Commercial Vehicle Group, Inc. - Quarter Report: 2008 March (Form 10-Q)

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2008

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

COMMERCIAL VEHICLE GROUP, INC.

(Exact name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 7800 Walton Parkway New Albany, Ohio (Address of principal executive offices)		41-1990662 (I.R.S. Employer Identification No.) 43054 (Zip Code)

(614) 289-5360
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o		Smaller reporting company o
		(Do not check is a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

The number of shares outstanding of the Registrant’s common stock, par value $.01 per share, at March 31, 2008 was 21,536,814 shares.

 

 

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q

PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS			1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 (UNAUDITED)			1
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2008 (UNAUDITED) AND DECEMBER 31, 2007 (UNAUDITED)			2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 (UNAUDITED)			3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)			4
ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			21
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			26
ITEM 4 CONTROLS AND PROCEDURES			26
PART II OTHER INFORMATION			27
SIGNATURES			29
Certification by Mervin Dunn, President and Chief Executive Officer
Certification by Chad M. Utrup, Chief Financial Officer
Certification Pursuant to Section 906
Certification Pursuant to Section 906

 i

ITEM 1 — FINANCIAL STATEMENTS

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES

		Three Months Ended
		March 31,
		2008				2007
		(Unaudited)				(Unaudited)
		(In thousands, except
		per share amounts)
REVENUES		$	197,004			$	198,801
COST OF REVENUES			176,239				172,532
Gross Profit			20,765				26,269
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			15,018				15,554
GAIN ON SALE OF LONG-LIVED ASSETS			(6,075	)			0
AMORTIZATION EXPENSE			345				103
Operating Income			11,477				10,612
OTHER EXPENSE			9,698				2,320
INTEREST EXPENSE			3,907				3,637
(Loss) Income Before Provision for Income Taxes			(2,128	)			4,655
(BENEFIT) PROVISION FOR INCOME TAXES			(2,600	)			1,696
NET INCOME		$	472			$	2,959
EARNINGS PER COMMON SHARE:
Basic		$	0.02			$	0.14
Diluted		$	0.02			$	0.14
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic			21,537				21,389
Diluted			21,641				21,663

The accompanying notes are an integral part of these condensed consolidated financial statements.

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES

		March 31,				December 31,
		2008				2007
		(Unaudited)				(Unaudited)
		(In thousands except share and per
		share amounts)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	7,530			$	9,867
Accounts receivable, net of reserve for doubtful accounts of $3,936 and $3,758, respectively			120,728				107,687
Inventories, net			100,454				96,385
Prepaid expenses			17,459				16,508
Deferred income taxes			17,178				12,989
Total current assets			263,349				243,436
PROPERTY, PLANT AND EQUIPMENT, net			96,969				98,258
GOODWILL			156,341				151,189
INTANGIBLE ASSETS, net of accumulated amortization of $2,022 and $1,687, respectively			97,240				97,575
OTHER ASSETS, net			9,832				8,631
TOTAL ASSETS		$	623,731			$	599,089
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES:
Current maturities of long-term debt		$	118			$	116
Accounts payable			95,938				93,033
Accrued liabilities			39,181				33,115
Total current liabilities			135,237				126,264
LONG-TERM DEBT, net of current maturities			160,579				159,609
DEFERRED TAX LIABILITIES			27,092				27,076
PENSION AND OTHER POST-RETIREMENT BENEFITS			18,032				18,335
OTHER LONG-TERM LIABILITIES			13,243				2,470
Total liabilities			354,183				333,754
COMMITMENTS AND CONTINGENCIES (Note 12)
STOCKHOLDERS’ INVESTMENT:
Common stock $.01 par value; 30,000,000 shares authorized; 21,536,814 and 21,536,814 shares issued and outstanding, respectively			215				215
Treasury stock purchased from employees; 28,153 shares			(414	)			(414	)
Additional paid-in capital			178,362				177,421
Retained earnings			89,290				88,818
Accumulated other comprehensive income (loss)			2,095				(705	)
Total stockholders’ investment			269,548				265,335
TOTAL LIABILITIES AND STOCKHOLDERS’ INVESTMENT		$	623,731			$	599,089

The accompanying notes are an integral part of these condensed consolidated financial statements.

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES

		Three Months Ended
		March 31,
		2008				2007
		(Unaudited)				(Unaudited)
		(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	472			$	2,959
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			4,688				3,729
Noncash amortization of debt financing costs			213				216
Share-based compensation expense			943				846
(Gain) loss on sale of long-lived assets			(6,043	)			61
Deferred income tax benefit			(4,173	)			(792	)
Noncash loss on forward exchange contracts			9,682				2,247
Change in other operating items			(9,606	)			(8,423	)
Net cash (used in) provided by operating activities			(3,824	)			843
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment			(3,627	)			(3,098	)
Proceeds from disposal/sale of property, plant and equipment			7,452				24
Other assets and liabilities			(5,501	)			(29	)
Net cash used in investing activities			(1,676	)			(3,103	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock under equity incentive plans			—				114
Excess tax benefit from equity incentive plans			—				39
Repayment of revolving credit facility			(46,000	)			(51,409	)
Borrowings under revolving credit facility			47,000				50,918
Repayments of long-term borrowings			—				(467	)
Payments on capital lease obligations			(31	)			(32	)
Debt issuance costs and other, net			(250	)			—
Net cash provided by (used in) financing activities			719				(837	)
EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS			2,444				(21	)
NET DECREASE IN CASH AND CASH EQUIVALENTS			(2,337	)			(3,118	)
CASH AND CASH EQUIVALENTS:
Beginning of period			9,867				19,821
End of period		$	7,530			$	16,703
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest		$	6,062			$	6,486
Cash paid (received) for income taxes, net		$	783			$	(5,288	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Description of Business and Basis of Presentation

