UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q



x☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2017~~March 31, 2023



¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-34365

COMMERCIAL VEHICLE GROUP, INC.

(Exact name of Registrant as specified in its charter)



Delaware (State or other jurisdiction of incorporation or organization)			41-1990662 (I.R.S. Employer Identification No.)
7800 Walton Parkway New Albany, Ohio (Address of principal executive offices)			43054 (Zip Code)

(614) 289-5360

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	CVGI	The NASDAQ Global Select Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes x No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” ~~and~~ “smaller reporting ~~company”~~company,” and "emerging growth company" in Rule 12b-2 of the Exchange ~~Act~~.

Act.

Large accelerated filer

¨☐

Accelerated filer

x☒

Non-accelerated filer

¨☐

~~(Do not check if a smaller reporting company)~~

Smaller reporting company

¨☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No x☒

The number of shares outstanding of the Registrant’s common stock, par value $.01 per share, at ~~November 6, 2017~~May 2, 2023 was ~~30,658,236~~33,473,336 shares.

Table of Contents

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q




PART I FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS		1
~~CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)~~Condensed Consolidated Statements of Operations		1
~~CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)~~Condensed Consolidated Statements of Comprehensive Income (Loss)		2
~~CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)~~Condensed Consolidated Balance Sheets		3
~~CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)~~Condensed Consolidated Statements of Cash Flows		4
~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)~~Condensed Consolidated Statements of Stockholders’ Equity		5
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~Notes to Condensed Consolidated Financial Statements		6
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		2219
ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		3024
ITEM 4 – CONTROLS AND PROCEDURES		3024

PART II OTHER INFORMATION		25

~~Part II OTHER ITEMS~~		31

ITEM 1 Legal Proceedings	3125
ITEM 1A Risk Factors		3125
ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds		3125
ITEM 3 Defaults Upon Senior Securities		3125
ITEM 4 Mine Safety Disclosures		3125
ITEM 5 Other Information		3125
ITEM 6 Exhibits		3226

SIGNATURE		3327

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED ~~BALANCE SHEETS~~STATEMENTS OF OPERATIONS

September 30, 2017 December 31, 2016
(Unaudited) (Unaudited)

(In thousands, except share and per
share amounts)
Assets
Current Assets:
Cash $ 50,232
$ 130,160
Accounts receivable, net of allowances of $4,418 and $3,881, respectively 128,282
97,793
Inventories 88,442
71,054
Other current assets 14,935
9,941
Total current assets 281,891
308,948
Property, plant and equipment, net of accumulated depreciation of $144,288 and $137,879, respectively 64,980
66,041
Goodwill 7,884
7,703
Intangible assets, net of accumulated amortization of $8,125 and $7,048, respectively 14,748
15,511
Deferred income taxes 29,044
28,587
Other assets, net 2,240
1,975
Total assets $ 400,787
$ 428,765
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable $ 91,713
$ 60,556
Accrued liabilities and other 39,778
45,699
Current portion of long-term debt 3,184
—
Total current liabilities 134,675
106,255
Long-term debt 164,565
233,154
Pension and other post-retirement benefits 19,973
18,938
Other long-term liabilities 3,140
2,728
Total liabilities 322,353
361,075
Stockholders’ Equity:
Preferred stock, $0.01 par value (5,000,000 shares authorized; no shares issued and outstanding) —
—
Common stock, $0.01 par value (60,000,000 shares authorized; 29,876,953 and 29,871,354 shares issued and outstanding, respectively) 299
299
Treasury stock, at cost: 1,014,413 shares, as of September 2017 and December 2016 (7,753 ) (7,753 )
Additional paid-in capital 239,209
237,367
Retained Deficit (107,855 ) (113,378 )
Accumulated other comprehensive loss (45,466 ) (48,845 )
Total stockholders’ equity 78,434
67,690
Total liabilities and stockholders’ equity $ 400,787
$ 428,765


	Three Months Ended March 31,
	2023		2022
	(Unaudited) (In thousands, except per share amounts)
Revenues	$	262,709	$	244,374
Cost of revenues	227,500		218,991
Gross profit	35,209		25,383
Selling, general and administrative expenses	20,565		16,999

Operating income	14,644		8,384
Other (income) expense	(202)		1,041
Interest expense	2,890		1,961
Income before provision for income taxes	11,956		5,382
Provision for income taxes	3,256		1,400


Net income	$	8,700	$	3,982
Earnings per Common Share:
Basic	$	0.26	$	0.12
Diluted	$	0.26	$	0.12
Weighted average shares outstanding:
Basic	32,868		32,065
Diluted	33,182		32,685

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016

(Unaudited)
(In thousands, except per
share amounts)
(Unaudited)
(In thousands, except per
share amounts)
Revenues $ 198,349
$ 153,604
$ 566,893
$ 512,147
Cost of Revenues 173,199
134,685
497,539
443,192
Gross Profit 25,150
18,919
69,354
68,955
Selling, General and Administrative Expenses 14,136
14,126
45,557
46,502
Amortization Expense 332
327
990
978
Operating Income 10,682
4,466
22,807
21,475
Interest and Other Expense 3,482
4,799
14,786
14,583
Income (Loss) Before Provision for Income Taxes 7,200
(333 ) 8,021
6,892
Provision (Benefit) for Income Taxes 2,437
(1,480 ) 2,498
461
Net Income $ 4,763
$ 1,147
$ 5,523
$ 6,431
Earnings per Common Share:
Basic and Diluted $ 0.16
$ 0.04
$ 0.18
$ 0.22
Weighted Average Shares Outstanding:
Basic 29,875
29,449
29,874
29,449
Diluted 30,487
30,101
30,379
29,783


	Three Months Ended March 31,
	2023		2022
	(Unaudited) (In thousands)
Net income	$	8,700	$	3,982
Other comprehensive income (loss):
Foreign currency exchange translation adjustments	2,557		327
Minimum pension liability, net of tax	140		(29)
Derivative instrument, net of tax	1,343		2,814
Other comprehensive income	4,040		3,112


Comprehensive income	$	12,740	$	7,094

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED ~~STATEMENTS OF COMPREHENSIVE INCOME~~BALANCE SHEETS

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017
2016
(Unaudited) (Unaudited) (Unaudited)
(Unaudited)
(In thousands) (In thousands)
Net income $ 4,763
$ 1,147
$ 5,523
$ 6,431
Other comprehensive income (loss):

Foreign currency exchange translation adjustments 1,130
621
5,209
215
Minimum pension liability, net of tax (546 ) (665 ) (1,830 ) (1,699 )
Other comprehensive income (loss) 584
(44 ) 3,379
(1,484 )
Comprehensive income $ 5,347
$ 1,103
$ 8,902
$ 4,947


	March 31, 2023		December 31, 2022
	(Unaudited)
	(In thousands, except per share amounts)
ASSETS
Current Assets:
Cash	$	41,484	$	31,825
Accounts receivable, net of allowances of $192 and $306, respectively	171,878		152,626
Inventories	139,553		142,542

Other current assets	20,112		12,582
Total current assets	373,027		339,575
Property, plant and equipment, net	68,939		67,805

Intangible assets, net	13,791		14,620
Deferred income taxes	10,996		12,275
Other assets, net	31,087		35,993
Total assets	$	497,840	$	470,268
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	119,057	$	122,091

Accrued liabilities and other	47,340		42,809
Current portion of long-term debt and short-term debt	16,399		10,938
Total current liabilities	182,796		175,838
Long-term debt	149,221		141,499

Pension and other post-retirement benefits	8,470		8,428
Other long-term liabilities	23,564		24,463
Total liabilities	364,051		350,228
Stockholders’ equity:
Preferred stock, $0.01 par value (5,000,000 shares authorized; no shares issued and outstanding)	—		—
Common stock, $0.01 par value (60,000,000 shares authorized; 32,991,468 and 32,826,852 shares issued and outstanding respectively)	330		328
Treasury stock, at cost: 2,009,162 and 1,899,996 shares, respectively	(15,278)		(14,514)
Additional paid-in capital	263,142		261,371
Retained deficit	(86,895)		(95,595)
Accumulated other comprehensive loss	(27,510)		(31,550)
Total stockholders’ equity	133,789		120,040
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	497,840	$	470,268

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Three Months Ended March 31,
	2023		2022
	(Unaudited)
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	8,700	$	3,982
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization	4,262		4,432


Noncash amortization of debt financing costs	76		113

Pension cash reversion	2,942		—

Shared-based compensation expense	1,771		1,117
Deferred income taxes	(467)		532
Non-cash loss (income) on derivative contracts	(658)		599


Change in other operating items:
Accounts receivable	(18,429)		(36,212)
Inventories	3,594		(17,502)
Prepaid expenses	(2,694)		(2,599)
Accounts payable	(4,340)		27,998

Other operating activities, net	5,301		(3,858)
Net cash (used in) provided by operating activities	58		(21,398)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(3,321)		(3,590)



Net cash used in investing activities	(3,321)		(3,590)
CASH FLOWS FROM FINANCING ACTIVITIES:

Repayment of term loan facility	(2,188)		(1,875)

Borrowing under revolving credit facility	11,000		55,200
Repayment of revolving credit facility	—		(24,400)


Surrender of common stock by employees	(764)		(464)



Other financing activities	4,329		(55)
Net cash provided by financing activities	12,377		28,406

EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH	545		(168)

NET INCREASE IN CASH	9,659		3,250

CASH:
Beginning of period	31,825		34,958
End of period	$	41,484	$	38,208

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


																		Common Stock			Treasury Stock		Additional Paid In Capital		Retained Deficit		Accumulated Other Comp. Loss		Total CVG Stockholders’ Equity
	Common Stock			Treasury Stock			Additional Paid In Capital		Retained Deficit			Accumulated Other Comp. Loss			Total CVG Stockholders’ Equity			Shares	Amount
	Shares	Amount																(Unaudited) (In thousands, except per share amounts)
	(Unaudited) (In thousands)
BALANCE - December 31, 2016	29,871	$	299	$	(7,753	)	$	237,367	$	(113,378	)	$	(48,845	)	$	67,690
Balance - December 31, 2021																	Balance - December 31, 2021	32,034,592	$	321	$	(13,172)	$	255,566	$	(73,624)	$	(42,438)	$	126,653
Share-based compensation expense	6	—		—			1,842		—			—			1,842		Share-based compensation expense	122,618	1		(464)		1,117		—		—		654
Total comprehensive income	—	—		—			—		5,523			3,379			8,902		Total comprehensive income	—	—		—		—		3,982		3,112		7,094
BALANCE - September 30, 2017	29,877	$	299	$	(7,753	)	$	239,209	$	(107,855	)	$	(45,466	)	$	78,434
Balance - March 31, 2022																	Balance - March 31, 2022	32,157,210	$	322	$	(13,636)	$	256,683	$	(69,642)	$	(39,326)	$	134,401

Balance - December 31, 2022																	Balance - December 31, 2022	32,826,852	$	328	$	(14,514)	$	261,371	$	(95,595)	$	(31,550)	$	120,040

Share-based compensation expense																	Share-based compensation expense	164,616	2		(764)		1,771		—		—		1,009

Total comprehensive income																	Total comprehensive income	—	—		—		—		8,700		4,040		12,740
Balance - March 31, 2023																	Balance - March 31, 2023	32,991,468	$	330	$	(15,278)	$	263,142	$	(86,895)	$	(27,510)	$	133,789

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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~~COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

Nine Months Ended September 30,
2017 2016
(Unaudited) (Unaudited)
(In thousands)
Cash Flows from Operating Activities:
Net Income $ 5,523
$ 6,431
Adjustments to reconcile net income to cash (used in) provided by operating activities:
Depreciation and amortization 11,431
12,571
Impairment of equipment held for sale —
616
Provision for doubtful accounts and bad debt 3,739
4,318
Non-cash amortization of debt financing costs and discount 891
630
Pension plan contribution (2,202 ) (2,180 )
Shared-based compensation expense 1,842
1,868
Deferred income taxes 88
(563 )
Non-cash gain on derivative contracts (979 ) 208
Change in other operating items:
Accounts receivable (32,404 ) 20,125
Inventories (15,086 ) 7,329
Prepaid expenses (1,755 ) (491 )
Accounts payable 28,751
(6,670 )
Other operating activities, net (2,149 ) 6,017
Net cash (used in) provided by operating activities (2,310 ) 50,209
Cash Flows from Investing Activities:
Purchases of property, plant and equipment (10,290 ) (7,546 )
Proceeds from disposal/sale of property, plant and equipment 254
55
Proceeds from settlement of corporate-owned insurance policies —
2,489
Net cash used in investing activities (10,036 ) (5,002 )
Cash Flows from Financing Activities:
Borrowing of Term Loan Facility 175,000
—
Repayment of 7.875% notes (235,000 ) —
Repayment of Term Loan principal (1,094 ) —
Prepayment charge for redemption of 7.875% notes (1,543 ) —
Prepayment of Term Loan Facility discount (3,500 ) —
Payment of debt issuance costs (4,242 ) —
Net cash used in financing activities (70,379 ) —

Effect of Foreign Currency Exchange Rate Changes on Cash 2,797
(337 )

Net (Decrease) Increase in Cash (79,928 ) 44,870

Cash:
Beginning of period 130,160
92,194
End of period 50,232
137,064
Supplemental Cash Flow Information:
Cash paid for interest $ 13,767
$ 9,396
Cash paid for income taxes, net $ 2,568
$ 918
Unpaid purchases of property and equipment included in accounts payable $ 321
$ 157

~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.~~

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COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(Amounts in thousands, except for share and per share amounts and where specifically disclosed)

1. Description of Business and Basis of Presentation

Commercial Vehicle Group, Inc. ~~(and~~and its ~~subsidiaries)~~subsidiaries, is a ~~leading supplier~~global provider of ~~a full range of cab related products~~systems, assemblies and ~~systems for~~components to the global commercial vehicle market, ~~including~~ the ~~medium- and heavy-duty truck (“MD/HD Truck”) market, the medium- and heavy-duty construction~~electric vehicle market, and the ~~bus, agriculture, military, specialty transportation, mining,~~ industrial ~~equipment and off-road recreational~~automation markets. References herein to the "Company", "CVG", "we", "our", or "us" refer to Commercial Vehicle Group, Inc. and its subsidiaries.

We have manufacturing operations in the United States, Mexico, China, United Kingdom, Czech Republic, Ukraine, ~~China,~~Thailand, India, Australia and ~~Australia.~~Morocco. Our products are primarily sold in North America, Europe, and the Asia-Pacific region.

Our products include seats and seating systems (“Seats”); trim systems and components (“Trim”); cab structures, sleeper boxes, body panels and structural components; mirrors, wipers and controls; and electronic wire harness and panel assemblies designed for applications primarily in commercial vehicles.

We ~~are differentiated from automotive industry suppliers by our ability to~~primarily manufacture ~~low volume,~~ customized products ~~on a sequenced basis~~ to meet the requirements of our ~~customers.~~customer. We believe our products are used by a majority of the North American ~~MD/HD~~Commercial Truck ~~and certain leading global~~manufacturers, many construction ~~and agriculture~~vehicle original equipment manufacturers ~~(“OEMs”~~("OEMs"), ~~which we believe creates an opportunity to cross-sell our products.~~parts and service dealers, distributors, as well as top e-commerce retailers.

~~We have prepared the~~The unaudited condensed consolidated interim financial statements ~~included herein pursuant to~~have been prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America and the rules and regulations of the ~~United States~~ Securities and Exchange Commission ~~(“SEC”). The information furnished in~~and include the accounts of the Company and its subsidiaries. Except as disclosed within these condensed notes to unaudited ~~condensed~~quarterly consolidated financial statements, ~~includes~~the adjustments made were of a normal, recurring adjustments and reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation of the results of operations and statements of financial position for the interim periods presented.nature. Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted.

The preparation of financial statements in conformity with GAAP in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements ~~prepared~~ in ~~accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been~~future periods.

These condensed ~~or omitted pursuant~~notes to ~~such rules and regulations. We believe that the disclosures are adequate to make the information presented not misleading when~~unaudited quarterly consolidated financial statements should be read in conjunction with ~~our fiscal 2016 consolidated financial statements and the notes thereto included in Part II, Item 8 of~~ our Annual Report on Form 10-K as filed with the SEC on March 9, 2017. Unless otherwise indicated, all amounts are in thousands, except share and per share amounts. Certain immaterial reclassifications have been made to prior year amounts to conform to current year presentation.

S~~EGMENTS~~

Operating segments are defined as components of an enterprise that are evaluated regularly by the Company’s chief operating decision maker, which is our President and Chief Executive Officer. The Company has two reportable segments: the Global Truck and Bus Segment (“GTB Segment”) and the Global Construction and Agriculture Segment (“GCA Segment”). Each of these segments consists of a number of manufacturing facilities. Certain of our facilities manufacture and sell products through both of our segments. Each manufacturing facility that sells products through both segments is reflected in the financial results of the segment that has the greatest amount of sales from that manufacturing facility. Our segments are more specifically described below.

~~The GTB Segment manufactures and sells the following products:~~

~~Seats, Trim, sleeper boxes, cab structures, structural components and body panels. These products are sold primarily to the MD/HD Truck markets in North America;~~

~~Seats to the truck and bus markets in Asia-Pacific and Europe;~~

~~mirrors and wiper systems to the truck, bus, agriculture, construction, rail and military markets in North America;~~

~~Trim to the recreational and specialty vehicle markets in North America; and~~

~~aftermarket seats and components in North America.~~

~~The GCA Segment manufactures and sells the following products:~~

~~Table of Contents~~

~~electronic wire harness assemblies and Seats for construction, agricultural, industrial, automotive, mining and military industries in North America, Europe and Asia-Pacific;~~

~~Seats to the truck and bus markets in Asia-Pacific and Europe;~~

~~wiper systems to the construction and agriculture markets in Europe;~~

~~office seating in Europe and Asia-Pacific; and~~

~~aftermarket seats and components in Europe and Asia-Pacific.~~

Corporate expenses consist of certain overhead and shared costs that are not directly attributable to the operations of a segment. For purposes of business segment performance measurement, some of these costs that are for the ~~benefit~~year ended December 31, 2022 (the "2022 Form 10-K"), which includes a complete set of footnote disclosures, including the ~~operations are allocated based on a combination of methodologies. The costs that are not allocated to a segment are considered stewardship costs and remain at corporate in our segment reporting.~~Company's significant accounting policies.

2. Recently Issued Accounting Pronouncements

~~In May 2017, the FASB~~

New accounting pronouncements that have been issued Accounting Standards Update ("ASU") No. 2017-09, "Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting". ASU 2017-09 provides clarity of accounting for modifications of share-based awards. The Company doesbut not ~~anticipate~~yet effective are currently being evaluated and at this ~~ASU will have a material impact on share-based compensation. ASU 2017-09 is effective for fiscal years beginning after December 15, 2017.~~

In March 2017, the FASB issued ASU No. 2017-07, "Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost". ASU 2017-07 requires employers to report service costs in the same line item as compensation costs arising from services rendered by associated employees during the period. The Company doestime are not ~~anticipate this ASU~~expected to have a material impact on our financial position or results of operations.

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3. Revenue Recognition

We had outstanding customer accounts receivable, net of allowances, of $171.9 million as of March 31, 2023 and $152.6 million as of December 31, 2022. We generally do not have other assets or liabilities associated with customer arrangements.

