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Item 1. Financial Statements

2025-05-06 compared with 2024-11-04 · 202 added, 288 removed, 458 unchanged (52% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

2024 2023 2024 2023

Three Months Ended March 31,

(In thousands, except per share amounts)

3 unchanged sentences

Selling, general and administrative expenses 16,385 18,655

Operating (loss) income ( 1,060 ) 8,920 4,513 35,804

Operating income 1,408 4,509

Other (income) expense ( 72 ) 212

1 unchanged sentence

Income (loss) before provision for income taxes ( 1,023 ) 2,111

Provision (benefit) for income taxes ( 1,515 ) 1,367 ( 1,110 ) 6,345

Provision for income taxes 2,116 665

Net income (loss) from continuing operations $ ( 3,139 ) $ 1,446

Net income from discontinued operations - Note 18 10,397 2,609 11,588 5,069

Net income 9,514 7,290 10,852 26,130

Net income (loss) from discontinued operations - Note 18 ( 1,173 ) 1,493

Net income (loss) ( 4,312 ) 2,939

Earnings (loss) per Common Share:

1 unchanged sentence

Income (loss) from continuing operations $ ( 0.09 ) $ 0.05

Income from discontinued operations $ 0.31 $ 0.08 $ 0.35 $ 0.15

Diluted earning (loss) per share

Income (loss) from discontinued operations $ ( 0.03 ) $ 0.04

Diluted earnings (loss) per share

Income (loss) from continuing operations $ ( 0.09 ) $ 0.05

Income from discontinued operations $ 0.31 $ 0.08 $ 0.35 $ 0.15

Income (loss) from discontinued operations $ ( 0.03 ) $ 0.04

Weighted average shares outstanding:

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

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

2024 2023 2024 2023

Three Months Ended March 31,

(In thousands)

Net income $ 9,514 $ 7,290 $ 10,852 $ 26,130

Net income (loss) $ ( 4,312 ) $ 2,939

Other comprehensive income (loss):

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Derivative instruments, net of tax 2,061 2,032

Other comprehensive loss ( 783 ) ( 5,220 ) ( 7,440 ) ( 1,080 )

Other comprehensive income (loss) 4,606 ( 994 )

Comprehensive income $ 294 $ 1,945

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(In thousands, except share and per share amounts)

4 unchanged sentences

Inventories 123,086 128,224

Current assets held for sale 4,951 15,603

Note receivable - Note 18 20,000 —

Other current assets 30,667 29,763

3 unchanged sentences

Deferred income taxes 11,381 11,084

Noncurrent assets held for sale — 11,130

Other assets, net 42,526 37,410

5 unchanged sentences

Current portion of long-term debt and short-term debt 13,906 8,438

Current liabilities held-for-sale 4,251 3,276

Total current liabilities 138,598 125,798

1 unchanged sentence

Pension and other post-retirement benefits 8,472 8,143

Noncurrent liabilities held-for-sale — 870

Other long-term liabilities 32,603 27,978

17 unchanged sentences

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 85 76

Pension cash reversion — 2,942

Share-based compensation expense 770 664

1 unchanged sentence

Non-cash loss (income) on derivative contracts ( 273 ) 18

Gain on sale of assets ( 3,544 ) —

Loss on write-down of Industrial automation segment assets 8,204 —

Gain on sale of cab structures business ( 28,597 ) —

Change in other operating items:

7 unchanged sentences

Purchases of property, plant and equipment ( 3,806 ) ( 5,059 )

Proceeds from disposal/sale of property, plant and equipment 4,455 —

Proceeds from sale of business — 3,200

4 unchanged sentences

Repayment of revolving credit facility ( 18,100 ) —

Surrender of shares to pay withholding taxes ( 59 ) ( 808 )

Debt issuance and amendment costs ( 217 ) —

Other financing activities ( 20 ) ( 43 )

17 unchanged sentences

Net income from discontinued operation for the period — — — — 1,493 — 1,493

Other comprehensive income — — — — — 4,040 4,040

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

Share-based compensation expense 101,524 — ( 24 ) ( 245 ) — — ( 269 )

Net income from continuing operations for the period — — — — 9,234 — 9,234

Net income from discontinued operation for the period — — — — 906 — 906

Other comprehensive income — — — — — 100 100

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

Net income from continuing operations for the period — — — — 4,681 — 4,681

Net income from discontinued operation for the period — — — — 2,609 — 2,609

Other comprehensive loss — — — — — ( 994 ) ( 994 )

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

Balance - December 31, 2023 33,322,535 $ 333 $ ( 16,150 ) $ 265,217 $ ( 46,184 ) $ ( 30,284 ) $ 172,932

Share-based compensation expense 3,438 — ( 2 ) 664 — — 662

Net income from continuing operations for the period — — — — 1,446 — 1,446

Net income from discontinued operation for the period — — — — 1,493 — 1,493

Other comprehensive loss — — — — — ( 994 ) ( 994 )

Balance - March 31, 2024 33,325,973 $ 333 $ ( 16,152 ) $ 265,881 $ ( 43,245 ) $ ( 31,278 ) $ 175,539

Balance - December 31, 2024 33,694,396 $ 337 $ ( 16,468 ) $ 269,117 $ ( 74,051 ) $ ( 43,343 ) $ 135,592

Share-based compensation expense ( 994 ) — — 770 — — 770

1 unchanged sentence

Net loss from discontinued operation for the period — — — — ( 1,173 ) — ( 1,173 )

Other comprehensive loss — — — — — ( 5,663 ) ( 5,663 )

Balance - June 30, 2024 33,443,964 $ 334 $ ( 16,170 ) $ 267,230 $ ( 44,846 ) $ ( 36,941 ) $ 169,607

Share-based compensation expense 50,519 1 ( 39 ) 965 — — 927

Net loss from continuing operations for the period — — — — ( 883 ) — ( 883 )

Net income from discontinued operation for the period — — — — 10,397 — 10,397

Other comprehensive loss — — — — — ( 783 ) ( 783 )

Balance - September 30, 2024 33,494,483 $ 335 $ ( 16,209 ) $ 268,195 $ ( 35,332 ) $ ( 37,724 ) $ 179,265

Other comprehensive income — — — — — 4,606 4,606

Balance - March 31, 2025 33,693,402 $ 337 $ ( 16,468 ) $ 269,887 $ ( 78,363 ) $ ( 38,737 ) $ 136,656

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

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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 manufacturers, many construction vehicle original equipment manufacturers ("OEMs"), parts and service dealers, and distributors.

