) Revenues. The decrease in Aftermarket & Accessories Segment revenues primarily resulted from decreased volume. Gross Profit. The increase in gross profit is primarily attributable to increased pricing and cost reduction. Included in gross profit is cost of revenues, which decreased $2.9 million, or 9.6%, as a result of a decrease in raw material and purchased component costs of $1.1 million, or 6.1%, and a decrease in labor and overhead expenses of $1.8 million, or 15.1%. As a percentage of revenues, gross profit margin was 19.2% for the three months ended September 30, 2023 compared to 17.2% for the three months ended September 30, 2022. The increase in gross profit margin is primarily due to increased pricing offsetting moderating cost inflation. Selling, General and Administrative Expenses . SG&A expenses increased $0.7 million for the three months ended September 30, 2023 compared to the three months ended September 30, 2022, primarily driven by increased employee benefit costs and salaries including an increase in incentive compensation expenses. 23 Table of Contents Industrial Automation Segment Results Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022 The table below sets forth certain Industrial Automation Segment operating data for the three months ended September 30 (dollars are in thousands): 2023 2022 $ Change % Change Revenues $ 13,020 $ 14,116 $ (1,096) (7.8)% Gross profit 1,777 404 1,373 339.9 Selling, general & administrative expenses 1,087 1,371 (284) (20.7) Operating income (loss) 690 (967) 1,657 NM 1 1. Not meaningful Revenues. The decrease in Industrial Automation Segment revenues primarily resulted from lower sales volume due to decreased customer demand. Gross Profit. The increase in gross profit is primarily attributable to profit reported from the liquidation of certain excess inventories. Included in gross profit is cost of revenues, which decreased $2.5 million, or 18.0%, as a result of a decrease in raw material and purchased component costs of $0.8 million, or 7.6%, and a decrease in labor and overhead expenses of $1.7 million, or 46.1%. As a percentage of revenues, gross profit margin was 13.6% for the three months ended September 30, 2023 compared to 2.9% for the three months ended September 30, 2022. The increase in gross profit margin is primarily due to the previously noted the liquidation of certain excess inventories. The three months ended September 30, 2023 results include charges of $0.1 million associated with the restructuring program. Selling, General and Administrative Expenses . SG&A expenses decreased $0.3 million for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. Consolidated Results of Operations Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022 The table below sets forth certain consolidated operating data for the nine months ended September 30, (dollars are in thousands): 2023 2022 $ Change % Change Revenues $ 771,590 $ 746,635 $ 24,955 3.3% Gross profit 107,534 74,104 33,430 45.1 Selling, general and administrative expenses 64,498 49,955 14,543 29.1 Other expense 488 2,798 (2,310) (82.6) Interest expense 8,308 6,892 1,416 20.5 Loss on extinguishment of debt — 921 (921) (100.0) Provision for income taxes 8,110 3,520 4,590 130.4 Net income 26,130 10,018 16,112 160.8 Revenues . The increase in consolidated revenues resulted from: • a $60.6 million, or 10.6%, increase in OEM and other revenues; • a $9.3 million, or 9.4%, increase in aftermarket and OES sales; and • a $45.0 million, or 58.6%, decrease in industrial automation sales. 24 Table of Contents Nine months ended 2023 revenues were unfavorably impacted by foreign currency exchange translation of $0.2 million, which is reflected in the change in revenues above. The increase in revenues is primarily driven by increased pricing to offset material cost increases and increased sales volume from the Electrical Systems business, offset by lower sales volume in the Industrial Automation segment and Aftermarket & Accessories. Gross Profit . The $33.4 million increase in gross profit is primarily attributable to price increases with customers and cost reduction initiatives. Cost of revenues decreased $8.5 million, or 1.3%, as a result of a decrease in raw material and purchased component costs of $21.9 million, or 4.9%, offset by an increase in labor and overhead expenses of $13.4 million, or 5.9%. As a percentage of revenues, gross profit margin was 13.9% for the nine months ended September 30, 2023 compared to 9.9% for the nine months ended September 30, 2022. The nine months ended September 30, 2023 results include charges of $1.4 million associated with the restructuring program. Selling, General and Administrative Expenses . SG&A expenses increased $14.5 million compared to the nine months ended September 30, 2022, primarily as a result of increased employee salaries and professional services. As a percentage of revenues, SG&A expense was 8.4% for the nine months ended September 30, 2023 compared to 6.7% for the nine months ended September 30, 2022. Other Expense. Other expenses decreased $2.3 million in the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022 due primarily to partial settlement of the Company's U.S. Pension Plan liabilities of $1.1 million completed in three months ended September 30, 2022 as well as a favorable change in foreign currency of $1.4 million. Interest Expense . Interest associated with our debt was $8.3 million and $6.9 million for the nine months ended September 30, 2023 and 2022, respectively. The increase in interest expense primarily related to higher interest rates on variable rate debt, offset by lower average debt balances during the respective comparative periods. Loss on extinguishment of debt. On May 12, 2022, the Company refinanced its long-term debt, which resulted in a loss of $0.9 million, including a $0.6 million non-cash write off relating to deferred financing costs of the Term loan facility due 2026 and $0.3 million of other associated fees. Provision for Income Taxes. An income tax provision of $8.1 million and $3.5 million were recorded for the nine months ended September 30, 2023 and 2022, respectively. The period over period change in income tax was primarily attributable to the $20.7 million increase in pre-tax income versus the prior year period. Net Income. Net income was $26.1 million for the nine months ended September 30, 2023 compared to $10.0 million for the nine months ended September 30, 2022. The increase in net income is attributable to the factors noted above. Segment Results Vehicle Solutions Segment Results Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022 The table below sets forth certain Vehicle Solutions Segment operating data for the nine months ended September 30, (dollars are in thousands): 2023 2022 $ Change % Change Revenues $ 458,707 $ 436,966 $ 21,741 5.0% Gross profit 58,035 35,657 22,378 62.8 Selling, general & administrative expenses 19,609 18,269 1,340 7.3 Operating income 38,426 17,388 21,038 121.0 Revenues. The increase in Vehicle Solutions Segment revenues primarily resulted from increased sales volume and increased pricing to offset material cost increases. Gross Profit. The increase in gross profit was primarily attributable to price increases with customers and cost reduction initiatives. Included in gross profit is cost of revenues, which decreased $0.6 million, or 0.2%, as a result of a decrease in raw 25 Table of Contents material and purchased component costs of $10.8 million, or 3.9%, offset by an increase in labor and overhead expenses of $10.2 million, or 8.1%. As a percentage of revenues, gross profit margin was 12.7% for the nine months ended September 30, 2023 compared to 8.2% for the nine months ended September 30, 2022, driven by lower startup costs, improved manufacturing efficiencies, increased pricing to offset material cost inflation and freight costs. The nine months ended September 30, 2023 results include charges of $0.4 million associated with the restructuring program. Selling, General and Administrative Expenses . SG&A expenses increased $1.3 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, primarily due to an increase in employee benefit costs and salaries including an increase in incentive compensation expenses. Electrical Systems Segment Results Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022 The table below sets forth certain Electrical Systems Segment operating data for the nine months ended September 30, (dollars are in thousands): 2023 2022 $ Change % Change Revenues $ 172,236 $ 133,350 $ 38,886 29.2% Gross profit 26,524 16,857 9,667 57.3 Selling, general & administrative expenses 6,932 3,998 2,934 73.4 Operating income 19,592 12,859 6,733 52.4 Revenues. The increase in Electrical Systems Segment revenues resulted from sales volume, increased pricing to offset material cost pass-through and other inflationary items. Gross Profit. The increase in gross profit is primarily attributable to volume leverage and increased pricing to offset material cost pass-through and other inflationary items. Included in gross profit is cost of revenues, which increased $29.2 million, or 25.1%, as a result of an increase in raw material and purchased component costs of $16.5 million, or 25.4%, and an increase in labor and overhead expenses of $12.7 million, or 24.7%. As a percentage of revenues, gross profit margin was 15.4% for the nine months ended September 30, 2023 compared to 12.6% for the nine months ended September 30, 2022, driven by volume leverage and increased pricing. Selling, General and Administrative Expenses . SG&A expenses increased $2.9 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, primarily driven by increased headcount and quarterly incentive adjustments. Aftermarket & Accessories Segment Results Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022 The table below sets forth certain Aftermarket & Accessories Segment operating data for the nine months ended September 30, (dollars are in thousands): 2023 2022 $ Change % Change Revenues $ 108,870 $ 99,530 $ 9,340 9.4% Gross profit 21,620 13,341 8,279 62.1 Selling, general & administrative expenses 6,017 4,636 1,381 29.8 Operating income 15,603 8,705 6,898 79.2 Revenues. The increase in Aftermarket & Accessories Segment revenues primarily resulted from increased pricing to offset material cost pass-through and increased sales volume. 