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| 8-K - 8-K - Commercial Vehicle Group, Inc. | a8-kroadshow112916.htm |
Commercial Vehicle Group, Inc.
Bank of America Merrill Lynch
2016 Leveraged Finance Conference
November 29, 2016
Patrick Miller
President and CEO
Tim Trenary
Chief Financial Officer
Terry Hammett
Treasurer and VP Investor Relations
Forward Looking Statement
This presentation 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 medium and 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; (x) the Company’s ability to realize
the benefits of its cost reduction and strategic initiatives; (xi) a material weakness in our internal control over financial reporting which could, if
not remediated, result in material misstatements in our financial statements; (xii) volatility and cyclicality in the commercial vehicle market
adversely affecting us; and (xiii) 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, 2015. There can be no assurance that statements made in this presentation 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.
pg | 1
22 Facilities
9 Countries
2015 sales $825M
NASDAQ CVGI
Global Presence
pg | 1
North America 11 facilities
Europe 5 facilities
Asia Pacific 6 Facilities
Products
Seats & Seating
Systems
Cabs and Sleeper BoxesWiper Systems,
Mirrors & Controls
Wire Harnesses &
Controls
Interior Trim
pg | 3
$825 Million 2015 Sales
pg | 4
78%
12%
10%
Region
N. America
EMEA
APAC
49%
18%
4%
1%
16%
12%
End Market
OEM Truck
OEM Construction
OEM Bus
OEM Agriculture
Aftermarket
Other
41%
22%
19%
11%
7%
Product
Seats
Trim
Wire Harnesses
Structures
Wipers/Motors
20%
18%
11%8%
7%
6%
30%
Customer
Volvo
Daimler
Paccar
Caterpillar
Navistar
John Deere
All Other
2015 Business Segment Sales¹
70%
15%
6%
2%
7%
Global Truck and Bus
$565 Million
MD/HD Truck
OEM
Aftermarket/OES
Bus OEMs
Construction
OEMs
Other
52%
16%
14%
5%
3%
3%
7%
Global Construction and Agriculture
$272 Million
Construction
Aftermarket/OES
Auto
Truck
Agriculture
Military
Other
pg | 5
1. Before intercompany sales eliminations
Strategies to Improve the Core
Operational Improvement Margin Impact
18% Fewer Sales
pg | 6
Restructuring Update
Executive leadership realigned
Major changes announced – on target for completion by the end of 2017
Supply Chain - Leveraging globally, increasing standardization, and localizing supply
Lean/Six Sigma driving cost out
2016 goal 400 belts
To date, 549 belts granted
Process investments
Interior trim in North America
More efficient seat assembly lines
in US and UK
18% Fewer Sales
See appendix for reconciliation of GAAP to non-GAAP financial measures
18% Fewer
Sales
20-25% Historical
Pull through
Operational
Improvement
Q3 YTD 2016
Adjusted OIM
Q3 YTD 2015
Adjusted OIM
5.3% 4.3% 3.8% 4.8%
pg | 7
Targets for Growth
New off-road seating product lines
Construction and Ag seats debut in Nov 2016.
Includes light duty equipment applications
Global Ag market
Wire harness, interior trim, and
seats. Potential addressable
market ~ $900M
Wire harnesses – Europe and North America
Winning in new segments – agriculture, truck
(powertrain), and power generation. Exploring
extension into digital components.
Global Truck and Bus
Major launch activities in North America.
Targeting seat growth in domestic India and
China. Interior trim and wiper options in
Europe.
