Commercial Vehicle Group, Inc. - Quarter Report: 2009 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, 2009

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)		41-1990662 (I.R.S. Employer Identification No.)
7800 Walton Parkway New Albany, Ohio (Address of principal executive offices)		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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o 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. (Check one):

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

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, 2009 was 21,746,415 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, 2009 AND 2008 (UNAUDITED)			1
		CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2009 (UNAUDITED) AND DECEMBER 31, 2008 (UNAUDITED)			2
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008 (UNAUDITED)			3
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)			4
ITEM 2		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			22
ITEM 3		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			29
ITEM 4		CONTROLS AND PROCEDURES			29
PART II		OTHER INFORMATION			30
SIGNATURES					32
Certification of CEO
Certification of CFO
CEO Certification Pursuant to Section 906
CFO Certification Pursuant to Section 906
EX-31.1
EX-31.2
EX-32.1
EX-32.2

ITEM 1 – FINANCIAL STATEMENTS

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

		Three Months Ended
		March 31,
		2009				2008
		(Unaudited)				(Unaudited)
		(In thousands, except per share
		amounts)
REVENUES		$	108,530			$	197,004
COST OF REVENUES			111,779				176,239
Gross (Loss) Profit			(3,249	)			20,765
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			13,343				15,018
AMORTIZATION EXPENSE			97				345
GAIN ON SALE OF LONG-LIVED ASSETS			—				(6,075	)
RESTRUCTURING COSTS			1,712				—
Operating (Loss) Income			(18,401	)			11,477
OTHER (INCOME) EXPENSE			(4,892	)			9,698
INTEREST EXPENSE			3,644				3,907
LOSS ON EARLY EXTINGUISHMENT OF DEBT			795				—
Loss Before Provision (Benefit) for Income Taxes			(17,948	)			(2,128	)
PROVISION (BENEFIT) FOR INCOME TAXES			1,456				(2,600	)
NET (LOSS) INCOME		$	(19,404	)		$	472
(LOSS) EARNINGS PER COMMON SHARE:
Basic		$	(0.89	)		$	0.02
Diluted		$	(0.89	)		$	0.02
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic			21,746				21,537
Diluted			21,746				21,641

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

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

		March 31,				December 31,
		2009				2008
		(Unaudited)				(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	5,350			$	7,310
Accounts receivable, net of reserve for doubtful accounts of $3,132 and $3,419, respectively			71,754				100,898
Inventories, net			71,238				90,782
Prepaid expenses			16,619				20,428
Total current assets			164,961				219,418
PROPERTY, PLANT AND EQUIPMENT, net			86,899				90,392
INTANGIBLE ASSETS, net of accumulated amortization of $1,714 and $1,618, respectively			34,514				34,610
OTHER ASSETS, net			12,989				10,341
TOTAL ASSETS		$	299,363			$	354,761
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES:
Current maturities of long-term debt		$	15,537			$	81
Accounts payable			47,494				73,451
Accrued liabilities, other			36,228				43,417
Total current liabilities			99,259				116,949
LONG-TERM DEBT, net of current maturities			150,014				164,814
PENSION AND OTHER POST-RETIREMENT BENEFITS			19,847				19,885
OTHER LONG-TERM LIABILITIES			6,525				9,171
Total liabilities			275,645				310,819
COMMITMENTS AND CONTINGENCIES (Note 12)
STOCKHOLDERS’ INVESTMENT:
Common stock $.01 par value; 30,000,000 shares authorized; 21,746,415 shares issued and outstanding, respectively			217				217
Treasury stock purchased from employees; 46,474 shares			(455	)			(455	)
Additional paid-in capital			181,619				180,848
Retained loss			(137,715	)			(118,311	)
Accumulated other comprehensive loss			(19,948	)			(18,357	)
Total stockholders’ investment			23,718				43,942
TOTAL LIABILITIES AND STOCKHOLDERS’ INVESTMENT		$	299,363			$	354,761

