Commercial Vehicle Group Inc. (CVGI) has reported financial results for the third quarter ended Sept. 30, 2016.
Patrick Miller, president and CEO, stated, “Our two largest end-markets, North American heavy-duty truck and global construction equipment, remain at depressed levels. Consequently, revenues in the third quarter were down 24 percent period-over-period. I continue to be pleased with the response of our operations and support teams to this challenging sales environment – our margins are outperforming historical sales conversions. Especially pleasing is the performance of the team leading our Global Construction and Agriculture Segment – GCA operating income improved $3 million in the quarter on lower period-over-period sales. This proactive response to the business cycle has and continues to position CVG with a favorable cost structure that is expected to contribute to earnings when the cycle turns up.”
Miller added, “The restructuring actions to improve capacity utilization and lower landed cost to our customers continue as planned and are on time as well as at or below the initial cost estimates. We believe this restructuring, when taken together with our corporate-wide cost reduction actions, our next generation product launches, and our dedication to high product quality and delivery standards is improving customer satisfaction and will contribute to improved earnings when our end markets rebound.”
Tim Trenary, chief financial officer, stated, “The company continues to manage down investment in operating working capital. This has contributed to cash build of $45 million in the nine months ended Sept. 30, 2016. The company’s debt, less cash, is now just under $100 million and therefore just over two times trailing twelve month Adjusted EBITDA of $48 million. This improvement in the company’s balance sheet and the improved cost structure that Pat described bodes well for value creation in an improved sales environment.”
Third quarter 2016 revenues were $153.6 million compared to $202.7 million in the prior-year period, a decrease of 24.2 percent. The decrease in revenues period-over-period reflects significantly lower heavy-duty truck production in North America as manufacturers adjust production schedules to more closely reflect replacement level orders and excess inventory of new trucks. Foreign currency translation adversely impacted third quarter 2016 revenues by $2.3 million, or by 1.1 percent when compared to the same period in the prior year.
Net income was $1.1 million in the third quarter 2016, or 4 cents per diluted share, compared to net income of $2.6 million in the prior year period, or 9 cents per diluted share. Earnings per share, as adjusted for special items, were 7 cents per diluted share in the third quarter 2016 compared to 10 cents per diluted share in the prior-year period. Net income in the third quarter 2016 benefited from $1.5 million of tax benefit primarily as a consequence of the geographic profile of pre-tax income and loss.