Revenue Disaggregation - The following is the composition, by product category, of our revenues:


	Three Months Ended March 31, 2023
	Vehicle Solutions		Electrical Systems		Aftermarket & Accessories		Industrial Automation		Total
Seats	$	76,990	$	—	$	19,164	$	—	$	96,154
Electrical wire harnesses, panels and assemblies	—		54,749		3,786		—		58,535
Trim	46,423		—		2,873		—		49,296
Industrial Automation	—		—		—		9,747		9,747
Cab structures	33,903		—		998		—		34,901
Mirrors, wipers and controls	3,268		—		10,808		—		14,076
Total	$	160,584	$	54,749	$	37,629	$	9,747	$	262,709


	Three Months Ended March 31, 2022
	Vehicle Solutions		Electrical Systems		Aftermarket & Accessories		Industrial Automation		Total
Seats	$	69,808	$	—	$	15,788	$	—	$	85,596
Electrical wire harnesses, panels and assemblies	—		39,876		3,321		1,795		44,992
Trim	44,758		—		1,296		—		46,054
Industrial Automation	—		—		—		32,331		32,331
Cab structures	25,591		—		—		—		25,591
Mirrors, wipers and controls	—		—		9,810		—		9,810
Total	$	140,157	$	39,876	$	30,215	$	34,126	$	244,374

4. Debt

Debt consisted of the following:


	March 31, 2023		December 31, 2022
Term loan facility	$	150,312	$	152,500
Revolving credit facility	11,000		—
China credit facility	4,368		—
Unamortized discount and issuance costs	(60)		(63)
	$	165,620	$	152,437
Less: current portion of long-term debt and short-term debt	(16,399)		(10,938)
Total long-term debt, net of current portion	$	149,221	$	141,499

Credit Agreement

On April 30, 2021, the Company and certain of its ~~pension disclosures. ASU 2017-07 is effective~~subsidiaries entered into a credit agreement (the “Credit Agreement”) between, among others, Bank of America, N.A. as administrative agent (the “Administrative Agent”) and other lenders party thereto (the “Lenders”) pursuant to which the Lenders made available a $150 million Term Loan Facility (the “Term Loan Facility”) and a $125 million Revolving Credit Facility (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Credit Facilities”).Subject to the terms of the Credit Agreement, the Revolving Credit Facility includes a $10 million swing line sublimit and a $10 million letter of credit sublimit. The Credit Agreement provides for ~~fiscal years beginning after December 15, 2017.~~an incremental term facility agreement and/or an increase of the Revolving Credit Facility (together, the “Incremental Facilities”), in a

~~In January 2017,~~

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maximum aggregate amount of (a) up to the ~~FASB issued ASU No. 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". ASU 2017-04 provides simplification~~date of receipt of financial statements for the ~~subsequent measurement~~fiscal quarter ending June 30, 2022, $75 million, and (b) thereafter, (i) $75 million less the aggregate principal amount of ~~goodwill~~Incremental Facilities incurred before such date, plus (ii) an unlimited amount if the pro forma consolidated total leverage ratio (assuming the Incremental Facilities are fully drawn) is less than 2.50:1.0.

On May 12, 2022, the Company and certain of its subsidiaries entered into a second amendment (the “Amendment”) to itsCredit Agreement pursuant to which the Lenders upsized the existing Term Loan Facility to $175 million in aggregate principal amount and increased the Revolving Credit Facility commitments by ~~eliminating Step 2~~$25 million to an aggregate of $150 million in revolving credit facility commitments. The Revolving Credit Facility includes a $10 million swing line sublimit and a $10 million letter of credit sublimit. The amended Credit Agreement provides for an incremental term facility agreement and/or an increase of the Revolving Credit Facility (together, the “Incremental Facilities”), in a maximum aggregate amount of (a) up to the date of receipt of financial statements for the fiscal quarter ending June 30, 2022, $75 million, and (b) thereafter, (i) $75 million less the aggregate principal amount of Incremental Facilities incurred before such date, plus (ii) an unlimited amount if the pro forma consolidated total leverage ratio (assuming the Incremental Facilities are fully drawn) is less than 2.50:1.0. Further, separate from the ~~goodwill impairment test. Annual impairment tests should be completed by comparing~~Company’s annual $35 million capital spending cap, a one-time $45 million capital project basket was included in the ~~fair value~~Amendment. All other key provisions, including the $75 million accordion, acquisition holiday, and other baskets remain unchanged. The Credit Facilities mature on May 12, 2027 (the “Maturity Date”).

The Amendment resulted in a loss on extinguishment of debt of $0.9 million, including $0.6 million non-cash write off relating to deferred financing costs and unamortized discount of the Term Loan Facility and $0.3 million of other fees associated with the Amendment, recorded in our Consolidated Statements of Operations for the twelve months ended December 31, 2022.

At March 31, 2023, we had $11.0 million of borrowings under the Revolving Credit Facility, outstanding letters of credit of $1.2 million and availability of $137.8 million. Combined with availability under our newly established foreign credit facilities of approximately $8.7 million, total consolidated availability was $146.5 million as of March 31, 2023. The unamortized deferred financing fees associated with the Revolving Credit Facility of $1.2 million and $1.3 million as of March 31, 2023 and December 31, 2022, respectively, are being amortized over the remaining life of the Credit Agreement. At December 31, 2022, we had no borrowings under the Revolving Credit Facility and we had outstanding letters of credit of $1.2 million.

Interest rates and fees

Amounts outstanding under the Credit Facilities and the commitment fee payable in connection with the Credit Facilities accrue interest at a ~~reporting unit~~per annum rate equal to ~~its carrying amount and impairment should not exceed~~(at the ~~goodwill allocated~~Company’s option) the base rate or the Term Secured Overnight Financing Rate ("SOFR"), including a credit spread adjustment, plus a rate which will vary according to the Consolidated Total Leverage Ratio as set forth in the most recent compliance certificate received by the Administrative Agent, as set out in the following table:


Pricing Tier	Consolidated Total Leverage Ratio	Commitment Fee	Letter of Credit Fee	Term SOFR Loans	Base Rate Loans
I	> 3.50 to 1.00	0.35%	2.75%	2.75%	1.75%
II	< 3.50 to 1.00 but > 2.75 to 1.00	0.30%	2.50%	2.50%	1.50%
III	< 2.75 to 1.00 but > 2.00 to 1.00	0.25%	2.25%	2.25%	1.25%
IV	< 2.00 to 1.00 but > 1.50 to 1.00	0.20%	2.00%	2.00%	1.00%
V	< 1.50 to 1.00	0.15%	1.75%	1.75%	0.75%

Guarantee and Security

All obligations under the Credit Agreement and related documents are unconditionally guaranteed by each of the Company’s existing and future direct and indirect wholly owned material domestic subsidiaries, subject to certain exceptions (the “Guarantors”). All obligations of the Company under the Credit Agreement and the guarantees of those obligations are secured by a first priority pledge of substantially all of the assets of the Company and of the Guarantors, subject to certain exceptions. The property pledged by the Company and the Guarantors includes a first priority pledge of all of the equity interests owned by the Company and the Guarantors in their respective domestic subsidiaries and a first priority pledge of the equity interests owned by the Company and the Guarantors in certain foreign subsidiaries, in each case, subject to certain exceptions.

Covenants and other terms

The Credit Agreement contains customary restrictive covenants, including, without limitation, limitations on the ability of the Company and its subsidiaries to incur additional debt and guarantees; grant certain liens on assets; pay dividends or make

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certain other distributions; make certain investments or acquisitions; dispose of certain assets; make payments on certain indebtedness; merge, combine with any other person or liquidate; amend organizational documents; make material changes in accounting treatment or reporting ~~unit. Additionally,~~practices; enter into certain restrictive agreements; enter into certain hedging agreements; engage in transactions with affiliates; enter into certain employee benefit plans; make acquisitions; and other matters customarily included in senior secured loan agreements.

The Credit Agreement also contains customary reporting and other affirmative covenants, as well as customary events of default, including, without limitation, nonpayment of obligations under the Credit Facilities when due; material inaccuracy of representations and warranties; violation of covenants in the Credit Agreement and certain other documents executed in connection therewith; breach or default of agreements related to material debt; revocation or attempted revocation of guarantees; denial of the validity or enforceability of the loan documents or failure of the loan documents to be in full force and effect; certain material judgments; certain events of bankruptcy or insolvency; certain Employee Retirement Income Securities Act events; and a change in control of the Company. Certain of the defaults are subject to exceptions, materiality qualifiers, grace periods and baskets customary for credit facilities of this ~~ASU eliminated~~type.

The Credit Agreement includes (a) a minimum consolidated fixed charge coverage ratio of 1.20:1.0, and (b) a maximum consolidated total leverage ratio of 3.75:1.0 (which was subject to step-down to 3.50:1.0 at the ~~requirement~~end of the fiscal quarter ending March 31, 2023; and will be subject to ~~assess reporting units~~step-downs to 3.25:1.0 at the end of the fiscal quarter ending June 30, 2023; and to 3.00:1.0 for each fiscal quarter on and after the fiscal quarter ending September 30, 2023).

We were in compliance with ~~zero or negative carrying amounts.~~ the covenants as of March 31, 2023.

Repayment and prepayment

The Company anticipates this ASU to simplify a component of its goodwill assessment. The Company does not anticipate an impact to its overall valuation of goodwill. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019.

In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business". ASU 2017-01 provides additional guidance to clarify acquisition transactions and whether they should be accounted for as an acquisition of a business or assets. This ASU will only impactCredit Agreement requires the Company to make quarterly amortization payments to the ~~extent we execute a business combination. ASU 2017-01 is effective~~Term Loan Facility at an annualized rate of the loans under the Term Loan Facility for ~~fiscal years beginning after December 15, 2017.~~every year as follows: 5.0%, 7.5%, 10.0%, 12.5% and 15.0%. The Credit Agreement also requires all outstanding amounts under the Credit Facilities to be repaid in full on the Maturity Date.

~~Revenue Recognition Guidance~~

The Credit Agreement requires mandatory prepayments from the receipt of proceeds of dispositions or debt issuance, subject to certain exceptions and the Company's ability to re-invest and use proceeds towards acquisitions permitted by the Credit Agreement.

Voluntary prepayments of amounts outstanding under the Credit Facilities are permitted at any time, without premium or penalty.

Foreign Facilities

In ~~May 2014,~~ the ~~FASB issued ASU No. 2014-09, “Revenue from Contracts~~quarter ended March 31, 2023, we established a credit facility in China with ~~Customers”, followed by~~availability of approximately $13.1 million (denominated in the local currency) consisting of a ~~series~~line of ~~standards~~credit which is subject to annual renewal (the "China Credit Facility"). We utilize the China Credit Facility to meet local working capital demands, fund letters of credit and ~~clarification, including: ASU No. 2016-08, "Principal Versus Agent Considerations (Reporting Revenue Gross versus Net)", ASU No. 2016-10, "Identifying Performance Obligations~~bank guarantees, and ~~Licensing" and ASU No. 2016-12, "Narrow-Scope Improvements and Practical Expedients". The ASUs supersede the revenue recognition~~support other short-term cash requirements in ~~Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout~~our China operations. We had $4.4 million and $0 million outstanding under the ~~Industry Topics~~China Credit Facility as of March 31, 2023 and December 31, 2022, respectively, which are included in Current portion of long-term debt and short-term debt on the Condensed Consolidated Balance Sheets. At March 31, 2023, we had $8.7 million availability under the China Credit Facility.

Cash Paid for Interest

For the three months ended March 31, 2023 and 2022, cash payments for interest were $3.2 million and $1.6 million, respectively.

5. Intangible Assets

Our definite-lived intangible assets were comprised of the ~~Codification.~~following:


		March 31, 2023						December 31, 2022
	Weighted- Average Amortization Period	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Definite-lived intangible assets:
Trademarks/tradenames	22 years	$	11,474	$	(5,453)	$	6,021	$	11,487	$	(5,377)	$	6,110
Customer relationships	15 years	14,200		(9,381)		4,819		14,161		(9,109)		5,052
Technical know-how	5 years	9,790		(6,935)		2,855		9,790		(6,445)		3,345
Covenant not to compete	5 years	330		(234)		96		330		(217)		113
		$	35,794	$	(22,003)	$	13,791	$	35,768	$	(21,148)	$	14,620

The ~~mandatory adoption date of each of~~aggregate intangible asset amortization expense was $0.8 million for the ~~revenue recognition ASUs referenced above is January 1, 2018. With respect to each of~~three months ended March 31, 2023 and $0.9 million for the elements of revenue recognition guidance above, the Company is in the process of assessing potential changes in revenue recognition for certain revenue streams. More specifically, the Company is in the process of assessing our customer arrangements, identifying contractual provisions that may result in a change in the timing or the amount of revenue recognized pursuant to current guidance, as well as assessing the enhanced disclosure requirements of the new guidance. Under current guidance, we typically recognize revenue when products are shipped and risk of loss has transferred to the customer. Under the new guidance, the customized nature of some of our products and provisions of some of our customer contracts provide us with an enforceable right to payment that may require us to recognize revenue prior to the product being shipped to the customer. We have assessed certain pricing provisions contained in some of our customer contracts to determine if they represent a material right to the customer. We are evaluating how the new guidance may impact our accounting for customer owned tooling, engineering and design services, and pre-production costs. Finally, we are assessing standard warranties to determine if they represent a material right to the customer. We do not anticipate that the new guidance will have a material impact on our consolidated financial position, results of operations,three months ended March 31, 2022, respectively.

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equity, or cash flows. As management assesses its various revenue streams, we may establish revised accounting policies and internal control procedures and will measure and disclose the accounting impact, if any. The new guidance permits the use of either the retrospective or cumulative effect transition method. We will apply the cumulative effect transition method. We will not adopt the new guidance early.

~~Lease Accounting Guidance~~

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)". ASU 2016-02 is intended to increase transparency and comparability among companies by recognizing lease assets and liabilities and disclosing key information about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018. The Company is assessing the impact of this pronouncement and anticipates that it will impact the presentation of our lease assets and liabilities and associated disclosures by the recognition of lease assets and liabilities that were not included in the balance sheet under existing accounting guidance. The Company is in the process of performing its initial assessment of lease arrangements, including facility leases and machinery and equipment leases. The Company's lease terms are not generally complex in nature. The Company will update its accounting policies as we complete our assessment of leases. The Company will also review other arrangements which could contain embedded lease arrangements to be considered under the revised guidance. The Company will determine the impact of the new guidance on its current lease arrangements that are expected to remain in place during 2019 and beyond.

3.6. Fair Value Measurement

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2 - Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3 - ~~Unobservable~~Significant unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

Our financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities, pension assets and ~~our revolving credit facility.~~liabilities. The carrying value of these instruments approximates fair value as a result of the short duration of such instruments or due to the variability of the interest cost associated with such instruments.

Recurring Measurements

Foreign Currency Forward Exchange Contracts.Our derivative assets and liabilities represent foreign exchange contracts ~~and an interest rate swap contract~~ that are measured at fair value using observable market ~~inputs.~~inputs such as forward rates, interest rates, our own credit risk and counterparty credit risk. Based on the utilization of these inputs, the derivative assets and liabilities are classified as Level 2. To manage our risk for transactions denominated in Mexican Pesos and Czech Crown, we have entered into forward exchange contracts that are designated as cash flow hedge instruments, which are recorded in the Condensed Consolidated Balance Sheets at fair value. The gains and losses as a result of the changes in fair value of the hedge contract for transactions denominated in Mexican Pesos are deferred in accumulated other comprehensive loss and recognized in cost of revenues in the period the related hedge transactions are settled. As of March 31, 2023, hedge contracts for transactions denominated in Czech Crown were not designated as a hedging instruments; therefore, they are marked-to-market and the fair value of agreements is recorded in the Condensed Consolidated Balance Sheets with the offsetting gains and losses recognized in other (income) expense and recognized in cost of revenues in the period the related hedge transactions are settled in the Condensed Consolidated Statements of Operations.

Interest Rate Swaps. To manage our exposure to variable interest rates, we have entered into interest rate swaps to exchange, at a specified interval, the difference between fixed and variable interest amounts calculated by reference to an agreed upon notional principal amount. The interest rate swaps are intended to mitigate the impact of rising interest rates on the Company and covers approximately 50% of outstanding debt under the Term Loan Facility. Any changes in fair value are included in

earnings or deferred through Accumulated other comprehensive loss, depending on the nature and effectiveness of the offset. Any ineffectiveness in a cash flow hedging relationship is recognized immediately in earnings in the consolidated statements of operations.

The fair values of our derivative assets and liabilities measured on a recurring basis are categorized as follows:


	March 31, 2023								December 31, 2022
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets:
Foreign exchange contract	$	3,109	$	—	$	3,109	$	—	$	—	$	—	$	—	$	—
Interest rate swap agreement	$	954	$	—	$	954	$	—	$	1,849	$	—	$	1,849	$	—
Liabilities:
Foreign exchange contract	$	—	$	—	$	—	$	—	$	356	$	—	$	356	$	—

September 30, 2017 December 31, 2016
Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3
Derivative assets Foreign exchange contract $ 395
$ —
$ 395
$ —
$ 142
$ —
$ 142
$ —
Interest rate swap contract ¹
$ 302
$ —
$ 302
$ —
$ —
$ —
$ —
$ —
Derivative liabilities Foreign exchange contract $ 22
$ —
$ 22
$ —
$ 1,234
$ —
$ 1,234
$ —
Interest rate swap contract ¹
$ 787
$ —
$ 787
$ —
$ —
$ —
$ —
$ —

¹ ~~Presented~~The following table summarizes the notional amount of our open foreign exchange contracts:


	March 31, 2023				December 31, 2022
	U.S. $ Equivalent		U.S. Equivalent Fair Value		U.S. $ Equivalent		U.S. Equivalent Fair Value
Commitments to buy or sell currencies	$	41,230	$	43,553	$	55,220	$	53,847

The following table summarizes the fair value and presentation of derivatives in the ~~condensed consolidated~~Condensed Consolidated Balance Sheets:


	Derivative Asset
	Balance Sheet Location	Fair Value
		March 31, 2023		December 31, 2022

Foreign exchange contracts	Other current assets	$	3,109	$	—
Interest rate swap agreement	Other assets, net	$	954	$	1,849

Derivative Liability

Balance Sheet
Location

Fair Value

March 31, 2023

December 31, 2022

Foreign exchange contracts

Accrued liabilities and other

—

356

Derivative Equity

Balance Sheet
Location

Fair Value

March 31, 2023

December 31, 2022

Derivative instruments

Accumulated other comprehensive (loss) income

6,115

3,777

The following table summarizes the effect of derivative instruments on the Condensed Consolidated Statements of Operations:


		Three Months Ended March 31,
		2023		2022
	Location of Gain (Loss) on Derivatives Recognized in Income	Amount of Gain (Loss) on Derivatives Recognized in Income
Foreign exchange contracts	Cost of revenues	$	451	$	456
Interest rate swap agreement	Interest expense	$	454	$	(193)
Foreign exchange contracts	Other (income) expense	$	469	$	(671)

We consider the impact of our credit risk on the fair value of the contracts, as ~~accrued liabilities of $0.5 million.~~well as our ability to honor obligations under the contract.

Other Fair Value Measurements

The fair value of long-term debt obligations is based on a fair value model utilizing observable inputs. Based on these inputs, our long-term debt fair value as disclosed is classified as Level 2. The carrying amounts and fair values of our long-term debt obligations are as follows:


	March 31, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value

Term loan and security agreement 1	$	150,252	$	144,052	$	152,437	$	143,477
Revolving credit facility	$	11,000	$	11,000	$	—	$	—

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September 30, 2017 December 31, 2016

Carrying
Amount
Fair Value
Carrying
Amount
Fair Value
7.875% senior secured notes due April 15, 2019 $ —
$ —
$ 233,154
$ 231,391
Term loan and security agreement (a) $ 167,749
$ 170,139
$ —
$ —

~~(a)~~ 1.Presented in the ~~condensed consolidated balance sheet as~~Condensed Consolidated Balance Sheets are the current portion of long-term debt of ~~$3.2~~$12.0 million and long-term debt of ~~$164.6 million.~~$149.2 million as of March 31, 2023, and current portion of long-term debt of $10.9 million and long-term debt of $141.5 million as of December 31, 2022.