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

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

		Three Months Ended
		March 31,
		2009				2008
		(Unaudited)				(Unaudited)
		(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income		$	(19,404	)		$	472
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization			4,415				4,688
Noncash amortization of debt financing costs			325				213
Loss on early extinguishment of debt			795				—
Share-based compensation expense			771				943
Loss (gain) on sale of assets			365				(6,043	)
Deferred income tax benefit			—				(4,173	)
Noncash (income) loss on forward exchange contracts			(4,858	)			9,682
Change in other operating items			21,377				(9,606	)
Net cash provided by (used in) operating activities			3,786				(3,824	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment			(1,690	)			(3,627	)
Proceeds from disposal/sale of property, plant and equipment			—				7,452
Other assets and liabilities			(976	)			(5,501	)
Net cash used in investing activities			(2,666	)			(1,676	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of revolving credit facility			(87,121	)			(46,000	)
Borrowings under revolving credit facility			87,807				47,000
Payments on capital lease obligations			(30	)			(31	)
Debt issuance costs and other			(2,631	)			(250	)
Net cash (used in) provided by financing activities			(1,975	)			719
EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS			(1,105	)			2,444
NET DECREASE IN CASH AND CASH EQUIVALENTS			(1,960	)			(2,337	)
CASH AND CASH EQUIVALENTS:
Beginning of period			7,310				9,867
End of period		$	5,350			$	7,530
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest		$	6,275			$	6,062
Cash (refund) received for income taxes, net		$	(655	)		$	783

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, 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 2008 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, 2009 are not necessarily indicative of the results to be expected in future operating quarters.

2. Recently Issued Accounting Pronouncements

In February 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) No. 157-1 and No. 157-2. FSP No. 157-1 amends Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements, to exclude SFAS No. 13, Accounting for Leases, 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. The adoption did not have a material impact on our consolidated financial position 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 No. 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 No. 161 applies to all derivative instruments within the scope of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 161 also applies to non-derivative hedging instruments and all hedged items designated and qualifying under SFAS No. 133. SFAS No. 161 is effective prospectively for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. As SFAS No. 161 only requires additional disclosures on our derivative and hedging activities, the adoption did not impact our consolidated financial position and results of operations.

In April 2008, the FASB issued FSP No. FAS 142-3, Determination of the Useful Life of Intangible Assets. This FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. The objective of this FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(R), and other principles of GAAP. This FSP applies to all intangible assets, whether acquired in a business combination or otherwise, and shall be effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years and applied prospectively to intangible assets acquired after the effective date. Early adoption is prohibited. This FSP did not have an impact on our consolidated financial position and results of operations.

In June 2008, the FASB issued FSP Emerging Issues Task Force (“EITF”) Issue No. 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities. The FSP concludes that unvested share-based payment awards that contain rights to receive nonforfeitable dividends or dividend equivalents are participating securities, and thus, should be included in the two-class method of computing earnings per share (“EPS”). This FSP is effective for fiscal years beginning after December 15, 2008, and interim periods within those years and requires that all prior period EPS be adjusted retroactively. This FSP did not have an impact on our consolidated financial position and results of operations.

In December 2008, the FASB issued FSP FAS 132(R)-1, Employers’ Disclosures about Postretirement Benefit Plan Assets. This FSP amends SFAS No. 132 (revised 2003), Employers’ Disclosures about Pensions and Other Postretirement Benefits, to provide guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan on investment policies and strategies, major categories of plan assets, inputs and valuation techniques used to measure the fair value of plan assets and significant concentrations of risk within plan assets. This FSP shall be effective for fiscal years ending after December 15, 2009, with earlier application permitted. Upon initial application, the provisions of this FSP are not required for earlier periods that are presented for comparative purposes. As FSP FAS 132(R)-1 only requires additional disclosures about our pension and other post-retirement benefits plans, the adoption will not impact our consolidated financial position and results of operations.

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.

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.

The fair values of our financial assets and liabilities are categorized as follows:

		March 31, 2009																December 31, 2008
		Total				Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3
Derivative assets (1)		$	29			$	—			$	29			$	—			$	32			$	—			$	32			$	—
Deferred compensation (2)			1,135				1,135				—				—				1,223				1,223				—				—
Total assets		$	1,164			$	1,135			$	29			$	—			$	1,255			$	1,223			$	32			$	—
Derivative liabilities (1)		$	10,471			$	—			$	10,471			$	—			$	15,331			$	—			$	15,331			$	—

The adoption of SFAS No. 157 for our non-financial assets and liabilities that are remeasured at fair value on a non-recurring basis did not impact our consolidated financial position and results of operations for the three months ended March 31, 2009.

