CVG Q3 2020 Earnings Report
Key Takeaways
CVG's third quarter results showed a decrease in revenue compared to the previous year, primarily due to lower commercial vehicle builds, although this was partially offset by growth in warehouse automation. The company's operating income decreased due to special charges, but adjusted EBITDA increased slightly due to lower costs and improved sales mix. The company is focused on diversifying into new markets such as warehouse automation and electric vehicles.
Revenue decreased by 16.7% year-over-year due to less commercial vehicle builds, offset partially by warehouse automation.
Revenue increased 47.9% sequentially compared to the second quarter.
Operating Income decreased due to special charges, but increased sequentially on an adjusted basis.
Adjusted EBITDA increased slightly due to lower costs and improved sales mix.
CVG
CVG
CVG Revenue by Segment
Forward Guidance
CVG anticipates steady demand for its products, supported by North American truck production levels and growth in warehouse automation. However, the company acknowledges that the effects of COVID-19 pose a risk to its outlook.
Positive Outlook
- North American 2020 Class 8 truck production levels are expected to be at 206,000 units.
- North American 2020 Class 5-7 production are expected to be at 223,000 units.
- RoboticsBusinessReview.com suggests growth rates for warehouse automation greater than 20% through 2022.
- Outlook supports steady demand for the Company’s products.
- The Company is having success with its growth program aimed at lessening its historical dependency on the North American combustion-engine, commercial truck market.
Challenges Ahead
- The effects of COVID, including the continued uncertainty of the pandemic, poses a risk to our outlook.
- Expect above average absenteeism, occasional shutdowns, and flexible work schedules, and quarantining.
- Vulnerable to the impacts of coronavirus due to need to gather in factories.
- Vulnerable to the impacts of coronavirus due to global footprint.
- Vulnerable to the impacts of coronavirus due to dependency of global supply chains.
Revenue & Expenses
Visualization of income flow from segment revenue to net income