~~Held-for-sale assets specific to our Shadyside operations~~

7. Leases

The components of lease expense are ~~recorded in the~~as follows:


	Three Months Ended March 31,
	2023		2022
Operating lease cost	$	2,348	$	2,578



Finance lease cost	47		76
Short-term lease cost	1,931		1,525
Total lease expense	$	4,326	$	4,179

Supplemental balance sheet ~~at their historical carrying value inasmuch~~information related to leases is as follows:


	Balance Sheet Location	March 31, 2023		December 31, 2022
Operating Leases
Right-of-use assets, net	Other assets, net	$	25,711	$	26,372

Current liabilities	Accrued liabilities and other	6,537		7,421
Non-current liabilities	Other long-term liabilities	19,603		19,422
Total operating lease liabilities		$	26,140	$	26,843

Finance Leases
Right-of-use assets, net	Other assets, net	$	221	$	270

Current liabilities	Accrued liabilities and other	118		131
Non-current liabilities	Other long-term liabilities	112		139
Total finance lease liabilities		$	230	$	270

For the ~~fair value~~three months ended March 31, 2023 and 2022, cash payments on operating leases were $2.7 million and $2.0 million, respectively.

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Anticipated future lease costs, which are based in part on certain assumptions to approximate minimum annual rental commitments under non-cancelable leases, are as follows:


	Operating		Financing		Total
Remainder of 2023	$	7,279	$	97	$	7,376
2024	5,873		89		5,962
2025	5,856		50		5,906
2026	4,599		2		4,601
2027	1,736		—		1,736
Thereafter	9,137		—		9,137
Total lease payments	$	34,480	$	238	$	34,718
Less: Imputed interest	(8,340)		(8)		(8,348)
Present value of lease liabilities	$	26,140	$	230	$	26,370

8. Income Taxes

For the ~~assets less selling costs were determined~~three months ended March 31, 2023, we recorded a $3.3 million tax provision, or 27% effective tax rate for the period, compared to ~~be greater than~~a $1.4 million tax provision, or 26% effective tax rate for the ~~historical carrying value. The fair value of~~three months ended March 31, 2022. Income tax expense for the ~~assets was measured~~three months ended March 31, 2023 and 2022 is based on an estimated ~~purchase price~~annual effective tax rate, which requires management to make its best estimate of annual pretax income or loss. During the year, management regularly updates forecasted annual pretax results for the ~~assets determined through discussions with third parties~~various countries in which the Company operates based on changes in factors such as prices, shipments, product mix, material inflation and manufacturing operations. To the extent that ~~began~~actual 2023 pretax results for U.S. and foreign income or loss vary from estimates, the actual income tax expense recognized in 2023 could be different from the forecasted amount used to estimate the income tax expense for the three months ended March 31, 2023.

For the three months ended March 31, 2023 and 2022, cash paid for taxes, net of refunds received were $2.0 million and $1.4 million, respectively.

9. Pension and Other Post-Retirement Benefit Plans

The components of net periodic (benefit) cost related to pension and other post-retirement benefit plans is as follows:


	Non-U.S. Pension Plan
	Three Months Ended March 31,
		2023		2022

Interest cost		347		215
Expected return on plan assets		(295)		(275)
Amortization of prior service cost		12		13
Recognized actuarial loss		185		164
Net cost		$	249	$	117

Net periodic (benefit) cost components, not inclusive of service costs, are recognized in other (income) expense within the Condensed Consolidated Statements of Operations.

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10. Performance Awards

The following table summarizes performance awards granted in the ~~first quarter~~form of ~~2017.~~cash awards under the equity incentive plans:

~~There were no other fair value measurements~~


	Amount
Adjusted Award Value at December 31, 2022	$	2,188
New grants	—
Forfeitures	—
Adjustments	844
Payments	(1,159)
Adjusted Award Value at March 31, 2023	$	1,873

Unrecognized compensation expense was $5.0 million as of March 31, 2023.

11. Share-Based Compensation

The company's outstanding share-based compensation is comprised solely of restricted stock awards and performance stock awards to be settled in stock.

As of March 31, 2023, there was approximately $5.3 million of unrecognized compensation expense related to non-vested share-based compensation arrangements granted under our equity incentive plans. This expense is subject to future adjustments and forfeitures and will be recognized on a straight-line basis over the remaining period listed above for each grant.

A summary of the status of our ~~long-lived assets and definite-lived intangible assets measured on a non-recurring basis~~restricted stock awards as of ~~September 30, 2017.~~March 31, 2023 and changes during the three months ended March 31, 2023 are presented below:


	2023
	Shares (in thousands)	Weighted- Average Grant-Date Fair Value
Nonvested - December 31, 2022	383	$	7.68
Granted	233	6.98
Vested	(274)	7.28
Forfeited	(1)	8.45
Nonvested - March 31, 2023	341	$	7.52

4.As of March 31, 2023, a total of 2.1 million shares were available for future grants from the shares authorized for award under our 2020 EIP, including cumulative forfeitures.

12. Stockholders’ Equity

Common Stock — Our authorized capital stock consists of 60,000,000 shares of common stock with a par value of $0.01 per ~~share;~~share, of which, ~~29,876,953~~32,991,468 and 32,826,852 shares were issued and outstanding as of ~~September 30, 2017~~March 31, 2023 and ~~29,871,354 were issued and outstanding as of~~ December 31, ~~2016.~~2022, respectively.

Preferred Stock — Our authorized capital stock also consists of 5,000,000 shares of preferred stock with a par value of $0.01 per ~~share;~~share, with no preferred shares ~~were~~ outstanding as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016.~~2022.

Earnings (Loss) Per Share — - Basic earnings (loss) per share is determined by dividing net income by the weighted average number of common shares outstanding during the ~~period.~~year. Diluted earnings (loss) per share ~~and all other diluted per share amounts~~ presented is determined by dividing net income by the weighted average number of common shares and potential common shares outstanding during the period as determined by the ~~Treasury Stock Method.~~treasury stock method. Potential common shares are included in the diluted earnings per share calculation when dilutive.

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Diluted earnings per share for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022 includes the ~~effects~~effect of potential common shares issuable ~~upon the vesting of restricted stock,~~ when ~~dilutive.~~dilutive, and is as follows:


	Three Months Ended March 31,
	2023		2022
Net income	$	8,700	$	3,982
Weighted average number of common shares outstanding (in '000s)	32,868		32,065
Dilutive effect of restricted stock grants after application of the Treasury Stock Method (in '000s)	314		620
Dilutive shares outstanding	33,182		32,685
Basic earnings per share	$	0.26	$	0.12
Diluted earnings per share	$	0.26	$	0.12

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Net income $ 4,763
$ 1,147
$ 5,523
$ 6,431
Weighted average number of common shares
outstanding 29,875
29,449
29,874
29,449
Dilutive effect of restricted stock grants after
application of the treasury stock method 612
652
505
334
Dilutive shares outstanding 30,487
30,101
30,379
29,783
Basic and diluted earnings per share $ 0.16
$ 0.04
$ 0.18
$ 0.22

There ~~are no antidilutive~~were 134 thousand outstanding ~~restrictive stock awards impacting~~restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three ~~and nine~~ months ended ~~September 30, 2017. No~~March 31, 2023 as the effect would have been antidilutive and no outstanding restricted ~~stock awards~~shares awarded that were ~~antidilutive~~excluded from the calculation of diluted earnings per share for the three months ended ~~September 30, 2016. Diluted earnings per share did not include 422 thousand antidilutive outstanding restricted stock awards for the nine months ended September 30, 2016.~~March 31, 2022.

~~Dividends —~~ ~~We have not declared or paid any cash dividends~~

13. Other Comprehensive Income (Loss)

The after-tax changes in ~~the past. The terms of the Third ARLS Agreement (as described in Note 11) restrict the payment or distribution of our cash or~~accumulated other ~~assets, including cash dividend payments.~~comprehensive income (loss) are as follows:


	Foreign currency translation adjustment		Pension and post-retirement benefits plans		Derivative instruments		Accumulated other comprehensive loss
Balance - December 31, 2022	$	(24,811)	$	(11,512)	4,773		$	(31,550)
Net current period change	2,557		140				2,697
Derivative instruments	—				1,343		1,343

Balance - March 31, 2023	$	(22,254)	$	(11,372)	$	6,116	$	(27,510)

~~5. Share-Based Compensation~~


	Foreign currency translation adjustment		Pension and post-retirement benefit plans		Derivative instruments		Accumulated other comprehensive loss
Balance - December 31, 2021	$	(20,445)	$	(22,750)	$	757	$	(42,438)
Net current period change	327		(29)		—		298
Derivative instruments	—		—		2,814		2,814

Balance - March 31, 2022	$	(20,118)	$	(22,779)	$	3,571	$	(39,326)

The ~~company's outstanding share-based compensation is comprised solely~~related tax effects allocated to each component of ~~restricted stock awards.~~other comprehensive income (loss) are as follows:

~~Restricted Stock Awards~~ –- Restricted stock awards are a grant of shares of common stock that may not be sold, encumbered or disposed of and that may be forfeited in the event of certain terminations of employment prior to the end of a restricted period set



	Three Months Ended March 31, 2023
	Before Tax Amount		Tax Expense		After Tax Amount
Cumulative translation adjustment	2,557		—		2,557
Amortization of actuarial losses	$	137	$	3	$	140
Derivative instruments	1,815		(472)		1,343
Total other comprehensive income	$	4,509	$	(469)	$	4,040


	Three Months Ended March 31, 2022
	Before Tax Amount		Tax Expense		After Tax Amount
Cumulative translation adjustment	327		—		327
Amortization of actuarial gains	$	1	$	(30)	$	(29)
Derivative instruments	3,752		(938)		2,814
Total other comprehensive income	$	4,080	$	(968)	$	3,112

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14. Cost Reduction and Manufacturing Capacity Rationalization

The Company's restructuring program includes aligning cost structure to support margin expansion. The program includes workforce reductions and footprint optimization across segments.

The changes in accrued restructuring balances are as follows:


	Vehicle Solutions		Electrical Systems				Aftermarket & Accessories		Industrial Automation		Corporate/ Other		Total
December 31, 2022	$	(5)	$	—			$	—	$	458	$	—	$	453
New charges	83		8				—		622		—		713
Payments and other adjustments	(78)		(8)				—		(369)		—		(455)
March 31, 2023	$	—	$	—	$	—	$	—	$	711	$	—	$	711


	Vehicle Solutions		Electrical Systems		Aftermarket & Accessories		Industrial Automation		Corporate/ Other		Total
December 31, 2021	$	230	$	417	$	—	$	—	$	(161)	$	486
New charges	204		—		435		350		—		989
Payments and other adjustments	(309)		(417)		(435)		(353)		422		(1,092)
March 31, 2022	$	125	$	—	$	—	$	(3)	$	261	$	383

Of the ~~Compensation Committee of the Board of Directors. A participant granted restricted stock generally has all of the rights of a stockholder, unless the Compensation Committee determines otherwise.~~

~~The following table summarizes information about outstanding restricted stock grants as of September 30, 2017:~~

Grant
Shares
(in thousands)
Vesting Schedule
Unearned
Compensation
(in millions)

Remaining
Periods
(in months)
October 2014 506
3 equal annual installments commencing on October 20, 2015 $ —
1
April 2015 27
3 equal annual installments commencing on October 20, 2015 $ —
1
October 2015 596
3 equal annual installments commencing on October 20, 2016 $ 0.6
13
January/March 2016 63
3 equal annual installments commencing on October 20, 2016 $ —
13
October 2016 411
3 equal annual installments commencing on October 20, 2017 $ 1.4
25
October 2016 98
fully vests as of October 20, 2017 $ 0.1
1
June 2017 6
3 equal annual installments commencing on October 20, 2017 $ —
25

~~As of September 30, 2017, there was approximately $2.1~~$0.7 million of unearned compensation expense related to non-vested share-based compensation arrangements granted under our equity incentive plans. We have elected to report forfeitures as they occur as opposed to estimating future forfeiturescosts incurred in ~~our share-based compensation expense.~~

~~The following table summarizes information about the non-vested restricted stock grants for the nine months ended September 30, 2017 and 2016:~~

Nine Months Ended September 30,
2017 2016
Shares
(000’s) Weighted-
Average
Grant-Date
Fair Value Shares
(000’s) Weighted-
Average
Grant-Date
Fair Value
Nonvested at December 31 981
$ 4.70
1,128
$ 4.24
Granted 6
8.77
63
2.49
Vested (6 ) 4.89
—
—
Forfeited (39 ) 4.84
(153 ) 4.29
Nonvested at September 30 942
$ 4.72
1,038
$ 4.37

~~6. Performance Awards~~

Awards, defined as cash, shares or other awards, may be granted to employees under the Commercial Vehicle Group, Inc. 2014 Equity Incentive Plan (the “2014 EIP”). The award is earned and payable based upon the Company’s relative Total Shareholder Return in terms of ranking as compared to the Peer Group over a three-year period (the “Performance Period”). Total Shareholder Return is determined by the percentage change in value (positive or negative) over the applicable measurement period as measured by dividing (A) the sum of (I) the cumulative value of dividends and other distributions paid on the Common Stock for the applicable measurement period, and (II) the difference (positive or negative) between each such company’s starting stock price and ending stock price, by (B) the starting stock price. The award is to be paid out at the end of the Performance Period in cash only if the employee is employed through the end of the Performance Period. If the employee is not employed during the entire Performance Period, the award will be forfeited. These grants are accounted for as cash settlement awards for which the fair value of the award fluctuates based on the change in Total Shareholder Return in relation to the Peer Group. The following table summarizes performance awards granted under the 2014 EIP in November 2016, 2015 and 2014:

Grant Date Vesting Schedule Grant Amount Forfeitures/ Adjustments Payments Grant Value at September 30, 2017 Unrecognized Compensation Remaining Periods (in Months) to Vesting
November 2014 October 2017 $ 2,087
$ (1,592 ) $ —
$ 495
—
1
November 2015 October 2018 1,487
(197 ) —
1,290
430
13
November 2016 October 2019 1,434
(37 ) —
1,397
932
25
$ 5,008
$ (1,826 ) $ —
$ 3,182
$ 1,362

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~~Compensation (income) and expense was recognized totaling $(0.3) million and $0.2 million for~~ the three months ended ~~September 30, 2017~~March 31, 2023 for restructuring, $0.5 million related to facility exit and ~~2016, respectively. Compensation expense totaling $0.4~~other costs and $0.2 million ~~was recognized for~~related to headcount reductions were recorded in cost of revenues. Of the ~~nine months ended September 30, 2017 and 2016. Unrecognized compensation expense was $1.4~~$0.7 million ~~and $1.2 million as of September 30, 2017 and 2016, respectively.~~

~~7. Accounts Receivable~~

Trade accounts receivable are stated at current value less an allowance for doubtful accounts, which approximates fair value. This allowance is estimated based primarily on management’s evaluation of specific balances as the balances become past due, the financial condition of our customers and our historical experience with write-offs. If not reserved through specific identification procedures, our general policy for potentially uncollectible accounts is to reserve at a certain percentage based upon the aging categories of accounts receivable and our historical experience with write-offs. Past due status is based upon the due date of the original amounts outstanding. When items are ultimately deemed uncollectible they are charged off against the reserve previously establishedcosts incurred in ~~the allowance for doubtful accounts.~~

~~8. Inventories~~

~~Inventories are valued at the lower of first-in, first-out (“FIFO”) cost or market. Cost includes applicable material, labor and overhead. Inventories consisted of the following:~~

September 30, 2017 December 31, 2016
Raw materials $ 61,646
$ 46,352
Work in process 10,646
11,234
Finished goods 16,150
13,468
$ 88,442
$ 71,054

Inventories on-hand are regularly reviewed and, when necessary, provisions for excess and obsolete inventory are recorded based primarily on our estimated production requirements which reflect expected market volumes. Excess and obsolete provisions may vary by product depending upon future potential use of the product.

~~9. Goodwill and Intangible Assets~~

Goodwill represents the excess of acquisition purchase price over the fair value of net assets acquired. We review goodwill for impairment annually, initially utilizing a qualitative assessment, in the second fiscal quarter and whenever events or changes in circumstances indicate the carrying value may not be recoverable. Our goodwill is attributable to the GTB Segment.

We performed a Step One fair value assessment of our reporting units as of May 31, 2017. Implied fair value of goodwill was determined by utilizing the income approach. Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions and determination of appropriate market comparables. We base our fair value estimates on assumptions we believe to be reasonable but that are inherently uncertain. Based on our fair value assessment of each of the reporting units, the fair value exceeded the carrying value of goodwill.

We review definite-lived intangible assets, including trademarks, tradenames and customer relationships, for recoverability whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. If the estimated undiscounted cash flows are less than the carrying amount of such assets, we recognize an impairment loss in an amount necessary to write down the assets to fair value as estimated from expected future discounted cash flows. Estimating the fair value of these assets is judgmental in nature and involves the use of significant estimates and assumptions. We base our fair value estimates on assumptions we believe to be reasonable, but that are inherently uncertain. Definite-lived intangible assets are amortized on a straight-line basis over the estimated life of the asset.

~~The changes in the carrying amounts of goodwill are as follows:~~

September 30, 2017 December 31, 2016
Balance — Beginning $ 7,703
$ 7,834
Currency translation adjustment 181
(131 )
Balance — Ending $ 7,884
$ 7,703

~~Our definite-lived intangible assets were comprised of the following:~~

September 30, 2017 December 31, 2016
Weighted-
Average
Amortization
Period Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount
Definite-lived intangible assets:
Trademarks/Tradenames 23 years $ 8,465
$ (3,486 ) $ 4,979
$ 8,378
$ (3,193 ) $ 5,185
Customer relationships 15 years 14,408
(4,639 ) 9,769
14,181
(3,855 ) 10,326
$ 22,873
$ (8,125 ) $ 14,748
$ 22,559
$ (7,048 ) $ 15,511

~~The aggregate intangible asset amortization expense was approximately $0.3 million for~~ the three months ended ~~September 30, 2017~~March 31, 2023 for restructuring, $0.6 million primarily related to the Industrial Automation segment and ~~2016, and $1.0 million for~~were recorded in Cost of revenues in the ~~nine months ended September 30, 2017 and 2016. The estimated intangible asset amortization expense for the fiscal year ending December 31, 2017 and for each~~Condensed Consolidated Statements of ~~the five succeeding years is as follows:~~Operations.

Fiscal Year Ended December 31,
Estimated
Amortization
Expense
2017 $ 1,321
2018 1,326
2019 1,326
2020 1,196
2021 1,196
2022 1,196

~~10.~~15. Commitments and Contingencies

~~Warranty —~~ We are subject to warranty claims for products that fail to perform as expected due to design or manufacturing deficiencies. Customers generally require their outside suppliers to guarantee or warrant their products and bear the cost of repair or replacement of such products. Depending on the terms under whichLeases - As disclosed in Note 7, Leases, we supply products to our customers, a customer may hold us responsible for some or all of the repair or replacement costs of defective products when the product supplied did not perform as represented. Our policy is to reserve for estimated future customer warranty costs based on historical trends and current economic factors.

~~The following represents a summary of the warranty provision for the nine months ended September 30, 2017:~~

Balance — December 31, 2016 $ 5,552
Provision for new warranty claims 1,532
Change in provision for preexisting warranty claims 98
Deduction for payments made (3,452 )
Currency translation adjustment 93
Balance — September 30, 2017 $ 3,823

~~Leases~~ ~~— We~~ lease office, warehouse and manufacturing space and ~~certain~~ equipment under non-cancelable operating lease agreements that generally require us to pay maintenance, insurance, taxes and other expenses in addition to annual rental fees. ~~The anticipated future lease costs are based in part on certain assumptions and we monitor these costs to determine if the estimates need to be revised in the future.~~ As of ~~September 30, 2017,~~March 31, 2023, our equipment leases did not provide for any material guarantee of a specified portion of residual values.