4. Restructuring Activities

On February 10, 2009, we announced a restructuring plan that includes a reduction in workforce and the closure of certain manufacturing, warehousing and assembly facilities. The facilities to be closed include an assembly and sequencing facility in Kent, Washington; seat sequencing and assembly facility in Statesville, North Carolina; manufacturing facility in Lake Oswego, Oregon; inventory and product warehouse in Concord, North Carolina; and seat assembly and distribution facility in Seneffs, Belgium. In addition, on March 18, 2009, we announced the closure of our Vancouver, Washington manufacturing facility. The decision to reduce our workforce and to close the facilities was the result of the extended downturn of the global economy, and in particular the commercial vehicle markets. 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 $3.0 million, consisting of approximately $1.7 million of severance costs and $1.3 million of facility closure costs. The Company estimates that all of the restructuring charges will be incurred as cash expenditures, of which approximately $2.7 million is expected to be incurred in 2009 and approximately $0.3 million is expected to be incurred in 2010. For the three months ended March 31, 2009, we have incurred approximately $1.7 million of employee related costs. The following table summarizes the restructuring liability as of March 31, 2009 (in thousands):

						Facility Exit
						and Other
		Employee				Contractual
		Costs				Costs				Total
Balance — December 31, 2008		$	—			$	—			$	—
Provision			1,712				—				1,712
Deductions for payments made			(1,337	)			—				(1,337	)
Balance — March 31, 2009		$	375			$	—			$	375

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.

In November 2008, 798,450 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 November 2008 vest in three equal annual installments commencing on October 20, 2009.

As of March 31, 2009, there was approximately $3.6 million of unearned compensation related to non-vested 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 7 months for the November 2006, February 2007 and March 2007 awards, 19 months for the October 2007 awards and 31 months for the November 2008 awards, respectively.

We currently estimate the forfeiture rates for the November 2006, February/March 2007, October 2007 and November 2008 restricted stock awards at 3.5%, 0.0%, 5.6% and 5.0%, respectively, for all participants in the plan.

The following table summarizes information about the non-vested restricted stock grants as of March 31, 2009:

						Weighted-Average
						Grant-Date Fair
		Shares (000’s)				Value
Nonvested at December 31, 2008			1,072			$	8.49
Granted			—				—
Vested			—				—
Forfeited			(50	)			5.04
Nonvested at March 31, 2009			1,022			$	8.61

As of March 31, 2009, 65,161 shares of the 2.0 million shares authorized for issuance were available 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, 2009.

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, 2009 and 2008 includes the effects of potential common shares consisting of common stock issuable upon exercise of outstanding stock options when dilutive (in thousands, except per share amounts):

		Three Months Ended
		March 31,
		2009				2008
Net (loss) income applicable to common shareholders — basic and diluted		$	(19,404	)		$	472
Weighted average number of common shares outstanding			21,746				21,537
Dilutive effect of outstanding stock options and restricted stock grants after application of the treasury stock method			—				104
Dilutive shares outstanding			21,746				21,641
Basic (loss) earnings per share		$	(0.89	)		$	0.02
Diluted (loss) earnings per share		$	(0.89	)		$	0.02

For the three months ended March 31, 2009, diluted loss per share did not include approximately 0.7 million outstanding stock options and approximately 1.1 million non-vested restricted stock, as the effect would have been antidilutive.

Dividends — In August 2004, in connection with its initial public offering, the Company entered into the prior senior credit agreement (the “Revolving Credit and Term Loan Agreement”), which provided for a revolving credit facility (the “prior revolving credit facility”) and a term loan. On January 7, 2009, the prior senior credit agreement was replaced with the Loan and Security Agreement (the “Loan and Security Agreement”). We have not declared or paid any cash dividends in the past. The terms of our prior senior credit agreement and our Loan and Security 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,
		2009				2008
Raw materials		$	48,820			$	57,954
Work in process			11,281				19,763
Finished goods			16,181				19,437
Less excess and obsolete			(5,044	)			(6,372	)
		$	71,238			$	90,782

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. Intangible Assets

We review 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. SFAS No. 142 requires that the fair value of the purchased intangible assets with indefinite lives be estimated and compared to the carrying value. Determining the fair value of these assets is judgmental in nature and involves the use of significant estimates and assumptions. We base our fair value

estimates on assumptions we believe to be reasonable, but that are inherently uncertain. To estimate the fair value of these intangible assets, we use an income approach, which utilizes a market derived rate of return to discount anticipated performance. We recognize an impairment loss when the estimated fair value of the intangible asset is less than the carrying value.

We review definite-lived intangible and long-lived assets in accordance with the provisions of SFAS No. 144, Accounting for Impairment or Disposal of Long-Lived Assets, for recoverability whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. 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 discounted future cash flows.