Commercial Vehicle Group, Inc. and its subsidiaries (“CVG”, “Company” or “we”) design and manufacture seat systems, interior trim systems (including instrument and door panels, headliners, cabinetry, molded products and floor systems), cab structures and components, mirrors, wiper systems, electronic wiring harness assemblies and controls and switches for the global commercial vehicle market, including the heavy-duty truck market, the construction, military, bus, agriculture and specialty transportation market. We have facilities located in the United States in Arizona, Indiana, Illinois, Iowa, North Carolina, Ohio, Oregon, Tennessee, Virginia and Washington and outside of the United States in Australia, Belgium, China, Czech Republic, Mexico, Sweden, Ukraine and the United Kingdom.

We have prepared the condensed consolidated financial statements included herein, without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). The information furnished in the condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations and statements of financial position for the interim periods presented. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. We believe that the disclosures are adequate to make the information presented not misleading when read in conjunction with our fiscal 2007 consolidated financial statements and the notes thereto included in Part II, Item 8 of our Annual Report on Form 10-K as filed with the SEC. Unless otherwise indicated, all amounts are in thousands except per share amounts.

Revenues and operating results for the three months ended March 31, 2008 are not necessarily indicative of the results to be expected in future operating quarters.

2. Recently Issued Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements. SFAS No. 157 establishes a common definition for fair value to be applied to U.S. GAAP guidance requiring use of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. We adopted SFAS No. 157 on January 1, 2008. The adoption did not have a material impact on our consolidated financial position and results of operations.

In February 2008, the FASB issued FASB Staff Position (“FSP”) No. 157-1 and No. 157-2. FSP No. 157-1 amends SFAS No. 157 to exclude SFAS No. 13 and its related interpretive accounting pronouncements that address leasing transactions. FSP No. 157-2 delays the effective date of SFAS No. 157 to fiscal years beginning after November 15, 2008 and interim periods with those fiscal years for all non-financial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) until January 1, 2009 for calendar year end entities. We have adopted FSB No. 157-2 except as it applies to non-financial assets and liabilities as noted. We are currently evaluating the effect that the adoption, as it relates to non-financial assets and liabilities, will have on our consolidated financial position and results of operations.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159, which amends SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, allows certain financial assets and liabilities to be recognized, at our election, at fair market value with any gains or losses for the period recorded in the statement of income. We adopted SFAS 159 on January 1, 2008 and have elected not to measure any additional financial instruments and other items at fair value. The adoption did not have a material impact on our consolidated financial position and results of operations.

In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R). SFAS No. 158 requires an employer to recognize the funded status of defined benefit pension and other post-retirement benefit plans as an asset or liability in our consolidated balance sheets and to recognize changes in that funded status in the year in

which the changes occur through accumulated other comprehensive income in stockholders’ investment. SFAS No. 158 also requires that, beginning in 2008, our assumptions used to measure our annual defined benefit pension and other post-retirement benefit plans be determined as of the balance sheet date, and all plan assets and liabilities be reported as of that date. Currently, the assumptions used to measure our annual defined benefit pension and other post-retirement benefit plan expenses are determined as of October 1 or December 31 (measurement dates) for our various plans, and all plan assets and liabilities are generally reported as of those dates. We are currently assessing the impact of the measurement date change of SFAS 158 on our consolidated financial positions and results of operations.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations, and SFAS No. 160, Noncontrolling Interests in Consolidated Finance Statements, an amendment of ARB No. 51. SFAS No. 141(R) will change how business acquisitions are accounted for and will impact financial statements both on the acquisition date and in subsequent periods. SFAS No. 160 will change the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of equity. Early adoption is prohibited for both standards. The provisions of SFAS No. 141(R) and SFAS No. 160 are effective for our 2009 fiscal year beginning January 1, 2009, and are to be applied prospectively.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an Amendment of FASB No. 133. SFAS 161 is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, financial performance, and cash flows. SFAS 161 applies to all derivative instruments within the scope of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS 161 also applies to non-derivative hedging instruments and all hedged items designated and qualifying under SFAS 133. SFAS 161 is effective prospectively for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.

3. Fair Value Measurement

In September 2006, the FASB issued SFAS No. 157 which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of SFAS No. 157 are effective as of the beginning of our 2008 fiscal year. However, the FASB deferred the effective date of SFAS No. 157, until the beginning of our 2009 fiscal year, as it relates to fair value measurement requirements for nonfinancial assets and liabilities that are not remeasured at fair value on a recurring basis. These include goodwill, other nonamortizable intangible assets and unallocated purchase price for recent acquisitions which are included within other assets.