Guarantees - Costs associated with guarantees are accrued when it is probable that a liability has been incurred and the amount can be reasonably estimated. The most likely cost to be incurred is accrued based on an evaluation of available facts; where no amount within a range of estimates is more likely, the minimum is accrued. As of March 31, 2023 and December 31, 2022, we had no such guarantees.

Litigation —- We are subject to various legal proceedings and claims arising in the ordinary course of business, including but not limited to ~~workers' compensation~~product liability claims, ~~OSHA investigations, employment~~customer and supplier disputes, service provider disputes, examinations by taxing authorities, employment disputes, workers’ compensation claims, unfair labor practice charges, OSHA investigations, intellectual property disputes and ~~those~~environmental claims arising out of ~~alleged defects, breach~~the conduct of ~~contracts, product warranties and environmental matters.~~our businesses.

Management believes that the Company maintains adequate insurance orand that we have established reserves for issues that are probable and estimable in amounts that are adequate to cover reasonable adverse judgments not covered by insurance. Based upon the information available to management and discussions with legal counsel, it is the opinion of management that the ultimate outcome of the various legal actions and claims that are incidental to our business are not expected to have a material adverse impact on the consolidated financial position, results of operations, equity or cash flows; however, such matters are subject to many uncertainties and the outcomes of individual matters are not predictable with any degree of assurance.

Warranty - We are subject to warranty claims for products that fail to perform as expected due to design or manufacturing deficiencies. Depending on the terms under which we supply products to our customers, a customer may hold us responsible for some or all of the repair or replacement costs of defective products when the product supplied did not perform as represented. Our policy is to record provisions for estimated future customer warranty costs based on historical trends and for specific claims. These amounts, as they relate to the periods ended March 31, 2023 and December 31, 2022, are included within accrued liabilities and other in the accompanying Condensed Consolidated Balance Sheets.

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The following presents a summary of the warranty provision for the three months ended March 31, 2023:


Balance - December 31, 2022	$	1,433
Provision for warranty claims	393
Deduction for payments made and other adjustments	(227)
Balance - March 31, 2023	$	1,599

Debt Payments —- As disclosed in Note ~~11,~~4, Debt, the ~~TLS~~Credit Agreement requires the Company to repay a fixed amount of principal on a quarterly basis and make ~~mandatory prepayments of excess cash flows, and~~ voluntary prepayments that coincide with certain events.

The following table provides future minimum principal payments due on long-term debt for the next five ~~fiscal years~~years. The existing long-term debt agreement matures in 2027; no payments are due thereafter:


	Total
Remainder of 2023	$	8,750
2024	$	15,313
2025	$	19,688
2026	$	24,063
2027	$	93,498
Thereafter	$	—

16. Segment Reporting

Operating segments are defined as components of an enterprise that are evaluated regularly by the Company’s chief operating decision maker (“CODM”), which is our President and Chief Executive Officer. Each of these segments consists of a number of manufacturing facilities. Certain of our facilities manufacture and sell products through multiple segments. Our segments are more specifically described below.

The Vehicle Solutions segment designs, manufactures and sells the following products:

•Commercial vehicle seats for the global commercial vehicle markets including heavy duty trucks, medium duty trucks, last mile delivery trucks and vans, construction and agriculture equipment in North America, Europe and Asia-Pacific. This segment includes a portion of the company’s activities in the electric vehicle market.

•Plastic components ("Trim") primarily for the North America commercial vehicle market and power sports markets; and Cab structures for the North American medium-duty/heavy-duty ("MD/HD") truck market.

The Electrical Systems segment designs, manufactures and sells the following products:

•Cable and harness assemblies for both high and low voltage applications, control boxes, dashboard assemblies and design and engineering for these applications.

•The end markets for these products are construction, agricultural, warehouse, automotive (both internal combustion and electric vehicles), truck, mining, rail and the ~~remaining years thereafter:~~military/ defense industries in North America, Europe and Asia-Pacific.

The Aftermarket & Accessories segment designs, manufactures and sells the following products:

•Seats and components sold into the commercial vehicle channels that provide repair and refurbishing. These channels include Original Equipment Service ("OES") centers and retail distributors, and are spread across North America, Europe and Asia-Pacific.

•Commercial vehicle accessories including wipers, mirrors, and sensors. These products are sold both as Original Equipment and as repair products.

•Office seats primarily sold into the commercial and home office furniture distribution channels in Europe and Asia-Pacific.

The Industrial Automation segment designs, manufactures and sells the following products:

•Warehouse automation subsystems including control panels, electro-mechanical assemblies, cable assemblies, and power and communication solutions.

•The end markets for these products primarily include e-commerce, warehouse integration, transportation and the military/defense industry.

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Year Ending December 31,
2017 $ 1,094
2018 4,375
2019 4,375
2020 4,375
2021 4,375
Thereafter $ 155,312
Corporate expenses consist of certain overhead and shared costs that are not directly attributable to the operations of a segment. For purposes of business segment performance measurement, some of these costs that are for the benefit of the operations are allocated based on a combination of methodologies. The costs that are not allocated to a segment are considered stewardship costs and remain at corporate in our segment reporting

The following tables present financial information for the Company's reportable segments for the periods indicated:

~~11. Debt~~


	Three Months Ended March 31, 2023
	Vehicle Solutions		Electrical Systems		Aftermarket & Accessories		Industrial Automation		Corporate/Other		Total
Revenues	$	160,584	$	54,749	$	37,629	$	9,747	$	—	$	262,709
Gross profit	19,471		8,297		7,227		214		$	—	35,209
Selling, general & administrative expenses	6,077		2,227		1,650		1,076		$	9,535	20,565
Operating income	$	13,394	$	6,070	$	5,577	$	(862)	$	(9,535)	$	14,644


	Three Months Ended March 31, 2022
	Vehicle Solutions		Electrical Systems		Aftermarket & Accessories		Industrial Automation		Corporate/Other		Total
Revenues	$	140,157	$	39,876	$	30,215	$	34,126	$	—	$	244,374
Gross profit	12,907		3,401		4,086		4,991		(2)		25,383
Selling, general & administrative expenses	6,588		1,640		1,465		1,324		5,982		16,999
Operating income	$	6,319	$	1,761	$	2,621	$	3,667	$	(5,984)	$	8,384

17. Other Financial Information

Items reported in inventories consisted of the following:


	March 31, 2023		December 31, 2022
Raw materials	$	103,506	$	108,417
Work in process	18,045		17,757
Finished goods	18,002		16,368
Total Inventory	$	139,553	$	142,542

Items reported in property, plant, and ~~Credit Facilities~~

~~Debt~~equipment, net consisted of the following:


	March 31, 2023		December 31, 2022
Land and buildings	$	32,599	$	32,267
Machinery and equipment	214,324		212,352
Construction in progress	5,548		7,317
Property, plant, and equipment, gross	252,471		251,936
Less accumulated depreciation	(183,532)		(184,131)
Property, plant and equipment, net	$	68,939	$	67,805

September 30, 2017 December 31, 2016
7.875% senior secured notes due April 15, 2019 $ —
$ 233,154
Term loan and security agreement (a) $ 167,749
$ —

~~(a) Presented~~Items reported in ~~the condensed consolidated balance sheet as current portion of long-term debt of $3.2 million, net of deferred financing costs~~accrued expenses and ~~original issue discount each of $0.6 million; and long-term debt of $164.6 million, net of deferred financing costs and original issue discount of $2.4 million and $2.6 million, respectively.~~

~~Term Loan and Security Agreement~~

On April 12, 2017, the Company entered into a $175.0 million senior secured term loan credit facility (the “Term Loan Facility”), maturing on April 12, 2023, pursuant to a term loan and security agreement (the “TLS Agreement”) with certain subsidiariesother liabilities consisted of the Company party thereto as guarantors, Bank of America, N.A., as administrative agent, and other lender parties thereto. Concurrent with the closing of the TLS Agreement, the proceeds of the Term Loan Facility were used, together with cash on hand in the amount of $74.0 million, to (a) fund the redemption, satisfaction and discharge of all of the Company’s outstanding 7.875% notes along with accrued interest; and (b) pay related transaction costs, fees and expenses. In conjunction with the redemption of the 7.875% notes, the Company recognized a non-cash charge of $1.6 million in the second quarter of 2017 to write-off deferred financing fees and a prepayment charge for interest of $1.5 million paid to bondholders during the 30-day notification period associated with the redemption of the 7.875% notes.following:

There was $0.1 million in accrued interest as of September 30, 2017. The unamortized deferred financing fees of $3.0 million and original issue discount of $3.2 million are netted against the aggregate book value of the outstanding debt to arrive at a balance of $167.7 million as of September 30, 2017 and are being amortized over the remaining life of the agreement.


	March 31, 2023		December 31, 2022
Compensation and benefits	$	16,822	$	13,370
Taxes payable	9,426		5,092
Operating lease liabilities	6,537		7,421
Accrued freight	4,298		4,225
Warranty costs	1,599		1,433
Other	8,658		11,268
	$	47,340	$	42,809

The term loan is a senior secured obligation of the Company. Our obligations under the TLS Agreement are guaranteed by certain subsidiaries of the Company. The obligations of the Company and the guarantors under the TLS Agreement are secured (subject to certain permitted liens) by a first-priority lien on substantially all of the non-current assets (and a second priority lien on substantially all of the current assets) of the Company and the guarantors, including a first priority pledge of certain capital stock of the domestic and foreign subsidiaries directly owned by the Company and the guarantors. The liens, the security interests and all of the obligations of the Company and the guarantors and all provisions regarding remedies in an event of default are subject to an intercreditor agreement among the Company, the guarantors, the agent for the lenders party to the Company’s revolving credit facility and the collateral agent under the TLS Agreement.

~~Terms, Covenants and Compliance Status~~

The TLS Agreement contains customary restrictive covenants, including limitations on our ability and the ability of our subsidiaries to: incur additional debt; pay dividends or other restricted payments; make investments; engage in transactions with affiliates; create liens on assets; and consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries. In

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addition, the TLS Agreement contains a financial maintenance covenant requiring the Company to maintain a Total Leverage Ratio as of the last day of any fiscal quarter not to exceed the ratios set forth in the applicable table within the TLS Agreement.~~The TLS Agreement also contains customary reporting and other affirmative covenants. We were in compliance with the covenants as of September 30, 2017.~~

The TLS Agreement requires the Company to repay principal of approximately $1.1 million on the last day of each quarter commencing with the quarter ending September 30, 2017 and extending through March 31, 2024, with the remaining outstanding principal due at maturity.

Voluntary prepayments of amounts outstanding under the TLS Agreement are permitted at any time, without premium or penalty; provided, however, that a prepayment penalty equal to 1.0% of the prepaid amount is required to be paid in connection with certain events that have the effect of reducing the all-in-yield applicable to the term loan during the 12 months following the initial funding thereof. In addition, to the extent applicable, customary LIBOR breakage charges may be payable in connection with any prepayment.

The TLS Agreement requires the Company to make mandatory prepayments with excess cash flow, the proceeds of certain asset dispositions and upon the receipt of insurance or condemnation proceeds, and, in the case of an asset disposition or insurance or condemnation event, to the extent the Company does not reinvest the proceeds within the periods set forth in the TLS Agreement.

~~The TLS Agreement includes customary events of default (subject in certain cases to customary grace and cure periods) which include, among others:~~

~~• nonpayment of obligations when due;~~

~~• breach of covenants or other agreements in the TLS Agreement; and~~

~~• defaults in payment of certain other indebtedness.~~

~~Revolving Credit Facility~~

On April 12, 2017, the Company entered into the Third Amended and Restated Loan and Security Agreement ("Third ARLS Agreement") increasing its senior secured revolving credit facility to $65 million from $40 million and setting the maturity date to April 12, 2022. Up to an aggregate of $10.0 million is available to the Company and the other borrowers for the issuance of letters of credit, which reduces availability under the Third ARLS Agreement.

The Third ARLS Agreement included amendments to certain definitions and covenants including, but not limited to, amendments to (i) permitted debt, (ii) permitted distributions, (iii) distribution of assets, and (iv) the calculation of EBITDA. The Third ARLS Agreement contains a fixed charge coverage ratio maintenance covenant of 1.00:1.00 and amended the availability threshold for triggering compliance with the fixed charge coverage ratio.

The borrowers’ obligations under the revolving credit facility are secured (subject to certain permitted liens) by a first-priority lien on substantially all of the current assets (and a second priority lien on substantially all of the non-current assets) of the borrowers. Each of the Company and each other borrower is jointly and severally liable for the obligations under the revolving credit facility and unconditionally guarantees the prompt payment and performance thereof. The liens, the security interests and all of the obligations of the Company and each other borrower and all provisions regarding remedies in an event of default are subject to an intercreditor agreement among the Company, certain of its subsidiaries, the agent under the Third ARLS Agreement and the collateral agent for the lenders party to the Company’s term loan credit facility.

~~The applicable margin is based on average daily availability under the revolving credit facility as follows:~~

Level Average Daily Availability Base Rate
Loans LIBOR
Revolver Loans
III ≥ $24,000,000 0.50 % 1.50 %
II > $12,000,000 but < $24,000,000 0.75 % 1.75 %
I ≤ $12,000,000 1.00 % 2.00 %

The applicable margin will be subject to increase or decrease by the agent on the first day of the calendar month following each fiscal quarter end. If the agent is unable to calculate average daily availability for a fiscal quarter due to borrowers' failure to deliver a borrowing base certificate when required, the applicable margin will be set at Level I until the first day of the calendar month following receipt of a borrowing base certificate. As of September 30, 2017, the applicable margin was set at Level III.

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The unamortized deferred financing fees associated with our revolving credit facility of $1.1 million and $0.1 million as of September 30, 2017 and December 31, 2016, respectively, were being amortized over the remaining life of the agreement. As of September 30, 2017 and December 31, 2016, we did not have borrowings under the revolving credit facility and had outstanding letters of credit of $2.1 million and $2.5 million, respectively. We had borrowing availability of $62.9 million at September 30, 2017.

~~The Company pays a commitment fee to the lenders equal to 0.25% per annum of the unused amounts under the revolving credit facility.~~

~~Terms, Covenants and Compliance Status~~

The Third ARLS Agreement requires the maintenance of a minimum fixed charge coverage ratio. The borrowers however are not required to comply with the fixed charge coverage ratio requirement for as long as the borrowers maintain borrowing availability under the revolving credit facility at the greater of (i) $5,000,000 and (ii) ten percent (10%) of the revolving commitments. If borrowing availability falls below this threshold at any time, the borrowers would be required to comply with a fixed charge coverage ratio of 1.00:1.00 as of the end of each relevant fiscal quarter, and would be required to continue to comply with these requirements until the borrowers have borrowing availability in excess of this threshold for 60 consecutive days. Since the Company had borrowing availability in excess of this threshold from December 31, 2016 through September 30, 2017, the Company was not required to comply with the minimum fixed charge coverage ratio covenant during the quarter ended September 30, 2017.

The Third ARLS Agreement contains customary restrictive covenants, including limitations on our ability and the ability of our subsidiaries to: incur additional debt; pay dividends or other restricted payments; make investments; engage in transactions with affiliates; create liens on assets; and consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries. The Third ARLS Agreement also contains customary reporting and other affirmative covenants. The Company was in compliance with these covenants as of September 30, 2017.

Voluntary prepayments of amounts outstanding under the revolving credit facility are permitted at any time, without premium or penalty, other than (to the extent applicable) customary LIBOR breakage charges and the aforementioned prepayment penalty.

The Third ARLS Agreement requires the borrowers to make mandatory prepayments upon the receipt of insurance or condemnation proceeds in respect of the revolving credit facility’s priority collateral.

~~The Third ARLS Agreement includes customary events of default (subject in certain cases to customary grace and cure periods) which include, among others:~~

•~~nonpayment of obligations when due;~~

•~~breach of covenants or other agreements in the Third ARLS Agreement;~~

•~~a change of control; and~~

•~~defaults in payment of certain other indebtedness, including the term loan credit facility.~~

~~12. Income Taxes~~

We file federal and state income tax returns in the U.S. and income tax returns in foreign jurisdictions. With a few minor exceptions, we are no longer subject to income tax examinations by any of the taxing jurisdictions for years prior to 2013. We currently have one foreign income tax examination in process.

As of September 30, 2017 and December 31, 2016, unrecognized tax benefits related to federal, state and foreign jurisdictions were $0.5 million and $0.6 million, respectively; all of which may impact our effective tax rate, if recognized. The domestic unrecognized tax benefits are netted against their related noncurrent deferred tax assets that are carried forward as net operating losses and tax credits. When appropriate, we accrue penalties and interest related to unrecognized tax benefits through income tax expense. Included in the unrecognized tax benefits is $0.2 million of interest and penalties as of September 30, 2017 and December 31, 2016.

During the nine months ended September 30, 2017, we released $0.2 million of tax reserves associated with items falling outside the statue of limitations and the closure of certain tax years for examination purposes. We are not aware of any events that could occur within the next twelve months that would have an impact on the amount of unrecognized tax benefits that would require a reserve.

~~Table of Contents~~

At September 30, 2017, due to cumulative losses and other factors, we continue to carry valuation allowances against the deferred tax assets primarily in the United Kingdom and Luxembourg. Additionally, we continue to carry valuation allowances related to certain state deferred assets that we believe to be more likely than not to expire before they can be utilized. We evaluate the need for valuation allowances in each of our jurisdictions on a quarterly basis.

~~13. Segment Reporting~~

The following tables present segment revenues, gross profit, depreciation and amortization expense, selling, general and administrative expenses, operating income, capital expenditures and other items for the three and nine months ended September 30, 2017 and 2016:

Three Months Ended September 30, 2017
Global
Truck &
Bus Global
Construction &
Agriculture Corporate/
Other Total
Revenues
External Revenues $ 121,497
$ 76,852
$ —
$ 198,349
Intersegment Revenues 552
2,705
(3,257 ) —
Total Revenues $ 122,049
$ 79,557
$ (3,257 ) $ 198,349
Gross Profit $ 17,180
$ 8,316
$ (346 ) $ 25,150
Depreciation and Amortization Expense $ 1,838
$ 1,117
$ 673
$ 3,628
Selling, General & Administrative Expenses $ 5,534
$ 4,160
$ 4,442
$ 14,136
Operating Income $ 11,350
$ 4,121
$ (4,789 ) $ 10,682
Capital and Other Items:
Capital Expenditures $ 1,097
$ 1,195
$ 476
$ 2,768
Other Items ¹
$ 373
$ 15
$ —
$ 388

¹~~Other items include costs associated with plant closures, including employee severance and retention costs, lease cancellation costs, building repairs and costs to transfer equipment.~~

Three Months Ended September 30, 2016
Global
Truck &
Bus Global
Construction &
Agriculture Corporate/
Other Total
Revenues
External Revenues $ 95,728
$ 57,876
$ —
$ 153,604
Intersegment Revenues 308
1,499
(1,807 ) —
Total Revenues $ 96,036
$ 59,375
$ (1,807 ) $ 153,604
Gross Profit $ 10,765
$ 8,525
$ (371 ) $ 18,919
Depreciation and Amortization Expense $ 2,215
$ 1,464
$ 484
$ 4,163
Selling, General & Administrative Expenses
$ 5,329
$ 4,588
$ 4,209
$ 14,126
Operating Income $ 5,144
$ 3,901
$ (4,579 ) $ 4,466
Capital and Other Items:
Capital Expenditures $ 1,592
$ 664
$ 290
$ 2,546
Other Items¹
$ 1,329
$ 191
$ —
$ 1,520

¹ ~~Other items include costs associated with plant closures, including employee severance and retention costs, lease cancellation costs, building repairs and costs to transfer equipment.~~

~~Table of Contents~~

Nine Months Ended September 30, 2017
Global
Truck &
Bus Global
Construction &
Agriculture Corporate/
Other Total
Revenues
External Revenues $ 342,964
$ 223,929
$ —
$ 566,893
Intersegment Revenues 1,084
7,315
(8,399 ) —
Total Revenues $ 344,048
$ 231,244
$ (8,399 ) $ 566,893
Gross Profit $ 48,288
$ 22,099
$ (1,033 ) $ 69,354
Depreciation and Amortization Expense $ 5,850
$ 3,530
$ 2,051
$ 11,431
Selling, General & Administrative Expenses $ 16,688
$ 12,619
$ 16,250
$ 45,557
Operating Income $ 30,716
$ 9,374
$ (17,283 ) $ 22,807
Capital and Other Items:
Capital Expenditures $ 5,145
$ 3,671
$ 1,795
$ 10,611
Other Items ¹
$ 1,341
$ 998
$ 2,377
$ 4,716

¹ Other items include costs associated with plant closures, including employee severance and retention costs, lease cancellation costs, building repairs, costs to transfer equipment, and settlement costs associated with the consulting contract litigation.

