| Schedule of Error Corrections and Prior Period Adjustments |
The following tables present the summary impacts of the restatement adjustments and immaterial error correction on our previously reported retained deficit and total stockholders’ equity for the year ended December 31, 2016, and income before provision for income taxes and net income (loss) for the years ended December 31, 2018 and 2017:
| | | | | | | | | | December 31, 2016 | | Retained deficit | | Total Stockholders' Equity | As previously reported | $ | (113,378 | ) | | $ | 67,690 |
| Cumulative adjustments | (1,855 | ) | | (1,855 | ) | As adjusted | $ | (115,233 | ) | | $ | 65,835 |
|
| | | | | | | | | | For the years ended December 31, | | 2018 | | 2017 | Income before income taxes - as previously reported | $ | 53,508 |
| | $ | 13,645 |
| Restatement adjustments | (4,080 | ) | | — |
| Error corrections | 148 |
| | (847 | ) | Income before income taxes - as restated / adjusted | $ | 49,576 |
| | $ | 12,798 |
| | | | | Net income (loss) - as previously reported | $ | 44,512 |
| | $ | (1,705 | ) | Restatement adjustments | (3,135 | ) | | — |
| Error corrections | 112 |
| | (564 | ) | Net income (loss) - as restated / adjusted | $ | 41,489 |
| | $ | (2,269 | ) |
The following table presents the effect of the error correction on the Company’s consolidated balance sheets for the period indicated:
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET | | | | | | | | | | | | | | | | As of December 31, 2018 | | Restatement References | | As Previously Reported | | Restatement Adjustments | | As Restated | | ASSETS | | | | | | | | Current Assets: | | | | | | | | Cash | $ | 70,913 |
| | $ | — |
| | $ | 70,913 |
| | | Accounts receivable, net of allowances of $5,139 | 134,624 |
| | (689 | ) | | 133,935 |
| | a | Inventories | 92,359 |
| | — |
| | 92,359 |
| | | Other current assets | 16,828 |
| | (4,748 | ) | | 12,080 |
| | a | Total current assets | 314,724 |
| | (5,437 | ) | | 309,287 |
| | | Property, Plant and Equipment: | | | | | | | | Land and buildings | 26,240 |
| | — |
| | 26,240 |
| | | Machinery and equipment | 175,990 |
| | (2,219 | ) | | 173,771 |
| | b | Construction in progress | 6,650 |
| | — |
| | 6,650 |
| | | Less accumulated depreciation | (143,781 | ) | | 1,221 |
| | (142,560 | ) | | b | Property, plant and equipment, net | 65,099 |
| | (998 | ) | | 64,101 |
| | | Goodwill | 7,576 |
| | — |
| | 7,576 |
| | | Intangible assets, net of accumulated amortization of of $9,568 | 12,800 |
| | — |
| | 12,800 |
| | | Deferred income taxes, net | 15,348 |
| | 993 |
| | 16,341 |
| | a, b | Other assets | 2,583 |
| | — |
| | 2,583 |
| | | TOTAL ASSETS | $ | 418,130 |
| | $ | (5,442 | ) | | $ | 412,688 |
| | | LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | Current Liabilities: | | | | | | | | Accounts payable | $ | 86,645 |
| | $ | — |
| | $ | 86,645 |
| | | Accrued liabilities and other | 36,969 |
| | — |
| | 36,969 |
| | | Current portion of long-term debt | 9,102 |
| | — |
| | 9,102 |
| | | Total current liabilities | 132,716 |
| | — |
| | 132,716 |
| | | Long-term debt | 154,656 |
| | — |
| | 154,656 |
| | | Pension and other post-retirement liabilities | 12,065 |
| | — |
| | 12,065 |
| | | Other long-term liabilities | 3,655 |
| | — |
| | 3,655 |
| | | Total liabilities | 303,092 |
| | — |
| | 303,092 |
| | | Stockholders’ Equity: | | | | | | | | Preferred stock, $.01 par value (5,000,000 shares authorized; no shares issued and outstanding) | — |
| | — |
| | — |
| | | Common stock, $.01 par value (60,000,000 shares authorized; 30,512,843 shares issued and outstanding) | 318 |
| | — |
| | 318 |
| | | Treasury stock, at cost: 1,334,251 shares | (10,245 | ) | | — |
| | (10,245 | ) | | | Additional paid-in capital | 243,007 |
| | — |
| | 243,007 |
| | | Retained deficit | (70,571 | ) | | (5,442 | ) | | (76,013 | ) | | a, b | Accumulated other comprehensive loss | (47,471 | ) | | — |
| | (47,471 | ) | | | Total CVG stockholders’ equity | 115,038 |
| | (5,442 | ) | | 109,596 |
| | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 418,130 |
| | $ | (5,442 | ) | | $ | 412,688 |
| | |
As of December 31, 2018
(a) Understatement of cost of revenues and impacted balance sheet accounts. As a result of the understatement of cost of revenues, the correction resulted in a $0.7 million decrease in accounts receivable, net; a $4.7 million decrease in other current assets; a $1.3 million increase in long-term deferred tax assets; and a $4.1 million increase in retained deficit.
