Business
Commercial Vehicle Group Announces Second Quarter 2019 Results
NEW ALBANY, Ohio, Aug. 8, 2019 /PRNewswire/ -- Commercial Vehicle Group, Inc. (the "Company" or "CVG") (NASDAQ: CVGI) today reported financial results for the
About this update from Commercial Vehicle Group, Inc.
[{"type":"text","content":"NEW ALBANY, Ohio, Aug. 8, 2019 /PRNewswire/ -- Commercial Vehicle Group, Inc. (the \"Company\" or \"CVG\") (NASDAQ: CVGI) today reported financial results for the second quarter ended June 30, 2019.\n\"Ongoing momentum in the North American heavy- and medium-duty truck markets drove sales growth of 4% during the quarter. We continue to make strategic investments in the business, including manufacturing capacity expansion in our Electrical Systems segment and in corporate development activities associated with the recent strategic reorganization of the business. These investments, coupled with headwinds, resulted in a decrease in operating income compared to the prior year period. Accordingly, we have identified and are implementing a number of cost control and recovery actions to mitigate the impact going forward,\" commented Patrick Miller, President and Chief Executive Officer. \"We believe full year 2019 revenues will be slightly higher than 2018 levels, barring any unexpected market shocks. Additionally, the actions taken to enhance operational efficiencies, coupled with our strategic investments in the business should position CVG for longer term success and growth.\"\n\"The headwinds we encountered in the second quarter resulted in a 190 basis point reduction in operating income margin, which was 7.1% for the quarter. Material and labor inflation, and more specifically a new statutorily higher minimum wage in our Mexico wire harness operations, continue to affect results. Additionally, a supplier filed for Chapter 11 bankruptcy protection during the quarter, driving our material costs up and creating manufacturing inefficiencies in one of our facilities. We have taken a number of actions to address these challenges and expect the impact on our results to moderate in the second half of the year,\" stated Tim Trenary, Chief Financial Officer. \"As regards the Company's balance sheet, we completed in the second quarter the voluntary lump sum settlement of $7.8 million in pension liabilities for a portion of term vested participants, reducing the future financial risk of our pension plan. Following the transaction, our U.S. pension plan is essentially fully funded and we have transitioned the asset allocation for the plan to more closely match our liabilities. Net leverage at June 30, 2019 was 1.3 times trailing EBITDA and liq...