Commercial Vehicle Group, Inc. · NASDAQ:CVGI
Commercial Vehicle — Q3 2020 Earnings Presentation
20 slides from Commercial Vehicle's earnings presentation, Nov 9, 2020
Slide 1: Q3 2020 Earnings Call
Q3 2020 EARNINGS CALL NOVEMBER 9, 2020
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures These slides and our remarks during investor presentations about CVG’s future expectations, plans and prospects are forward- looking statements within the meaning of the federal securities laws. Forward-looking statements involve risks, unce
Slide 3: Q3 2020 Was a Good Quarter
Q3 2020 WAS A GOOD QUARTER • Down 17% vs. prior year • Up 48% vs. prior quarter • Commercial vehicle markets recovered sequentially, but below 2019 • Warehouse automation market continues to be a bright spot • Down $0.4 million vs. prior year • Adjusted margins increased to 6.4% from 5.5% vs. prior
Slide 4: Sales Mix Is Turning the Corner
Q3 2 0 2 0 SALES MIX IS TURNING THE CORNER Strategic focus areas: • Warehouse automation systems • Delivery vans and Class 5-7 trucks • Electric vehicles • Alternate markets for plastic parts and wire harness CVG’s approximate percentage of sales from Medium-duty and Heavy- duty trucks 2009-2019 202
Slide 5: Truck Markets Improved Substantially
Q3 2 0 2 0 TRUCK MARKETS IMPROVED SUBSTANTIALLY e-Commerce Growth and GDP Outlook Driving Favorable Truck Outlook; EV Substitution will Occur in Future Periods *Source: October 2020 ACT Research Report 5
Slide 6: Strategically Added Output Capacity to Warehouse Automation Business
Q3 2 0 2 0 STRATEGICALLY ADDED OUTPUT CAPACITY TO WAREHOUSE AUTOMATION BUSINESS PLANTS •• Expanded capacity at 4 plants Evaluating next steps for additional capacity PEOPLE •• Added dedicated resources in business leadership, procurement Staffed up hourly production personnel ~ 100 people PRODUCTS •
Slide 7: Focus on Securing Platform Positions on Electric Vehicles
Q3 2 0 2 0 FOCUS ON SECURING PLATFORM POSITIONS ON ELECTRIC VEHICLES . • Secured 2 marquee Electric Vehicle contingent awards in 2020 with >$200 million of business potential, with future start dates • Secured 3 smaller Electric Vehicle contingent awards in 2020 with future start dates • Pending bus
Slide 8: Key Takeaways
Q3 2020 KEY TAKEAWAYS MARKETS PERFORMED WELL COST REDUCTIONS WERE -- OLD AND NEW -- AGGRESSIVE AND WORKED • Truck markets recovered • Salaried/benefit/discretionary expenses • Warehouse automation stayed strong suppressed, restoring some costs in Q4/Q1 • Permanent reductions still underway GROWTH AC
Slide 9: Q3 2020 Financial Update
Q3 2020 FINANCIAL UPDATE 9
Slide 10: CVG Consolidated Financials
Q3 2 0 2 0 CVG CONSOLIDATED FINANCIALS $ MILLIONS, EXCEPT PER SHARE DATA Q3 2020 Q2 2020 Q3 2019 Q3 2020 NOTES Revenue 187.7 126.9 225.4 Gross Profit 24.2 6.5 29.4 • The P&L benefited in Q3 from Gross Margin 12.9% 5.1% 13.1% revenue rebound, year over year impact of FSE acquisition, SGA 14.4 16.0 17
Slide 11: Electrical Systems Segment Results
Q3 2 0 2 0 ELECTRICAL SYSTEMS SEGMENT RESULTS $ MILLIONS Q3 2020 Q2 2020 Q3 2019 Q3 2020 NOTES Revenue 121.1 74.2 131.4 Gross Profit 16.1 1.1 17.1 • Revenue increased 63.2% vs. Q2 due to increased truck Gross Margin 13.3% 1.5% 13.0% build and year over year SGA 3.2 6.6 4.0 impact of FSE acquisition
Slide 12: Global Seating Segment Results
Q3 2 0 2 0 GLOBAL SEATING SEGMENT RESULTS $ MILLIONS Q3 2020 Q2 2020 Q3 2019 Q3 2020 NOTES Revenue 68.9 53.9 95.7 Gross Profit 8.4 5.3 12.3 • Revenue increased 27.8% vs. Gross Margin 12.2% 9.9% 12.9% Q2 due to increased truck build SGA 3.5 3.7 5.0 • Adjusted OI increased 142.8% Amortization 0.1 0.1
Slide 13: Balance Sheet
Q3 2 0 2 0 BALANCE SHEET $ MILLIONS September 30, 2020 June 30, 2020 Q3 2020 NOTES Cash 53.6 63.4 Accounts Receivable 128.6 102.8 • Cash and available liquidity at Inventories 83.3 70.7 September 30, 2020 was $126.2M Other Assets 161.6 164.1 • Paid down $15M on the ABL Total Assets 427.1 401.0 and a
Slide 14: Supplemental Information
SUPPLEMENTAL INFORMATION 14
Slide 15: Use of Non-GAAP Financial Measures
Q3 2 0 2 0 USE OF NON-GAAP FINANCIAL MEASURES This earnings presentation contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). In general, the non-GAAP measures exclude items that (i) management believes reflect the Company’s m
Slide 16: Reconciliation of GAAP to Non-GAAP: Adjusted Operating Income and EPS
Q3 2 0 2 0 R E C O N C I L I AT I O N O F G AAP TO N O N - G AAP F I N AN C I AL M E AS U R E S – AD J U S T E D O P E R AT I N G I N C O M E AN D E B I T D A For the Three Months Ended September 30, 2020 June 30, 2020 September 30, 2019 Operating Income/(Loss) 8.9 (10.5) 11.5 FSE Acquisition Costs
Slide 17: Reconciliation of GAAP to Non-GAAP: Adjusted EBITDA
Q3 2 0 2 0 R E C O N C I L I AT I O N O F G AAP TO N O N - G AAP F I N AN C I AL M E AS U R E S – AD J U S T E D E B I T D A For the three months ended Trailing twelve months March 31, June 30, September December March 31, June 30, September September September 2019 2019 30, 2019 31, 2019 2020 2020
Slide 18: Business Segment Financial Information
Q3 2 0 2 0 BUSINESS SEGMENT FINANCIAL INFORMATION For the three months ended September 30, 2020 Electrical Global Corporate Total Systems Seating Operating (Loss) Income 12.2 4.8 (8.1) 8.9 Restructuring 0.7 0.3 1.1 2.2 Deferred Consideration Purchase Accounting 0.5 - - 0.5 Investigation - - 0.5 0.5
Slide 19: Free Cash Flow
Q3 2 0 2 0 FREE CASH FLOW For 4 the quarters ended December March 31, June 30, September 31, 2019 2020 2020 30, 2020 Cash Flow from Operations 8.2 10.3 10.1 10.4 Capital Expenditures (5.2) (3.4) (1.0) (1.5) Free Cash Flow 3.0 6.9 9.1 8.9 19
Slide 20: Conference Call Playback Info
Q3 2 0 2 0 CONFERENCE CALL PLAYBACK INFO A telephonic replay of the conference will be available for a period of two weeks following the call. To access the replay, dial (800) 585-8367 using access code 2727789 Webcast / PowerPoint / replay available at ir.cvgrp.com 20
Commercial Vehicle Group — Q3 2020 Earnings Presentation on 6ix