Commercial Vehicle Group, Inc. · NASDAQ:CVGI
Commercial Vehicle — Q4 2021 Earnings Presentation
30 slides from Commercial Vehicle's earnings presentation, Mar 1, 2022
Slide 1: Q4/FY 2021 Earnings Presentation
Q4/FY – 2021 Earnings Presentation March 1, 2022 1
Slide 2: Forward Looking Statements and Non-GAAP Financial Measures
Forward Looking Statements and Non-GAAP Financial Measures These slides contain forward-looking statements that are subject to risks and uncertainties. These statements often include words such as “believe”, “anticipate”, “plan”, “expect”, “intend”, “will”, “should”, “could”, “would”, “project”, “co
Slide 3: Management in Attendance Today
Management in Attendance Today Harold Bevis President, CEO, Director of CVG. 7 years with CVG – Director since 2014, CEO since 2020. 18 years as a CEO, President, Director. Chris Bohnert Over 30 years of experience with manufacturing and technology businesses. Chief Financial Officer and Investor Re
Slide 4: Q4 Highlights
Q4 Highlights Securing high level of new business wins while operating in a difficult and inflationary supply chain environment 2021 NEW BUSINESS NET SALES OPERATING INCOME ADJUSTED EBITDA DILUTED ADJ. EPS AWARDS $228.9 $6.5 $12.9 $0.13 $200+ MILLION MILLION MILLION MILLION MILLION 6% YoY 30% YoY (1
Slide 5: 2021 Highlights - CVG
2021 Highlights - CVG Improved revenue Record revenues & margin expansion end-market diversification Adj. 18% 17% Sales* OI Margin % 36% 7.9% 12.2% 11% 1000 6% 14% 49% $972 $901 5.5% 4.9% $718 4% 19% 500 3.3% 19% 17% 2% 0 0% North American OEM Truck Aftermarket 2019 2020 2021 2019 2020 2021 Warehous
Slide 6: Supply Chain Challenges and Inflation
Supply Chain Challenges and Inflation • Legacy agreements were not Margin Compression Increased in Second Half of 2021 designed to accommodate Covid Primarily Due to Lag in Price-Cost Offsets pandemic or rapid inflation. • Legacy supply chain was not built for Covid nor Asian supply chain disruption
Slide 7: North American Class 8 Truck Market
North American Class 8 Truck Market NA Class 8 Truck Build Outlook* (in thousands) 400 Annual 300 363 300 200 265 214 100 • eCommerce increasing truck miles & first mile/middle mile/last mile complexities. 0 2020 2021 2022 2023 • North America transportation increasing with less dependency on 100 As
Slide 8: Strategic Reorganization into Four Segments
Strategic Reorganization into Four Segments • Strengthen the Company’s revenue profile with accretive new business • Improve the Company’s legacy business, renegotiate contracts, improve profitability % Sales Adj. Operating Income by Segment Sales Adj. OI by Segment** $499* Vehicle Solutions $24.1 1
Slide 9: Winning Big in Electric Vehicles
Winning Big in Electric Vehicles 2021 New Business Wins Electric & Fuel Cell Vehicles by End Market 5% 11% Government regulation and New market entrants looking industry environmental for technical expertise to 5% initiatives driving electric launch, CVG working with vehicle and fuel cell vehicle ma
Slide 10: Aftermarket and Accessories Strategy
Aftermarket and Accessories Strategy Improved Strategy for Future Growth 2021 Sales Profile Products Current Aftermarket Business Improvements 19% Wipers and Mirrors Lower priority Developing standalone 34% customer service manufacturing Seats 47% Other Imbedded in existing manufacturing process Hir
Slide 11: 2022 Initiatives
2022 Initiatives Win New Business Grow earnings and improve revenue mix Vertical Integration Decrease China supply chains and increase internal value proposition Core Business Optimization Improved pricing strategy and contractual arrangements Debt Paydown Pay down $25-40 million in debt in 2022 Cor
Slide 12: 2025 Roadmap
2025 Roadmap Revenue (in millions) $1,900* $500 Strengthen the company’s revenue profile with accretive new business that increases the $1,400 company’s value proposition and decreases $972 its legacy customer dependence. 2021 2025 Improve the company’s legacy business, renegotiate contracts, improv
Slide 13: Financial Review
Q4/FY – 2021 Financial Review March 1, 2022 13
Slide 14: Q4 Highlights
Q4 Highlights ADJUSTED NET SALES GROSS PROFIT OPERATING INCOME ADJUSTED EBITDA $228.9 $23.4 $8.5 $12.9 MILLION MILLION MILLION MILLION 6% YoY 1.3% YoY 2.4% YoY (1)% YoY • Q4 sales increase due primarily to material cost pass through. • Legacy contracts have impeded margin expansion. • Higher than ex
Slide 15: Vehicle Solutions