The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

Level 1 — Unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2 — Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3 — Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

As of March 31, 2008, the fair values of our financial assets and liabilities are categorized as follows:

		Total				Level 1				Level 2				Level 3
Derivative Financial Instruments (1)		$	(11,179	)		$	—			$	(11,179	)		$	—
Deferred Compensation (2)			1,656				1,656				—				—
Total		$	(9,523	)		$	1,656			$	(11,179	)		$	—

4. Restructuring Activities

On May 22, 2007, our Board of Directors approved the closing of our Seattle, Washington facility and transfer of operations to existing plants throughout the United States in order to improve customer service and strengthen our long-term competitive position. The decision to close the Seattle facility and redistribute the work was the result of a long-term analysis of changing market requirements, including the consolidation of product lines and closer proximity to customer operations. The closure was substantially completed as of December 31, 2007. We estimate that we will record in accordance with SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, total charges of approximately $2.1 million, consisting of employee related costs of approximately $0.8 million, non-cash expense related to the write-down of certain assets of approximately $0.4 million and facility exit and other contractual costs of approximately $0.9 million. We have incurred costs of approximately $1.4 million in the twelve months ended December 31, 2007 consisting of approximately $0.8 million employee related costs, $0.5 million of facility exit and other contractual costs and $0.1 million in noncash expense related to the write-down of certain assets. For the three months ended March 31, 2008, we have incurred costs of approximately $0.1 million of facility exit and contractual costs. We estimate that approximately $0.7 million of the total charges will be incurred as future cash expenditures. A summary of the restructuring activities as of March 31, 2008 is as follows (in thousands):

		Employee
		Costs
Balance — December 31, 2007		$	646
Deductions for payments made			(123	)
Balance — March 31, 2008		$	523

5. Share-Based Compensation

Stock Option Grants and Restricted Stock Awards

In November 2005, 168,700 shares of restricted stock and in November 2006, 207,700 shares of restricted stock were awarded by our compensation committee under our Amended and Restated Equity Incentive Plan. Restricted stock is a grant of shares of common stock that may not be sold, encumbered or disposed of, and that may be forfeited in the event of certain terminations of employment prior to the end of a restricted period set by the compensation committee. The shares of restricted stock granted in November 2005 vest ratably in three equal annual installments commencing on October 20, 2006. The shares of restricted stock granted in November 2006 vest ratably in three equal annual installments commencing on October 20, 2007. A participant granted restricted stock generally has all of the rights of a stockholder, unless the compensation committee determines otherwise.

In February 2007, 10,000 shares of restricted stock and in March 2007, 10,000 shares of restricted stock were awarded by our compensation committee under our Amended and Restated Equity Incentive Plan. The shares of restricted stock granted in February 2007 and March 2007 vest ratably in three equal annual installments commencing on October 20, 2007.

In October 2007, 328,900 shares of restricted stock were awarded by our compensation committee under our Second Amended and Restated Equity Incentive Plan. The shares of restricted stock granted in October 2007 vest ratably in

three equal annual installments commencing on October 20, 2008.

As of March 31, 2008, there was approximately $6.6 million of unearned compensation related to nonvested share-based compensation arrangements granted under our Second Amended and Restated Equity Incentive Plan. This expense is subject to future adjustments for vesting and forfeitures and will be recognized on a straight-line basis over the remaining period of seven months for the November 2005 awards, 19 months for the November 2006, February 2007 and March 2007 awards and 31 months for the November 2007 awards, respectively.

We currently estimate the forfeiture rate for our stock option and restricted stock grants at 8.7%, respectively, for all participants of each plan.

A summary of the status of our stock options as of March 31, 2008 and changes during the three-month period ending March 31, 2008 is presented below:

										Weighted-
						Weighted-				Average				Aggregate
						Average				Remaining				Intrinsic
		Options				Exercise				Contractual				Value
Stock Options		(000’s)				Price				Life (Years)				(000’s)
Outstanding at December 31, 2007			750			$	12.45				6.5			$	2,013
Granted			—				—				—				—
Exercised			—				—				—				—
Forfeited			—				—				—				—
Outstanding at March 31, 2008			750			$	12.45				6.2			$	981
Exercisable at March 31, 2008			750			$	12.45				6.2			$	981

The following table summarizes information about the nonvested restricted stock grants as of March 31, 2008:

						Weighted-Average
						Grant-Date Fair
		Shares (000’s)				Value
Nonvested at December 31, 2007			520			$	16.94
Granted			—				—
Vested			—				—
Forfeited			(3	)			14.67
Nonvested at March 31, 2008			517			$	16.95

As of March 31, 2008, a total of 801,629 shares were available from the 2.0 million shares authorized for issuance under our Second Amended and Restated Equity Incentive Plan, including cumulative forfeitures.

6. Stockholders’ Investment

Common Stock — Our authorized capital stock consists of 30,000,000 shares of common stock with a par value of $0.01 per share.

Preferred Stock — Our authorized capital stock consists of 5,000,000 shares of preferred stock with a par value of $0.01 per share, with no shares outstanding as of March 31, 2008.

Earnings Per Share — In accordance with SFAS No. 128, Earnings per Share, as amended, basic earnings per share is determined by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share, and all other diluted per share amounts presented, is determined by dividing net income by the weighted average number of common shares and potential common shares outstanding during the period as determined by the Treasury Stock Method, as amended, in SFAS No. 123(r), Share Based Payment. Potential common shares are included in the diluted earnings per share calculation when dilutive. Diluted earnings per share for the three months ended March 31, 2008 and 2007 includes the effects of potential common shares consisting of common stock issuable upon exercise of outstanding stock options and for March 31, 2008, the effect of nonvested restricted stock (in thousands, except per share amounts):

		Three Months Ended
		March 31,
		2008				2007
Net income applicable to common shareholders — basic and diluted		$	472			$	2,959
Weighted average number of common shares outstanding			21,537				21,389
Dilutive effect of outstanding stock options and restricted stock grants after application of the treasury stock method			104				274
Dilutive shares outstanding			21,641				21,663
Basic earnings per share		$	0.02			$	0.14
Diluted earning per share		$	0.02			$	0.14

For the three months ended March 31, 2008, diluted earnings per share excludes 591 thousand of outstanding stock options and nonvested restricted stock as the effect would have been antidilutive.

