Commercial Vehicle Group, Inc. · NASDAQ:CVGI
Commercial Vehicle — The MicroCap Rodeo Winter Wonderland Conference 2021
28 slides from Commercial Vehicle's conference presentation, Feb 17, 2021
Slide 1: The MicroCap Rodeo Winter Wonderland Conference
T H E M I C R O C AP R O D E O W I N T E R W O N D E R L AN D CONFERENCE F E B R U ARY 1 7 , 1 8 & 1 9 , 2 0 2 1
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: Management in Attendance Today
MANAGEMENT IN ATTENDANCE TODAY Harold Bevis Chris Bohnert Mr. Bevis has been President and Chief Executive Officer Mr. Bohnert has been Chief Financial Officer since since March 2020 and has served as Director since June October 2020. Mr. Bohnert brings more than 30 2014. Mr. Bevis brings more than
Slide 4: CVG – A Diversified Industrial Company
COMPANY AT A GLANCE CVG – A DIVERSIFIED INDUSTRIAL COMPANY $502M Founded in 2000 ~7,500 Employees 2020 9mos. YTD Revenues Listed on NASDAQ in 2004 Depending on flex requirements Global Footprint $29M $25M 40 plants/locations and 26 2020 9mos.YTD Adjusted EBIDA 2020 9mos. YTD Free Cash Flow geographi
Slide 5: Investment Highlights
INVESTMENT HIGHLIGHTS L E A D I N G S U P P L I E R O F E L E C T R I C A L W I R E H A R N E S S E S , S E AT I N G S Y S T E M S , ENGINEERED PLASTIC COMPONENTS, AND ELECTROMECHANICAL ASSEMBLIES Pivoting the company for Leading supplier to Expanding into growth by optimizing the core sophisticated
Slide 6: Global Footprint
LOCATIONS GLOBAL FOOTPRINT Seats Harness Warehouse Sub Assemblies Structures Plastics Wipers 6
Slide 7: 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 8: 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 2020
Slide 9: 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 9
Slide 10: Strategic Objectives-Revenue Growth
STRATEGIC OBJECTIVES-REVENUE GROWTH Lead in core markets Leverage strengths into new markets Right-size cost structure, increase new product and Add new people, add new capabilities where innovation rate, pursue new customers, and needed, pursue brand-new markets, pursue brand- reposition footprint.
Slide 11: Strategically Added Capacity and Expanded Product Line in Warehouse Automation
Q3 2 0 2 0 STRATEGICALLY ADDED CAPACITY AND EXPANDED PRODUCT LINE IN THE 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
Slide 12: Warehouse Automation Subassemblies
Q3 2 0 2 0 WAREHOUSE AUTOMATION SUBASSEMBLIES • Complicated subassemblies used in warehouse systems; multiple units in each warehouse • Each warehouse implementation is unique • Top 100 retailers, top shippers, top ecommerce companies 12
Slide 13: 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 14: Unique Electric Vehicle Value Proposition
UNIQUE ELECTRIC VEHICLE VALUE PROPOSITION Brand Recognition, Existing Certifications Product Development Capabilities Speed to Market Bundled Sourcing Opportunity Manufacturing Technologies 14
Slide 15: Entering New End Markets – Injection Molding and Wire Harnesses
EN T ER IN G N EW EN D M AR KET S – IN J EC T ION M O L D ING AN D W IR E H AR N ESSES • Decades of experience in demanding • Decades of experience in demanding applications serving a very discriminating application service a very discriminating customer base customer base Near perfect quality and
Slide 16: 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 17: Q3 2020 Financial Update
Q3 2020 FINANCIAL UPDATE 17
Slide 18: 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 19: 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 20: 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 21: 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 22: CVG Current Debt Structure
Debt CVG CURRENT DEBT STRUCTURE • $90M facility (“Tranche A”) - LIBOR + 150 bps if availability stays above $30M AB L • $7M FILO (“Tranche B”) - Interest rate is 100bps greater than Tranche A • Paid down to zero balance in 3Q 2020 • Matures April 12, 2022 • $151M outstanding as of 10/31/2020 - Inter
Slide 23: Supplemental Information
SUPPLEMENTAL INFORMATION 23
Slide 24: 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 25: Reconciliation of GAAP to Non-GAAP – Adjusted Operating Income and EBITDA
Q3 2 0 2 0 R E C O N C I L I AT I O N O F G A A P T O N O N - G A A P 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 C
Slide 26: 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 A A P T O N O N - G A A P 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
Slide 27: 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 28: 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 28
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