CVGI 10-K & 10-Q changes, risk factors and insider trading
Commercial Vehicle Group, Inc. · Nasdaq · Motor Vehicle Parts & Accessories · CIK 1290900 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Changes in trade policies among the United States and other countries, in particular the imposition of new or higher tariffs, could place pressure on our average selling prices as our customers seek to offset the impact of increased tariffs on their own products. Increased tariffs or the imposition of other barriers to international trade has previously and could in the future decrease demand, increase costs and have a material adverse effect on our revenues and operating results.”
New heading “Future sales and issuances of our Common Stock or rights to purchase Common Stock could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to decline.”
Largest changes
“Changes in trade policies among the United States and other countries, in particular the imposition of new or higher tariffs, could place pressure on our average selling prices as our customers seek to offset the impact of increased tariffs on their own products. Increased tariffs or the imposition of other barriers to international trade has previously and could in the future decrease demand, increase costs and have a material adverse effect on our revenues and operating results.”see in full comparison
“In addition, tariffs could make our OEM customers’ products less attractive relative to products offered by their competitors, which may not be subject to similar tariffs. Some OEMs in our industry have already implemented short-term price adjustments to offset such tariffs and transitioned their production and supply chain to locations not subject to the higher tariffs. …”see in full comparison
“Future sales and issuances of our Common Stock or rights to purchase Common Stock could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to decline.”see in full comparison
“Furthermore, compliance with export controls and implementation of additional tariffs may increase compliance costs and further affect our business and operating results.”see in full comparison
“•tariffs, duties or other costs attributable to the importation of raw materials, parts, products and services, which could impact sales and/or delivery of products and services outside the U.S. and/or impose increased costs on us, our supply chain or our customers;”see in full comparison
“The United States has recently imposed new or higher tariffs on a large number of products exported by U.S. trading partners. In response, many of those trading partners have imposed or proposed new or higher tariffs on American products. Although the U.S. …”see in full comparison
Full comparison: every changed paragraph (28)
You should carefully consider the information in this Form 10-K. These risks could materially and adversely affect our results of operations, financial condition, liquidity and cash flows. Our business also could be affected by risks that we are not presently aware of or that we currently consider immaterial to our operations.
You should carefully consider the risks described below before making an investment decision. These are not the only risks we face. If any of these risks and uncertainties were to actually occur, our business, financial condition or results of operations could be materially and adversely affected. In such case, the trading price of our common stock could decline and you may lose all or part of your investment.
Changes in trade policies among the United States and other countries, in particular the imposition of new or higher tariffs, could place pressure on our average selling prices as our customers seek to offset the impact of increased tariffs on their own products. Increased tariffs or the imposition of other barriers to international trade has previously and could in the future decrease demand, increase costs and have a material adverse effect on our revenues and operating results.
The United States has recently imposed new or higher tariffs on a large number of products exported by U.S. trading partners. In response, many of those trading partners have imposed or proposed new or higher tariffs on American products. Although the U.S. Supreme Court recently ruled that the International Emergency Economic Powers Act ("IEEPA") does not authorize the President to impose tariffs, and invalidated those tariffs that President Trump imposed under IEEPA, the administration has announced across-the-board tariffs of 15 percent under Section 122 of the Trade Act of 1974, and we expect that the President may impose tariffs under other authority when these short-term tariffs expire. Continuing changes in U.S. and foreign government trade policies and a heightened risk of further increased tariffs that impose barriers to international trade could further decrease international demand. Our business and operating results are substantially dependent on international trade.
In addition, tariffs could make our OEM customers’ products less attractive relative to products offered by their competitors, which may not be subject to similar tariffs. Some OEMs in our industry have already implemented short-term price adjustments to offset such tariffs and transitioned their production and supply chain to locations not subject to the higher tariffs. We believe that sustained increases in tariffs on imported goods, further increases in tariffs on imported goods, or the failure to resolve current international trade disputes could further decrease demand and have a material adverse effect on our business and operating results.
The tariff environment has been dynamic in 2025, with changes occurring on an ongoing basis. We expect that additional developments will occur in the future, as a result of negotiations between the U.S. and trade partners and the recent ruling by the U.S. Supreme Court regarding legal challenges to certain of the tariffs including imposition of additional tariffs by the U.S. The actual impact of the tariffs is subject to a number of factors including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs, any countermeasures that the target countries may take, the result of negotiations between the U.S. and trade partners, how our suppliers and customers react, and any mitigating actions that may become available. In addition, lower courts and administrative processes will need to provide guidance with respect to refund-related questions with respect to the IEEPA tariffs paid prior to the U.S. Supreme Court decision.
Furthermore, compliance with export controls and implementation of additional tariffs may increase compliance costs and further affect our business and operating results.
Our financial results, operations and prospects depend significantly on worldwide economic and geopolitical conditions, the demand for our products, and the financial condition of our customers and suppliers. Economic weakness and geopolitical uncertainty have in the past resulted, and may result in the future, in reduced demand for our products resulting in decreased sales, margins and earnings. In addition to inflationary pressures, weWe may not be able to fully mitigate the impact of inflation or increased tariffs through price increases, productivity initiatives and cost savings, which could have an adverse effect on our results of operations. In addition, if the U.S. economy enters a recession, we may experience sales declines which could have an adverse effect on our business, operating results and financial condition.
Economic weakness and geopolitical uncertainty have in the past led us, and may alsoin the future lead us to impair assets, take restructuring actions or adjust our operating strategy and reduce expenses in response to decreased sales or margins. WeIn the past, we were not able to, and may in the future not be able to adequately adjust our cost structure in a timely fashion, which couldresults havein an adverse effect on our operating results and financial condition. Uncertainty about economic conditions may increase foreign currency volatility in markets in which we transact business, which could have an adverse effect on our operating results.
The global trade environment remains highly dynamic and continues to evolve. Increased tariffs and any retaliatory actions could significantly increase the cost of our products and result in lower demand for our products, delivery delays, and terminations of orders by customers.
The commercial vehicle industry as a whole has been more adversely affected by volatile economic conditions than many other industries, as the purchase or replacement of commercial vehicles, which are durable items, may be deferred for many reasons. Future changesChanges in the regulatory and business environments in which we operate, including increased trade protectionism and tariffs such as those recently announced by President Trump,Trump during 2025, and any retaliatory counter measures by affected countries, may adversely affect our ability to sell our products and source materials needed to manufacture our products. In addition, tariffs could increase our costs for materials sourced outside the US which we mayhave not bealways been able to pass along to our customers and wouldcould therefore adversely affect our results of operations. Furthermore, financial instability or bankruptcy at any of our suppliers or customers could disrupt our ability to manufacture our products and impair our ability to collect receivables, any or all of which may have an adverse effect on our business, results of operations and financial condition. In addition, some of our customers and suppliers may experience serious cash flow problems and, thus, may find it difficult to obtain financing, if financing is available at all. Any inability of customers to pay us for our products and services, or any demands by suppliers for different payment terms, or inability of our suppliers to supply us may adversely affect our results of operations and financial condition. Furthermore, our suppliers may not be successful in generating sufficient sales, restarting or ramping up production or securing alternate financing arrangements, and therefore may no longer be able to supply goods and services to us. In that event, we would need to find alternate sources for these goods and services, and there is no assurance we would be able to find such alternate sources on favorable terms, if at all. Disruption in our supply chain has had and could continue to have an adverse effect on our ability to manufacture and deliver our products on a timely basis, and thereby affect our results of operations.
