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Dec 31, 2019
CVG Q4 2019 Earnings Report
Reported financial results for the fourth quarter and fiscal year 2019.
Key Takeaways
Commercial Vehicle Group experienced a decrease in revenues and operating income for the fourth quarter of 2019, primarily due to a decline in heavy-duty truck production in North America and the global construction market. The company took proactive steps to align the business to lower production levels, with restructuring actions expected to reduce operating costs by $5 to $7 million annually once fully implemented by early 2021.
Revenues decreased by 15.3% to $189.5 million compared to the prior year period, mainly due to lower heavy-duty truck production in North America and declines in the construction equipment markets.
Operating loss was $4.3 million, compared to an operating income of $13.4 million in the prior year period, impacted by lower volumes, inflationary pressure, and operating inefficiencies.
Net loss was $7.5 million, or $0.24 per diluted share, compared to a net income of $8.1 million, or $0.26 per diluted share, in the prior year period.
Restructuring initiatives, including employee separation costs and manufacturing capacity rationalization, totaled $3.0 million in charges during the quarter.
Revenue by Segment
Forward Guidance
Management estimates that 2020 North American Class 8 truck production may decline by 35% to 42% (to 200,000 to 225,000 production units), North American Class 5-7 production may decline by 15% to 20%, and the construction markets the Company serves in North America, Europe and Asia Pacific may decline by 10 to 15%.
Positive Outlook
- steady improvements in our ability to produce in China operation
- operating at approximately 70% of expected levels in China.
- sales losses in the first quarter have been immaterial
- early indications are that the customers intend to make up lost production throughout the year
- implementing preventative measures where possible while monitoring conditions closely
Challenges Ahead
- 2020 North American Class 8 truck production may decline by 35% to 42%
- North American Class 5-7 production may decline by 15% to 20%
- construction markets the Company serves in North America, Europe and Asia Pacific may decline by 10 to 15%
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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