Commercial Vehicle Group, Inc. · NASDAQ:CVGI
Commercial Vehicle — Q4 2019 Earnings Presentation
18 slides from Commercial Vehicle's earnings presentation, Mar 17, 2020
Slide 1: Q4 2019 Earnings Conference Call
Q4 2019 EARNINGS CONFERENCE CALL March 17, 2020 Patrick Miller President & CEO Tim Trenary CFO & Treasurer Kirk Feiler VP Corporate Development & Investor Relations
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains 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”, “continue”, “likely”, and sim
Slide 3: Restatement Update
RESTATEMENT UPDATE ► Restated quarterly financials for the year ended December 31, 2018 and for the nine months ended September 30, 2019 due to inappropriate journal entries discovered in year-end review ► Independent investigation concluded the inappropriate journal entries were isolated to one emp
Slide 4: 2019 Quarterly Sales and Build Rates
2019 QUARTERLY SALES AND BUILD RATES 2019 Quarterly Sales and build rates 260 100 240 90 • Strong revenue and build 220 rates in the first half of 2019 200 80 swiftly decelerated beginning in Q3 180 70 • Total Class 8 production in 160 60 2019 was 342,000 units 140 50 120 100 40 Q1 18 Q2 18 Q3 18 Q4
Slide 5: End Market Outlook
END MARKET OUTLOOK CVG 2019 Revenue by End Market 16% 2020 Market Outlook 14% • Management estimates 51% Class 8 build to decline 35- 42%, 200,000-225,000 19% • Class 5-7 production expected to decline 15-20% Truck Construction Aftermarket Other • Construction markets in North America, Europe and As
Slide 6: Organic Growth
ORGANIC GROWTH ► Investing in growth areas ► Shift to more value-add content and services support ► Restructuring sales and engineering teams to better align with long-term strategy ► Expanding capabilities into high-speed data and high-voltage cabling applications Modem for defense application High
Slide 7: FSE Acquisition Update
FSE ACQUISITION UPDATE ► Integration nearly complete and on plan ► Applying LEAN concepts to FSE’s flexible manufacturing model ► Strong order book in FSE’s core business ► FSE end markets expected to grow 8-10% CAGR over next few years ► Cross selling opportunities taking hold ► New business coming
Slide 8: 2020 Priorities
2020 PRIORITIES Remediate internal control weaknesses Manage Covid-19 impact Complete restructuring actions Align operations Continue to volume to monitor impactslevels and return of Covid-19 to historical on our pull through rates global operations Strategically invest in growth areas COMMERCIAL VE
Slide 9: Finance Update
FINANCE UPDATE COMMERCIAL VEHICLE GROUP, INC. 9
Slide 10: Financial Impact of Restatement
FINANCIAL IMPACT OF RESTATEMENT ► Cost of revenues were understated by $3.9 million and $4.6 million for the year ended December 31, 2018 and for the nine months ended September 30, 2019, respectively ► Total Assets in the Consolidated Balance Sheets as of December 31, 2018 and as of September 30, 2
Slide 11: 2019 Quarterly Impact of Cost Challenges
2019 QUARTERLY IMPACT OF COST CHALLENGES 2019 Summary of Cost Challenges 4.5 4.0 3.5 3.0 2.5 3.0 0.8 0.5 2.0 1.5 0.9 1.0 1.9 1.9 0.3 0.2 0.5 0.8 0.8 0.0 Q1 Q2 Q3 Q4 Material and Labor Manufacturing Investments FSE Costs Restructuring $ millions Operational challenges declined as a result of mitigati
Slide 12: Consolidated Financial Update
CONSOLIDATED FINANCIAL UPDATE $M except per share data Full-Year Highlights • Revenue robust in first half, sharp decline in Q4 • Revenue includes $13 Q4 FY million from FSE Q4 2018 $ FY 2018 $ 2019 (restated) Change 2019 (restated) Change • FX translation negatively Revenue 189.5 223.6 (34.1) 901.2
Slide 13: Restructuring
RESTRUCTURING ► Actions initiated in 2019 in anticipation of weakening end markets ► Improved productivity and floor space utilization enabled the combination and closure of facilities ► $6 to $8 million costs • $3 million in 4Q 2019 • $3 to $5 million throughout 2020 • Primarily employee separation
Slide 14: Electrical Systems Segment Results
ELECTRICAL SYSTEMS SEGMENT RESULTS $ in millions Full-Year Highlights • North American truck market robust through three quarters; Q4 FY deteriorates in fourth quarter Q4 2018 $ FY 2018 $ 2019 (restated) Change 2019 (restated) Change • Construction markets softening Revenue 113.9 127.0 (13.1) 530.9
Slide 15: Global Seating Segment Results
GLOBAL SEATING SEGMENT RESULTS $ in millions Full-Year Highlights Q4 Q4 $ FY FY $ • Sales decline driven by 2019 2018 Change 2019 2018 Change lower construction and aftermarket revenue Revenue 76.5 99.3 (22.8) 381.5 397.5 (16.0) 45.2 54.2 (9.0) • $6.7 million negative FX Gross Profit 4.4 12.7 (8.3)
Slide 16: Appendix
APPENDIX COMMERCIAL VEHICLE GROUP, INC. 16
Slide 17: Impacts of Restatement – Gross Profit and Net Income
IMPACTS OF RESTATEMENT – GROSS PROFIT AND NET INCOME $ Millions Gross Profit Net Income As Previously As Previously CVG As Restated Reported Difference As Restated Reported Difference 2018 1Q 30.3 30.8 (0.5) 9.4 9.9 (0.4) 2018 2Q 34.9 35.6 (0.7) 12.7 13.2 (0.5) 2018 3Q 30.5 32.2 (1.7) 11.3 12.6 (1.3
Slide 18: Impacts of Restatement – Total Assets
IMPACTS OF RESTATEMENT – TOTAL ASSETS $ Millions Total Assets As Previously CVG As Restated Reported Difference As of March 31, 2018 396.8 399.6 (2.8) As of June 30, 2018 397.9 401.3 (3.4) As of September 30, 2018 410.3 415.0 (4.7) As of December 31, 2018 412.7 418.1 (5.4) As of March 31, 2019 447.0
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