Nine Months Ended September 30, 2016
Global
Truck &
Bus Global
Construction &
Agriculture Corporate/
Other Total
Revenues
External Revenues $ 323,895
$ 188,252
$ —
$ 512,147
Intersegment Revenues 771
5,417
(6,188 ) —
Total Revenues $ 324,666
$ 193,669
$ (6,188 ) $ 512,147
Gross Profit $ 43,019
$ 27,100
$ (1,164 ) $ 68,955
Depreciation and Amortization Expense $ 6,438
$ 4,321
$ 1,812
$ 12,571
Selling, General & Administrative Expenses
$ 17,466
$ 13,859
$ 15,177
$ 46,502
Operating Income $ 24,679
$ 13,137
$ (16,341 ) $ 21,475
Capital and Other Items:

Capital Expenditures $ 4,039
$ 2,881
$ 867
$ 7,787
Other Items¹
$ 1,704
$ 512
$ 688
$ 2,904

¹Other items include costs associated with plant closures, including employee severance and retention costs, lease cancellation costs, building repairs and costs to transfer equipment, and a write down of an asset held for sale and severance costs in corporate.

~~14. Derivative Contracts~~

We use forward exchange contracts to hedge certain of our foreign currency transaction exposures. We estimate our projected revenues and purchases in certain foreign currencies and may hedge a portion of the anticipated long or short positions. The contracts typically run from one month up to eighteen months. As of September 30, 2017, we did not have any derivatives designated as hedging instruments; therefore, our forward foreign exchange contracts have been marked-to-market and the fair value of contracts recorded in the condensed consolidated Balance Sheet with the offsetting non-cash gain or loss recorded in cost of revenue in our consolidated Statement of Income. We do not hold or issue foreign exchange options or forward contracts for trading purposes. Our forward foreign exchange contracts are subject to a master netting agreement. We record assets and liabilities relating to our forward foreign exchange contracts on a gross basis in our condensed consolidated Balance Sheet.

~~The following table summarizes the notional amount of our open foreign exchange contracts:~~

September 30, 2017 December 31, 2016

U.S. $
Equivalent

U.S. $
Equivalent
Fair Value

U.S. $
Equivalent

U.S. $
Equivalent
Fair Value
Commitments to buy or sell currencies $ 5,389
$ 5,723
$ 18,593
$ 17,213

~~Table of Contents~~

~~We consider the impact of our credit risk on the fair value of the contracts, as well as our ability to honor obligations under the contract.~~

The Company entered into an interest rate swap contract to fix the interest rate on an initial aggregate amount of $80.0 million thereby reducing exposure to interest rate changes. The interest rate swap has a floor rate of 2.07% and an all-in rate of 8.07%, and an effective date of June 30, 2017 and a maturity date of April 30, 2022. As of September 30, 2017, the interest rate swap contract was not designated as a hedging instrument; therefore, our interest rate swap contract has been marked-to-market and the fair value of the contract recorded in the condensed consolidated Balance Sheet with the offsetting gain or loss recorded in interest and other expense in our condensed consolidated Statement of Income.

~~The following table summarizes the fair value and presentation in the condensed consolidated Balance Sheet for derivatives, none of which are designated as accounting hedges:~~

Asset Derivatives

September 30, 2017 December 31, 2016

Balance Sheet
Location Fair Value Balance Sheet
Location Fair Value
Foreign exchange contracts Other current assets $ 395
Other current assets $ 142
Interest rate swap contract¹
Other current assets $ 1
Other current assets $ —
Interest rate swap contract¹
Other assets, net $ 301
Other assets, net $ —

Liability Derivatives

September 30, 2017 December 31, 2016

Balance Sheet
Location Fair Value Balance Sheet
Location Fair Value
Foreign exchange contracts Accrued liabilities $ 22
Accrued liabilities $ 1,234
Interest rate swap contract¹
Accrued liabilities $ 494
Accrued liabilities $ —
Interest rate swap contract¹
Other long-term liabilities $ 293
Other long-term liabilities $ —

¹ ~~Presented in the condensed consolidated Balance Sheet as accrued liabilities of $0.5 million.~~

~~The following table summarizes the effect of derivative instruments on the consolidated Statement of Income for derivatives not designated as hedging instruments:~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016

Location of Gain (Loss)
Recognized in Income on
Derivatives

Amount of Gain (Loss)
Recognized in Income on
Derivatives

Amount of Gain (Loss)
Recognized in Income on
Derivatives
Foreign exchange contracts Cost of Revenues $ (322 ) $ (869 ) $ 1,438
$ (205 )
Interest rate swap contract Interest Income (Expense) $ 38
$ —
$ (485 ) $ —

~~15. Other Comprehensive Loss~~

~~The after-tax changes in accumulated other comprehensive loss are as follows:~~

Foreign
currency translation adjustment
Pension and
post-retirement
benefits plans

Accumulated other
comprehensive
loss
Ending balance, December 31, 2016 $ (24,313 ) $ (24,532 ) $ (48,845 )
Net current period change 5,209
—
5,209
Reclassification adjustments for losses reclassified into income —
(1,830 ) (1,830 )
Ending balance, September 30, 2017 $ (19,104 ) $ (26,362 ) $ (45,466 )

~~Table of Contents~~

Foreign
currency translation adjustment
Pension and
post-retirement
benefit plans

Accumulated other
comprehensive
loss
Ending balance, December 31, 2015 $ (21,079 ) $ (18,575 ) $ (39,654 )
Net current period change 215
—
215
Reclassification adjustments for losses reclassified into income —
(1,699 ) (1,699 )
Ending balance, September 30, 2016 $ (20,864 ) $ (20,274 ) $ (41,138 )

~~The related tax effects allocated to each component of other comprehensive income are as follows:~~

Three Months Ended
Nine Months Ended
September 30, 2017 September 30, 2017
Before Tax
Amount Tax Expense After Tax Amount Before Tax
Amount Tax Expense After Tax Amount
Retirement benefits adjustment $ (763 ) $ 217
$ (546 ) $ (2,481 ) $ 651
$ (1,830 )
Cumulative translation adjustment 1,130
—
1,130
5,209
—
5,209
Total other comprehensive income $ 367
$ 217
$ 584
$ 2,728
$ 651
$ 3,379

Three Months Ended
Nine Months Ended
September 30, 2016 September 30, 2016
Before Tax
Amount Tax Expense After Tax
Amount Before Tax
Amount Tax Expense
After Tax
Amount
Retirement benefits adjustment $ (893 ) $ 228
$ (665 ) $ (2,478 ) $ 779
$ (1,699 )
Cumulative translation adjustment 621
—
621
215
—
215
Total other comprehensive loss $ (272 ) $ 228
$ (44 ) $ (2,263 ) $ 779
$ (1,484 )

~~16. Pension and Other Post-Retirement Benefit Plans~~

We sponsor pension plans that cover certain hourly and salaried employees in the United States and United Kingdom. Each of the plans are frozen to new participants. Our policy is to make annual contributions to the plans to fund the normal cost as required by local regulations. In addition, we have a post-retirement benefit plan for certain U.S. operations, retirees and their dependents.

~~The components of net periodic (benefit) cost related to pension and other post-retirement benefit plans is as follows:~~

U.S. Pension Plans and Other Post-Retirement Benefit Plans Non-U.S. Pension Plans
Three Months Ended September 30, Three Months Ended September 30,
2017 2016 2017 2016
Service cost $ 33
$ 32
$ —
$ —
Interest cost 449
469
289
338
Expected return on plan assets (671 ) (678 ) (302 ) (375 )
Amortization of prior service cost 2
—
—
—
Recognized actuarial loss 89
107
122
52
Net (benefit) cost $ (98 ) $ (70 ) $ 109
$ 15

~~Table of Contents~~

U.S. Pension Plans and Other Post-Retirement Benefit Plans Non-U.S. Pension Plans
Nine Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Service cost $ 100
$ 96
$ —
$ —
Interest cost 1,346
1,407
845
1,041
Expected return on plan assets (2,013 ) (2,034 ) (882 ) (1,156 )
Amortization of prior service cost 5
—
—
—
Recognized actuarial loss (gain) 268
321
358
160
Net (benefit) cost $ (294 ) $ (210 ) $ 321
$ 45

We expect to contribute approximately $2.9 million to our pension plans and our other post-retirement benefit plans in 2017. As of September 30, 2017, $2.2 million of contributions have been made to our pension and other post-retirement plans.


~~17.~~	~~Restructuring~~

On November 19, 2015, the Board of Directors of the Company approved adjustments to the Company’s manufacturing footprint and capacity utilization, and reductions to selling, general and administrative costs. We expect the costs associated with restructuring activities to total $6.5 million to $7.6 million, and capital investments to total $1.0 million to $2.0 million. The restructuring and cost reduction actions began in the fourth quarter of 2015 and are expected to continue through 2017. Restructuring costs incurred during the nine months ended September 30, 2017 and 2016 were $2.0 million and $2.3 million, respectively. The following is a summary of some of our key actions.

~~Edgewood Facility~~

~~The closure of our Edgewood, Iowa facility and transfer of production to our Agua Prieta, Mexico facility was announced on December 3, 2015 and was substantially complete as of June 30, 2016.~~

~~Piedmont Facility~~

On May 2, 2016, the Company announced plans to consolidate its North American seat production into two North American facilities and cease seat production in its Piedmont, Alabama facility. The Company will continue to maintain a presence in Piedmont for our Aftermarket distribution channel. The restructuring plan is now complete.

~~Monona Facility~~

On July 19, 2016, the Company announced its intent to transfer all wire harness production from its manufacturing facility in Monona, Iowa to its facility in Agua Prieta, Mexico. On May 24, 2017, the Company elected to maintain production capability in the Monona facility as a result of a shortage of labor in our North American wire harness business. The Company released accrued employee separation charges of $0.4 million and incurred lease cancellation charges of $1.3 million.

~~Shadyside Facility~~

On July 21, 2016, the Company announced that it will close its Shadyside, Ohio facility that performs assembly and stamping activities. These activities will be transferred to alternative facilities or sourced to local suppliers. We anticipate the closure of the Shadyside facility to be complete by the end of 2017.

~~Ongoing Restructuring Expenditures~~

~~The table below summarizes the expenditures incurred to date and projected future expenditures associated with the restructuring activities approved on November 19, 2015:~~

~~Table of Contents~~

Total Project
Expense
Expected Future Expense (Income)
2015/2016
Current
Quarter

2017 Year
to Date
Income Statement
(in millions) Low High Expense Expense (Income) Low High Classification
Edgewood Wire Harness
Separation costs $ 0.3
$ 0.3
$ 0.3
$ —
$ —
$ —
$ —
Cost of revenues
Facility and other costs 0.1
0.1
0.1
—
—
—
—
Cost of revenues
Total $ 0.4
$ 0.4
$ 0.4
$ —
$ —
$ —
$ —

Piedmont Seating
Separation costs $ 0.6
$ 0.6
$ 0.6
$ —
$ —
$ —
$ —
Cost of revenues
Facility and other costs 0.4
0.4
0.4
—
—
—
—
Cost of revenues
Total $ 1.0
$ 1.0
$ 1.0
$ —
$ —
$ —
$ —

Monona Wire Harness
Separation costs $ 0.1
$ 0.1
$ 0.5
$ —
$ (0.4 ) $ —
$ —
Cost of revenues
Facility and other costs 1.9
2.3
0.1
—
1.4
0.4
0.8
Cost of revenues
Total $ 2.0
$ 2.4
$ 0.6
$ —
$ 1.0
$ 0.4
$ 0.8

Shadyside Stamping
Separation costs $ 2.5
$ 2.6
$ 1.7
$ 0.2
$ 0.6
$ 0.2
$ 0.3
Cost of revenues
Facility and other costs 0.2
0.8
0.2
0.2
0.4
(0.4 ) 0.2
Cost of revenues
Total $ 2.7
$ 3.4
$ 1.9
$ 0.4
$ 1.0
$ (0.2 ) $ 0.5

Other Restructuring
Separation costs $ 0.1
$ 0.1
$ 0.1
$ —
$ —
$ —
$ —
Cost of revenues
Separation costs 0.3
0.3
0.3
—
—
—
—
Selling, general and administrative
Total $ 0.4
$ 0.4
$ 0.4
$ —
$ —
$ —
$ —

Total Restructuring $ 6.5
$ 7.6
$ 4.3
$ 0.4
$ 2.0
$ 0.2
$ 1.3

~~Restructuring Liability~~

~~A summary of changes in the restructuring liability for the nine months ended September 30, 2017 and 2016 is as follows:~~

2017
Employee Costs Facility Exit and Other Costs Total
Balance - December 31, 2016 $ 2,229
$ 45
$ 2,274
Provisions 212
1,801
2,013
Utilizations (2,134 ) (1,317 ) (3,451 )
Balance - September 30, 2017 $ 307
$ 529
$ 836

2016
Employee Costs Facility Exit and Other Costs Total
Balance - December 31, 2015 $ 542
$ 43
$ 585
Provisions 1,721
568
2,289
Utilizations (496 ) (588 ) (1,084 )
Balance - September 30, 2016 $ 1,767
$ 23
$ 1,790

~~18. Subsequent Events~~

~~The sale of our Shadyside, Ohio property to Warren Distribution, Inc. for $2.5 million was consummated on October 31, 2017, resulting in a gain on sale of $0.9 million in the fourth quarter of 2017.~~

~~Table of Contents~~

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion and analysis below ~~describes~~describe material changes in financial condition and results of operations ~~for~~as reflected in our condensed consolidated financial statements for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~2016.~~2022. This discussion and analysis should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our ~~Annual Report on~~2022 Form ~~10-K for the fiscal year ended December 31, 2016 (the “2016 Form 10-K”).~~10-K.

~~Company~~

Business Overview

~~Commercial Vehicle Group, Inc. (and its subsidiaries)~~CVG is a ~~leading supplier~~global provider of ~~a full range of cab related products~~systems, assemblies and ~~systems for~~components to the global commercial vehicle market, ~~including~~ the ~~MD/HD Truck market, the medium- and heavy-construction~~electric vehicle market, and the ~~military, bus, agriculture, specialty transportation, mining,~~ industrial ~~equipment~~automation markets. We deliver real solutions to complex design, engineering and ~~off-road recreational markets.~~manufacturing problems while creating positive change for our customers, industries, and communities we serve.

Our products include Seats; Trim; cab structures, sleeper boxes, body panels and structural components; mirrors, wipers and controls; and electronic wire harness and panel assemblies designed for applications in commercial and other vehicles.

We ~~are differentiated from automotive industry suppliers by our ability to~~primarily manufacture ~~low volume,~~ customized products ~~on a sequenced basis~~ to meet the requirements of our ~~customers.~~customer. We believe our products are used by a majority of the North American ~~MD/HD~~Commercial Truck ~~and certain leading global~~markets, many construction ~~and agriculture OEMs, which we believe creates an opportunity to cross-sell our products.~~

~~Business Overview~~

For the nine months ended September 30, 2017, approximately 42% of our revenue was generated from sales to North American MD/HD Truck OEMs. Our remaining revenue was primarily derived from sales to OEMs in the global construction equipment market, aftermarket, OE service organizations, military market and other specialty markets.

~~Demand for our products is driven to a significant degree by preferences of the end-user of the vehicle, particularly with respect to heavy-duty trucks. Unlike the automotive industry,~~ vehicle OEMs ~~generally afford the end-user the ability to specify many of the component~~ parts ~~that will be used to manufacture the commercial vehicle, including a wide variety of cab interior styles~~ and colors, brand and type of seats, type of seat fabric and color, and specific interior styling. In addition, certain of our products are only utilized in heavy-duty trucks, such as our storage systems, sleeper boxes and privacy curtains. Accordingly, changes in demand for heavy-duty trucks in North America or the mix of options on a vehicle can have a greater impact on our business than changes in the overall demand for commercial vehicles. To the extent that demand for higher content vehicles increases or decreases, our revenues and gross profit will be impacted positively or negatively.

We generally compete for new business at the beginning of the development of a new vehicle platform and upon the redesign of existing programs. New platform development generally begins one to three years before the marketing of such models by our customers. Contract durations for commercial vehicle products generally extend for the entire life of the platform, which is typically five to seven years. Several of the major truck makers are in the process of upgrading their key truck platforms and we believe we have maintained our share of content in these platforms. We continue to pursue opportunities to expand our content.

Demand for our heavy-duty (or "Class 8") truck products is generally dependent on the number of new heavy-duty trucks manufactured in North America, which in turn is a function of general economic conditions, interest rates, changes in government regulations, consumer spending, fuel costs, freight costs, fleet operators' financial health and access to capital, used truck prices and our customers’ inventory levels. New heavy-duty truck demand has historically been cyclical and is particularly sensitive to the industrial sector of the economy, which generates a significant portion of the freight tonnage hauled by commercial vehicles. According to a October 2017 report by ACT Research, a publisher of industry market research, North American Class 8 production levels are expected to increase to 252,000 units in 2017 and then increase to 296,000 units in 2019 before decreasing to 281,000 units in 2022. We believe the demand for North American Class 8 vehicles in 2017 will be between 235,000 to 255,000 units. ACT Research estimates that the average age of active North American Class 8 trucks is 11.4 and 11.3 years in 2016 and 2017, respectively. As vehicles age, their maintenance costs typically increase. ACT Research forecasts that the vehicle age will decline as aging fleets are replaced.

~~Table of Contents~~

North American medium-duty (or "Class 5-7") truck production steadily increased from 227,000 units in 2014 to 233,000 units in 2016. According to a October 2017 report by ACT Research, North American Class 5-7 truck production is expected to increase to 250,000 units in 2017 and then gradually increase to 275,000 units in 2022.

Demand for our construction and agricultural equipment products is dependent on vehicle production. Demand for new vehicles in the global construction and agricultural equipment market generally follows certain economic conditions around the world. Our products are primarily used in the medium- and heavy-duty construction equipment markets (vehicles weighing over 12 metric tons). Demand in the medium- and heavy-duty construction equipment market is typically related to the level of large scale infrastructure development projects such as highways, dams, harbors, hospitals, airports and industrial development,service dealers distributors, as well as ~~activity~~top e-commerce retailers.