(b) Property, plant and equipment, net error correction. The immaterial error correction of property, plant and equipment, net, resulted in a $2.2 million decrease in machinery and equipment; a $1.2 million decrease in accumulated depreciation; a $0.3 million decrease in long-term deferred tax assets; and a $1.3 million increase in retained deficit.
The following table presents the effect of the error corrections on the consolidated statements of income for the periods indicated:
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the Year Ended December 31, 2018 | | For the Year Ended December 31, 2017 | | | | As Previously Reported | | Restatement Adjustments | | As Restated | | As Previously Reported | | Adjustments | | As Adjusted | | Restatement References | Revenues | $ | 897,737 |
| | $ | — |
| | $ | 897,737 |
| | $ | 755,231 |
| | $ | — |
| | $ | 755,231 |
| | | Cost of revenues | 768,885 |
| | 3,932 |
| | 772,817 |
| | 663,513 |
| | 847 |
| | 664,360 |
| | a, b | Gross profit | $ | 128,852 |
| | $ | (3,932 | ) | | $ | 124,920 |
| | $ | 91,718 |
| | $ | (847 | ) | | $ | 90,871 |
| | | Selling, general and administrative expenses | 60,679 |
| | — |
| | 60,679 |
| | 59,547 |
| | — |
| | 59,547 |
| | | Amortization expense | 1,300 |
| | — |
| | 1,300 |
| | 1,320 |
| | — |
| | 1,320 |
| | | Operating income | $ | 66,873 |
| | $ | (3,932 | ) | | $ | 62,941 |
| | $ | 30,851 |
| | $ | (847 | ) | | $ | 30,004 |
| | | Other expense | 1,311 |
| | — |
| | 1,311 |
| | 1,943 |
| | — |
| | 1,943 |
| | | Interest expense | 14,676 |
| | — |
| | 14,676 |
| | 19,149 |
| | — |
| | 19,149 |
| | | Income before provision for income taxes | $ | 53,508 |
| | $ | (3,932 | ) | | $ | 49,576 |
| | $ | 13,645 |
| | $ | (847 | ) | | $ | 12,798 |
| | a, b | Provision for income taxes | 8,996 |
| | (909 | ) | | 8,087 |
| | 15,350 |
| | (283 | ) | | 15,067 |
| | a, b | Net income (loss) | $ | 44,512 |
| | $ | (3,023 | ) | | $ | 41,489 |
| | $ | (1,705 | ) | | $ | (564 | ) | | $ | (2,269 | ) | | | Earnings (loss) per common share | | | | | | | | | | | | | | Basic | $ | 1.47 |
| | $ | (0.10 | ) | | $ | 1.37 |
| | $ | (0.06 | ) | | $ | (0.02 | ) | | $ | (0.08 | ) | | | Diluted | $ | 1.46 |
| | $ | (0.10 | ) | | $ | 1.36 |
| | $ | (0.06 | ) | | $ | (0.02 | ) | | $ | (0.08 | ) | | | Weighted average shares outstanding | | | | | | | | | | | | | | Basic | 30,277 |
| | 30,277 |
| | 30,277 |
| | 29,942 |
| | 29,942 |
| | 29,942 |
| | | Diluted | 30,587 |
| | 30,587 |
| | 30,587 |
| | 29,942 |
| | 29,942 |
| | 29,942 |
| | |
For the year ended December 31, 2018
(a) Understatement of cost of revenues and impacted balance sheet accounts. As a result of the understatement of cost of revenues, the correction resulted in a $4.1 million increase in cost of revenues; a $1.0 million decrease in provision for income taxes; and a $3.1 million decrease in net income. (b) Property, plant and equipment, net error correction. The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million decrease in cost of revenues; an immaterial increase in provision for income taxes; and a $0.1 million increase in net income.
For the year ended December 31, 2017
(a) Understatement of cost of revenues and impacted balance sheet accounts. As a result of the understatement of cost of revenues, the correction resulted in a $1.0 million increase in cost of revenues; a $0.2 million decrease in provision for income taxes; and a $0.8 million increase in net loss.