Our intangible assets were comprised of the following (in thousands):

		March 31, 2009																December 31, 2008
		Weighted-																Weighted-
		Average																Average
		Amortization				Gross Carrying				Accumulated				Net Carrying				Amortization				Gross Carrying				Accumulated				Net Carrying
		Period				Amount				Amortization				Amount				Period				Amount				Amortization				Amount
Definite-lived intangible assets:
Tradenames/Trademarks		30 years				$	9,790			$	(1,323	)		$	8,467			30 years				$	9,790			$	(1,242	)		$	8,548
Licenses		7 years					438				(391	)			47			7 years					438				(376	)			62
						$	10,228			$	(1,714	)		$	8,514							$	10,228			$	(1,618	)		$	8,610
Indefinite-lived intangible assets:
Customer relationships							26,000				—				26,000								26,000				—				26,000
						$	26,000			$	—			$	26,000							$	26,000			$	—			$	26,000
Total intangible assets														$	34,514															$	34,610

The aggregate intangible asset amortization expense was approximately $0.1 million and $0.3 million, respectively, for the three months ended March 31, 2009 and 2008.

The estimated intangible asset amortization expense for the fiscal year ending December 31, 2009, and for the five succeeding years is as follows (in thousands):

Fiscal Year Ended		Estimated
December 31,		Amortization Expense
2009		$	389
2010		$	326
2011		$	326
2012		$	326
2013		$	326
2014		$	326

10. Debt

Debt consisted of the following (in thousands):

		March 31,				December 31,
		2009				2008
Revolving credit facilities bore interest at a weighted average of 5.9% as of March 31, 2009 and 7.5% as of December 31, 2008		$	15,486			$	14,800
8.0% senior notes due 2013			150,000				150,000
Other			65				95
			165,551				164,895
Less current maturities			15,537				81
		$	150,014			$	164,814

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 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 prior revolving credit facility 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 a 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 8% senior notes, 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 January 7, 2009, we and certain of our direct and indirect U.S. subsidiaries, as borrowers (the “domestic borrowers”), entered into a Loan and Security Agreement with Bank of America, N.A., as agent and lender. In addition to the domestic borrowers, the Loan and Security Agreement contemplates the addition of certain of our direct and indirect UK subsidiaries as borrowers under the Loan and Security Agreement (the “UK borrowers” and together with the domestic borrowers, the “borrowers”). Based on the provisions of EITF 98-14, approximately $0.8 million of third party fees relating to the prior senior credit agreement were expensed as loss on early extinguishment of debt and the remaining $2.3 million of third party fees relating to the Loan and Security Agreement were capitalized and were being amortized over its remaining life. We used borrowings under the Loan and Security Agreement to repay in full our borrowings under the prior credit revolving credit facility.

On March 12, 2009, we entered into a first amendment to the Loan and Security Agreement (the “First Amendment”). Pursuant to the terms of the First Amendment, the lenders consented to changing the thresholds in the minimum operating performance covenant. In addition, the First Amendment provided for (i) an increase in the applicable margin for interest rates on amounts borrowed by the domestic borrowers of 1.50%, (ii) a limitation on permitted capital expenditures in 2009 and (iii) a temporary decrease in domestic availability until such time as the domestic borrowers demonstrate a fixed charge coverage ratio of at least 1.0:1.0 for any fiscal quarter ending on or after March 31, 2010. Based on the provisions of EITF 98-14, approximately $0.4 million of third party fees relating to the Loan and Security Agreement were capitalized and were being amortized over its remaining life.

As of March 31, 2009, approximately $4.8 million in deferred fees relating to the Loan and Security Agreement and fees related to the 8.0% senior notes offering were outstanding and were being amortized over the life of the agreements.

The Loan and Security Agreement provides for a three-year asset-based revolving credit facility. The aggregate amount of loans permitted to be made to the domestic borrowers under the revolving credit facility may not exceed a borrowing base consisting of the lesser of: (a) $47.5 million, minus domestic letters of credit, and (b) the sum of eligible accounts receivable and eligible inventory of the domestic borrowers, minus certain domestic availability reserves.

In addition, the domestic borrowers are obligated to maintain availability under the domestic borrowing base of at least $11.5 million until such time as the domestic borrowers demonstrate a fixed charge coverage ratio of at least 1.0:1.0 for any fiscal quarter ending March 31, 2010 or thereafter, at which time the domestic borrowers will be required to maintain availability under the domestic borrowing base of at least $7.5 million at all times.

As of March 31, 2009, the Company had $15.5 million of the borrowings under the Loan and Security Agreement, all of which were denominated in U.S. dollars. As of March 31, 2009, these borrowings bore interest at a rate of 5.9% per annum. In addition, as of March 31, 2009, the Company had outstanding letters of credit of approximately $1.4 million.