Key Developments

During the quarter ended March 31, 2023, CVG established two new plant locations: one in ~~the mining, forestry~~Tangier, Morocco, and ~~other raw material based industries. We believe the construction markets we serve~~another in ~~Europe, Asia, and North America are improving. Global agriculture markets may be stabilizing.~~

~~Our Long-Term Strategy~~

Our long-term strategy is to grow organically by product, geographic region and end market. Our products are Seats, Trim, wire harnesses, structures, wipers, mirrors and office seats. We expect to realize some end market diversification in truck and bus in Asia-Pacific and trim in Europe, with additional diversification weighted toward the agriculture market, and to a lesser extent the construction market. We intend to allocate resources consistent with our strategy; and more specifically, consistent with our product portfolio, geographic region and end market diversification objectives. We periodically evaluate our long-term strategy in response to significant changes in our business environment and other factors.

Although our long-term strategy is an organic growth plan, we will consider opportunistic acquisitions to supplement our product portfolio, and to enhance our ability to serve our customers in our geographic end markets.

~~Strategic Footprint~~

We review our manufacturing footprint in the normal course to, among other considerations, provide a competitive landed cost to our customers. In November 2015, the Company announced a restructuring and cost reduction plan, which is expected to lower operating costs by $8 million to $12 million annually when fully implemented at the end of 2017. As part of the Company's restructuring efforts, on July 19, 2016, the Company announced it will transfer all wire harness production from its manufacturing facility in Monona, Iowa to its facility in Agua Prieta,Aldama, Mexico. On May 24, 2017, the Company elected to maintain production capability in the Monona, Iowa facility as a result of a shortage of labor in our North American wire harness business. Additionally, the Company established a new facility in Mexico with better access to labor. The labor shortage and footprint adjustment in our North American wire harness business are collectively referred to as the "NA Footprint Adjustment". Notwithstanding the decision to maintain production capability in the Monona facility and to establish additional production capacity elsewhere in Mexico, the Company expects to achieve its previously disclosed $8 million to $12 million of annual savings from its cost reduction and restructuring efforts.

At the time of the November 2015 announcement of facility restructuring actions, the Company estimated pre-tax costs of $11 million to $16 million. This range of pre-tax restructuring costs, net of related income, has been lowered to $7 million to $8 million. Pre-tax expenditures associated with the restructuring actions announced in November 2015 were approximately $1 million in the year ended December 31, 2015, approximately $4 million in the year ended December 31, 2016, andBoth locations are expected to be ~~$2 million to $3 million~~large scale facilities and production is targeted for ~~year ended December 31, 2017. The majority~~third quarter of ~~these costs~~2023. These plants are ~~employee-related separation costs and other costs associated with the transfer~~a cornerstone in CVG's strategy of ~~production and subsequent closure of facilities, offset by gains on the sale of long-lived assets.~~expanding its electrification systems business.

Consolidated Results of Operations

Three ~~months ended September 30, 2017~~Months Ended March 31, 2023 Compared to Three ~~months ended September 30, 2016~~Months Ended March 31, 2022

~~Table of Contents~~

Three Months Ended September 30,
(in thousands)
2017 2016
Revenues $ 198,349
100.0 % $ 153,604
100.0 %
Cost of Revenues 173,199
87.3
134,685
87.7
Gross Profit 25,150
12.7
18,919
12.3
Selling, General and Administrative Expenses 14,136
7.1
14,126
9.2
Amortization Expense 332
0.2
327
0.2
Operating Income 10,682
5.4
4,466
2.9
Interest and Other Expense 3,482
1.8
4,799
3.1
Income (Loss) Before Provision for Income Taxes 7,200
3.6
(333 ) (0.2 )
Provision (Benefit) for Income Taxes 2,437
1.2
(1,480 ) (1.0 )
Net Income $ 4,763
2.4 % $ 1,147
0.7 %

~~Revenues. On a~~The table below sets forth certain consolidated ~~basis, revenues increased $44.7 million, or 29.1%, to $198.3 million~~operating data for the three months ended ~~September 30, 2017 from $153.6 million for the three months ended September 30, 2016.~~March 31 (dollars are in thousands):


	2023		2022		$ Change		% Change
Revenues	$	262,709	$	244,374	$	18,335	7.5%

Gross profit	35,209		25,383		9,826		38.7
Selling, general and administrative expenses	20,565		16,999		3,566		21.0

Other (income) expense	(202)		1,041		(1,243)		NM 1
Interest expense	2,890		1,961		929		47.4

Provision for income taxes	3,256		1,400		1,856		132.6
Net income	8,700		3,982		4,718		118.5

1.Not meaningful

Revenues. The increase in consolidated revenues resulted from:

•a ~~$26.3~~$40.0 million, or ~~42.2%~~24.1%, increase in ~~OEM North American MD/HD Truck revenues;~~sales to OEM;

•a ~~$14.9~~$21.9 million, or ~~48.5%~~(69.2)%, ~~increase~~decrease in ~~construction equipment revenues; and~~industrial automation sales;

•a ~~$3.5~~$0.4 million, or ~~5.9%~~(1.0)%, decrease in aftermarket and OES sales; and

•a $0.7 million, or 20.1%, increase in other revenues.

~~Third~~First quarter ~~2017~~2023 revenues were ~~favorably~~unfavorably impacted by foreign currency exchange translation of ~~$1.7~~$3.6 million, which is reflected in the change in revenues above. The increase in revenues was primarily driven by increased pricing to offset material cost increases and increased sales volume, offset by sales volume decreases in the Industrial Automation segment.

Table of Contents

Gross Profit. ~~Gross profit increased $6.2 million, or 32.9%, to $25.2 million for the three months ended September 30, 2017 from $18.9 million for the three months ended September 30, 2016.~~ Included in gross profit is cost of revenues, which consists primarily of raw materials and purchased components for our products, wages and benefits for our employees and overhead expenses such as manufacturing supplies, facility rent and ~~utility~~utilities costs related to our operations. The $9.8 million increase in gross profit is primarily attributable to the increase in sales volume. Cost of ~~revenue~~revenues increased ~~$38.5~~$8.5 million, or ~~28.6%~~3.9%, ~~resulting from~~as a result of an increase in raw material and purchased component costs of ~~$31.5~~$2.5 million, ~~an increase in wages and benefits of $4.2 million,~~or 1.7%, and an increase in labor and overhead ~~costs~~expenses of $2.8 million. The increase in gross profit is primarily attributable to an increase in sales volume partially offset by rising commodity prices, product launch costs and near term costs associated with the sharp acceleration in North American truck build. Also adversely impacting cost of revenue is the impact of the NA Footprint Adjustment. The adverse impact of the NA Footprint Adjustment on third quarter results was approximately $2 million; we expect the impact in the second half of the year to be at the low end of the previously disclosed range of $3$6.0 million, ~~to $6 million. Additionally, third quarter 2017 results included $0.4 million in charges relating to facility restructuring and other related costs compared to $1.5 million in the third quarter 2016.~~or 8.1%. As a percentage of revenues, gross profit margin was ~~12.7%~~13.4% for the three months ended ~~September 30, 2017~~March 31, 2023 compared to ~~12.3%~~10.4% for the three months ended ~~September 30, 2016.~~March 31, 2022.

Selling, General and Administrative Expenses. Selling, general and administrative expenses ("SG&A”) consist primarily of wages and benefits and other expenses such as marketing, travel, legal, audit, rent and utility costs which are not directly associated with the manufacturing of our products. ~~Selling, general and administrative~~SG&A expenses ~~were $14.1 million~~ for the three months ended ~~September 30, 2017 and 2016.~~March 31, 2023 increased $3.6 million compared to the three months ended March 31, 2022, primarily as a result of higher incentive compensation expenses. As a percentage of revenues, SG&A expense was 7.8% for the three months ended March 31, 2023 compared to 7.0% for the three months ended March 31, 2022.

Other (Income) Expense. Other expenses decreased $1.2 million in the quarter ended March 31, 2023 as compared to the quarter ended March 31, 2022 due primarily to a favorable change in the fair value of foreign currency forward exchange contracts in 2023 versus an unfavorable change in the fair value of foreign currency forward exchange contracts in 2022.

Interest ~~and Other~~ Expense. Interest associated with our debt, and other expense was ~~$3.5~~$2.9 million and ~~$4.8~~$2.0 million for the three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016,~~2022, respectively. The ~~decrease is~~increase in interest expense primarily ~~the result of less outstanding~~related to higher interest rates on variable rate debt.

Provision ~~(Benefit)~~ for Income Taxes. An income tax provision of ~~$2.4~~$3.3 million and ~~income tax benefit of $1.5~~$1.4 million ~~was~~were recorded for the three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016,~~2022, respectively. The period over period change in ~~the~~income tax ~~provision resulted~~was primarily ~~from the~~attributable to a $6.6 million increase in pre-tax ~~earnings,~~income versus the mix of income between our U.S. and non-U.S. locations and earnings or losses in certain foreign tax jurisdictions which were no longer subject to valuation allowances in the quarter ended September 30, 2017.prior year period.

Net Income. Net income was ~~$4.8 million and $1.1~~$8.7 million for the three months ended ~~September 30, 2017 and 2016, respectively. The increase is attributed~~March 31, 2023 compared to ~~the factors noted above.~~

~~SEGMENT RESULTS~~

~~Table of Contents~~

~~Global Truck and Bus Segment Results~~

Three Months Ended September 30,
(amounts in thousands)
2017 2016
Revenues $ 122,049
100.0 % $ 96,036
100.0 %
Gross Profit $ 17,180
14.1 % $ 10,765
11.2 %
Depreciation and Amortization Expense $ 1,838
1.5 % $ 2,215
2.3 %
Selling, General & Administrative Expenses
$ 5,534
4.5 % $ 5,329
5.5 %
Operating Income $ 11,350
9.3 % $ 5,144
5.4 %

~~Revenues.~~ ~~GTB Segment revenues increased $26.0 million, or 27.1%, to $122.0~~$4.0 million for the three months ended ~~September 30, 2017 from $96.0 million~~March 31, 2022. The increase in net income is attributable to the factors noted above.

Segment Results

Vehicle Solutions Segment Results

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

The table below sets forth certain Vehicle Solutions Segment operating data for the three months ended ~~September 30, 2016.~~March 31 (dollars are in thousands):


	2023		2022		$ Change		% Change
Revenues	$	160,584	$	140,157	$	20,427	14.6%
Gross profit	19,471		12,907		6,564		50.9
Selling, general & administrative expenses	6,077		6,588		(511)		(7.8)
Operating income	13,394		6,319		7,075		112.0

Revenues. The increase in ~~GTB~~Vehicle Solutions Segment revenues primarily resulted ~~from:~~from increased sales volume and increased pricing to offset material cost increases.

~~a $23.6 million, or 40.4%, increase in OEM North American MD/HD Truck revenues; and~~

~~a $2.4 million, or 6.5%, increase in other revenues.~~

~~GTB Segment revenues were favorably impacted by foreign currency exchange translation of $0.4 million, which is reflected in the change in revenues above.~~

Gross Profit. GTB Segment gross profit increased $6.4 million, or 59.6%, to $17.2 million for the three months ended September 30, 2017 from $10.8 million for the three months ended September 30, 2016. Cost of revenues increased $19.6 million, or 23.0%, as a result of an increase in raw material and purchased component cost of $17.4 million, and an increase in wages and benefits of $1.7 million and overhead costs of $0.5 million. The increase in gross profit was primarily ~~the result of~~attributable to the increase in sales ~~volume offset by rising commodity prices, product launch costs and near term costs associated with the sharp acceleration~~volume. Included in ~~North American truck build. The third quarter of 2017 and 2016 results included $0.4 million and $1.3 million, respectively, in facility restructuring and other related costs. As a percentage~~gross profit is cost of revenues, ~~gross profit margin was 14.1% for the three months ended September 30, 2017 compared to 11.2% for the three months ended September 30, 2016.~~

~~Selling, General and Administrative Expenses.~~ ~~GTB Segment selling, general and administrative expenses~~which increased ~~$0.2~~$13.9 million, or ~~3.8%, to $5.5 million for the three months ended September 30, 2017 from $5.3 million for the three months ended September 30, 2016.~~

~~Global Construction and Agriculture Segment Results~~

Three Months Ended September 30,
(amounts in thousands)
2017 2016
Revenues $ 79,557
100.0 % $ 59,375
100.0 %
Gross Profit $ 8,316
10.5 % $ 8,525
14.4 %
Depreciation and Amortization Expense $ 1,117
1.4 % $ 1,464
2.5 %
Selling, General & Administrative Expenses $ 4,160
5.2 % $ 4,588
7.7 %
Operating Income $ 4,121
5.2 % $ 3,901
6.6 %

~~Revenues.~~ GCA Segment revenues increased $20.2 million, or 34.0%, to $79.6 million for the three months ended September 30, 2017 from $59.4 million for the three months ended September 30, 2016. The increase in GCA Segment revenues resulted from:

~~a $14.0 million, or 48.6%, increase in OEM construction equipment revenues; and~~

~~a $6.2 million, or 20.2%, increase in other revenues.~~

~~GCA Segment revenues were favorably impacted by foreign currency exchange translation of $1.4 million, which is reflected in the change in revenues above.~~

~~Gross Profit.~~ GCA Segment gross profit decreased $0.2 million, or 2.5%, to $8.3 million for the three months ended September 30, 2017 from $8.5 million for the three months ended September 30, 2016. Cost of revenues increased $20.4 million, or 40.1%10.9%, as a result of an increase in raw material and purchased component costs of ~~$15.6~~$10.1 million, or 11.8%, and an increase in ~~wages and benefits~~

~~Table of Contents~~

~~of $2.5 million~~labor and overhead ~~costs~~expenses of $2.3 million. The decrease in gross profit is primarily attributable to the NA Footprint Adjustment and to rising commodity prices. The adverse impact of the NA Footprint Adjustment on the third quarter 2017 results was approximately $2 million; we expect the impact in the second half of the year to be at the low end of the previously disclosed range of $3 million to $6 million. Third quarter 2016 results include $0.2 million of costs associated with our ongoing restructuring initiatives. As a percentage of revenues, gross profit margin decreased to 10.5% for the three months ended September 30, 2017 from 14.4% for the three months ended September 30, 2016.

~~Selling, General and Administrative Expenses.~~ ~~GCA Segment selling, general and administrative expenses decreased $0.4~~$3.8 million, or ~~9.3%, to $4.2 million for the three months ended September 30, 2017 from $4.6 million for the three months ended September 30, 2016.~~9.1%.

~~Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016~~

~~Consolidated Results~~

Nine Months Ended September 30,
(in thousands)
2017 2016
Revenues $ 566,893
100.0 % $ 512,147
100.0 %
Cost of Revenues 497,539
87.8
443,192
86.5
Gross Profit 69,354
12.2
68,955
13.5
Selling, General and Administrative Expenses 45,557
8.0
46,502
9.1
Amortization Expense 990
0.2
978
0.2
Operating Income 22,807
4.0
21,475
4.2
Interest and Other Expense 14,786
2.6
14,583
2.8
Income (Loss) Before Provision for Income Taxes 8,021
1.4
6,892
1.3
Provision (Benefit) for Income Taxes 2,498
0.4
461
0.1
Net Income $ 5,523
1.0 % $ 6,431
1.3 %

~~Revenues.~~ ~~On a consolidated basis, revenues~~ ~~increased$54.7 million, or~~ ~~10.7%, to~~ ~~$566.9 million~~ ~~for~~ ~~nine months ended September 30, 2017~~ ~~from~~ ~~$512.1 million~~ ~~for~~ ~~nine months ended September 30, 2016. The~~ ~~increase~~ ~~in the consolidated revenue resulted from:~~

~~a $26.9 million, or 27.0%, increase in construction revenues;~~

~~a $21.6 million, or 10.0%, increase in OEM North American MD/HD Truck revenues; and~~

~~a $6.2 million, or 3.2%, increase in other revenues.~~

~~Revenues were adversely impacted by foreign currency exchange translation of $3.2 million, which is reflected in the change in revenue above.~~

~~Gross Profit~~. Gross profit increased $0.4 million, or 0.6%, to $69.4 million for the nine months ended September 30, 2017 compared to $69.0 million for the nine months ended September 30, 2016. Cost of revenue increased $54.3 million, or 12.3%, resulting from an increase in raw material and purchased component costs of $35.0 million, an increase in wages and benefits of $7.1 million and an increase in overhead costs of $12.2 million. The increase in gross profit is primarily attributable to an increase in sales volume partially offset by rising commodity prices, product launch costs and near term costs associated with the sharp acceleration in North American truck build. Also adversely impacting cost of revenue is the impact of the NA Footprint Adjustment. The adverse impact of the NA Footprint Adjustment on the results for the nine months ended September 2017 was approximately $10 million; we expect the impact in the second half of the year to be at the low end of the previously disclosed range of $3 million to $6 million. Additionally, the nine months ended September 30, 2017 results included $2.3 million in charges relating to facility restructuring and other related costs compared to $2.2 million in the prior year period ended September 30, 2016. As a percentage of revenues, gross profit margin was ~~12.2%~~12.1% for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 compared to ~~13.5%~~9.2% for the ~~nine~~three months ended ~~September 30, 2016.~~March 31, 2022, driven by lower startup costs, improved manufacturing efficiencies, increased pricing to offset material cost inflation and freight costs.

Selling, General and Administrative Expenses. ~~Selling, general and administrative~~SG&A expenses decreased ~~$0.9 million, or 2.0%, to $45.6~~$0.5 million for the ~~nine~~three months ended ~~September 30, 2017 from $46.5 million for~~March 31, 2023 compared to the ~~nine~~three months ended ~~September 30, 2016. The decline in selling, general and administrative expenses reflects a continuing focus on cost discipline, partially offset by $2.4~~

March 31, 2022, primarily due to overhead reductions.

Table of Contents

Electrical Systems Segment Results

~~million of settlement costs~~Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

The table below sets forth certain Electrical Systems Segment operating data for the ~~nine~~three months ended ~~September 30, 2017 associated with the settlement of contract litigation. In addition, the nine months ended September 30, 2016 included a $0.6 million impairment of an asset held for sale.~~March 31 (dollars are in thousands):

~~Interest~~


	2023		2022		$ Change		% Change
Revenues	$	54,749	$	39,876	$	14,873	37.3%
Gross profit	8,297		3,401		4,896		144.0
Selling, general & administrative expenses	2,227		1,640		587		35.8
Operating income	6,070		1,761		4,309		244.7

Revenues. The increase in Electrical Systems Segment revenues primarily resulted from volume, increased pricing to offset material cost pass-through and ~~Other Expense. Interest associated with our debt and other expense~~new business.

Gross Profit. The increase in gross profit was $14.8 million and $14.6 million for the nine months ended September 30, 2017 and 2016, respectively. Included in interest expense for the nine months ended September 30, 2017 is a non-cash write-off of deferred financing fees of $1.6 million and a prepayment charge for interest paid of $1.5 million paid to bondholders during the 30-day notification period associated with the redemption of the 7.875% notes completed during the second quarter of 2017. These expenses were partially offset by lower interest expense resulting from less outstanding debt.

~~Provision for Income Taxes.~~ ~~An income tax provision of $2.5 million and $0.5 million was recorded for the nine months ended September 30, 2017 and 2016, respectively. The period over period change in the tax provision resulted~~ primarily from the mix of income between our U.S. and non-U.S locations and earnings or losses in certain foreign jurisdictions which are no longer subject to valuation allowances in the period ended September 30, 2017.