Open to M&A
options that could
facilitate our targets
for growth
FINANCIAL UPDATE
(Dollars in millions) 2016 2015
Sales 153.6 202.7 Reflects end markets
Gross Profit 18.9 27.9
Margin 12.3 % 13.8 %
SG&A 14.1 17.6 Down $3.5 million
Operating Income 4.5 9.9
Margin 2.9 % 4.9 %
Adjusted Operating Income 6.0 10.3
Margin 3.9 % 5.1 % Good margin protection
N.A. Class 8 Production (000's) 53,754 83,005 Down 35%
N.A. Class 5 - 7 Production (000's) 52,555 60,935
Three months ended September 30,
Financial Results
pg | 9
ACT outlook for medium
and heavy duty truck
production (000’s)*
Class 8 Class 5-7
* Source: ACT Research
See appendix for reconciliation of GAAP to non-GAAP financial measures
Business Segments¹
pg | 10
1. Before intercompany sales eliminations
See appendix for reconciliation of GAAP to non-GAAP financial measures
(Dollars in millions)
Global
Truck & Bus
Global
Construction
& Agriculture
Sales 96.0 59.4
Gross Profit 10.8 8.5
Margin 11.2 % 14.4 %
SG&A 5.3 4.6
Operating Income 5.1 3.9
Margin 5.4 % 6.6 %
Adjusted Operating Income 6.5 4.1
Margin 6.7 % 6.9 %
Three Months Ended September 30, 2016
See appendix for reconciliation of GAAP to non-GAAP financial measures
Capital Structure
pg | 11
Capital Allocation: 1.) liquidity 2.) growth 3.) de-leverage 4.) return capital to shareholders
(Dollars in millions) 2013 2014 2015
LTM
Q3 2016
Principal Balance 235
Debt 250 250 235 235 Interest 7.875%
Cash 73 70 92 137 Due April 2019
Net Debt 177 180 143 98 April 2016 Redemption 102%
April 2017 Redemption 100%
Adjusted EBITDA 34 54 58 48
Leverage:
Debt / Adj. EBITDA 7.4 X 4.6 X 4.1 X 4.9 X Commitment 40
Net Debt / Adj. EBITDA 5.2 X 3.3 X 2.5 X 2.0 X Availability 37
Letters of Credit 3
Liquidity: Accordion 35
Cash 137
ABL 40
Less: LOC (3) Moody's B2 / Stable
S&P B / Stable
Total 174
Senior Secured Notes
Asset Based Credit Facility
Agency Ratings
GAAP to Non-GAAP Reconciliation
APPENDIX
GAAP to Non-GAAP Reconciliation
Adjusted Operating Income Reconciliation
pg | 13
2015 2016
(Dollars in millions) YTD Q3 YTD Q3
Sales 640.6 512.2
Cost of Sales 554.2 443.2
Gross Profit 86.4 69.0
SG&A 52.7 46.5
Amortization 1.0 1.0
Operating Income 32.7 21.5
Margin 5.1 % 4.2 %
Special Items:
Restructuring 1.5 2.9
Adjusted Operating Income 34.2 24.4
Margin 5.3 % 4.8 %
EBITDA Reconciliation
GAAP to Non-GAAP Reconciliation
pg | 14
Q4 Q1 Q2 Q3 LTM
(Dollars in millions) 2013 2014 2015 2015 2016 2016 2016 Q3 2016
Net Income (12.5) 7.6 7.1 (2.3) 2.6 2.7 1.1 4.1
Interest 21.1 20.7 21.4 5.9 4.9 4.9 5.0 20.6
Income Tax (2.3) 5.1 9.8 1.7 1.2 0.8 (1.5) 2.1
Depreciation 19.0 16.7 16.4 4.1 4.1 3.7 3.8 15.7
Amortization 1.6 1.5 1.3 0.3 0.3 0.3 0.3 1.3
BITDA 26.9 51.7 55.9 9.7 13.0 12.4 8.8 43.9
Restructuring 7.1 1.3 2.3 0.8 0.3 0.5 1.5 3.1
Impaired Asset - 0.8 - - 0.6 - - 0.6
Adjusted EBITDA 34.0 53.8 58.2 10.5 13.9 12.9 10.3 47.6
GAAP to Non-GAAP Reconciliation
Business Segment Adjusted Operating Income Reconciliation
pg | 15
Three Months Ended September 30, 2016
(Dollars in millions)
Global Truck
& Bus
Global
Construction &
Agriculture
Operating Income 5.1 3.9
Special Items
Restructuring 1.4 0.2
Adjusted Operating Income 6.5 4.1
Margin 6.7 % 6.9%