NEW ALBANY, OH — Commercial Vehicle Group, Inc. has reported revenues of $158.6 million for the second quarter ended June 30, compared to revenues of $234.8 million for the second quarter of 2006 and a net loss of $0.2 million, or 1 cent per diluted share, compared to net income of $15.5 million, or 72 cents per diluted share, in the prior-year quarter.
The company reported that the primary drivers of the change in its results, when compared to the prior year, were a decrease in production levels and the fluctuations in the product mix of the North American Class 8 heavy truck market.
Net debt (calculated as total debt less cash and cash equivalents) improved by approximately $18.6 million to $125.9 million when compared to $144.4 million at March 31, 2007. Included as Other Income in the company’s results for the second quarter of 2007 is a gain of approximately $1.7 million from the marking to market of its foreign currency exchange contracts and a gain of approximately $0.5 million related to the reversal of estimated withholding tax penalties and interest on prior period debt activity. Fully diluted shares outstanding for the quarter were 21.4 million compared to 21.5 million in the prior-year quarter.
"Our 2007 results have been impacted by the slow down in the North American Class 8 heavy truck market, and specifically the product variation, or mix, of the units being produced," said Mervin Dunn, president and chief executive officer of Commercial Vehicle Group. "During this slow period, our employees are working diligently to accommodate the fluctuations in customer production schedules while minimizing the overall impact to our targeted operating improvements for this year. In addition, we continue to focus on our material cost savings objectives which have been hindered by inventory levels and the lower volumes and product mix of 2007. We continue to face the challenges of the cyclicality of the industry but remain committed to our long-term strategy for success by making tough decisions such as the closure and consolidation of our Seattle operation. These decisions along with our focus on continuous improvement, organic growth and the development of both our products and our employees will continue to position CVG for the future," added Dunn.
The company reported revenues of $357.4 million for the six-month period ended June 30, down approximately 23 percent compared to $464.1 million in the six-month period ended last year. Net income for the six-month period was $2.7 million, or 13 cents per diluted share, compared to $28.9 million, or $1.35 per diluted share, for the six-month period ended last year. Fully diluted shares outstanding for the six-month period ended this year were 21.7 million compared to 21.5 million in the prior-year period.
Management believes that the mix, or content, of the Class 8 units being produced during 2007 will require less of the company’s products than its previous outlook for the year. As a result, the company is adjusting its 2007 full year fully diluted earnings per share estimates downward from a range of $0.85 to $1.35 per diluted share to a range of 18 cents to 46 cents per diluted share, based on 21.6 million diluted shares. The revised estimates include the effects of the company’s Seattle facility closure and are based upon total North American Class 8 truck production levels, excluding Mexico and export units, in the range of 145 thousand to 170 thousand units. The company has also adjusted its 2007 capital expenditure outlook from $23 million to $18 million.
"We are revising our estimates for 2007 based on where we have seen our product content track through the first six months of this year and where we expect it to be for the remainder of the year," said Chad Utrup, chief financial officer of Commercial Vehicle Group. "We are also revising our estimates to include the impact of production scheduling variations, changes in our material sourcing programs and the effects of the Seattle facility closure and consolidation. Our efforts are obviously focused on minimizing the impact of the decline in the Class 8 market, while remaining equally focused on what lies ahead for us in 2008 and beyond," added Utrup.