~~Net Income.~~ ~~Net income~~ attributable to the ~~Company's stockholders was $5.5 million and $6.4 million for the nine months ended September 30, 2017 and 2016, respectively. The decrease~~increase in ~~net income~~sales volume. Included in gross profit is ~~attributed to the factors noted above.~~

~~SEGMENT RESULTS~~

~~Global Truck and Bus Segment Results~~

Nine Months Ended September 30,
(amounts in thousands)
2017 2016
Revenues $ 344,048
100.0 % $ 324,666
100.0 %
Gross Profit $ 48,288
14.0 % $ 43,019
13.3 %
Depreciation and Amortization Expense $ 5,850
1.7 % $ 6,438
2.0 %
Selling, General & Administrative Expenses
$ 16,688
4.9 % $ 17,466
5.4 %
Operating Income $ 30,716
8.9 % $ 24,679
7.6 %

~~Revenues.~~ ~~GTB Segment~~cost of revenues, which increased ~~$19.4~~$10.0 million, or ~~6.0%, to $344.0 million for the nine months ended September 30, 2017 from $324.7 million for the nine months ended September 30, 2016. The increase in GTB Segment revenues is resulted from:~~

~~a $15.2 million, or 7.4%, increase in OEM North American MD/HD Truck revenues; and~~

~~a $4.2 million, or 3.5%, increase in other revenues.~~

~~GTB Segment revenues were favorably impacted by foreign currency exchange translation of $0.4 million, which is reflected in the change in revenues above.~~

~~Gross Profit.~~ GTB Segment gross profit increased $5.3 million, or 12.2%, to $48.3 million for the nine months ended September 30, 2017 from $43.0 million for the nine months ended September 30, 2016. Cost of revenues increased $14.1 million, or 5.0%27.4%, as a result of an increase in raw material and purchased component costs of ~~$12.1~~$5.2 million, or 25.8%, and an increase in ~~wages~~labor and ~~benefits~~overhead expenses of ~~$2.3~~$4.8 million, and a decrease in overhead cost of $0.3 million. The increase in gross profit was primarily the result of the sharp acceleration in sales volume partially offset by rising commodity prices, product launch costs and near term costs associated with the in North American truck build. Additionally, each of the nine months ended September 30, 2017 and 2016 results included $1.3 million of charges relating to facility restructuring and other related costs. or 29.4%.

As a percentage of revenues, gross profit margin was ~~14.0%~~15.2% for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 compared to ~~13.3%~~8.5% for the ~~nine~~three months ended ~~September 30, 2016.~~March 31, 2022, driven by volume, increased pricing and manufacturing efficiencies.

Selling, General and Administrative ~~Expenses.~~ ~~GTB Segment selling, general and administrative~~Expenses. SG&A expenses ~~decreased $0.8 million, or 4.5%, to $16.7~~increased $0.6 million for the ~~nine~~three months ended ~~September 30, 2017 from $17.5 million~~March 31, 2023 compared to the three months ended March 31, 2022, consistent with the prior year amount on a percent of sales basis.

Aftermarket & Accessories Segment Results

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

The table below sets forth certain Aftermarket & Accessories Segment operating data for the ~~nine~~three months ended ~~September 30, 2016.~~March 31 (dollars are in thousands):


	2023		2022		$ Change		% Change
Revenues	$	37,629	$	30,215	$	7,414	24.5%
Gross profit	7,227		4,086		3,141		76.9
Selling, general & administrative expenses	1,650		1,465		185		12.6
Operating income	5,577		2,621		2,956		112.8

~~Table of Contents~~

~~Global Construction and Agriculture Segment Results~~

Nine Months Ended September 30,
(amounts in thousands)
2017 2016
Revenues $ 231,244
100.0 % $ 193,669
100.0 %
Gross Profit $ 22,099
9.6 % $ 27,100
14.0 %
Depreciation and Amortization Expense $ 3,530
1.5 % $ 4,321
2.2 %
Selling, General & Administrative Expenses $ 12,619
5.5 % $ 13,859
7.2 %
Operating Income $ 9,374
4.1 % $ 13,137
6.8 %

Revenues. ~~GCA Segment revenues increased $37.6 million, or 19.4%, to $231.2 million for the nine months ended September 30, 2017 from $193.7 million for the nine months ended September 30, 2016.~~ The increase in ~~GCA~~Aftermarket & Accessories Segment revenues primarily resulted from increased sales volume and increased pricing to offset material cost pass-through.

Gross Profit. The increase in gross profit is ~~resulted from:~~

~~a $24.8~~primarily attributable to the increase in sales volume. Included in gross profit is cost of revenues, which increased $4.3 million, or ~~26.5%, increase in OEM construction revenues; and~~

~~a $12.8 million, or 12.8%, increase in other revenues.~~

~~GCA Segment revenues were adversely impacted by foreign currency exchange translation of $4.1 million, which is reflected in the change in revenue above.~~

~~Gross Profit.~~ GCA Segment gross profit decreased $5.0 million, or 18.5%, to $22.1 million for nine months ended September 30, 2017 from $27.1 million for the nine months ended September 30, 2016. Cost of revenues increased $42.6 million, or 25.6%16.4%, as a result of an increase in raw material and purchased component costs of ~~$25.3~~$3.0 million, or 17.8%, and an increase in ~~wages~~labor and ~~benefits~~overhead expenses of ~~$4.8~~$1.3 million, or 14.0%.

As a percentage of revenues, gross profit margin was 19.2% for the three months ended March 31, 2023 compared to 13.5% for the three months ended March 31, 2022. This was primarily due to increased pricing offsetting moderating cost inflation.

Selling, General and Administrative Expenses. SG&A expenses increased $0.2 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022.

Table of Contents

Industrial Automation Segment Results

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

The table below sets forth certain Industrial Automation Segment operating data for the three months ended March 31 (dollars are in ~~overhead costs of $12.5 million.~~ thousands):


	2023		2022		$ Change		% Change
Revenues	$	9,747	$	34,126	$	(24,379)	(71.4)%
Gross profit	214		4,991		(4,777)		(95.7)
Selling, general & administrative expenses	1,076		1,324		(248)		(18.7)
Operating income (loss)	(862)		3,667		(4,529)		NM 1

1.Not meaningful

Revenues. The modest decrease in Industrial Automation Segment revenues primarily resulted from lower sales volume due to decreased customer demand which was commensurate with market contraction.

Gross Profit. The decrease in gross profit is primarily attributable to ~~the NA Footprint Adjustment~~lower sales volume. Included in gross profit is cost of revenues, which decreased $19.6 million, or 67.3%, as a result of a decrease in raw material and ~~to rising commodity prices. The adverse impact~~purchased component costs of ~~the NA Footprint Adjustment on the results for the nine months ended September 30, 2017 was approximately $10 million; we expect the impact~~$15.8 million, or 69.8%, and a decrease in ~~the second half~~labor and overhead expenses of ~~the year to be at the low end of the previously disclosed range of $3~~$3.8 million, to $6 million. Additionally, the nine months ended September 30, 2017 and 2016 results included $1.0 million and $0.5 million, respectively, in charges relating to facility restructuring and other related costs or 58.6%.

As a percentage of revenues, gross profit margin ~~decreased to 9.6%~~was 2.2% for the ~~nine~~three months ended ~~September 30, 2017 from 14.0%~~March 31, 2023 compared to 14.6% for the ~~nine~~three months ended ~~September 30, 2016.~~March 31, 2022 due to volume reduction and restructuring expenses.

Selling, General and Administrative ~~Expenses.~~ ~~GCA Segment selling, general and administrative~~Expenses. SG&A expenses decreased ~~$1.2 million, or 8.9%, to $12.6~~$0.2 million for the ~~nine~~three months ended ~~September 30, 2017 from $13.9 million for~~March 31, 2023 compared to the ~~nine~~three months ended ~~September 30, 2016 reflecting a continuing focus on cost discipline.~~March 31, 2022, primarily driven by overhead reduction.

Liquidity and Capital Resources

~~Cash Flows~~

As of March 31, 2023, the Company had total liquidity of $188.0 million, including $41.5 million of cash and $146.5 million of availability from its US and China credit facilities.

Our primary sources of liquidity ~~during the nine months ended September 30, 2017~~as of March 31, 2023 were cash reserves and availability under our ~~revolving~~ credit ~~facility.~~facilities. We believe that these sources of liquidity will provide adequate funds for our working capital needs, ~~planned~~ capital expenditures and ~~servicing of our~~ debt ~~through~~service throughout the next twelve months. However, no assurance can be given that this will be the case. ~~We did not borrow under our revolving credit facility during the nine months ended September 30, 2017.~~

~~For the nine months ended September 30, 2017, net~~As of March 31, 2023, cash ~~used in operations~~of $41.5 million was $2.3 million compared to net cash provided by operations of $50.2 million for the nine months ended September 30, 2016. Net cash used in operations for the nine months ended September 30, 2017 is due primarily to an increase in investment in working capital associated with the increased revenues and changes in other operating activities.

For the nine months ended September 30, 2017, net cash used for investing activities was $10.0 million compared to $5.0 million for the nine months ended September 30, 2016. In 2017, we expect capital expenditures to be at the low end of the previously disclosed range of $14 million to $16 million, of which we have incurred approximately $11 million through September 30, 2017.

For the nine months ended September 30, 2017, net cash used for financing activities was $70.4 million compared to no financing activities for the nine months ended September 30, 2016. Net cash used in financing activities for the nine months ended September 30, 2017 is attributable to the debt refinancing completed in the second quarter of 2017.

~~Table of Contents~~

~~As of September 30, 2017, cash~~ held by foreign subsidiaries. The Company had a $1.3 million deferred tax liability as of March 31, 2023 for the expected future income tax implications of repatriating cash from the foreign subsidiaries was $38.2 million. If we were to repatriate any portion of these funds to the U.S., we would accrue and pay the appropriate withholding and income taxes on amounts repatriated. Our expectation is to use the cash to fund the growth of our foreign operations.for which no indefinite reinvestment assertion has been made.

~~Debt and Credit Facilities~~

~~The debt and credit facilities described in Note 11 of the "Notes to Consolidated Financial Statements" are incorporated in this section by reference.~~

Covenants and Liquidity

On May 12, 2022, the Company entered into an amendment to increase its existing senior secured credit facilities to $325 million from $275 million consisting of a $175 million Term Loan A and a $150 million Revolving Credit Facility. The amendment provides the Company with additional capital flexibility to execute upon its transformation and growth initiatives. As part of the amended terms of the agreement, the maturity date of the Senior Secured Credit Facilities has been extended by twelve months to May 12, 2027, the interest rate decreased by 50 bps at various leverage ratios based on SOFR, and the maximum consolidated total leverage ratio increased from 3.25x to 3.75x until December 31, 2022 with a quarterly step down of 25 bps to 3.00x leverage by September 30, 2023 and the maximum consolidated total leverage ratio will remain at this level thereafter. Further, separate from the Company’s annual $35 million capital spending cap, a one-time $45 million capital project basket was included in the amendment. All other key provisions, including the $75 million accordion, acquisition holiday, and other baskets remain unchanged.

Our ability to comply with the covenants in the ~~TLS Agreement and the Third ARLS~~Credit Agreement, as discussed in ~~note 11,~~Note 4, Debt, may be affected ~~in the future~~ by economic or business conditions beyond our control. Based on our current forecast, we believe that we will be able to maintain compliance with the financial maintenance ~~covenant~~covenants and the fixed charge coverage ratio covenant ~~if applicable,~~ and other covenants in the ~~TLS Agreement and the Third ARLS~~

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Credit Agreement for the next twelve months; however, no assurances can be given that we will be able to comply. We base our forecasts on historical experience, industry forecasts and ~~various~~ other assumptions that we believe are reasonable under the circumstances. If actual results are substantially different than our current forecast, ~~or if~~ we domay not ~~realize a significant portion of our planned cost savings or sustain sufficient cash or borrowing availability, we could~~ be ~~required~~able to comply with our financial ~~covenants,~~covenants.

Sources and ~~there~~Uses of Cash


	March 31, 2023		March 31, 2022
	(In thousands)
Net cash (used in) provided by operating activities	$	58	$	(21,398)
Net cash used in investing activities	(3,321)		(3,590)
Net cash provided by financing activities	12,377		28,406
Effect of currency exchange rate changes on cash	545		(168)
Net increase in cash	$	9,659	$	3,250

Operating activities. For the three months ended March 31, 2023, net cash provided by operating activities was $0.1 million compared to net cash used in operating activities of $21.4 million for the three months ended March 31, 2022. Net cash provided by operating activities is ~~no assurance that~~primarily attributable to a smaller increase in working capital for the three months ended March 31, 2023 as compared to the three months ended March 31, 2022.

Investing activities. For the three months ended March 31, 2023, net cash used in investing activities was mainly due to capital expenditures and was $3.3 million compared to $3.6 million for the three months ended March 31, 2022. In 2023, we ~~would~~expect capital expenditures to be ~~able to comply with such financial covenants. If we do not comply with the financial and other covenants~~ in the ~~TLS Agreement and~~range of $20 million to $25 million.

Financing activities. For the ~~Third ARLS Agreement, and we are unable~~three months ended March 31, 2023, net cash provided by financing activities was $12.4 million compared to ~~obtain necessary waivers or amendments from~~$28.4 million for the ~~lenders, we would be in default of~~three months ended March 31, 2022. Net cash provided by financing activities for the ~~TLS Agreement and be precluded from borrowing~~three months ended March 31, 2023 is attributable to borrowings under the ~~Third ARLS Agreement, which could have~~revolving credit facility to fund the working capital increase.

Debt and Credit Facilities

The debt and credit facilities descriptions in Note 4, Debt are incorporated in this section by reference.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). For a ~~material adverse effect on~~comprehensive discussion of our ~~business,~~significant accounting policies, see "Note 1. Significant Accounting Policies", to our consolidated financial statements in Item 8 in our 2022 Form 10-K.

Critical accounting estimates are those that are most important to the portrayal of our financial condition and ~~liquidity. If we are unable to borrow under~~results. These estimates require management's most difficult, subjective, or complex judgments, often as a result of the ~~Third ARLS Agreement, we will~~ need to ~~meet~~estimate matters that are inherently uncertain. We review the development, selection, and disclosure of our ~~capital requirements using other sources and alternative sources of liquidity may not be available on acceptable terms. In addition, if we do not comply~~critical accounting estimates with the ~~financial~~Audit Committee of our board of directors. For information about critical accounting estimates, see Critical Accounting Estimates in "Item 7. Management's Discussion and ~~other covenants~~Analysis of Financial Condition and Results of Operations" in ~~the TLS Agreement and the Third ARLS Agreement, the lenders could declare an event of default under the TLS Agreement and the Third ARLS Agreement, and~~ our ~~indebtedness thereunder could be declared immediately due and payable. The TLS Agreement and the Third ARLS Agreement contain cross default provisions. Any of these events would~~2022 Form 10-K. At March 31, 2023, there have abeen no material ~~adverse effect on~~changes to our ~~business, financial condition and liquidity.~~critical accounting estimates from those disclosed in our 2022 Form 10-K.

We believe that cash on hand, cash flow from operating activities together with available borrowings under the Third ARLS Agreement will be sufficient to fund anticipated working capital, capital spending, certain strategic initiatives, and debt service requirements for at least the next 12 months. Additionally, the Company has the ability under the Term Loan Facility to increase borrowings by an additional $20 million, or more if certain total leverage ratio requirements are met. No assurance can be given, however, that this will be the case.

Forward-Looking Statements

~~All~~

This Quarter Report on Form 10-Q contains forward-looking statements ~~other than~~within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. For this purpose, any statements contained herein that are not statements of historical fact, ~~included in this Form 10-Q,~~ including without limitation, ~~the~~certain statements under ~~“Management’s~~“Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” ~~are,~~and located elsewhere herein regarding industry outlook, the Company’s expectations for future periods with respect to its plans to improve financial results, the future of the Company’s end markets, including the short-term and long-term impact of the COVID-19 pandemic on our business and the global supply chain, changes in the Class 8 and Class 5-7 North America truck build rates, performance of the global construction equipment business, the Company’s prospects in the wire harness, warehouse automation and electric

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vehicle markets, the Company’s initiatives to address customer needs, organic growth, the Company’s strategic plans and plans to focus on certain segments, competition faced by the Company, volatility in and disruption to the global economic environment, including inflation and labor shortages, financial covenant compliance, anticipated effects of acquisitions, production of new products, plans for capital expenditures and our results of operations or financial position and liquidity, may be deemed to be forward-looking ~~statements which speak only as of~~statements. Without limiting the ~~date the statements were made. When used in this Form 10-Q,~~foregoing, the words ~~“believe,” “anticipate,” “plan,” “expect,” “intend,” “will,” “should,” “could,” “would,” “project,” “continue,” “likely,”~~“believe”, “anticipate”, “plan”, “expect”, “intend”, “will”, “should”, “could”, “would”, “project”, “continue”, “likely”, and similar expressions, as they relate to us, are intended to identify forward-looking statements. The important factors discussed in “Item 1A - Risk Factors”, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Such forward-looking statements ~~may include forward-looking statements about our~~represent management’s current expectations ~~for future periods with respect to our plans to improve financial results~~ and enhance the Company, the future of the Company’s end markets, Class 8 North America build rates, performance of the global construction equipment business, expected cost savings, enhanced shareholder value and other economic benefits of the Company’s initiatives to address customer needs, organic growth, the Company’s economic growth plans to focus on certain segments and markets and the Company’s financial position or other financial information. These statements are ~~based on certain assumptions~~inherently uncertain. Investors are warned that the Company has made in light of its experience in the industry as well as its perspective on historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Actualactual results may differ from management’s expectations. Additionally, various economic and competitive factors could cause actual results to differ materially from ~~the anticipated results because of certain risks and uncertainties,~~those discussed in such forward-looking statements, including, but not limited ~~to: (i) general economic or business conditions affecting the markets in~~to, factors which the Company serves; (ii) the Company's ability to develop or successfully introduce new products; (iii) risks associated with conducting business in foreign countries and currencies; (iv) increased competition in the heavy-duty truck, medium-duty truck, construction, aftermarket, military, bus, agriculture and other markets; (v) the Company’s failure to complete or successfully integrate strategic acquisitions; (vi) the impact of changes in governmental regulations on the Company's customers or on its business; (vii) the loss of business from a major customer or the discontinuation of particular commercial vehicle platforms; (viii) security breaches and other disruptions toare outside our information systems and our business; (ix) the Company’s ability to obtain future financing due to changes in the lending markets or its financial position; (x) the Company’s ability to comply with the financial covenants in its revolving credit facility and term loan facility; (xi) fluctuation in interest rates relating to the Company's term loan facility and revolving credit facility; (xii) the Company’s ability to realize thecontrol.

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benefits of its cost reduction and strategic initiatives; (xiii) a material weakness in our internal control over financial reporting which could, if not remediated, result in material misstatements in our financial statements; (xiv) volatility and cyclicality in the commercial vehicle market adversely affecting us; (xv) the geographic profile of our taxable income and changes in valuation of our deferred tax assets and liabilities impacting our effective tax rate; (xvi) changes to domestic manufacturing initiatives impacting our effective tax rate related to products manufactured either in the United States or in international jurisdictions; (xvii) implementation of tax changes, by the United States or another international jurisdiction, related to products manufactured in one or more jurisdictions whereAny forward-looking statement that we do business; and (xviii) various other risks as outlined under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for fiscal year ending December 31, 2016 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2017. There can be no assurance that statements mademake in this ~~press release relating to future events will be achieved. The Company undertakes~~report speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statement or ~~revise forward-looking~~to publicly announce the results of any revision to any of those statements to reflect ~~changed assumptions, the occurrence of unanticipated~~future events or ~~changes~~developments. Comparisons of results for current and any prior periods are not intended to express any future ~~operating results over time. All subsequent written~~trends or indications of future performance, unless specifically expressed as such, and ~~oral forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by such cautionary statements.~~should only be viewed as historical data.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~We believe~~For information relating to quantitative and qualitative disclosures about market risk, see the discussion under "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" in our 2022 Form 10-K. As of March 31, 2023, there ~~are~~have been no material changes in ~~the quantitative and qualitative~~our exposure to market ~~risks since~~risk from those disclosed in our ~~2016~~2022 Form 10-K.