Dividends — We have not declared or paid any cash dividends in the past. The terms of our credit agreement restricts the payment or distribution of our cash or other assets, including cash dividend payments.

7. Accounts Receivable

Trade accounts receivable are stated at historical value less an allowance for doubtful accounts, which approximates fair value. This estimated allowance is based primarily on management’s evaluation of specific balances as the balances become past due, the financial condition of our customers and our historical experience of write-offs. If not reserved through specific identification procedures, our general policy for uncollectible accounts is to reserve at a certain percentage threshold, based upon the aging categories of accounts receivable. Past due status is based upon the due date of the original amounts outstanding. When items are ultimately deemed uncollectible, they are charged off against the reserve previously established in the allowance for doubtful accounts.

8. Inventories

Inventories are valued at the lower of first-in, first-out (“FIFO”) cost or market. Cost includes applicable material, labor and overhead. Inventories consisted of the following (in thousands):

		March 31,				December 31,
		2008				2007
Raw materials		$	59,867			$	62,129
Work in process			25,239				19,811
Finished goods			21,341				19,862
Less excess and obsolete			(5,993	)			(5,417	)
		$	100,454			$	96,385

Inventory quantities on-hand are regularly reviewed, and where necessary, provisions for excess and obsolete inventory are recorded based primarily on our estimated production requirements driven by current market volumes. Excess and obsolete provisions may vary by product depending upon future potential use of the product.

9. Goodwill and Intangible Assets

Goodwill represents the excess of acquisition purchase price over the fair value of net assets acquired. We review goodwill and indefinite-lived intangible assets for impairment annually in the second fiscal quarter and whenever events or changes in circumstances indicate the carrying value may not be recoverable in accordance with SFAS No. 142, Goodwill and Intangible Assets. We review definite-lived intangible assets in accordance with the provisions of SFAS No. 144, Accounting for Impairment or Disposal of Long-Lived Assets.

The provisions of SFAS No. 142 require that a two-step impairment test be performed on goodwill. In the first step, we compare the fair value of our reporting unit to our carrying value. Our reporting unit is consistent with the reportable segment identified in Note 8 to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2007. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is considered not impaired and we are not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds the implied fair value, then we

would record an impairment loss equal to the difference. SFAS No. 142 also requires that the fair value of the purchased intangible assets with indefinite lives be estimated and compared to the carrying value. We estimate the fair value of these intangible assets using an income approach. We recognize an impairment loss when the estimated fair value of the intangible asset is less than the carrying value. In this regard, management considers the following indicators in determining if events or changes in circumstances have occurred indicating that the recoverability of the carrying amount of indefinite-lived and amortizing intangible assets should be assessed: (1) a significant decrease in the market value of an asset; (2) a significant change in the extent or manner in which an asset is used or a significant physical change in an asset; (3) a significant adverse change in legal factors or in the business climate that could affect the value of an asset or an adverse action or assessment by a regulator; (4) an accumulation of costs significantly in excess of the amount originally expected to acquire or construct an asset; and (5) a current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with an asset used for the purpose of producing revenue. Our annual goodwill analysis was performed during the second quarter of fiscal 2007 and did not result in an impairment charge.

Annually, or more frequently if events or circumstances change, a determination is made by management, in accordance with SFAS No. 144 to ascertain whether property and equipment and certain definite-lived intangibles have been impaired based on the sum of expected future undiscounted cash flows from operating activities. If the estimated net cash flows are less than the carrying amount of such assets, we will recognize an impairment loss in an amount necessary to write down the assets to fair value as determined from expected future discounted cash flows.

Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions and determination of appropriate market comparables. We base our fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. The valuation approaches we use include the Income Approach (the Discounted Cash Flow Method) and the Market Approach (the Guideline Company and Transaction Methods) to estimate the fair value of the reporting unit; earnings are emphasized in the Discounted Cash Flow, Guideline Company, and the Transaction Methods. In addition, these methods utilize market data in the derivation of a value estimate and are forward-looking in nature. The Discounted Cash Flow Method utilizes a market-derived rate of return to discount anticipated performance, while the Guideline Company Method and the Transaction Method incorporate multiples that are based on the market’s assessment of future performance. Actual future results may differ materially from those estimates.

Our intangible assets as of March 31, 2008 and December 31, 2007 were comprised of the following (in thousands):

		March 31, 2008
		Weighted-
		Average
		Amortization				Gross Carrying				Accumulated				Net Carrying
		Period				Amount				Amortization				Amount
Definite-lived intangible assets:
Tradenames/Trademarks		30 years				$	9,790			$	(997	)		$	8,793
Licenses		7 years					438				(329	)			109
Customer relationships		15 years					14,234				(696	)			13,538
						$	24,462			$	(2,022	)		$	22,440
Indefinite-lived intangible assets:
Goodwill						$	156,341			$	—			$	156,341
Customer relationships							74,800				—				74,800
						$	231,141			$	—			$	231,141
Total consolidated goodwill and intangible assets														$	253,581

		December 31, 2007
		Weighted-
		Average
		Amortization				Gross Carrying				Accumulated				Net Carrying
		Period				Amount				Amortization				Amount
Definite-lived intangible assets:
Tradenames/Trademarks		30 years				$	9,790			$	(915	)		$	8,875
Licenses		7 years					438				(313	)			125
Customer relationships		15 years					14,234				(459	)			13,775
						$	24,462			$	(1,687	)		$	22,775
Indefinite-lived intangible assets:
Goodwill						$	151,189			$	—			$	151,189
Customer relationships							74,800				—				74,800
						$	225,989			$	—			$	225,989
Total consolidated goodwill and intangible assets														$	248,764

The aggregate intangible asset amortization expense was approximately $0.3 million for the three months ended March 31, 2008 and approximately $0.1 million for the three months ended March 31, 2007.