We believe our products are used by a majority of the North American Commercial Truck manufacturers, many construction and agricultural vehicle original equipment manufacturers ("OEMs"), parts and service dealers, and distributors.

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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Additionally, certain prior period amounts related to discontinued operations have been reclassified to conform to footnote presentation for the current year, as further described in this section.

During the quarter ended September 30, 2024, the Company entered into a purchase agreement to sell its cab structures business with operations in Kings Mountain, North Carolina and met the held for sale criteria with respect to its Industrial Automation segment given the Company's intent to sell its First Source Electronics (FSE) business with operations in Elkridge, Maryland.

During the year ended December 31, 2024, the Company sold its cab structures business with operations in Kings Mountain, North Carolina and its Industrial Automation segment including First Source Electronics (FSE) business with operations in Elkridge, Maryland.

These divestitures represent a strategic shift in CVG's business and, in accordance with U.S.

GAAP, qualified as discontinued operations.

As a result, the operating results related to the cab structures business and Industrial Automation segment have been reflected as discontinued operations in the Condensed Consolidated Statements of Operations.

The assets and liabilities that are to be sold have met the requirements to be classified within the Condensed Consolidated Balance Sheets under a held for sale designation.

As a result, the operating results related to the cab structures business and Industrial Automation segment have been reflected as discontinued operations in the Consolidated Statements of Operations.

See Note 18, Discontinued Operations, for additional information on the divestitures.

As a result of classifying the Industrial Automation reporting segment as a discontinued operation, CVG is now comprised of three reportable segments:

Vehicle Solutions, Electrical Systems and Aftermarket & Accessories.

The financial information reported for Vehicle Solutions and Aftermarket & Accessories excludes the activity from the Kings Mountain, North Carolina facility as a result of the divestiture.

During the quarter ended March 31, 2025, the Company completed a strategic reorganization of its operations into three segments:

Global Seating, Global Electrical Systems, and Trim Systems and Components.

The reorganization was designed to enhance alignment with its customers and end markets which will allow the Company to better focus on growth opportunities, capital allocation and enhancing shareholder value.

As a result of the strategic reorganization, the prior period amounts have been revised to conform to the Company’s current period presentation.

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

See Note 16, Segment Reporting, for more information.

The preparation of financial statements in conformity with GAAP in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period.

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Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2023-07, Improvements to Reportable Segment Disclosures (Topic 280).

This ASU updates reportable segment disclosure requirements by requiring

disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss.

This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements.

Early adoption is also permitted.

This ASU will likely result in us including the additional required disclosures when adopted.

We are currently evaluating the provisions of this ASU and expect to adopt them for the year ending December 31, 2024.

In December 2023, the FASB issued ASU No.

2023-09, Improvements to Income Tax Disclosures (Topic 740).

The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid.

The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information

on income taxes paid.

The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024.

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This ASU will result in the required additional disclosures being included in our consolidated financial statements, once adopted.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income-Expense Disaggregation (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

Additionally, in January 2025, the FASB issued ASU No.

2025-01 to clarify the effective date of ASU No.

This ASU updates financial reporting to require public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.

This information is generally not presented in the financial statements today.

The ASU also requires disclosure of the total amount of selling expenses and our definition of selling expenses.

The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

Revenue Recognition

We had outstanding customer accounts receivable, net of allowances, of $ 127.2 million as of September 30, 2024 and $ 129.3 million as of December 31, 2023.

We had outstanding customer accounts receivable, net of allowances, of $ 119.5 million as of March 31, 2025 and $ 118.7 million as of December 31, 2024.

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 September 30, 2024

Vehicle Solutions Electrical Systems Aftermarket and Accessories Total

Seats $ 59,392 $ — $ 16,313 $ 75,705

Electrical wire harnesses, panels and assemblies 939 43,380 3,333 47,652

Plastic & Trim components 36,350 — 833 37,183

Mirrors, wipers and controls 615 — 10,617 11,232

Total $ 97,296 $ 43,380 $ 31,096 $ 171,772

Three Months Ended September 30, 2023

Vehicle Solutions Electrical Systems Aftermarket and Accessories Total

Seats $ 66,862 $ — $ 17,703 $ 84,565

Electrical wire harnesses, panels and assemblies 657 53,862 3,273 57,792

Plastic & Trim components 46,255 — 1,845 48,100

Mirrors, wipers and controls 1,461 — 10,979 12,440

Total $ 115,235 $ 53,862 $ 33,800 $ 202,897

Nine Months Ended September 30, 2024

Vehicle Solutions Electrical Systems Aftermarket and Accessories Total

Three Months Ended March 31, 2025

Global Seating Global Electrical Systems Trim Systems and Components Total

Seats $ 72,702 $ — $ — $ 72,702

3 unchanged sentences

Total $ 73,408 $ 50,453 $ 45,934 $ 169,795

Nine Months Ended September 30, 2023

Vehicle Solutions Electrical Systems Aftermarket and Accessories Total

Three Months Ended March 31, 2024

Global Seating Global Electrical Systems Trim Systems and Components Total

Seats $ 80,267 $ — $ — $ 80,267

4 unchanged sentences

Debt consisted of the following:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Term loan facility $ 85,000 $ 85,000

Revolving credit facility 32,400 50,500

Unamortized issuance costs ( 241 ) ( 49 )

$ 117,400 $ 135,500

4 unchanged sentences

On April 30, 2021, the Company and certain of its subsidiaries entered into a credit agreement (the “Credit Agreement”) between, among others, Bank of America, N.A.

