Commercial Vehicle : Sidoti Winter Virtual Conference Presentation

SIDOTI WINTER 2021

INVESTOR CONFERENCE

JANUARY 14, 2021

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MANAGEMENT IN ATTENDANCE TODAY

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COMPANY AT A GLANCE

CVG - A DIVERSIFIED INDUSTRIAL COMPANY

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INVESTMENT HIGHLIGHTS

LEADING SUPPLIER OF ELECTRICAL WIRE HARNESSES, SEATING SYSTEMS, ENGINEERED PLASTIC

COMPONENTS, AND ELECTROMECHANICAL ASSEMBLIES

Optimizing support structure, making core business leaner,

and driving new business wins where innovation and engineering expertise can add value

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LOCATIONS

GLOBAL FOOTPRINT

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Q3 2020 WAS A GOOD QUARTER

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Q3 2020

SALES MIX IS TURNING THE CORNER

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Q3 2020

TRUCK MARKETS IMPROVED SUBSTANTIALLY

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STRATEGIC OBJECTIVES-REVENUE GROWTH

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Q3 2020

STRATEGICALLY ADDED CAPACITY AND EXPANDED PRODUCT LINE IN THE WAREHOUSE AUTOMATION BUSINESS

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Q3 2020

WAREHOUSE AUTOMATION SUBASSEMBLIES

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Q3 2020

FOCUS ON SECURING PLATFORM POSITIONS

ON ELECTRIC VEHICLES

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UNIQUE ELECTRIC VEHICLE

VALUE PROPOSITION

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ENTERING NEW END MARKETS -

INJECTION MOLDING AND WIRE HARNESSES

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Q3 2020 KEY TAKEAWAYS

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Q3 2020

FINANCIAL UPDATE

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Q3 2020

CVG CONSOLIDATED FINANCIALS

$ MILLIONS, EXCEPT PER SHARE DATA

	Q3 2020	Q2 2020	Q3 2019
Revenue	187.7	126.9	225.4
Gross Profit	24.2	6.5	29.4
Gross Margin	12.9%	5.1%	13.1%
SGA	14.4	16.0	17.5
Amortization	0.9	0.9	0.4
Impairment	-	0.2	-
Operating (Loss)/Income	8.9	(10.5)	11.5
Operating Margin	4.7%	(8.3)%	5.1%
Diluted Earnings Per Share	$0.13	($0.40)	$0.23
Adjusted Operating (Loss)/Income*	$12.0	(3.6)	12.4
Adjusted Operating Margin*	6.4%	(2.8)%	5.5%
Adjusted EBITDA*	$16.4	1.2	16.3
Adjusted EBITDA Margin*	8.8%	1.0%	7.3%

Q3 2020 NOTES

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Q3 2020

ELECTRICAL SYSTEMS SEGMENT RESULTS

$ MILLIONS

	Q3 2020	Q2 2020	Q3 2019
Revenue	121.1	74.2	131.4
Gross Profit	16.1	1.1	17.1
Gross Margin	13.3%	1.5%	13.0%
SGA	3.2	6.6	4.0
Amortization	0.7	0.7	0.3
Operating (Loss)/Income	12.2	(6.2)	12.8
Operating Margin	10.1%	(8.3)%	9.7%
Adjusted Operating (Loss)/Income*	13.4	(0.7)	12.8
Adjusted Operating Margin*	11.1%	(1.0)%	9.7%

Q3 2020 NOTES

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Q3 2020

GLOBAL SEATING SEGMENT RESULTS

$ MILLIONS

	Q3 2020	Q2 2020	Q3 2019
Revenue	68.9	53.9	95.7
Gross Profit	8.4	5.3	12.3
Gross Margin	12.2%	9.9%	12.9%
SGA	3.5	3.7	5.0
Amortization	0.1	0.1	0.1
Operating Income	4.8	1.5	7.2
Operating Margin	6.9%	2.8%	7.5%
Adjusted Operating Income*	5.1	2.1	7.2
Adjusted Operating Margin*	7.4%	3.9%	7.5%

Q3 2020 NOTES

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Q3 2020

BALANCE SHEET

$ MILLIONS

	September 30, 2020	June 30, 2020
		Q3 2020 NOTES
Cash	53.6	63.4
Accounts Receivable	128.6	102.8
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Inventories	83.3	70.7
Other Assets	161.6	164.1
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Total Assets	427.1	401.0
Accounts Payable	89.4	54.6
Debt (Current + Long Term)	150.4	154.2
Line of Credit	-	15.0
Other Liabilities	92.0	89.4
Total Liabilities	331.8	313.1
Total Equity	95.3	87.9
Total Liabilities + Equity	427.1	401.0

