Commercial Vehicle Group reports revenue increase of 11.2% for first quarter 2015

Commercial Vehicle Group Inc. reports financial results for the first quarter ended March 31, 2015.

Consolidated Results

• First quarter 2015 revenues were $220.3 million compared to $198.1 million in the prior year period, an increase of 11.2%. Foreign currency exchange translation negatively impacted current quarter sales compared to the prior year period by $5.0 million.
• Operating income in the first quarter was $11.2 million compared to operating income of $5.4 million in the prior year period. First quarter 2015 results include $0.7 million of costs associated with the impending closure of the Tigard, OR facility. First quarter 2014 results include a severance charge of $0.5 million associated with the closure of Tigard, and an asset impairment charge of $0.8 million resulting from the sale of the Norwalk, OH facility.
• Net income was $3.6 million in the first quarter, or $0.12 per diluted share, compared to a net loss of $0.5 million, or $(0.02) per diluted share in the prior year period. Earnings per share, as adjusted for special items, were $0.13 per diluted share, compared to $0.00 per diluted share in the prior-year period.

For the period ending March 31, 2015, the company did not have any borrowings under its asset-based revolver and therefore was not subject to any financial maintenance covenants. On March 31, 2015, the company had liquidity of $118.3 million; $81.2 million of cash and $37.1 million of availability from asset based revolver.

Rich Lavin, President and CEO of Commercial Vehicle Group, states, "We are pleased with our first quarter sales growth and corresponding improvement in operating income. We continue to benefit from robust medium- and heavy-duty truck production in North America. Our Global Truck and Bus Segment increased sales by 20% despite the adverse impact of weather related disruptions in parts of the U.S. to some of our customers' production schedules. Conversely, the global markets for construction and agriculture equipment for which we manufacture products were flat to down as compared to the prior year period. We did, however, increase our Global Construction and Agriculture Segment sales in the first quarter as compared to the prior year period by 3% before giving effect to the burden of foreign currency exchange translation."

Tim Trenary, Chief Financial Officer of Commercial Vehicle Group, states, "Operating income for the first quarter improved to $11.2 million compared to $5.4 million in the prior year period, an operating income margin of 5.1% and an improvement of 230 bps over the first quarter of 2014. Operating income pull through on the incremental sales was within the range we generally expect. SG&A spending was modestly lower than the prior year period even as we invest in value accretive activities that support our long-term strategy, CVG 2020."

Segment Results

Global Truck and Bus Segment

• Revenues for the Global Truck and Bus Segment for the first quarter of 2015 were $145.8 million compared to $121.7 million for the prior year period, an increase of 19.8% primarily resulting from increased medium- and heavy-duty truck production volumes in North America. Foreign currency exchange translation negatively impacted first quarter 2015 sales by $0.6 million due to the relative strength of the U.S. Dollar.
• Operating income for the first quarter was $14.1 million compared to operating income of $8.3 million for the prior year period. First quarter 2015 results include $0.7 million of costs associated with the impending closure of the Tigard, OR facility. First quarter 2014 results included a severance charge of $0.5 million associated with the closure of Tigard, and an asset impairment charge of $0.8 million from the sale of the Norwalk, OH facility. 

Global Construction and Agriculture Segment

• Revenues for the Global Construction and Agriculture Segment in the first quarter of 2015 were $74.5 million compared to $76.4 million in the prior year period, a decrease of 2.4%. The global construction and agriculture end markets for which the company manufactures products were flat to down in the first quarter of 2015 as compared to the prior-year period. Foreign currency exchange translation negatively impacted first quarter 2015 sales by $4.4 million due to the relative strength of the U.S. Dollar.
• Operating income was $3.6 million for the current and prior year periods.

2015 End Market Outlook

Management estimates that 2015 North American Class 8 truck production levels will be in the range of 300,000 to 320,000 units compared to 297,000 units in 2014. It believes there is a downward bias in 2015 to equipment production in the global construction and agriculture end markets it serves.