(b) Property, plant and equipment, net error correction. The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million decrease in cost of revenues; a $0.1 million decrease in provision for income taxes; and a $0.2 million decrease in net loss.
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the Year Ended December 31, 2018 | | For the Year Ended December 31, 2017 | | | | As Previously Reported | | Restatement Adjustments | | As Restated | | As Previously Reported | | Adjustments | | As Adjusted | | Restatement References | Net income (loss) | $ | 44,512 |
| | $ | (3,023 | ) | | $ | 41,489 |
| | $ | (1,705 | ) | | $ | (564 | ) | | $ | (2,269 | ) | | a, b | Other comprehensive (loss) income: | | | | | | | | | | | | | | Foreign currency translation adjustments | (5,675 | ) | | — |
| | (5,675 | ) | | 7,141 |
| | — |
| | 7,141 |
| | | Minimum pension liability, net of tax | (1,057 | ) | | — |
| | (1,057 | ) | | 469 |
| | — |
| | 469 |
| | | Derivative instrument | 496 |
| | — |
| | 496 |
| | — |
| | — |
| | — |
| | | Other comprehensive (loss) income | $ | (6,236 | ) | | $ | — |
| | $ | (6,236 | ) | | $ | 7,610 |
| | $ | — |
| | $ | 7,610 |
| | | Comprehensive income (loss) | $ | 38,276 |
| | $ | (3,023 | ) | | $ | 35,253 |
| | $ | 5,905 |
| | $ | (564 | ) | | $ | 5,341 |
| | |
For the year ended December 31, 2018
(a) Understatement of cost of revenues and impacted balance sheet accounts. As a result of the understatement of cost of revenues, the correction resulted in a $3.1 million decrease in net income. Refer to descriptions of the adjustments and their impacts to net income above.
(b) Property, Plant and Equipment, Net error correction. The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million increase in net income. Refer to descriptions of the adjustment and its impact to net income above.
For the year ended December 31, 2017
(a) Understatement of cost of revenues and impacted balance sheet accounts. As a result of the understatement of cost of revenues, the correction resulted in a $0.8 million increase in net loss. Refer to descriptions of the adjustments and their impacts to net loss above.
(b) Property, Plant and Equipment, Net error correction. The immaterial error correction of property, plant and equipment, net, resulted in a $0.2 million decrease in net loss. Refer to descriptions of the adjustment and its impact to net loss above.
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Common Stock | | Treasury
Stock | | Additional
Paid-In
Capital | | Retained
Deficit | | Accumulated Other Comprehensive Loss | | Total CVG
Stockholders’
Equity | | Shares | | Amount | | | | | | |
| BALANCE - December 31, 2016 (As Previously Reported) | 29,871,354 |
| | $ | 299 |
| | $ | (7,753 | ) | | $ | 237,367 |
| | $ | (113,378 | ) | | $ | (48,845 | ) | | $ | 67,690 |
| Cumulative adjustments | — |
| | — |
| | — |
| | — |
| | (1,855 | ) | | — |
| | (1,855 | ) | BALANCE - December 31, 2016 (As Adjusted) | 29,871,354 |
| | $ | 299 |
| | $ | (7,753 | ) | | $ | 237,367 |
| | $ | (115,233 | ) | | $ | (48,845 | ) | | $ | 65,835 |
| | | | | | | | | | | | | | | BALANCE - December 31, 2017 (As Previously Reported) | 30,219,278 |
| | $ | 304 |
| | $ | (9,114 | ) | | $ | 239,870 |
| | $ | (115,083 | ) | | $ | (41,235 | ) | | $ | 74,742 |
| Cumulative adjustments | — |
| | — |
| | — |
| | — |
| | (2,419 | ) | | — |
| | (2,419 | ) | BALANCE - December 31, 2017 (As Adjusted) | 30,219,278 |
| | $ | 304 |
| | $ | (9,114 | ) | | $ | 239,870 |
| | $ | (117,502 | ) | | $ | (41,235 | ) | | $ | 72,323 |
| | | | | | | | | | | | | | | BALANCE - December 31, 2018 (As Previously Reported) | 30,512,843 |
| | $ | 318 |
| | $ | (10,245 | ) | | $ | 243,007 |
| | $ | (70,571 | ) | | $ | (47,471 | ) | | $ | 115,038 |
| Cumulative restatement adjustments | — |
| | — |
| | — |
| | — |
| | (5,442 | ) | | — |
| | (5,442 | ) | BALANCE - December 31, 2018 (As Restated) | 30,512,843 |
| | $ | 318 |
| | $ | (10,245 | ) | | $ | 243,007 |
| | $ | (76,013 | ) | | $ | (47,471 | ) | | $ | 109,596 |
|
As of December 31, 2018, 2017 and 2016
The increase in retained deficit and corresponding decrease of total CVG stockholders’ equity for each restated period was the result of the adjustments for understatement of costs of revenues and impacted balance sheet accounts and the adjustment to property, plant and equipment, net. These adjustments resulted in a $5.4 million increase in retained deficit and corresponding decrease of total CVG stockholders’ equity as of December 31, 2018, a $2.4 million increase in retained deficit and corresponding decrease of total CVG stockholders’ equity as of December 31, 2017, and a $1.9 million increase in retained deficit and corresponding decrease of total CVG stockholders’ equity as of December 31, 2016.