The U.S. government has taken actions or made proposals that are intended to address trade imbalances or trade practices, specifically with China, among other countries, which include encouraging increased production in the United States. Furthermore, theThe current administration has begun implementing a more protectionist trade environment, including through measures such as the imposition of higher tariffs on imports into the U.S., the renegotiation of some U.S. trade agreements and other government regulations affecting trade between the U.S. and other countries where we conduct our business, including announced tariffs on imports from China and Mexico, and threatened tariffs on imports from the EU.business. These actions and proposals have resulted or could result in retaliatory actions by affected countries. Such changes could increase the price we pay for certain raw materials we import from such countries, for which we may not able to obtain alternative supply at equivalent or lower prices, reduce demand for our products in other countries and adversely impact the U.S. economy or certain sectors thereof or the economy of other countries in which we conduct operations, our industry and supply chain, all of which could have a material adverse effect on our business, financial condition and results of operations.
Even though we may be selected as the supplier of a product by an OEM for a particular vehicle, our OEM customers issue blanket purchase orders, which generally provide for the supply of that customer’s annual requirements for that vehicle, rather than for a specific number of our products. If the OEM’s requirements are less than estimated, the number of products we sell to that OEM will be accordingly reduced. In addition, the OEM may terminate its purchase orders with us at any time. The loss of any of our large customers or the loss of significant business from any of these customers could have an adverse effect on our business, financial condition and results of operations. In addition, as of December 31, 2025, receivables from our top five customers represented approximately 46% of total receivables.
We incur costs and make capital expenditures based in part upon estimates of production volumes for our customers’ vehicles. While we attempt to establish a price for our components and systems that will compensate for variances in production volumes, when the actual production of these vehicles is significantly less than anticipated, our gross margin on these products is adversely affected. Our OEM customers have historically had a significant amount of leverage over us. We enter into agreements with our customers at the beginning of a given platform’s life to supply products for that platform. Once we enter into such agreements, fulfillment of the supply requirements is our obligation for the entire production life of the platform, with terms generally ranging from five to seven years, and we have limited provisions to terminate such contracts. We are committed to supplying products to our customers at selling prices that may, with the benefit of hindsight, not be sufficient to cover the direct cost to produce such products, which may be as a result of amongfactors othersuch factors,as, inflation, new tariffs or increased employment costs due to increasingly competitive labor markets or other factors. We cannot predict our customers’ demands for our products. If customers representing a significant amount of our revenues were to purchase materially lower volumes than expected, or if we are unable to keep our commitment under the agreements, or if our costs are higher than anticipated, itthere would havebe an adverse effect on our business, financial condition and results of operations.
Additionally, we generally do not have clausesterms in our customer agreements that guarantee that we will recoup the design and development costs that we incurred to develop a product. In other cases, we share the design costs with the customer and therebytherefore we have some risk that not all the development costs that we incur will be coveredrecouped if the project does not go forward or if itthe business relationship is not as profitable as expected.
We may not be able to implement customer price increases where margin on product is not meeting profitability targets. Failure to meet our profitability target may be the result of a variety of factors, such as fluctuations in our material, freight and labor costs, inflation, new or increased tariffs or other competitive conditions, which are beyond our control. For example, we expect our cost of goods sold will continue to be impacted by tariffs which increase the price of goods purchased and sold to customers. In the past, we have negotiated with our customers in an attempt to pass on a portion of the costs of tariffs to our customers, although there is significant uncertainty as to our ability to pass these costs, or a portion of these costs, along to our customers. Customers may refuse to pay increased prices that meet our profitability targets, re-source from other suppliers, or not issue purchase orders to us with large volumes. Any failure to successfully implement price increases in order to meet profitability targets could have an adverse effect on our business, results of operations and growth potential.
We have operations in the Mexico, China, United Kingdom, Czech Republic, Morocco, Ukraine, Australia, India and Thailand, which collectively accounted for approximately 30%38% of our total revenues for the year ended December 31, 2024.2025. We expect our foreign operations to continue to account for a significant portion of our revenues for the foreseeable future. There are certain risks inherent in our international business activities including, but not limited to:
•changes in the global trade environment, including potential deterioration in geopolitical or trade relations between countries;
•tariffs, duties or other costs attributable to the importation of raw materials, parts, products and services, which could impact sales and/or delivery of products and services outside the U.S. and/or impose increased costs on us, our supply chain or our customers;
•exposure to local social unrest, including any acts of war, terrorismterrorism, international tensions, conflicts or similar events;
•complications in complying with a variety of laws and regulations related to doing business with and in foreign countries, some of which may conflict with U.S. law or may be vague or difficult to comply with.with, as well as U.S. laws affecting the activities of U.S. companies abroad.
We purchase raw materials, fabricated components, assemblies and services from a variety of suppliers. Steel, aluminum, petroleum-based products, copper, resin, foam, fabrics, wire and wire components, semiconductor chips, electronics and electrical components account for the most significant portion of our raw material costs. Although we currently maintain alternative sources for most raw materials, from time to time, however, the prices and availability of these materials fluctuate due to global market demands and other considerations, which could impair the Company's ability to procure necessary materials, or increase the cost of such materials. We may be assessed surcharges on certain purchases of steel, copper and other raw materials. Inflationary and other increases in costs, including as a result of new or increased tariffs, or shortages of the various materials that are needed for us to produce our products are currently having an impact on our business which may continue for the foreseeable future. In addition, freight costs associated with shipping and receiving product are impacted by fluctuations in freight tonnage, freight hauler availability or capacity and the cost of oil and gas. We occasionally experience difficulty purchasing and obtaining timely delivery of certain raw materials required for our operations, which could have an adverse effect on our results of operations. In addition, to the extent we are unable to pass on the increased costs of raw materials, freight and labor to our customers, it could adversely affect our results of operations and financial condition.
We source a variety of systems, components, raw materials and parts, including but not limited to top covers, fabricated steel, semiconductor chips, chemicals, seat-foam, air bag, air bag inflators, seat belts, and other components from third parties. From time to time these third-party items do not meet the quality standards that we desire, which could harm our reputation, cause delays and cause us to incur significant costs. Furthermore, we may be unable to source third-party items in sufficient quantities or at acceptable prices. We have recently experienced and may in the future experience difficulty sourcing certain raw materials, parts and components required for our operations, which has had and may in the future have an adverse effect on our results of operations.
Additionally, if we are the cause for a customer being forced to halt production the customer may seek to recoup all of its losses and expenses from us. These losses and expenses could include consequential losses such as lost profits. Thus, any supply chain disruption, however small, could potentially cause the complete shutdown of an assembly line of one of our customers, and any such shutdown could expose us to claims for compensation. WhereWhen a customer halts production because of another supplier failing to deliver on time, we may not be fully compensated, if at all, and therefore our business and financial results could be adversely affected.
In 2021, as part of the Organization for Economic Co-operation and Development's ("OECD") Inclusive Framework, 140 member countries agreed to the implementation of the Pillar Two Global Minimum Tax ("Pillar Two") of 15%. The OECD continues to release additional guidance, including administrative guidance on how Pillar Two rules should be interpreted and applied by jurisdictions as they adopt Pillar Two. These changes, when enacted by various countries in which we do business, may increase our taxes in these countries. Changes to these and other areas in relation to international tax reform, including future actions taken by foreign governments in response to Pillar Two, could increase uncertainty and may adversely affect our tax rate and cash flow in future years. We continue to monitor the adoption of the OECD Pillar Two global minimum tax rules in each of our tax jurisdictions to evaluate its impact on our effective income tax rate. Pillar Two did not have a material impact to our effective tax rate for the year ended December 31, 2025.