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Debt

CVG CURRENT DEBT STRUCTURE

ABL

TLB

MAY 2020

AMENDMENT

• $90M facility ("Tranche A") - LIBOR + 150 bps if availability stays above $30M
• $7M FILO ("Tranche B") - Interest rate is 100bps greater than Tranche A
• Paid down to zero balance in 3Q 2020
• Matures April 12, 2022
• $151M outstanding as of 10/31/2020 - Interest rate LIBOR + 600bps subject to a floor of 1.00%
• Paid additional $5M in Q3 2020
• Matures on 4/12/2023
• Amendment provided a "covenant relief period" through 9/30/2021
• • Increased TLB interest by 450bps - PIK interest
  • Suspended 4.75x TLB leverage ratio
  • Provided gradual phase-in from 12.00x at 3/31/2021 to 4.75x on 12/31/2021
  • Optional redemption added - 102 hard call through 6/30/2021 and 101 hard call through 6/30/2022
• Steps down to LIBOR + 600bps and no PIK interest on 10/1/2021

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SUPPLEMENTAL

INFORMATION

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Q3 2020

USE OF NON-GAAP

FINANCIAL MEASURES

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Q3 2020

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - ADJUSTED OPERATING INCOME AND EBITDA

		For the Three Months Ended
	September 30, 2020		June 30, 2020	September 30, 2019
Operating Income/(Loss)	8.9		(10.5)	11.5
FSE Acquisition Costs	-		-	0.9
Deferred Consideration Purchase Accounting	0.5		3.5	-
Restructuring	2.2		2.9	-
Investigation	0.5		0.4	-
Impairment of Goodwill and Long-Lived Assets	-		0.2	-
Adjusted Operating Income/(Loss)	12.0		(3.6)	12.4
% of Revenues	6.4%		(2.8%)	5.5%
Interest Expense	5.5		5.3	3.9
Other (Income) / Expense	0.2		(0.2)	(0.1)
Adjusted Income/(Loss) Before Provision for Income Taxes	6.4		(8.7)	8.6
Adjusted Provision/(Benefit) for Income Taxes	(0.2)		(1.4)	0.7
Adjusted Net Income/(Loss)	6.5		(7.3)	7.9
Adjusted Basic and Diluted EPS	0.21		(0.24)	0.26
Adjusted Net Income/(Loss)	6.5		(7.3)	7.9
Interest Expense	5.5		5.3	3.9
Adjusted (Benefit) Provision for Income Taxes	(0.2)		(1.4)	0.7
Depreciation Expense	3.8		3.7	3.4
Amortization Expense	0.9		0.9	0.4
Adjusted EBITDA	16.4		1.2	16.3
% of Revenues	8.8%		1.0%	7.3%

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Q3 2020

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - ADJUSTED EBITDA

			For the three months ended
	March 31,	June 30,	September	December	March 31,	June 30,	September
	2019	2019	30, 2019	31, 2019	2020	2020	30, 2020
Net Income	10.0	6.1	7.2	(7.5)	(24.6)	(12.5)	4.2
Interest	4.6	4.8	3.9	3.6	4.6	5.3	5.5
Provision for Income Taxes	3.2	2.2	0.5	(0.1)	(7.3)	(3.1)	(1.0)
Depreciation	3.4	3.0	3.4	3.8	3.8	3.7	3.8
Amortization	0.3	0.3	0.4	0.9	0.9	0.9	0.9
Impairment	-	-	-	-	28.9	0.2	-
EBITDA	21.4	16.5	15.4	0.6	6.2	(5.6)	13.3
Adjustments
CEO Transition	-	-	-	-	2.3	-	-
Restructuring	-	-	-	3.0	0.2	2.9	2.2
Investigation	-	-	-	-	2.4	0.4	0.5
FSE Acquisition Costs	-	-	0.9	-	-	-	-
Deferred Consideration
Purchase Accounting	-	-	-	-	-	3.5	0.5
Non-Cash Pension Charge	-	2.5	-	-	-	-	-
Adjusted EBITDA	21.4	19.0	16.3	3.6	11.0	1.2	16.4

Trailing twelve months

September	September
30, 2020	30, 2019
(40.4)	31.4
19.0	18.4
(11.5)	6.3
15.0	13.1
3.4	1.4
29.0	-

14.570.5

2.3-

8.2-

3.3-

-0.9

4.0

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32.371.4

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Q3 2020

BUSINESS SEGMENT FINANCIAL

INFORMATION

		For the three months ended September 30, 2020
	Electrical			Global		Corporate	Total
	Systems			Seating
Operating (Loss) Income	12.2	4.8	(8.1)			8.9
Restructuring	0.7	0.3	1.1			2.2
Deferred Consideration
Purchase Accounting	0.5	-	-			0.5
Investigation	-	-	0.5			0.5

Adjusted Operating Income	13.4	5.1	(6.5)	12.0
Adjusted Operating Margin	11.1%	7.4%		6.4%

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Q3 2020

FREE CASH FLOW

For 4 the quarters ended

December		March 31,		June 30,		September
31, 2019	2020	2020	30, 2020

Cash Flow from Operations

8.2

10.3

10.1

10.4

Capital Expenditures	(5.2)		(3.4)		(1.0)		(1.5)
Free Cash Flow	3.0		6.9		9.1		8.9

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