8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): May 4, 2017

Commercial Vehicle Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-34365	41-1990662
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)

7800 Walton Parkway, New Albany, Ohio	43054
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 614-289-5360

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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.	¨

Item 1.01. Entry into a Material Definitive Agreement.

As previously disclosed, on November 15, 2015, Bouchet & Co., a consulting firm, filed a lawsuit against the Company captioned Bouchet & Co. v. Commercial Vehicle Group, Inc., Case Number 1:15-CV-10333 in the United States District Court for the Northern District of Illinois, alleging two causes of actions. First, the plaintiff asserted a breach of contract claim, alleging that the Company breached an agreement signed on October 2, 2014 (the “Agreement”) and refused to pay plaintiff’s fees as set forth in the Agreement. In the breach of contract claim, the plaintiff sought compensatory damages in the amount of $2.5 million. Second, the plaintiff asserted a promissory fraud cause of action. Under this claim, the plaintiff alleged that the Company committed fraud by promising to pay a fee to the plaintiff that the Company had no intention of paying. In the promissory fraud claim, the plaintiff sought punitive damages, post judgment interest, and any other costs awarded by the Court. On October 24, 2016, the Court granted plaintiff’s motion for partial summary judgment on the breach of contract claim. Specifically, the Court held that the Company was liable for breach of contract, but reserved the issue of damages for the jury. The Court also denied the plaintiff’s motion for partial summary judgment on the promissory fraud claim, holding that liability on that claim would be a matter for the jury at trial.

On May 4, 2017, the parties reached a settlement agreement whereby the Company paid $3.3 million to the plaintiff in return for a dismissal of the lawsuit with prejudice and a complete release of any and all claims arising from the relationship giving rise to the claims.

Item 2.02. Results of Operations and Financial Condition.

On May 4, 2017, Commercial Vehicle Group, Inc. (the “Company”) issued the press release attached hereto as Exhibit 99.1 announcing earnings for the first quarter ended March 31, 2017.

The information, including exhibit 99.1 hereto, the registrant furnished in this report is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Registration statements or other documents filed with the Securities and Exchange Commission shall not incorporate this information by reference, except as otherwise expressly stated in such filing.

Item 8.01. Other Events.

The information set forth above in Item 1.01 is hereby incorporated by reference into this Item 8.01.

Item 9.01.    Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	First quarter ended March 31, 2017 earnings press release dated May 4, 2017.

SIGNATURES

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 hereunto duly authorized.

	COMMERCIAL VEHICLE GROUP, INC.
May 4, 2017	By:	/s/ C. Timothy Trenary
	Name:	C. Timothy Trenary
	Title:	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	First quarter ended March 31, 2017 earnings press release dated May 4, 2017.

EX-99.1

Exhibit 99.1

CONTACT: Terry Hammett, Investor Relations

Commercial Vehicle Group, Inc.

(614) 289-5384

FOR IMMEDIATE RELEASE

COMMERCIAL VEHICLE GROUP ANNOUNCES

FIRST QUARTER 2017 RESULTS

NEW ALBANY, OHIO, May 4, 2017 /PRNewswire/ – Commercial Vehicle Group, Inc. (the “Company”) (Nasdaq: CVGI) today reported financial results for the first quarter ended March 31, 2017.

	First Quarter
	2017		2016
($ in millions except EPS)	GAAP	Non-GAAP	GAAP	Non-GAAP
Revenues	$173.4	$173.4	$180.3	$180.3
Operating Income	$4.6	$8.0	$8.6	$9.5
Net Income	$0.6	$2.5	$2.6	$3.1
Basic and Diluted EPS	$0.02	$0.08	$0.09	$0.10
(See Appendix A for Reconciliation of GAAP to Non-GAAP Financial Measures )

Patrick Miller, President and CEO, stated, “In comparison to Q3 and Q4 of 2016, we are seeing top line improvements resulting from better than expected order levels in heavy duty truck production in North America as well as the strengthening of the global construction segments we serve. Generally, our customers who produce large construction machinery including earth moving, mining, and paving are driving higher orders. We are encouraged by these positive market dynamics.”