ITEM 4 – CONTROLS AND PROCEDURES

Disclosure Controls and Procedures. Our senior management is responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. ~~Disclosure~~

We evaluated, the effectiveness of our disclosure controls and procedures ~~include, without limitation,~~as of March 31, 2023. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures ~~designed~~were effective as of March 31, 2023 to ~~ensure~~provide reasonable assurance that information required to be disclosed ~~by an issuer~~ in ~~the~~our reports ~~that it files or submits~~ under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to ~~the issuer’s~~ management ~~including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions,~~ as appropriate to allow timely decisions regarding required disclosure.

We have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report with the participation of our Chief Executive Officer and Chief Financial Officer, as well as other key members of our management. Based upon the disclosure controls evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of September 30, 2017 our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting.There were no changes during the quarter ended March 31, 2023 in our internal control over financial reporting ~~during the three months ended September 30, 2017~~ that have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of ~~Controls.~~Controls. Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of error or mistake. Controls also can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

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PART II. OTHER INFORMATION

~~Item 1.~~ITEM 1 Legal ~~Proceedings:~~Proceedings

We are subject to various legal proceedings and claims arising in the ordinary course of business, including, but not limited to, ~~workers’ compensation~~product liability claims, ~~OSHA investigations, employment disputes, unfair labor practice charges,~~ customer and supplier disputes, service provider disputes, ~~product liability~~examinations by taxing authorities, employment disputes, workers’ compensation claims, unfair labor practice charges, OSHA investigations, intellectual property disputes and environmental claims arising out of the conduct of our ~~businesses and examinations by the Internal Revenue Service.~~businesses. Based upon the information available to management and discussions with legal counsel, it is the opinion of management that the ultimate outcome of the various legal actions and claims that are incidental to our business are not expected to have a material adverse impact on the consolidated financial position, results of operations, stockholders' equity or cash flows; however, such matters are subject to many uncertainties and the outcomes of individual matters are not predictable with any degree of assurance.

~~Item 1A.~~ITEM 1A Risk ~~Factors:~~Factors

~~There have been no material changes to our~~You should carefully consider the information in this Form 10-Q, the risk factors ~~as disclosed~~discussed in ~~Item 1A.~~ "Risk Factors" and other risks discussed in our ~~2016~~2022 Form 10-K and our ~~Quarterly Report on Form 10-Q for~~filings with the ~~quarter ended September 30, 2017.~~SEC since December 31, 2022. These risks could materially and adversely affect our results of operations, financial condition, liquidity and cash flows. Our business also could be affected by risks that we are not presently aware of or that we currently consider immaterial to our operations.

~~Item 2.~~ITEM 2 Unregistered Sales of Equity Securities and Use of ~~Proceeds.~~Proceeds

We did not sell any equity securities during the three months ended ~~September 30, 2017~~March 31, 2023 that were not registered under the Securities Act of 1933, as amended. We did not repurchase any equity securities during the three months ended March 31, 2023.

~~Item 3.~~ITEM 3 Defaults Upon Senior ~~Securities.~~Securities

Not applicable.

~~Item 4.~~ITEM 4 Mine Safety ~~Disclosures.~~Disclosures

Not applicable.

~~Item 5.~~ITEM 5 Other ~~Information.~~Information

Not applicable.

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~~Item 6. Exhibits:~~

ITEM 6 Exhibits



~~10.1~~3.1		~~Contract for Purchase~~Amended and ~~Sale~~Restated Bylaws of ~~Real Property~~Commercial Vehicle Group, Inc., effective February 1, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on February 2, 2023).
10.1*		Restricted Stock Agreement between ~~Mayflower~~Harold C. Bevis and Commercial Vehicle ~~Systems, LLC and Warren Distribution,~~Group, Inc. dated ~~July 24, 2017.~~as of March 31, 2023
10.2*		Performance Award Agreement (ROIC cash) between Harold C. Bevis and Commercial Vehicle Group, Inc. dated as of March 31, 2023.
10.3*		Performance Award Agreement (ROIC stock) between Harold C. Bevis and Commercial Vehicle Group, Inc. dated as of March 31, 2023.
10.4*		Performance Award Agreement (TSR cash) between Harold C. Bevis and Commercial Vehicle Group, Inc. dated as of March 31, 2023.
10.5*		Performance Award Agreement (TSR stock) between Harold C. Bevis and Commercial Vehicle Group, Inc. dated as of March 31, 2023.
10.6*		Form of Restricted Stock Agreement pursuant to Commercial Vehicle Group, Inc. 2020 Equity Incentive Plan.
10.7*		Form of Performance Award Agreement (ROIC stock to cash) pursuant to Commercial Vehicle Group, Inc. 2020 Equity Incentive Plan.
10.8*		Form of Performance Award Agreement (TSR stock to cash) pursuant to Commercial Vehicle Group, Inc. 2020 Equity Incentive Plan.
31.1		302 Certification by Harold C. Bevis, President and Chief Executive Officer.
31.2		302 Certification by ~~Patrick E. Miller,~~Andy Cheung, Executive Vice President and ~~Chief Executive Officer.~~
~~31.2~~	~~302 Certification by C. Timothy Trenary,~~ Chief Financial Officer.
32.1		Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101		Interactive Data Files


*			Management contract or compensatory arrangement.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

COMMERCIAL VEHICLE GROUP, INC.

Date:

May 2, 2023

~~COMMERCIAL VEHICLE GROUP, INC.~~

~~Date:~~

~~November 6, 2017~~

~~By:~~By

/s/ ~~C. Timothy Trenary~~Andy Cheung

~~C. Timothy Trenary~~Chung Kin Cheung ("Andy Cheung")

Chief Financial Officer

(Principal Financial Officer)

Date:

~~November 6, 2017~~May 2, 2023

~~By:~~By

/s/ ~~Stacie N. Fleming~~Angela M. O'Leary

~~Stacie N. Fleming~~Angela M. O'Leary

Chief Accounting Officer

(Principal Accounting Officer)



	September 30, 2017			December 31, 2016
	(Unaudited)			(Unaudited)
	(In thousands, except share and per share amounts)
Assets
Current Assets:
Cash	$	50,232		$	130,160
Accounts receivable, net of allowances of $4,418 and $3,881, respectively	128,282			97,793
Inventories	88,442			71,054
Other current assets	14,935			9,941
Total current assets	281,891			308,948
Property, plant and equipment, net of accumulated depreciation of $144,288 and $137,879, respectively	64,980			66,041
Goodwill	7,884			7,703
Intangible assets, net of accumulated amortization of $8,125 and $7,048, respectively	14,748			15,511
Deferred income taxes	29,044			28,587
Other assets, net	2,240			1,975
Total assets	$	400,787		$	428,765
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	91,713		$	60,556
Accrued liabilities and other	39,778			45,699
Current portion of long-term debt	3,184			—
Total current liabilities	134,675			106,255
Long-term debt	164,565			233,154
Pension and other post-retirement benefits	19,973			18,938
Other long-term liabilities	3,140			2,728
Total liabilities	322,353			361,075
Stockholders’ Equity:
Preferred stock, $0.01 par value (5,000,000 shares authorized; no shares issued and outstanding)	—			—
Common stock, $0.01 par value (60,000,000 shares authorized; 29,876,953 and 29,871,354 shares issued and outstanding, respectively)	299			299
Treasury stock, at cost: 1,014,413 shares, as of September 2017 and December 2016	(7,753		)	(7,753		)
Additional paid-in capital	239,209			237,367
Retained Deficit	(107,855		)	(113,378		)
Accumulated other comprehensive loss	(45,466		)	(48,845		)
Total stockholders’ equity	78,434			67,690
Total liabilities and stockholders’ equity	$	400,787		$	428,765



		Three Months Ended September 30,				Nine Months Ended September 30,
		2017	2016			2017		2016
		(Unaudited) (In thousands, except per share amounts)				(Unaudited) (In thousands, except per share amounts)
Revenues	$	198,349	$	153,604		$	566,893	$	512,147
Cost of Revenues		173,199	134,685			497,539		443,192
Gross Profit		25,150	18,919			69,354		68,955
Selling, General and Administrative Expenses		14,136	14,126			45,557		46,502
Amortization Expense		332	327			990		978
Operating Income		10,682	4,466			22,807		21,475
Interest and Other Expense		3,482	4,799			14,786		14,583
Income (Loss) Before Provision for Income Taxes		7,200	(333		)	8,021		6,892
Provision (Benefit) for Income Taxes		2,437	(1,480		)	2,498		461
Net Income	$	4,763	$	1,147		$	5,523	$	6,431
Earnings per Common Share:
Basic and Diluted	$	0.16	$	0.04		$	0.18	$	0.22
Weighted Average Shares Outstanding:
Basic		29,875	29,449			29,874		29,449
Diluted		30,487	30,101			30,379		29,783



Grant	Shares (in thousands)	Vesting Schedule	Unearned Compensation (in millions)		Remaining Periods (in months)
October 2014	506	3 equal annual installments commencing on October 20, 2015	$	—	1
April 2015	27	3 equal annual installments commencing on October 20, 2015	$	—	1
October 2015	596	3 equal annual installments commencing on October 20, 2016	$	0.6	13
January/March 2016	63	3 equal annual installments commencing on October 20, 2016	$	—	13
October 2016	411	3 equal annual installments commencing on October 20, 2017	$	1.4	25
October 2016	98	fully vests as of October 20, 2017	$	0.1	1
June 2017	6	3 equal annual installments commencing on October 20, 2017	$	—	25



Grant Date	Vesting Schedule	Grant Amount		Forfeitures/ Adjustments			Payments		Grant Value at September 30, 2017		Unrecognized Compensation		Remaining Periods (in Months) to Vesting
November 2014	October 2017	$	2,087	$	(1,592	)	$	—	$	495	—		1
November 2015	October 2018	1,487		(197		)	—		1,290		430		13
November 2016	October 2019	1,434		(37		)	—		1,397		932		25
		$	5,008	$	(1,826	)	$	—	$	3,182	$	1,362



	September 30, 2017		December 31, 2016
Balance — Beginning	$	7,703	$	7,834
Currency translation adjustment	181		(131		)
Balance — Ending	$	7,884	$	7,703



Fiscal Year Ended December 31,	Estimated Amortization Expense
2017	$	1,321
2018	1,326
2019	1,326
2020	1,196
2021	1,196
2022	1,196



Balance — December 31, 2016	$	5,552
Provision for new warranty claims	1,532
Change in provision for preexisting warranty claims	98
Deduction for payments made	(3,452		)
Currency translation adjustment	93
Balance — September 30, 2017	$	3,823



Year Ending December 31,
2017	$	1,094
2018	4,375
2019	4,375
2020	4,375
2021	4,375
Thereafter	$	155,312



	September 30, 2017		December 31, 2016
7.875% senior secured notes due April 15, 2019	$	—	$	233,154
Term loan and security agreement (a)	$	167,749	$	—



Level	Average Daily Availability	Base Rate Loans		LIBOR Revolver Loans
III	≥ $24,000,000	0.50	%	1.50	%
II	> $12,000,000 but < $24,000,000	0.75	%	1.75	%
I	≤ $12,000,000	1.00	%	2.00	%



	Three Months Ended September 30, 2017
	Global Truck & Bus		Global Construction & Agriculture		Corporate/ Other			Total
Revenues
External Revenues	$	121,497	$	76,852	$	—		$	198,349
Intersegment Revenues	552		2,705		(3,257		)	—
Total Revenues	$	122,049	$	79,557	$	(3,257	)	$	198,349
Gross Profit	$	17,180	$	8,316	$	(346	)	$	25,150
Depreciation and Amortization Expense	$	1,838	$	1,117	$	673		$	3,628
Selling, General & Administrative Expenses	$	5,534	$	4,160	$	4,442		$	14,136
Operating Income	$	11,350	$	4,121	$	(4,789	)	$	10,682
Capital and Other Items:
Capital Expenditures	$	1,097	$	1,195	$	476		$	2,768
Other Items ¹	$	373	$	15	$	—		$	388



	Three Months Ended September 30, 2016
	Global Truck & Bus		Global Construction & Agriculture		Corporate/ Other			Total
Revenues
External Revenues	$	95,728	$	57,876	$	—		$	153,604
Intersegment Revenues	308		1,499		(1,807		)	—
Total Revenues	$	96,036	$	59,375	$	(1,807	)	$	153,604
Gross Profit	$	10,765	$	8,525	$	(371	)	$	18,919
Depreciation and Amortization Expense	$	2,215	$	1,464	$	484		$	4,163
Selling, General & Administrative Expenses	$	5,329	$	4,588	$	4,209		$	14,126
Operating Income	$	5,144	$	3,901	$	(4,579	)	$	4,466
Capital and Other Items:
Capital Expenditures	$	1,592	$	664	$	290		$	2,546
Other Items¹	$	1,329	$	191	$	—		$	1,520



	Nine Months Ended September 30, 2017
	Global Truck & Bus		Global Construction & Agriculture		Corporate/ Other			Total
Revenues
External Revenues	$	342,964	$	223,929	$	—		$	566,893
Intersegment Revenues	1,084		7,315		(8,399		)	—
Total Revenues	$	344,048	$	231,244	$	(8,399	)	$	566,893
Gross Profit	$	48,288	$	22,099	$	(1,033	)	$	69,354
Depreciation and Amortization Expense	$	5,850	$	3,530	$	2,051		$	11,431
Selling, General & Administrative Expenses	$	16,688	$	12,619	$	16,250		$	45,557
Operating Income	$	30,716	$	9,374	$	(17,283	)	$	22,807
Capital and Other Items:
Capital Expenditures	$	5,145	$	3,671	$	1,795		$	10,611
Other Items ¹	$	1,341	$	998	$	2,377		$	4,716



	Nine Months Ended September 30, 2016
	Global Truck & Bus		Global Construction & Agriculture		Corporate/ Other			Total
Revenues
External Revenues	$	323,895	$	188,252	$	—		$	512,147
Intersegment Revenues	771		5,417		(6,188		)	—
Total Revenues	$	324,666	$	193,669	$	(6,188	)	$	512,147
Gross Profit	$	43,019	$	27,100	$	(1,164	)	$	68,955
Depreciation and Amortization Expense	$	6,438	$	4,321	$	1,812		$	12,571
Selling, General & Administrative Expenses	$	17,466	$	13,859	$	15,177		$	46,502
Operating Income	$	24,679	$	13,137	$	(16,341	)	$	21,475
Capital and Other Items:
Capital Expenditures	$	4,039	$	2,881	$	867		$	7,787
Other Items¹	$	1,704	$	512	$	688		$	2,904



	Asset Derivatives
	September 30, 2017			December 31, 2016
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign exchange contracts	Other current assets	$	395	Other current assets	$	142
Interest rate swap contract¹	Other current assets	$	1	Other current assets	$	—
Interest rate swap contract¹	Other assets, net	$	301	Other assets, net	$	—



	Liability Derivatives
	September 30, 2017			December 31, 2016
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign exchange contracts	Accrued liabilities	$	22	Accrued liabilities	$	1,234
Interest rate swap contract¹	Accrued liabilities	$	494	Accrued liabilities	$	—
Interest rate swap contract¹	Other long-term liabilities	$	293	Other long-term liabilities	$	—



	Three Months Ended								Nine Months Ended
	September 30, 2017								September 30, 2017
	Before Tax Amount			Tax Expense		After Tax Amount			Before Tax Amount			Tax Expense		After Tax Amount
Retirement benefits adjustment	$	(763	)	$	217	$	(546	)	$	(2,481	)	$	651	$	(1,830	)
Cumulative translation adjustment	1,130			—		1,130			5,209			—		5,209
Total other comprehensive income	$	367		$	217	$	584		$	2,728		$	651	$	3,379



	Three Months Ended								Nine Months Ended
	September 30, 2016								September 30, 2016
	Before Tax Amount			Tax Expense		After Tax Amount			Before Tax Amount			Tax Expense		After Tax Amount
Retirement benefits adjustment	$	(893	)	$	228	$	(665	)	$	(2,478	)	$	779	$	(1,699	)
Cumulative translation adjustment	621			—		621			215			—		215
Total other comprehensive loss	$	(272	)	$	228	$	(44	)	$	(2,263	)	$	779	$	(1,484	)



	U.S. Pension Plans and Other Post-Retirement Benefit Plans						Non-U.S. Pension Plans
	Three Months Ended September 30,						Three Months Ended September 30,
	2017			2016			2017			2016
Service cost	$	33		$	32		$	—		$	—
Interest cost	449			469			289			338
Expected return on plan assets	(671		)	(678		)	(302		)	(375		)
Amortization of prior service cost	2			—			—			—
Recognized actuarial loss	89			107			122			52
Net (benefit) cost	$	(98	)	$	(70	)	$	109		$	15



	Total Project Expense											Expected Future Expense (Income)
	Total Project Expense				2015/2016		Current Quarter		2017 Year to Date			Expected Future Expense (Income)					Income Statement
(in millions)	Low		High		Expense		Expense (Income)					Low			High		Classification
Edgewood Wire Harness
Separation costs	$	0.3	$	0.3	$	0.3	$	—	$	—		$	—		$	—	Cost of revenues
Facility and other costs	0.1		0.1		0.1		—		—			—			—		Cost of revenues
Total	$	0.4	$	0.4	$	0.4	$	—	$	—		$	—		$	—
Piedmont Seating
Separation costs	$	0.6	$	0.6	$	0.6	$	—	$	—		$	—		$	—	Cost of revenues
Facility and other costs	0.4		0.4		0.4		—		—			—			—		Cost of revenues
Total	$	1.0	$	1.0	$	1.0	$	—	$	—		$	—		$	—
Monona Wire Harness
Separation costs	$	0.1	$	0.1	$	0.5	$	—	$	(0.4	)	$	—		$	—	Cost of revenues
Facility and other costs	1.9		2.3		0.1		—		1.4			0.4			0.8		Cost of revenues
Total	$	2.0	$	2.4	$	0.6	$	—	$	1.0		$	0.4		$	0.8
Shadyside Stamping
Separation costs	$	2.5	$	2.6	$	1.7	$	0.2	$	0.6		$	0.2		$	0.3	Cost of revenues
Facility and other costs	0.2		0.8		0.2		0.2		0.4			(0.4		)	0.2		Cost of revenues
Total	$	2.7	$	3.4	$	1.9	$	0.4	$	1.0		$	(0.2	)	$	0.5
Other Restructuring
Separation costs	$	0.1	$	0.1	$	0.1	$	—	$	—		$	—		$	—	Cost of revenues
Separation costs	0.3		0.3		0.3		—		—			—			—		Selling, general and administrative
Total	$	0.4	$	0.4	$	0.4	$	—	$	—		$	—		$	—
Total Restructuring	$	6.5	$	7.6	$	4.3	$	0.4	$	2.0		$	0.2		$	1.3



	2017
	Employee Costs			Facility Exit and Other Costs			Total
Balance - December 31, 2016	$	2,229		$	45		$	2,274
Provisions	212			1,801			2,013
Utilizations	(2,134		)	(1,317		)	(3,451		)
Balance - September 30, 2017	$	307		$	529		$	836

	2016
	Employee Costs			Facility Exit and Other Costs			Total
Balance - December 31, 2015	$	542		$	43		$	585
Provisions	1,721			568			2,289
Utilizations	(496		)	(588		)	(1,084		)
Balance - September 30, 2016	$	1,767		$	23		$	1,790



	Three Months Ended September 30,
	(amounts in thousands)
	2017				2016
Revenues	$	122,049	100.0	%	$	96,036	100.0	%
Gross Profit	$	17,180	14.1	%	$	10,765	11.2	%
Depreciation and Amortization Expense	$	1,838	1.5	%	$	2,215	2.3	%
Selling, General & Administrative Expenses	$	5,534	4.5	%	$	5,329	5.5	%
Operating Income	$	11,350	9.3	%	$	5,144	5.4	%