WeDuring recently2024, we experienced a credit rating downgrade which is likely to affectaffected the amount, type and terms of capital financings we have been able to obtain. Factors affecting our credit rating include, among others, our financial performance, success in raising sufficient equity capital, adverse changes in our debt and fixed charge coverage ratios, our capital structure, level of indebtedness and future changes in the regulatory framework applicable to our operators and industry. We may be unable to maintain our current credit ratings, and in the event that our current credit ratings deteriorate, a ratings agency downgrades our credit rating or places our rating under watch or review for possible downgrade, we would likely incur higher borrowing costs, which would make it more difficult or expensive to obtain additional financing or refinance existing obligations and commitments and the trading price of our common stock may decline.
Future sales and issuances of our Common Stock or rights to purchase Common Stock could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to decline.
We may issue additional securities, including shares of Common Stock and rights to purchase Common Stock. Future sales and issuances of our Common Stock or rights to purchase our Common Stock could result in substantial dilution to our existing stockholders and could potentially dilute future net income per share. We may issue and sell Common Stock in a manner as we may determine from time to time. If we sell any such Common Stock in subsequent transactions, investors may be materially diluted. New investors in such subsequent transactions could gain rights, preferences and privileges senior to those of holders of our Common Stock.
Management's Discussion & Analysis (MD&A)
New heading “Year Ended December 31, 2025 Compared to Year Ended December 31, 2024”
New heading “Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 and Year Ended December 31, 2024 Compared to Year Ended December 31, 2023”
New heading “Global Electrical Systems Segment Results”
New heading “Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 and Year Ended December 31, 2024 Compared to Year Ended December 31, 2023”
New heading “Trim Systems and Components Segment Results”
New heading “Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 and Year Ended December 31, 2024 Compared to Year Ended December 31, 2023”
Removed heading “Year Ended December 31, 2023 Compared to Year Ended December 31, 2022”
Removed heading “Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 and Year Ended December 31, 2023 Compared to Year Ended December 31, 2022”
Removed heading “Electrical Systems Segment Results”
Removed heading “Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 and Year Ended December 31, 2023 Compared to Year Ended December 31, 2022”
Removed heading “Aftermarket & Accessories Segment Results”
Removed heading “Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 and Year Ended December 31, 2023 Compared to Year Ended December 31, 2022”
Largest changes
“Gross Profit. The decrease in 2024 gross profit of $24.7 million from 2023 was primarily attributable to lower sales volume, restructuring activities, labor inflation and unfavorable foreign exchange impacts. Cost of revenues decreased in line with the revenues, decrease of 17.0%, driven by a decrease in raw material and purchased component costs of $16.6 million, or 15.6%; a decrease in wages and benefits of $4.1 million, or 12.3%; offset by an increase in overhead expenses of $6.6 million, or 12.3%. …”see in full comparison
“As a percentage of revenues, gross profit for the years ended December 31, 2025 and 2024, was 10.6% and 6.5%, respectively. The increase in 2025 gross profit margin was primarily due to mix and improved operational efficiency. The twelve months ended December 31, 2025 results include charges of $1.6 million associated with the restructuring program. The decrease in 2024 gross profit margin was primarily due to lower sales volume, restructuring activities, labor inflation, and unfavorable foreign exchange impacts. …”see in full comparison
“Gross Profit. The increase in 2025 gross profit of $8.3 million from 2024 was primarily attributable to mix and improved operational efficiency, and a decrease in cost of revenues driven by a decrease in overhead expenses of $7.0 million, or 10.8%; a decrease in wages and benefits of $0.8 million, or 2.8%; and a decrease in raw material and purchased component costs of $0.5 million, or 0.5%. The decrease in 2024 gross profit of $26.5 million from 2023 was primarily attributable to lower sales volume, restructuring activities, labor inflation and unfavorable foreign exchange impacts.”see in full comparison
As a percentage of revenues, gross profit for the years ended December 31,see in full comparison20242025 and2023,2024, was5.6%12.3% and15.5%,12.0%, respectively. The decrease in gross profit in 2025 from 2024 was primarily due to lower sales volume. The twelve months ended December 31, 2025 results include charges of $2.3 million associated with the restructuring program. The decrease in gross profit margin in 2024 from 2023 was primarily due to lower sales volume, restructuringactivities, labor inflation,activities andunfavorableincreasedforeignfreightexchange impacts.costs. The twelve months ended December 31, 2024 results include charges of$3.7$1.5 million associated with the restructuring program.The increase in 2023 gross profit margin was primarily due to volume leverage and increased pricing, more than offsetting inflationary items.
“We are navigating through several challenging external factors which create uncertainty and volatility in our end markets, including, but not limited to, geopolitical dynamics, new and changing tariff actions and responses, tax regulation and fluctuating foreign exchange rates. We expect the Company’s cost of goods sold will continue to be impacted by tariffs which increase the price of materials purchased and products sold to customers. …”see in full comparison
see in full comparisonAsSelling,a percentage of revenues, gross profit for the years ended December 31, 2024General and2023,Administrativewas 18.0% and 19.3%, respectively.Expenses. The decrease in 2025 SG&A expenses of $6.1 million from 2024gross profit margin iswas primarilydueatoresultlowerofsalesreducedvolumepayroll andrestructuringbenefitsrelated expenses.expense. The twelve months ended December 31,20242025 results include charges of$0.9$0.2 million associated with the restructuring program. Theincreasedecrease in 2024 SG&A expenses of $0.5 million from 2023gross profit margin iswas primarilydueatoresultincreasedofpricingreducedoffsettingincentivemoderatingcompensationcost inflation and cost reduction initiatives including lower freight costs.expense.
Full comparison: every changed paragraph (99)
Commercial Trends in the VehicleGlobal SolutionsSeating and AftermarketTrim &Systems Accessoriesand Components Segments
North American heavy-duty truck production was 332,382251,247 units in 2024.2025. According to a February 20252026 report by ACT Research, a publisher of industry market research, North American Class 8 production levels are expected to decreaseincrease to 316,000approximately 260,000 units in 2025.2026. ACT Research estimated that the average age of active North American Class 8 trucks was 5.8 years in 2024.2025. As vehicles age, maintenance costs typically increase. ACT Research forecasts that the vehicle age will decline as aging fleets are replaced.
North American medium-duty (or "Class 5-7") truck production was 274,135195,522 units in 2024.2025. According to a February 20252026 report by ACT Research, North American Class 5-7 truck production is expected to decreaseincrease to 226,000approximately 197,000 units in 2025.2026. We primarily participate in the class 6 and 7 portion of the medium-duty truck market.
Commercial Trends in the Global Electrical Systems Segment
Demand for our Global Electrical Systems products, such as wire harnesses, is primarily driven by construction and agriculture equipment vehicle production. Demand for new vehicles in the global construction and agriculture equipment market generally follows certain economic conditions around the world. Our products are primarily used in the medium- and heavy-duty construction and agriculture equipment market (vehicles weighing over 12 metric tons). Demand in the medium- and heavy-duty construction and agriculture equipment market is typically related to the level of large scale infrastructure development projects, such as highways, dams, harbors, hospitals, airports and industrial development, as well as activity in the mining, forestry and commodities industries.