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

as administrative agent (the “Administrative Agent”) and other lenders party

thereto (the “Lenders”) pursuant to which the Lenders made available a $ 150 million Term Loan Facility (the “Term Loan Facility”) and a $ 125 million Revolving Credit Facility (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Credit Facilities”).

The Credit Facilities mature on May 12, 2027.

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.

On July 30, 2024, the Company and certain of its subsidiaries, as guarantors, entered into an Amendment No.

3, which amends the Credit Agreement.

Amendment No.3 amends the terms of the existing Credit Agreement to limit the mandatory prepayment requirements for certain specified asset dispositions of the Company and certain of its subsidiaries.

The Company repaid $ 20.0 million in accordance with Amendment No.3 during the three months ended September 30, 2024.

At September 30, 2024, we had $ 14.0 million of borrowings under the Revolving Credit Facility, outstanding letters of credit of $ 1.1 million and availability of $ 134.9 million.

Combined with availability under our China Credit Facility (described below) of approximately $ 11.4 million, total consolidated availability was $ 146.3 million at September 30, 2024.

The unamortized deferred financing fees associated with the Revolving Credit Facility of $ 0.8 million and $ 1.0 million as of September 30, 2024 and December 31, 2023, respectively, are being amortized over the remaining life of the Credit Agreement.

At December 31, 2023, we had no borrowings under the Revolving Credit Facility and we had outstanding letters of credit of $ 1.2 million.

On May 12, 2022, the Company and certain of its subsidiaries entered into a second amendment (“Amendment No.

2”) 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.

On July 30, 2024, the Company and certain of its subsidiaries, as guarantors, entered into a third amendment (Amendment No.

3"), which amended the terms of the existing Credit Agreement to limit the mandatory prepayment requirements for certain specified asset dispositions of the Company and certain of its subsidiaries.

The Company repaid $ 20.0 million in accordance with the terms of Amendment No.3 during the three months ended September 30, 2024.

On December 19, 2024, the Company and certain of its subsidiaries entered into a fourth amendment ("Amendment No.

4") to its credit agreement pursuant to which the Lenders reduced the existing term loan facility to $ 85 million in aggregate principal amount, reduced the revolving credit facility commitments by $ 25 million to an aggregate of $ 125 million in revolving credit facility commitments, and revised the covenant calculation including increasing the maximum consolidated total leverage ratio to 4.25 :1.0 (which will be subject to step-downs to 3.75 :1.0 at the end of the fiscal quarter ending September 30, 2025;

and to 3.00 :1.0 for each fiscal quarter thereafter).

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

The amended Credit Agreement provides for an incremental term facility agreement and/or an increase of the Revolving Credit Facility, in a maximum aggregate amount of $ 15 million.

At March 31, 2025, we had $ 32.4 million of borrowings under the Revolving Credit Facility, outstanding letters of credit of $ 1.1 million and availability of $ 91.5 million.

Combined with availability under our China Credit Facility (described below) of approximately $ 11.0 million, total consolidated availability was $ 102.5 million at March 31, 2025.

The unamortized deferred financing fees associated with the Revolving Credit Facility of $ 0.7 million and $ 0.8 million as of March 31, 2025 and December 31, 2024, respectively, are being amortized over the remaining life of the Credit Agreement.

At December 31, 2024, we had $ 50.5 million borrowings under the Revolving Credit Facility and we had outstanding letters of credit of $ 1.1 million.

Covenants and other terms

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 3.00 :1.0.

We were in compliance with these covenants as of September 30, 2024.

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 4.25 :1.0 (which is subject to step-downs to 3.75 :1.0 at the end of the fiscal quarter ending September 30, 2025;

to 3.00 :1.0 for each fiscal quarter thereafter).

We were in compliance with these covenants as of March 31, 2025.

Repayment and prepayment

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

Amendment No.

3 amended the terms of the existing Credit Agreement and allowed mandatory prepayment requirements for certain specified asset dispositions of the Company and certain of its subsidiaries to be applied to quarterly amortization payments.

The Company repaid $ 20 million in accordance with Amendment No.3 during the three months ended September 30, 2024 which will be applied to future amortization payments beginning with the September 30, 2024 payment.

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

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

See Note 15, Commitments and Contingencies, for the future minimum principal payments due on long-term debt for the next five years.

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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 of our China operations.

We had no outstanding borrowings under the China Credit Facility as of September 30, 2024 and December 31, 2023.

At September 30, 2024, we had $ 11.4 million (denominated in the local currency and this amount varies based on the currency conversion rate) of availability under the China Credit Facility.

We had no outstanding borrowings under the China Credit Facility as of March 31, 2025 and December 31, 2024.

At March 31, 2025, we had $ 11.0 million of availability under the China Credit Facility.

Cash Paid for Interest

For the nine months ended September 30, 2024 and 2023, cash payments for interest were $ 9.0 million and $ 9.5 million, respectively.

For the three months ended March 31, 2025 and 2024, cash payments for interest were $ 2.8 million and $ 2.9 million, respectively.

Intangible Assets

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Amount Accumulated

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$ 12,124 $ ( 8,343 ) $ 3,781 $ 13,409 $ ( 9,491 ) $ 3,918

The aggregate intangible asset amortization expense was $ 0.1 million and $ 0.3 million for the three months ended September 30, 2024 and 2023, respectively.