In accordance with EITF 95-22, Balance Sheet Classification of Borrowings Outstanding under Revolving Credit Agreements that Include both a Subjective Acceleration Clause and a Lock-Box Arrangement, we have classified our Loan and Security Agreement, which has a maturity date of more than one year from the balance sheet date, as a current liability since it includes a lockbox arrangement and a subjective acceleration clause.

Terms, Covenants and Compliance Status – The Loan and Security Agreement, as amended, contains financial covenants, including minimum operating performance, a limitation on capital expenditures and a minimum fixed charge coverage ratio commencing with the fiscal quarter ending March 31, 2010. We were in compliance with the financial covenants in the Loan and Security Agreement as of March 31, 2009. The Loan and Security Agreement also contains other customary restrictive covenants, customary reporting and other affirmative covenants and customary events of default.

Under the Loan and Security Agreement, borrowings bear interest at various rates plus a margin based on certain financial ratios. The domestic borrowers’ obligations under the Loan and Security Agreement are secured by a first-priority lien (subject to certain permitted liens) on substantially all of the tangible and intangible assets of the domestic borrowers, as well as 100% of the capital stock of the domestic subsidiaries of each domestic borrower and 65% of the capital stock of each foreign subsidiary directly owned by a domestic borrower. Each of CVG and each other domestic borrower is jointly and severally liable for the obligations under the Loan and Security Agreement and unconditionally guarantees the prompt payment and performance thereof.

We continue to operate in a challenging economic environment, and our ability to comply with the new covenants in the Loan and Security Agreement may be affected in the future by economic or business conditions beyond our control. Based on our current forecast, we believe that we will be able to maintain compliance with the minimum operating performance covenant and other covenants in the Loan and Security Agreement for the next twelve months; however, no assurances can be given that we will be able to comply. We base our forecasts on historical experience, industry forecasts and various other assumptions that we believe are reasonable under the circumstances. If actual revenue is less than our current forecast by a substantial margin, or if we do not realize a significant portion of our planned cost savings, we could violate our financial covenants. If we do not comply with the financial and other covenants in the Loan and Security Agreement, and we are unable to obtain necessary waivers or amendments from the lender, we would be precluded from borrowing under the Loan and Security Agreement, which would have a material adverse effect on our business, financial condition and liquidity. If we are unable to borrow under the Loan and Security Agreement, we will need to meet our capital requirements using other sources. Due to current economic conditions, alternative sources of liquidity may not be available on acceptable terms if at all. In addition, if we do not comply with the financial and other covenants in the Loan and Security Agreement, the lender could declare an event of default under the Loan and Security Agreement, and our indebtedness thereunder could be declared immediately due and payable, which would also result in an event of default under the 8% senior notes due 2013. Any of these events would have a material adverse effect on our business, financial condition and liquidity.

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 is currently one income tax examination in process. We do not anticipate that any adjustments from this examination will result in material changes to our consolidated financial position and results of operations.

We adopted the provisions of FIN No. 48, Accounting for Uncertainty in Income Taxes, effective January 1, 2007. As of March 31, 2009, we have provided a liability of approximately $3.1 million of unrecognized tax benefits related to various federal and state income tax positions. Of the $3.1 million, the amount that would impact our effective tax rate, if recognized, is $2.2 million. The remaining $0.9 million of unrecognized tax benefits consists of items that are offset by deferred tax assets.

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 $0.7 million accrued for the payment of interest and penalties at March 31, 2009, of which $34 thousand was accrued during the current year. Accrued interest and penalties are included in the $3.1 million of unrecognized tax benefits.

During the current quarter, we released approximately $21 thousand of tax reserves, which related to tax, interest and penalties associated with items with expiring statues of limitations. We anticipate events could occur within the next twelve months that would have an impact on the amount of unrecognized tax benefits that would be required. Approximately $0.3 million of unrecognized tax reserves, interest and penalties will be released within the next twelve months due to the statutes of limitations and amendment of prior year returns.

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, 2009 (in thousands):

Balance — December 31, 2008		$	3,706
Additional provisions recorded			448
Deduction for payments made			(518	)
Currency translation adjustment			(5	)
Balance — March 31, 2009		$	3,631

Leases — We lease office and manufacturing space and certain equipment under non-cancelable operating lease agreements that require us to pay maintenance, insurance, taxes and other expenses in addition to annual rents. As of March 31, 2009, our equipment leases did not provide for any material guarantee of a specified portion of residual values.