26 Table of Contents Gross Profit. The increase in gross profit is primarily attributable to the increased pricing to offset material cost inflation and freight costs. Included in gross profit is cost of revenues, which increased $1.1 million, or 1.2%, as a result of an increase in raw material and purchased component costs of $1.9 million, or 3.5%, offset by a decrease in labor and overhead expenses of $0.8 million, or 2.5%. As a percentage of revenues, gross profit margin was 19.9% for the nine months ended September 30, 2023 compared to 13.4% for the nine months ended September 30, 2022. This was primarily due to increased pricing offsetting moderating cost inflation. Selling, General and Administrative Expenses . SG&A expenses increased $1.4 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, consistent with the prior year amount on a percent of sales basis. Industrial Automation Segment Results Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022 The table below sets forth certain Industrial Automation Segment operating data for the nine months ended September 30, (dollars are in thousands): 2023 2022 $ Change % Change Revenues $ 31,777 $ 76,789 $ (45,012) (58.6)% Gross profit 1,355 8,249 (6,894) (83.6) Selling, general & administrative expenses 3,588 4,242 (654) (15.4) Operating (loss) income (2,233) 4,007 (6,240) NM 1 1. Not meaningful Revenues. The decrease in Industrial Automation Segment revenues primarily resulted from lower sales volume due to decreased customer demand. Gross Profit. The decrease in gross profit is primarily attributable to lower sales volume. Included in gross profit is cost of revenues, which decreased $38.1 million, or 55.6%, as a result of a decrease in raw material and purchased component costs of $29.5 million, or 55.5%, and a decrease in labor and overhead expenses of $8.6 million, or 55.8%. As a percentage of revenues, gross profit margin was 4.3% for the nine months ended September 30, 2023 compared to gross profit margin of 10.7% for the nine months ended September 30, 2022 due to volume reduction and restructuring expenses. The nine months ended September 30, 2023 results include charges of $1.1 million associated with the restructuring program. Selling, General and Administrative Expenses . SG&A expenses decreased $0.7 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, primarily driven by overhead reduction. Liquidity and Capital Resources As of September 30, 2023, the Company had total liquidity of $198.3 million, including $46.3 million of cash and $152.0 million of availability from its U.S. and China credit facilities. Our primary sources of liquidity as of September 30, 2023 were operating income, cash reserves and availability under our credit facilities. We believe that these sources of liquidity will provide adequate funds for our working capital needs, capital expenditures and debt service throughout the next twelve months. However, no assurance can be given that this will be the case. As of September 30, 2023, cash of $43.5 million was held by foreign subsidiaries. The Company had a $0.9 million deferred tax liability as of September 30, 2023 for the expected future income tax implications of repatriating cash from the foreign subsidiaries for which no indefinite reinvestment assertion has been made. Covenants and Liquidity On May 12, 2022, the Company entered into an amendment to increase its existing senior secured credit facilities to $325 million from $275 million consisting of a $175 million Term Loan A and a $150 million Revolving Credit Facility. The 27 Table of Contents amendment provides the Company with additional capital flexibility to execute upon its transformation and growth initiatives. As part of the amended terms of the agreement, the maturity date of the Senior Secured Credit Facilities has been extended by twelve months to May 12, 2027, the interest rate decreased by 50 bps at various leverage ratios based on SOFR, and the maximum consolidated total leverage ratio increased from 3.25x to 3.75x until December 31, 2022 with a quarterly step down of 25 bps to 3.00x leverage by September 30, 2023 and the maximum consolidated total leverage ratio will remain at this level thereafter. 