The aggregate intangible asset amortization expense was $ 0.5 million and $ 0.8 million for the nine months ended September 30, 2024 and 2023 respectively.

The aggregate intangible asset amortization expense was $ 0.1 million and $ 0.2 million for the three months ended March 31, 2025 and 2024, respectively.

Fair Value Measurement

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Foreign Currency Forward Exchange Contracts.

Our derivative assets and liabilities represent foreign exchange contracts that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk and

counterparty credit risk.

Based on the utilization of these inputs, the derivative assets and liabilities are classified as Level 2.

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

As of September 30, 2024, hedge contracts for transactions denominated in Czech Crown were not designated as a hedging instruments;

As of March 31, 2025, 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.

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

Any changes in fair value were 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 would be recognized immediately in earnings in the consolidated statements of operations.

During the quarter ended March 31, 2025, the Company entered into transactions to cash settle existing interest rate swaps and received proceeds of $ 0.6 million.

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

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

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

Foreign exchange contract designated as hedging instruments $ 66 $ — $ 66 $ — $ — $ — $ — $ —

Interest rate swap agreement $ 208 $ — $ 208 $ — $ 1,073 $ — $ 1,073 $ —

Interest rate swap agreement settled in 2025 $ — $ — $ — $ — $ 1,069 $ — $ 1,069 $ —

Foreign exchange contract designated as hedging instruments $ 2,179 $ — $ 2,179 $ — $ 5,698 $ — $ 5,698 $ —

1 unchanged sentence

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Equivalent U.S.

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Location Fair Value

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Foreign exchange contract designated as hedging instruments Other current assets $ 66 $ —

Foreign exchange contract designated as hedging instruments Other assets, net $ 55 $ 139

Interest rate swap agreement Other assets, net $ 208 $ 1,073

Interest rate swap agreement settled in 2025 Other assets, net $ — $ 1,069

Derivative Liability

1 unchanged sentence

Location Fair Value

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Foreign exchange contract designated as hedging instruments Accrued liabilities and other $ 2,179 $ 5,648

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Location Fair Value

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Foreign exchange contracts designated as hedging instruments Accumulated other comprehensive income (loss) $ ( 1,760 ) $ ( 2,119 )

1 unchanged sentence

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,

2024 2023 2024 2023

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)

Foreign exchange contracts designated as hedging instruments Cost of revenues $ ( 1,982 ) $ 89

Interest rate swap agreement Interest expense $ 408 $ 415 $ 1,227 $ 1,045

Interest rate swap agreement settled in 2025 Interest expense $ 127 $ 416

Interest rate swap agreement settled in 2022 Interest expense $ 230 $ 189

Foreign exchange contracts not designated as hedging instruments Other (income) expense $ 43 $ ( 206 )

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The fair value of long-term debt obligations is based on a fair value model utilizing observable inputs.

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

Based on these inputs, our long-term debt fair value as disclosed was classified as Level 2 as of December 31, 2024.

As of March 31, 2025 the classification was changed to a Level 3 due to the lack of observable market inputs or comparable instruments.

Given the fact that our term loan matures on May 12, 2027, its carrying value approximates the fair value.

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Amount Fair Value Carrying

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Revolving credit facility $ 32,400 $ 32,400 $ 50,500 $ 50,500

Presented in the Condensed Consolidated Balance Sheets as the current portion of long-term debt of $ 3.0 million and long-term debt of $ 111.8 million as of September 30, 2024 and current portion of long-term debt of $ 15.3 million and long-term debt of $ 126.2 million as of December 31, 2023.

Presented in the Condensed Consolidated Balance Sheets as the current portion of long-term debt of $ 13.9 million and long-term debt of $ 71.1 million as of March 31, 2025 and current portion of long-term debt of $ 8.4 million and long-term debt of $ 76.6 million as of December 31, 2024.

The components of lease expense are as follows:

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

2024 2023 2024 2023

Three Months Ended March 31,

Operating lease cost

2 unchanged sentences

Short-term lease cost

1,259 1,208 3,211 4,733

Total lease expense $ 4,263 $ 3,229

Supplemental balance sheet information related to leases is as follows:

Balance Sheet Location September 30, 2024 December 31, 2023

Balance Sheet Location March 31, 2025 December 31, 2024

Operating Leases

8 unchanged sentences

Total finance lease liabilities $ 134 $ 94

Cash payments on operating leases were $ 7.3 million and $ 6.8 million for the nine months ended September 30, 2024 and 2023 respectively.

Cash payments on operating leases were $ 2.8 million and $ 2.5 million for the three months ended March 31, 2025 and 2024 respectively.

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

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Present value of lease liabilities $ 36,272 $ 134 $ 36,406

We recorded a $ 1.5 million tax benefit, or 63 % effective tax rate for the three months ended September 30, 2024, and $ 1.1 million tax benefit, or 60 % effective tax rate for the nine months ended September 30, 2024, compared to a $ 1.4 million tax provision for the three months ended September 30, 2023, and $ 6.3 million tax provision for the nine months ended September 30, 2023, or 23 % effective tax rate for each period.

We recorded a $ 2.1 million tax provision, or ( 207 )% effective tax rate for the three months ended March 31, 2025, compared to a $ 0.7 million, or 32 % effective tax rate for the three months ended March 31, 2024.

The primary driver in the effective tax rate is the company's losses in the US while maintaining its full valuation allowance position on U.S.

deferred tax assets.

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.

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To the extent that actual 2025 pretax results for U.S.

and foreign income or loss vary from estimates, the actual income tax expense recognized in 2024 could be different from the forecasted amount used to estimate the income tax expense for the three and nine months ended September 30, 2024.

For the nine months ended September 30, 2024 and 2023, cash paid for taxes, net of refunds received, were $ 6.4 million and $ 9.2 million, respectively.

and foreign income or loss vary from estimates, the actual income tax expense recognized in 2025 could be different from the forecasted amount used to estimate the income tax expense for the three months ended March 31, 2025.