Tim Trenary, Chief Financial Officer, stated, “Sales are off 4 percent period-over-period, but up 16 percent sequentially reflecting improving heavy-duty truck build in North America and global construction equipment build. This improvement in our two largest end markets, when taken together with our operational improvement and restructuring efforts and cash build on the balance sheet positioned us to refinance the Company’s $235 million in senior secured notes. Accordingly, last month we closed a $175 million institutional term loan facility with a maturity date of April 2023. Pro forma for this refinancing, we were able to delever the Company and reduce the Company’s interest expense by about $6 million annually. We also took this opportunity to upsize our revolving credit facility to $65 million from $40 million and to extend the facility to 2022. We are happy to have completed this refinancing and expect it to contribute to value creation for our shareholders in the future.”

Consolidated Results

First Quarter 2017 Results

• First quarter 2017 revenues were $173.4 million compared to $180.3 million in the prior-year period, a decrease of 3.8 percent. The decrease in revenues period-over-period reflects lower heavy-duty truck production in North America offset somewhat by improvement in the global construction markets we serve. Foreign currency translation adversely impacted first quarter 2017 revenues by $2.8 million, or by 1.5 percent when compared to the same period in the prior year.

• Operating income for the first quarter 2017 was $4.6 million compared to operating income of $8.6 million in the prior year period. The decrease in operating income period-over-period was primarily the result of lower revenues, the increased reserve reflecting the recent litigation settlement of a contract dispute with a consultant, and approximately $4.0 million as a result of the production challenges in our North American wire harness operations, partially offset by operational improvements and the benefit of cost reduction and restructuring actions. First quarter 2017 results include $1.1 million of costs associated with our ongoing restructuring initiatives and other related expenditures, and $2.4 million associated with the litigation settlement. First quarter 2016 results include $0.3 million of costs associated with the restructuring initiatives, and $0.6 million related to the write-down of assets held for sale.

• Net income was $0.6 million for the first quarter 2017, or $0.02 per diluted share, compared to net income of $2.6 million in the prior year period, or $0.09 per diluted share. Earnings per share, as adjusted for special items, were $0.08 per diluted share in the first quarter 2017 compared to $0.10 per diluted share in the prior-year period.

For the period ending March 31, 2017, the Company did not have any borrowings under its asset-based revolver. At March 31, 2017, the Company had liquidity of $157 million: $119 million of cash and $38 million of availability from our asset based revolver.

On April 12, 2017 the Company closed a $175 million Term Loan and Security Agreement ("TLS Agreement") with interest at LIBOR plus 600 and a maturity date of April 12, 2023 to refinance the Company’s $235 million 7.875% notes due April 2019 (the “7.875% notes”). Concurrent with the closing of the TLS Agreement, a notice of redemption of the 7.875% notes, the proceeds from the term loan and approximately $74 million of cash was delivered to the trustee to retire the 7.875% notes and to pay accrued interest. On the same date, the Company also entered into a Third Amended and Restated Loan and Security Agreement upsizing its revolving credit facility to $65 million from $40 million and extending the maturity date to April 2022 from April 2018.

Segment Results

Global Truck and Bus Segment

First Quarter 2017 Results

• Revenues for the Global Truck and Bus Segment in the first quarter 2017 were $102.1 million compared to $116.5 million for the prior year period, a decrease of 12.4 percent primarily resulting from lower North American heavy-duty truck production when compared to the same period in the prior year.

• Operating income for the first quarter 2017 was $8.3 million compared to operating income of $11.0 million in the prior year period. The decrease in operating income period-over-period is primarily the result of the decrease in revenues and launch costs associated with new product ramp-ups. First quarter 2017 results include $1.0 million of costs associated with our ongoing restructuring initiatives and other related expenditures. First quarter 2016 results include $0.1 million of costs associated with the restructuring initiatives.

Global Construction and Agriculture Segment

First Quarter 2017 Results

• Revenues for the Global Construction and Agriculture Segment in the first quarter 2017 were $73.5 million compared to $65.8 million in the prior year period, an increase of 11.8 percent. The global construction markets for which we manufacture products are generally improving. Foreign currency translation adversely impacted first quarter 2017 revenues by $2.9 million, or by 4.4 percent when compared to the same period in the prior year.

• Operating income for the first quarter 2017 was $3.3 million compared to operating income of $3.8 million for the prior year period. The decrease in operating income period-over-period resulted primarily from the production challenges in our North American wire harness operations, partially offset by the increase in volume and the benefit of the cost reduction and restructuring actions. First quarter 2017 and 2016 results each include $0.1 million of costs associated with our ongoing restructuring initiatives.