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW | | | | | | | | | | | | | | | | For the Year Ended December 31, 2018 | | | | As Previously Reported | | Restatement Adjustments | | As Restated | | Restatement References | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | Net (loss) income | $ | 44,512 |
| | $ | (3,023 | ) | | $ | 41,489 |
| | a, b | Adjustments to reconcile net (loss) income to net cash provided by operating activities: | | | | | | | | Depreciation and amortization | 15,418 |
| | (148 | ) | | 15,270 |
| | b | Provision for doubtful accounts | 7,607 |
| | — |
| | 7,607 |
| | | Noncash amortization of debt financing costs | 1,404 |
| | — |
| | 1,404 |
| | | Shared-based compensation expense | 3,137 |
| | — |
| | 3,137 |
| | | Deferred income tax | 5,940 |
| | (909 | ) | | 5,031 |
| | a, b | Noncash (gain) loss on derivative contracts | (1,468 | ) | | — |
| | (1,468 | ) | | | Change in other operating items: | | | | | | | | Accounts receivable | (35,674 | ) | | 687 |
| | (34,987 | ) | | a | Inventories | 4,836 |
| | — |
| | 4,836 |
| | | Prepaid expenses | (5,685 | ) | | 3,393 |
| | (2,292 | ) | | a | Accounts payable | 1,451 |
| | — |
| | 1,451 |
| | | Accrued liabilities | 2,631 |
| | — |
| | 2,631 |
| | | Other operating activities, net | (3,117 | ) | | — |
| | (3,117 | ) | | | Net cash provided by operating activities | 40,992 |
| | — |
| | 40,992 |
| | | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | Purchases of property, plant and equipment | (14,150 | ) | | — |
| | (14,150 | ) | | | Proceeds from disposal/sale of property, plant and equipment | 49 |
| | — |
| | 49 |
| | | Net cash used in investing activities | (14,101 | ) | | — |
| | (14,101 | ) | | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | Borrowings of Revolving Credit Facility | 80,500 |
| | — |
| | 80,500 |
| | | Repayment of Revolving Credit Facility | (80,500 | ) | | — |
| | (80,500 | ) | | | Repayment of Term Loan Facility principal | (4,375 | ) | | — |
| | (4,375 | ) | | | Surrender of common stock by employees | (1,131 | ) | | — |
| | (1,131 | ) | | | Other financing activities, net | (329 | ) | | — |
| | (329 | ) | | | Net cash used in financing activities | (5,835 | ) | | — |
| | (5,835 | ) | | | EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH | (2,387 | ) | | — |
| | (2,387 | ) | | | NET (DECREASE) INCREASE IN CASH | 18,669 |
| | — |
| | 18,669 |
| | | CASH: | | | | | | | | Beginning of period | 52,244 |
| | — |
| | 52,244 |
| | | End of period | $ | 70,913 |
| | $ | — |
| | $ | 70,913 |
| | | | | | | | | | | SUPPLEMENTAL CASH FLOW INFORMATION: | | | | | | | | Cash paid for interest | $ | 14,046 |
| | $ | — |
| | $ | 14,046 |
| | | Cash paid for income taxes, net | $ | 3,143 |
| | $ | — |
| | $ | 3,143 |
| | | Unpaid purchases of property and equipment included in accounts payable | $ | 509 |
| | $ | — |
| | $ | 509 |
| | |
For the year ended December 31, 2018
(a) Understatement of cost of revenues and impacted balance sheet accounts. As a result of the understatement of cost of revenues, the correction resulted in a $3.1 million decrease in net income; a $0.9 million decrease in deferred income tax; a $0.7 million decrease in change in accounts receivable; and a $3.4 million decrease in change in prepaid expenses. Refer to descriptions of the adjustments and their impacts to net income above.