Guarantees — We accrue for costs associated with guarantees when it is probable that a liability has been incurred and the amount can be reasonably estimated. The most likely cost to be incurred is accrued based on an evaluation of currently available facts, and where no amount within a range of estimates is more likely, the minimum is accrued. In accordance with FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, for guarantees issued after December 31, 2002, we record a liability for the fair value of such guarantees in the balance sheet. As of March 31, 2009, we had no such guarantees.

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. 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. As of March 31, 2009, none of our derivatives were designated as hedging instruments under SFAS No. 133; therefore, our forward foreign exchange contracts have been marked-to-market and the fair value of contracts recorded in the consolidated balance sheets with the offsetting non-cash gain or loss recorded in our 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 (in thousands):

		March 31, 2009								December 31, 2008
						U.S.								U.S.
		U.S. $				Equivalent				U.S. $				Equivalent
		Equivalent				Fair Value				Equivalent				Fair Value
Commitments to buy currencies:
Eurodollar		$	(1,023	)		$	(805	)		$	(1,832	)		$	(1,345	)
Swedish krona			—				—				—				—
Japanese yen			(453	)			(448	)			(736	)			(765	)
		$	(1,476	)		$	(1,253	)		$	(2,568	)		$	(2,110	)
Commitments to sell currencies:
Eurodollar		$	28,541			$	34,352			$	35,236			$	43,532
Swedish krona			—				—				54				56
Japanese yen			14,059				18,465				15,813				22,372
		$	42,600			$	52,818			$	51,103			$	65,960
Total		$	41,123			$	51,565			$	48,535			$	63,850

The fair value of our derivative instruments was a net liability of approximately $10.4 million and $15.3 million as of March 31, 2009 and December 31, 2008, respectively. The net liability was comprised of $7.9 million and $10.1 million in accrued liabilities and $2.5 million and $5.2 million in other long-term liabilities in the condensed consolidated balance sheet as of March 31, 2009 and December 31, 2008, respectively.

We consider the impact of our and our counterparties’ credit risk on the fair value of the contracts as well as the ability of each party to execute its obligations under the contract. For the three months ended March 31, 2009, we recorded a credit valuation adjustment of approximately $2.4 million on our foreign currency forward contracts.

The following table summarizes the fair value and presentation in the consolidated balance sheets for derivatives not designated as hedging instruments under SFAS No. 133 (in thousands):

Asset Derivatives

March 31, 2009

December 31, 2008

Balance Sheet

Balance Sheet

Location

Fair Value

Location

Fair Value

Foreign exchange contracts

Other assets

$

29

Other assets

$

32

		Liability Derivatives
		March 31, 2009						December 31, 2008
		Balance Sheet						Balance Sheet
		Location		Fair Value				Location		Fair Value
Foreign exchange contracts		Accrued liabilities		$	7,994			Accrued liabilities		$	10,096
Foreign exchange contracts		Other long-term liabilities			2,477			Other long-term liabilities			5,235
				$	10,471					$	15,331

The following table summarizes the effect of derivative instruments on the consolidated statements of operations for derivatives not designated as hedging instruments under SFAS No. 133 for the three months ended March 31 (in thousands):

		Location of Gain
		(Loss)				Amount of Gain (Loss)
		Recognized in				Recognized in Income on
		Income on				Derivatives
		Derivatives				2009				2008
Foreign exchange contracts		Other Expenses				$	4,858			$	(9,862	)

14. 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 ended March 31 was as follows (in thousands):

																		Other Post-Retirement
		U.S. Pension Plans								Non-U.S. Pension Plans								Benefit Plans
		2009				2008				2009				2008				2009				2008
Service cost		$	76			$	112			$	—			$	—			$	4			$	5
Interest cost			474				457				453				694				32				38
Expected return on plan assets			(379	)			(491	)			(318	)			(537	)			—				—
Recognized actuarial loss (gain)			26				—				42				66				(12	)			(6	)
Net periodic benefit cost			197				78				177				223				24				37
Special Termination Benefits			35				—				—				—				85				—
Net benefit cost		$	232			$	78			$	177			$	223			$	109			$	37

We previously disclosed in our financial statements for the year ended December 31, 2008, that we expect to contribute approximately $1.8 million to our pension plans in 2009. As of March 31, 2009, approximately $0.3 million of contributions have been made to our pension plans. We anticipate contributing an additional $1.5 million to our pension plans in 2009 for total estimated contributions during 2009 of $1.8 million.