The estimated intangible asset amortization expense for the fiscal year ending December 31, 2008, and for the five succeeding years is as follows (in thousands):

Fiscal Year Ended		Estimated
December 31,		Amortization Expense
2008		$	1,338
2009		$	1,338
2010		$	1,275
2011		$	1,275
2012		$	1,275
2013		$	1,275

The changes in the carrying amounts of goodwill for the three months ended March 31, 2008, were comprised of the following (in thousands):

Balance — December 31, 2007		$	151,189
Currency translation adjustment			124
Post-acquisition adjustments			5,028
Balance — March 31, 2008		$	156,341

We recorded post-acquisition adjustments of approximately $5.0 million primarily related to the recognition of loss contracts related to our acquisition of PEKM.

10. Debt

Debt consisted of the following (in thousands):

		March 31,				December 31,
		2008				2007
Revolving credit facilities bore interest at a weighted average of 8.2% as of March 31, 2008 and 8.5% as of December 31, 2007		$	10,500			$	9,500
8.0% senior notes due 2013			150,000				150,000
Other			197				225
			160,697				159,725
Less current maturities			118				116
		$	160,579			$	159,609

Credit Agreement — We account for amendments to our revolving credit facility under the provisions of EITF Issue No. 98-14, Debtor’s Accounting for the Changes in Line-of-Credit or Revolving-Debt Arrangements (EITF 98-14), and our term loan and 8.0% senior notes under the provisions of EITF Issue No. 96-19, Debtor’s Accounting for a Modification or Exchange of Debt Instruments (EITF 96-19). Historically, we have periodically amended the terms of our revolving credit facility and term loan to increase or decrease the individual and collective borrowing base of the instruments on an as needed basis. We have not modified the terms of our 8.0% senior notes subsequent to the original offering date. In connection with an amendment of our revolving credit facility, bank fees incurred are deferred and amortized over the term of the new arrangement and, if applicable, any outstanding deferred fees are expensed proportionately or in total, as appropriate per the guidance of EITF 98-14. In connection with an amendment of our term loan, under the terms of EITF 96-19, bank and any third-party fees are either expensed as an extinguishment of debt or deferred and amortized over the term of the agreement based upon whether or not the old and new debt instruments are substantially different.

On June 29, 2007, we repaid our foreign denominated term loan in full. In connection with this loan repayment, approximately $0.1 million of deferred fees, representing a proportionate amount of total deferred fees, were expensed as a loss on early extinguishment of debt.

On August 16, 2007, we entered into an Amendment and Waiver Letter to the Revolving Credit and Term Loan Agreement (the “Amendment and Waiver Letter”). Pursuant to the terms of the Amendment and Waiver Letter, the lenders consented to increase the size of permitted acquisitions to $40 million per fiscal year and waived any default or event of default in connection with intercompany loans, contributions to capital, investments in capital stock or mixed stock and indebtedness certificates provided in connection with permitted acquisitions.

On September 28, 2007, we entered into the Tenth Amendment to the Revolving Credit and Term Loan Agreement (the “Tenth Amendment”). Pursuant to the terms of the Tenth Amendment, the lenders consented to various amendments, including but not limited to, changes to reporting requirements and financial ratios, which included the fixed charge coverage ratio and the maximum ratio of total indebtedness. Based on the provisions of EITF 98-14, approximately $0.1 million third party fees relating to the credit agreement were capitalized and are being amortized over the remaining life of the senior credit agreement.

On March 11, 2008, we entered into the Eleventh Amendment to the Revolving Credit and Term Loan Agreement (the “Eleventh Amendment”). Pursuant to the terms of the Eleventh Amendment, the banks party thereto consented to various amendments to the senior credit agreement, including but not limited to: (i) amendments to the fixed charge ratio and the leverage ratio to provide us with increased flexibility in the near future; (ii) an amendment to the applicable margin pricing grid to include increased rates for prime rate and LIBOR borrowings when our leverage ratio (x) is equal to or greater than 4.0x; (iii) a reduction in availability under the revolving credit facility from $100 million to $50 million, subject to increases to $75 million and then to $100 million upon satisfaction of certain conditions, including meeting certain financial covenant thresholds; (iv) increases in certain baskets in the indebtedness, asset disposition, investment and lien covenants contained in the senior credit agreement; and (v) an amendment to permit proposed future tax planning. Based on the provisions of EITF 98-14, approximately $0.3 million third party fees relating to the credit agreement were capitalized and are being amortized over the remaining life of the senior credit agreement.

As of March 31, 2008, approximately $4.0 million in deferred fees relating to previous amendments of our senior credit agreement and fees related to the 8.0% senior note offering were outstanding and are being amortized over the life of the agreements.

The senior credit agreement provides us with the ability to denominate a portion of our borrowings in foreign currencies. As of March 31, 2008, $10.5 million of the revolving credit facility borrowings were denominated in U.S. dollars and none of the revolving credit facility borrowings were denominated in British pounds sterling.