For the three months ended March 31, 2025 and 2024, cash paid for taxes, net of refunds received, were $ 0.8 million and $ 1.9 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 September 30,

Interest cost $ 366 $ 359

Expected return on plan assets ( 334 ) ( 310 )

Amortization of prior service cost 13 11

Recognized actuarial loss 211 192

Net cost $ 256 $ 252

Nine months ended September 30,

Three Months Ended March 31,

Interest cost $ 384 $ 349

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Adjusted Award Value at December 31, 2024 $ 700

New grants 3,028

Forfeitures ( 47 )

Adjustments ( 54 )

Payments ( 324 )

Adjusted Award Value at September 30, 2024 $ 851

Unrecognized compensation expense was $ 0.9 million and $ 2.8 million as of September 30, 2024 and 2023, respectively.

Adjusted Award Value at March 31, 2025 $ 599

Unrecognized compensation expense was $ 0.2 million and $ 4.1 million as of March 31, 2025 and 2024, 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 September 30, 2024, there was approximately $ 4.8 million of unrecognized compensation expense related to unvested share-based compensation arrangements granted under our equity incentive plans.

As of March 31, 2025, there was approximately $ 3.4 million of unrecognized compensation expense related to unvested 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, 2024 and changes during the nine months ended September 30, 2024, are presented below:

A summary of the status of our restricted stock awards as of March 31, 2025 and changes during the three months ended March 31, 2025, are presented below:

(in thousands) Weighted-

Unvested - December 31, 2024 835 $ 5.02

Granted 509 6.09

Vested ( 185 ) 8.43

Forfeited ( 33 ) 6.42

Unvested - September 30, 2024

As of September 30, 2024, a total of 1.4 million shares were available for future grants from the shares authorized for award under our 2020 Equity Incentive Plan, including cumulative forfeitures.

Unvested - March 31, 2025 802 $ 4.96

As of March 31, 2025, a total of 0.5 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, 33,494,483 and 33,322,535 shares were issued and outstanding as of September 30, 2024 and December 31, 2023, 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 September 30, 2024 and December 31, 2023.

of which, 33,693,402 and 33,694,396 shares were issued and outstanding as of March 31, 2025 and December 31, 2024, respectively.

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

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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, 2024 and 2023 includes the effect of potential common shares issuable when dilutive, and is as follows:

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

2024 2023 2024 2023

Net income $ 9,514 $ 7,290 $ 10,852 $ 26,130

Diluted earnings (loss) per share for the three months ended March 31, 2025 and 2024 includes the effect of potential common shares issuable when dilutive, and is as follows:

Three Months Ended March 31,

Net income (loss) $ ( 4,312 ) $ 2,939

Net income (loss) from continuing operations ( 3,139 ) 1,446

Net income from discontinued operations 10,397 2,609 11,588 5,069

Net income (loss) from discontinued operations ( 1,173 ) 1,493

Weighted average number of common shares outstanding (in '000s) 33,693 33,325

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Basic earnings (loss) per share from continuing operations $ ( 0.09 ) $ 0.05

Basic earnings per share from discontinued operations $ 0.31 $ 0.08 $ 0.35 $ 0.15

Basic earnings (loss) per share from discontinued operations $ ( 0.03 ) $ 0.04

Diluted earnings (loss) per share from continuing operations $ ( 0.09 ) $ 0.05

Diluted earnings per share from discontinued operations $ 0.31 $ 0.08 $ 0.35 $ 0.15

There were 733 thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three months ended September 30, 2024 and no outstanding restricted shares awarded were excluded from the calculation of diluted earnings per share for the three months ended September 30, 2023.

There were 409 thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the nine months ended September 30, 2024 and no outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the nine months ended September 30, 2023.

Diluted earnings (loss) per share from discontinued operations $ ( 0.03 ) $ 0.04

There were 646 thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings (loss) per share for the three months ended March 31, 2025 and 408 thousand outstanding restricted shares awarded were excluded from the calculation of diluted earnings (loss) per share for the three months ended March 31, 2024.

Other Comprehensive Income (Loss)

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Amounts reclassified into earnings — 103 1,625 1,728

Balance - September 30, 2024 $ ( 24,384 ) $ ( 12,578 ) $ ( 762 ) $ ( 37,724 )

Balance - March 31, 2025 $ ( 28,067 ) $ ( 11,509 ) $ 839 $ ( 38,737 )

currency translation adjustment Pension and

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Amounts reclassified into earnings — 245 ( 694 ) ( 449 )

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

Balance - March 31, 2024 $ ( 25,786 ) $ ( 12,363 ) $ 6,871 $ ( 31,278 )

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

Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024

Amount Tax Expense After Tax Amount Before Tax

Three Months Ended March 31, 2025

Amount Tax Expense After Tax Amount

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Derivative instruments 1,625 — 1,625

Net realized gain (loss) $ 978 $ ( 228 ) $ 750 $ ( 1,179 ) $ 344 $ ( 835 )

Net realized gain 1,728 — 1,728

Total other comprehensive income (loss) $ 5,410 $ ( 804 ) $ 4,606

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

Amount Tax Expense After Tax

Amount Before Tax

Three Months Ended March 31, 2024

Amount Tax Expense After Tax

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Total other comprehensive income (loss) $ ( 154 ) $ ( 840 ) $ ( 994 )

As of September 30, 2024, the Company estimates that net pre-tax derivative loss of $ 2.9 million included in Accumulated other comprehensive income (loss) will be reclassified into earnings within the next 12 months.

As of March 31, 2025, the Company estimates that net pre-tax derivative loss of $ 0.4 million included in Accumulated other comprehensive income (loss) will be reclassified into earnings within the next 12 months.