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. Our ability to comply with the covenants in the Credit Agreement, as discussed in Note 4, Debt, may be affected by economic or business conditions beyond our control. Based on our current forecast, we believe that we will be able to maintain compliance with the financial maintenance covenants and the fixed charge coverage ratio covenant and other covenants in the Credit Agreement for the next twelve months; however, no assurances can be given that we will be able to comply. We base our forecasts on historical experience, industry forecasts and other assumptions that we believe are reasonable under the circumstances. If actual results are substantially different than our current forecast, we may not be able to comply with our financial covenants. Sources and Uses of Cash September 30, 2023 September 30, 2022 (In thousands) Net cash provided by operating activities $ 29,990 $ 33,794 Net cash used in investing activities (15,196) (12,525) Net cash provided by (used in) financing activities 531 (13,031) Effect of currency exchange rate changes on cash (857) (4,483) Net increase in cash $ 14,468 $ 3,755 Operating activities. For the nine months ended September 30, 2023, net cash provided by operating activities was $30.0 million compared to $33.8 million for the nine months ended September 30, 2022. Net cash provided by operating activities is primarily attributable to a smaller increase in working capital offset by the improved financial results during the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022. Investing activities. For the nine months ended September 30, 2023, net cash used in investing activities was mainly due to timing of capital expenditures of $15.2 million compared to $12.5 million for the nine months ended September 30, 2022. In 2023, we expect capital expenditures to be in the range of $20 million to $25 million. Financing activities. For the nine months ended September 30, 2023, net cash provided by financing activities was $0.5 million compared to net cash used in financing activities of $13.0 million for the nine months ended September 30, 2022. Net cash used in financing activities for the nine months ended September 30, 2022 is primarily attributable to $11.3 million of net repayments under our credit facilities. Debt and Credit Facilities The debt and credit facilities descriptions in Note 4, Debt are incorporated in this section by reference. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). For a comprehensive discussion of our significant accounting policies, see "Note 1. Significant Accounting Policies", to our consolidated financial statements in Item 8 in our 2022 Form 10-K. Critical accounting estimates are those that are most important to the portrayal of our financial condition and results. These estimates require management's most difficult, subjective, or complex judgments, often as a result of the need to estimate matters that are inherently uncertain. We review the development, selection, and disclosure of our critical accounting estimates with the Audit Com mittee of our board of directors. For information about critical accounting estimates, see Critical Accounting Estimates in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in 28 Table of Contents our 2022 Form 10-K. At September 30, 2023, there have been no material changes to our critical accounting estimates from those disclosed in our 2022 Form 10-K. Forward-Looking Statements This Quarter Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. For this purpose, any statements contained herein that are not statements of historical fact, including without limitation, certain statements under “Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” and located elsewhere herein regarding industry outlook, the Company’s expectations for future periods with respect to its plans to improve financial results, the future of the Company’s end markets, changes in the Class 8 and Class 5-7 North America truck build rates, performance of the global construction equipment business, the Company’s prospects in the wire harness, warehouse automation and electric vehicle markets, the Company’s initiatives to address customer needs, organic growth, the Company’s strategic plans and plans to focus on certain segments, competition faced by the Company, volatility in and disruption to the global economic environment, including inflation and labor shortages, financial covenant compliance, anticipated effects of acquisitions, production of new products, plans for capital expenditures and our results of operations or financial position and liquidity, may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believe”, “anticipate”, “plan”, “expect”, “intend”, “will”, “should”, “could”, “would”, “project”, “continue”, “likely”, and similar expressions, as they relate to us, are intended to identify forward-looking statements. The important factors discussed in “Item 1A - Risk Factors”, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Such forward-looking statements represent management’s current expectations and are inherently uncertain. Investors are warned that actual results may differ from management’s expectations. Additionally, various economic and competitive factors could cause actual results to differ materially from those discussed in such forward-looking statements, including, but not limited to, factors which are outside our control. Any forward-looking statement that we make in this report speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statement or to publicly announce the results of any revision to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.