A developing trend that may have a favorable impact on our Global Electrical Systems segment is the expectation that autonomous, self-driving cars are expected to become more common with continued advancements in technology, including applications such as last mile delivery. Demand for autonomous vehicles will contribute to higher electrical and electronic content per vehicle and increased complexity in vehicle wiring architectures. As vehicles incorporate additional sensors, connectivity features, and electronic systems, demand is expected to increase for more complex wire harness solutions supporting power distribution, data transmission, and safety-related functions. This trend may create opportunities for suppliers, like us, with capabilities in advanced design, engineering, and manufacturing of integrated wiring systems. The timing and extent of adoption of these technologies remain uncertain and are influenced by factors such as regulatory requirements, technology readiness, infrastructure development, and overall vehicle production levels. Changes in vehicle mix, platform design, or customer demand could impact volumes and content levels and, in turn, affect demand for the Company’s products.
The Company announced on June 27, 2025, it had closed on $210 million in senior secured credit facilities, consisting of (i) a $95 million senior secured Term Loan with TCW Group, as agent, and (ii) a $115 million senior secured asset-based revolving credit facility with Bank of America, N.A., as agent. Obligations under the new senior secured credit facilities will mature on June 27, 2030, with the ABL revolving credit facility springing to 91 days prior to the maturity of the Term Loan or third-party subordinated debt.
In connection with the financing, TCW Group affiliates received five-year warrants for the purchase of up to 3,934,776 shares of the company’s common stock, issued in two equal tranches. The tranches of warrants have an exercise price of $1.52 and $2.07 per share, respectively. Until the fourth anniversary after issuance, the Company has the right to repurchase up to 50% of each tranche of warrants at a price equal to $1.40 or $1.00 per share, respectively, above the applicable exercise price. Upon a refinancing of the new credit agreement, the holders can require the Company to repurchase up to 50% of each tranche at a price equal to the price of the common stock at the time of repurchase less the exercise price. The warrants contain customary anti-dilution adjustments. The Company has provided the holders with certain information and registration rights, including filing a registration statement within 45 days to register the resale of the shares underlying the warrants.
During the year ended December 31, 2024, the Company amended its credit agreement in the second and fourth quarters. On July 30, 2024, the Company entered into Amendment No. 3, to the Credit Agreement. Amendment No. 3 amended the terms of the existing Credit Agreement to limit the mandatory prepayment requirements for certain specified asset dispositions of the Company and certain of its subsidiaries. The Company repaid $20 million in accordance with Amendment No.3 during the three months ended September 30, 2024. On December 19, 2024, the Company entered into Amendment No. 4 to its Credit Agreement. Amendment No. 4 reduced the existing term loan facility to $85 million in aggregate principal amount, reduced the revolving credit facility commitments by $25 million to an aggregate of $125 million in revolving credit facility commitments, and revised the covenant calculation including increasing the maximum consolidated total leverage ratio to 4.25:1.0 (which will be subject to step-downs to 3.75:1.0 at the end of the fiscal quarter ending September 30, 2025; and to 3.00:1.0 for each fiscal quarter thereafter).
On July 31, 2024, the Company and SVO, LLC ("Buyer") entered into a purchase agreement pursuant to which the Company would sell substantially all of the assets of the Company's business of manufacturing and assembling structured products, including cabs for medium and heavy-duty vehicles, at its facility in Kings Mountain, North Carolina (the cab structures business). On September 6, 2024, the Company and Buyer entered into an amendment to the purchase agreement whereby the transaction closed on September 6, 2024 with the Buyer paying the Company $20 million of the $40 million purchase price. Pursuant to the amended purchase agreement, the parties agreed (i) that the remaining $20 million of the purchase price would be paid on October 1, 2024, (ii) that the assigned contracts and the employees of Seller would transfer to Buyer on October 1, 2024, and (iii) the inventory would be valued as of October 1, 2024, for purposes of determining any adjustment to the purchase price.The Company received the remaining portion of the purchase price on October 1, 2024. The net proceeds of the transaction were approximately $40 million. The Company used the proceeds for debt paydown and other general corporate purposes. The Company recorded an after-tax gain on the sale of the business of approximately $28.8 million for the year ended December 31, 2024.
On October 30, 2024, the Company entered into a purchase agreement to sell its First Source Electronics (FSE) business with operations in Elkridge, Maryland for approximately $1.5 million, with a note in the amount of $0.5 million and earn out potential of an additional $1.5 million subject to certain criteria. The Elkridge facility is the primary manufacturing facility of the Company's Industrial Automation segment. CVG recorded an estimated after-tax loss on the contemplated sale of the Industrial Automation business of approximately $7.9 million for the year ended December 31, 2024.
The cab structures and Industrial Automation segment divestitures represent a strategic shift in CVG's business and, in accordance with U.S. GAAP, qualified as discontinued operations. As a result, the operating results and cash flows related to the cab structures business and Industrial Automation segment have been reflected as discontinued operations in the Consolidated Statements of Operations. Additionally, the results of operations in this section include retrospective changes for discontinued operations. See Note 17, Discontinued Operations, for additional information on the divestitures.
Certain indirect corporate costs included within the selling, general and administrative expense caption of the Consolidated Statements of Operations that were previously allocated to the Kings Mountain facility and Industrial Automation segment do not qualify for classification within discontinued operations and are now reported as selling, general and administrative expense within continuing operations on a consolidated basis and within the Corporate and other segment.
Subsequent to December 31, 2024, theThe Company announced a new organizational structure designed to enhance alignment with its customers and end markets, effective January 1, 2025. Under this new structure, CVG will reorganizereorganized its vertical business units into the following three operating divisions and reporting segments: Global Electrical Systems, Global Seating, Trim Systems and Components. As part of this realignment, the Company’s Aftermarket & Accessories business unit will bewas absorbed in these three segments. Its seating and electrical portfolio will transitiontransitioned to Global Seating and Global Electrical Systems, respectively. Its wiper systems will becomebecame part of the newly formed Trim Systems and Components business unit in addition to the trim and components businesses from the prior Vehicle Solutions segment.
We are navigating through several challenging external factors which create uncertainty and volatility in our end markets, including, but not limited to, geopolitical dynamics, new and changing tariff actions and responses, tax regulation and fluctuating foreign exchange rates. We expect the Company’s cost of goods sold will continue to be impacted by tariffs which increase the price of materials purchased and products sold to customers. In the past, we have negotiated with our customers in an attempt to pass on a portion of the increased costs resulting from the tariffs to our customers, although there is significant uncertainty as to our ability to pass these costs, or a portion of these costs, along to our customers. Geopolitical uncertainties will continue to create a challenging operating environment. We continue to closely monitor the situation and are prepared to remain agile in responding to any new developments. In addition, lower courts and administrative processes will need to provide guidance with respect to refund-related questions with respect to the IEEPA tariffs paid prior to the recent U.S. Supreme Court decision.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”), which includes a broad range of tax reform provisions, was signed into law in the United States. Key provisions of the bill include, but are not limited to, immediate expensing of R&D expenditures, restoration and expansion of 100% bonus depreciation and permanent reinstatement of the EBITDA limitation for the calculation of the 163(j) business interest expense deduction. Additionally, the bill extends and modifies certain international tax provisions of the 2017 Tax Cuts and Jobs Act that were set to expire at the end of 2025. The tax provisions in OBBBA did not have a material impact on the Company’s consolidated financial statements or results of operations.