Cost Reduction and Manufacturing Capacity Rationalization

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

The Company's restructuring program seeks to align 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 Electrical Systems Aftermarket & Accessories Corporate/Other Total

Global Seating Global Electrical Systems Trim Systems and Components Corporate/Other Total

December 31, 2024 $ 28 $ — $ — $ 360 $ 388

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March 31, 2025 $ — $ — $ — $ 358 $ 358

New charges 2,199 1,379 197 — 3,775

Payments and other adjustments ( 2,203 ) ( 1,379 ) ( 197 ) ( 97 ) ( 3,876 )

June 30, 2024 $ 124 $ — $ — $ 510 $ 634

Global Seating Global Electrical Systems Trim Systems and Components Corporate/

December 31, 2023 $ 128 $ — $ — $ 983 $ 1,111

New charges 53 1,090 470 164 1,777

Payments and other adjustments ( 53 ) ( 1,090 ) ( 470 ) ( 540 ) ( 2,153 )

September 30, 2024 $ — $ — $ — $ 429 $ 429

Of the $ 4.2 million costs incurred in the three months ended September 30, 2024 for restructuring, $ 2.8 million related to headcount reductions and $ 1.4 million related to facility exit and other;

$ 3.5 million were recorded in cost of revenue and $ 0.7 million were recorded in selling, general and administrative expenses.

Of the $ 9.8 million costs incurred in the nine months ended September 30, 2024 for restructuring, $ 7.7 million related to headcount reductions and $ 2.1 million related to facility exit and other;

$ 8.6 million were recorded in cost of revenues and $ 1.2 million were recorded in selling, general and administrative expenses.

All of the $ 0.4 million costs incurred in the nine months ended September 30, 2023 for restructuring related to headcount reductions and primarily were recorded in cost of revenues within the Vehicle Solution segment.

There were no costs incurred in the three months ended September 30, 2023.

March 31, 2024 $ 128 $ — $ — $ 607 $ 735

All of the $ 0.7 million costs incurred in the three months ended March 31, 2025 for restructuring related to headcount reductions.

Of the $ 0.7 million costs incurred in the three months ended March 31, 2025 for restructuring, $ 0.5 million were recorded in cost of revenue and $ 0.2 million were recorded in selling, general and administrative expenses.

Of the $ 1.8 million costs incurred in the three months ended March 31, 2024 for restructuring, $ 1.5 million related to headcount reductions and $ 0.3 million related to facility exit and other.

Of the $ 1.8 million costs incurred in the three months ended March 31, 2024 for restructuring, $ 1.6 million were recorded in cost of revenue and $ 0.2 million were recorded in selling, general and administrative expenses.

Of the $ 1.8 million costs incurred in three months ended March 31, 2024 for restructuring, $ 1.1 million related to headcount in the Global Electrical Systems segment and $ 0.5 million related to headcount reductions in the Trim Systems and Components segment.

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, 2024, our equipment leases did not provide for any material guarantee of a specified portion of residual values.

As of March 31, 2025, our equipment leases did not provide for any material guarantee of a specified portion of residual values.

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

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

As of September 30, 2024 and 2023, we had no such guarantees.

As of March 31, 2025 and 2024, we had no such guarantees.

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

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Warranty - We are subject to warranty claims for products that fail to perform as expected due to design or manufacturing deficiencies.

Depending on the terms under which we supply products to our customers, a customer may hold us responsible for

some or all of the repair or replacement costs of defective products when the product supplied did not perform as represented.

Depending on the terms under which we supply products to our customers, a customer may hold us responsible for some or all of the repair or replacement costs of defective products when the product supplied did not perform as represented.

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

These amounts, as they relate to the periods ended September 30, 2024 and December 31, 2023, are included within accrued liabilities and other in the accompanying Condensed Consolidated Balance Sheets.

These amounts, as they relate to the periods ended March 31, 2025 and December 31, 2024, 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.

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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, 2024:

The following presents a summary of the warranty provision for the three months ended March 31, 2025:

Balance - December 31, 2024 $ 1,207

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Deduction for payments made and other adjustments ( 315 )

Balance - September 30, 2024 $ 1,290

Provision for warranty claims includes $ 0.1 million of expense that is attributable to cab structures business and included in discontinued operations for the nine months ended September 30, 2024.

Balance - March 31, 2025 $ 1,352

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.

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2027 $ 84,900

Thereafter $ —

Segment Reporting

Operating segments are defined as components of an enterprise that are evaluated regularly by the Company’s chief operating decision maker (“CODM”), which is our President and Chief Executive Officer.

Each of these segments consists of a number of manufacturing facilities.

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

Our segments are more specifically described below.

CVG's reportable segments were impacted in the current period due to the divestiture of the cab structure business with operations in Kings Mountain, North Carolina and the expected divestiture of the Industrial Automation segment.

As a result of classifying the Industrial Automation reporting segment as a discontinued operation, CVG is now comprised of three reportable segments:

Vehicle Solutions, Electrical Systems and Aftermarket & Accessories.

The financial information reported for Vehicle Solutions and Aftermarket & Accessories excludes the activity from the Kings Mountain, North Carolina facility due to the divestiture.

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

During the quarter ended March 31, 2025, the Company completed a strategic reorganization of its operations into three segments:

Global Seating, Global Electrical Systems, and Trim Systems and Components.

As a result of the strategic reorganization, the prior period amounts have been revised to conform to the Company’s current period presentation.

Our President and Chief Executive Officer is the Company’s chief operating decision maker (“CODM”).

The CODM uses segment operating income compared to historical results, budgets, and forecasted financial information, in order to assess segment performance and allocate operating and capital resources.

During the quarter ended March 31, 2025, the Company revised its method for allocating corporate expenses to segment operating income to better align with how the segments utilize corporate support activities.