Vehicle Solutions 4th Quarter Full Year Net Sales Adj. Operating Net Sales Adj. Operating Income 600 30 Income 140 6 500 25 120 $498.9 $126.4 5 $5.5 $24.1 100 $111.0 400 20 4 80 $366.6 15 $3.8 300 3 60 $14.4 200 10 2 40 1 100 5 20 0 0 0 0 Q4 2020 Q4 2021 Q4 2020 Q4 2021 2020 2021 2020 2021 Material
Slide 16: Warehouse Automation
Warehouse Automation 4th Quarter Full Year Net Sales Adj. Operating Net Sales Adj. Operating Income 200 30 Income 40.0 6 $187.9 25 35.0 $37.4 $37.5 5 150 $24.5 30.0 20 25.0 4 100 15 20.0 3 $3.6 $101.7 15.0 10 2 10.0 50 $1.9 $8.5 1 5 5.0 - 0 0 0 4Q 2020 4Q 2021 4Q 2020 4Q 2021 2020 2021 2020 2021 Imp
Slide 17: Electrical Systems
Electrical Systems 4th Quarter Full Year Net Sales Adj. Operating Net Sales Adj. Operating Income 200 18 Income 45.0 16 6 175 40.0 $15.6 $41.3 150 $169.0 14 35.0 $38.2 5 12 30.0 125 $141.1 4 10 25.0 $3.9 100 3 8 $8.9 20.0 75 15.0 $2.7 6 2 50 10.0 4 1 25 5.0 2 - 0 0 0 4Q 2020 4Q 2021 4Q 2020 4Q 2021
Slide 18: Aftermarket & Accessories
Aftermarket & Accessories 4th Quarter Full Year Net Sales Adj. Operating Net Sales Adj. Operating Income 140 14 Income 30.0 3 12 120 $12.1 25.0 $26.3 $26.7 2.5 $2.8 $115.8 $11.3 100 $108.3 10 20.0 2 80 8 $1.9 15.0 1.5 60 6 10.0 1 40 4 5.0 0.5 20 2 - 0 0 0 4Q 2020 4Q 2021 4Q 2020 4Q 2021 2020 2021 20
Slide 19: 2022 Initiatives – Debt Paydown
2022 Initiatives – Debt Paydown Debt Paydown • Targeting to pay down $25-40 million of debt in 2022. Leverage Ratio* • Leverage ratio estimated to further decline. 3.5x • CVG is cash generative. In 2021, CVG invested >$100 million. 3.0x 3.2x 2.5x • $86 million in working capital to support >$250 mil
Slide 20: Q&A
Q4 – 2021 Q&A March 1, 2022 20
Slide 21: Appendix
Q4 – 2021 Appendix March 1, 2022 21
Slide 22: Non-GAAP Financial Measures
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 multi-year corporat
Slide 23: CVG Consolidated Results Q4 2021 vs. Q4 2020
CVG Consolidated Results Q4 2021 vs. Q4 2020 (In millions except for share information) Q4 2021 Q4 2020 Revenue 228.9 216.0 Gross Profit 23.4 23.1 Gross Margin 10.2% 10.7% Selling, General & Administrative Expense 16.0 17.3 Amortization Expense 0.9 0.9 Operating Income 6.5 5.0 Operating Margin 2.8%
Slide 24: CVG Consolidated Balance Sheet
CVG Consolidated Balance Sheet Q4 2021 Q4 2020 Cash 35.0 50.5 Accounts receivable, net 174.5 151.1 Inventories 141.0 91.2 Q4 2021 Highlights Other current assets 20.2 17.7 Total current assets 370.7 310.5 Primarily increased raw Property, plant and equipment, net 63.1 62.8 material inventory Intangi
Slide 25: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures Q4 2021 Q4 2020 Operating Income 6.5 5.0 Deferred Consideration Purchase Accounting 0.1 1.0 Restructuring 1.9 1.6 Investigation - 0.7 Adjusted Operating Income 8.5 8.3 % of Revenues 3.7% 3.8% Net Income/(Loss) 2.6 (4.1) Interest Expense 1.7 5.2 P
Slide 26: Reconciliation of GAAP to Non-GAAP Financial Measures – Adjusted EBITDA
Reconciliation of GAAP to Non-GAAP Financial Measures – Adjusted EBITDA Q1 Q2 Q3 Q1 Q2 Q3 Q4 (in millions) Q4 2020 2020 2020 2020 2021 2021 2021 2021 Net income/(Loss) (24.6) (12.5) 4.2 (4.1) 8.5 5.1 7.5 2.6 Interest 4.6 5.3 5.5 5.2 5.0 2.8 1.6 1.7 Provision / (Benefit) for Income Taxes (7.3) (3.1)
Slide 27: Reconciliation of GAAP to Non-GAAP Financial Measures – Diluted EPS
Reconciliation of GAAP to Non-GAAP Financial Measures – Diluted EPS Three Months Ended (in millions except for share information) 31-Dec-21 31-Dec-20 Net income/(Loss) 2.6 (4.1) Operating income (loss) adjustments 2.0 3.3 Adjusted (benefit) provision for income taxes1 (0.5) (0.8) Adjusted net income
Slide 28: Segment GAAP to Non GAAP QTD
Segment GAAP to Non GAAP QTD For the Three Months Ended December 31, 2021 Vehicle Warehouse Electrical Aftermarket & (in millions) Corporate Total Solutions Automation Systems Accessories Operating Income/(Loss) 5.0 3.1 1.7 1.9 (5.2) 6.5 Deferred consideration purchase accounting - 0.1 - - - 0.1 Res
Slide 29: Segment GAAP to Non GAAP YTD
Segment GAAP to Non GAAP YTD For the Twelve Months Ended December 31, 2021 Vehicle Warehouse Electrical Aftermarket & (in millions) Corporate Total Solutions Automation Systems Accessories Operating Income/(Loss) 23.6 23.6 14.6 12.1 (24.3) 49.6 Deferred consideration purchase accounting - 0.6 - - -
Slide 30: Reconciliation of GAAP to Non-GAAP Cash Flow Information
Reconciliation of GAAP to Non-GAAP Cash Flow Information (in millions) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Cash Flow from Operations $ 10.3 $ 10.1 $ 10.4 $ 3.6 $ (15.4) $ (9.4) $ 3.9 $ (8.9) Capital Expenditures1 (3.4) (1.0) (1.0) (1.0) (1.7) (5.2) (4.5) (6.2) Free Cash F
Commercial Vehicle Group — Q4 2021 Earnings Presentation on 6ix