The Company's long-term strategy is to increase our sales, profits and shareholder value by growing our Global Electrical Systems segment to be our largest business while financially optimizing its core legacy businesses, organically growing in targeted areas, strengthening our product portfolio, increasing our margins and evaluating opportunities to add to our businesses through a focused M&A program. The Company expects to diversify its revenue and profits by product, customer, platform, and end market with a goal of becoming less cyclical and less customer concentrated while strengthening / enhancing current positions, entering new markets, developing relationships with new customers, and enhancing service to our customers, leading to increased return to our stockholders. Our products include electrical wire harnesses, seating systems, plastic components, mirrors, wipers and other accessories.
We have a long-term strategy to globally optimize our cost structure through manufacturing process enhancements, low cost footprint and global sourcing. WeOur Board and management periodically and from time to time, review and evaluate our short-term and long-term strategiesstrategies, andas well as potential strategic alternatives, to enhance shareholder value. These strategic alternatives may adjustinclude, actionsamong inothers, responseacquisitions, to changes in our business environmentdispositions and other factorsbusiness includingcombination buttransactions, notrecapitalizations, limitedrestructurings to,or implementingother restructuringtransactions, asin needed.each case, involving all or a portion of our business. There can be no assurance that any such transaction will be pursued or completed, or, if completed, that it will achieve the intended strategic or financial objectives.
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
The table below sets forth certain consolidated operating data for the twelve months ended indicated (dollars are in thousands):
Revenues. The decrease in consolidated revenues resulted from:
•a $69.4 million, or 11.7%, decrease in sales to OEM and a decrease in other revenues; and
•a $5.0 million, or 3.9%, decrease in aftermarket and OES sales.
The decrease in revenues of 10.3% was primarily driven by a softening in customer demand in the Global Seats and Trim Systems & Components segments.
Gross Profit. Included in gross profit is cost of revenues, which consists primarily of raw materials and purchased components for our products, wages and benefits for our employees and overhead expenses such as manufacturing supplies, facility rent and utilities costs related to our operations. The decrease in gross profit was primarily attributable to the impact of lower sales volumes. Cost of revenues decreased $69.6 million, or 10.7% as a result of a decrease in raw material and purchased component costs of $46.8 million, or 12.3%; a decrease in wages and benefits of $4.3 million, or 6.9%; and a decrease in overhead expenses of $18.4 million, or 8.9%. As a percentage of revenues, gross profit margin was 10.5% for the year ended December 31, 2025 compared to 10.1% for the year ended December 31, 2024.
Selling, General and Administrative Expenses. Selling, general and administrative ("SG&A") expenses consist primarily of wages and benefits and other expenses such as marketing, travel, legal, audit, rent and utilities costs, which are not directly or indirectly associated with the manufacturing of our products. SG&A expenses decreased $4.8 million in the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to implementation of cost control measures designed to align with the magnitude of continuing operations and focus on leveraging existing resources to improve profitability in a low demand period. The twelve months ended December 31, 2024 results include a benefit of $3.5 million from the gain on the sale of a building. As a percentage of revenues, SG&A expense was 10.6% for the twelve months ended December 31, 2025 compared to 10.2% for the twelve months ended December 31, 2024.
Other (Income) Expense. Other expense increased $3.8 million in the year ended December 31, 2025 as compared to the year ended December 31, 2024 due primarily to transition service fee income of $3.2 million recognized during the year ended December 31, 2024 which supported the transition of discontinued operations transactions.
Interest Expense. Interest associated with our debt was $13.0 million and $9.2 million for the years ended December 31, 2025 and 2024, respectively. The increase in interest expense was primarily attributed to higher weighted average margins on debt balances, partially offset by the impact of lower average debt balances during the respective comparative periods.
Loss on extinguishment of debt. On June 27, 2025, the Company recognized a loss on extinguishment of debt to reflect the write-off of deferred financing fees related to early repayment of the prior revolver of $0.5 million. On December 19, 2024, the Company refinanced its long-term debt, which resulted in a loss of $0.5 million, including a $0.3 million non-cash write off relating to deferred financing costs of the Term loan facility due 2027 and $0.2 million of other associated fees.
Provision (Benefit) for Income Taxes. Income tax expense of $4.7 million and $27.5 million were recorded for the years ended December 31, 2025 and 2024, respectively. The period over period change in income tax was primarily attributable to establishing a full valuation allowance on our U.S. deferred tax assets of $28.8 million in 2024.
In 2021, as part of the Organization for Economic Co-operation and Development's ("OECD") Inclusive Framework, 140 member countries agreed to the implementation of the Pillar Two Global Minimum Tax ("Pillar Two") of 15%. The OECD continues to release additional guidance, including administrative guidance on how Pillar Two rules should be interpreted and applied by jurisdictions as they adopt Pillar Two. These changes, when enacted by various countries in which we do business, may increase our taxes in these countries. Changes to these and other areas in relation to international tax reform, including future actions taken by foreign governments in response to Pillar Two, could increase uncertainty and may adversely affect our tax rate and cash flow in future years. We continue to monitor the adoption of the OECD Pillar Two global minimum tax rules in each of our tax jurisdictions to evaluate its impact on our effective income tax rate. Pillar Two did not have a material impact to our effective tax rate for the year ended December 31, 2025.
Net Income (Loss) from continuing operations. Net loss from continuing operations was $20.5 million for the twelve months ended December 31, 2025 compared to net loss from continuing operations of $35.7 million for the twelve months ended December 31, 2024. The decrease in net income from continuing operations was attributable to the factors noted above.
The table below sets forth certain consolidated operating data for the twelve months endedperiods indicated (dollars are in thousands):
1.Not meaningful
The decrease in revenues of 13.4% was primarily driven by a softening in customer demand across all segments, and the wind-down of certain programs in our VehicleGlobal SolutionsSeating/ segment.Trim Systems and Components segments.
Gross Profit. Included in gross profit is cost of revenues, which consists primarily of raw materials and purchased components for our products, wages and benefits for our employees and overhead expenses such as manufacturing supplies, facility rent and utilities costs related to our operations. The decrease in gross profit iswas primarily attributable to the impact of lower sales volumes, unfavorable mix, and increased restructuring charges. Cost of revenues decreased $64.1 million, or 9.0% as a result of a decrease in raw material and purchased component costs of $54.9 million, or 12.6%; a decrease in wages and benefits of $6.9 million, or 9.9%; and a decrease in overhead expenses of $2.3 million, or 1.1%. As a percentage of revenues, gross profit margin was 10.1% for the year ended December 31, 2024 compared to 14.5% for the year ended December 31, 2023.
Selling, General and Administrative Expenses. Selling, general and administrative ("SG&A") expenses consist primarily of wages and benefits and other expenses such as marketing, travel, legal, audit, rent and utilities costs, which are not directly or indirectly associated with the manufacturing of our products. SG&A expenses decreased $7.3 million in the year ended December 31, 2024 as compared to the year ended December 31, 2023,2023 primarily as a result of the gain on the sale of a building of $3.5 million and reduced incentive compensation expense, partially offset by an increase in salary expense and consulting spend during the 2024 period. As a percentage of revenues, SG&A expense was 10.2% for the twelve months ended December 31, 2024 compared to 9.7% for the twelve months ended December 31, 2023.
Other (Income) Expense. Other incomeexpense increased $3.4 million in the year ended December 31, 2024 as compared to the year ended December 31, 2023 due primarily to transition service fees of $3.2 million recognized during the year ended December 31, 2024 which supported the transition of discontinued operations transactions as well as favorable change in foreign currency of $0.5 million.