This change provides the CODM meaningful segment profitability information to support operating decisions and the allocation of resources.

The prior period amounts have been revised to conform to the Company’s current period presentation.

Certain of our facilities manufacture and sell products through multiple product lines.

The products produced by each of our segments are more specifically described below.

The Global Seating segment designs, manufactures and sells the following products:

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

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

• Plastic & Trim components 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 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, marine, power generation 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 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.

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

The Global 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 Trim Systems and Components segment designs, manufactures and sells the following products:

• Plastic components ("Trim") primarily for the North America commercial vehicle market, MD/HD truck market and power sports markets.

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

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.

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

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

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

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

Three Months Ended September 30, 2024

Vehicle Solutions Electrical Systems Aftermarket and Accessories Corporate/Other Total

Three Months Ended March 31, 2025

Global Seating Global Electrical Systems Trim Systems and Components Total

Revenues $ 73,408 $ 50,453 $ 45,934 $ 169,795

Cost of revenues 64,317 46,463 41,222 152,002

Gross profit 9,091 3,990 4,712 17,793

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Operating income (loss) 1

Three Months Ended September 30, 2023

Vehicle Solutions Electrical Systems Aftermarket and Accessories Corporate/Other Total

Revenues $ 115,235 $ 53,862 $ 33,800 $ — $ 202,897

Gross profit 15,050 7,881 6,416 ( 38 ) 29,309

Selling, general & administrative expenses

$ 2,713 $ ( 316 ) $ 1,535 $ 3,932

Operating income (loss) $ 8,289 $ 5,863 $ 4,312 $ ( 9,544 ) $ 8,920

Nine Months Ended September 30, 2024

Vehicle Solutions Electrical Systems Aftermarket and Accessories Corporate/Other Total

Revenues $ 312,785 $ 149,327 $ 97,951 $ — $ 560,063

Gross profit 32,177 9,934 18,091 ( 158 ) 60,044

Selling, general & administrative expenses 15,985 7,799 6,228 25,519 55,531

Operating income (loss) $ 16,192 $ 2,135 $ 11,863 $ ( 25,677 ) $ 4,513

Nine Months Ended September 30, 2023

Vehicle Solutions Electrical Systems Aftermarket and Accessories Corporate/Other Total

Corporate and other unallocated costs 2

Other (income) expense ( 72 )

Interest expense 2,503

Loss before provision for income taxes $ ( 1,023 )

Three Months Ended March 31, 2024

Global Seating Global Electrical Systems Trim Systems and Components Total

Revenues $ 80,797 $ 58,726 $ 55,103 $ 194,626

Cost of revenues 69,951 53,901 47,503 171,355

Gross profit 10,846 4,825 7,600 23,271

Selling, general & administrative expenses

Operating income (loss) $ 29,654 $ 19,592 $ 15,054 $ ( 28,496 ) $ 35,804

8,051 4,382 3,400 15,833

Operating income 1

$ 2,795 $ 443 $ 4,200 $ 7,438

Corporate and other unallocated costs 2

Other (income) expense 212

Interest expense 2,186

Income before provision for income taxes $ 2,111

Segment operating income includes allocated corporate operating expenses associated with central services such as procurement, quality, logistics, environmental health and safety, information technology, insurance, finance, credit and collections, treasury and human resources.

Operating expenses related to corporate headquarter functions are primarily allocated to each segment based on revenue contribution.

Unallocated corporate costs include enterprise and governance stewardship which include listing fees, audit fees, compliance costs, insurance costs, Board of Directors fees, and corporate management stock-based compensation expenses.

Finally, interest expense, income taxes, and certain other items included in Other (income) expense, which are managed on a consolidated basis, are not allocated to the operating segments.

Other Financial Information

Items reported in inventories consisted of the following:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Raw materials $ 95,635 $ 98,677

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Land and buildings $ 27,215 $ 26,613

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Compensation and benefits $ 14,726 $ 12,542

Operating lease liabilities 8,160 8,033

Derivative liabilities 4,670 304

Taxes payable 3,385 2,122

Accrued freight 3,184 2,679

Customer tooling projects 2,565 1,217

Accrued legal and professional fees 2,209 1,694

Derivative liabilities 2,195 5,701

Accrued freight 2,159 3,243

Warranty costs 1,352 1,207

Customer tooling projects 1,083 1,259

Other 3,867 4,557

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On September 6, 2024, the Company entered into an Amendment to the Purchase Agreement whereby the transaction closed on September 6, 2024 with the Company receiving $ 20 million of the purchase price on September 6, 2024 and $ 20 million (subject to adjustment) on October 1, 2024.

The decision to divest this business was part of our strategy to reduce our exposure to the cyclical Class 8 market, lower our customer concentration, remove complexity from our business, and improves our return profile.

As a result of the transaction, CVG recorded an after-tax gain on the sale of the business of approximately $ 27.2 million for the three months ended September 30, 2024 and recorded a Note receivable of $ 20.0 million in its balance sheet as of September 30, 2024.

The $ 20.0 million Note receivable was subsequently collected on October 1, 2024.

On October 30, 2024, the Company entered into a purchase agreement to sell its First Source Electronics (FSE) business with operations in Elkridge, Maryland for approximately $ 1.5 million, with a note in the amount of $ 500 thousand and earn out potential of an additional $ 1.5 million subject to certain criteria.

The Elkridge facility is the primary manufacturing facility of the Company's Industrial Automation segment.

On October 30, 2024, the Company entered into a purchase agreement to sell its First Source Electronics (FSE) business with operations in Elkridge, Maryland for approximately $ 1.5 million, with a note in the amount of $ 0.5 million and earn out potential of an additional $ 1.5 million subject to certain criteria.

The Elkridge facility was the primary manufacturing facility of the Company's Industrial Automation segment.