15. Comprehensive (Loss) 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 loss consisted of the following as of March 31, 2009 (in thousands):

Foreign currency translation adjustment		$	(9,844	)
Pension liability			(10,149	)
Unrealized loss on derivatives			45
		$	(19,948	)

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

		2009				2008
Net (loss) income		$	(19,404	)		$	472
Other comprehensive (loss) income:
Foreign currency translation adjustment			(1,636	)			2,800
Unrealized loss on derivative instruments			45				—
Comprehensive (loss) income		$	(20,995	)		$	3,272

16. Related Party Transactions

In May 2008, we entered into a freight services arrangement with Group Transportation Services Holdings, Inc. (“GTS”), a third party logistics and freight management company. Under this arrangement, which was approved by our Audit Committee on April 29, 2008, GTS manages a portion of the Company’s freight and logistics program as well as administers its payments to additional third party freight service providers. Scott D. Rued, the Company’s Chairman, is also Chairman of the Board of GTS and Managing Partner of Thayer Hidden Creek, the controlling shareholder of GTS, and Richard A. Snell, a member of our Board of Directors, is an Operating Partner of Thayer Hidden Creek. For the three months ended March 31, 2009, we made payments under these arrangements of approximately $2.4 million, which consisted primary of payments from us for other third-party service providers and the balance of which consisted of approximately $.01 million of fees for GTS's services.

17. 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 8% senior 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 following consolidated financial information presents the financial information of the Company (the “Parent Company”), the guarantor companies and the non-guarantor companies in accordance with Rule 3-10 under the Securities and Exchange Commission’s Regulation S-X. The financial information may not necessarily be indicative of results of operations or financial position had the guarantor companies or non-guarantor companies operated as independent entities. The guarantor companies and the 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, 2009

		Parent				Guarantor				Non-Guarantor
		Company				Companies				Companies				Elimination				Consolidated
		(In thousands)
REVENUES		$	—			$	89,216			$	24,677			$	(5,363	)		$	108,530
COST OF REVENUES			—				91,846				25,364				(5,431	)			111,779
Gross Loss			—				(2,630	)			(687	)			68				(3,249	)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			—				9,895				3,504				(56	)			13,343
AMORTIZATION EXPENSE			—				97				—				—				97
RESTRUCTURING COSTS			—				619				1,093				—				1,712
Operating Loss			—				(13,241	)			(5,284	)			124				(18,401	)
OTHER EXPENSE (INCOME)			—				13				(4,905	)			—				(4,892	)
INTEREST EXPENSE			—				3,603				440				(399	)			3,644
LOSS ON EARLY EXTINGUISHMENT OF DEBT			—				795				—				—				795
Loss Before Provision (Benefit) for Income Taxes			—				(17,652	)			(819	)			523				(17,948	)
PROVISION (BENEFIT) FOR INCOME TAXES			—				2,275				(819	)			—				1,456
NET LOSS		$	—			$	(19,927	)		$	—			$	523			$	(19,404	)

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2009

		Parent				Guarantor				Non-Guarantor
		Company				Companies				Companies				Elimination				Consolidated
		(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	—			$	276			$	5,074			$	—			$	5,350
Accounts receivable, net			—				68,045				4,784				(1,075	)			71,754
Inventories, net			—				43,972				28,027				(761	)			71,238
Prepaid expenses			—				3,628				3,707				9,284				16,619
Deferred income taxes			—				(2,868	)			5,770				(2,902	)			—
Total current assets			—				113,053				47,362				4,546				164,961
PROPERTY, PLANT AND EQUIPMENT, net			—				77,608				9,291				—				86,899
INVESTMENT IN SUBSIDIARIES			43,904				44,648				50,305				(138,857	)			—
INTANGIBLE ASSETS, net			—				34,514				—				—				34,514
OTHER ASSETS, net			—				38,555				3,351				(28,917	)			12,989
TOTAL ASSETS		$	43,904			$	308,378			$	110,309			$	(163,228	)		$	299,363
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES:
Current maturities of long-term debt		$	—			$	15,537			$	—			$	—			$	15,537
Accounts payable			—				35,567				13,003				(1,076	)			47,494
Accrued liabilities, other			—				20,703				11,404				4,121				36,228
Total current liabilities			—				71,807				24,407				3,045				99,259
LONG-TERM DEBT, net			—				150,000				25,730				(25,716	)			150,014
DEFERRED TAX LIABILITIES			—				29,670				(689	)			(28,981	)			—
PENSION AND OTHER POST-RETIREMENT BENEFITS			—				13,361				6,486				—				19,847
OTHER LONG-TERM LIABILITIES			—				2,809				3,716				—				6,525
Total liabilities			—				267,647				59,650				(51,652	)			275,645
STOCKHOLDERS’ INVESTMENT			43,904				40,731				50,659				(111,576	)			23,718
TOTAL LIABILITIES AND STOCKHOLDERS’ INVESTMENT		$	43,904			$	308,378			$	110,309			$	(163,228	)		$	299,363