Loss on extinguishment of debt. On December 19, 2024, the Company refinanced its long-term debt, which resulted in a loss of $0.5 million, including a $0.3 million non-cash write off relating to deferred financing costs of the Term loan facility due 2027 and $0.2 million of other associated fees.
In 2021, as part of the Organization for Economic Co-operation and Development's ("OECD") Inclusive Framework, 140 member countries agreed to the implementation of the Pillar Two Global Minimum Tax ("Pillar Two") of 15%. The OECD continues to release additional guidance, including administrative guidance on how Pillar Two rules should be interpreted and applied by jurisdictions as they adopt Pillar Two. These changes, when enacted by various countries in which we do business, may increase our taxes in these countries. Changes to these and other areas in relation to international tax reform, including future actions taken by foreign governments in response to Pillar Two, could increase uncertainty and may adversely affect our tax rate and cash flow in future years. We continue to evaluate the potential impacts of Pillar Two through current and pending legislative adoption by individual countries.
Net Income (Loss) from continuing operations. Net loss from continuing operations was $35.7 million for the twelve months ended December 31, 2024 compared to net income from continuing operations of $43.6 million for the twelve months ended December 31, 2023. The decrease in net income from continuing operations iswas attributable to the factors noted above.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022
The table below sets forth certain consolidated operating data for the periods indicated (dollars are in thousands):
1.Not meaningful
Revenues. The increase in consolidated revenues resulted from:
•a $47.6 million, or 7.3%, increase in sales to OEM and other revenues; and
•a $5.2 million, or 4.0%, increase in aftermarket and OES sales.
The increase in revenues was primarily driven by increased pricing and increased sales volume from the Electrical Systems business, offset by lower sales volume in the Vehicle Solutions segments.
Gross Profit. Included in gross profit is cost of revenues, which consists primarily of raw materials and purchased components for our products, wages and benefits for our employees and overhead expenses such as manufacturing supplies, facility rent and utilities costs related to our operations. The increase in gross profit is primarily attributable to price increases with customers and cost reduction initiatives. Cost of revenues increased $16.8 million, or 2.4% as a result of an increase in overhead expenses of $16.5 million, or 8.5%; an increase in wages and benefits of $4.2 million, or 6.4%; and offset by a decrease in raw material and purchased component costs of $3.9 million, or 0.9%. As a percentage of revenues, gross profit margin was 14.5% for the year ended December 31, 2023 compared to 10.9% for the year ended December 31, 2022.
Selling, General and Administrative Expenses. Selling, general and administrative ("SG&A") expenses consist primarily of wages and benefits and other expenses such as marketing, travel, legal, audit, rent and utilities costs, which are not directly or indirectly associated with the manufacturing of our products. SG&A expenses increased $21.0 million in the year ended December 31, 2023 as compared to the year ended December 31, 2022 primarily due to increased employee salaries, incentive compensation, recruitment costs, travel spending and professional services. As a percentage of revenues, SG&A expense was 9.7% for the twelve months ended December 31, 2023 compared to 7.7% for the twelve months ended December 31, 2022.
Other (Income) Expense. Other expense decreased $9.3 million in the year ended December 31, 2023 as compared to the year ended December 31, 2022 due primarily to the settlement of the Company's U.S. Pension Plan liabilities of $9.2 million completed during the year ended December 31, 2022.
Interest Expense. Interest associated with our debt was $10.2 million and $9.2 million for the years ended December 31, 2023 and 2022, respectively. The increase primarily related to higher interest rates on variable rate debt, offset by lower average debt balances during the respective comparative periods.
Loss on extinguishment of debt. On May 12, 2022, the Company refinanced its long-term debt, which resulted in a loss of $0.9 million, including a $0.6 million non-cash write off relating to deferred financing costs of the Term loan facility due 2026 and $0.3 million of other associated fees.
Provision (Benefit) for Income Taxes. Income tax benefit of $15.2 million and expense of $20.9 million were recorded for the years ended December 31, 2023 and 2022, respectively. The period over period change in income tax was primarily attributable to the reversal of $22.0 million valuation allowance on our U.S. deferred tax assets during 2023 versus the 2022 establishment of a full valuation allowance on our U.S. deferred tax assets of $24.5 million, offset by the reversal of a $9.9 million valuation allowance on our United Kingdom (U.K.) deferred tax asset.
VehicleGlobal SolutionsSeating Segment Results
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 and Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 and Year Ended December 31, 2023 Compared to Year Ended December 31, 2022
The table below sets forth certain VehicleGlobal SolutionsSeating Segment operating data for the twelve months ended, (dollars are in thousands):
Revenues. The decrease in Vehicle Solutions Segment revenues in 2024 of $65.8 million from 2023 primarily resulted from lower sales volume due to decreased customer demand and the wind-down of certain programs. The decrease in 2023 revenues of $0.4 million from 2022 primarily resulted from increased pricing which more than offset lower sales volume.
Gross Profit. The decrease in 2024 gross profit of $20.1 million from 2023 was primarily due to lower sales volume, restructuring activities and increased freight costs, and a decrease in cost of revenues driven by a decrease in raw material and purchased component costs of $29.0 million, or 11.2%; a decrease in overhead expenses of $12.8 million, or 10.4%; and a decrease in wages and benefits of $3.8 million, or 13.4%. The increase in 2023 gross profit of $16.3 million from 2022 was primarily due to price increases with customers and cost reduction initiatives including lower freight costs, lower startup costs, and improved manufacturing efficiencies..
What changed in the latest 10-Q
Risk Factors
You should carefully consider the information in this Form 10-Q, the risk factors discussed in "Risk Factors" and other risks discussed in our 2025 Form 10-K and our filings with the SEC since December 31, 2025. These risks could materially and adversely affect our results of operations, financial condition, liquidity and cash flows. Our business also could be affected by risks that we are not presently aware of or that we currently consider immaterial to our operations.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Global Electrical Systems Segment Results”
New heading “Trim Systems and Components Segment Results”
New heading “Consolidated Results of Operations”
New heading “Segment Results”
New heading “Global Seating Segment Results”
Largest changes
“On June 18, 2026, the Company entered into the Sales Agreement with Sales Agent for the ATM Program which enables the Company to issue and sell shares of Common Stock in transactions that are deemed to be "at the market" offerings as defined in Rule 415 under the Securities Act of 1933, as amended, for a maximum aggregate offering amount of up to $25.0 million. During the three and six months ended June 30, 2026, we issue and sold 2.6 million shares of our Common Stock under the ATM program for net proceeds (after sales commissions and direct offering expenses) of $11.6 million. …”see in full comparison
“Selling, General and Administrative Expenses. SG&A expenses increased $7.1 million compared to the six months ended June 30, 2025, primarily as a result of an increase in incentive compensation expense and advisory service fees. As a percentage of revenues, SG&A expense was 11.5% for the six months ended June 30, 2026 compared to 10.3% for the six months ended June 30, 2025. The six months ended June 30, 2026 results include charges of $0.3 million associated with the restructuring programs, compared to $0.2 million for the six months ended June 30, 2025.”see in full comparison
Full comparison: every changed paragraph (75)
The discussion and analysis below describeddescribes material changes in financial condition and results of operations as reflected in our condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026 and 2025. This discussion and analysis should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Form 10-K.
On June 18, 2026, the Company disclosed that it entered into a Capital on Demand™ Sales Agreement (the “Sales Agreement”) with JonesTrading Institutional Services LLC (“Sales Agent”), as sales agent, pursuant to which the Company may offer and sell, from time to time, through or to the Sales Agent, as agent or principal, shares of the Company’s Common Stock, par value $0.01 per share (“Common Stock”), having an aggregate offering price of up to $25,000,000 (the “ATM Program”).