Terms, Covenants and Compliance Status — Our senior credit agreement contains various restrictive covenants, including limiting indebtedness, rental obligations, investments and cash dividends, and also requires the maintenance of certain financial ratios, including fixed charge coverage and funded debt to EBITDA as defined by our senior credit agreement. We were in compliance with respect to these covenants as of March 31, 2008. Under this agreement, borrowings bear interest at various rates plus a margin based on certain financial ratios. Borrowings under the senior credit agreement are secured by specifically identified assets, comprising in total, substantially all of our assets and the subsidiaries party to the financing, except that the assets of our foreign subsidiaries party to the financing only secure foreign borrowings. Additionally, as of March 31, 2008, we had outstanding letters of credit of approximately $1.8 million.

11. Income Taxes

We or one of our subsidiaries files federal income tax returns in the United States and income tax returns in various states and foreign jurisdictions. With few exceptions, we are no longer subject to income tax examinations by any of the taxing authorities for years before 2004. There are currently two income tax examinations in process. We do not anticipate that any adjustments from these examinations will result in material changes to our consolidated financial position and results of operations.

We adopted the provisions of FIN 48, Accounting for Uncertainty in Income Taxes, effective January 1, 2007. As of March 31, 2008, we have provided a liability for $2.7 million of unrecognized tax benefits related to various federal and state income tax positions. Of the $2.7 million, the amount that would impact our effective tax rate, if recognized, is $1.6 million. The remaining $1.1 million of unrecognized tax benefits consists of items that are offset by deferred tax assets subject to valuation allowances, and thus could further impact the effective tax rate.

We accrue penalties and interest related to unrecognized tax benefits through income tax expense, which is consistent with the recognition of these items in prior reporting periods. We had approximately $0.6 million accrued for the payment of interest and penalties at March 31, 2008 which is included in the $2.7 million of unrecognized tax benefits.

During the current quarter, we did not release any tax reserves associated with items with expiring statue of limitations. We anticipate events could occur within the next 12 months that would have an impact on the amount of unrecognized tax benefits that would be required. Approximately $0.9 million of unrecognized tax benefits relate to items that are affected by expiring statutes of limitation within the next 12 months.

12. Commitments and Contingencies

Warranty — We are subject to warranty claims for products that fail to perform as expected due to design or manufacturing deficiencies. Customers continue to require their outside suppliers to guarantee or warrant their products and bear the cost of repair or replacement of such products. Depending on the terms under which we supply products to our customers, a customer may hold us responsible for some or all of the repair or replacement costs of defective products when the product supplied did not perform as represented. Our policy is to reserve for estimated future customer warranty costs based on historical trends and current economic factors. The following represents a summary of the warranty provision for the three months ended March 31, 2008 (in thousands):

Balance — December 31, 2007		$	3,958
Additional provisions recorded			1,302
Deduction for payments made			(807	)
Currency translation adjustment			47
Balance — March 31, 2008		$	4,500

Foreign Currency Forward Exchange Contracts — We use forward exchange contracts to hedge certain of the foreign currency transaction exposures primarily related to our United Kingdom operations. We estimate our projected revenues and purchases in certain foreign currencies or locations, and will hedge a portion or all of the

anticipated long or short position. The contracts typically run from three months up to three years. These contracts are marked-to-market and the fair value is included in assets (liabilities) in the consolidated balance sheet, with the offsetting noncash gain or loss included in the consolidated statements of operations. We do not hold or issue foreign exchange options or forward contracts for trading purposes.

The following table summarizes the notional amount of our open foreign exchange contracts at March 31, 2008 (in thousands):

										U.S. $
		Local Currency				U.S. $				Equivalent Fair
		Amount				Equivalent				Value
Contracts to (buy) sell currencies:
U.S. dollar		$	(489	)		$	(489	)		$	(489	)
Eurodollar			47,335				67,246				76,049
Swedish kronor			10,880				1,621				1,891
Japanese yen			2,940,000				29,917				31,798
Australian dollar			3,800				3,223				3,459

The difference between the U.S. $ equivalent and U.S. $ equivalent fair value of approximately $11.2 million and $1.5 million is included in other long-term liabilities in the condensed consolidated balance sheet at March 31, 2008 and December 31, 2007, respectively.

Litigation — We are subject to various legal actions and claims incidental to our business, including those arising out of alleged defects, product warranties, employment-related matters and environmental matters. Management believes that we maintain adequate insurance to cover these claims. We have established reserves for issues that are probable and estimatable in amounts management believes are adequate to cover reasonable adverse judgments not covered by insurance. Based upon the information available to management and discussions with legal counsel, it is the opinion of management that the ultimate outcome of the various legal actions and claims that are incidental to our business will not have a material adverse impact on our consolidated financial position, results of operations or cash flows; however, such matters are subject to many uncertainties, and the outcomes of individual matters are not predictable with assurance.

13. Pension and Other Post-Retirement Benefit Plans

We sponsor pension and other post-retirement benefit plans that cover certain hourly and salaried employees in the United States and United Kingdom. Our policy is to make annual contributions to the plans to fund the normal cost as required by local regulations. In addition, we have a post-retirement benefit plan for certain U.S. operations, retirees and their dependents.

The components of net periodic benefit cost related to the pension and other post-retirement benefit plans for the three months ending March 31, is as follows (in thousands):

										Non-U.S. Pension								Other Post-
		U.S. Pension Plans								Plans								Retirement Benefit Plans
		2008				2007				2008				2007				2008				2007
Service cost		$	112			$	125			$	—			$	—			$	5			$	6
Interest cost			457				440				694				586				38				34
Expected return on plan assets			(491	)			(381	)			(537	)			(557	)			—				—
Recognized actuarial loss			—				—				66				47				(6	)			—
Net periodic benefit cost			78				184				223				76				37				40
Special Termination Benefits			—				55				—				—				—				96
Net benefit cost		$	78			$	239			$	223			$	76			$	37			$	136

We previously disclosed in our financial statements for the year ended December 31, 2007, that we expect to contribute approximately $2.7 million to our pension plans in 2008. As of March 31, 2008, approximately $0.4 million of contributions have been made to our pension plans. We anticipate contributing an additional $2.3 million to our pension plans in 2008 for total estimated contributions during 2008 of $2.7 million.