GAAP to Non-GAAP Reconciliation

A reconciliation of GAAP to non-GAAP financial measures referenced in this release is included as Appendix A to this release.

2017 End Market Outlook

Management estimates that the 2017 North American Class 8 truck production will be in the range of 215,000 - 235,000 units, as compared to 228,000 units in 2016; North American Class 5-7 production is expected to be up slightly year-over-year. The global construction markets we serve in Europe, Asia, and North America are improving.

CONFERENCE CALL

A conference call to discuss this press release is scheduled for Friday, May 5, 2017, at 10:00 a.m. ET. To participate, dial (844) 743-2497 using conference code 7179605.

This call is being webcast by Nasdaq and can be accessed at Commercial Vehicle Group’s Web site at www.cvgrp.com, where it will be archived for one year.

A telephonic replay of the conference call will be available for a period of two weeks following the call. To access the replay, dial (855) 859-2056 using access code 7179605.

About Commercial Vehicle Group, Inc.

Commercial Vehicle Group, Inc. (and its subsidiaries) is a leading supplier of a full range of cab related products and systems for the global commercial vehicle market, including the medium- and heavy-duty truck market, the medium-and heavy-construction vehicle markets, the military, bus, agriculture, specialty transportation, mining, industrial equipment and off-road recreational markets. Information about the Company and its products is available on the internet at www.cvgrp.com.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. These statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," or similar expressions. In particular, this press release may contain forward-looking statements about Company expectations for future periods with respect to its 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 consulting services, 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 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. Actual results may differ materially from the anticipated results because of certain risks and uncertainties, including but not limited to: (i) general economic or business conditions affecting the markets in 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, 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) the Company’s ability to obtain future financing due to changes in the lending markets or its financial position; (ix) the Company’s ability to comply with the financial covenants in its revolving credit facility and term loan facility; (x) fluctuation in interest rates relating to its term loan facility and revolving credit facility; (xi) the Company’s ability to realize the benefits of its cost reduction and strategic initiatives; (xii) a material weakness in our internal control over financial reporting which could, if not remediated, result in material misstatements in our financial statements; (xiii) volatility and cyclicality in the commercial vehicle market adversely affecting us; (xiv) the geographic profile of our taxable income and changes in valuation of our deferred tax assets and liabilities impacting our effective tax rate; (xv) changes to domestic manufacturing initiatives impacting our effective tax rate related to products manufactured either in the United States or in international jurisdictions; (xvi) implementation of tax changes, by the United States or another international jurisdiction, related to products manufactured in one or more jurisdictions where we do business; and (xvii) 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. There can be no assurance that statements made in this press release relating to future events will be achieved. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. All subsequent written 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.

###

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Amounts in thousands, except per share amounts)

	Three Months Ended March 31,
	2017			2016
Revenues	$	173,416		$	180,291
Cost of Revenues	151,913			154,587
Gross Profit	21,503			25,704
Selling, General and Administrative Expenses	16,619			16,790
Amortization Expense	327			334
Operating Income	4,557			8,580
Interest and Other Expense	4,565			4,857
(Loss) Income Before Provision for Income Taxes	(8		)	3,723
(Benefit) Provision for Income Taxes	(636		)	1,160
Net Income	$	628		$	2,563
Earnings per Common Share:
Basic and Diluted	$	0.02		$	0.09
Weighted Average Shares Outstanding:
Basic	29,872			29,449
Diluted	30,194			29,509

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(Amounts in thousands, except share and per share amounts)