As of June 30, 2026, the Company had sold 2.6 million shares of Common Stock in the ATM Program, generating net cash proceeds of approximately $11.6 million. As required by the Company’s secured term loan facility, all such net proceeds were used by the Company to pay down outstanding indebtedness and associated prepayment premium under such facility.
The table below sets forth certain consolidated operating data for the three months ended MarchJune 3130 (dollars are in thousands):
•a $0.4$1.4 million, or 1.1%,4.3%, decreaseincrease in aftermarket and OES sales.
The increase in revenues of 1.0%13.5% is primarily driven by 14% growth in our Global Electrical Systems segment, offset by softerincreased customer demand in theinternational Global Seatsmarkets and Trim Systems & Components segments particularly in the Northramp Americaof heavypreviously truckawarded market.new business wins across all three of our segments.
Gross Profit. Included in gross profit is cost of revenues, which consists primarily of raw materials and purchased components for our products, wages and benefits for our employees and overhead expenses such as manufacturing supplies, facility rent and utilities costs related to our operations. The $2.0$5.2 million increase in gross profit is primarily attributable to the impact of increased sales volumes and operational efficiency improvements. Cost of revenues decreasedincreased $0.3$18.1 million, or 0.2%,11.9%, as a result of a decreaseincrease in raw material and purchased component costs of $0.7$13.2 million, or 0.8%,14.6%, and a increase in labor and overhead expenses of $0.4$4.9 million, or 0.7%.7.9%. As a percentage of revenues, gross profit margin was 11.6%12.7% for the three months ended MarchJune 31,30, 2026 compared to 10.5%11.4% for the three months ended MarchJune 31,30, 2025. The three months ended MarchJune 31,30, 2026 results include charges of $1.2$0.5 million associated with restructuring programs, compared to $0.5$1.1 million for the three months ended MarchJune 31,30, 2025.
Selling, General and Administrative Expenses. Selling, general and administrative ("SG&A") expenses consist primarily of wages and benefits and other expenses such as marketing, travel, legal, audit, rent and utilities costs, which are not directly or indirectly associated with the manufacturing of our products. SG&A expenses increased $2.7$4.4 million compared to the three months ended MarchJune 31,30, 2025, primarily as a result of increased incentive compensation expense.expense and advisory service fees. As a percentage of revenues, SG&A expense was 11.1%11.9% and 9.6%10.9% for the three months ended MarchJune 31,30, 2026 and 2025, respectively.
Gain on sale of assets. During the three months ended March 31, 2026, the Company recognized a gain of $13.7 million related to the Sale and Leaseback Transaction.
Other (Income) Expense. Other expense increased $1.0$0.5 million in the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, primarily related to unfavorable change in foreign currency.
Warrant expense. Change in fair value of warrant liabilities represents the mark-to-market fair value adjustments to the outstanding warrants issued in connection with entering into the Term Loan due 2030. The change in fair value of the outstanding warrants liability during three months ended MarchJune 31,30, 2026 was 5.0$3.4 million. The change in fair value of stock warrants was the result of changes in market prices and other observable inputs deriving the value of the financial instruments.
Loss on extinguishment of debt. The loss recognized from the extinguishment of debt includes a non-cash expense of $0.9$0.5 million for the write-off of deferred financing costs, as well as a prepayment premium and make-whole interest totalingof $1.0$0.5 million, both of which are associated with the repayment of the Term LoanLoan. followingThe prior year loss on extinguishment of debt reflects the Salewrite-off andof Leasebackdeferred transaction.financing fees related to early repayment of the prior revolver $0.5 million.
Interest Expense. Interest associated with our debt increased $1.6$0.7 million in the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase in interest expense was primarily attributed to higher interest rates from our refinancing completed during the second quarter of 2025.
Provision for Income Taxes. Income tax expense of $1.9$2.0 million and $2.1$1.7 million were recorded for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The primary driver in the tax expense was the Company's mix of profitable foreign operations and losses in the USU.S. while maintaining its full valuation allowance position on U.S. deferred tax assets.
Net Income (Loss) from continuing operations. Net incomeloss from continuing operations was $0.9$8.7 million for the three months ended MarchJune 31,30, 2026 compared to net loss of $3.1$4.1 million for the three months ended MarchJune 31,30, 2025. The increasechange in net income iswas attributable to the factors noted above.
The table below sets forth certain Global Seating Segment operating data for the three months ended MarchJune 3130 (dollars are in thousands):
Revenues. The increase in Global Seating Segment revenues of $5.6 million primarily resulted from higher international volumes, offset by decreased customer demand in North America.
Gross Profit. The increase in 2026 gross profit of $1.2 million was primarily due to the impact of increased sales volumes and operational efficiency improvements. The increase in cost of revenues was driven by a increase in raw material and purchased component costs of $3.1 million, or 7.8%, and a increase in labor and overhead expenses of $1.4 million, or 5.5%.
As a percentage of revenues, gross profit margin was 13.9% for the three months ended June 30, 2026 compared to 13.3% for the three months ended June 30, 2025. The three months ended June 30, 2026 results include charges of $0.7 million associated with restructuring programs, compared to $0.4 million for the three months ended June 30, 2025.
Selling, General and Administrative Expenses. SG&A expenses increased $0.9 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily as a result of increased incentive compensation expense.
Global Electrical Systems Segment Results
The table below sets forth certain Global Electrical Systems Segment operating data for the three months ended June 30 (dollars are in thousands):
Revenues. The increase in Global Electrical Systems Segment revenues of $8.4 million was primarily as a result of new business wins.
Gross Profit. The increase in gross profit of $1.0 million was primarily attributable to volume and product mix. The increase in cost of revenues was driven by an increase in raw material and purchased component costs of $4.6 million, or 18.1%, and an increase in labor and overhead expenses of $2.8 million, or 12.7%.
As a percentage of revenues, gross profit margin was 11.1% for the three months ended June 30, 2026 compared to 11.0% for the three months ended June 30, 2025. The increase in gross profit margin was primarily due to mix. The three months ended June 30, 2026 results include no charges associated with restructuring programs, compared to $0.5 million for the three months ended June 30, 2025.
Selling, General and Administrative Expenses. SG&A expenses were flat for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Trim Systems and Components Segment Results
The table below sets forth certain Trim Systems and Components Segment operating data for the three months ended June 30 (dollars are in thousands):
Revenues. The increase in the Trim Systems and Components Segment revenues of $9.3 million was primarily driven by higher sales volume as a result of increased customer demand in North America, including improved product mix.
Gross Profit. The increase in gross profit of $3.0 million was primarily attributable to higher sales volume. The cost of revenues increased in line with the sales increase of 21.1%, driven by a increase in labor and overhead expenses of $0.9 million, or 5.9%; and a increase in raw material and purchased component costs of $5.4 million, or 21.8%.
As a percentage of revenues, gross profit margin was 12.6% for the three months ended June 30, 2026 compared to 8.4% for the three months ended June 30, 2025. The increase in gross profit margin was primarily due to volume leverage. The three months ended June 30, 2026 results include no charges associated with restructuring programs, compared to $0.2 million for the three months ended June 30, 2025.
Selling, General and Administrative Expenses. SG&A expenses increased $0.9 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily as a result of increased incentive compensation expense.