14. Comprehensive Income

We follow the provisions of SFAS No. 130, Reporting Comprehensive Income, which established standards for reporting and display of comprehensive income and its components. Comprehensive income reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. Comprehensive income represents net income adjusted for foreign currency translation adjustments and minimum pension liability. In accordance with SFAS No. 130, we have elected to disclose comprehensive income in stockholders’ investment. The components of accumulated other comprehensive income consisted of the following as of March 31, 2008 (in thousands):

Foreign currency translation adjustment		$	7,668
Pension liability			(5,406	)
Unrealized loss on derivatives			(167	)
		$	2,095

Comprehensive income for the three months ended March 31 was as follows (in thousands):

		2008				2007
Net income		$	472			$	2,959
Other comprehensive income:
Foreign currency translation adjustment			2,800				71
Comprehensive income		$	3,272			$	3,030

15. Related Party Transactions

On January 31, 2005, we entered into an advisory agreement with Hidden Creek Partners, LLC (“HCP”), pursuant to which HCP agreed to assist us in financing activities, strategic initiatives and acquisitions in exchange for an annual fee. In addition, we agreed to pay HCP a transaction fee for services rendered that relate to transactions we may enter into from time to time, in an amount that is negotiated between our Chief Executive Officer or Chief Financial Officer and approved by our Board of Directors. All of the principals of HCP are employees and managing directors of Thayer Capital. Scott Rued, the Company’s Chairman, is a managing partner of Thayer Capital and Richard Snell, a member of our Board of Directors and our Compensation Committee Chairman, is an operating partner of Thayer Capital. Thayer Capital, Scott Rued or Richard Snell are not a party to, and have no direct or indirect financial interest in the advisory agreement between us and HCP. For the three months ended March 31, 2008 and 2007, we made payments under these arrangements of approximately $0.1 million and $0.2 million, respectively.

16. Consolidating Guarantor and Non-Guarantor Financial Information

The following consolidating financial information presents balance sheets, statements of operations and cash flow information related to our business. Each Guarantor, as defined, is a direct or indirect wholly owned subsidiary of the Company and has fully and unconditionally guaranteed the Subordinated Notes issued by the Company, on a joint and several basis. Separate financial statements and other disclosures concerning the Guarantors have not been presented because management believes that such information is not material to investors.

The Parent Company includes all of the wholly owned subsidiaries accounted for under the equity method. The guarantor and non-guarantor companies include the consolidated financial results of their wholly owned subsidiaries accounted for under the equity method. All applicable corporate expenses have been allocated appropriately among the guarantor and non-guarantor subsidiaries.

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2008

		Parent				Guarantor				Non-Guarantor
		Company				Companies				Companies				Elimination				Consolidated
		(Unaudited)
		(In thousands)
REVENUES		$	—			$	138,752			$	65,254			$	(7,002	)		$	197,004
COST OF REVENUES			—				127,310				55,708				(6,779	)			176,239
Gross Profit			—				11,442				9,546				(223	)			20,765
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			—				10,143				5,110				(235	)			15,018
(GAIN) ON SALE OF LONG-LIVED ASSETS			—				(6,075	)			—				—				(6,075	)
AMORTIZATION EXPENSE			—				103				242				—				345
Operating Income			—				7,271				4,194				12				11,477
OTHER EXPENSE			—				36				9,662				—				9,698
INTEREST EXPENSE			—				3,658				1,025				(776	)			3,907
Income Before Provision for Income Taxes			—				3,577				(6,493	)			788				(2,128	)
PROVISION FOR INCOME TAXES			—				163				(2,763	)			—				(2,600	)
NET INCOME		$	—			$	3,414			$	(3,730	)		$	788			$	472

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2008

		Parent				Guarantor				Non-Guarantor
		Company				Companies				Companies				Elimination				Consolidated
		(Unaudited)
		(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	—			$	3,262			$	6,283			$	(2,015	)		$	7,530
Accounts receivable, net			—				256,877				42,610				(178,759	)			120,728
Inventories, net			—				59,991				41,062				(599	)			100,454
Prepaid expenses and other current assets			—				3,348				8,667				5,444				17,459
Deferred income taxes			—				15,222				3,973				(2,017	)			17,178
Total current assets			—				338,700				102,595				(177,946	)			263,349
PROPERTY, PLANT AND EQUIPMENT, net			—				84,003				12,966				—				96,969
INVESTMENT IN SUBSIDIARIES			423,993				(106,663	)			45,502				(362,832	)			—
GOODWILL			—				113,908				42,433				—				156,341
INTANGIBLE ASSETS, net			—				83,702				13,538				—				97,240
OTHER ASSETS, net			—				13,684				3,323				(7,175	)			9,832
TOTAL ASSETS		$	423,993			$	527,334			$	220,357			$	(547,953	)		$	623,731
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES:
Current maturities of long-term debt		$	—			$	118			$	—			$	—			$	118
Accounts payable			—				231,459				45,253				(180,774	)			95,938
Accrued liabilities			—				22,399				14,131				2,651				39,181
Total current liabilities			—				253,976				59,384				(178,123	)			135,237
LONG-TERM DEBT, net of current maturities			—				160,551				25,744				(25,716	)			160,579
DEFERRED TAX LIABILITIES			—				35,084				(816	)			(7,176	)			27,092
PENSION AND OTHER POST-RETIREMENT BENEFITS			—				6,811				11,221				—				18,032
OTHER LONG-TERM LIABILITIES			—				437				12,806				—				13,243
Total liabilities			—				456,859				108,339				(211,015	)			354,183
STOCKHOLDERS’ INVESTMENT			423,993				70,475				112,018				(336,938	)			269,548
TOTAL LIABILITIES AND STOCKHOLDERS’ INVESTMENT		$	423,993			$	527,334			$	220,357			$	(547,953	)		$	623,731