	March 31, 2017			December 31, 2016
ASSETS
Current Assets:
Cash	$	118,997		$	130,160
Accounts receivable, net of allowances of $3,877 and $3,881, respectively	113,827			97,793
Inventories	76,443			71,054
Other current assets	16,542			9,941
Total current assets	325,809			308,948
Property, plant and equipment, net of accumulated depreciation of $136,200 and $137,879, respectively	65,027			66,041
Goodwill	7,955			7,703
Intangible assets, net of accumulated amortization of $7,492 and $7,048, respectively	15,452			15,511
Deferred income taxes, net	29,654			28,587
Other assets	2,259			1,975
Total assets	$	446,156		$	428,765
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	74,120		$	60,556
Accrued liabilities and other	46,340			45,699
Current portion of long-term debt	66,337			—
Total current liabilities	186,797			106,255
Long-term debt	167,015			233,154
Pension and other post-retirement benefits	19,069			18,938
Other long-term liabilities	3,239			2,728
Total liabilities	376,120			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; 29,873,953 and 29,871,354 shares issued and outstanding, respectively)	299			299
Treasury stock, at cost: 1,014,413 shares, as of March 2017 and December 2016	(7,753		)	(7,753		)
Additional paid-in capital	238,003			237,367
Retained deficit	(112,750		)	(113,378		)
Accumulated other comprehensive loss	(47,763		)	(48,845		)
Total stockholders’ equity	70,036			67,690
Total liabilities and stockholders’ equity	$	446,156		$	428,765

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES

BUSINESS SEGMENT FINANCIAL INFORMATION

(Unaudited)

(Amounts in thousands)

	Three months ended March 31,
	Global Truck & Bus				Global Construction & Agriculture				Corporate / Other						Total
	2017		2016		2017		2016		2017			2016			2017		2016
Revenues
External Revenues	$	101,864	$	116,283	$	71,552	$	64,008	$	—		$	—		$	173,416	$	180,291
Intersegment Revenues	225		219		1,953		1,761		(2,178		)	(1,980		)	—		—
Total Revenues	$	102,089	$	116,502	$	73,505	$	65,769	$	(2,178	)	$	(1,980	)	$	173,416	$	180,291
Gross Profit	14,038		17,823		7,822		8,306		(357		)	(425		)	21,503		25,704
Selling, General & Administrative Expenses	5,453		6,495		4,483		4,491		6,683			5,804			16,619		16,790
Operating Income	8,293		11,029		3,305		3,780		(7,041		)	(6,229		)	4,557		8,580

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES

Appendix A: Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

(Amounts in thousands, except per share amounts)

	Three Months Ended March 31,
	2017			2016
Operating Income, as reported	$	4,557		$	8,580
Restructuring and other related expenditures 1	1,073			272
Impaired asset 2	—			616
Litigation settlement 3	2,377			—
Adjusted Operating Income	$	8,007		$	9,468
Operating Income Margin, as reported	2.6		%	4.8		%
Restructuring and other related expenditures 1	0.6			0.2
Impaired asset 2	—			0.3
Litigation settlement 3	1.4			—
Adjusted Operating Income Margin	4.6		%	5.3		%
Net Income, as reported	$	628		$	2,563
Restructuring and other related expenditures 1	1,073			272
Impaired asset 2	—			616
Litigation settlement 3	2,377			—
Income tax 4	(1,553		)	(400		)
Adjusted Net Income	$	2,525		$	3,051
Basic and Diluted EPS, as reported	$	0.02		$	0.09
Restructuring and other related expenditures, net of tax 1	0.02			—
Impaired Asset, net of tax 2	—			0.01
Litigation settlement, net of tax 3	0.04			$	—
Adjusted Basic and Diluted EPS	$	0.08		$	0.10
1  Costs associated with restructuring, including employee severance and retention costs, lease cancellation costs, building repairs, costs to transfer equipment, and other related expenditures.
2  Write down to market value of assets held for sale.
3  Settlement of consulting contract litigation.
4 Adjusted Net Income is calculated by applying an assumed 45 percent tax rate to the special items. This rate may not reflect the effective tax rate for the periods presented.

Use of Non-GAAP Measures

This earnings release contains financial measures that are not in accordance with U.S. generally accepted accounting principles (“GAAP”). In general, the non-GAAP measures exclude items and charges that management believes reflect the cost reduction and restructuring actions being undertaken by the Company. These items and charges that are excluded have taken place over multiple prior periods without predictable trends. Management uses these non-GAAP financial measures to evaluate the Company’s performance, engage in financial and operational planning and to, in part, determine incentive compensation.

Management provides these non-GAAP financial measures to investors as supplemental metrics to assist readers in assessing the effects of items and events on the Company’s financial and operating results and in comparing the Company’s performance to that of its competitors and comparable reporting periods. However, the non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements set forth above should be carefully evaluated.