Consolidated Results of Operations
The table below sets forth certain consolidated operating data for the six months ended June 30, (dollars are in thousands):
Revenues. The increase in consolidated revenues resulted from:
•a $24.0 million, or 8.6%, increase in OEM and other revenues; and
•a $1.0 million, or 1.6%, increase in aftermarket and OES sales.
Revenues. The increase in Global Seating Segment revenues of $1.1$25.0 million was primarily resulted from higher international volumes, offsetdriven by decreasedan increase in customer demand inacross Northall America.segments.
Gross Profit. The $7.2 million increase in 2026 gross profit of $1.3 million wasis primarily dueattributable to the impact of increased sales volumes and operational efficiency improvements. The decrease in costCost of revenues wasincreased driven$17.8 bymillion, or 5.8%, as a decreaseresult of a increase in raw material and purchased component costs of $0.9$12.4 million, or 2.4%,6.9%, and a increase in labor and overhead expenses of $0.7$5.4 million, or 2.8%.4.3%.
As a percentage of revenues, gross profit margin was 14.0%12.1% for the threesix months ended MarchJune 31,30, 2026 compared to 12.4%10.9% for the threesix months ended MarchJune 31,30, 2025. The threesix months ended MarchJune 31,30, 2026 results include charges of $0.5$1.9 million associated with restructuring programs, compared to zero$1.6 million for the threesix months ended MarchJune 31,30, 2025.
Selling, General and Administrative Expenses. SG&A expenses increased $7.1 million compared to the six months ended June 30, 2025, primarily as a result of an increase in incentive compensation expense and advisory service fees. As a percentage of revenues, SG&A expense was 11.5% for the six months ended June 30, 2026 compared to 10.3% for the six months ended June 30, 2025. The six months ended June 30, 2026 results include charges of $0.3 million associated with the restructuring programs, compared to $0.2 million for the six months ended June 30, 2025.
Selling, General and Administrative Expenses. SG&A expenses increased $1.0 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily as a result of increased incentive compensation expense.
Gain on sale of assets. During the threesix months ended MarchJune 31,30, 2025,2026, the Company recognized a gain of $13.7 million related to the Sale and Leaseback Transaction.
Other (Income) Expense. Other expense increased $1.4 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily related to unfavorable change in foreign currency..
Warrant expense. Change in fair value of warrant liabilities represents the mark-to-market fair value adjustments to the outstanding warrants issued in connection with entering into the Term Loan due 2030. The change in fair value of the outstanding warrants liability during three months ended June 30, 2026 was $3.4 million. The change in fair value of stock warrants was the result of changes in market prices and other observable inputs deriving the value of the financial instruments.
Loss on extinguishment of debt. The loss recognized from the extinguishment of debt includes a non-cash expense of $1.6 million for the write-off of deferred financing costs, as well as a prepayment premium and make-whole interest of $1.4 million, both of which are associated with the repayment of the Term Loan. The prior year loss on extinguishment of debt reflects the write-off of deferred financing fees related to early repayment of the prior revolver $0.5 million..
Interest Expense. Interest associated with our debt was $7.0 million and $4.8 million for the six months ended June 30, 2026 and 2025, respectively. The increase in interest expense was primarily attributed to higher interest rates from our refinancing completed during the second quarter of 2025.
Provision (benefit) for Income Taxes. Income tax expense of $3.9 million and $3.8 million were recorded for the six months ended June 30, 2026 and 2025, respectively. The primary driver in the tax expense was the Company's mix of profitable foreign operations and losses in the U.S. while maintaining its full valuation allowance position on U.S. deferred tax assets.
Net Income (loss) from continuing operations. Net loss from continuing operations was $7.8 million for the six months ended June 30, 2026 compared to net loss of $7.2 million for the six months ended June 30, 2025. The change is attributable to the factors noted above.
Segment Results
Global Seating Segment Results
The table below sets forth certain Global Seating Segment operating data for the six months ended June 30, (dollars are in thousands):
Revenues. The increase in Global Seating Segment revenues of $6.7 million was primarily driven by higher international volume, offset by customer demand in North America.
Gross Profit. The increase in gross profit of $2.5 million was primarily attributable to increased sales volumes and operational efficiency improvements. The increase in cost of revenues was driven by a increase in raw material and purchased component costs of $2.2 million, or 2.7%, and a increase in labor and overhead expenses of $2.0 million, or 4.0%.
As a percentage of revenues, gross profit margin was 14.0% for the six months ended June 30, 2026 compared to 12.9% for the six months ended June 30, 2025. The six months ended June 30, 2026 results include charges of $1.3 million associated with restructuring programs, compared to $0.4 million for the six months ended June 30, 2025.
Selling, General and Administrative Expenses. SG&A expenses increased $1.9 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily as a result of increased incentive compensation expense.
Gain on sale of assets. During the six months ended June 30, 2026, the Company recognized a gain of $13.7 million related to the Sale and Leaseback Transaction.
The table below sets forth certain Global Electrical Systems Segment operating data for the threesix months ended MarchJune 3130, (dollars are in thousands):
Revenues. The increase in Global Electrical Systems Segment revenues of $7.0$15.4 million was primarily asdriven a result ofby new business wins.
Gross Profit. The increase in gross profit of $1.8$2.8 million wasis primarily attributable to volume and product mix. The increase in cost of revenues was driven by ana increase in raw material and purchased component costs of $4.1$8.7 million, or 17.1%,17.6%; and ana increase in labor and overhead expenses of $1.1$3.9 million, or 4.9%.8.8%.
CVGI insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-02 | Ray James R Jr |
Grant/award | 85,031 | — | — |
| 2026-06-02 | Ray James R Jr |
Grant/award | 335,079 | — | — |
| 2026-06-02 | Lig Fund Management, Llc |
Grant/award | 23,483 | — | — |
| 2026-06-02 | Cook Melanie K. |
Grant/award | 23,483 | — | — |
| 2026-06-02 | Rancourt Wayne M |
Grant/award | 23,483 | — | — |
| 2026-06-02 | Johnson William |
Grant/award | 23,483 | — | — |
| 2026-06-02 | Nauman J Michael |
Grant/award | 23,483 | — | — |
| 2026-06-02 | Niew Jeffrey |
Grant/award | 23,483 | — | — |
| 2026-04-22 | Ray James R Jr |
Disposition to issuer | 85,031 | — | — |
| 2026-04-20 | O'leary Angela M |
Grant/award | 41,885 | — | — |
| 2026-04-20 | Mathers Kristin S |
Grant/award | 35,812 | — | — |
| 2026-04-20 | Mohamed Aneezal H |
Grant/award | 40,314 | — | — |
| 2026-03-31 | Ray James R Jr |
Shares withheld for tax | 80,100 | $3.39 | $271.5K |
| 2026-03-31 | O'leary Angela M |
Shares withheld for tax | 3,978 | $3.39 | $13.5K |
| 2026-03-31 | Mathers Kristin S |
Shares withheld for tax | 11,801 | $3.39 | $40.0K |
Well-known investors holding CVGI (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 1,956,659 | $9.0M | 0.01% | Added 13% |
| Two Sigma Investments | 2026-06-30 | 1,191,537 | $5.5M | 0.0% | Reduced 2% |
| D. E. Shaw & Co. | 2026-06-30 | 272,165 | $928.1K | — | Sold out |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 194,172 | $897.1K | 0.0% | Added 29% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 94,898 | $438.4K | 0.0% | New position |
| Millennium Management (Israel Englander) | 2026-06-30 | 51,824 | $239.4K | 0.0% | New position |