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2008

		Parent				Guarantor				Non-Guarantor
		Company				Companies				Companies				Elimination				Consolidated
										(Unaudited)
										(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	—			$	3,414			$	(3,730	)		$	788			$	472
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			—				3,553				1,135				—				4,688
Noncash amortization of debt financing costs			—				213				—				—				213
Stock-based compensation expense			—				943				—				—				943
(Gain) on sale of long-lived assets			—				(6,043	)			—				—				(6,043	)
Deferred income tax provision			—				18				(4,190	)			(1	)			(4,173	)
Noncash gain on forward exchange contracts			—				—				9,682				—				9,682
Change in other operating items			—				(4,887	)			(1,917	)			(2,802	)			(9,606	)
Net cash (used in) provided by operating activities			—				(2,789	)			980				(2,015	)			(3,824	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment			—				(3,002	)			(625	)			—				(3,627	)
Proceeds from disposal/sale of property, plant and equipment			—				7,432				20				—				7,452
Other asset and liabilities			—				(594	)			(4,907	)			—				(5,501	)
Net cash provided by (used in) investing activities			—				3,836				(5,512	)			—				(1,676	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of revolving credit facility			—				(46,000	)			—				—				(46,000	)
Borrowings under revolving credit facility			—				47,000				—				—				47,000
Payments on capital lease obligations			—				(28	)			(3	)			—				(31	)
Other, net			—				(250	)			—				—				(250	)
Net cash provided by (used in) financing activities			—				722				(3	)			—				719
EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS			—				144				2,300				—				2,444
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			—				1,913				(2,235	)			(2,015	)			(2,337	)
CASH AND CASH EQUIVALENTS:
Beginning of period			—				1,349				8,518				—				9,867
End of period		$	—			$	3,262			$	6,283			$	(2,015	)		$	7,530

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2007

		Parent				Guarantor				Non-Guarantor
		Company				Companies				Companies				Elimination				Consolidated
		(Unaudited)
		(In thousands)
REVENUES		$	—			$	158,399			$	41,880			$	(1,478	)		$	198,801
COST OF REVENUES			—				138,416				35,300				(1,184	)			172,532
Gross Profit			—				19,983				6,580				(294	)			26,269
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			—				11,963				3,876				(285	)			15,554
AMORTIZATION EXPENSE			—				103				—				—				103
Operating Income			—				7,917				2,704				(9	)			10,612
OTHER EXPENSE			—				69				2,251				—				2,320
INTEREST EXPENSE			—				3,356				281				—				3,637
Income Before Provision for Income Taxes			—				4,492				172				(9	)			4,655
PROVISION FOR INCOME TAXES			—				1,827				(131	)			—				1,696
NET INCOME		$	—			$	2,665			$	303			$	(9	)		$	2,959

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2007

		Parent				Guarantor				Non-Guarantor
		Company				Companies				Companies				Elimination				Consolidated
										(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	—			$	1,349			$	8,518			$	—			$	9,867
Accounts receivable, net			—				242,842				34,824				(169,979	)			107,687
Inventories, net			—				58,757				38,238				(610	)			96,385
Prepaid expenses			—				3,175				7,914				5,419				16,508
Deferred income taxes			—				15,223				624				(2,858	)			12,989
Total current assets			—				321,346				90,118				(168,028	)			243,436
PROPERTY, PLANT AND EQUIPMENT, net			—				85,817				12,441				—				98,258
INVESTMENT IN SUBSIDIARIES			417,428				(100,082	)			45,502				(362,848	)			—
GOODWILL			—				113,787				37,402				—				151,189
INTANGIBLE ASSETS, net			—				83,800				13,775				—				97,575
OTHER ASSETS, net			—				8,631				—				—				8,631
DEFERRED INCOME TAXES			—				4,172				3,323				(7,495	)			—
TOTAL ASSETS		$	417,428			$	517,471			$	202,561			$	(538,371	)		$	599,089
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES:
Current maturities of long-term debt		$	—			$	116			$	—			$	—			$	116
Accounts payable			—				220,923				42,089				(169,979	)			93,033
Accrued liabilities			—				21,128				9,426				2,561				33,115
Total current liabilities			—				242,167				51,515				(167,418	)			126,264
LONG-TERM DEBT, net			—				159,581				25,744				(25,716	)			159,609
DEFERRED TAX LIABILITIES			—				35,387				(816	)			(7,495	)			27,076
OTHER LONG-TERM LIABILITIES			—				7,614				13,191				—				20,805
Total liabilities			—				444,749				89,634				(200,629	)			333,754
STOCKHOLDERS’ INVESTMENT			417,428				72,722				112,927				(337,742	)			265,335
TOTAL LIABILITIES AND STOCK HOLDERS’ INVESTMENT		$	417,428			$	517,471			$	202,561			$	(538,371	)		$	599,089