(b) Property, plant and equipment, net error correction. The immaterial error correction of property, plant and equipment, net, resulted in a $0.1 million increase in net income; a $0.1 million decrease in depreciation expense; and an immaterial increase in deferred income tax. Refer to descriptions of the adjustment and its impact to net income above.
The impact of these error corrections to relevant segment and quarterly financial information is presented in Notes 12 and 19 to these consolidated financial statements, respectively. COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW | | | | | | | | | | | | | | | | For the Year Ended December 31, 2017 | | | | As Previously Reported | | Adjustments | | As Adjusted | | Restatement References | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | Net (loss) income | $ | (1,705 | ) | | $ | (564 | ) | | $ | (2,269 | ) | | a, b | Adjustments to reconcile net (loss) income to net cash provided by operating activities: | | | | | | | | Depreciation and amortization | 15,344 |
| | (148 | ) | | 15,196 |
| | b | Provision for doubtful accounts | 5,622 |
| | — |
| | 5,622 |
| | | Noncash amortization of debt financing costs | 1,251 |
| | — |
| | 1,251 |
| | | Shared-based compensation expense | 2,503 |
| | — |
| | 2,503 |
| | | (Gain) loss on sale of assets | (586 | ) | | — |
| | (586 | ) | | | Deferred income tax | 7,992 |
| | (283 | ) | | 7,709 |
| | a, b | Noncash (gain) loss on derivative contracts | (726 | ) | | — |
| | (726 | ) | | | Change in other operating items: | | | | | | | | Accounts receivable | (13,794 | ) | | 2 |
| | (13,792 | ) | | a | Inventories | (25,104 | ) | | — |
| | (25,104 | ) | | | Prepaid expenses | (814 | ) | | 993 |
| | 179 |
| | a | Accounts payable | 23,250 |
| | — |
| | 23,250 |
| | | Accrued liabilities | (12,284 | ) | | — |
| | (12,284 | ) | | | Other operating activities, net | 1,308 |
| | — |
| | 1,308 |
| | | Net cash provided by operating activities | 2,257 |
| | — |
| | 2,257 |
| | | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | Purchases of property, plant and equipment | (13,458 | ) | | — |
| | (13,458 | ) | | | Proceeds from disposal/sale of property, plant and equipment | 2,682 |
| | — |
| | 2,682 |
| | | Net cash used in investing activities | (10,776 | ) | | — |
| | (10,776 | ) | | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | Borrowings of Term Loan Facility | 175,000 |
| | — |
| | 175,000 |
| | | Repayment of Term Loan Facility principal | (2,188 | ) | | — |
| | (2,188 | ) | | | Surrender of common stock by employees | (1,361 | ) | | — |
| | (1,361 | ) | | | Redemption of Notes | (235,000 | ) | | — |
| | (235,000 | ) | | | Prepayment charge for redemption of Notes | (1,543 | ) | | — |
| | (1,543 | ) | | | Payment of Term Loan Facility discount | (3,500 | ) | | — |
| | (3,500 | ) | | | Payment of debt issuance costs | (4,256 | ) | | — |
| | (4,256 | ) | | | Net cash used in financing activities | (72,848 | ) | | — |
| | (72,848 | ) | | | EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH | 3,451 |
| | — |
| | 3,451 |
| | | NET (DECREASE) INCREASE IN CASH | (77,916 | ) | | — |
| | (77,916 | ) | | | CASH: | | | | | | | | Beginning of period | 130,160 |
| | — |
| | 130,160 |
| | | End of period | $ | 52,244 |
| | $ | — |
| | $ | 52,244 |
| | | SUPPLEMENTAL CASH FLOW INFORMATION: | | | | | | | | Cash paid for interest | $ | 18,572 |
| | $ | — |
| | $ | 18,572 |
| | | Cash paid for income taxes, net | $ | 3,276 |
| | $ | — |
| | $ | 3,276 |
| | | Unpaid purchases of property and equipment included in accounts payable | $ | 109 |
| | $ | — |
| | $ | 109 |
| | |
For the year ended December 31, 2017
(a) Understatement of cost of revenues and impacted balance sheet accounts. As a result of the understatement of cost of revenues, the correction resulted in a $0.8 million increase in net loss; a $0.2 million decrease in deferred income tax; an immaterial decrease in change in accounts receivable; and a $1.0 million decrease in change in prepaid expenses. Refer to descriptions of the adjustments and their impacts to net income above.
(b) Property, plant and equipment, net error correction. The immaterial error correction of property, plant and equipment, net, resulted in a $0.2 million decrease in net loss; a $0.1 million decrease in depreciation expense; and a $0.1 million decrease in deferred income tax.
|