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, 2009

		Parent				Guarantor				Non-Guarantor
		Company				Companies				Companies				Elimination				Consolidated
										(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	—			$	(19,927	)		$	—			$	523			$	(19,404	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization			—				3,674				741				—				4,415
Noncash amortization of debt financing costs			—				325				—				—				325
Loss on early extinguishment of debt			—				795				—				—				795
Share-based compensation expense			—				771				—				—				771
Loss on sale of assets			—				360				5				—				365
Deferred income tax benefit			—				(381	)			380				1				—
Noncash loss on forward exchange contracts			—				—				(4,858	)			—				(4,858	)
Change in other operating items			—				18,868				3,033				(524	)			21,377
Net cash provided by (used in) operating activities			—				4,485				(699	)			—				3,786
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment			—				(1,313	)			(377	)			—				(1,690	)
Other asset and liabilities			—				(976	)			—				—				(976	)
Net cash used in by investing activities			—				(2,289	)			(377	)			—				(2,666	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of revolving credit facility			—				(87,121	)			—				—				(87,121	)
Borrowings under revolving credit facility			—				87,807				—				—				87,807
Payments on capital lease obligations			—				(30	)			—				—				(30	)
Debt issuance costs and other			—				(2,631	)			—				—				(2,631	)
Net cash used in financing activities			—				(1,975	)			—				—				(1,975	)
EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS			—				—				(1,105	)			—				(1,105	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			—				221				(2,181	)			—				(1,960	)
CASH AND CASH EQUIVALENTS:
Beginning of period			—				55				7,255				—				7,310
End of period		$	—			$	276			$	5,074			$	—			$	5,350

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
										(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
AMORTIZATION EXPENSE			—				103				242				—				345
GAIN ON SALE OF LONG-LIVED ASSETS			—				(6,075	)			—				—				(6,075	)
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 (Loss) Before Provision (Benefit) for Income Taxes			—				3,577				(6,493	)			788				(2,128	)
PROVISION (BENEFIT) FOR INCOME TAXES			—				163				(2,763	)			—				(2,600	)
NET INCOME (LOSS)		$	—			$	3,414			$	(3,730	)		$	788			$	472

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

		Parent				Guarantor				Non-Guarantor
		Company				Companies				Companies				Elimination				Consolidated
		(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	—			$	55			$	7,255			$	—			$	7,310
Accounts receivable, net			—				88,918				13,056				(1,076	)			100,898
Inventories, net			—				59,554				32,113				(885	)			90,782
Prepaid expenses			—				4,226				4,765				11,437				20,428
Deferred income taxes			—				(2,868	)			5,673				(2,805	)			—
Total current assets			—				149,885				62,862				6,671				219,418
PROPERTY, PLANT AND EQUIPMENT, net			—				80,154				10,238				—				90,392
INVESTMENT IN SUBSIDIARIES			62,537				44,647				50,305				(157,489	)			—
INTANGIBLE ASSETS, net			—				34,610				—				—				34,610
OTHER ASSETS, net			—				35,821				3,354				(28,834	)			10,341
TOTAL ASSETS		$	62,537			$	345,117			$	126,759			$	(179,652	)		$	354,761
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES:
Current maturities of long-term debt		$	—			$	81			$	—			$	—			$	81
Accounts payable			—				54,365				20,161				(1,075	)			73,451
Accrued liabilities, other			—				20,590				16,057				6,770				43,417
Total current liabilities			—				75,036				36,218				5,695				116,949
LONG-TERM DEBT, net			—				164,800				25,731				(25,717	)			164,814
DEFERRED TAX LIABILITIES			—				29,714				(816	)			(28,898	)			—
PENSION AND OTHER POST-RETIREMENT BENEFITS			—				13,157				6,728				—				19,885
OTHER LONG-TERM LIABILITIES			—				2,566				6,605				—				9,171
Total liabilities			—				285,273				74,466				(48,920	)			310,819
STOCKHOLDERS’ INVESTMENT			62,537				59,844				52,293				(130,732	)			43,942
TOTAL LIABILITIES AND STOCKHOLDERS’ INVESTMENT		$	62,537			$	345,117			$	126,759			$	(179,652	)		$	354,761