The decision to divest this business was part of our strategy to continually evaluate our portfolio of businesses and product lines for strategic fit and continued investment.

As of September 30, 2024, the assets and liabilities of the Industrial Automation segment are classified as held for sale on the balance sheets, net of the

estimated write-down loss as of September 30, 2024.

CVG recorded an estimated after-tax loss on the contemplated sale of the Industrial Automation business of approximately $ 7.8 million for the three months ended September 30, 2024.

We determined that the sale of the cab structures and Industrial Automation businesses represent discontinued operations as they constitute disposals of a product line and an operating segment, respectively, meet the held for sale criteria, and are a strategic shift that will have a major effect on our operations and financial results (individually and collectively).

As a result, we reclassified the related earnings (loss) from continuing operations to earnings (loss) from discontinued operations - net of income taxes on the consolidated statement of earnings (loss) for all the periods presented.

We determined that the sale of the cab structures and Industrial Automation businesses represent discontinued operations as they constitute disposals of a product line and an operating segment, respectively, and are a strategic shift that will have a major effect on our operations and financial results (individually and collectively).

As a result, we reclassified the related earnings (loss) from continuing operations to earnings (loss) from discontinued operations - net of income taxes on the consolidated

statement of earnings (loss) for all the periods presented.

No amounts for shared general and administrative operating support expense were allocated to the discontinued operation.

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While the transition services are expected to vary in duration depending upon the type of service provided, the Company expects to reduce costs as the transition services are completed.

The Company collected a total of $ 2.0 million related to the transition services agreement for the three and nine months ended September 30, 2024, which was recognized in Continuing operations, Other (income) expense in the Condensed Consolidated Statements of Operations.

The following table provides a reconciliation of the individual discontinued operations to the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023.

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

2024 2023 2024 2023

The Company recognized $ 0.4 million of income related to the transition services agreement for the three months ended March 31, 2025, which was presented in Continuing operations, Other (income) expense in the Condensed Consolidated Statements of Operations.

The following table provides a reconciliation of the individual discontinued operations to the Condensed Consolidated Statements of Operations for the three and three months ended March 31, 2025 and 2024.

Three Months Ended March 31,

Income (loss) from discontinued operations, net of tax

1 unchanged sentence

Industrial Automation segment ( 150 ) ( 1,527 )

Total income from discontinued operations, net of tax $ 10,397 $ 2,609 $ 11,588 $ 5,069

The following tables present reconciliations of the captions within CVG's Condensed Consolidated Statements of Operations attributable to each discontinued operation for the three and nine months ended September 30, 2024 and 2023.

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

2024 2023 2024 2023

Total income (loss) from discontinued operations, net of tax $ ( 1,173 ) $ 1,493

Three Months Ended March 31,

Income (loss) from discontinued operations attributable to Cab structures business:

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Gross profit ( 1,023 ) 3,999

Selling, general and administrative expenses — —

Operating income (loss) ( 1,023 ) 3,999

Income (loss) before provision for income taxes ( 1,023 ) 3,999

Provision (benefit) for income taxes of discontinued operations — 979

Gain on disposition of discontinued operations, net of income taxes 27,221 — 27,221 —

Net income from discontinued operations, net of income taxes $ 18,814 $ 2,130 $ 22,327 $ 7,060

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

2024 2023 2024 2023

Net income (loss) from discontinued operations, net of income taxes $ ( 1,023 ) $ 3,020

Three Months Ended March 31,

Income (loss) from discontinued operations attributable to Industrial Automation segment:

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Provision (benefit) for income taxes of discontinued operations — ( 474 )

Loss on disposition of discontinued operations, net of income taxes ( 7,809 ) — ( 7,809 ) —

Net income (loss) from discontinued operations, net of income taxes $ ( 150 ) $ ( 1,527 )

The following table presents the major classes of assets and liabilities of the Industrial Automation segment as of September 30, 2024, and of the cab structures and Industrial Automation segment as of December 31, 2023 that are classified as held for sale in the accompanying Condensed Consolidated Balance Sheets (in thousands).

September 30, 2024 December 31, 2023

Account receivable, net 4,964 4,603

Inventories 3,710 10,815

Other current assets — 185

Property, plant and equipment, net 232 —

Intangible assets, net 3,093 —

Other assets, net 1,156 —

Write-down loss on disposal group ( 8,204 ) —

Current assets held for sale 4,951 15,603

Property, plant and equipment, net — 4,545

Intangible assets, net — 4,628

Other assets, net — 1,957

Non current assets held for sale — 11,130

Total assets held for sale $ 4,951 $ 26,733

Accounts payable 2,069 2,068

Accrued liabilities and other 2,067 1,208

Other long-term liabilities 115 —

Current liabilities held-for-sale 4,251 3,276

Other long-term liabilities — 870

Noncurrent liabilities held-for-sale — 870

Total liabilities held for sale $ 4,251 $ 4,146

The following tables present reconciliations of the captions within CVG's Condensed Consolidated Statements of Cash Flows attributable to discontinued operations for the nine months ended September 30, 2024 and 2023.

Net cash provided by operating activities for the nine months ended September 30, 2024 includes the gain and loss on the respective transactions, as noted above.

Nine Months Ended September 30,

The following tables present reconciliations of the captions within CVG's Condensed Consolidated Statements of Cash Flows attributable to discontinued operations for the three months ended March 31, 2025 and 2024.

Three Months Ended March 31,

CASH FLOWS FROM DISCONTINUED OPERATIONS:

Net cash provided by (used in) operating activities ( 4,567 ) 9,027

Net cash provided by (used in) investing activities ( 838 ) ( 414 )

Net cash provided by operating activities $ 157 $ 2,476

Net cash used in investing activities — ( 222 )

Total cash provided by discontinued operations $ 157 $ 2,254

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